Thu, Feb 08, 2018 - Page 12 News List

PChomestore shares fall after earnings drop

By Lauly Li  /  Staff reporter

PChomestore Inc (商店街) shares yesterday fell 1.62 percent as the company reported its largest-ever losses per share of NT$43.25 for last year due to competition from Shopee Taiwan Co (樂購蝦皮).

PChomestore, a subsidiary of PChome Online Inc (網路家庭), on Tuesday night released its earnings for last quarter, recording its biggest quarterly net loss of NT$1.1 billion (US$37.58 million), or losses per share of NT$27.6.

With the fourth-quarter results, the company rounded out last year with an annual net loss of NT$1.06 billion, or losses per share of NT$43.25.

It was PChomestore’s first annual net loss since the company was listed on the Taipei Exchange in 2011.

The company will report the bleak results to shareholders at its annual general meeting in April, as the net loss exceeded the firm’s paid-in capital of NT$344.45 million.

“The net loss was mainly due to increased marketing expenses, which we considered PChome group’s largest investment in years,” PChomestore said in a statement.

To compete with Singapore-based Shopee in the local market, PChomestore early last year reduced its minimum purchase for free delivery from NT$199 to NT$99 and then entirely scrapped it in August in a bid to aggressively expand its market position.

The company then stepped up its free delivery policy from package collections at more than 8,200 convenience stores nationwide to home delivery in December last year, with all of the logistics costs categorized as marketing expenses.

PChomestore organized a concert and live-streamed shows to boost transactions during the Singles’ Day and the Double Twelve shopping festivals in November and December last year respectively, causing its overall marketing expenses to balloon to more than NT$700 million in the October-to-December quarter, compared with NT$37.44 million in the same period in 2016, filings with the Taiwan Stock Exchange showed.

The investment in marketing last quarter helped boost its gross merchandise value to a record of nearly NT$10 billion, PChomestore said, adding that package collections at convenience stores exceeded 10 million pickups last month alone.

“Our operational scale and business development are largely better than when we were profitable,” PChomestore general manager Su Yun (蘇芸) said in the statement.

Looking ahead, Su said the company would more aggressively invest in its mobile platform to increase customer loyalty and grow its market position.

PChomestore shares yesterday closed at NT$48.7 on the Taipei Exchange, underperforming the TPEX, which climbed 2.34 percent.

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