GOME Electrical Appliances : Sustains Growth in FY2015 Operating Results Online GMV up 114.5% Y-o-Y while Mobile GMV up 511.8% Y-o-Y

For Immediate Release

For Immediate Release

GOME Sustains Growth in FY2015 Operating Results GOME Online GMV up 114.5% Y-o-Y while Mobile GMV up 511.8% Y-o-Y

Omni-Channel, New Scenario, Strong Linkage Attract Customer Flow Establish New Experience of Total Retail Ecosystem Build an Open Supply Chain Platform to Accelerate Development of O2O Total Retail Strategy

Results Summaries:

• The Group achieved year-on-year growth for 12 consecutive quarters with financial indicators outperforming the industry:

• Sales revenue reached RMB64.60 billion, representing an increase of 7.0% y-o-y, with second-tier market sales up 16.0% y-o-y

• GOME Online GMV increased by 114.5% y-o-y, Mobile GMV significantly increased by 511.8% y-o-y, accounting for 55.5% of the total GOME Online GMV

• Logistic service GMV was up 395% y-o-y, financial service GMS increased by 518% y-o-y and after-sales service GMV was up 58.5% y-o-y.

• Consolidated gross profit margin* was 17.8%, remained at a relatively high level

• Operating expense ratio* was 15.4%, fell 0.9 percentage point y-o-y

• Net operating profit* was RMB1,415 million, increased by 19.9% y-o-y

• O2O Total Retail Strategy achieved significant results with basic earnings per share amounting to RMB7.1 fen. The Board proposed a final dividend of HK1.50 cents per ordinary share.

*Excluding non-operating factors, non-operating factors are loss on equity investments during the reporting period and compensation received in 2014.

Hong Kong, March 31, 2016 - GOME Electrical Appliances Holding Limited (HKSE stock code: 493, "GOME" or "The Company", together with its subsidiaries, "The Group") today announced the Group's audited consolidated results for the year ended 31 December 2015 ("the Reporting Period"). In 2015, GOME continued to pursue its strategic goal of establishing the "Total Retail Ecosystem". During the reporting period, the Group recorded sales revenue of approximately RMB64.60 billion, up 7% y-o-y, while sales revenue from comparable stores increased by 2.3% y-o-y. Its consolidated gross profit margin remained at a relatively high level of 17.8%. Through effective cost control, the operating expense ratio fell 0.9 percentage point to 15.4%. Net operating profit increased by 19.9% to approximately RMB1,415 million from RMB1,180 million for the corresponding period last year; basic earnings per share amounted to RMB7.1 fen.

During the reporting period, the Group opened 208 new stores in tier-one and tier-two markets. Total store number amounted to 1,223 by the end of the year. GOME Online GMV increased

by 114.5% y-o-y, Mobile GMV significantly increased by 511.8%, accounting for 55.5% of the total online GMV.

Acquisition of Target Group was Overwhelmingly Approved To Accomplish Nationwide Total Retail Network

GOME's acquisition of Artway Development Limited and its subsidiaries ("the Target Group") was overwhelmingly approved by the independent shareholders by resolution at the special general meeting held on 22 January 2016 and was completed on 31 March 2016. Benefiting from the strong performance of the Target Group, the pro forma basic earnings per share of the enlarged group (or "GOME Group") is RMB7.7 fen, enhanced by 8.5% as compared with the basic earnings per share prior to the transaction. The acquisition allows the total number of stores to reach 1790, span 434 cities nationwide and upgrade from a regional network to a unified nationwide Total Retail network. GOME Group achieved full integration of nationwide retail operations with an enlarged market share and growth potential, enhancing its overall corporate market value.

GOME Group Results Indicators Show Sustained Rapid Compound Annual Growth, Outperformed the Industry for Three Consecutive Years; to Further Accelerate the Development of Total Retail Strategy

Following the Total Retail Strategy, GOME Group continues to enhance its supply chain. As of the end of 2015, the enlarged group recorded a total GMV of RMB 111.9 billion with the CAGR of GMV reaching 10.5% for three consecutive years; the number of memberships reached 180 million, with the CAGR reaching 22.5% for three consecutive years; net profit attributable to the parent company rose to 1.731 billion with the CAGR of 17.3% for three consecutive years, achieving outstanding growth in results performance.

