Equity Analysis /
Hong Kong

HK : GOME Retail Holdings - Transformation results require time

    Lei Yang
    Lei Yang

    Research Analyst

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    CGS-CIMB
    8 April 2021
    Published byCGS-CIMB

    Gome reported FY20 revenue of Rmb44bn, down 25.8% yoy, and a net loss of Rmb7.0bn, an increase from a net loss of Rmb2.6bn in FY19, below our expectation, because of lower revenue and margins. We believe there is potential for Gome’s sales to recover in FY21F to the FY19 level, but the margin recovery will take more time, as we expect Gome to invest more in business transformation and online promotions. Reiterate Reduce with a lower DCF-based TP of HK$0.44.