“Cut Off an Arm to Survive” Fails to Stem the Slide: Suning’s Revenue and Net Profit Both Decline, and Its Core Business “Blood-Generating” Ability Remains a Mystery

Ask AI · How does Zhang Jindong’s expansion strategy affect the company’s current predicament?

Recently, Suning.com (hereinafter referred to as ST Suning) released its 2025 annual report. The financial statement shows that in 2025, the company recorded total operating revenue of 48.958 billion yuan, down 13.79% year-on-year; net profit attributable to shareholders of listed companies was 58.14 million yuan, down 90.48% year-on-year; and net profit after deducting non-recurring gains and losses was -4.414 billion yuan, down 330.65% year-on-year. Basic earnings per share were 0.01 yuan.

Regarding the decline in operating revenue, the annual report explains that in the first three quarters of 2025, the company’s store sales revenue increased by 3.5% year-on-year, and the comparable store revenue of its home appliances, 3C, and household-life specialty stores increased by 5.4% year-on-year. However, in the fourth quarter, due to low industry sentiment and the high base formed in the same period of the previous year, revenue saw a sharp drop, which led to a corresponding year-on-year decline in full-year operating revenue.

Revenue and profits both decline

What is particularly striking is that across ST Suning’s four quarters in 2025, the net profit attributable to the parent company was 17.96 million yuan, 30.73 million yuan, and 24.63 million yuan in the first, second, and third quarters respectively, while the fourth quarter recorded a loss of 15.19 million yuan—showing a trend of profit first followed by loss, and a decline quarter by quarter. Moreover, in terms of non-net profit, losses also expanded quarter by quarter: last year, losses in the four quarters were 198 million yuan, 666 million yuan, 1.11 billion yuan, and 2.43 billion yuan respectively.

Despite this, ST Suning did not sit back. In 2025, the company proactively took action by speeding up cash recovery through multiple channels: throughout the year, it disposed of other equity instrument investments and other financial assets, recovering 2.003 billion yuan; it divested equity interests in long-loss subsidiaries such as Changsha Shengming Commercial Management Co., Ltd., reducing sources of losses; and it promoted its subsidiaries to reach debt settlement agreements with major creditors such as Carrefour Group of France, easing near-term repayment pressure. These measures were supposed to help improve the financial situation, so why did performance still fail to stabilize and rebound?

On the revenue side, ST Suning once showed signs of recovery. In the first three quarters, benefiting from the policy dividend of the national “trade-in for upgrades” program, the company actively connected with government subsidy channels to promote sales growth of home appliances and 3C products. Data shows that store sales revenue increased by 3.5% year-on-year; among that, comparable store revenue of home appliances, 3C, and household-life specialty stores increased by 5.4% year-on-year, indicating that offline channels still had room for resilience under policy stimulation. However, after entering the fourth quarter, overall industry sentiment continued to remain weak, and together with the high-base effect from the same period in 2024, the quarter’s revenue dropped sharply by more than 20% year-on-year, directly dragging down the full-year revenue performance.

At the same time, the company significantly increased investment in upgrading store experience. To improve consumers’ shopping experience, ST Suning advanced digital transformation of stores in key cities, introducing intelligent guidance systems, immersive scenario merchandising, and a membership precision marketing system; related spending boosted selling expenses. The annual report shows that in 2025, selling expenses rose by about 2.93% year-on-year, further squeezing the already meager space for profit.

More critically, the dramatic volatility in non-recurring gains and losses became the core driver behind the “performance turnaround” in the wrong direction. In 2025, the company completed the overall divestment of Carrefour China’s supermarket business. This transaction generated non-recurring gains and losses of -4.287 billion yuan, which was directly recorded in current profit and loss, becoming the main cause of the huge loss in net profit after deducting non-recurring items. Although, in the same period, it obtained substantial gains from debt restructuring and positive investment gains from the disposal of some equity investments—supporting net profit attributable to the parent company to barely remain positive—the underlying profitability of its main business remained weak after excluding these one-off gains.

This also means that ST Suning’s profit structure relies heavily on non-recurring gains and losses, and its core retail business has not yet established a sustainable profit model. If in the future there are fewer assets to dispose of or the room for debt restructuring narrows, the company will face a greater risk of a “profit cliff.”

Reconstruction of store footprint: contraction and transformation go hand in hand

As the core asset and traffic gateway of a retail enterprise, stores prompted ST Suning to systematically restructure its store network in 2025. The annual report shows that the company firmly pushed forward the “large-store strategy.” In first- and second-tier markets, it opened or renovated a total of 79 large experience stores such as SuningMax and SuningPro. The average area of these stores exceeded 5,000 square meters, integrating home appliance displays, smart home experience, life services, and coffee leisure, with an emphasis on “scenario-based services” and “one-stop shopping experience.” For example, some SuningMax stores introduced Huawei whole-home smart home showrooms, Dyson experience corners, and children’s interactive zones to attract family customer groups to stay and spend. Data indicates that in the first month after a new store opened, its sales-per-square-meter performance was generally more than 30% higher than that of traditional stores, showing early results from the new model.

Suning.com store

In lower-tier markets, the company accelerated its layout by relying on the “retail cloud” model. Retail cloud adopts a light-asset operation approach of “platform + franchise stores.” The headquarters provides the supply chain, system support, and brand authorization, while franchisees are responsible for store operations. In the second half of 2025, as franchise policies were optimized and supply chain response speed improved, the retail cloud business stabilized and rebounded. The scale of self-operated goods sales increased by 15.9% year-on-year, becoming one of the few business segments that achieved positive growth for the company.

