红星美凯龙(01528) - 2025 - 中期业绩

Report Overview Financial Highlights In the first half of 2025, the company's revenue decreased by 21.0% to RMB 3.337 billion, loss for the period expanded to RMB 2.108 billion, loss attributable to owners of the Company was RMB 1.955 billion, and loss per share was RMB 0.45, with core net loss also slightly increasing Key Financial Data for H1 2025 (Consolidated Statement) | Metric | H1 2025 (RMB Thousand) | H1 2024 (RMB Thousand) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 3,337,076 | 4,224,862 | -21.0% | | Gross Profit | 2,210,002 | 2,797,379 | -21.0% | | Gross Profit Margin | 66.2% | 66.2% | 0.0% | | Loss for the Period | (2,108,206) | (1,423,256) | +48.1% | | Loss Attributable to Owners of the Company | (1,954,786) | (1,336,774) | +46.2% | | Loss Attributable to Owners of the Company Margin | -58.6% | -31.6% | -27.0pp | | Core Net Loss Attributable to Owners of the Company | (393,939) | (383,784) | +2.6% | | Core Net Loss Attributable to Owners of the Company Margin | -11.8% | -9.1% | -2.7pp | | Loss Per Share (Basic and Diluted) | (0.45) Yuan | (0.31) Yuan | +45.2% | Operating Highlights As of June 30, 2025, the company's total number of shopping malls and operating area both decreased, with the number of cities covered also declining, while the average occupancy rate for self-operated malls slightly increased and for managed malls decreased Operating Data for H1 2025 | Metric | As of June 30, 2025 | As of June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Number of Shopping Malls | 311 | 352 | -41 | | Shopping Mall Operating Area (sqm) | 19,361,762 | 21,201,448 | -1,839,686 | | Number of Cities Covered | 189 | 210 | -21 | | Number of Self-operated Shopping Malls | 76 | 85 | -9 | | Self-operated Shopping Mall Operating Area (sqm) | 7,490,428 | 7,885,050 | -394,622 | | Average Occupancy Rate of Self-operated Shopping Malls | 84.2% | 81.6% | +2.6pp | | Number of Managed Shopping Malls | 235 | 267 | -32 | | Managed Shopping Mall Operating Area (sqm) | 11,871,334 | 13,316,398 | -1,445,064 | | Average Occupancy Rate of Managed Shopping Malls | 81.3% | 82.8% | -1.5pp | Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income During the reporting period, the Group's revenue and gross profit both decreased by 21.0% year-on-year, with loss for the period expanding from RMB 1.423 billion in H1 2024 to RMB 2.108 billion in H1 2025, primarily due to significant net fair value losses on investment properties and impairment losses under the expected credit loss model - Loss for the period increased from RMB 1,423,256 thousand in H1 2024 to RMB 2,108,206 thousand in H1 2025[8] - Net fair value loss on investment properties increased from RMB 1,177,523 thousand in H1 2024 to RMB 2,274,001 thousand in H1 2025[8] - Impairment losses under the expected credit loss model decreased from RMB 474,770 thousand in H1 2024 to RMB 116,365 thousand in H1 2025[8] Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets slightly decreased, non-current assets totaled RMB 109.626 billion, net current liabilities were RMB 19.253 billion, and both the asset-liability ratio and net gearing ratio increased, indicating higher financial leverage - Total assets decreased from RMB 118,635,369 thousand as of December 31, 2024, to RMB 117,644,278 thousand as of June 30, 2025[10] - Net current liabilities were (RMB 19,252,602 thousand), showing an improvement compared to (RMB 20,596,046 thousand) as of December 31, 2024, but still negative[11] - Equity attributable to owners of the Company decreased from RMB 48,198,250 thousand as of December 31, 2024, to RMB 46,057,257 thousand as of June 30, 2025[11] Notes to the Condensed Consolidated Financial Statements General Information Red Star Macalline was incorporated in China in 2011, with H-shares and A-shares listed in 2015 and 2018 respectively, Xiamen C&D is the parent company, and Xiamen Municipal People's Government State-owned Assets Supervision and Administration Commission is the ultimate controlling shareholder, with the Group primarily engaged in operating and managing home furnishing shopping malls and involved in the pan-home consumption sector - The Company was incorporated in China as a Sino-foreign joint stock limited company on January 6, 2011[12] - Xiamen C&D Corporation Limited is the Company's parent company, and Xiamen Municipal People's Government State-owned Assets Supervision and Administration Commission is the ultimate controlling shareholder[12] - The Group's principal activities are the operation and management of home furnishing shopping malls and participation in pan-home consumption[12] Basis of Preparation The condensed consolidated financial statements are prepared in accordance with IAS 34 and the Listing Rules; despite continuous losses and significant