author | Yue Jiachen
editor | Chen Fuye
production | Prism·Tencent Xiaoman Studio
has fewer self-owned assets, the New Year party has disappeared, and there are more and more "non-ten thousand people"... The so-called "non-ten thousand people" , is a "slang" among Wanda employees, referring to former employees who have left Wanda.
In September 2016, Wanda Commercial was delisted from the Hong Kong stock market, paving the way for Wang Jianlin’s future ups and downs. Over the past seven years, after continuous "bone scraping and healing", Wanda is still alive. On the other hand, Sunac and R&F, which once heavily purchased Wanda’s assets, have fallen into quagmire one after another.
Wanda’s two major crises occurred in 2017 and 2023. Especially during the second crisis, as Wanda Commercial Management failed to break into the Hong Kong Stock Exchange for the fourth time, the news surrounding Wanda focused on the gambling crisis.
In December 2023, PAG Investment Group and Dalian Wanda Commercial Management Group signed a new investment agreement. Several existing and new investors including PAG hold a total of 60% of the shares, while Dalian Wanda Commercial Management holds 40%. This means that Wang Jianlin survived the second crisis at the cost of losing absolute control of Wanda Commercial Management.
The dangerous "ticking time bomb" has been defused, but Wanda's pace of selling off assets has not stopped. Among them, the latest asset sale occurred on January 19 this year, when Xiamen Dianqian Wanda Plaza Commercial Management Co., Ltd. underwent industrial and commercial changes. After
sold, Wanda today is no longer what it was before.
At the same time, with the disposal of assets, the Wang Jianlin family's wealth has shrunk by 53 billion on the "Hurun Rich List", surpassing Country Garden's Yang Huiyan family and becoming the richest person with the largest decline in wealth in 2023.
Wanda’s story is not only Wang Jianlin’s personal story, but also a microcosm of China’s real estate industry.
Assets put on the "shelf"
The comedy movie "Don't Stop the Annual Meeting" released at the end of 2023 has triggered discussions about the company's annual meeting. Looking at the large private companies in China, the most topical company annual meeting is Wanda.
Since the founding of Wanda Group, Chairman Wang Jianlin’s solo performance has been a reserved program at annual meetings.
The last time Wang Jianlin sang at the annual meeting was in 2017. The annual meeting was held in Hefei, Anhui Province. Wang Jianlin sang a duet with a female singer from Anhui Province in the Huangmei Opera "The Husband and Wife Return the Home".
That year, Wanda experienced its first major crisis. In July of that year, Wanda signed an agreement with Sunac and R&F to transfer 77 hotels to R&F at a price of 19.906 billion yuan, and transferred 91% of its equity in 13 cultural tourism projects including the Xishuangbanna Wanda Cultural Tourism Project and the Nanchang Wanda Cultural Tourism Project to 438.44 Transferred to Sunac for a price of 100 million yuan. The total amount of the two transactions of
was as high as 63.75 billion yuan, which was called the "deal of the century" at the time.
After this, Wang Jianlin did not sing at the annual meeting for 6 consecutive years.
On January 14, 2024, Wanda held its annual meeting again at the Wanda Vista Hotel in Beijing. This is an annual meeting with almost no media communication. The press release on Wanda’s official website about this annual meeting only has 110 words.
Wang Jianlin’s statement is even more like an “eight-legged” text: “Chairman Wang Jianlin made a summary of Wanda Group’s work in 2023 at the meeting, comprehensively summarized the work achievements and existing problems in 2023, and deployed work tasks for 2024.”
The press release did not mention how Wang Jianlin summarized the past year, but 2023 is considered by the outside world to be the year that Wanda will once again overcome the crisis and the year that it will restart its "sell, sell, sell" business.
Even after the above-mentioned gambling crisis was resolved, its pace of selling assets did not stop.
According to statistics, since 2023, Wanda Group has transferred 10 Wanda Plazas. Among them, four were intensively transferred between December 25 and 30, 2023, namely Suzhou Taicang Wanda Plaza, Huzhou Wanda Plaza, Guangzhou Luogang Wanda Plaza and Shanghai Jinshan Wanda Plaza.
Who is the buyer of Wanda Plaza?
According to the equity change information, funds and insurance companies are the main buyers. The takeover parties for the above four Wanda Plazas are all subsidiaries of China United Fund. The previously acquired Shanghai Songjiang Wanda Plaza, Xining Haihu Wanda Plaza and Jiangmen Taishan Wanda Plaza have been acquired by Everyone Insurance.
However, there is currently no news about the head insurance capital’s intention to purchase Wanda Plaza. "The capitalization rate is too low, which is the main reason why buyers are unwilling to take over." An investment institution person told the author.
Judging from the nature of the transaction, after the "fire sale", Wanda will no longer be the holder of these heavy assets, but it will still be the operator. The shift from "heavy" to "light" is also seen as part of Wanda Group's strategic transformation.
