Zhong Guo Jing Ying Bao·2025-05-14 21:15Core Viewpoint - The recent investigation and detention of the general manager of Red Star Macalline, Che Jianxing, has raised concerns about the company's governance and operational stability, although the company asserts that its daily operations remain unaffected [5][6]. Company Governance - Che Jianxing has been placed under investigation by the Yunnan Provincial Supervisory Committee, with the company stating that the management team is stable and operations are normal [5][6]. - The company has a robust organizational structure and internal control mechanisms, with the chairman, Li Yupeng, temporarily assuming the responsibilities of the general manager [6][9]. Financial Issues - Red Star Macalline faced financial penalties from the Ministry of Finance due to accounting errors related to its subsidiaries, leading to overstatements in various financial metrics, including a misreported investment property value of 2.475 billion yuan [7][8]. - The company has reported significant losses over the past two years, totaling nearly 5.2 billion yuan, with revenue declining sharply in 2023 and 2024 [10][11]. Business Strategy and Performance - In response to market challenges, Red Star Macalline is diversifying its business model by introducing new categories such as home decoration and electric vehicles, with a planned operational area of approximately 910,000 square meters by the end of 2024 [9][10]. - Despite efforts to innovate and expand, the company's revenue continues to decline, with a reported 23.49% drop in Q1 2025 compared to the previous year [10][11]. Market Presence - As of the end of 2024, Red Star Macalline operates 77 self-managed malls and has seen a reduction in the number of managed and franchised stores, indicating a contraction in its market presence [10][11]. - The company aims to transform from a traditional building materials and home furnishing service provider to a comprehensive lifestyle aggregator, focusing on innovation and digitalization to enhance competitiveness [11].