Maoye International Holdings Announces Major Disposal of Shares in Maoye Commercial Co., Ltd.

Maoye International Holdings Limited (Stock Code: 848) has announced a major transaction involving the disposal of shares in its indirect non-wholly-owned subsidiary, Maoye Commercial Co., Ltd. This strategic move is likely to draw investor attention, given its impact on the company’s financial structure and future outlook.

Key Points of the Transaction

• Two Tranches of Disposal:
  • First Disposal: On 28 November and 1 December 2025, Maoye Urban Commercial Management, an indirect wholly-owned subsidiary, sold a total of 25,113,500 Maoye Commercial Shares for approximately RMB160.77 million (excluding transaction costs), representing about 1.45% of Maoye Commercial’s equity.
  • Second Disposal: On 8 December 2025, an additional 7,811,960 shares were sold for around RMB45.26 million, representing approximately 0.45% equity interest.
• Total Proceeds: The aggregate net proceeds from both disposals amounted to approximately RMB205.89 million.
• Average Selling Price: Shares were sold at an average of RMB6.40 and RMB6.26 per share for the respective disposals.
• Buyers: The company does not know the identities of the buyers, but confirms they are third parties independent of the company and its connected persons.
• Shareholding Impact: The Group’s equity interest in Maoye Commercial decreased from 86.45% to 84.55%. Maoye Commercial remains an indirect non-wholly-owned subsidiary and will continue to be consolidated into the Group’s financials.

Strategic Rationale and Use of Proceeds

• Debt Reduction and Liquidity: Proceeds will be used primarily to repay short-term interest-bearing bank borrowings due in 2026 and to supplement general working capital for costs such as staff, professional fees, rent, and other business expenses.
• Financial Health: The Board believes this move will optimize the Group’s financial structure by increasing liquidity and reducing debt.
• Impact on Financial Statements: There will be no gain or loss recognized in the consolidated profit or loss statement from these disposals, as per IFRS Accounting Standards.

Performance and Financial Position of Maoye Commercial

• Net Profits:
  • 2023: Net profit (after tax) of RMB44.16 million
  • 2024: Net profit (after tax) of RMB29.84 million
• Assets as of 30 June 2025 (unaudited):
  • Total assets: RMB18,280 million
  • Net assets: RMB7,556 million

Financial Effects and Balance Sheet Highlights

• Indebtedness: As of 31 December 2025, the Group had total interest-bearing bank loans and other borrowings of approximately RMB10,477.59 million, with a significant portion secured by assets of the Group and related parties.
• Lease Liabilities: Total lease liabilities under IFRS 16 amounted to approximately RMB944.17 million.
• Guarantees: Guarantees provided for bank loans (for property buyers) stood at approximately RMB130.43 million.
• Working Capital: The Directors believe the Group has adequate resources for at least 12 months from the date of the circular.

Profit Warning: Material Adverse Change in 2025

• Expected Net Loss: The Group is expected to record a net loss of approximately RMB200-250 million for the year ended 31 December 2025, compared to a net loss of RMB99.92 million in 2024.
• Impairment Losses:
  • Impairment loss on fair value changes of investment properties: ~RMB300 million (impacting net profit by RMB230 million)
  • Impairment loss on assets (goodwill, properties under construction): ~RMB100 million
• Operating Profit Excluding Impairments: Expected to be approximately RMB100 million for 2025.
• Valuation of Investment Properties: Decreased from RMB21.8 billion to RMB21.5 billion (a 1.4% decrease).

This profit warning and the recognition of substantial impairment losses may be price-sensitive and could negatively impact the company’s share value.

Shareholder Approval and Listing Rules Implications

• Major Transaction: The disposals constitute a major transaction under Chapter 14 of the Listing Rules, with the applicable percentage ratio exceeding 25% but below 75%.
• Shareholder Approval: The controlling shareholder, Maoye Department Store Investment Limited (holding 81.71% of shares), has provided written approval in lieu of a general meeting. No extraordinary general meeting will be held.

Disclosure of Interests and Related Party Transactions

• Controlling Shareholder and Director Interests:
  • Mr. Huang Mao Ru, Chairman, controls 82.68% of the Company (directly and via related entities).
  • Other related parties include Mr. Tony Huang (Non-Executive Director, son of Mr. Huang) and entities controlled by the Huang family.
• Competing Interests:
  • Mr. Huang owns Maoye Wuxi Store and holds a significant stake in Guiyang Friendship Group Holdings Company Limited, both of which engage in similar retail business as the Group but are managed under agreements with the Group.
• Related Party Transactions:
  • Property lease agreements and service agreements with entities controlled by Mr. Huang and other directors, as disclosed in several connected transaction announcements.

Outlook and Trading Prospects

• Industry Trends: The Group expects continued growth in consumption in China, especially in business formats related to livelihood and experiential consumption, as national policies aim to boost domestic demand.
• Strategic Focus: Emphasis on integrating traditional retail with new digital formats, customer-centric strategies, and operational upgrades to drive sustainable growth.
• Digital Transformation: Ongoing efforts to digitize operations, enhance online-offline integration, and foster innovation in the retail business model.

Conclusion

The disposal of shares in Maoye Commercial is a significant step for Maoye International Holdings, aimed at strengthening its balance sheet by reducing debt and increasing liquidity. However, the simultaneous profit warning and recognition of substantial impairment losses are material events that could impact investor sentiment and share value. Investors should closely monitor further announcements regarding financial performance and strategic execution.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should consult their own professional advisers before making any investment decisions. The information is based on disclosures by Maoye International Holdings Limited up to 25 February 2026, and actual results or events may differ materially from those discussed herein.

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