HONG KONG Jan 21 Shares in GOME Electrical
Appliances Holding Ltd tumbled on Monday after a
similarly named but privately held company said it was shutting
up shop in Hong Kong, fanning worries about consumer demand and
the health of electronics retailing industry.
GOME Home Appliances (H.K.Ltd, privately owned by
billionaire Huang Guangyu, who is also a major shareholder in
the listed company, said it would close its six retail stores
and focus on its wholesale trade.
It is not part of GOME Electrical, China's No.2 home
appliance retail chain operator, which operates more than 1,000
stores in China and is backed by private equity firm Bain
Capital and bigger rival Suning Appliance.
GOME's stock fell as much as 8 percent to HK$0.91, its
lowest level since Dec. 27. The shares were down 4 percent at
HK$0.95 as of 0610 GMT, underperforming a flat overall market
While analysts said the similar names may have initially
played some part in the stock's decline, the news also fed into
already existing worries.
The announcement comes less than a week after German
retailer Metro decided to scrap its consumer
electronics venture in China, once trumpeted as an engine of
future growth, after meeting unexpectedly strong competition.
"Despite the clarification, it still triggered concern about
the overall operating environment in the mainland that is facing
challenges," said Steve Chow, analyst at Kingsway Group
Smaller rival Huiyin Household Appliances (Holdings) Co Ltd
was down nearly 10 percent in Hong Kong although
shares of rival Suning in Shenzhen fared better, declining just
A spokesman for the listed GOME declined to comment on the
In November, the listed GOME swung to a loss in the third
quarter from a profit a year earlier due to sluggish demand,
rising costs and a loss at its e-commerce business.
(Reporting by Donny Kwok; Editing by Edwina Gibbs)