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MarketScreener Homepage  >  Equities  >  SHENZHEN STOCK EXCHANGE  >  Suning.Com Co Ltd    002024   CNE000001KF2

SUNING.COM CO LTD (002024)
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China retailers slash iPhone prices after Apple sales warning

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01/11/2019 | 06:14am EST
FILE PHOTO: A new iPhone X is sold at an Apple Store in Beijing

SHANGHAI (Reuters) - Several Chinese electronics retailers including Alibaba-backed Suning and JD.com have slashed iPhone prices this week, after Apple recently blamed poor sales of the smartphone in the country for a rare revenue warning.

The discounting, as steep as $118 (92.50 pounds) for the recently launched 64GB iPhone XR, is the latest sign that Apple's weak holiday sales in China may have extended to the current quarter.

The price cuts on iPhones by Chinese retailers began in the middle of this week, with at least six offering promotions this weekend, according to checks done by Reuters.

Apple did not respond to requests for comment. Prices for iPhones sold through its Chinese website remained unchanged.

Such widespread price cuts are not uncommon around shopping festivals like Single's Day in November, but these cuts stand out as they affect Apple's latest XS and XR models that were released only months ago, said Mo Jia, a Canalys analyst who tracks China's smartphone industry.

Jia believes Apple itself could have lowered prices of the phones it ships to distributors, or that distributors may have slashed rates in order to move more units.

"It's possible Apple wants to test the market's feedback if it brings down the channel prices. Or, Apple might be under pressure to clean out its stock of iPhones," he said.

Apple has been trailing local competitors such as Huawei Technologies Co Ltd [HWT.UL] that offer cheaper options in China, home to the world's biggest smartphone market in terms of shipment volume.

Last week, Apple issued its first revenue warning in nearly 12 years, citing poor Chinese demand, sending its shares down 10 percent, their biggest intra-day fall in six years.

STEEP DISCOUNTS

Suning announced on Friday that it would start selling the 64GB iPhone XR for 5,699 yuan, 800 yuan ($118.46) less than the device's sticker price in China. It is also selling the 64GB version of the iPhone 8 for 3,899 yuan, a 1,200 yuan discount.

JD.com, a major online seller of consumer electronics, is offering promotions on models going back to the 8 series. Dangdang, one of its rivals, has launched a similar campaign.

Brick-and-mortar retailer GOME Retail Holdings has discounted a range of iPhone models, while several authorized Apple resellers on Tmall, a marketplace run by e-commerce giant Alibaba, are set to offer discounts on Sunday.

Qian Chao, a district manager for Shanghai-based iPhone distributor DoubleRise Beijing Technology, said it was the company's decision to make the price cuts and that it had not received any official notice from Apple.

Apple's China woes come against the backdrop of a broader slowdown in demand for gadgets across the tech sector as the country's economic growth slows, exacerbated by Beijing's festering trade war with the United States.

According to government data, smartphone shipments dropped 15.5 percent annually in the country in 2018. Domestic Chinese brands, meanwhile, have won over local consumers with a wide range of devices at competitive price points.

(Reporting by Josh Horwitz and Shanghai newsroom; Editing by Brenda Goh and Himani Sarkar)

By Josh Horwitz

Stocks mentioned in the article
ChangeLast1st jan.
ALIBABA GROUP HOLDING 2.62% 154.84 Delayed Quote.12.96%
APPLE 1.22% 154.94 Delayed Quote.-1.78%
GOME RETAIL HOLDINGS LTD 0.00% 0.65 End-of-day quote.-75.38%
JD.COM 0.36% 22.33 Delayed Quote.6.69%
SUNING.COM CO LTD --End-of-day quote.
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Financials (CNY)
Sales 2018 244 B
EBIT 2018 1 349 M
Net income 2018 8 211 M
Finance 2018 22 879 M
Yield 2018 2,31%
P/E ratio 2018 14,77
P/E ratio 2019 39,10
EV / Sales 2018 0,32x
EV / Sales 2019 0,27x
Capitalization 101 B
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 15
Average target price 15,9  CNY
Spread / Average Target 46%
EPS Revisions
Managers
NameTitle
En Long Hou President
Jin Dong Zhang Chairman
Xiao Ling Wang Chairman-Supervisory Board
Zhong Xiang Xiao Chief Financial Officer
Wei Min Sun Vice Chairman
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