After selling a series of assets, as of the end of June this year, Meikaron, which was listed on A-share , had a total liability of 76.321 billion yuan; the total amount of interest-bearing debt also dropped slightly to 37.469 billion yuan. Although the debt of
has slightly decreased, all of the more than 30 billion yuan need to be repaid by Red Star Macalline.
Red Star Macalline is not optimistic on the financing side. In the first half of the year, the inflow of cash flow in financing activities was only 1.965 billion yuan, a new low since 2018. This can only rely on the cash flow brought by the business, but in the industry, its performance is also declining.
At the same time, there are less than 100 days left before the end of 2022, and the retail industry is quite urgency.
The current epidemic situation in various places is still spreading at multiple points, and the trends in the real estate market have an impact on home consumption confidence and offline home store shopping. If needs to rely on the retail end to optimize the debt structure, then for Red Star Macalline, the eleven things that just passed are strategic high grounds that must be won.
1. After the business declines, Macalline cannot defend its "light asset position"
For investors and consumers, Red Star Macalline is a magical existence.
On the one hand, many people still have faith in Red Star Macalline's stock and think it is the most resilient one among home furnishing brands.
After all, compared with many home furnishing companies, Meikaron's performance in the first half of the year was not lost, at least it was profitable, with revenue of 6.957 billion yuan in the first half of the year, a year-on-year decline of 7.3%; net profit attributable to shareholders was 1.025 billion yuan, a year-on-year decline of 32.1%.
But on the other hand, Red Star Macalline was expanding before, and debt problems were already a fact that some investors were worried that the entire Red Star system's capital chain could no longer hold on to the future turmoil. , especially Red Star Macalline's profits, can cover the future debt repayment needs? It's worth discussing.
industry perspective, Meikaron's main business did not increase significantly in the first half of the year, with self-operated shopping mall leasing and related revenues of 4.153 billion yuan, an increase of 6.0% year-on-year, accounting for 59.7% of operating income; the commissioned business revenue of the commissioned shopping mall was 1.296 billion yuan, a decrease of 22.7% from the same period last year; the home decoration related service and commodity sales business declined by 56.3%.
Although Meikelong attributed the custodian shopping mall business to the delay in the relevant service progress in the epidemic environment, in fact, since 2020, the custodian shopping mall business has been declining. Although the number of custodian shopping malls has grown faster than that of self-operated shopping malls; however, from 2018 to 2021, its revenue dropped from 4.177 billion yuan to 3.256 billion yuan, and the proportion of total revenue has also continued to decline.
You should know that the entrusted management model was once considered a good medicine for Red Star Macalline to get rid of heavy assets . The decline in this part of the business inevitably makes people question the effectiveness of its light assets.
Of course, some people have put forward similar views: Red Star Macalline's business is very stable mainly by renting out shopping malls. In the first half of the year, the average occupancy rate of 94 self-operated shopping malls reached 92.1%, and the average occupancy rate of 280 shopping malls managed by the committee reached 90.1%, so it is not feared that the decline in business management and home improvement sales will be.
However, this statement is difficult to be consistent.
Because of the obvious transmission effect of the decline in home purchasing power, the business area of Red Star Macalline is now mostly distributed in third-tier and below cities, especially the entrusted management shopping malls account for more than 70% of the markets in third-tier and below cities.
Since the previous year, the real estate transactions in third- and fourth-tier cities have continued to be weak; as a downstream, decoration has already felt a lot of "cold". Since home consumption in third- and fourth-tier cities is weak, the development speed of Meikaron's commissioned business will slow down, which will eventually lead to a heavy pace of "lightweight".
Therefore, high debt is still the double-edged sword of Mekalon, especially from 2015 to 2022, its expansion is very fast, with the number of shopping malls growing from 177 to 475. It can be seen that it really wants to do a good job in high-end home furnishings, continue to sink to third- and fourth-tier cities, and squeeze into the one-acre and three-point land of miscellaneous furniture cities. Moreover, in order to expand stores, Red Star Macalline has also done a lot of tests in grass planting capabilities and store types. Now it has three main store types: No. 1 Store, Supreme Mall, and benchmark mall, and the operation is not small.
However, in the consumer field, Yonghui Supermarket test super species , Yonghui mini can announce failure, RT-Mart test FA Zhongrunfa and Xiaorunfa did not achieve real results, Suning Small Store even traded losses for expansion, and the retail model that was too segmented has long been falsified many times.
