SYS-CON MEDIA Authors: Carmen Gonzalez, Sean Houghton, Glenn Rossman, Ignacio M. Llorente, Xenia von Wedel

News Feed Item

Sun Art Retail Achieves Profitable Growth in 2013



Record high of 50 new stores, increasing market leading position
Developing www.feiniu.com to become a multichannel retailer
A dividend of HK$ 0.28 per share was recommended, compare to HK$ 0.12 per share in 2012


Hong Kong, Mar 3, 2014 - (ACN Newswire) - Sun Art Retail Group Limited ("Sun Art Retail" or the "Group"; stock code: 6808), a leading hypermarket operator in China, has today announced its 2013 annual results. Turnover, profit margins and net profit have all improved over last year.

For the year ended 31 December 2013, the Group's year-on-year turnover increased 10.7% to RMB86,195 million. Profit attributable to equity shareholders of the company increased by 15.2% to RMB2,775 million. Basic earnings per share amounted to RMB0.29. The Board has recommended the payment of a final dividend of HK$ 0.28 per ordinary share, subject to the approval of the shareholders.

Gross profit surged 15.3% to RMB18,613 million. Gross profit margin rose to 21.6%, an increase of 0.9 percentage points, reflecting improvements in product mix and further purchasing common negotiations (the banners negotiated together 40% of the Group's buying turnover in 2013).

Operating margin and net profit margin also rose to 4.8% and 3.4% respectively thanks to the effective cost control resulting from store level initiatives to improve our productivity and energy costs.

The Group maintained a healthy financial position. As at 31 December 2013, its gearing ratio stayed at 0.61, identical to last year. Cash flow generated from operating activities was RMB 6,994 million, an increase of 25.3%. Inventory turnover days dropped to 58 days.

Mr. Bruno Robert Mercier, the Chief Executive Officer and Executive Director of the Group commented, "During 2013, China's economy maintained steady growth with gross domestic product for the whole year growing by 7.7%. Nevertheless, changes emerged in consumer behavior. Luxury consumption such as premium tobacco and high end alcohol suffered set-backs while online retail continued to grow at a high rate.

"Our cost control has been outstanding through efficient management. We opened a record 50 stores and in response to market changes we have set up a new e-commerce arm to tap into online shopping, another growth opportunity in the coming years. These initiatives will further strengthen the Group's leading position in the retail market." Mr. Mercier added.

For the year 2013, the Group's turnover from sales of goods rose 10.6% to RMB83,958 million primarily attributable to its continuous business expansion with the opening of new stores along with same store sales growth ("SSSG")of 2.0%.

Besides, Sun Art Retail recorded a RMB2,237 million turnover from rental income, an increase of 16.8%. This increase was primarily attributable to the rise in rentable area from new stores and an increase in rental income from existing stores as a result of better management of tenant mix.

Opened 50 new stores and 160 sites secured

In 2013, the Group continued to steadily open new stores. During the year, it opened 50 hypermarket complexes, of which 5 were under the Auchan banner and 45 were under the RT-Mart banner, covering first-tier to fifth-tier cities. At the same time, the Group continued to proactively seek opportunities to open new stores. It had identified and secured 160 sites to open hypermarket complexes, of which 99 were under construction, ensuring sufficient sites reserves for the Group's turnover growth in the next three years and laying a solid ground for the Group's development in the medium term.

As of 31 December 2013, the Group had a total of 323 hypermarket complexes across the country, with a total gross floor area of approximately 8.93 million square meters.

Optimization of Procurement and Merchandise Mix
To better grasp opportunities arising from changes in consumer demand, Sun Art Retail continuously enriched its product lines and improved merchandise differentiation. It also fostered the development of its own "Big Thumb," "RT-Mart" and "Auchan" brands, other exclusive brands and self-manufactured merchandise, all of which generated higher profit margins.

Successfully launched E-Business platform: www.feiniu.com
During the period under review, the Group established Uitox E-commerce (Shanghai) Co. Limited as one of Sun Art Retail's e-commerce business platforms. Uitox set up the web-site www.feiniu.com and its merchandise and logistics distribution system by December 2013. Trial operations were initially opened to internal staff of the Group and member registration in Shanghai was gradually rolled out. The number of registered members reached 182,000 by year end, and the number of items available on-line rose to 100,000. The site www.feiniu.com officially commenced operations on 16 January 2014.

Optimization of Supply Chain Management & Operating Efficiency
As the store network expanded and distribution efficiency was enhanced, the South China and Northeast China distribution centres of RT-Mart banner commencing operation at the end of 2011 had achieved profitability, providing greater support for regional development. During the year construction commenced on the Chibi distribution centre in Hubei province for future distribution in Central China with operations expected to start in October 2014. Besides, the Auchan banner East China Logistics Center started operating in August 2013.

