Warnings on electronics retail

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.