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Gome's profit booms 46% through September
(Shanghai Daily)
Updated: 2006-11-21 15:25
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Net income increased to 560.4 million yuan (US$72 million), from 384 million yuan a year earlier, the Beijing-based company said in a statement to the Hong Kong Stock Exchange today.
Revenue rose to 17.8 billion yuan from 12.6 billion yuan of the company, whose billionaire Chairman Huang Guangyu is reportedly being investigated for illegal loans.
Gome's business and its planned US$675 billion acquisition of China Paradise Electronics Retail Ltd won't be affected by the alleged probe, head of corporate finance Curt Lam said on November 4.
Chairman Huang and his brother Huang Junqin are being investigated for illegally borrowing at least 1.3 billion yuan from Bank of China 10 years ago without repaying the loan, Caijing magazine reported October 30. Gome denied the report, saying an investment company indirectly owned by Huang Guangyu is being probed.
Gome shares rose 1.6 percent to HK$6.43 (81 US cents) in Hong Kong yesterday before earnings were released. The stock has gained 22 percent this year.
Gome said on July 25 that it agreed to pay US$675 million to buy China Paradise, Shanghai's largest home-appliance seller, in a deal which would create a retailer with 516 stores with combined sales of 30 billion yuan.
The acquisition would help Gome reduce costs and gain market position "in every single region in China," as fiercer competition in the industry hurts profitability, Lam said in the November 4 interview.
Huang Guangyu, who topped Forbes magazine's China Rich List this year with worth of US$2.3 billion, built Gome into a chain of more than 500 stores after dropping out of school at 16 and traveling to Beijing with a bag of radios, batteries and other gadgets from factories in his native Guangdong province.
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