Suning shares fall 7.1% on bond sale
By Ding Yining |
August 15, 2012, Wednesday
|
Print Edition
Print Edition
Shares of Suning Appliance Co, China's largest electronics retailer, tumbled 7.1 percent yesterday after it said it will sell 8 billion yuan (US$1.3 billion) in corporate bonds to fund expansion as it competes with rivals amid a drop in profit.
Suning fell as much as 8.8 percent in the morning session before closing at 5.88 yuan.
Suning said in a filing to the Shenzhen Stock Exchange that its board of directors has approved the bond sale to seek operating capital which will be used to utilize the inventory management system and improve logistics network.
The bond sale came a month later after it completed a 4.7 billion yuan private placement.
Suning and major rival 360buy.com are engaged in an aggressive price war for customers - a move seen by market watchers as further hurting earnings.
Liu Qiangdong, CEO of 360buy.com, said on his official Weibo that he will ensure home appliances sold at 360buy.com will be at least 10 percent cheaper than Suning's online store as well as offline outlets, from yesterday.
Li Bin, executive vice president of Suning's online unit Yigou, responded by saying that all its products will be cheaper than 360buy.com's.
Last month, Suning said in its preliminary half-year earnings report that profit fell 30 percent from a year earlier to 1.74 billion yuan.
Suning fell as much as 8.8 percent in the morning session before closing at 5.88 yuan.
Suning said in a filing to the Shenzhen Stock Exchange that its board of directors has approved the bond sale to seek operating capital which will be used to utilize the inventory management system and improve logistics network.
The bond sale came a month later after it completed a 4.7 billion yuan private placement.
Suning and major rival 360buy.com are engaged in an aggressive price war for customers - a move seen by market watchers as further hurting earnings.
Liu Qiangdong, CEO of 360buy.com, said on his official Weibo that he will ensure home appliances sold at 360buy.com will be at least 10 percent cheaper than Suning's online store as well as offline outlets, from yesterday.
Li Bin, executive vice president of Suning's online unit Yigou, responded by saying that all its products will be cheaper than 360buy.com's.
Last month, Suning said in its preliminary half-year earnings report that profit fell 30 percent from a year earlier to 1.74 billion yuan.
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