SYS-CON MEDIA Authors: Xenia von Wedel, Peter Silva, Glenn Rossman, Ava Smith, Elizabeth White

News Feed Item

Sun Art Retail's Net Profit Reaches Record High at RMB 1,710 Million in 1H14; Gross Profit Margin Increases to 21.9%



Hong Kong, Aug 13, 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 2014 interim results. For the six months ended 30 June 2014, the Group's turnover increased by 7.9% to RMB48,038 million. Profit attributable to equity shareholders of the company increased by 8.5% to RMB1,710 million. Basic earnings per share amounted to RMB0.18.

Business Highlights

-- Opened four new hypermarket complexes, of which one was under the Auchan banner and three were under the RT-Mart banner
-- Successfully secured 162 sites to open hypermarket complexes, ensuring sufficient sites reserves for the Group's expansion in the next three years
-- Officially launched the web-site feiniu.com. As of 30 June 2014, 750,000 members had registered, of whom 167,000 were active members. The number of self-operated items available for sale on line amounted to 120,000

For the six months ended 30 June 2014, gross profit was RMB10,523 million, an increase of 14.0% from the corresponding period in 2013. The gross profit margin was 21.9% compared to 20.7% for the corresponding period in 2013. The increase in gross profit margin was a result of a greater increase in turnover of 7.9% as compared to the increase in cost of sales of 6.3%, reflecting the Group's ability to leverage the economy of scale to improve the gross profit margin.

Mr. Bruno Robert Mercier, the Chief Executive Officer and Executive Director of the Group commented, "During the first half of 2014, China's economy maintained steady growth with gross domestic product growing 7.4% while total retail sales growth of consumer goods dropped 60 basis points when compared to the same period of last year."

"While labor costs are on an upward trend, we will continue to enhance employees' productivity through training and optimized work processes. In response to market opportunities, we have set up a new e-commerce business. The website feiniu.com officially commenced operations on 16 January 2014. Additionally, Auchan Store APP tool was officially launched on 27 June, in order to enhance the shopping experience at our stores and create a deeper relationship with our customers. Finally we are happy to have opened a 8,000 square meters hypermarket complex in Inter IKEA Wuxi LIVAT, a 230,000 square meters shopping center." Mr. Mercier added.

During the period under review, the Group opened four hypermarket complexes, of which one was under the Auchan banner and three were under the RT-Mart banner. Of the new stores, two were located in Eastern China and two in Southern China. As of 30 June 2014, the Group had a total of 327 hypermarket complexes in China with a total gross floor area ("GFA") of approximately 9.02 million square meters. Approximately 65.4% of the GFA was operated on leased space, 34.0% of the GFA in self-owned properties and 0.6% of the GFA as contracted Stores.

In particular, the above mentioned Wuxi LIVAT store is the first of three such cooperation projects with Inter IKEA, the next ones will be in Beijing and Wuhan.

As of 30 June 2014, the Group's turnover from sales of goods rose 7.5% to RMB46,690 million, primarily attributable to its continuous business expansion with the opening of new stores.

Besides, Sun Art Retail recorded a RMB1,348 million turnover from rental income, an increase of 23.1%. 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.

Store Expansion with 162 sites secured and 102 sites under construction
During the period under review, the Group continued to proactively seek opportunities to open new stores. As of 30 June 2014, through the execution of lease contracts or the acquisition of land parcels, the Group had identified and secured 162 sites to open hypermarket complexes, of which 102 were under construction, ensuring that there were sufficient land reserves for the Group's expansion for the next three years till 2016 and laying a solid ground for the Group's development in the medium term.

Optimization of Procurement and Merchandise Mix
The Group continued to enhance direct sourcing of fruit, vegetables and dried vegetables and fruits. We introduced more quality yet price competitive fresh products to our customers. At the same time, the Group continued to provide a greater variety of choices to our customers including customized mass consumer products ("MCP") as well as own branded products under the Disney license with high quality and "fun" packaging.

Successfully launched E-Business platform: www.feiniu.com
During the period under review, our e-commerce business, so-called feiniu.com was officially launched and the operations commenced on 16 January 2014. Currently the delivery area of feiniu.com covers Shanghai, Jiangsu Province, Zhejiang Province and Anhui Province, and the delivery area is scheduled to be rolled out successively to other areas across the nation till the end of 2014. As of 30 June 2014, 750,000 members had registered, of which 167,000 were active members. The number of self-operated items available for sale on line amounted to 120,000 with the coverage of categories of fast moving consumer goods ("FMCG"), bazaar, electronics, fashion, maternal and child products and imported products. feiniu.com will continue to introduce new items to expand the range of offerings . A 40,000 square meters warehouse dedicated to feiniu.com was opened in Shanghai Qingpu district. Along with the expansion of delivery areas, feiniu.com will establish warehouses in other areas across the nation. The business of feiniu.com is not yet contributing to the Group's net profit.

Optimization of Supply Chain Management & Operating Efficiency
The Auchan banner recruited more new suppliers to integrate into its Taicang warehouse. Chibi distribution center of the RT-Mart banner will commence operations in October 2014.

Mr. Mercier concluded "Building on the steady growth of the economy in China, the Group will continue to have a multi-pronged approach to its development in China: Both RT-Mart and Auchan banners will continue to open stores in more regions in China, either as leased or property projects; we will also make necessary investment in I.T. systems and marketing to enhance the very positive trends we start to see in our on-line business."

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 30 June 2014, Sun Art Retail had a total of 327 hypermarket complexes in China with a total gross floor area ("GFA") of approximately 9.02 million square meters. 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
The 4th International DevOps Summit, co-located with16th International Cloud Expo – being held June 9-11, 2015, at the Javits Center in New York City, NY – announces that its Call for Papers is now open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's large...
"There is a natural synchronization between the business models, the IoT is there to support ,” explained Brendan O'Brien, Co-founder and Chief Architect of Aria Systems, in this SYS-CON.tv interview at the 15th International Cloud Expo®, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
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...
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...
We are all here because we are sold on the transformative promise of The Cloud. But what good is all of this ephemeral, on-demand infrastructure if your usage doesn't actually improve the agility and speed of your business? How must Operations adapt in order to avoid stifling your Cloud initiative? In his session at DevOps Summit, Damon Edwards, co-founder and managing partner of the DTO Solutions, will highlight the successful organizational, process, and tooling patterns of high-performing c...
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from ha...
Software-driven innovation is becoming a primary approach to how businesses create and deliver new value to customers. A survey of 400 business and IT executives by the IBM Institute for Business Value showed businesses that are more effective at software delivery are also more profitable than their peers nearly 70 percent of the time (1). DevOps provides a way for businesses to remain competitive, applying lean and agile principles to software development to speed the delivery of software that ...
Docker offers a new, lightweight approach to application portability. Applications are shipped using a common container format and managed with a high-level API. Their processes run within isolated namespaces that abstract the operating environment independently of the distribution, versions, network setup, and other details of this environment. This "containerization" has often been nicknamed "the new virtualization." But containers are more than lightweight virtual machines. Beyond their small...
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...
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.

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

An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and asse...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Ar...
Technology is enabling a new approach to collecting and using data. This approach, commonly referred to as the "Internet of Things" (IoT), enables businesses to use real-time data from all sorts of things including machines, devices and sensors to make better decisions, improve customer service, and lower the risk in the creation of new revenue opportunities. In his General Session at Internet of @ThingsExpo, Dave Wagstaff, Vice President and Chief Architect at BSQUARE Corporation, discuss the ...