Gome net profit rises 24%

Gome Electrical Appliances Holding (0493.HKG), one of China’s largest electronics retailers, reported a 24% net profit increase for the first nine months and announced the cancelation of a planned property joint venture due to volatile market conditions, The Wall Street Journal reported. Gome’s net profit for the first nine months surged to US$280.5 million, up 24% from US$226 million in the same period last year. Revenue for the same period rose 18% year-on-year to US$6.9 billion. The improved earnings come after the resignation in March of former Chairman Chen Xiao and rapid retail expansion in second- and third-tier cities. “The recent volatility and uncertainty in the macroeconomic environment which hampered the visibility over the property market in the near term” led Gome to drop the joint-venture plan, according to the company. Gome said on September 27 that it had signed an agreement with Beijing Eagle and Beijing Gome to form a joint venture to invest in retail properties in lower-tier cities in an effort to increase margins.