MeiKaiLong 2025 Annual Report: Main Business Stabilizing at the Bottom, Asset Write-downs in Accounting Treatment Leading to Losses

On March 30, Maika Long (601828.SH, 01528.HK) released its 2025 annual report. During the reporting period, the company achieved revenue of 6.582 billion yuan. Affected by downward pressure in the real estate industry, Maika Long adheres to a prudent principle and made a major valuation adjustment to the fair value of its investment property, resulting in a net loss of 23.722 billion yuan attributable to shareholders of the listed company for this year.

Notably, after excluding non-operating factors, Maika Long’s core business is showing operational resilience and repair-driven upside. Under the guidance of its new five-year strategy and the deep empowerment from Jianfa Holdings, the company’s operating quality has improved. The annual report shows that its net operating cash flow for the full year reached 816 million yuan, a substantial increase of 277.34% compared with 216 million yuan in 2024. The gross margin of the core home furnishing commercial services segment rose by 2 percentage points to 61.9%.

Jianfa provides all-round empowerment; the core business is stabilized at the bottom

From this annual report, Maika Long’s main business has been initially stabilized. As of December 31, 2025, the average occupancy rate of its 74 self-operated malls and 218 managed-by-the-company malls improved versus 2024. Among them, the average occupancy rate of self-operated malls increased by 2 percentage points to 85.0%.

Meanwhile, Jianfa Group’s mature experience in state-owned asset management helps the company achieve all-round cost reduction and efficiency improvement. In 2025, Maika Long’s operating costs, selling expenses, and management expenses fell by 18.95%, 18.59%, and 24.22%, respectively; the decline in each category exceeded the decline in operating revenue, and operating efficiency was materially enhanced. The financing advantages brought by Jianfa Holdings’ shareholder background are also gradually being realized. The company’s comprehensive cost of financing rate was optimized from 5.1% last year to 4.4%, driving interest expenses down from 2.531 billion yuan to 2.160 billion yuan. By the end of 2025, the combined scale of Maika Long’s accounts payable notes and accounts payable decreased by 43.79% compared with the end of the prior year, and historical debts were steadily cleared.

During the reporting period, business synergy between the two parties accelerated. Maika Long and Jianfa Light Industry and Jianfa Auto deepened cooperation, continuously advancing the implementation of strategies such as 3+ Star ecosystem and car-man-home. In 2025, Maika Long’s appliance store operating area reached 1.405 million square meters, with its area share rising to 10.1%. Its automobile operating area doubled from 160,000 square meters to 320,000 square meters, covering 46 cities nationwide.

Jianfa Holdings also brought Maika Long new customer acquisition channels. On the one hand, the company coordinated with international events such as the Diamond League and the Xiamen Marathon to elevate its brand image. On the other hand, Maika Long, through the Jianfa/Fuafan real estate ecosystem, extended its marketing reach to 20 cities and 76 property projects. It cumulatively expanded over 14,000 customer groups, directly driving conversion amounts of about 150 million yuan, thereby building a “real estate + home furnishings” traffic closed loop.

In addition, the first deep-cooperation commercial project between the two parties, Chengdu Bay Yue City, opened on December 20, 2025. The project is positioned as “a Yue Gathering Place for Active Families in the south of the city,” breaking traditional boundaries of home-furnishing commerce. It introduces diversified high-frequency consumption formats such as sports and outdoor activities, parent-child entertainment, and特色餐饮/特色餐饮 (specialty dining), achieving a renewed upgrade of stock assets and efficient release of commercial value.

Investment property valuation adjustments; strengthen asset quality

Due to the deep adjustment in China’s real estate sector over the past few years, commercial real estate has generally faced the need for valuation adjustments. Based on prudent judgments about the macro environment and industry trends, Maika Long carried out a comprehensive revaluation of the fair value of its investment property under accounting standards. This action resulted, on the books, in about 23.442 billion yuan of fair value change losses, becoming the core reason for the company’s large loss in 2025. On the other hand, however, this valuation adjustment strengthens the company’s asset quality, making the carrying value of assets more aligned with current market reality.

Industry insiders point out that such accounting treatment does not involve the company’s cash flow and does not mean a substantial deterioration of its main business. By making sufficient value adjustments, Maika Long has eliminated potential risks of ongoing depreciation of assets in the future, laying a more solid financial foundation for the company’s subsequent strategic layout.

While promoting the return of asset valuations to reasonable commercial value, Maika Long also takes proactive action at the operating level. Faced with the real challenges of shrinking industry demand and difficulties faced by tenants, the company has implemented measures to stabilize and support tenants, such as rent reductions and exemptions, to fully safeguard tenants’ space to survive and maintain stability in the home furnishing industrial chain. While this does create some pressure on the revenue side in the short term, it also stabilizes the tenant group, laying a stronger foundation for subsequent continuous improvement.

New five-year strategy begins; anchored to high-quality development

Since 2025, under the top-level policy guidance of “efforts to stabilize the real estate market,” the real estate industry has received a series of policy tailwinds. In December 2025, the China Securities Regulatory Commission issued the “Notice on Promoting High-Quality Development of the REITs Market for Real Estate Investment Trusts,” bringing commercial real estate into the pilot scope and helping the industry expand diversified financing channels. Starting January 1, 2026, interest rates on stock provident fund loans were comprehensively lowered. Among them, the mortgage rate for first homes with terms of more than five years was lowered to 2.6%, and for second homes to 3.075%, continuously easing residents’ pressure to buy homes. 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 the threshold for purchasing and investing in commercial real estate. At the same time, nationwide consumption policies to replace old for new continued to be strengthened, with smart home furnishing products included in the subsidy scope, precisely stimulating the release of home-furnishing consumption demand.

With policies continuing to be intensified and the market’s own long-term clearing, the real estate sector is gradually moving out of the downturn cycle, and stabilizing and halting the decline is becoming a consensus across sectors. A research report by CITIC Securities states that as supply contraction enters the sixth year, the deep adjustment in the real estate market is expected to be close to its end. Ting Zuyu, co-president of China Index Research Group and chairman of URD Smart Tech, analyzed six dimensions including the dynamic supply-demand relationship, inventory, and the magnitude of adjustments in house prices, and believes that the real estate market is confirming a bottom and sending signals that the decline will stop and stabilization will take hold.

At this key point when the industry is stabilizing and recovering, Maika Long’s new five-year strategy begins in line with the trend. The company anchors its direction of high-quality development with the positioning of “a new commercial operator for home-living and a service provider for the home furnishing industrial ecosystem.” On one hand, Maika Long will focus on upgrading its home-furnishing main business. By continuously upgrading content and operational capabilities, it will deeply tap into the value of home-furnishing commercial space and strengthen its competitive advantage in the main business. At the same time, the company continues to expand the boundaries of its services, empowering the upstream of the industrial chain, covering core entities such as brand factories, and building a second growth curve.

Analysts believe that as investment properties return to today’s commercial value and as the business fundamentals stabilize at the bottom, in the broader context of the real estate market gradually warming up and home-furnishing consumption demand continuing to be released, Maika Long is expected to capture the industry recovery dividend, achieving continuous improvement in operating performance and a return of long-term value.

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