(Yicai Global) Nov. 9 -- This afternoon, near the close of markets, Suning.Com refuted a rumor that a retailers’ cooperative has bought a majority stake in the struggling Chinese chain store. The rumor has driven the firm’s stock up by the exchange-imposed limit for two days running.

Suning’s share price [SHE:002024] closed up 5.2 percent at CNY2.02 (USD0.28), giving it a market valuation of CNY18.8 billion (USD2.6 billion). Yesterday the stock also surged by 5 percent, which is the maximum daily fluctuation for firms at risk of being delisted, as opposed to the usual 10 percent.

Suning has checked with shareholders holding 5 percent or more of the company’s equity and can confirm that the acquisition rumor is not true, the Nanjing-based firm said today.

A retailers’ cooperative has bought 39 percent of Suning.com to become its largest shareholder and will actively develop its online and brick-and-mortar sales channels, some online media outlets said yesterday.

As of Sept. 30, Suning’s largest shareholder was e-commerce giant Alibaba Group Holding's software arm Taobao China Software with a 19.99 percent stake, according to data from Wind Information.

Suning, which was part of a CNY8.8 billion (USD1.2 billion) government-led bailout last July, is still hemorrhaging cash. The firm racked up losses of CNY4.5 billion (USD621 million) in the first three quarters, although this was a narrowing of 40 percent from a year earlier, according to its latest earnings report. It logged revenue of CNY55.5 billion over the period.

Suning had overdue debts of CNY32.9 billion (USD4.9 billion) as of the end of last year, so there are uncertainties regarding its ability to maintain sustainable operations, audit agency Pricewaterhouse Coopers said earlier. The stock lost almost 70 percent of its value between June 2021 and June this year, because of its poor performance.

Suning’s financial crisis is largely due to overaggressive expansion – the company bought an 80 percent stake in hypermarket chain Carrefour China in September 2019 – and the fallout from the Covid-19 pandemic which greatly reduced footfall at its brick-and-mortar outlets.

Editor: Kim Taylor