Qiu Zhe took up the post of director of Macalline: continue to advance the company's strategy and serve investors well

On December 6, Red Star Macalline (601828.SH), a major domestic home retailer, issued an announcement stating that Qiu Zhe was hired as the company's new board secretary to be responsible for the company's legal compliance, corporate governance, investor relations, and information disclosure matters.

According to public information, Qiu Zhe previously worked for many years at Ernst & Young, one of the “Big Four” accounting firms, and had rich experience in financial audits. Later, he went to Alibaba to be responsible for investor relations.

Meanwhile, after the resignation of Guo Binghe, the former secretary of the board of directors, he will continue to serve as the company's vice chairman, focusing more on resource construction and implementation during the company's strategic upgrading process, thus creating sustainable value for the company's future development.

Industry insiders pointed out that Qiu Zhe's joining Macalline will inject new vitality into the company, especially investor relations management. According to information, when working as an auditor, Qiu Zhe mainly faced customers for A-share listed companies. He assisted many companies in listing their A-share IPOs, including annual audits and consulting services after listing. He has accumulated rich experience and is very familiar with the current A-share regulatory requirements and environment.

From the perspective of investor relations services, Alibaba has successively listed on US stocks and Hong Kong stocks. During his tenure at Alibaba, Qiu Zhe was mainly responsible for investor relations work and had rich experience in investor communication.

For Red Star Macalline, which is listed on both A+H shares, it is necessary to effectively communicate with A-share and H-share investors at the same time. Qiu Zhe can undoubtedly make good use of the advantages of two years of work experience.

Qiu Zhe, Executive President and Secretary of the Board of Red Star Macalline

Unswervingly promote the “asset-light, operation-heavy, and leverage-reduction” strategy

In an interview with reporters, the new director Qiu Zhe also discussed his understanding of the company's development, particularly the “light assets, heavy operation, and leverage reduction” strategy. Qiu Zhe said that the “asset light, heavy operation, and leverage reduction” strategy is Macalline's path to achieving high-quality development, and it should continue to be promoted unswervingly.

“'Asset light' can help companies achieve wider market penetration at a faster pace and with better resources, including shopping mall upgrades and iterations. Compared to the original asset-heavy model, the “asset-light” model has a shorter cycle, faster iterations, and more obvious efficiency improvements.”

Currently, Red Star Macalline's asset-light model mainly includes entrustment management and franchising. Most of them are distributed in second- and third-tier cities and sinking markets, complementing self-operated shopping malls.

According to the three-quarter report, as of the end of September 2021, Red Star Macalline had operated 94 self-operated shopping malls and 273 managed shopping malls; operated 11 home furnishing shopping malls through strategic cooperation and authorized 66 home building materials projects through franchises, including a total of 478 home building materials stores. In addition, the company has 20 self-owned shopping malls in preparation. Among the planned managed shopping malls, 345 commissioned projects have obtained land use permits or land plots.

“'Heavy operation' focuses on helping stores drive traffic and transform consumption. People will pay more attention to the speed at which we expand our stores. In fact, we need not only to expand the penetration of stores, but also to improve the operational efficiency of existing stores. Specifically, it is to help existing dealers and brands in existing stores to bring in more traffic. We are not only asking for in-store visits, but also for consumption conversion.” Qiu Zhe said, “In the future, we will continue to shorten the cycle of everyone arriving at the store through category adjustments and structural optimization.”

Regarding “reducing leverage,” Qiu Zhe said, “'Reducing leverage' is imperative in the current environment. Currently, both the international situation and the domestic environment require us to reduce leverage to ensure the steady progress of the company's overall strategy.”

Previously, Red Star Macalline steadily promoted the reduction bar by maintaining sufficient and stable operating cash flow, fixed growth in A-shares, reducing capital expenditure, and divesting non-main assets, and the size of debt was well controlled. According to the three-quarter report, the company's balance ratio fell to 59.38% from 61.16% at the end of last year, the lowest since the end of 2018.

In recent years, Red Star Macalline has maintained a steady and healthy growth trend on a relatively traditional racetrack. The company accelerates penetration through “light assets”, improves efficiency through “heavy operation”, and pursues steadiness by “reducing leverage”, thus ultimately achieving high-quality enterprise development.

Under the “asset-light, operation-heavy, and leverage-reduction” strategy, Macalline actively invests in the operation of shopping malls. While making full use of the mall's own resources, it is leading the construction of an alliance ecosystem among merchants, promoting mutual drainage and empowerment, increasing customer unit prices, and diluting customer acquisition costs, thereby increasing the value of the market.

Previously, Macalline achieved impressive results through measures such as actively arranging nine major themed pavilions, building a high-end shopping mall traffic ecosystem, and arranging a “No. 1 store” as a benchmark self-operated shopping mall located in China's core cities, and further promoted online and offline retail in the same city.

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Regarding the future, Qiu Zhe said that Macalline will continue to explore its own additional commercial value, not just limit itself to a single store channel; it will continue to adapt to the development trends of the times, evolve and innovate, and embrace the development and digitalization process of the Internet.

Do a good job as a bridge between internal and external connections

When asked about his future work after taking office, especially when it comes to investor service, Qiu Zhe said that in the future, he will mainly focus on acting as a bridge between internal and external connections, conveying information on the company's development to the market in a better, more transparent and real-time manner, while also feeding back some of the voices of the market to the company's internal management.

“In my opinion, investors are not limited to size; there are no big or small investors. Whether they are institutional investors or individual investors, as long as they need some information about the company or have suggestions for the company, we will treat them equally and respond or adopt them as much as possible.”

“We hope to create more communication scenarios to convey the company's important information and core values to everyone and the market as much as possible. We hope to continue to show our core values and achievements on the investor side, such as the continuous improvement of financial indicators, the increasing diversification of revenue structures, etc., so that the market, investors, and consumers have a fuller understanding of our business model, thereby boosting confidence.” Qiu Zhe said.

Regarding how to do a good job as a director secretary, Guo Binghe also said based on his many years of experience that if the director wants to have a good investor relationship, he must participate in the company's strategic planning and business, so that he can perform this role well, because only by understanding the business can he convey the real situation of the company to investors, and can it be easy to communicate with regulators.

According to information, Qiu Zhe joined Red Star Macalline for a while. In the interview, I can also fully feel that she already has an in-depth understanding of Red Star Macalline's business situation. Guo Binghe also believes that the introduction of outstanding talents such as Qiu Zhe will help Red Star Macalline achieve continuous transformation. However, only by continuously absorbing fresh blood can any enterprise maintain continuous competitiveness in a changing market environment.

Source: Financial Services Association

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