(Yicai Global) April 1 -- Chinese electronics retailer Gome Retail Holdings' net loss last year narrowed sharply from about CNY4.9 billion (USD690 million) the year before to some CNY2.6 billion, the financial report the firm released yesterday shows, citing reduced operating expenses.

Gome shares [HK: 0493] traded 2.78 percent down at HKD0.70 (9 US cents) in mid-afternoon.

The company continued to push its strategic transformation, and this affected its conventional businesses. Sales revenue was around CNY59.5 billion in a 7.57 percent annual drop. Its overall gross profit was about CNY10.7 billion, basically flat on a yearly basis. Operating expenses were some CNY11.7 billion in an almost 24 percent slide. Financial costs were around CNY2 billion, much higher than the CNY861 million in the prior year.

Sales revenue of the firm's 1,308 comparable stores was roughly CNY50 billion in a 4.45 percent annual contraction, while that of the four regions of Beijing, Shanghai, Guangzhou and Shenzhen made up about 32 percent of the total, as against 33 percent the year before.

Comparable stores are those with historical data that can be compared with the previous year. Stores newly established in a given year are not included because they lack such a historical reference.

The company's sales revenue fell in first-tier cities, while the proportion from rural stores rose from just over 4 percent to 7 percent of overall revenue. New business segments, including cabinets and appliances and home improvement and household income, rose from 4.7 percent in the same period last year to nearly 9 percent this year. Gome Retail expects these businesses to grow more in future and will drive the company's overall revenue growth.

Gome Retail reported sufficient funds and cash, and cash equivalents of approximately CNY8.2 billion as of the end of the period.

Gome did not elaborate on the impact of the recent Covid-19 pandemic in its annual report but will accelerate the creation of 100 franchise stores with sales of over CNY100 million (USD14.1 million) this year, it said.

Editor: Ben Armour