Red Star Macalline Group Corporation Ltd. provided earnings guidance for nine months ended September 30, 2023. For the period, the company expected net profit attributable to the shareholders of the parent Company for the first three quarters of 2023 reached around RMB 600.00 million to RMB 500.00 million, representing a decrease of RMB 1,817.957 million to RMB 1,917.957 million as compared with RMB 1,317.957 million from the same period of last year, or a year-on-year decrease of 137.9% to 145.5%. Due to the factors including the macroeconomic environment and policies targeting the real estate sector, the residents' income is growing at a slower pace, leading to their weak confidence for consumption.

Currently, the valuation of the industry in which the Company operates is at a low level, and it needs time to gradually restore its vitality. As of the end of the third quarter of 2023, the occupancy rate for the Company's shopping malls periodically declined year-on-year. Meanwhile, in order to support the continued development of tenants and the home furnishing material industry, the Company reduced or waived part of the rents and management fees of qualified tenants, leading to the decrease in the Company's portfolio and leased business income, which has in turn resulted in a downwards adjustment on the valuation of its investment properties.

Affected by the regulatory policies targeting the real estate sector launched last year and the economic downturn, the market is recovering slowly, leading to the decrease in the number of new projects for the Company's managed business and construction-related business and a slower progress in advancing the existing projects. At the same time, for the sake of prudence, the Company made a forecast on the recoverability of its overall assets in a more prudent manner and made corresponding provisions for the impairment. In addition, for individual projects, the Company estimated that their rates of return would be lower than expected if they were going forward, and upon assessment by the relevant departments, the Company decided to discontinue further investment on them, and recognize the previous investments as losses in the form of sunk cost.