RS Macalline to raise CNY 4bn

Red Star (RS) Macalline announced its board has passed a resolution for a non-public placement of A shares worth CNY 4.00 billion (USD 562.23 million) to further expand its shopping mall network.

The mainland-registered, Hong Kong-listed home improvement and furnishing store operator is roping in 35 subscribers for a sale of 912.89 million new stocks accounting for 20.5 per cent of the post-issue capital.

RS Macalline operated 337 shopping malls – offering more than 27,000 brands in total – in 212 cities in 29 provinces, municipalities and autonomous regions in China, as at 31st December 2019.

According to Frost & Sullivan, cited in the 2019 annual report, the group had a 15.5 per cent share of the chain home improvement and furnishing mall sector market in terms of retail sales last year.

It also had 6.3 per cent of the whole home improvement and furnishing mall sector.

RS Macalline intends to continue implementing a two-pronged approach, with a focus on the development of its asset-light managed business model and the strategic expansion of its shopping network nationwide to gain more market share.

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The group noted its arrangements in the core areas in Guangdong, Guangxi, Jiangxi and other provinces will be further improved, which helps it consolidate its position and regional advantages in relevant regions.

Its home furnishing mall construction plans are closely related to its strategic plan of business development and are expected to boost brand awareness and bargaining power with merchants.

Proceeds are specifically earmarked for RS Macalline’s Tmall Tongcheng station, 3D Shejiyun platform and the new generation home improvement platform system projects.

These construction plans will “better provide consumers with one-stop industry chain services for pan-home improvement and furnishing consumption”, among other things.

RS Macalline generated net profit of CNY 4.69 billion on revenue of CNY 16.47 billion in the 12 months ended 31st December 2019, compared to CNY 4.71 billion on CNY 14.24 billion in FY 2018.

© Zephus Ltd

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