Gome Warns of First-Half Loss on Sales Drop, E-Commerce
Gome Electrical Appliances Holding Ltd. (493), China’s second-biggest electronics retailer, plunged to an all-time low in Hong Kong after forecasting a first-half loss on lower sales and losses at its e-commerce unit.
Gome dropped 14.5 percent to close at HK$0.65, the lowest level for the shares since trading began in 1992. The stock has declined 64 percent this year, compared with a 2.4 percent rise in the benchmark Hang Seng Index.
The retailer reported an 88 percent profit decline in the first quarter as China stopped subsidizing some home appliance purchases. Larger rival Suning Appliance Co. said on July 13 that it expects first-half net income to fall by as much as 30 percent because of weaker sales and higher expenses.
The retailers last year benefited from a government program, which ended on Dec. 31, that gave shoppers as much as 400 yuan ($63) as subsidies on purchase of home appliances.
The company will report results by Aug. 31, Beijing-based Gome said in a filing to the Hong Kong stock exchange yesterday, without specifying the size of the projected loss.
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