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Retail group Sun Art posts mixed first-half results

Hong Kong-listed retail group Sun Art has posted revenues of RMB50.06 billion (US$7.322 billion) for the first half year.

Profit attributable to shareholders reached RMB1,758 million (US$257.1 million), a figure closely matching the same period last year.

The gross profit margin for the six month period was 23.9 per cent, representing an increase of 0.6 percentage points year on year. The group said the margin increase reflected the group’s continuous leverage on economies of scale to make improvements to its business.

Sun Art’s principal business is operating hypermarkets and e-commerce platforms in Mainland China. It opened 11 new stores during the financial reporting period, leading to stronger sales.

Negative same-store sales growth for this year’s first half was attributed to competition in the retail industry and the development of multi-channel shopping environments, providing customers with diversified shopping methods, which impacted the business of the traditional hypermarket.

“After the strategic alliance with Alibaba Group, various business co-operations have been launched,” the company said in its half-year report. “By introducing the items which are popular online in our hypermarkets, the group improved choices to better satisfy our customers.

“Meanwhile, with the deployment of the Taoxianda projects and the additional traffic obtained from the Taobao app, the group was able to serve more customers through its O2O business within the catchment area of the hypermarkets. We expect that these integrations of both parties’ advantages will enable us to expand our market share and improve our sales.”

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