net current liabilities, management, through assessment and financing negotiations, considers the going concern basis appropriate Measurement Basis The condensed consolidated financial statements are primarily prepared on a historical cost basis, with investment properties and certain financial instruments measured at fair value - The condensed consolidated financial statements are primarily prepared on a historical cost basis, with investment properties and certain financial instruments measured at fair value[16] Going Concern The Group recorded a loss of RMB 2.108 billion and faced net current liabilities of RMB 19.253 billion in H1 2025; management has assessed and implemented measures, including utilizing bank credit lines and negotiating financing, deeming liquidity risk to be under control and the going concern basis appropriate - As of June 30, 2025, the Group recorded a loss of RMB 2,108,206 thousand and net current liabilities of RMB 19,252,602 thousand[14] - Management has assessed the going concern ability and believes that liquidity risk is under control through measures such as unused bank loan facilities and expected operating cash flows[14] Significant Accounting Policies The accounting policies adopted during the reporting period are consistent with the 2024 consolidated financial statements, and the first-time application of revised International Financial Reporting Standards had no significant impact on financial position or performance - Accounting policies are the same as those in the 2024 consolidated financial statements, except for additional policies arising from the application of revised IFRS accounting standards[16] - The amendment to IAS 21 "Lack of Exchangeability" had no significant impact on the financial position and performance for the current period[17] Segment Information and Revenue The Group's business is divided into four segments: self-operated/leased shopping malls, managed shopping malls, construction and decoration services, and others; in H1 2025, self-operated/leased shopping malls contributed the highest revenue, but all segments experienced year-on-year revenue decline, with all revenue and operating results derived from mainland China Business Segments The Group's operating segments include self-operated/leased shopping malls, managed shopping malls, construction and decoration services, and others, with each segment's revenue and profit reported independently for resource allocation and performance evaluation - The Group's operating segments include self-operated/leased shopping malls, managed shopping malls, construction and decoration services, and others[18][19] Revenue Analysis Total revenue for H1 2025 was RMB 3.337 billion, a 21.0% year-on-year decrease, with self-operated/leased shopping mall revenue down 15.6%, managed shopping mall revenue down 26.4%, and construction and decoration services and other revenues also declining Segment Revenue (H1 2025 vs H1 2024) | Segment | H1 2025 (RMB Thousand) | H1 2024 (RMB Thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Self-operated/Leased Shopping Malls | 2,450,706 | 2,903,166 | -15.6% | | Managed Shopping Malls | 609,371 | 827,466 | -26.4% | | Construction and Decoration Services | 103,613 | 212,098 | -51.1% | | Others | 173,386 | 282,132 | -38.6% | | Total | 3,337,076 | 4,224,862 | -21.0% | - Revenue from contracts with customers was RMB 861,311 thousand, and rental and related income was RMB 2,475,765 thousand[23] Geographical Information All of the Group's revenue and operating results are generated from mainland China, with non-current assets primarily located in mainland China and a small portion in the Cayman Islands - All of the Group's revenue and operating results are generated from China[26] - Non-current assets are primarily located in mainland China (RMB 103,615,597 thousand), with a small portion in the Cayman Islands (RMB 86,091 thousand)[29] Other Income and Gains/Losses Other income for H1 2025 was RMB 72.575 million, a 27.38% year-on-year decrease, mainly due to reduced interest income and government grants; net other gains/losses turned from a loss to a profit of RMB 9.011 million, primarily benefiting from increased gains on disposal of property, plant and equipment and reduced fair value losses on financial instruments - Other income decreased from RMB 99,943 thousand in H1 2024 to RMB 72,575 thousand in H1 2025[30] - Net other gains/losses turned from (RMB 273,992 thousand) in H1 2024 to RMB 9,011 thousand in H1 2025[31] - Fair value losses on financial instruments at fair value through profit or loss decreased from RMB 85,531 thousand to RMB 53,849 thousand[31] Finance Costs Finance costs for H1 2025 were RMB 1.095 billion, a 15.8% year-on-year decrease, primarily due to reduced interest on bank and other