Nan Fang Du Shi Bao·2025-05-14 05:44Core Viewpoint - The company is facing significant challenges due to leadership issues, financial distress, and declining performance in the home furnishing retail sector, leading to investigations and legal actions against its founder and former executives [1][2][3]. Group 1: Leadership and Legal Issues - Founder Che Jianxing has been placed under investigation by the Yunnan Provincial Supervisory Committee, with measures taken against him, although the company claims its board operations remain normal [1]. - The former CEO Gao Shuang was sentenced to three years in prison for embezzlement, highlighting ongoing governance issues within the company [7]. Group 2: Financial Performance - The company has experienced a significant decline in revenue and net profit, with total revenue for 2024 reported at 7.821 billion, a decrease of 32.08%, and a net loss of 2.983 billion [5]. - In the first quarter of 2024, revenue was 1.615 billion, down 23.49%, with a net loss of 513 million, an increase of 38.2% compared to the previous year [5]. Group 3: Debt and Asset Management - The company has been under severe financial strain, with total liabilities reaching 381 billion by June 2023, and a short-term debt gap exceeding 4 billion [2][3]. - To alleviate debt pressure, Che Jianxing has engaged in asset divestitures, including selling a 29.95% stake in Meikailong for 6.3 billion [3]. Group 4: Market Position and Strategy - The company is attempting to adapt to declining foot traffic in the home furnishing sector by diversifying its offerings, including introducing automotive sales and supermarkets, but continues to face challenges with rental income and occupancy rates [6].