By Donny Kwok
HONG KONG, March 18 China's largest hypermarket
chain, Sun Art Retail Group Ltd, said on Monday it
plans to open more than 50 new stores in China this year as it
increasingly taps growth in less developed cities.
Sun Art's expansion comes as foreign rivals such as
Carrefour SA and Wal-Mart Stores Inc. have
shut down stores in China, while other retailers such as
Britain's Tesco Plc and Germany's Metro AG
are slowing their mainland growth plans.
"Sun Art's same-store sales growth has consistently
outperformed its peers," Nice Wang, an analyst from Yuanta
Securities, wrote in a research note.
"Effective cost controls have limited the margin dilution
effects from new store openings," Wang said.
Sun Art, a joint venture between Taiwan conglomerate Ruentex
Group and privately held French retailer Groupe Auchan SA
, said it aimed to boost its market share this year by
0.5 percentage points from 13.6 percent at the end of 2012.
"We aim to open more than 50 stores in China this year, with
a similar pace in the next few years," Peter Huang, Sun Art's
executive director, told a news conference.
China's hypermarket industry will be valued at 911 billion
yuan in 2015, and the industry is seen expanding at a compound
annual growth rate of 15.4 percent between 2010 and 2015, Yuanta
Hong Kong-listed Sun Art entered the China market in 1998,
three years after Wal-Mart, but overtook the U.S. behemoth in
2010 and has extended its lead since.
Sun Art opened 43 new hypermarkets last year, bringing its
total to 273 hypermarkets in mainland China at the end of 2012.
On Sunday, Sun Art posted a 50.6 percent rise in its 2012
net profit due to retail network expansion into lower-tier
Chinese cities even as an economic slowdown weighed on consumer
The company, which sells mostly food, groceries and home
appliances at its hypermarkets, said at an earnings press
conference on Monday it aims to achieve same store sales growth
of China inflation, plus 2 percentages this year.
The company's shares were down 3.7 percent at the midday
break on Monday, a day after the earnings were announced,
lagging a 2 percent drop in the benchmark Hang Seng Index