On September 19, according to data from the Hong Kong Stock Exchange, on September 14, Huang Guangyu and Du Juan, the major shareholders of Gome Retail Holdings Co., Ltd. (Gome Retail, 0493.HK), reduced their holdings by 1.439 billion shares, and shareholders Henghai Investment Co., Ltd. (Ever Ocean Investments Limited (hereinafter referred to as “Henghai Investment”) and Gome Management Limited (hereinafter referred to as “Gome Management”) reduced their holdings by 1.298 billion shares, with a total reduction of approximately 2.737 billion shares and approximately HK$531 million.
According to the 2021 annual report of Gome Retail, Huang Guangyu is the founder of Gome and a major shareholder of Gome Retail, a listed company of Gome Group. Du Juan is Huang Guangyu’s spouse. Both Henghai Investment and Gome Management are wholly and beneficially owned by Huang Guangyu.
It is worth noting that on September 14, due to the freezing of some shares of Gome Retail, the stock price fell all the way after the opening. As of the close of the day, it was reported at HK$0.19, down 21.81%.
On September 13, Beijing Zhongguancun Science and Technology Development (Holding) Co., Ltd. (Zhongguancun, 000931.SZ) announced that Gome, as a concerted actor of Zhongguancun’s controlling shareholder Gome Group, holds 7.37% of the company’s shares. As of September 8, 2022, 4.62% of the Zhongguancun shares held by the above-mentioned shareholders and their concerted actors have been judicially frozen;
On September 14, a reporter from The Paper called Zhongguancun Securities Agency as an investor. The staff said that some of the shares held by Gome, the controlling shareholder of Gome Group, who acted in concert, had been judicially re-frozen and waiting to be frozen. Not sure, the latest progress will be announced in time.
According to the China Securities Journal, regarding the re-freezing of some Zhongguancun shares held by Gome, Fang Wei, senior vice president of Gome Retail, responded that the company’s production and operation are normal. Regarding the freezing of shares held by Gome, the group has contacted the relevant parties. Bank docking can be resolved soon, and the company is also actively communicating with investors.
Gome Retail is a listed company under Gome Group and was listed on the Hong Kong Stock Exchange in July 2004. Founded by Huang Guangyu in 1987, Gome has developed into a comprehensive product and service provider integrating retail, Internet, finance, R&D and manufacturing, real estate, investment and other business sectors.
According to data from the Hong Kong Stock Exchange, since the beginning of this year, the majority shareholder Huang Guangyu and his wife have reduced their holdings many times. After the last reduction on December 22 last year, Huang Guangyu and his wife held 20.584 billion shares of Gome Retail. As of September 19, data from the Hong Kong Stock Exchange showed that Huang Guangyu and his wife held 15.375 billion shares of Gome Retail.
The 2021 annual report means that Huang Guangyu and Du Juan, the major shareholders of Gome Retail, have reduced their holdings of Gome Retail by more than 5 billion shares since the beginning of this year.
In the first half of this year, Gome’s retail revenue was 12.109 billion yuan, a year-on-year decrease of 53.46%; the net loss attributable to the parent company was 2.966 billion yuan, and the loss increased by 50.24% year-on-year. In 2021, Gome Group will achieve revenue of 46.484 billion yuan, a year-on-year increase of 5.36%. The net loss attributable to the parent was 4.402 billion yuan, a year-on-year decrease of 37.06%.
Previously, several platforms under Gome Retail were exposed to business contraction, layoffs, salary delays, etc. The relevant person in charge of Gome Group responded to the surging news reporter that Gome Retail did not owe wages or social security provident funds, but it did not rule out that it plans to implement a staff reduction plan due to operational difficulties.
On the evening of August 19, Huang Guangyu, founder of Gome Holdings Group, issued an open letter saying that Gome Retail will focus on its main business, get rid of the burden, and go into battle lightly. According to the open letter, the projects and assets divested from listed companies will be based on the strategic layout of “home and life”, relying on other capital platforms under the group to carry out focused restructuring and rapid and pragmatic progress, and for future preparations that can be suspended and affect cash flow non-profitable projects, sold or closed and transferred.
In February 2021, Huang Guangyu proposed a development goal to the management team: “Strive to use the next 18 months to restore Gome to its original market position.” Huang Guangyu said in this open letter that time changes and the situation is easy. We did not anticipate the difficulties of implementation, and coupled with the disturbance of the epidemic, there is a certain gap between the reality and this goal. We calmly accept the doubts and criticisms from the outside world, and we will actively listen to, seriously review, and continuously correct the strategy and implementation path, and avoid detours.
Huang Guangyu also put forward new development goals, “As a major shareholder, I will promote the management team to realize the promise of better performance in the future, and realize the three-year strategic development goal of ‘1+1+1’: to achieve a higher level in 2023. Profit and reach the highest level in the past, reaching the best level in history in 2024, and significantly surpassing the best level in history in 2025.”
Huang Guangyu said that it took Gome more than two years to build the infrastructure for the entire retail ecosystem. During the process of implementation, due to the impact of the epidemic, the launch time was delayed by about a year compared to the original plan. Therefore, it is planned to use the “1+1+1” three years to further promote the implementation of this model in three steps.
As of press release on September 20, Gome Retail reported HK$0.166, down more than 5%. It has fallen more than 75% year-to-date.