Yesterday Suning Appliance (002024, closing price of 10.75 yuan) fell 4.44%, setting its biggest decline since January 21 this year, ranking the fourth place in the list of Shanghai and Shenzhen stock markets. This performance may be related to the three quarterly reports it issued. "Daily Economic News" reporter found that after deducting the maximum non-recurring gains and losses, the company's net profit growth in the third quarter has been negative, and the most direct reason is the sudden increase in company expenses.
Single-quarter net profit growth declines
Suning Appliance announced on October 29 that the three quarterly reports showed that its first three quarters realized revenue of 67.625 billion yuan, an increase of 24.54%, and a net profit of 3.422 billion yuan, an increase of 21.03%, and earnings per share of 0.4892 yuan. Data show that Suning Appliance achieved net profit of 1.123 billion yuan, 1.352 billion yuan, and 948 million yuan respectively in the first to third quarters of this year, and the year-on-year growth rates were 27.05%, 24.05%, and 10.94%, respectively. The growth in the third quarter was sluggish.
Even more shocking is that as Suning Appliance increased its shareholding in Japan's LAOX Co., Ltd. in the third quarter, its shareholding ratio rose from 34.28% to 51%, and LAOX Co., Ltd. has also changed from an original joint venture into a holding subsidiary. According to the provisions of the Accounting Standards for Business Enterprises, for a business combination achieved through multiple transactions and step by step, in the consolidated financial statements, the company holds a 34.28% stake in LAOX Co., Ltd. held prior to the acquisition date (August 31, 2011). The fair value of the equity on the purchase date is re-measured. The difference between the fair value and the book value is included in the investment income of the current period, and the related gains of this portion of the equity are approximately 181 million yuan. After deducting all non-recurring gains and losses, Suning Appliance's net profit growth rate should be -9% in the third quarter alone.
This may also be the logic of the market voting with their feet yesterday.
Third-quarter costs increased by 50% year-on-year
Why did Suning Appliance, known for its "steadfast stability and stability", experience large fluctuations in its third-quarter results? The Daily Economic News reporter noticed that the company’s mastermind is a substantial increase in expenses. According to the disclosure, Suning Appliance's sales expenses and management expenses for the third quarter were 2.711 billion yuan and 530 million yuan respectively. In the third quarter of last year, these figures were only 1.802 billion yuan and 319 million yuan, a sharp increase of 50.44% year-on-year. 66.14%, its sales, management, finance and other expenses rate figures have reached a historical high since 2008.
"The sharp increase in costs is unexpected," said a securities firm researcher in Guangzhou. The increase in costs is mainly due to the increase in the number of new stores opened. As prices rise, the cost of new stores rises. The company has implemented a series of compensation adjustment measures. The increase in costs; the use of office buildings at headquarters, and the increase in expenses associated with personnel and office expenses. The source said that from the company's plan, the future will use more money, this year's performance may also be Suning Appliance's expected level of 20% to 25%.
The Suning Appliance Office Secretary Miss Sun told Daily Economic News that with the maturity of personnel and stores, the company’s expense rate will not continue to rise. There will be a series of sales activities in the fourth quarter. It will be better.
Single-quarter net profit growth declines
Suning Appliance announced on October 29 that the three quarterly reports showed that its first three quarters realized revenue of 67.625 billion yuan, an increase of 24.54%, and a net profit of 3.422 billion yuan, an increase of 21.03%, and earnings per share of 0.4892 yuan. Data show that Suning Appliance achieved net profit of 1.123 billion yuan, 1.352 billion yuan, and 948 million yuan respectively in the first to third quarters of this year, and the year-on-year growth rates were 27.05%, 24.05%, and 10.94%, respectively. The growth in the third quarter was sluggish.
Even more shocking is that as Suning Appliance increased its shareholding in Japan's LAOX Co., Ltd. in the third quarter, its shareholding ratio rose from 34.28% to 51%, and LAOX Co., Ltd. has also changed from an original joint venture into a holding subsidiary. According to the provisions of the Accounting Standards for Business Enterprises, for a business combination achieved through multiple transactions and step by step, in the consolidated financial statements, the company holds a 34.28% stake in LAOX Co., Ltd. held prior to the acquisition date (August 31, 2011). The fair value of the equity on the purchase date is re-measured. The difference between the fair value and the book value is included in the investment income of the current period, and the related gains of this portion of the equity are approximately 181 million yuan. After deducting all non-recurring gains and losses, Suning Appliance's net profit growth rate should be -9% in the third quarter alone.
This may also be the logic of the market voting with their feet yesterday.
Third-quarter costs increased by 50% year-on-year
Why did Suning Appliance, known for its "steadfast stability and stability", experience large fluctuations in its third-quarter results? The Daily Economic News reporter noticed that the company’s mastermind is a substantial increase in expenses. According to the disclosure, Suning Appliance's sales expenses and management expenses for the third quarter were 2.711 billion yuan and 530 million yuan respectively. In the third quarter of last year, these figures were only 1.802 billion yuan and 319 million yuan, a sharp increase of 50.44% year-on-year. 66.14%, its sales, management, finance and other expenses rate figures have reached a historical high since 2008.
"The sharp increase in costs is unexpected," said a securities firm researcher in Guangzhou. The increase in costs is mainly due to the increase in the number of new stores opened. As prices rise, the cost of new stores rises. The company has implemented a series of compensation adjustment measures. The increase in costs; the use of office buildings at headquarters, and the increase in expenses associated with personnel and office expenses. The source said that from the company's plan, the future will use more money, this year's performance may also be Suning Appliance's expected level of 20% to 25%.
The Suning Appliance Office Secretary Miss Sun told Daily Economic News that with the maturity of personnel and stores, the company’s expense rate will not continue to rise. There will be a series of sales activities in the fourth quarter. It will be better.
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