Gome Retail (00493) expects medium-term net loss to be between 70% and 90% year-on-year

According to the Zhitong Finance App, Gome Retail (00493) issued an announcement. For the six months ending June 30, 2026 (reporting period), the external environment was complicated. Although foreign trade was resilient, domestic demand recovered and weakened, hampering economic growth. The consumer market fell short of expectations, and the downward pressure on the home appliance industry was particularly strong, which was only partially offset by the growth of green smart products. Due to capital restrictions and the reduction in the scale of the retail network, the scale of the Group's business operations has been reduced. According to a preliminary review of the Group's recent management accounts, sales revenue for the reporting period is expected to drop by 30% to 50% compared to RMB 297 million in the same period last year.

Despite this, due to an increase in profits (liquidation and cancellation) and impairment losses on financial assets from disposal of subsidiaries, as well as a reduction in financial guarantees and penalties on overdue financing debts of bankrupt subsidiaries, the Group's losses attributable to owners of the parent company during the reporting period decreased by between 70% and 90% compared to the expected figure of RMB 1,347 billion for the same period last year.

As of June 30, 2026, the total principal amount of the Group's overdue bank and other loans (including bonds payable) was approximately RMB 16.2 billion. The Group is actively discussing (including) changing loan terms or extending loan terms with relevant banks and relevant entities to reach mutually agreed repayment terms.

As of June 30, 2026, the Group was involved in a total of 624 pending litigation cases, involving a total amount of approximately RMB 6 billion, of which the total amount of pending litigation cases involving banks and financial institutions was approximately RMB 4.9 billion.

On June 30, 2026, the Group's funds were frozen totaling approximately RMB 24 million.

In a complex environment where challenges and opportunities coexist, the Group adheres to the mission and vision of “national beauty, family beauty, and beauty of life”, focuses on its main business, continues to push forward reforms and self-help around the three main strategic lines of “debt resolution, asset-light transformation, and new business cultivation”, and has made significant progress in various fields. Furthermore, the Company is evaluating its assets and liabilities and discussing different structures with its advisors in order to arrive at an overall solution to the issues currently faced by the Group (including issues relating to debts, lawsuits and frozen funds described above), and lay a solid foundation for moving on the right track of recovery.