However, the latest equity change shows that Wanda has begun to dispose of even its asset-light operations and management companies.
On January 19, Xiamen Dianqian Wanda Plaza Commercial Management Co., Ltd. underwent industrial and commercial changes. The original wholly-owned shareholder Zhuhai Wanda Commercial Management withdrew and Xiamen Jinshengyang Real Estate Co., Ltd. was added as a shareholder.
Xiamen Dianqian Wanda Plaza Commercial Management Co., Ltd. does not hold heavy assets and is only responsible for the operation and management of Xiamen Huli Wanda Plaza. The project opened on September 2, 2011.
In addition, on January 8, the equity of Foshan Shunde Wanda Plaza Commercial Management Co., Ltd. changed. Dalian Wanda Commercial Management Group withdrew and Foshan Yueshang Maojing Enterprise Management Co., Ltd. held 100% of the shares. The latter does not hold Wanda Plaza, but operates and manages the company. Its actual controller is Meiji Service Group Co., Ltd., which is a subsidiary of Midea Real Estate.
In addition to real estate projects, Wanda Hotels, Wanda Movies, etc. were also sold off.
On December 12 last year, Wanda Film announced that it would transfer 51% of its equity to Ruyi Investment for a total transfer price of 2.155 billion yuan. Ten days later, the equity of Shanghai Wanda Hotel Investment Co., Ltd., a subsidiary of Dalian Wanda Commercial Management, changed, and the shareholder changed from Dalian Wanda Commercial Management to Beijing Yinglang Commercial Management Co., Ltd.
"Light" and "Heavy" strategies, repeatedly swinging
How short is Wanda of money? According to Wanda Commercial data, as of November 23 last year, the company's domestic bond balance has reduced to approximately 6.9 billion yuan, of which 4.8 billion yuan needs to be repaid in 2024.
In terms of overseas debt, Wanda Commercial successfully extended its US$600 million debt in November last year. Wanda Commercial needs to repay the extended US$600 million debt in four installments this year. In 2025 and 2026, Wanda Commercial each has a debt of US$400 million due. Based on this calculation, in 2024, Wanda Commercial is expected to repay the bond amount equivalent to RMB 7.671 billion.
In addition, Tianyancha shows that from June 2023 to the present, Wanda Group has added 5 pieces of equity freeze information. In November 2023, Wanda was forced to execute 164 million yuan by the Dayi County People's Court.
Under such circumstances, even if the gambling crisis is resolved, continuing to sell assets and layoffs are undoubtedly important options for Wanda to maintain cash flow.
A Wanda source told the author that when the assets are sold, it is estimated that each Wanda Plaza can be sold for 700 million yuan, but the transaction amounts vary among different projects.
However, in today's cold winter, even if more and more Wanda employees become "non-ten thousand people" and more and more Wanda Plazas change owners, Wanda Group is still strong in the cold wind.
Regarding the continued sale of assets, a person from Wanda Group headquarters explained to the author of "Prism" that this is part of Wanda's "asset-light" transformation strategy. Precisely because it started its asset-light transformation in 2017, Wanda has survived longer than most of its peers in today's real estate cycle.
However, Wanda’s asset-light strategy is not consistent. "Getting land and building buildings" may always be Wang Jianlin's obsession.
On the one hand, in September 2020, Wanda Commercial Management announced that it would no longer develop asset-heavy projects and would no longer invest in and hold Wanda Plaza properties. It would fully implement an asset-light strategy and realize the divestment of its real estate business. On the other hand, heavy assets have been transferred to real estate groups, which continue to engage in real estate development business and acquire development land through bidding, auctions, commercial complexes, and cultural tourism projects.
"The group's strategy at that time was not to abandon real estate, but to divest real estate from Wanda Commercial Management, which would help increase valuation." A Wanda insider explained to the author.
A management member of Wanda Group who will leave in 2022 revealed to the author of "Prism" that at the annual meeting before his resignation, Wang Jianlin once said that he would still work hard to achieve sales of 100 billion.
According to information disclosed by insiders, at that time, Wang Jianlin proposed that the target for 2020 was 80 billion sales, and that sales would "return to 100 billion" in 2021.
The peak of Wanda’s real estate revenue was in 2015, when its real estate business revenue reached 164.08 billion yuan. But in 2019, Wanda Real Estate’s sales were less than 50 billion.
In contrast, at that time, many second- and third-tier real estate companies were running to increase leverage and sprint towards the "100 billion club". Among them, in 2020, real estate companies such as Yuzhou Group, Zhongjun Group, and KWG have successfully achieved sales of 100 billion. However, during the later real estate "ebb" period, these real estate companies also became the first batch of thunderstorms.
Around 2020, the "resurrected" Wanda was once again active in the land market.