borrowings, lease liabilities, and bonds - Finance costs decreased from RMB 1,300,450 thousand in H1 2024 to RMB 1,095,295 thousand in H1 2025, a 15.8% decrease[32][53] - Interest on bank and other borrowings decreased by RMB 166,174 thousand[32] Income Tax and Loss for the Period Income tax for H1 2025 turned from a credit in the prior year to an expense of RMB 37.55 million, mainly due to increased deferred income tax expense; loss for the period included staff costs, depreciation and amortization, and advertising and promotion expenses - Income tax turned from a credit of RMB 113,193 thousand in H1 2024 to an expense of RMB 37,550 thousand in H1 2025[33][54] - Total staff costs were RMB 858,595 thousand, a 18.8% year-on-year decrease[33] - Total rental income from investment properties was (RMB 2,475,765 thousand), a 15.1% year-on-year decrease[33] Dividends The Board of Directors resolved not to declare an interim dividend for H1 2025 - The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025[34] Loss Per Share Basic and diluted loss per share for H1 2025 expanded to RMB 0.45, compared to RMB 0.31 in H1 2024, primarily due to the increased net loss attributable to owners of the Company - Basic and diluted loss per share increased from (RMB 0.31) in H1 2024 to (RMB 0.45) in H1 2025[36][37][57] - Net loss for the period attributable to owners of the Company was (RMB 1,954,786 thousand)[37] Investment Properties As of June 30, 2025, the fair value of investment properties was RMB 95.609 billion, a slight increase from the end of 2024, but the reporting period incurred a fair value change loss of RMB 2.274 billion, mainly due to increased concessions to support tenant operations - The fair value of investment properties as of June 30, 2025, was RMB 95,609,200 thousand[37] - Fair value change loss on investment properties for the reporting period was (RMB 2,274,001 thousand)[37][59] - New properties added amounted to RMB 2,454.7 million, while a fair value change loss of RMB 2,274.0 million was incurred, mainly due to increased concessions to support tenant operations[59] Trade and Other Receivables/Payables As of the end of the reporting period, the carrying amount of trade receivables was RMB 556.76 million, a decrease of RMB 28.4 million from the end of 2024, with impairment provisions of RMB 1.588 billion; trade payables were RMB 1.283 billion, a decrease from the end of 2024 - The carrying amount of trade receivables was RMB 556,764 thousand, a decrease from RMB 585,204 thousand as of the end of 2024[38][58] - Impairment provisions for expected credit losses of RMB 1,588,447 thousand were made[38] - Trade payables were RMB 1,283,357 thousand, a decrease from RMB 1,402,974 thousand as of the end of 2024[39] Bank and Other Borrowings As of June 30, 2025, total bank and other borrowings amounted to RMB 30.174 billion, with secured borrowings accounting for the vast majority; the borrowing structure was primarily fixed-rate, and floating-rate borrowings were based on the People's Bank of China benchmark interest rate - Total bank and other borrowings amounted to RMB 30,174,395 thousand, of which RMB 24,039,281 thousand were secured borrowings[39] - Fixed-rate borrowings accounted for 53.3% (RMB 16,095,038 thousand), and floating-rate borrowings accounted for 46.7% (RMB 14,079,357 thousand)[39] - Borrowing repayment periods are distributed as follows: RMB 5.372 billion within 1 year, RMB 7.748 billion in 1-2 years, RMB 12.214 billion in 2-5 years, and RMB 4.841 billion over 5 years[40] Share Capital As of June 30, 2025, the company's total issued share capital was RMB 4.355 billion, comprising H-shares and A-shares, with a par value of RMB 1 per share, and no changes during the reporting period - Total issued share capital was RMB 4,354,733 thousand, consisting of 741,286 thousand H-shares and 3,613,447 thousand A-shares[42] Acquisition of Subsidiaries During the reporting period, the Group acquired 100% equity of Yantai Red Star for RMB 980 million in cash and obtained 100% equity of Tangshan Fengnan Property Project Company by disposing of receivables - On May 7, 2025, the Group acquired 100% equity of Yantai Red Star for a cash consideration of RMB 980,000 thousand[45] - On April 16, 2025, the Group acquired 100% equity of Tangshan Fengnan Property Project Company for a consideration of disposed receivables with a fair value of RMB 30,000 thousand[45] Financial Review Revenue Total revenue for the reporting period was RMB 3.337 billion, a 21.0% year-on-year decrease; self-operated/leased shopping mall revenue decreased by 15.6% (due to increased concessions to support tenants), managed shopping mall revenue decreased by 26.4% (due to fewer shopping malls), and construction and decoration services and other revenues also declined - Total revenue decreased by 21.0% to RMB 3,337.1 million year-on-year[46] - Rental and related income from self-operated shopping malls decreased by 15.6%, mainly due to increased concessions to stabilize and retain tenants[46] - Managed shopping mall revenue decreased by 26.4%, primarily affected by a reduction in the number of managed shopping malls[46] Gross Profit and Gross Profit Margin Gross profit for the reporting period was RMB 2.210 billion, a 21.0% year-on-year decrease, consistent with the revenue decline, while the overall gross profit margin remained at 66.2%, with fluctuations across business segments and a significant drop in construction and decoration services gross profit margin - Gross profit decreased by 21.0% to RMB 2,210.0 million year-on-year[49] - The overall gross profit margin was 66.2%, consistent with the same period last year[49] - Gross profit margin for construction and decoration services significantly decreased from 20.9% to 5.4%[50] Selling and Distribution Expenses Selling and distribution expenses were RMB 366.3 million, a 20.9% year-on-year decrease, accounting for 11.0% of revenue, mainly due to reduced advertising and promotion, energy and maintenance, and staff costs - Selling and distribution expenses decreased by 20.9% to RMB 366.3 million year-on-year[51] - This was primarily due to decreases in advertising and promotion expenses, energy and maintenance expenses, and staff costs[51] Administrative Expenses Administrative expenses were RMB 596.2 million, a 14.9% year-on-year decrease, accounting for 17.9% of revenue, mainly due to reduced staff costs and office and administrative expenses - Administrative expenses decreased by 14.9% to RMB 596.2 million year-on-year[52] - This was primarily due to decreases in staff costs and office and administrative expenses[52] Finance Costs Finance costs were RMB 1.095 billion, a 15.8% year-on-year decrease, primarily benefiting from a further reduction in financing costs - Finance costs decreased by 15.8% to RMB 1,095.3 million year-on-year[53] - This was primarily due to a further reduction in related financing costs[53] Income Tax Income tax turned from a credit in the same period of 2024 to an expense of RMB 37.6 million, a 133.2% increase year-on-year, mainly due to increased deferred income tax expense - Income tax expense was RMB 37.6 million, an increase of 133.2% compared to an income tax credit of RMB 113.2 million in the same period of 2024[54] - This was primarily due to an increase in deferred income tax expense during the reporting period[54] Total Loss for the Period Attributable to Owners of the Company, Core Net Loss Attributable to Owners of the Company, and Loss Per Share Total loss for the period attributable to owners of the Company was RMB 1.955 billion, a 46.2% year-on-year increase; core net loss was RMB 394 million, a 2.6% year-on-year increase; and loss per share expanded to RMB 0.45 Loss Attributable to Owners of the Company (H1 2025 vs H1 2024) | Metric | 2025 (RMB Thousand) | 2024 (RMB Thousand) | Increase/Decrease | | :--- | :--- | :--- | :--- | | Total Loss for the Period Attributable to Owners of the Company | (1,954,786) | (1,336,774) | 46.2% | | Core Net Loss Attributable to Owners of the Company | (393,939) | (383,784) | 2.6% | | Loss Per Share | (0.45) Yuan | (0.31) Yuan | - | Trade Receivables As of the end of the reporting period, the carrying amount of trade receivables was RMB 556.8 million, a decrease of RMB 28.4 million from the end of 2024, with impairment provisions of RMB 1.588 billion - The carrying amount of trade receivables was RMB 556.8 million, a decrease of RMB 28.4 million compared to the end of 2024[58] - Impairment provisions for bad debts amounted to RMB 1,588.4 million[58] Investment Properties and Fair Value Change Loss As of the end of the reporting period, the carrying amount of investment properties was RMB 95.609 billion, an increase of RMB 505 million from the end of 2024; new properties added during the period amounted to RMB 2.455 billion, but a fair value change loss of RMB 2.274 billion was incurred, mainly due to increased concessions to support tenant operations - The carrying amount of investment properties was RMB 95,609.2 million, an increase of RMB 505.0 million compared to the end of 2024[59] - New properties added during the reporting period amounted to RMB 2,454.7 million, while a fair value change loss of RMB 2,274.0 million was incurred[59] - The fair value change loss was mainly due to increased concessions to support tenant operations[59] Capital Expenditure Capital expenditure for the reporting period was RMB 137.9 million, a 29.2% year-on-year decrease, primarily including acquisition and construction development expenditures for investment properties, reflecting the company's