【Dow Jones】 MARKET TALK: Gome Dn 15.2%;Worries About Margins,Placement

1353 [Dow Jones] Gome Electrical Appliances Holding (0493.HK) down 15.2% at HK$5.30 but still may not be attractive due to worries about earnings and possible placement, says Clive Zhang of Partners Capital Asset Management. Private chip was once priced for perfection as once-scarce play on rising consumerism in China. Stock tumbling after disclosure yesterday of declining margins on rising competition, but still trading at market level of 14X FY05 earnings. "But analysts are likely to revise down their forecasts," says Zhang; that will push P/E back up. Chairman Wong Kwong Yu seeking to sell remaining 35% of listed company's core business Gome Appliance Co has also raised fears a large placement by listed company at discount to market price may be around corner.