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August 1, 2009

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Suning posts faster rise in Q2 earnings

SUNING Appliance Co yesterday reported a faster growth in second-quarter net profit, thanks partly to a recovery in China's economy.

Net earnings in the first six months jumped 14.65 percent to 1.26 billion yuan (US$184 million) from a year earlier, according to a company statement filed to the Shenzhen Stock Exchange yesterday. As the firm didn't give detailed figures for the second quarter, the statement implied the growth outpaced a rise of 10.21 percent in the first quarter as retail sales climbed in the second quarter due to government measures to boost consumer spending.

The Nanjing-based home appliance retailer generated sales of 27.33 billion yuan, a rise of 5.46 percent on an annual basis.

"The economy showed signs of further warming up in the second quarter, which boosted consumer confidence and market demand," Suning said in the statement.

The retailer operated 847 stores across the country by the end of June. Same-store sales dipped 4.12 percent.

Analysts forecast same-store sales to rebound in the second half.

"Same-store sales will rise for the full year with the recovery in the property market and as government subsidies for home appliance upgrading will bear fruit in the second half," said Jin Zefei, an analyst at Shenyin Wanguo Securities Co.

Jin forecast the retailer's net profit will surge by 20 percent in the third quarter and 34.6 percent in the fourth quarter.

Suning is close to completing its takeover of electronic firm Laox after getting approval from Laox shareholders and Japanese regulators.


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