GOME Electrical Appliances Holdings Ltd, China's biggest electronics retailer, announced yesterday that its 2007 profit rose 38 percent as the country's booming economy spurred domestic consumption, Bloomberg News reported.

Net income rose to 1.13 billion yuan (US$162 million) or 0.35 yuan a share, from 819 million yuan, or 0.34 yuan, in the previous year, Hong Kong-listed Gome said in a statement to the city's stock exchange yesterday.

That compares with the 1.29 billion yuan median estimate of six analysts surveyed by Bloomberg.

Sales increased 72 percent to 42.5 billion yuan.

The retailer, with 726 stores at the end of last year, plans to open 120 outlets in 2008 and to have a market share of more than 20 percent by 2011, President Chen Xiao told reporters in Hong Kong yesterday.

Gome is also seeking to spur growth by acquiring rivals.

"The company is starting to benefit from having a bigger sales network," said Kenny Tang, research director at Hong Kong-based Tung Tai Securities Ltd.

"If earnings continue to grow over the next couple of years, all these acquisitions will be justified."

"We're now at every region of China, except Tibet, Taiwan and Ningxia," Chen said. "We have the biggest retail network of household-appliance stores in China."

Gross profit at the electronics retailer rose 71 percent to 4.1 billion yuan in 2007. Gross profit margin climbed to 9.64 percent from 9.54 percent a year earlier, the company said.

The acquisition of China Paradise Electronics Retail Ltd last year allowed Gome to increase operating efficiency, it said. Gome last month agreed to pay 541 million yuan for a 10.7 percent stake in Sanlian Commerce Co.

In December, the company said it will finance a partner's 3.6 billion yuan acquisition of Beijing Dazhong Electronics Ltd. Gome may buy the electronics retailer later for a minimum 3.65 billion yuan.

Gome will pay a final dividend of 10.6 Hong Kong cents (1.4 US cents) a share.