Sun Art Profit Rises 51 Percent in 2012 on China Store Openings
Sun Art Retail Group Ltd. (6808), China’s largest hypermarket operator, said profits rose 51 percent last year as it expanded operations.
Net income jumped to 2.41 billion yuan ($388 million) from 1.6 billion yuan in 2011, the company said in a statement to the Hong Kong Stock Exchange today. This beat the mean estimate of 2.31 billion yuan by five analysts surveyed by Bloomberg. Sales rose 14 percent to 77.9 billion yuan.
Sun Art, a venture between Taiwan’s RT-Mart and France’s Groupe Auchan SA, has gained market share in China’s 507 billion yuan hypermarket industry even as rivals from Carrefour SA (CA) to Tesco Plc (TSCO) have struggled to expand in the world’s second-biggest economy. The Shanghai-based retailer’s sales are expected to double between 2012 and 2017, analysts at HSBC Holdings Plc said in a Feb. 27 report.
The company’s store locations and scale make it best placed “to benefit from the macro trends like urbanization, an economic rebound and the rising spending power in second and third-tier cities,” Hong Kong-based HSBC analysts Lina Yan and Erwan Rambourg wrote.
The retailer, which operates RT-Mart and Auchan brand stores in China, overtook Carrefour in 2007 as the biggest operator of hypermarkets by tailoring American-style megamarts to the Chinese consumer.
The Auchan Group had a 13.6 percent market share in 2012 among operators of hypermarkets in China, Euromonitor’s data showed. This compares with 10.9 percent for Wal-Mart Stores Inc. and Carrefour’s 6.9 percent.
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