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Lianhua Supermarket Announces 2008 Interim Results.

Article Excerpt
Outstanding Growth in Core Business and Earning Structure Optimized

Turnover, Net Profit and Profit Attributable to Shareholders up 19.8%, 44.2% and 61.8% YOY Respectively

HONG KONG -- Lianhua Supermarket Holdings Co.,Ltd. ("Lianhua Supermarket" or the "Company", together with its subsidiaries the "Group"; HKEx stock code: 980) today announced its unaudited interim results for the six months ended June 30, 2008 (the "Review Period" or the "Period").

Financial and Business Highlights

* Turnover increased 19.8% YOY to approximately RMB 10.74 billion; The gross profit margin continued to maintain a steady growth of 0.7 percentage point to 13.4%. Net profit was RMB 262 million, increased 44.2% YOY. Net profit margin made a record high. Profit attributable to shareholders increased 61.8% to RMB 227 million. Basic earnings per share was RMB 0.36.

* Same store sales of the Group increased significantly, up 13%, among which the growths of hypermarket, supermarket and convenience stores were 12%, 15.2% and 11.4% respectively, a new record high since our listing.

* All the three retail formats achieved satisfactory results. Operating profit of hypermarket segment increased substantially, reaching RMB 80.73 million. Operating profit margin of supermarket was 4.3%, the highest in recent years. Convenience store also experienced stable growth.

* Our retail network continued to expand, 256 newly opened stores comprising 11 hypermarkets, 94 supermarkets and 151 convenience stores. Total numbers of outlets reached 3,848 with 84% of the outlets locate in Eastern China.

* Strong growth in sales and stringent cost control effectively mitigated the impact of the increase in operating costs. During the Period, cost rate (distribution cost plus administrative cost divided by turnover) down 0.4 percentage point YOY.

* The Board declared an interim dividend of RMB 0.1 per share, up 66.7% YOY

Commenting on the financial results for the first half year, Mr. Wang Zhigang, Chairman of Lianhua Supermarket, said, 'In the first half of 2008, the Group actively promoted the "Strong Outlet" strategy and outlets transformation...

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