According to data from the China Index Research Institute, in 2019, Wanda Group ranked 9th in the list of land acquisition areas, with the amount of land acquired reaching 34 billion yuan. In the 2018 rankings, Wanda was not among the top 50. In 2020, Wanda Group continued to acquire land, ranking 14th in the rankings, with a land acquisition amount of 23 billion yuan. In 2021, 18.7 billion yuan will be spent to acquire land.
calculated based on this that in the three years from 2019 to 2021, Wanda spent a total of 75.7 billion yuan on purchasing land for expansion.
"Without the radical expansion around 2020, Wanda's life might have been easier in the past year." The above-mentioned Wanda insider analyzed the author.
In addition, according to CRIC's 2020 China Real Estate Enterprise Sales Ranking Data, Wanda's sales in 2020 were 69.9 billion yuan, ranking 49th, and failed to complete the 80 billion sales target. As the situation in the real estate industry takes a turn for the worse in the second half of 2021, Wanda's thousand "small goals" have become unachievable plans.
What’s left for Wanda?
In order to survive, Wanda has sold financial licenses, Wanda Movies, AMC shares, and Wanda Plazas one after another in the past five years. If we look back to five years ago, these can be said to be Wang Jianlin's core assets.
Now, after the "sell, sell, sell", what is left of Wanda Group?
According to Wanda Commercial Management’s previously disclosed prospectus, as of December 31, 2022, Zhuhai Wanda Commercial Management managed a total of 472 commercial plazas, of which 184 were owned by independent third parties, accounting for 39% of the total number of commercial plazas under management. According to the prospectus, the average occupancy rate of commercial plazas managed by Wanda Commercial Management is as high as 98.6%.
In addition, Zhuhai Wanda Commercial Management has 181 reserve projects, including 163 independent third-party projects. In order to package and launch
, Wang Jianlin packed all the most eye-catching content into the plate of Zhuhai Wanda Commercial Management.
Apart from the Wanda Commercial Management "Plate", which discloses data to the outside world, little is known about Wanda Group's other assets. Judging from public information, Wang Jianlin did not mention Wanda Group’s operating data for the past year at the 2023 annual meeting.
"Wanda Group is not a listed company, so it does not need to release relevant data to the outside world." A Wanda employee told the author. Before 2020, Wang Jianlin will announce Wanda Group's operating data at the annual meeting, which has also become an important source for outsiders to quote Wanda Group's financial data.
According to the official website, Wanda Group is divided into business management group, cultural tourism group and investment group. In Wang Jianlin’s layout, Wanda Movies, Wanda Baby King, Wanda Cultural Tourism City, etc. were incorporated into the cultural tourism group. With asset sales one after another, cultural tourism groups and investment groups now have very little business left.
Dalian Wanda Commercial Management Group (hereinafter referred to as Wanda Commercial to avoid confusion) is Wanda’s biggest trump card today. Zhuhai Wanda Commercial Management, the entity previously proposed to be listed, and Wanda Hotel Development, an H-share listed company, are both under Wanda Commercial.
Among them, Wanda Commercial Management, as a light asset management company, mainly provides Wanda Plaza with investment promotion, management operations, security and other services. According to the previous prospectus, Wanda Commercial Management’s asset-light model is divided into leasing operation model and entrusted management model. Leasing operation means that the assets of Wanda Commercial Management leasing owners are used for leasing, while entrusted management means that the owners entrust Wanda to attract investment and operate and pay a certain service fee.
Judging from the revenue and net profit data, Wanda Commercial Management is thriving.From 2020 to 2022, Zhuhai Wanda Commercial Management's revenue was 17.196 billion yuan, 23.481 billion yuan and 27.12 billion yuan respectively, and its net profits were 1.112 billion yuan, 3.512 billion yuan and 7.534 billion yuan respectively.
In 2022, its parent company Wanda Commercial achieved revenue of 49.314 billion yuan and net profit of 12.499 billion yuan. The holder of heavy assets in Wanda Plaza is Wanda Commercial, the parent company of Wanda Commercial Management.
According to the Dalian Wanda Commercial Tracking Rating Report released by China Chengxin International in June 2023, as of the end of March 2023, Wanda Commercial’s total assets were 612.216 billion yuan, including 458.679 billion yuan in investment real estate. It can be seen that although some heavy assets have been disposed of, investment real estate is still the core asset of Wanda Commercial.
However, as of the end of March 2023, Wanda Commercial’s book monetary funds were 30.467 billion yuan. In comparison, cash on hand at the end of 2022 was 43.2 billion yuan.
China Chengxin International reported that Dalian Wanda’s commercial capital outflows were mainly used to repay debts, make external investments and distribute dividends.
In 2022, Wanda’s net cash flow from commercial operating activities was 9.686 billion yuan. However, including the net outflow of cash flow from investment and financing activities, Wanda’s net cash outflow from commercial activities that year was 22.156 billion yuan. In 2020 and 2021, there will be a net cash outflow of 27.5 billion yuan and a net inflow of 890 million yuan respectively.
Comprehensive calculation, Wanda Commercial’s cumulative net cash outflow in the three years was 48.7 billion yuan.
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