effective control over capital expenditure - Capital expenditure was RMB 137.9 million, a 29.2% year-on-year decrease[60] - This primarily included expenditures for the acquisition and construction development of investment properties[60] Bank Balances and Cash and Cash Flows As of the end of the reporting period, cash and cash equivalents were RMB 3.222 billion, an increase of RMB 68 million from the end of 2024; operating cash flow turned from a net outflow to a net inflow of RMB 201.9 million, investing cash outflow significantly increased to RMB 946.4 million, and financing cash inflow was RMB 814.6 million - Cash and cash equivalents were RMB 3,222.0 million, an increase of RMB 68.0 million compared to the end of 2024[61] - Net cash inflow from operating activities was RMB 201.9 million, an increase of RMB 1,023.2 million compared to a net outflow in the same period of 2024[63][64] - Net cash outflow from investing activities was RMB 946.4 million, an increase of RMB 833.3 million compared to a net outflow in the same period of 2024, mainly due to increased cash paid for the acquisition of subsidiaries[63][64] - Net cash inflow from financing activities was RMB 814.6 million, an increase of RMB 33.6 million compared to the same period of 2024, mainly due to reduced cash paid for interest repayment[63][64] Key Gearing Ratios As of the end of the reporting period, the asset-liability ratio was 58.3% and the net gearing ratio was 62.7%, both increasing from the end of 2024, indicating an increased level of financial leverage Key Gearing Ratios (As of June 30, 2025 vs December 31, 2024) | Metric | As of June 30, 2025 | As of December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Asset-Liability Ratio | 58.3% | 56.8% | +1.5pp | | Net Gearing Ratio | 62.7% | 54.8% | +7.9pp | - Investment properties and fixed assets totaling RMB 82,618.9 million were mortgaged/pledged to obtain borrowings of RMB 31,950.9 million[66] Contingent Liabilities There were no contingent liabilities at the end of the reporting period - There were no contingent liabilities at the end of this reporting period[68] Financial Resources The Group's future funding will primarily come from operating cash flows, bank borrowings, bond issuance, and equity contributions, and it will continue to monitor liquidity needs and comply with loan covenants - Future funding will primarily come from operating cash flows, bank borrowings, bond issuance, and equity contributions[69] - The Group will continue to regularly monitor liquidity needs, comply with loan covenants, and ensure sufficient cash reserves and credit lines are maintained[69] Significant Acquisitions and Disposals of Subsidiaries, Associates, and Joint Ventures The report claims the company had no significant acquisitions and disposals during the reporting period, which contradicts the acquisitions of Yantai Red Star and Tangshan Fengnan Property Project disclosed in the notes to the financial statements - During the reporting period, the Company claimed no significant acquisitions and disposals of subsidiaries, associates, and joint ventures[70] - Note: This statement contradicts the acquisitions of Yantai Red Star and Tangshan Fengnan Property Project disclosed in Note 18 (Acquisition of Subsidiaries, chunk 45) to the financial statements[45][70] Capital Commitments As of the end of the reporting period, capital expenditure for contracted but unrecognised acquisitions and development of investment properties amounted to RMB 720.5 million, with additional investment commitments of RMB 69.2 million - Capital expenditure for contracted but unrecognised acquisitions and development of investment properties amounted to RMB 720.5 million[71] - Investment commitments for joint development of investment properties with partners amounted to RMB 69.2 million[71] Foreign Exchange Risk The Group faces foreign exchange risk from USD bonds and a small amount of foreign currency deposits; management has implemented risk control measures such as forward contracts and currency swaps, and believes foreign exchange risk will not have a significant impact on operating performance - Foreign exchange risk primarily arises from USD bonds and a small amount of foreign currency deposits[72] - Management has implemented risk control measures such as forward contracts and currency swaps, and believes foreign exchange risk will not have a significant impact on operating performance[72] Significant Investments There were no significant investments during the reporting period, nor any plans for significant investments as of the announcement date - The Group had no significant investments during the reporting period, nor any plans for significant investments as of the announcement date[73] Business Review and Outlook Human Resources As of