GOME Group achieved outstanding performance between 2013 and 2015. In terms of retail network, it further renovated stores in the tier-one market and established digital stores. GOME Group continues to foster the development of tier-two markets and to enable deeper E-commerce penetration by expanding store coverage and facilitating logistics distribution efficiency. In addition, GOME Online GMV had achieved a CAGR of 100% for three consecutive years as at 2015. In terms of cross-border E-commerce, GOME Group successfully established its supply chain for overseas shopping business and further enhanced its O2O overseas shopping platform.

Comprehensive product mix with low-pricing is the key for GOME Group to retain its market leadership. Through collaborating with suppliers to develop exclusive products that suits customers, GOME Group further participate and build up an ODM ecosystem. Meanwhile, through big-data analysis, GOME was able to arrange procurement based on sales, the portion of differentiated products with high gross profit margin reached 35%.

In terms of nationwide logistic, warehousing and after-sales services, GOME Group adheres to the highest industry service standards, such as "3 Deliveries/Day, Precise Delivery & Installation with Delivery", achieving a one-day delivery order satisfaction rate of 99%. GOME Group established a nationwide logistic network with regional warehouses, municipal warehouses and last-mile delivery, achieving shared warehousing and inventory. GOME Group established over 2,000 After-sales Service Centers across over 400 cities, providing professional after-sales service for GOME Group and third parties.

To Establish Total Retail Ecosystem Experience with support of Open Supply Chain, New Scenario and Strong Linkage

In the future, supported by the open supply chain, GOME Group is committed to creating new experiences of Total Retail Ecosystem through New Scenario and Strong Linkage, so as to achieve sustainable development of the O2O Total Retail Ecosystem. Leveraging the solid interface platform as traffic portals, GOME establishes stronger linkage with its customers through the operation of memberships which in turn translate into GMV.

• New Scenario:

  The concept of GOME Group New Scenario is the new retail model combining entertainment scenario and consumption scenario. The new model allows customer traffics from retail, entertainment and leisure to complement with each other in forming new business mix. In 2016, GOME Group will convert from single transaction retail mode to the application retail mode focusing on the theme of entertainment and leisure, to attract strong customer flow and to drive consumption.

  
  

• Strong Linkage:

On such a basis, GOME Group commenced its "GOME TOGO" project, through its micro shops, to build a strong bonding among 100,000 sales persons with their respective social networks. As such, GOME Group will be able to build up strong linkages with its consumers. GOME Group's micro shops will foster its physical stores' penetration into the internet and realize seamless integration between online and offline channels. In the first half of 2016, GOME Group's total number of micro shops will reach over 100,000. In the future, GOME Group will vigorously promote the new sales channel of micro shops in order to increase transaction volume.

Concurrently, internal sales campaigns help to drive customer flow for GOME Group and build the strong linkage with customers via collaboration across industries and strong promotions. Among these, GOME Group's "12.18 Super Welfare Day" , which recorded a daily GMV of 5.5 billion, fully demonstrated the effectiveness of the fans economy in attracting mass volume of customers.

As an extension, GOME Group will spare no effort to develop the post-service market of home appliances in 2016 by establishing the online "GOME Butler" post-service platform. This aims to offer all rounded home-alike services in relation to home appliances, forming the home appliance life cycle of "purchase-cleaning-repair-recycling-re-purchase" and thus contributing to the optimal GOME Group Total Retail Ecosystem.

Mr. Wang Junzhou, President of GOME, concluded, "The internet era is a time to realize personalized demand. The commercial value is to be re-defined. Traditional operating business mode will further shift its focus from products to customers. The existing customer relationship that based on transaction will focus more on the linkage with customers. In 2016, we will actively embrace the Internet, focus on customer flow and customer linkage and apply innovative thinking and skills with an open mind, to realize the upgrade and iteration of traditional retail business so as to create greater value for shareholders, suppliers and consumers.''

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About GOME Electrical Appliances Holding Limited

GOME Electrical Appliances Holding Limited has been listed on The Hong Kong Stock Exchange since July 2004 (HKSE: 00493). The GOME Group was founded in China in 1987 and is engaged in the retail business of electrical appliances and consumer electronics in China. It is the leading retail chain of electrical appliances and consumer electronics and the leading retail chain enterprise in China.

Please visit our website for more information: www.gome.com.hk

For further enquiries, please contact: Hong Kong Hill+Knowlton Strategies Asia

Samantha Wang	Queenie Hung
Tel: (852) 2894 6266 / 9418 0271	Tel: (852) 2894 6262 / 6932 2584
Email: samantha.wang@hkstrategies.com	Email: queenie.hung@hkstrateies.com

Beijing Maggie Zhang

Tel: (86 10) 5928 8178

Email: zhangyuan-cw@gome.com.cn