高鑫零售（06808） 　　Sun Art reported a relatively strong 3Q16 result. While sales were weaker than JPMf (3Q16 SSSG flat), both gross margins andoperating margins were stronger than our forecasts. E-commerce losses were also better than our expectations. We think this result isan incremental positive for Sun Art. 　　3Q16 result 　　3Q16 turnover RMB24,376m (JPMf RMB24,854m), up 4.4% yoy (JPMf +6.4%). 　　3Q16 gross profit RMB5,999m (JPMf RMB6,000m), implying group gross margin of 24.61% (JPMf 24.14%). 　　3Q16 profit from operations (as reported) RMB934m (JPMf RMB861m). Operating margin (as reported) was 3.83% (JPMf3.46%). 　　3Q16 NPAT attributable to shareholders RMB599m (JPMf RMB583m), up 12.2% yoy (JPMf +9.1% on restated numbers). 　　For Jan-Sep 2016 YTD, net profit before minority interests increased ~2%. Management indicated excluding losses associatedwith e-commerce, net profit before minority interests would have increased ~6%. 1H16 net profit before minority interests declined3.4% yoy. Excluding the losses associated with e-commerce, 1H16 net profit before minority interests would have increased 2.2%.This suggests e-commerce losses narrowed in 3Q16 relative to 1H16.