Meikailong: State-owned shareholder stabilizes core business, investment-property revaluation triggers huge loss

Core business steadies under state-backed hands

Meikailong (美凯龙), the listed home furnishings mall operator, posted revenue of 65.82亿元 (RMB 6.582 billion) for 2025 but reported a headline net loss attributable to shareholders of -237.22亿元 (RMB -23.722 billion). The annual report shows the loss was driven almost entirely by a large fair-value revaluation of investment properties—about 234.42亿元—taken in response to the prolonged downturn in China’s real-estate market. The writedown swamped operating results, but operating metrics paint a different picture: operating cash flow rose to 8.16亿元 from 2.16亿元 a year earlier (up 277.3%), and the core home-commercial services gross margin improved two percentage points to 61.9%.

State-owned backing, cost cuts and financing relief

Since C&D Corporation (建发股份) became the controlling shareholder, it has been reported that Meikailong has benefited from stronger governance and state-backed financing advantages. Under C&D’s stewardship the group trimmed costs—cost of sales, selling and administrative expenses fell by 18.95%, 18.59% and 24.22% respectively, outpacing the revenue decline—and comprehensive financing cost dropped to 4.4% from 5.1%, helping interest expense fall from 25.31亿元 to 21.60亿元. Occupancy and footprint metrics show stabilization: 74 self-operated malls (average occupancy 85.0%), 218 managed malls (82.9% occupancy), 19 franchise projects covering 345 stores, and total operating area of 1,913.48万平方米 across 181 cities.

Why the write-down—and why it might be a reset

China’s commercial-property market has faced falling rents, rising vacancies and tight financing. Meikailong’s revaluation reflects that macro reality and, importantly, brings balance-sheet values closer to market conditions—an accounting pain now that could remove uncertainty later. The company has also taken active measures to support tenants through rent concessions and to reshape mall mix—expanding appliance and auto zones (appliance area rose to 140.5万平方米, 10.1% of area; auto area doubled to 32万平方米 across 46 cities) and piloting mixed-use concepts such as the recently opened Chengdu Bay Yue City.

Policy tailwinds and outlook

The firm’s strategic repositioning sits against a backdrop of Chinese policy aimed at stabilizing property and stimulating consumption: regulators have widened REITs pilots to include commercial real estate, mortgage rates and down-payment rules have been loosened, and nationwide consumption incentives—some covering smart home products—are under way. Can accounting pain turn into commercial opportunity? Meikailong’s management argues yes: with a new five-year plan positioning the group as a “home-life new commercial operator and home-industry ecosystem service provider,” it is betting that state-backed financing, cost discipline and tenant-support measures will underpin recovery as the broader property cycle finds a floor.