Not long ago, Red Star Macalline released its 2021 performance announcement, with revenue of 15.513 billion yuan during the reporting period, an increase of 8.97% year-on-year; net profit of 2.047 billion yuan, an increase of 18.31% year-on-year; net profit of 1.658 billion yuan, an increase of 42.62% year-on-year.
As the epidemic is initially controlled, the industry collectively ushered in a wave of recovery last year, especially for stores that do not need to be affected by fluctuations in upstream raw materials. This wave of recovery is particularly eye-catching, and Red Star Macalline's data has also improved.
But the improvement of the data cannot conceal the debt crisis of Red Star Macalline being still at a high level. After surviving with broken arms, Red Star Macalline's situation still seems to be quite difficult.
Hardly promoted the strategy
For a long time, Red Star Macalline's business has been mainly built on the model of self-built shopping malls. This model has brought about rapid increase in the valuation of Red Star Macalline assets in the past decade, and thus brought about huge financing, supporting the rapid expansion of the group's business.
But real estate itself is an industry with a very tight capital chain, especially for commercial real estate with a longer recycling cycle. Once it encounters a counter-trend and the store business cannot keep up, Red Star Macalline will face the question of where the money comes from.
In 2020, Red Star Macalline proposed the strategy of "light assets, focus on operations, and reduce leverage", trying to reverse its serious debt crisis caused by its heavy asset model.
Light assets and heavy operations are essentially the same thing, that is, no longer relying on real estate business for expansion, but instead adopting entrusted management business to avoid the squeezing of the expansion on the capital chain, while exporting brands and operations, and charging corresponding consulting and management fees.
According to the performance announcement of Red Star Macalline in 2021, the number of its managed shopping malls increased from 273 in 2020 to 278, with the average occupancy rate of managed shopping malls of 91.4%, an increase of 0.7%. This is obviously the specific result of 's "light assets and heavy operations". Although it cannot be said to have a rapid growth, it has at least increased.
But on the other hand, the area of the custodian mall was only 13.8481 million square meters, a year-on-year decrease of 1.24%; the revenue of the custodian mall was 3.256 billion yuan, a year-on-year decrease of 9.06%, accounting for 20.99% of the revenue, a year-on-year decrease of 4.16%. Various data show that Red Star Macalline's light asset strategy does not seem to be smooth, and it is even shrinking, so it cannot bear the burden of helping Red Star Macalline get out of trouble.
leverage reduction level, Red Star Macalline sold 70% of its 7 logistics subsidiaries and Hongxing Real Estate to Ocean Capital last year, with prices of 2.312 billion yuan and 4 billion yuan respectively. In addition, Red Star Macalline also transferred 80% of the equity of Meikelong Property to Xuhui Yongsheng for 696 million yuan in the fourth quarter.
keeps breaking his arms to survive, which has indeed brought a certain amount of breathing space to Red Star Macalline. According to the 2021 performance announcement of Red Star Macalline, as of the end of the period, Red Star Macalline's debt-to-asset ratio decreased by 1.94% compared with 2020 to 57.44%.
But just like the light asset strategy, a slight data improvement cannot cover up the fundamental problem. Under 's debt-to-asset ratio is 57.44%, it is still as high as 77.656 billion yuan, of which current liabilities are 32.132 billion yuan.
Under the huge debt, Red Star Macalline's interest expenditure in 2021 was as high as 3.077 billion yuan, even higher than 2.914 billion yuan in 2020. Last year, Red Star Macalline's net profit was 2.047 billion yuan.
In addition, as of the reporting period, Red Star Macalline's current assets totaled only 15.653 billion yuan, of which 6.904 billion yuan of cash and cash equivalents were.
Debt crisis is still the sword of Damocles on the head of Red Star Macalline, and it is far from time to celebrate. can be said that for a long time in the future, Red Star Macalline will be on thin ice.
microscopic decline
macroscopic strategic adjustment effect is not as expected, but at least it has increased, which can give people a certain degree of confidence. However, the decline at the micro level of has gradually emerged, which has almost exhausted this confidence.
According to previous financial report data, Red Star Macalline's revenue in the first quarter was 3.341 billion yuan, a year-on-year increase of 48.09%; revenue in the second quarter was 4.162 billion yuan, a year-on-year increase of 20.01%; revenue in the third quarter was 3.851 billion yuan, a year-on-year increase of 9.93%; revenue in the fourth quarter was 4.159 billion yuan, a year-on-year decrease of 11.68%.
