China Resources warns of tough times ahead

Consumer-focused conglomerate China Resources warned of a tougher operating environment after seeing third-quarter profit drop by 12.3% to US$86.6 million, the South China Morning Post reported. "Looking forward, [the] retail market will inevitably be affected by the reversal in market sentiment following the recent financial [turmoil]," Mark Chen, the firm’s managing director, said. The company’s retail, food-processing and distribution and textile businesses all posted a decline in profits. China Resources, which operates more than 2,500 supermarkets in Hong Kong and the mainland, saw earnings from these operations fall by 12.3% to US$8.3 million in the third quarter, mostly due to poor performance in Hong Kong. However, Francis Kwong, deputy managing director of China Resources, said there would be no change in the firm’s medium term plan of achieving 15% yearly growth in sales through new store openings on the mainland.