Bloomberg News

Gome Slumps After Forecasting Earnings Decline: Hong Kong Mover

May 02, 2012

The Gome Electrical Appliance Holdings Ltd. logo is displayed outside a store in Shanghai, China. Photographer: Kevin Lee/Bloomberg

The Gome Electrical Appliance Holdings Ltd. logo is displayed outside a store in Shanghai, China. Photographer: Kevin Lee/Bloomberg

Gome Electrical Appliances Holding Ltd. (493), China’s second-biggest electronics retailer, slumped to its lowest level in almost three years in Hong Kong trading after forecasting a drop in first-quarter earnings.

The company expects a “significant decline” in first- quarter profit because of lower sales and a loss from its e- commerce business, it said after trading closed on April 30. The Hong Kong stock market was closed for a holiday yesterday.

Gome slid 11 percent to HK$1.24 at the close of Hong Kong trading, its lowest level since June 22, 2009. The stock has lost 31 percent this year compared with a 16 percent gain for the benchmark Hang Seng Index. (HSI)

The Beijing-based company in March reported a 6 percent drop in 2011 profit and warned that investments in its e- commerce business may hurt margins.

Gome competitor Suning Appliance Co. reported a 15 percent drop in first-quarter net income last month.

To contact the reporter on this story: Vinicy Chan in Hong Kong at vchan91@bloomberg.net

To contact the editor responsible for this story: Anjali Cordeiro at acordeiro2@bloomberg.net


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