the end of the reporting period, the Group's total number of employees decreased to 10,037, with total remuneration expenses of RMB 859 million, and the company continues to provide training to enhance employee capabilities - As of the end of the reporting period, the Group employed 10,037 employees, a decrease of 3,108 from the same period in 2024[74] - Total remuneration expenses for the reporting period amounted to RMB 858.6 million[74] Industry Overview and Business Strategies The home furnishing and building materials industry faces challenges from supply fluctuations and demand decline; the company actively responds by offering rent reductions, adjusting strategic layouts, introducing quality brands, advancing the "3+Star Ecosystem" strategy, digital intelligence upgrades, and integrated online-offline marketing, while also responding to national "trade-in" policies Industry Challenges and Company Response The home furnishing and building materials industry is affected by supply fluctuations and demand decline; the company offers rent reductions to support tenants and actively adjusts its strategy to attract quality brands - The home furnishing and building materials industry faces a dual challenge of supply fluctuations and demand decline due to multiple reasons[74] - The company provided rent and management fee reductions to some tenants to support the stable development of small and medium-sized enterprises[74] - The company actively adjusted its strategy and mall category layout to attract quality brands such as designers, home decoration companies, and new energy vehicles[74] Operating Data As of June 30, 2025, the company operated 76 self-operated shopping malls (average occupancy rate 84.2%) and 235 managed shopping malls (average occupancy rate 81.3%), covering 189 cities with a total operating area of 19.36 million square meters - Operates 76 self-operated shopping malls with an average occupancy rate of 84.2%[74] - Operates 235 managed shopping malls with an average occupancy rate of 81.3%[74] - Covers 189 cities nationwide, with a total shopping mall operating area of 19,361,762 square meters[74] Strategic Ecosystem and New Business Development The company is steadily advancing its "3+Star Ecosystem" strategy, centered on "home" and integrating home furnishings, home appliances, and home decoration; high-end appliance operating area accounts for 9.4%, with plans to build 40 high-end appliance ecosystem benchmarks; M+ Design Centers have reached 731,000 square meters, collaborating with nearly 5,000 designers; new energy vehicle business has entered 50 malls, with operating area increasing by 97,000 square meters; actively responding to the "trade-in" policy, achieving sales of RMB 7.31 billion in H1 - Steadily advancing the "3+Star Ecosystem" strategy, centered on "home," extending from home furnishings to home appliances and home decoration[75] - High-end appliance operating area accounts for 9.4%, with plans to build 40 high-end appliance ecosystem benchmarks in the next three years[75] - M+ Design Centers have been developed to 731,000 square meters, introducing over 1,000 design studios and collaborating with nearly 5,000 excellent designers[75] - New energy vehicle business has entered 50 shopping malls, covering 44 cities, with an operating area of 261,000 square meters, an increase of 97,000 square meters from the end of 2024[75] - Actively responding to the national "trade-in" policy, with 743,000 trade-in orders and sales of RMB 7.31 billion across national malls in H1[75] Digital Intelligence Upgrade and Marketing Operations The company focuses on four areas of digital intelligence upgrade: strategic business support, process efficiency, model-driven, and intelligent applications, to enhance business development and management efficiency; in marketing, it deeply integrates online and offline, building a "online seeding - offline experience" closed loop, and implementing "trade-in," "ten thousand-plate service plan," and "home delivery service system" initiatives - Digital intelligence upgrade focuses on four key areas: "strategic business support," "process efficiency," "model-driven," and "intelligent applications"[76] - In marketing operations, online and offline are deeply integrated, building a "online seeding - offline experience" closed loop through platforms like Douyin, Xiaohongshu, and Meituan[76] - Offline, the company is solidifying "trade-in," launching the "ten thousand-plate service plan," and co-building a home delivery service system[76] Outlook and Prospects The Group will continue to adhere to the "market-oriented operation, mall-based management" model, consolidate its market leadership and brand image, aiming to become China's leading and most professional "omnichannel platform service