GOME's revenue surges 20%, trading suspended on boss' alleged detention
Updated: 2008-11-25 07:39
By Joey Kwok(HK Edition)
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Business at Gome's outlet in Hong Kong is not affected despite its chairman's alleged involvement in stock manipulation. CNS |
GOME Electrical Appliances Holding, the second largest electronics retailer on the mainland by market value, said its nine-month net profits surged more than double to around 1.59 billion yuan.
The retailer's net profits jumped 111.6 percent for the nine months till Sept 30, while its revenue also soared 20 percent to 36.4 billion yuan. The company's consolidated gross margin rose 1.57 percentage points to 16.75 percent, with same-store sales climbing around 3.18 percent.
However, GOME suspended its share trading yesterday after media reports that its founder and chairman Huang Guangyu had been detained and was under investigation for market manipulation.
Huang, also one of the richest men on the mainland, may have been detained because of manipulating shares of Shandong Jintai Group, a mainland drugs and medical equipment firm controlled by his brother Huang Junqin, according to Caijing magazine in Beijing.
To avoid market volatility because of the reports, trading of GOME shares on the Hong Kong Stock Exchange was suspended yesterday until further notice, GOME said in its announcement.
"The company has not received any notice or legal documents in connection with the allegations from any regulatory, governmental or judicial authority," it said, adding that the company is making enquiries to verify the allegations.
The home appliances and electronics retailer stressed that its business, operations and financial position have not been affected by the news, while the company's relations with its suppliers have remained intact .
A company spokesperson said the management has not yet decided on the timetable to resume trading on the mainboard.
"At the moment, it is quite unclear for the shares to resume trading," the spokesperson said yesterday.
Shares of GOME, which was listed in Hong Kong in 2004, have tumbled 78 percent this year, compared with a 55 percent slump of the benchmark Hang Seng Index. The shares dropped 3 percent and closed at HK$1.12 last Friday.
Shares of GOME's rival Suning Appliance surged as much as 9 percent to 15.99 yuan, its highest level in a week, in Shenzhen trading yesterday.
Tai Fook Securities analyst Vivian Fong said the media reports about Huang Guangyu's detention will more or less drag down the company's share price after it resumes trading.
Fong also expects GOME's profit growth to slow down in the coming quarter, despite the central government's 4-trillion-yuan stimulus package.
"Since the property market on the mainland is still not performing very well, people will not spend too much money on buying electrical appliances, which are not daily necessities," she added.
(HK Edition 11/25/2008 page2)