(Yicai Global) Jan. 9 -- Shares of Red Star Macalline Group surged after Chinese state-owned supply chain operator Xiamen C&D said it plans to become the furniture retailer's largest shareholder.

After soaring almost 39 percent in the morning, Red Star Macalline [HKG: 1528] finished up 14.6 percent at HKD3.06 (41 US cents). Its Shanghai-listed stock [SHA: 601828] was suspended from trading today.

Xiamen C&D intends to buy a 30 percent stake in Red Star Macalline, but has not yet held a board meeting to discuss the acquisition nor signed a deal, the firm said late yesterday.

Founded in 2007, Red Star Macalline was China's first furniture retailer to list in the Chinese mainland and Hong Kong. It operates nearly 400 furniture malls nationwide and many others overseas.

The Shanghai-based company hit a cash crunch in the first half of 2021. It needs to pay nearly CNY15 billion (USD2.2 billion) of debt and interest in the next three years, according to credit investment analysis platform Chazhaitong.

In the nine months to Sept. 30, the firm logged a net profit of CNY1.3 billion (USD191.5 million) on operating revenue of CNY10.5 billion and had CNY133.6 billion (USD19.7 billion) of assets and CNY76 billion of liabilities.

Xiamen C&D is a unit of China's C&D Group, but its actual controller is the Xiamen State-owned Assets Supervision and Administration Commission. Xiamen C&D's businesses cover supply chain operations, urban construction and operations, tourism and exhibitions, medical care, and investment in emerging industries.

Xiamen C&D's shares [SHA: 600153] sank 9.6 percent to CNY13.50 (USD1.99).

Editors: Shi Yi, Futura Costaglione