Meanwhile, the closure of inefficient stores continued to advance. Although the annual report did not clearly list the specific number of stores closed, based on past announcements and industry research information, it is known that in recent years, ST Suning has cumulatively closed more than 1,000 stores that were operating poorly. These stores are mostly distributed in two categories of regions: one category consists of traditional stores located at the edges of core commercial districts, where foot traffic has continued to decline and rental costs remain high; the other category consists of small stores in lower-tier markets that have been losing money for the long term and are unable to achieve scale efficiencies.

Through “shutting down, merging, and transferring,” the company is gradually concentrating resources on high-profit potential regions and high-operating-efficiency stores. While this measure affects revenue scale in the short term, in the long run it helps improve overall asset turnover and profitability per store. Relevant data shows that in 2025, the average human-efficiency and sales-per-square-meter metrics of retained stores increased by 12.3% and 9.7% respectively year-on-year, indicating that the store optimization strategy has begun to show results.

Debt totaling 238.7 billion yuan weighs down the company

The 1993 Nanjing air conditioner war made 27-year-old Zhang Jindong famous with his feat of “taking on eight major aircraft carriers in a small boat.” When the eight state-owned department stores joined forces to block Suning, this young businessman traveled around the country day and night to relocate inventory, insisted on not raising prices under cost pressure, and ultimately tore open the iron curtain of the monopoly with credibility. This classic business battle was later written into university textbooks, and it also opened the path for Suning’s takeoff.

In the ringing of the bell on the Shenzhen Stock Exchange in 2004, Zhang Jindong raised the banner of “China’s No. 1 home appliance retail stock.” At that time, Suning had nearly 10,000 stores, annual sales exceeded 200 billion yuan, and the Xinjiekou flagship store set an Asian record for single-store sales. When Zhang Jindong topped the list as Jiangsu’s richest man in 2011, his personal net worth exceeded 30 billion yuan, and Suning and Gome together held the duopoly pattern in home appliance retail.

The turning point of decline came in 2012’s “Jing-Su price war.” Faced with JD.com’s fierce offensive, Zhang Jindong chose a dangerous path—non-related diversification and expansion. Acquiring PPTV, taking over Carrefour China, and spending 5 billion yuan to operate the Inter Milan club… Over the decade, with an investment footprint of more than 78 billion yuan, nearly half of the projects became cash-devouring black holes. In 2017, acquiring Tiantian Express for 4.25 billion yuan ended with a collapse in service quality, and the company was ultimately shut down; the 20 billion yuan invested in Evergrande Group also resulted in all funds lost when the real estate developer defaulted.

In February 2026, the Nanjing Intermediate People’s Court ruled to reveal the curtain on the substantive merger and reorganization of 38 companies in the Suning-related group. Total liabilities under the full scope amounted to 238.73 billion yuan—nearly 90% of Suning.com’s peak-year revenue. To obtain creditors’ suspension of pursuit, Zhang Jindong and his wife injected all their equity holdings, real estate, and financial assets into the restructuring trust, leaving only an old house of 68 square meters in Nanjing.

Although in 2025 ST Suning reduced its liabilities by 8.718 billion yuan, the 326.4 billion yuan in current liabilities still hangs over the company like the sword of Damocles. Even more severe is the long-term debt that is due within 2026. With the company’s “blood-making” capacity not yet restored, the debt restructuring administrator admitted to the media: “What is called completion of debt restructuring is a misinterpretation; the 2387 billion yuan restructuring is still ongoing.”

Some long-term borrowings will be concentrated and due within 2026

To address the liquidity crisis, over the past five years, ST Suning and Zhang Jindong’s family, its actual controller, have embarked on a large-scale path of converting assets into cash. Since 2021, the Zhang Jindong family has gradually transferred equity in Suning Holdings Group and reduced holdings of ST Suning’s listed company shares, cumulatively raising several tens of billions of yuan to fill the group’s funding gap. Meanwhile, at the company level, it has also sold multiple quality assets, including Suning Finance’s 38% equity interest, all Alibaba shares it held, and part of Wanda’s commercial real estate equity, among others. The cash recovered was mainly used to repay debts to financial institutions and maintain day-to-day operations.

In 2025, this asset disposal process continued. In addition to further divesting equity interests in loss-making subsidiaries, the company also supplemented cash flow by transferring non-core real estate and idle equipment and other assets.

Although asset disposals improved near-term cash flow, ST Suning still faces a compounded situation of multiple risks. First, because it touched relevant provisions of Chapter 9 of the “Rules Governing Listing of Stocks on the Shenzhen Stock Exchange (2025 Amendment),” the company has been placed under “other risk warnings,” harming its image in the capital market and restricting financing channels. Second, although by the end of 2025 the company’s total liabilities decreased by 8.718 billion yuan compared with the beginning of the year, improving the asset-liability structure, as of the end of the reporting period, current liabilities remained as high as 326.4 billion yuan. Among them, short-term borrowings, accounts payable notes, and accounts payable occupy a relatively high proportion, and repayment pressure remains severe.

More seriously, some long-term borrowings will be concentrated and due within 2026. If the company cannot cover them through operating cash flows or obtain new financing support, it will face the risk of debt default. Although the company has reached loan extension agreements with multiple banks and resolved some disputes over payables through debt settlement, these measures are mostly “emergency arrangements,” and it is difficult to fundamentally resolve the problem of imbalance in the debt structure.

In addition, the external environment is also not optimistic. Competition in the home appliance retail industry is becoming increasingly fierce; JD.com and Tmall keep strengthening offline penetration; Pinduoduo’s low-price strategy is impacting the mid- and low-end markets; and consumers’ purchasing willingness remains weak under macroeconomic pressures. Under multiple pressures, ST Suning’s path to recovery is full of uncertainties.

Byline: Nan Du · Wan Cai She reporter Kong Xueshao