How did Meikailong lose 23.7 billion yuan in one year?

Ask AI · Maike Lai Property Valuation Down by 23.4 Billion Yuan, What Industry Risks Are Reflected?

Under the background of deep adjustments in real estate, structural changes in consumer demand, and impacts from new business models, traditional home furnishing malls are facing unprecedented challenges.

Investment Time Network, Punctuation Finance Researcher Xi Yu

Leading domestic home furnishing retailer Maike Lai (601828.SH) has delivered its worst performance since listing.

The 2025 annual report shows the company achieved revenue of 6.58B yuan, down 15.85% year-on-year; net profit attributable to shareholders was a loss of 23.72B yuan, an increase of 695.12% compared to the previous year. The annual loss hit a new high since listing.

Looking at the timeline, Maike Lai’s performance peaked in 2021, then entered a continuous four-year decline. Over these four years, the company’s revenue declined by over 57%, and net profit shifted from profit to massive losses.

Maike Lai 2021–2025 Performance Overview

Data source: Eastmoney.com

Maike Lai pointed out in its annual report that a major reason for the huge loss in 2025 was a fair value change of investment properties resulting in a loss of about 23.4 billion yuan. This non-recurring gain and loss directly dominated the full-year performance.

From the annual report data, the loss related to this category in 2025 was as high as 23.44 billion yuan, accounting for 98.8% of net loss attributable to shareholders. Affected by sluggish demand in the home retail market and deep adjustments in the real estate industry, market expectations for future rental income from home furnishing malls have significantly fallen. Maike Lai, based on prudent accounting principles, sharply lowered the valuation of its core investment properties.

Industry analysts believe this move directly highlights the shortcomings of its heavy-asset operating model. The previous reliance on property valuation appreciation to boost profits can no longer be sustained during industry downturns. Sharp fluctuations in property valuations have a clear impact on performance and are a key reason for the substantial losses this year.

According to the National Bureau of Statistics, in 2025, the nationwide new housing construction area was 588 million square meters, a decline of over 70% from 1.99B square meters in 2021; combined with continued low delivery volumes of new homes, this directly led to a sharp shrinkage in demand for home renovation and supporting procurement.

Meanwhile, commercial real estate rents remain under pressure. The China Index Academy’s “2025 China Commercial Rent Index Research Report” shows that in 2025, the average rent of shops on 100 major commercial streets nationwide fell by 0.81% year-on-year; the average rent of shops in 100 typical shopping malls decreased by 0.34% year-on-year. As an important part of commercial real estate, home furnishing malls saw their property valuations plummet along with rent expectations, further dragging down performance.

In addition to asset impacts, the core home furnishing mall business also continued to shrink due to weakening demand. According to data from the China Building Materials Circulation Association, in 2025, the total sales of large-scale building materials and home furnishing malls nationwide decreased by 3.33% year-on-year, and market area declined by 11.38%.

Industry insiders analyze that although the proportion of renovation demand for existing homes exceeded 50% in 2025, the demand for new home renovations sharply decreased, and activity in second-hand home transactions was insufficient, jointly leading to a decline in overall traffic in the home industry.

More severely, the rise of new business models continues to erode the market share of traditional malls, further squeezing Maike Lai’s survival space.

As home renovation demand upgrades, China’s overall home renovation market continues to expand, with the penetration rate of integrated renovation models rising rapidly, gradually becoming the industry mainstream. According to Shell’s 2025 financial report, its home renovation and furniture business achieved a net revenue of 15.4 billion yuan, up 4.4% year-on-year, with profit margin contribution increasing by 0.7 percentage points to 31.4%. Meanwhile, new formats such as internet-based home renovation, brand direct sales, and online home furnishing platforms are rapidly emerging, continuously diverting foot traffic from traditional malls.

To stabilize and retain merchants, Maike Lai has had to adopt measures such as rent reductions and management fee discounts, leading to declines in leasing and management income; meanwhile, its newly expanded businesses like home renovation and home appliances are still in early stages, requiring large resource investments and unlikely to turn profitable in the short term, further dragging down core operations.

Asset impairment pressures have also widened Maike Lai’s losses. The annual report shows that in 2025, the company recognized asset impairment provisions of about 3.97 billion yuan, including losses from store closures, inventory impairments, and receivables impairments, directly reflecting the sluggishness of core business. The number of net store closures increased from 25 in 2024 to 42 in 2025, averaging over 3 closures per month.

Maike Lai 2025 Asset Impairment Provision Overview

Data source: Company announcement

Faced with multiple operational difficulties, Maike Lai has not been idle. The company has launched transformation plans such as the “1001 Strategy” and “3+Star Ecosystem,” attempting breakthroughs through online-offline integration and expansion into home renovation and home appliances, but overall transformation results have yet to offset the decline in core business, only achieving partial improvement in operational quality. Compared with platforms like JD.com, Alibaba, and Shell, gaps remain in full-chain supply chain integration, comprehensive digital operation capabilities, and one-stop user service systems.

Notably, in 2025, management underwent significant changes, with key executives being investigated, a new general manager appointed, and multiple senior managers leaving, leading to frequent governance adjustments. Although the company claims operations remain stable, management fluctuations still impact market confidence and strategic implementation.

Investment Keywords: Maike Lai (601828.SH)

Author’s statement: Personal opinions only, for reference purposes