Moreover, because of the low frequency of home consumption and high average customer price, whether it is high net worth or ordinary users, everyone knows about houses from multiple sources. The home furnishing cities in the city will compare. The different store types of Red Star Macalline are not very different in the minds of customers.
Too many store types and operational difficulties are high, and the home consumption power has declined. If this transmission mechanism deteriorates, the leasing rate will increase significantly. The occupancy rate that Red Star Macalline once proud of will no longer exist by then.
And 2022 is about to end, Red Star Macalline should "know the times as the heroes", seize the Mid-Autumn Festival to the National Day Golden Week, and ensure cash flow in the second half of the year.
This is not only a problem facing Red Star Macalline, but also a test for the home furnishing market.
2. The National Day Golden Period determines the success or failure of this year
In order to verify the preparation rhythm and promotion intensity of Red Star Macalline in this National Day Golden Week, we also visited some of the stores in Red Star Macalline in Beijing. On Sunday afternoons at the end of September, except for the time of the activities in the middle hall, there was not much traffic in the store, and most of the people participating in the event were parents and children to join in the fun.
Beijing Red Star Macalline North Beach Store rushes on Sunday afternoon
It is said that Red Star Macalline has several characteristics in the home building materials industry : relies on experience , non-standardized , relies on service , so e-commerce is more difficult to cause impact , , and is also very irreplaceable .
But our on-site visit found that Red Star Macalline's high-end home furnishing brands are deserted, such as coffee tables worth tens of thousands of yuan, functional leather sofa worth more than 30,000 yuan, and bed worth tens of thousands of yuan, and no one consulted.
In contrast, several more affordable whole-house customization brands are more popular, with customers coming in and out, and there are also constant transactions and card swiping; in addition, is in the mattress experience area, with significantly more people flowing, especially for more consumers who try to sleep, and many young consumers have recorded their numbers, and I don’t know if they want to go to e-commerce to find the same model.
A clerk of a listed mattress brand said he didn't mind customers doing this. After all, a mattress brand like mattress rents a store in Hongxing Macalline just to have an offline experience, and the average customer price of mattresses is low, so the frequency and probability of changing mattresses are relatively high. The clerk laughed and said that they may be the store with the best customer flow in the entire mall, and the store requires all employees to arrive during the National Day holiday.
However, relying solely on mattresses and whole-house customization, it seems that the overall sales volume of the mall cannot be supported.
When talking to some of the shop assistants who have joined the brand in Red Star Macalline, we seem to be able to feel the tight cash flow of Red Star Macalline. For example, a whole-house customization clerk introduced that during the National Day holiday, in addition to the brand's own activities, Meikaron Shopping Mall also has "pay 10,000 yuan to offset the value of 11,500 yuan", which is indeed a good way to recover funds. However, when the shop assistant introduced, a customer shook his head and thought it was not insured to give the mall 100,000 yuan in advance, because he had only handed over the house and started construction after more than half a year.
In addition, a clerk of a certain home furnishing brand believes that this year's 11th is still much lower than that of previous years' 11th. He took Beijing as an example. First of all, there are fewer new houses delivered, and fewer communities that Red Star Macalline can cooperate with. In addition, the transaction volume of second-hand houses has also declined this year, and fewer people are decorating it. It depends entirely on the secondary decoration of existing houses. This cake is not too big. After all, no one will change a sofa in two or three years.
The clerk also said that before, Red Star Macalline was positioned as high-end, and the brands that entered the market also believed that it was a gathering place for "high-end models". The decorations in the store were all genuine leather sofas worth more than 20,000 yuan; but the best sales this year was the imitation leather sofas worth about 7,000 yuan from the wrong store. The clerk joked that the gap between Red Star Macalline and other home furnishing cities is not big, so there is no need to go to other home furnishing cities to compare prices, and intent on letting us quickly set this set of sofas.
It is worth mentioning that on the evening of October 7th and the last day of the National Day event, a clerk who worked as a whole house smart still called us to deposit funds to participate in the activities of the brand and Red Star Macalline Shopping Mall, and also revealed that it could help us apply to extend the event time limit. It can be seen that this 11th is really "to the last minute" for the home furnishing industry.
3. Can Mekayron give up high debt?
The current Red Star Macalline not only has to face the "intra-conversion" of the industry externally, but also calmly think about its own debt structure internally.
has always had a consensus in the industry before that Red Star Macalline's and Wanda are similar. Both started with self-operated shopping malls, and now they are gradually choosing to divest real estate and transform into light assets.
