I am glad to be joining GOME Electrical Appliances Holding Limited (the “Company”) together with its subsidiaries (collectively known as the “Group” or “GOME“). The Group has been back on track of sustainable growth after it has surmounted one of the most difficult periods to date for the past two years since its listing. 2010 is the first year of formulating GOME’s five-year plan. The Group resolved its internal problems amidst heightened media and public attention. Although the process was not easy, GOME adjusted the board structure. The new board structure enables shareholders, the board of directors and senior management to reach agreement upon the company’s revised strategies, which is crucial for the Group’s future sustainable growth and survival in competitions.

In 2010, the Group was concentrating efforts on effective implementation of store management initiatives to optimize our store network and increase operating efficiency of individual store. All these would not be possible without a stable and focused management. We are keen to further strengthen our management team to accomplish the strategic direction of the Group. As a newcomer, I am proud to be working with such a well-established and loyal management team.

2011 is the first year of China’s 12th Five-Year Plan, intended to reorient the entire economy from an outward export focus to domestic development and the empowerment of Chinese consumers. The mainland consumer electrical appliances retail market is enormous, with even the leading players like GOME only commanding some 10%. We are keen to capitalize on the untapped opportunities ahead.

Looking ahead, we will continue to execute the five year strategic blueprint laid out by the Board to further strengthen our market leadership. The Group through precision management will enhance the operational quality and efficiency and will focus on a host of initiatives including: rapid and focused expansion of our store network, improving supply chain management, setting up national and regional logistics centers, refining the stores nationwide, expanding the range of product offerings, raising profit margins by introducing high-end differentiated products, improving consumer’s experiences and relations with banks and suppliers, and striving to enhance its business model. We will accelerate the store expansion plan with enhanced operating margins. The net results will enhance our core competency and benefit all shareholders in the long run.

Lastly, I would like to express my respects and appreciation for all GOME employees for their consistent efforts. I would also like to thank for everyone outside of GOME for their supports on the Group’s development. In the future, we will strive for the benefits of the shareholders, the employees, and the customers. We will focus on the long-term sustainable growth of the Group, making GOME one of the best companies in the world. I myself is very confident to take GOME to many new heights.

Zhang Da Zhong
Chairman of the Board