A ¥6.3B rescue couldn't stop a ¥23.7B writedown at China's mall giant

In 1986 Che Jianxin borrowed 600 yuan to start a furniture workshop in Changzhou; it grew into Red Star Macalline, China's largest operator of home-furnishing malls, listed in Hong Kong in 2015 and Shanghai in 2018 — the first A+H furniture retailer. By early 2019 it ran 364 malls across 199 cities, and its self-operated malls were carried on the balance sheet as investment property at fair value. That accounting worked while prices rose; it became the whole problem when they stopped.

By 2023 the founder needed a rescuer. C&D, the Xiamen state-backed developer, paid ¥6.286 billion for 29.95% of Macalline at ¥4.82 a share; Xiamen SASAC became the actual controller and C&D's chairman replaced Che Jianxin in the chair. The rescue changed the shareholder, not the market: FY2024 lost ¥2.983 billion, and FY2025 lost ¥23.722 billion — ¥23.442 billion of fair-value losses on investment property plus ¥3.904 billion of impairments, on revenue of ¥6.582 billion, down 15.85%. The network shrank by another 42 malls, from 334 to 292.

The odd part of the report is that the business itself kept working: operating cash flow rose from ¥216 million to ¥816 million, and the malls still collect rent at 85% occupancy — the loss is the book being marked to a housing market that will not recover on schedule. C&D now carries the drag inside its own accounts. Macalline's answer is to change what the malls sell: appliance halls cover 1.4 million square meters and a car-sales business doubled to 320,000 square meters across 46 cities. The furniture mall is being refitted into whatever still moves.