BRIEF: Gome warns of wider losses amid debt problems

Electronics retailer Gome Retail Holdings Ltd. (0493.HK) warned last Friday that it would report a loss for 2024 that was flat to as much as 20% wider compared to its 10 billion yuan loss in 2023. After excluding losses from non-operating items, the company said it expects to report a 65% reduction in its core operational losses for the year.

Gome also said its revenue fell between 20% and 30% last year from the 647 million yuan it recorded in 2023. It attributed the decline to ongoing debt problems, which have led some key suppliers to suspend deliveries. It also cited its own business streamlining efforts, and China’s weak economy. Lower revenue, along with liabilities tied to some of its subsidiaries in bankruptcy and impairment losses on financial and right-of-use assets, further contributed to the anticipated loss increase.

Gome had 18.7 billion yuan in overdue interest-bearing bank and other loans at the end of last year. The company is also facing 772 pending lawsuits, with total claims amounting to 5.5 billion yuan, while 60 million yuan of its funds remain frozen.

Despite its financial struggles, Gome’s stock rose over 5% in the morning session on Monday, closing up 5.26% at HK$0.02 by the midday break.

By Lee Shih Ta

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