Wanda really has the determination to cut off its arm. After Lao Wang decided to transform in 2015, he no longer provided funds to build Wanda Plaza and continued to clear heavy assets. After four years, Wanda no longer holds Wanda Plaza in 2019, and it can be said that it is timely to complete the transformation.
But Red Star Macalline's light asset slogan is very loud, and it seems that it cannot give up heavy assets when actually implementing it, because the occupancy rate and profit average of self-operated shopping malls are significantly higher than that of the commissioned shopping malls, and the operating efficiency of self-operated shopping malls is better. Its 2022 semi-annual report shows that there are still 19 self-operated shopping malls in preparation.
Red Star Macalline head Chejianxin once publicly stated: the cost of opening a new shopping mall is close to 500 million yuan, and these 19 stores mean that nearly 10 billion yuan is needed. Although
has no impact on MeKelone in the short term, it has fulfilled its principal of 3.931 billion yuan of unmatured domestic bonds this year, with only 79 million yuan of interest remaining to be repaid. A US$300 million bond has been repaid before, so I breathed a sigh of relief.
However, when the future rent cannot meet the required expansion funds, not only will borrow new and return old , but also need to rely on more external financing. Recently, MeKelone is preparing to issue a three-year bond of US$249.7 million to repay other debts, and there is still about 15 billion yuan of domestic bonds to mature in the next three years. So we have reason to speculate that in the next three years, MeKelone may face the embarrassment of "borrowing new and repaying old, demolishing east and repairing west walls".
Let’s look at the asset quality of Red Star Macalline, with a total assets of 133.932 billion yuan, the most important of which is investment real estate of 96.164 billion yuan (which can be understood as the land price of self-operated shopping malls), accounting for 71.80%. Of the 96.164 billion yuan of investment real estate, 85.045 billion yuan has been mortgaged to obtain loans. If the debt pressure rises, Red Star Macalline may even face the embarrassment of not having collateral for the loan.
In addition, Red Star Macalline's profit level is also "positively correlated" with the properties in hand, because investment real estate can be measured at fair value. As long as it can be proved that the land price has risen, the company will have profits.
In fact, some investors have questioned this issue long ago, and Red Star Macalline's reply also indirectly confirmed that self-operated properties can indeed increase profits, so it is really reluctant to let go!
Even before 2021, research institutions believed that Red Star Macalline made a lot of money through property appreciation. Some institutions have calculated that under two different measurement models, the appreciation of investment real estate can not only reduce the apparent debt ratio, but also have an impact on Red Star Macalline's net profit margin of 18%.
No wonder some investors commented that Red Star Macalline's main business sells furniture, in fact, it is very good at buying land. But now, whether it is housing or commercial land, prices are "shut down", so this road to increase income has been blocked.
A primary market person in Shanghai commented on the current situation of Red Star Macalline: "Now, you still have to walk on two legs when you go into battle lightly. If you want to resolve the debt crisis, you should sell assets, such as using REITs to package the mall for sale and recover funds; on the other hand, you cannot borrow a lot of money. You have to find ways to introduce investors to reduce their holdings at low prices and convert their shares to stocks, and use measures such as reducing leverage to improve the capital structure. After all, looking at the shares pledged by Meikelong Group, you are shocked."
was written at the end
Looking back more than 30 years ago, Che Jianxin, the head of Red Star Macalline, took 600 yuan, and went from a hardworking apprentice to a giant in the industry. It is not an exaggeration to say that he is the "godfather" of the Chinese living industry.
However, Che Jianxin, which is nearly 60 years old, and Red Star Macalline, which is nearly 40 years old, must continue to manage its own "great wisdom" and realize that big does not mean strong, and fast does not mean excellent.
Only by giving up can you gain something in capital optimization can you step into the real estate cycle and achieve "the vast sky and the sky".
Reference:
Red Star Macalline Financial Report
Financial Entropy: Red Star Macalline is not able to bear the "heavy" burden
Hi Niu Business Review: Red Star Macalline has nearly 80 billion yuan in debt, is Che Jianxin's "real estate dream" about to be shattered?
First Finance: What is the downgrade of Red Star Macalline? The key is to recite the quality scriptures
However, in the consumer field, Yonghui Supermarket test super species , Yonghui mini can announce failure, RT-Mart test FA Zhongrunfa and Xiaorunfa did not achieve real results, Suning Small Store even traded losses for expansion, and the retail model that was too segmented has long been falsified many times.
