Analysts have cautioned against investment in electronics retailers because of rapid expansion hitting profit margins, Dow Jones reported. Analysts said the three biggest electronics and home appliance retail chains – GOME Home Appliance Group, Suning Appliance Chain Store and China Paradise Electronics Retail were engaged in a price war for customers while bidding against each other for new retail space. Merrill Lynch has a "sell" recommendation on China Paradise stock, on the back of sales per outlet dropping 44% on year in the first half of 2005. It has a "neutral" rating on GOME, which traded 43% down Monday from its March peak.
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