provider for the home decoration and furniture industry"; future development plans include light-asset transformation, deep expansion into the home decoration sector, new retail development, strengthened financial management, and improved corporate governance Corporate Vision and Goals The Group is committed to building warm and harmonious homes, enhancing consumption and home living quality, and aims to become China's leading and most professional "omnichannel platform service provider for the home decoration and furniture industry" - The corporate vision is to "build warm and harmonious homes and enhance consumption and home living quality"[77] - The development goal is to become China's leading and most professional "omnichannel platform service provider for the home decoration and furniture industry"[77] Future Development Plans Future development plans include adhering to a "light-asset, heavy-operation" transformation, deeply expanding into the home decoration sector, promoting new retail, strengthening financial management, and continuously improving corporate governance - Adhere to the "light-asset, heavy-operation" transformation to further solidify market leadership[78] - Deeply expand into the home decoration sector to establish consumer mindshare[78] - Promote the development of new retail to empower mall operations[78] - Strengthen financial management to achieve high-quality development[78] - Continuously improve corporate governance, standardize operations, and fulfill social responsibilities[78] Corporate Governance and Other Information Corporate Governance The company is committed to maintaining high standards of corporate governance, having adopted and complied with the Hong Kong Stock Exchange's Corporate Governance Code and the Model Code for Securities Transactions by Directors of Listed Issuers Compliance with the Corporate Governance Code The company has adopted and complied with the principles and code provisions of the Hong Kong Stock Exchange's Corporate Governance Code - The Company has adopted and complied with the principles and code provisions of the Hong Kong Stock Exchange's Corporate Governance Code[80][81] Compliance with the Model Code The company has adopted and complied with the Model Code for Securities Transactions by Directors of Listed Issuers, with all directors and supervisors confirming compliance during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors and supervisors confirmed compliance[82] Securities Related Matters During the reporting period, the company did not purchase, sell, or redeem listed securities but held A-share treasury stock for employee incentives; no interim dividend was declared; detailed disclosures were made on the use of proceeds from A-share public and non-public offerings, with some projects concluded or terminated; shareholder and senior management share reduction plans were disclosed, as well as the proposed judicial enforcement of shares held by a shareholder holding 5% or more Purchase, Sale or Redemption of Listed Securities During the six months ended June 30, 2025, the Group did not purchase, sell, or redeem any of the company's listed securities; as of June 30, 2025, the company held 1,044,800 A-share treasury shares, to be used for employee stock ownership or equity incentive plans - The Group did not purchase, sell, or redeem any of the Company's listed securities during the six months ended June 30, 2025[83] - The Company holds 1,044,800 A-share treasury shares, which will be entirely used for employee stock ownership plans or equity incentive plans[83] Interim Dividend The Board of Directors did not recommend the payment of a dividend for the six months ended June 30, 2025 - The Board of Directors did not recommend the payment of a dividend for the six months ended June 30, 2025[84] Use of Proceeds from A-share Public Offering The net proceeds from the 2018 A-share public offering amounted to RMB 3.050 billion and were used as disclosed; several home furnishing mall construction projects have been fully invested, the Changsha Jinxia Mall project has been concluded, the new generation smart home furnishing mall project has been terminated, and the remaining funds have been permanently used to supplement working capital - Net proceeds from the A-share public offering amounted to RMB 3,050,007,849.63[85] - Several home furnishing mall construction projects have been fully invested[88] - The Changsha Jinxia Mall project has been concluded, the new generation smart home furnishing mall project has been terminated, and the remaining proceeds have been permanently used to supplement working capital[89] Use of Proceeds from A-share Non-public Offering The net proceeds from the 2021 A-share non-public offering amounted to RMB 3.678 billion and were used as