Suning Appliance: Fierce Competition Nanyi Rapid Growth - Suning, Electrical Appliances, Chain - Hc

2005,2006 years of rapid growth

2005,2006 years of rapid growth

2005 first three quarters States United States Pre-tax profit rose only 3.71%, pre-tax profit margin decreased from 6.86% last year to 5.31%

Investment Are attributed appliance market Competition Intense at the same time that the U.S. is the country's leading chain of home appliance industry, companies, countries the U.S. slowdown in performance occur, means that chains are beginning to get down as home appliances,

Suning Appliance (002024) is inevitable, it will also increase there performance slowdown.

We believe that: with the strong cyclical

Steel , Petrochemical Different industries, the retail industry, the company is not a model of development go hand in hand, but the patchwork, 2005,2006 Suning in precisely the performance of high-speed growth period.

2005 the first three quarters, excluding non-recurring gains and losses, consolidated gross profit margin from the U.S. state in 2004 over the same period from 13.22% to 13.34%, which indicates that the performance slowdown in the U.S. state the real reason is not due to price competition. Excluding non-recurring gains and losses, the cost rate by the integrated effects of the first three quarters of 2005 the country the United States from the same period last year pre-tax profit margin 6.86% to 5.31%, which is slowing the performance of GOME important reason, which led to cost the country U.S. rate The main reason is rising faster, "more for different city business", the profitability of the core chain of home appliance industry is scale, "the number of same city store" is the impact of one of the key indicators of scale.

And the National United States is different from Suning mid-2004, the same city the number of stores rising trend in the same city the corresponding

Logistics , Advertisement , Management cost-sharing will be reduced, resulting in an after-tax profit Suning also maintained a rising trend.

We believe that years of 2005,2006 Suning just in the last stage of the blooming stage profit thick plot, and Gome is just thick in the next phase of profitable product stage, from the absolute level of profitability of view, the absolute profit level of Suning far below the current level of profitability GOME, still in the normal range. Suning's rapid growth is only because of profit growth from a relatively low level point in its

Sell Scale close to the country the United States, the absolute profit levels will be close to the normal growth of the U.S. law of the country.

Fierce market competition, rapid growth Nanyi

Market competition on Retailers Consolidated gross margin did not affect the competitive impact of the retailers profit mainly reflected in revenue growth and cost growth in two ways.

First, market competition will affect the mature store sales month of 2005, 1-9, Tsann Kuen, easy to good home, Wuhan has been dismal in the business out of home appliance market

Appliance Retail

Intense competition in the market can not be said enough, but even in such a competitive market conditions, the National US-mature stores grew by 3.6%, 4.0% of Suning, conservative, and we may wish to 2006,2007 growth in Suning stores mature rate is assumed to be -10% and -5%.

by: gaga

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