HONG KONG Aug 14 China's biggest hypermarket
chain Sun Art Retail Group Ltd posted an 8.5 percent
increase in first-half net profit as it continued to expand into
lower-tier cities though same-store sales in the period were
While more diversified ways of shopping and slower growth in
consumer spending have kept a lid on same-store sales, Sun Art
said it had improved margins by leveraging economies of scale
and that it would continue its push into lower-tier cities.
The joint venture between Taiwan conglomerate Ruentex Group
and French retailer Groupe Auchan SA said late on
Wednesday its first-half net profit was 1.71 billion yuan ($278
million) for the six months ended in June, in line with
Revenue surged 7.9 percent to 48.0 billion yuan while gross
profit margin increased 1.2 percentage points to 21.9 percent.
"Aligning with the long term trend of urbanization, the
group will continue to maintain a strong pace of expansion to
lower tier cities by prudently selecting the location of new
stores to ensure their quality," Chief Executive Bruno Robert
Mercier said in a filing to the Hong Kong bourse.
It opened 4 new hypermarket complexes during the period,
bringing its total to 327 as of end-June. Of the total, 45
percent are in third-tier cities, and 21 percent in fourth-tier
cities while 28 percent are in first and second-tier cities.
The company also launched its website in January, aiming to
drive sales further through e-commerce. It competes with
Wal-Mart Stores Inc and local rivals including China
Resources Enterprise Ltd.
(1 US dollar = 6.1531 Chinese yuan)
(Reporting by Donny Kwok; Editing by Edwina Gibbs)