(Yicai Global) Oct. 15 -- Suning.Com’s shares fell after the Chinese e-commerce platform said it expected to have lost as much as CNY4.3 billion (USD668 million) in the third quarter due to low product stocks amid a severe cash shortage.

Suning’s stock price [SHE:002024] ended 4 percent lower today at CNY4.78 (74 US cents). The benchmark Shenzhen Component Index rose 0.5 percent.

The net loss was likely between CNY3.9 billion and CNY4.3 billion in the three months ended Sept. 30, widening from CNY3.5 billion in the first half, the firm said late yesterday. Suning is still at a difficult juncture, it said, adding that managers and shareholders are doing their utmost to get the business back on its feet, but time is needed to achieve results.

Operations are expected to improve this quarter, and the Nanjing-based company will strive to report positive earnings before interest, taxes, depreciation, and amortization at its core 3C products business -- computers, communications, and consumer electronics -- in a single month of the fourth quarter, it said.

Suning started to face cash pressures in June and July, leading to goods shortages, with stocks of 3C products plunging to 30 percent at the end of July. In that month, Suning secured CNY8.8 billion of state investment from Jiangsu province, and on July 12 founder Zhang Jindong stepped down as chairman, leading to a board reshuffle.

Under new leadership, Suning has been actively reviving its business. Cooperation with financial institutions was restored and lenders stabilized the size of its outstanding credit by setting up Suning.Com Joint Credit Committee in August, which actively pushed Bank of Jiangsu and Bank of Nanjing to advance additional credit. These efforts gradually restored Suning’s liquidity, with a slow rebound of product inventory.

Suning also said labor costs fell 35 percent in the third quarter from the second quarter, and 37 percent from a year ago. Rent dropped 13.5 percent from the previous quarter, and 18 percent from 2020 due to changes at loss-making stores, rent reductions, and subletting. Marketing costs fell about 70 percent from the second quarter, and 80 percent from last year’s third quarter.

Last month, Suning’s 3C products business saw gross merchandise volume jump 30 percent from August, it said.

Editor: Futura Costaglione