disclosed; projects such as Tmall "Home Decoration City Station" have been terminated, with proceeds fully utilized or permanently used to supplement working capital; the Foshan Lecong Mall project has been suspended, and the Nanning Dingqiu Mall project has been postponed - Net proceeds from the A-share non-public offering amounted to RMB 3,678,363,799.29[90][92] - The Tmall "Home Decoration City Station" project, 3D Design Cloud Platform construction project, and New Generation Home Decoration Platform System construction project have been terminated, with remaining proceeds permanently used to supplement working capital[94] - The Foshan Lecong Mall project has been suspended, and the Nanning Dingqiu Mall project has been postponed until December 2026[93] Share Reduction Plan by Shareholders and Senior Management The company disclosed on July 26, 2025, the share reduction plans of shareholder Hangzhou Haoyue Enterprise Management Co., Ltd. and Board Secretary Ms. Qiu Zhe, with the reduction period from September 1, 2025, to November 30, 2025 - Shareholder Hangzhou Haoyue Enterprise Management Co., Ltd. and Board Secretary Ms. Qiu Zhe disclosed their share reduction plans[99] - The share reduction period is from September 1, 2025, to November 30, 2025[99] Proposed Judicial Enforcement of Shares Held by Shareholders Holding 5% or More The company received a court enforcement ruling stating that 43,023,000 A-shares held by Changzhou Meikai Information Technology Co., Ltd., a shareholder holding 5% or more, will be sold at market price through centralized bidding, with proceeds transferred to the court account - 43,023,000 A-shares held by Changzhou Meikai Information Technology Co., Ltd., a shareholder holding 5% or more, are subject to proposed judicial enforcement[100] - The shares will be sold at market price through centralized bidding, and the proceeds will be transferred to the court account[100] Changes in Board of Directors and Management Subsequent to the reporting period, the company's Board of Directors underwent several changes, including the appointment of Ms. Ye Yanliu as a non-executive director, Mr. Che Jianxing's resignation as general manager while remaining an executive director, Mr. Shi Yaofeng's appointment as the new general manager, Mr. Li Jianhong's resignation as a non-executive director, the appointment of Mr. Xu Guofeng as a non-executive director, and the election of Mr. Zheng Jianjie as an employee director - Ms. Ye Yanliu was appointed as a non-executive director of the Fifth Board of Directors[95] - Mr. Che Jianxing resigned as general manager but remains an executive director[95] - Mr. Shi Yaofeng was appointed as the company's general manager[95] - Mr. Li Jianhong resigned as a non-executive director, and Mr. Xu Guofeng was appointed as a non-executive director[96] - Mr. Zheng Jianjie was elected as an employee director of the Fifth Board of Directors[96] Abolition of Supervisory Committee and Amendments to Articles of Association The company has approved the abolition of the Supervisory Committee, with its functions to be exercised by the Board's Audit Committee, and has repealed related regulations while amending the Articles of Association and other governance documents - The company plans to abolish the Supervisory Committee, with its functions to be exercised by the Board's Audit Committee[98] - The "Rules of Procedure for the Supervisory Committee of Red Star Macalline Group Corporation Ltd." and other related Supervisory Committee regulations have been repealed, and the "Articles of Association" and other governance documents have been amended[98] Review of Interim Results The Board's Audit Committee has reviewed the interim results announcement and condensed consolidated financial statements for the six months ended June 30, 2025 - The Board's Audit Committee has reviewed the interim results announcement and condensed consolidated financial statements for the six months ended June 30, 2025[101] Publication of Announcement This announcement has been published on the Hong Kong Stock Exchange website and the company's website, and the 2025 interim report will be dispatched to shareholders and published on relevant websites in due course - This announcement has been published on the Hong Kong Stock Exchange website and the Company's website[102] - The 2025 interim report will be dispatched to shareholders and published on relevant websites in due course[102] Board Members As of the announcement date, the company's Board of Directors includes executive directors, non-executive directors, independent non-executive directors, and employee directors - A list of executive directors, non-executive directors, independent non-executive directors, and employee directors as of the announcement date is provided[103]