Moreover, because of the low frequency of home consumption and high average customer price, whether it is high net worth or ordinary users, everyone knows about houses from multiple sources. The home furnishing cities in the city will compare. The different store types of Red Star Macalline are not very different in the minds of customers.
Too many store types and operational difficulties are high, and the home consumption power has declined. If this transmission mechanism deteriorates, the leasing rate will increase significantly. The occupancy rate that Red Star Macalline once proud of will no longer exist by then.
And 2022 is about to end, Red Star Macalline should "know the times as the heroes", seize the Mid-Autumn Festival to the National Day Golden Week, and ensure cash flow in the second half of the year.
This is not only a problem facing Red Star Macalline, but also a test for the home furnishing market.
2. The National Day Golden Period determines the success or failure of this year
In order to verify the preparation rhythm and promotion intensity of Red Star Macalline in this National Day Golden Week, we also visited some of the stores in Red Star Macalline in Beijing. On Sunday afternoons at the end of September, except for the time of the activities in the middle hall, there was not much traffic in the store, and most of the people participating in the event were parents and children to join in the fun.
Beijing Red Star Macalline North Beach Store rushes on Sunday afternoon
It is said that Red Star Macalline has several characteristics in the home building materials industry : relies on experience , non-standardized , relies on service , so e-commerce is more difficult to cause impact , , and is also very irreplaceable .
But our on-site visit found that Red Star Macalline's high-end home furnishing brands are deserted, such as coffee tables worth tens of thousands of yuan, functional leather sofa worth more than 30,000 yuan, and bed worth tens of thousands of yuan, and no one consulted.
In contrast, several more affordable whole-house customization brands are more popular, with customers coming in and out, and there are also constant transactions and card swiping; in addition, is in the mattress experience area, with significantly more people flowing, especially for more consumers who try to sleep, and many young consumers have recorded their numbers, and I don’t know if they want to go to e-commerce to find the same model.
A clerk of a listed mattress brand said he didn't mind customers doing this. After all, a mattress brand like mattress rents a store in Hongxing Macalline just to have an offline experience, and the average customer price of mattresses is low, so the frequency and probability of changing mattresses are relatively high. The clerk laughed and said that they may be the store with the best customer flow in the entire mall, and the store requires all employees to arrive during the National Day holiday.
However, relying solely on mattresses and whole-house customization, it seems that the overall sales volume of the mall cannot be supported.
When talking to some of the shop assistants who have joined the brand in Red Star Macalline, we seem to be able to feel the tight cash flow of Red Star Macalline. For example, a whole-house customization clerk introduced that during the National Day holiday, in addition to the brand's own activities, Meikaron Shopping Mall also has "pay 10,000 yuan to offset the value of 11,500 yuan", which is indeed a good way to recover funds. However, when the shop assistant introduced, a customer shook his head and thought it was not insured to give the mall 100,000 yuan in advance, because he had only handed over the house and started construction after more than half a year.
In addition, a clerk of a certain home furnishing brand believes that this year's 11th is still much lower than that of previous years' 11th. He took Beijing as an example. First of all, there are fewer new houses delivered, and fewer communities that Red Star Macalline can cooperate with. In addition, the transaction volume of second-hand houses has also declined this year, and fewer people are decorating it. It depends entirely on the secondary decoration of existing houses. This cake is not too big. After all, no one will change a sofa in two or three years.
The clerk also said that before, Red Star Macalline was positioned as high-end, and the brands that entered the market also believed that it was a gathering place for "high-end models". The decorations in the store were all genuine leather sofas worth more than 20,000 yuan; but the best sales this year was the imitation leather sofas worth about 7,000 yuan from the wrong store. The clerk joked that the gap between Red Star Macalline and other home furnishing cities is not big, so there is no need to go to other home furnishing cities to compare prices, and intent on letting us quickly set this set of sofas.
It is worth mentioning that on the evening of October 7th and the last day of the National Day event, a clerk who worked as a whole house smart still called us to deposit funds to participate in the activities of the brand and Red Star Macalline Shopping Mall, and also revealed that it could help us apply to extend the event time limit. It can be seen that this 11th is really "to the last minute" for the home furnishing industry.