Information technology teams continued to provide more tools for simplifying procedures and eliminating paperwork delivering efficiency improvements in operations and office management, for instance, the "E-catalogue," "DM (direct mail) merchandises stock-keeping system and "Electronic direct mail" (EDM).

Mr. Mercier concluded "Looking ahead, we will continue to maintain steady new store expansion by leveraging the opportunities arising from accelerating urbanization and prudently selecting the location of new stores to ensure their quality. We will also devote efforts to reduce our costs by optimizing processes, stepping up training, and improving logistic, distribution and information technology systems to enhance staff productivity and effectiveness across the entire supply chain. Focused on the consumer needs, we will improve our product mix, develop aggressively our own brand products, increase the proportion of direct procurement, and impose strict product quality and safety controls in particular on all food products. Lastly, we will continue to improve and develop our e-commerce business, enhance our customers shopping experience and explore new shopping channels."

About Sun Art Retail Group Limited

Sun Art Retail is a leading hypermarket operator in China. Sun Art Retail operates its hypermarket business under two recognized banners - "Auchan" and "RT-Mart". As of 31 December 2013, Sun Art Retail had a nationwide footprint of 323 hypermarket complexes across 26 out of 31 provinces, autonomous regions and municipalities in China. The e-commerce business platform of Sun Art Retail: www.feiniu.com officially commenced operations on 16 January 2014.

Source: Sun Art Retail Group Limited

Contact:
Strategic Financial Relations Limited
Veron Ng        (852) 2864 4831         [email protected]
Brenda Chan     (852) 2864 4833         [email protected]
Agnes Luo       (852) 2864 4851         [email protected]





Copyright 2014 ACN Newswire. All rights reserved.

More Stories By ACN Newswire

Copyright 2008 ACN Newswire. All rights reserved. Republication or redistribution of ACN Newswire content is expressly prohibited without the prior written consent of ACN Newswire. ACN Newswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
“DevOps is really about the business. The business is under pressure today, competitively in the marketplace to respond to the expectations of the customer. The business is driving IT and the problem is that IT isn't responding fast enough," explained Mark Levy, Senior Product Marketing Manager at Serena Software, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete...
“We help people build clusters, in the classical sense of the cluster. We help people put a full stack on top of every single one of those machines. We do the full bare metal install," explained Greg Bruno, Vice President of Engineering and co-founder of StackIQ, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The cloud is becoming the de-facto way for enterprises to leverage common infrastructure while innovating and one of the biggest obstacles facing public cloud computing is security. In his session at 15th Cloud Expo, Jeff Aliber, a global marketing executive at Verizon, discussed how the best place for web security is in the cloud. Benefits include: Functions as the first layer of defense Easy operation –CNAME change Implement an integrated solution Best architecture for addressing network-l...
Mobile commerce traffic is surpassing desktop, yet less than 20% of sales in the U.S. are mobile commerce sales. In his session at 15th Cloud Expo, Dan Franklin, Segment Manager, Commerce, at Verizon Digital Media Services, defined mobile devices and discussed how next generation means simplification. It means taking your digital content and turning it into instantly gratifying experiences.
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, p...
Leysin American School is an exclusive, private boarding school located in Leysin, Switzerland. Leysin selected an OpenStack-powered, private cloud as a service to manage multiple applications and provide development environments for students across the institution. Seeking to meet rigid data sovereignty and data integrity requirements while offering flexible, on-demand cloud resources to users, Leysin identified OpenStack as the clear choice to round out the school's cloud strategy. Additional...
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com...
Verizon Enterprise Solutions is simplifying the cloud-purchasing experience for its clients, with the launch of Verizon Cloud Marketplace, a key foundational component of the company's robust ecosystem of enterprise-class technologies. The online storefront will initially feature pre-built cloud-based services from AppDynamics, Hitachi Data Systems, Juniper Networks, PfSense and Tervela. Available globally to enterprises using Verizon Cloud, Verizon Cloud Marketplace provides a one-stop shop fo...
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover ...
The move in recent years to cloud computing services and architectures has added significant pace to the application development and deployment environment. When enterprise IT can spin up large computing instances in just minutes, developers can also design and deploy in small time frames that were unimaginable a few years ago. The consequent move toward lean, agile, and fast development leads to the need for the development and operations sides to work very closely together. Thus, DevOps become...

ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ --  IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's

"Our premise is Docker is not enough. That's not a bad thing - we actually love Docker. At ActiveState all our products are based on open source technology and Docker is an up-and-coming piece of open source technology," explained Bart Copeland, President & CEO of ActiveState Software, in this SYS-CON.tv interview at DevOps Summit at Cloud Expo®, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Media announced today that Aruna Ravichandran, VP of Marketing, Application Performance Management and DevOps at CA Technologies, has joined DevOps Journal’s authors. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Aruna's inaugural article "Four Essential Cultural Hacks for DevOps Newbies" discusses how to demonstrate the...