Chinese electronics retailer and e-tailer Suning (SHE:002024) is having a nightmare time with its stock down 15 percent from this point last week on the Shenzhen Stock Exchange. The plunge began on Monday morning local time, after Suning issued a warning after close of trading on Friday saying that 2012 H1 profit looks set to drop as much as 30 percent to 1.73 billion RMB ($274.24 million), down from 2.47 billion RMB ($391.55 million) for the same period last year.
Suning’s shares are currenlty trading at $7.25 a piece, a trough that they haven’t crashed into since the beginning of 2009. The company – which has over 1,300 stores across China and is now pushing hard into the e-commerce sector – did not indicate why the anticipated slump was happening. But Suning’s announcement did state that 2012 H1 saw 5.28 billion RMB ($837 million) in sold items, which is not down too much from 2011 H1’s 5.9 billion RMB. It’s not clear how much of that is from Suning’s rapidly expanding e-commerce operations, which have also diversified into online travel bookings and several other areas.
The expansion into China’s well-developed e-commerce scene has also brought new challenges for Suning, with rivals like market leading e-tailer Tmall and second-placed 360Buy already well established – including in the sales of electronics.
Suning is not the only Chinese giant having pre-report jitters this week. Earlier today we looked at how telecoms firm ZTE (HKG:0763; SHE:000063) is bracing itself for profits being down as much as 80 percent.
[Source: Techweb – article in Chinese]
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