Suning.com is "treading" on the edge of turning losses into profits.

On the evening of July 12th, Suning.com Group (ST Suning) released a performance forecast for the first half of 2024 (from January 1, 2024, to June 30, 2024), with an expected net profit attributable to shareholders of the listed company ranging from a loss of 50 million yuan to a profit of 45 million yuan in the first half of the year, compared to a loss of 1.93 billion yuan in the same period last year.

The announcement shows that in the first half of the year, Suning.com's net profit attributable to shareholders of the listed company, after deducting non-recurring gains and losses, is expected to be a loss of 500 million yuan to 600 million yuan, compared to a loss of 1.97 billion yuan in the same period last year; the basic earnings per share are expected to be a loss of 0.0054 yuan per share to a profit of 0.0049 yuan per share, compared to a loss of 0.21 yuan per share in the same period last year.

In addition, Suning is expected to achieve profitability in the second quarter. The announcement shows that the net profit attributable to shareholders of the listed company in the second quarter is expected to be a profit of 47 million yuan to 142 million yuan. Suning.com's store sales also improved quarter-on-quarter in the second quarter, with comparable store sales income of home appliance 3C home living specialty stores in mainland China increasing by about 20.1% quarter-on-quarter in the second quarter compared to the first quarter.

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Previously, on June 26th, Suning announced profits for the second quarter and mentioned that the reason for the profits in the second quarter was the company's continuous focus on cost reduction and efficiency improvement, improving corporate management and operational efficiency, bringing about a quarter-on-quarter improvement in floor efficiency and labor efficiency, as well as seizing the "trade-in" industry policy opportunities, and leveraging live broadcasting and instant delivery and other local life platforms as customer acquisition channels. At the same time, Suning.com stated that in the second quarter, it moderately accelerated the opening and image upgrade of stores in core business districts, effectively enhancing store experience and single-store scale.

Whether Suning can emerge from the quagmire of losses has become a key issue. On June 25th, Suning's stock price hit the daily limit down, closing at 1.12 yuan per share, setting a new low for the stock price in the past 52 weeks, just one step away from falling into the "1 yuan zone". On June 26th, with the announcement of the expected profit in the second quarter, Suning's stock price rose by 5.36%, closing at 1.18 yuan per share. For Suning.com, which has been struggling with losses and debts for many years, "turning losses into profits" is obviously the most effective "stimulant" it can inject into investors.

The "profit timeline" has been written into the 2024 goals of Suning's management. In the 2023 annual report, Suning.com clearly stated its development goals for 2024: the company will achieve comprehensive profitability at the operational level.

From the half-year report forecast, it is commendable that compared with the same period last year, Suning.com has achieved a significant reduction in losses, both in net profit and in non-deductible net profit. However, despite the expected single-quarter profit in the second quarter, Suning.com's net profit attributable to shareholders of the listed company, after deducting non-recurring gains and losses, is still expected to be a loss in the first half of the year, and whether the company can achieve "turning losses into profits" in the first half of the year still needs to be questioned.

In the third quarter, how to continue the profitability of the second quarter will also be a challenge for Suning.

From the current initiatives launched by Suning, focusing on the sales of key home appliances and improving the timeliness of delivery and installation may become its direction of effort. On July 3rd, Suning.com announced a joint effort with brands such as Hisense, Skyworth, TCL, Samsung, Konka, and Changhong to increase the "Tens of Thousands of People Grab Color TV" event, with hundred-inch giant screen TVs starting at 7,999 yuan, launching a "price war" for color TVs. At the same time, Suning.com launched the "Color TV Buy Now, Deliver Now, Fastest 2 Hours Delivery" installation service. On July 10th, Suning.com established the "Air Conditioner Busy Special Team", through the collaborative capabilities of warehouses, stores, logistics, and services, to improve the speed of air conditioner delivery and installation. Suning.com stated that Suning.com's air conditioner installation capacity has covered more than 95% of the county-level markets nationwide, and has achieved "same-day delivery, same-day installation" in more than 100 cities.In the future, how to collaborate with home appliance brands to offer more cost-effective products that cater to Suning's customer base, enhance the cost advantages of the supply chain, and improve the efficiency of transportation and installation will become a long-term task for Suning. At the same time, with the development of instant retail, Suning's cooperation with platforms such as Ele.me and Meituan is also deepening. Whether it can open up new sales channels through instant retail and develop more home appliance products that fit the instant retail scenario is also a direction worth paying attention to.

It is worth mentioning that data from the Ministry of Industry and Information Technology shows that the home appliance industry has achieved a relative recovery from January to May. The national production of home refrigerators reached 41.791 million units, a year-on-year increase of 12.1%; the production of room air conditioners reached 128.807 million units, a year-on-year increase of 16.7%; and the production of home washing machines reached 44.954 million units, a year-on-year increase of 9.4%. For Suning.com, the recovery of the home appliance consumer market is a significant advantage on its path to "turning losses into profits." However, Suning.com still needs to continue its efforts in improving operational efficiency, enriching product research and development, and enhancing supply chain efficiency to maintain the growth momentum of the second quarter. The challenges that lie ahead for Suning are still not easy.

On July 12th, the closing price of Suning.com was 1.31 yuan per share, with a total market value of 12.137 billion yuan.