Red Star Macalline Group Corp Ltd Class A

Macalline released its 2026 interim report. Total operating revenue was 3.095 billion yuan, and net profit attributable to the parent company was 74.8599 million yuan, swinging from a loss to a profit year on year and increasing by 1.975 billion yuan compared with the same period last year. Net cash inflow from operating activities was 883 million yuan, up 337.34 percent year on year, marking a second consecutive year of growth. The company's asset-liability ratio was 72.60 percent, and gross margin was 65.54 percent, up 4.04 percentage points from the same period last year and rising for a third straight year. Diluted earnings per share were 0.02 yuan, an increase of 0.46 yuan compared with the same period last year.

Red Star Macalline Executive President Zhu Jiagui recently gave an exclusive interview to National Business Daily, responding to questions about the company's business adjustments and restructuring. In the first half of 2026, Red Star Macalline expects net profit attributable to the parent company of 50 million to 75 million yuan, turning losses into profits. Zhu Jiagui said that overcapacity in the furniture mall industry is a fact, the original business model does not match today's market, and the company is compressing the operating area for home furnishing and building materials from 100 percent to 60 percent, adjusting the appliance area to 15 percent, the design center area to 15 percent, and leaving 10 percent for automotive and commercial content innovation. He proposed that terminal shopping malls should shift from the past landlord model to becoming commercial content operators and ecosystem service providers, and plans to expand the operating area of new retail furniture stores to over 300,000 square meters by the end of 2026, with 20 benchmark stores in place. Zhu Jiagui believes that China still has an appliance market worth 800 billion yuan and a home furnishing and building materials stock market of 3 trillion to 4 trillion yuan. The industry needs three to five years to complete adjustments and reduce its dependence on real estate.

Macalline plans to use the Red Star Macalline Shanghai Wenshui Road mall in Baoshan District as the underlying asset to issue asset-backed securities of up to 2.4 billion yuan. The special plan has a term of no more than 18 years, and the funds raised will be used to repay existing liabilities on the underlying asset and to supplement working capital. The underlying asset is held by the controlled subsidiary Shanhai Artist Furniture, with a gross floor area of 139,500 square meters. In 2025, it achieved operating revenue of 158 million yuan and net profit of 29.91 million yuan. The product is divided into senior and subordinated tranches, with the senior tranche of up to 2.34 billion yuan offered to professional institutional investors, and the subordinated tranche of up to 60 million yuan subscribed by Macalline. The controlling shareholder, C&D Inc., acts as the deficiency payment provider and put option provider, providing credit enhancement for the senior securities.

Macalline issued an announcement, expecting attributable net profit for the first half of 2026 to be between 50 million and 75 million yuan, compared with a loss of 1.9 billion yuan in the same period last year, achieving a turnaround from loss to profit year-on-year. The company expects attributable net profit after deducting non-recurring items to be between 20 million and 30 million yuan, compared with a loss of 602 million yuan in the same period last year. The expected profit is mainly due to focusing on core main business, stabilization of occupancy rates in self-operated shopping malls, a significant reduction in period expenses, and improved operating quality of individual shopping malls. In addition, housing price indicators showed marginal improvement in May 2026, and the loss from changes in fair value of investment properties and related asset impairment losses narrowed significantly year-on-year. In the first quarter of 2026, Macalline achieved revenue of 1.548 billion yuan and attributable net profit of 47.68 million yuan.