3. Can Mekayron give up high debt?
The current Red Star Macalline not only has to face the "intra-conversion" of the industry externally, but also calmly think about its own debt structure internally.
has always had a consensus in the industry before that Red Star Macalline's and Wanda are similar. Both started with self-operated shopping malls, and now they are gradually choosing to divest real estate and transform into light assets.
Wanda really has the determination to cut off its arm. After Lao Wang decided to transform in 2015, he no longer provided funds to build Wanda Plaza and continued to clear heavy assets. After four years, Wanda no longer holds Wanda Plaza in 2019, and it can be said that it is timely to complete the transformation.
But Red Star Macalline's light asset slogan is very loud, and it seems that it cannot give up heavy assets when actually implementing it, because the occupancy rate and profit average of self-operated shopping malls are significantly higher than that of the commissioned shopping malls, and the operating efficiency of self-operated shopping malls is better. Its 2022 semi-annual report shows that there are still 19 self-operated shopping malls in preparation.
Red Star Macalline head Chejianxin once publicly stated: the cost of opening a new shopping mall is close to 500 million yuan, and these 19 stores mean that nearly 10 billion yuan is needed. Although
has no impact on MeKelone in the short term, it has fulfilled its principal of 3.931 billion yuan of unmatured domestic bonds this year, with only 79 million yuan of interest remaining to be repaid. A US$300 million bond has been repaid before, so I breathed a sigh of relief.
However, when the future rent cannot meet the required expansion funds, not only will borrow new and return old , but also need to rely on more external financing. Recently, MeKelone is preparing to issue a three-year bond of US$249.7 million to repay other debts, and there is still about 15 billion yuan of domestic bonds to mature in the next three years. So we have reason to speculate that in the next three years, MeKelone may face the embarrassment of "borrowing new and repaying old, demolishing east and repairing west walls".
Let’s look at the asset quality of Red Star Macalline, with a total assets of 133.932 billion yuan, the most important of which is investment real estate of 96.164 billion yuan (which can be understood as the land price of self-operated shopping malls), accounting for 71.80%. Of the 96.164 billion yuan of investment real estate, 85.045 billion yuan has been mortgaged to obtain loans. If the debt pressure rises, Red Star Macalline may even face the embarrassment of not having collateral for the loan.
In addition, Red Star Macalline's profit level is also "positively correlated" with the properties in hand, because investment real estate can be measured at fair value. As long as it can be proved that the land price has risen, the company will have profits.
In fact, some investors have questioned this issue long ago, and Red Star Macalline's reply also indirectly confirmed that self-operated properties can indeed increase profits, so it is really reluctant to let go!
Even before 2021, research institutions believed that Red Star Macalline made a lot of money through property appreciation. Some institutions have calculated that under two different measurement models, the appreciation of investment real estate can not only reduce the apparent debt ratio, but also have an impact on Red Star Macalline's net profit margin of 18%.
No wonder some investors commented that Red Star Macalline's main business sells furniture, in fact, it is very good at buying land. But now, whether it is housing or commercial land, prices are "shut down", so this road to increase income has been blocked.
A primary market person in Shanghai commented on the current situation of Red Star Macalline: "Now, you still have to walk on two legs when you go into battle lightly. If you want to resolve the debt crisis, you should sell assets, such as using REITs to package the mall for sale and recover funds; on the other hand, you cannot borrow a lot of money. You have to find ways to introduce investors to reduce their holdings at low prices and convert their shares to stocks, and use measures such as reducing leverage to improve the capital structure. After all, looking at the shares pledged by Meikelong Group, you are shocked."
was written at the end
Looking back more than 30 years ago, Che Jianxin, the head of Red Star Macalline, took 600 yuan, and went from a hardworking apprentice to a giant in the industry. It is not an exaggeration to say that he is the "godfather" of the Chinese living industry.
However, Che Jianxin, which is nearly 60 years old, and Red Star Macalline, which is nearly 40 years old, must continue to manage its own "great wisdom" and realize that big does not mean strong, and fast does not mean excellent.
Only by giving up can you gain something in capital optimization can you step into the real estate cycle and achieve "the vast sky and the sky".
Reference:
Red Star Macalline Financial Report
Financial Entropy: Red Star Macalline is not able to bear the "heavy" burden
Hi Niu Business Review: Red Star Macalline has nearly 80 billion yuan in debt, is Che Jianxin's "real estate dream" about to be shattered?
First Finance: What is the downgrade of Red Star Macalline? The key is to recite the quality scriptures
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