The Red Star Macalline, a major player in the home furnishings industry that has long sought an IPO, has finally released its prospectus and aims to raise approximately 4.45 billion yuan. This move is expected to set a new record for the largest fundraising in the Chinese home furnishing sector. Meanwhile, Qumei Furniture is also making a bold attempt to go public, seeking to raise around 1.087 billion yuan through its IPO.
Currently, only 10 companies in the home industry are listed on the Shenzhen and Shanghai Stock Exchanges, all of which are focused on home improvement and decoration. However, with the recent release of the China Securities Regulatory Commission’s “IPO company pre-disclosed list,†both Red Star Macalline and Qumei have made it onto the list. In addition, several other home-related companies, including Imperial Sanitary Ware, Asia Vibration Furniture, Gujia Household, Jiangsu Hengkang Home Technology, and Guangzhou Hollyock, are also preparing to enter the IPO pipeline.
Amid a weak real estate market and the growing influence of e-commerce, traditional home companies are pushing forward with their IPO strategies. According to the draft prospectus of Red Star Macalline, the company plans to list on the Shanghai Stock Exchange, aiming to raise about 4.45 billion yuan. The funds will be used for 11 projects, including the development of shopping plazas and an e-commerce platform, with a total investment of roughly 6.11 billion yuan.
While this rapid expansion has driven strong growth, it has also led to significant debt. As of 2013, the company reported revenue of 6.65 billion yuan and a net profit of 1.35 billion yuan, but its debt-to-asset ratio reached 66.96%. Additionally, the company's net working capital was negative in 2011, 2012, and 2013, at -3.346 billion, -1.373 billion, and -3.928 billion yuan respectively.
Despite these challenges, investor interest in Red Star Macalline remains high. New shareholders have already committed to raising 1.85 billion yuan, and well-known investment firms such as Bohai Industry Group, Fosun Group, and CITIC Industrial Corp. have also finalized their investments, though specific details remain undisclosed.
An insider close to the company noted that the home industry is following a similar development path to the appliance industry. While Red Star Macalline is growing rapidly in terms of scale and profitability, there is still significant potential for future integration. The company’s operational load rate is within normal limits.
Looking ahead, Car Jianxin, chairman of Hongxing Meikailong Group, emphasized that the furniture industry should avoid direct competition with e-commerce. He warned that if consumers shift from offline to online platforms, it could lead to severe consequences.
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