C&D Co., Ltd.'s assets of 890 billion yuan correspond to a market value of 30 billion yuan for a long time, and the price-earnings ratio is less than 3 times. So far, what has supported C&D Group is the supply chain and real estate. It's just that the development model of relying on the supply chain to increase cash flow and relying on real estate to make more profits in the past has begun to become ineffective after 40 years. Today's C&D Group looks like an old lady who is in trouble.
Without the restructuring proceeds after the acquisition of Macalline, C&D shares immediately showed their original form. In the first quarter of this year, C&D's revenue and net profit both declined, with revenue of 131.3 billion yuan, down 21%, and net profit of about 600 million yuan, down nearly 24%. In the 2023 annual report just released not long ago, C&D's revenue was 763.7 billion, although it decreased by 8.3%, but its net profit increased by 109%.
C&D's 2023 annual report actually can't stand scrutiny. Nearly 30% of Macalline's shares acquired by C&D Co., Ltd. began to consolidate its financial statements in the third quarter of 2023. At that time, C&D shares spent less than 6.3 billion, but the corresponding Macalline asset valuation was 16 billion, and the premium of nearly 10 billion yuan became a profit that could be reflected in the financial statements of C&D shares.
But this part of Macalline's premium assets is typical of paper wealth, and it is not even static. In the 2023 interim report after the acquisition of C&D shares, Macalline's assets were 126.4 billion, which began to shrink after the consolidated statement, and were 121.6 billion in the first quarter of this year. In two quarters, Macalline's assets shrank by nearly 5 billion. Looking at it today, this part of Macalline's asset consolidation statement not only did not add color to C&D shares, but became a burden for C&D shares.
After C&D acquired Macalline, Macalline's revenue and net profit both declined significantly. In 2022, Macalline's revenue will be 14.1 billion, down 8.8%, and in 2023, it will be 11.5 billion, down 18.5%. In the first quarter of this year, it continued to expand, with a decline of 19.3%.
In the general environment, this decline of Macalline is easy to understand, Macalline is a home furnishing store, and the rise and fall are inseparable from real estate. Zheng Yongda, chairman of C&D Co., Ltd., once had high hopes for the acquisition of Macalline, saying, "Macalline participates in the synergy of supply chain operation business, expands consumer goods categories, and smooths the cyclical impact of bulk commodities. "But in such a general environment, C&D's beautiful vision of integrating Macalline can only be wishful thinking.
At present, the two legs of C&D Co., Ltd. are supply chain and real estate, which are actually the pillars of C&D Group, a Fortune 500 company. C&D Group's revenue in 2023 will be US$125.9 billion, ranking 69th in the Fortune Global 500. C&D Group's volume has been expanding, and its ranking has been improving, but if C&D Group's revenue of 763.7 billion yuan is deducted in 2023, there will be little left of C&D Group's other three main businesses, namely tourism and exhibition, medical health and emerging industry investment revenue.
More than 40 years ago, C&D existed as the only window for Xiamen Special Economic Zone to introduce capital, technology and equipment to the outside world, and this innate resource advantage created the later C&D Group.
Today's C&D Group is still eating its old roots. In 2023, the supply chain will still account for the majority of C&D's revenue, while pulp, steel, mineral products, agricultural products, automobiles and wine are still important parts of the supply chain. These projects are traditional and intermediate businesses, and the only thing that can see a little modern atmosphere is the car, and the car C&D is not built by itself, he is only an agent dealer. Just like as soon as Xiaomi SU7 was released, C&D immediately got the agency again.
Lin Mao, general manager of C&D Co., Ltd., mentioned that the supply chain industry is large in scale and low in concentration, and the domestic CR5 share is only 2.77%, which has great room for improvement. Today, C&D Co., Ltd. also hopes to expand C&D's revenue scale by improving the industry concentration of the supply chain, which is obviously a bit out of date.
Driven by C&D Group, Xiamen state-owned enterprises have grown into three of the world's top 500 state-owned enterprises, namely C&D Group, ITG Holdings and Xiangyu Group, all of which are inseparable from the supply chain. From the perspective of scale, the overall plate of the supply chain is constantly expanding in Xiamen, but after decades of hard work, none of the three major state-owned enterprises in Xiamen has the absolute right to speak in the supply chain, and each state-owned enterprise relies on its own customer groups to form its own supply chain forces.
C&D's dual-main development model of "supply chain + real estate" has become more and more unsustainable.
In 2021, C&D Co., Ltd.'s revenue will be 707.8 billion yuan, and the supply chain will account for 86%, contributing 53% of the profit of about 3.2 billion yuan, while real estate will only account for 14% of the revenue, but will contribute 47% of the profit of about 2.9 billion yuan. Entering 2023, C&D Co., Ltd.'s revenue will be 763.7 billion, with the supply chain accounting for about 78% and real estate accounting for 22%, however, the supply chain will contribute about 3.9 billion yuan in profits, while real estate will only contribute less than 200 million yuan in profits.
C&D Real Estate's "money capacity" has become lower and lower. In the first quarter of this year, C&D's revenue was 131.3 billion, but the net profit margin was as low as 0.31%. In this case, C&D shares may lose money if they are not careful. It used to expand the scale of cash flow through the supply chain and make money from real estate, but now real estate is no longer powerful. In the first quarter of this year, C&D Real Estate's revenue was less than 6.6 billion, and there was a rare loss, with a loss of more than 15 million.
C&D Co., Ltd.'s revenue in the first quarter of this year did not do anything bigger, but various expenses rose to the sky. Sales expenses increased from less than 2 billion yuan in the same period last year to 2.3 billion, management expenses increased from 340 million yuan to 590 million, financial expenses increased from 290 million yuan to 1 billion, of which interest expenses increased from 800 million yuan to nearly 1.5 billion. Of course, supply chain operations also generate some interest income, which ensures that financial expenses don't swell even more.
Thinking about the net profit created by C&D in the first quarter of this year, if Macalline has to lose money next, C&D Co., Ltd. may not be far from turning from profit to loss. Compared with the requirements of new quality productivity, is C&D Group a little far away?