Sun Art Retail Group Ltd., China’s largest hypermarket operator, said 2013 profit gained 15 percent as it opened new stores and rental income increased.
Net income rose to 2.78 billion yuan ($452 million) from 2.41 billion yuan a year earlier, according to a filing to Hong Kong’s stock exchange yesterday. Last year’s profit matched the median estimate 17 analysts surveyed by Bloomberg. Sales climbed 11 percent to 86.2 billion yuan and same-store sales increased 2 percent.
Sun Art vies with Wal-Mart Stores Inc., Wumart Stores Inc. and online grocery platforms to attract customers. The company opened 50 stores and ramped up its e-commerce operations in 2013 amid consolidation in China’s hypermarket industry.
“The group will continue to maintain a stable pace in new store expansion by leveraging on the opportunities arising from urbanization and prudently selecting the location of new stores to ensure their quality,” the Shanghai-based company, backed by France’s Group Auchan, said in its statement yesterday.
The company’s rental income gained 17 percent to 2.24 billion yuan last year, according to the filing.
The stock dropped 1.3 percent to HK$8.82 at the close in Hong Kong trading yesterday before it announced earnings. The stock has slumped 19 percent this year, against a 2 percent drop in the city’s benchmark Hang Seng Index.
The company said yesterday it has secured 160 sites to open hypermarkets, sufficient for its expansion for three years.
Tesco Plc, the largest U.K. retailer, said in October it would pay $558 million to merge its more than 130 stores in China into a joint venture with Hong Kong-listed China Resources.