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Shares of Suning.com declined following the announcement that its largest shareholder plans to reduce its stake in the company. The Chinese retailer’s stock closed down 4.8%, trading at CNY1.78 (about 25 US cents). According to regulations on the Shenzhen Stock Exchange, stocks of companies facing operational risks like Suning can fluctuate up to 5% daily, which in this case was rounded to 4.8% due to the low share price.
A subsidiary of a major Chinese tech company will sell up to 263 million shares, representing approximately 2.9% of Suning’s total shares, through centralized bidding and block trading over the next three months starting from the 15th trading day after the announcement, the company revealed yesterday.
The tech giant invested CNY23.8 billion (roughly USD 3.3 billion) to acquire a stake in Suning through its online marketplace platform in 2015, aiming to enhance cooperation between online and offline retail channels.
However, increased competition in the e-commerce sector and various other challenges—including the economic impacts of the COVID-19 pandemic—have put Suning under significant pressure since 2020, resulting in a steep drop in its stock value.
Last year, its online marketplace sold its entire 20% stake in Suning to the management company for CNY2.8 billion (around USD 393.6 million). Based on that sale, the original investment by the tech company has diminished by nearly 90%.
The company’s second-largest shareholder is its founder, Zhang Jindong. In 2021, he reduced his holdings and stepped down as chairman, though he still owns 17.7% of Suning.
From 2020 to 2023, Suning reported cumulative losses of approximately CNY67.9 billion (about USD 9.5 billion). Last year, thanks to one-time asset sales, the company turned a profit of CNY611 million (roughly USD 85.9 million). Without these non-recurring gains, however, it still posted a loss of about CNY1 billion.
In the first half of this year, Suning recorded a net profit of CNY48.7 million (around USD 6.8 million). But when excluding one-time gains and losses, the company faced an operating loss of approximately CNY865 million. During this period, revenue increased slightly by 0.4%, reaching CNY25.9 billion (about USD 3.6 billion).
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