Suning Suffers 140% Net Profit Decrease in 2020

According to Suning's 2020 annual financial report, its operating revenue decreased by 4% year-on-year suffering a 140% net profit decrease. However, the scale of commodity sales increased by 9.92% year-on-year, with online commodity sales accounting for nearly 70%.

Suning generated operating revenue of CNY 258.45 billion, a year-on-year decrease of 4%; the scale of commodity sales was CNY 416.31 billion, a year-on-year increase of 9.92%; the net profit loss attributable to the shareholders of the listed company was CNY 3.91 billion, a year-on-year decrease of 139.75%.

Suning stated that that the company is focused on the commodity retail and service business. In 2020, the sales volume of online platform products reached CNY 290.33 billion, up 21.6% year-on-year, accounting for nearly 70% of the total sales volume. It is reported that through the development of social marketing such as Suning twitter, store live broadcast and Su Xiaotuan, the online sales scale brought by social operation of stores increased by 145.7%, year-on-year in 2020.

In 2020, the retail cloud business witnessed rapid growth, with the opening of 3201 new stores throughout the year and the proportion of non-electric goods on the open platform increased to 86.81%. In the fourth quarter of 2020, Suning's active buyers increased by 52% year-on-year.

According to the company, in 2020 it carried out a series of cost reduction and efficiency enhancement and business focus work. It is expected that the sales scale will achieve steady growth in 2021 and the net profit excluding non-recurring profit and loss will be significantly improved.

On February 25, Suning announced that the actual controller, controlling shareholder Zhang Jindong and shareholder Suning Electric would transfer 20% – 25% of the shares of the company, and the transferee might be a state-owned enterprise in Jiangsu or Guangdong Province. According to the proportion of shares to be transferred, it is expected that changes in the company's control rights may be involved.

After the change of controlling shares, it is still unknown how Suning will develop according to the plan in the future.