Red Star Macalline Group Corporation (01528): Massive trading volume continues to appear, with sharp rises and falls taking turns in the spotlight. What is the reason behind this?

ration Red Star Macalline Group CorporationRed Star Macalline Group CorporationRation's controlling shareholder. After the change of ownership of Red Star Macalline Group Corporation, it began to incur losses, close stores, and write down assets. Its stock price has been halved compared to the time of the acquisition deal last year, and the deteriorating performance is causing concern.In the view, in the current real estate industry background, it is not surprising that the home building materials industry is struggling to make profits, as there are no perfect eggs under a toppled nest. The key issue now is whether the trend of declining performance has stabilized and reached the bottom. The reason for this concern is that Red Star Macalline Group Corporation is currently showing a state of overall decline in business performance. Among them, the revenues of home commercial services, construction and design services, and home decoration related services and goods sales decreased by 16.2%, 68.5%, and 72.3% respectively compared to the same period last year. The revenue contributed by other industries also decreased by 41.5% from last year. On the other hand, as of the end of June this year, Red Star Macalline Group Corporation operated 85 self-owned commercial centers, down from 91 in the same period last year. In addition, commissioned commercial centers, strategically operated commercial centers, franchise operations for home building materials, etc., are all decreasing. In other words, after Jianfa Group acquired Red Star Macalline Group Corporation as its controlling shareholder, the company has been in a state of consecutive closure, declining rental rates, and impairment losses. However, as the new controlling shareholder, Xiamen Jianfa Group has indeed put a lot of effort into Red Star Macalline Group Corporation. Especially recently, there have been continuous actions. Recently, Red Star Macalline Group Corporation joined hands with Jianfa Group's Jianfa Motors to create the first " Space" store in Jialing Shopping Mall in Chengdu. This space integrates smart home, smart car experience, and trendy art life elements into one, directly breaking the commercial boundaries of Red Star Macalline Group Corporation as a traditional home furnishings market, crossing borders and selling cars. It can be seen that the transformation path pursued by Red Star Macalline Group Corporation is to leverage the advantages of Xiamen C&D Inc. and collaborate with Jianfa Group to achieve a win-win situation. However, whether home retail companies turning to sell cars will be accepted by consumers is uncertain. Because home products and car products have significant differences in actual consumption scenarios, they are two industries that are fundamentally unrelated. It seems difficult for Red Star Macalline Group Corporation's reputation in the home retail industry to be transferred to car sales. Even worse, the company is facing unresolved financial issues, which may also be the most concerning issue for investors. From a basic cash flow observation, the third-quarter report this year shows that Red Star Macalline Group Corporation's operating cash flow net amount is -531 million yuan, compared to 2.768 billion yuan in the same period last year. Furthermore, in many years until 2024, Red Star Macalline Group Corporation's cash flow has been positive. Therefore, the continuously negative operating cash flow this year also indicates that the company's ability to generate cash flow on its own has been seriously damaged. In conclusion, with negative cash flow, continuous losses in performance, and the overall downturn of the industry, the hidden worries of Red Star Macalline Group Corporation's development still deserve attention. Despite the positive news, the recent sharp rise and fall in the company's stock price also suggest that investors' confidence in its fundamentals may not be sufficient.