Even if you don’t look at the net profit that turned losses in the fourth quarter, your revenue will decline by nearly 10%. For Red Star Macalline, which is already in a debt crisis, the signal sent by you is probably not very positive.
. In response to this revenue decline, Red Star Macalline's gross profit margin and net profit margin have declined year by year. In 2021, Red Star Macalline's gross profit margin was 61.67%, which rebounded slightly after five consecutive years of decline, and its net profit margin was 14.11%, which was the sixth consecutive year of decline.
It is worth mentioning that compared with the net profit cut by half before the epidemic, changes in fair value of investment real estate account for a considerable proportion. According to the data from the performance announcement, the total changes in fair value in 2021 was 374 million yuan, accounting for 18.3%.
In general, although there are some progress in the grand strategic level of "light assets, heavy operations, and reduced leverage", Red Star Macalline has made little progress. To achieve strategic goals, there may still be a long way to go. On the contrary, its dark side is even more eye-catching, whether it is huge debts or the decline in revenue and profit levels.
market seems to value the impact of these dark sides more. Red Star Macalline, with a total asset of of 135.188 billion yuan, currently has a market value of about 33 billion yuan in the A-share market, and the Hong Kong stock market is only more than 14 billion yuan.
Not smooth business development
Under the big "light assets and heavy operations" strategy, Red Star Macalline also made it clear that is to continue to expand the sinking market and categories, second is home improvement and home integration, and third is online and offline integration.
at the sinking market level, according to the data of the performance announcement, the current operating area of Red Star Macalline's commission-managed mall is 13.8481 million square meters, accounting for about 70% of the third-tier and below cities. Among the 327 signed projects, the number of commission-managed malls in the preparations for third-tier and below cities accounts for 70%. Although the revenue contribution of is still relatively small, the scale is obviously piled up and the results need to be observed.
expands the category level. Because it is a performance announcement, Red Star Macalline's statement is mainly to accelerate the creation of category theme museums in order to quickly seize the minds of consumers in the mid-to-high-end market. It has currently completed the creation of more than 300 theme museums.
The most popular among them is the Smart Electrical Life Museum. htmlIn late February, under the successful experience of last year, Red Star Macalline, with dozens of leading electrical appliance brands such as Haier Smart Home, Aiosmith, and Fangtai, announced that it will build a total of 100 smart electrical appliance life halls within two years, creating sales of 30 billion yuan.
Of course, electrical appliances themselves are a fully competitive market. Even in offline where Red Star Macalline is dominant, it also faces competition from traditional giants such as Suning and Gome. It is even more difficult to be online where Red Star Macalline does not have an advantage, and the strength of platforms such as Tmall and JD.com.
According to the data from the "2020 China Home Appliance Market Report" released by the China Electronic Information Industry Development Research Institute, the contribution rate of e-commerce channels to home appliance retail has exceeded 50%.
So how is Red Star Macalline's online and offline integration progressing? In the performance announcement, Red Star Macalline did not provide specific data, but only stated that company is actively developing new retail models in the same city and has begun to show results, and the digital upgrade based on the shopping mall and the effective layout of online traffic entrances have begun to show results.
If there is no concept of this expression, let’s take a look at the progress of home improvement integration that has transcended the initial results, and there may be a general concept.
2021, relying on the offline shopping mall physical network, Red Star Macalline home decoration stores cover more than 200 cities in 25 provinces, municipalities and autonomous regions across the country, with a total of 253 stores opened, and home decoration-related and commodity sales achieved revenue of 1.396 billion yuan, a year-on-year increase of 14.05%, accounting for 9.0% of the revenue ratio, an increase of 0.4%.
If construction and design are included, the total revenue is 2.895 billion yuan, which is almost on the spot compared to 2.892 billion yuan in 2020.
Relatively speaking, based on the advantages of its own store, expanding the sales logic of whole-installation and high-end electrical appliances may be smoother than simply online construction, but the problems faced are actually the same as those faced by the store in recent years. This is also the reason why its size has started to run first, but the progress is still relatively slow.
In the downward cycle of real estate, whether it is the main business of the store, or the diversified businesses such as complete decoration and electrical appliances, they are facing the general environmental impact of the decline in the growth rate of the entire home furnishing incremental market.
When the overall environment leads to poor business development, Red Star Macalline's gross profit margin and net profit margin decline, and the debt crisis still exists. Endogenous crises also remind us that after Red Star Macalline broke its arm, it is still on the road to survival.
Author | Liu Lin
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