Shares of Gome Electrical Appliances yesterday fell to their lowest in almost three years after the company issued a profit warning for the first quarter.
The stock dropped 11.43 per cent to HK$1.24, the lowest since June 2009, after the company forecast on Monday 'a significant decline in its net profit' for the first quarter.
It attributed the poor performance to lower sales and a loss in its e-commerce business.
Analysts said demand for home appliances on the mainland had cooled since the central government ended a nationwide subsidy policy in December last year.
Under the policy, consumers were given subsidies when they replaced their old home appliances.
Linda Huang of Macquarie said in a research note the operating deleverage would continue in the first half as the impact from the subsidy's expiration could last for the whole year.