MeiKaiLong 2025 Annual Report: Net operating cash flow of 818 million yuan; the core business is bottoming out and stabilizing

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On March 30, MaikeLung (601828.SH, 01528.HK) released its 2025 annual report. During the reporting period, the company achieved operating revenue of 6.582 billion yuan. Due to downward pressure on the real estate industry, MaikeLung, adhering to a prudent approach, made a major fair-value valuation adjustment to its investment properties, resulting in a net loss of 23.722 billion yuan attributable to shareholders of listed companies for the year.

It is worth noting that, after excluding non-operating factors, MaikeLung’s main business is showing operational resilience and recovery elasticity. Guided by the new five-year strategy and empowered deeply by Jianfa Shares, the company’s operating quality has improved. The annual report shows that the net amount of operating cash flow for the full year reached 816 million yuan, up significantly 277.34% from 216 million yuan in 2024; the gross profit margin of the core home furnishing commercial services segment increased by 2 percentage points to 61.9%.

Jianfa empowers across the board—solidifying the foundation of core business

Judging from this annual report, MaikeLung’s main business has initially stabilized. As of December 31, 2025, the average occupancy rates of 74 self-operated malls and 218 managed malls under the company had both improved compared with 2024. Among them, the average occupancy rate of self-operated malls increased by 2 percentage points to 85.0%.

At the same time, Jianfa Group’s mature experience in state-owned asset management helps the company achieve comprehensive cost reduction and efficiency gains. In 2025, MaikeLung’s cost of sales, selling expenses, and administrative expenses decreased by 18.95%, 18.59%, and 24.22%, respectively. Each of these declines exceeded the drop in operating revenue, and operating efficiency improved in a tangible way. The financing advantages brought by Jianfa Shares’ shareholder background have also been gradually realized: the company’s overall cost of comprehensive financing was optimized from 5.1% last year to 4.4%, driving interest expense to fall from 25.31 billion yuan to 21.60 billion yuan. By the end of 2025, the combined scale of MaikeLung’s bills payable and accounts payable decreased by 43.79% compared with the end of the previous year, and historical debts were steadily cleared.

During the reporting period, business synergy between the two sides accelerated in implementation. MaikeLung and Jianfa Light Industry and Jianfa Automotive deepened their cooperation, continuously advancing the rollout of strategies such as the 3+Star ecosystem and the integration of people, vehicles, and homes. In 2025, MaikeLung’s electrical appliance store operating area reached 1.405 million square meters, and its area share rose to 10.1%; the auto business operating area doubled from 1.6 million square meters to 3.2 million square meters, covering 46 cities nationwide.

Jianfa Shares also brought MaikeLung new customer acquisition channels. On one hand, the company leveraged international-level events such as the Diamond League and the Xiamen Marathon to elevate its brand image; on the other hand, through Jianfa/Lianfa’s real estate ecosystem, MaikeLung extended its marketing touchpoints to 20 cities and 76 residential projects, cumulatively expanding customers by more than 14,000 groups. This directly drove conversion amount of approximately 150 million yuan, forming a “real estate + home furnishing” traffic closed loop.

In addition, the first deeply coordinated commercial project of the two sides, Chengdu Bay Yuecheng, opened on December 20, 2025. The project is positioned as “a vibrant family gathering venue in the south of the city,” breaking traditional boundaries of home furnishing commerce. It introduced diversified high-frequency consumption formats such as sports and outdoor activities, parent-child entertainment, and specialty dining, achieving a refreshed upgrade of stock assets and efficient release of commercial value.

Adjustment of investment property valuation—bolstering asset quality

Due to the deep reshaping of China’s real estate industry over the past few years, commercial real estate generally faces the need for valuation adjustments. Based on its cautious judgment of the macro environment and industry trends, MaikeLung conducted a comprehensive re-evaluation of the fair value of its investment properties in accordance with accounting standards. This measure resulted in a fair value change loss of approximately 23.442 billion yuan on the books, becoming the core reason for the company’s large loss in 2025. However, on the other hand, this valuation adjustment strengthens the company’s asset quality, making the carrying value of assets more aligned with current market reality.

Industry observers point out that such accounting treatment does not involve the company’s cash flow, nor does it mean that the company’s main business has deteriorated materially. Through sufficient value adjustments, MaikeLung eliminated potential hidden risks of continued depreciation of future assets, laying a more solid financial foundation for the company’s subsequent strategic layout.

While promoting the return of asset valuation to reasonable commercial value, MaikeLung also takes proactive actions at the operational level. Faced with the real challenges of shrinking industry demand and difficulties for merchants to operate, the company has adopted stabilizing merchant and supporting-the-business measures such as rent reductions and exemptions. It works to fully safeguard merchants’ survival space and maintain stability in the home furnishing industrial chain. Although this creates some short-term pressure on the revenue side, it also solidifies the merchant community and lays the groundwork for subsequent continuous improvement.

New five-year strategy sets sail—aiming at high-quality development

Since 2025, under the top-level guidance of “efforts to stabilize the real estate market,” the real estate industry has seen a series of policy tailwinds. In December 2025, the China Securities Regulatory Commission released the notice on “Relevant Work Concerning Promoting High-Quality Development of the Real Estate Investment Trust (REITs) Market,” bringing commercial real estate into the pilot program scope to help the industry broaden diversified financing channels. Starting January 1, 2026, the interest rates of existing provident fund loans were comprehensively lowered; among them, the interest rate for first-home loans with terms of over five years was lowered to 2.6%, and that for second homes to 3.075%, continuing to ease residents’ home-buying pressure. In March 2026, Shanghai announced that the minimum down payment ratio for commercial property purchase loans would be lowered to no less than 30%, reducing barriers to setting up, purchasing, and investing in commercial real estate. At the same time, across the country, policies to encourage replacing old consumer goods with new ones continued to be rolled out with great efforts. Smart home products were included in the subsidy scope, precisely unlocking the release of home furnishing consumption demand.

Accompanied by continuous policy reinforcement and the market’s own longer-term clearing, the real estate industry is gradually moving out of the downturn cycle. Stabilization and bottoming out are becoming a consensus across sectors. A research report from Citic Securities indicates that, as supply contraction enters its sixth year, the deep adjustments in the real estate market are expected to be nearing their end. Ding Zuyu, Vice Chairman of the CRIC Group and Chairman of Pru Smart Technology, analyzed from six dimensions—dynamic supply and demand, inventory, and the magnitude of adjustments in home prices—that the real estate market is conducting bottom confirmation and sending a signal of bottoming out and stabilization.

At this key juncture of industry bottoming out and recovery, MaikeLung’s new five-year strategy sets sail accordingly. With its positioning as “a new commercial operator for home furnishing living and a service provider for the home furnishing industry ecosystem,” the company anchors its direction toward high-quality development. On one hand, MaikeLung will focus on upgrading its home furnishing core business. By continuously upgrading content and operational capabilities, it will deeply explore the value of home furnishing commercial spaces to strengthen its competitiveness in core operations. At the same time, the company will continue to expand the scope of its services, empower upstream parts of the industrial chain—including brand factories—and build a second growth curve.

Analysts believe that as investment properties return to current commercial value and operational fundamentals solidify, against the backdrop of the real estate market gradually recovering and home furnishing consumption demand continuing to release, MaikeLung is expected to seize the recovery dividends of the industry, achieve continuous improvement in operating performance, and realize a return of long-term value.

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