Red Star Macalline Returns to Profit in 9M 2026 as Fair-Value Losses Recede and Costs Fall

Bulletin Express
10/30

Red Star Macalline Group Corporation Ltd. reported a sharp turnaround for the nine months ended 30 September 2026, moving back into the black on the back of markedly lower fair-value losses and tighter cost control, despite a modest top-line contraction.

Revenue slipped 7.9% year on year to RMB4.58 billion, primarily reflecting a smaller mall portfolio and reduced activity in construction and decoration services. Nevertheless, gross profit margin widened to 65.3% (9M 2025: 61.9%), supported by a 16.0% cut in cost of sales to RMB1.59 billion.

Operating profit rebounded to RMB292.06 million from a loss of RMB3.34 billion a year earlier. The main driver was a steep reduction in fair-value losses on investment properties to RMB148.32 million, compared with a RMB3.33 billion hit in the prior-year period, as mall leasing operations stabilised and rental expectations improved. Distribution & selling expenses and G&A costs were trimmed by 30.4% and 15.8% respectively, reflecting management’s focus on core businesses and tighter expense discipline.

Net profit attributable to shareholders reached RMB93.05 million versus a loss of RMB3.14 billion in 9M 2025. On a core basis—excluding non-recurring items—the company generated RMB46.06 million, a swing from a RMB958.81 million loss a year earlier. Basic earnings per share came in at RMB0.02 (9M 2025: –RMB0.72).

Cash generation strengthened materially. Operating cash inflow surged to RMB1.58 billion, up from RMB642.88 million, supported by improved working-capital management. After modest net investing inflows of RMB33.07 million and financing outflows of RMB1.28 billion, cash and cash equivalents increased by RMB329.06 million to RMB3.12 billion.

Total assets stood at RMB86.36 billion as of 30 September 2026, down 1.1% from end-2025, while total liabilities eased 1.3% to RMB62.64 billion. The debt load remained significant, with aggregate borrowings of RMB29.43 billion. Equity attributable to shareholders was broadly stable at RMB22.47 billion, equivalent to 26.0% of total assets.

Management attributed the revenue decline to a smaller number of shopping malls and a deliberate pullback from non-core construction and decoration projects. Looking ahead, the company emphasised its commitment to consolidating its mall leasing and operations platform as the principal growth driver.

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