In the hit drama "Flowers" at the beginning of 2024, the uncle played by Mr. You Benchang is deeply rooted in the hearts of the people. Every line he speaks is like a ground-breaking and enlightening statement, such as this sentence:
"In business, it is not about comparing who can earn. It depends on who lives longer."
This sentence is not difficult to understand, but very few people actually do it. If Wanda's Wang Jianlin watched this "Flowers", he would probably sigh, "The person who knows me is my uncle."
As early as 2015, the real estate industry was at its peak, and many companies were eager to squeeze in. Wanda, which was already the industry leader, transformed into an asset-light industry under the leadership of Wang Jianlin.
At that time, many people doubted that Wang Jianlin knew how to do business. Now, when some radical companies encounter crises, Wanda stood on the safe side early, and Wang Jianlin smiled at the situation.
The tree wants to be quiet but the wind is not stopping. During this period, the outside world's attention to Wanda and Wang Jianlin has been rising and falling like a roller coaster. Since the beginning of the year, topics such as "Wang Jianlin successively sold Wanda Plazas" have continued; subsequently, the news that "Wanda received 60 billion investment" has appeared on the hot search lists of major platforms; recently, "Wanda will sell its Beijing headquarters" has once again aroused heated discussions, with some Netizens joked, "The ruthless Wang Jianlin even sells his headquarters if he becomes ruthless!".
What is Wang Jianlin planning behind Wanda’s series of big moves? In fact, there is no secret or special feature. It can be explained in 8 words: strategic determination and consistency.
In 2015, Wanda proposed an asset-light strategy. Over the past eight years, Wanda has undoubtedly implemented this strategy. It reflects Wanda’s long-term thinking.
For example, the transfer of the Beijing CBD Wanda project is also part of Wanda’s implementation of the asset-light strategy. It is understood that Wanda’s Beijing headquarters will continue to work here in the future, and the project will still be managed and serviced by Wanda, and the Wanda brand will be retained.
Wanda Plaza's heavy assets are sold, while the operations and management remain. "One is sold and the other is retained." This is the underlying logic of Wanda's asset-light model.
The "asset-heavy" model can easily make companies burdened by debt, while the "asset-light" model can effectively avoid debt risks, allowing Wanda to develop "stable and fast."
Judging from a series of operating data, Wanda has lived beyond my uncle’s expectations. Not only has it “earned more”, but it has also laid the foundation for “living a long life”.
Wanda “slims down”
Wanda is a leading company in business management, and its every move is observed with a magnifying glass by the outside world, which inevitably leads to various interpretations.
For example, some people think that Wanda may be short of funds and describe selling assets as "cutting off flesh." If we look at Wanda Commercial Management's business logic over a longer period, we can see that it is not accurate to say "cutting off flesh". Wanda is continuing to "slim down."
Wanda’s “downsizing” began with its youth asset transformation in 2015. Wang Jianlin said: “It’s time for Wanda to make money from its brand.” Making money from your brand is the highest level of doing business.
At the end of October 2014, the 100th Wanda Plaza in the country opened in Kunming. Wang Jianlin said at the ceremony: This marks that Wanda Plaza has become a brand with global influence. "Wanda Plaza is the center of the city" is no longer a slogan.
It has taken 12 years for Wanda Plaza to go from Tower 1 to Tower 100. Wanda’s outstanding operational strength and brand influence have been repeatedly verified by the market. For example, the occupancy rate and rent collection rate of Wanda Plaza have been above 99% for a long time. With data like this, it’s not too much to say “way ahead”.
So, how does Wanda make money from its brand? There are two main aspects:
On the one hand, for most of the new projects, Wanda does not use the investment funds for the projects. It only exports the brand, is responsible for the design, construction and operation, and shares the profits.
On the other hand, Wanda sells its original "heavy assets" and retains Wanda's brand and management and services. By "selling one and keeping one", we can make ourselves lighter and achieve the goal of "slimming down".
Wang Jianlin decided on the strategy, and Wanda stayed committed to implementing it.
For example, not long ago, Shanghai Jinshan Wanda Plaza Investment Co., Ltd. experienced an equity change, and its major shareholder was changed from "Dalian Wanda Commercial Management Group Co., Ltd." to "Suzhou Lianshang No. 2 Commercial Management Co., Ltd."Now, when market conditions mature, Wanda continues to transfer its projects at high points and continues to "downsize."
After Wanda sells its assets, it will not "separate one thing from the other and live happily together" with these assets. These assets will still be managed and serviced by Wanda in the future, and the Wanda brand will be retained. After
the transaction party acquired the assets, it handed over the brand and operations to Wanda, and became the "hands-off shopkeeper". Is this a high degree of recognition of the growth potential of Wanda Plaza? Is this a high recognition of Wanda’s business capabilities? You taste it, you taste it carefully.
In recent years, whenever Wanda makes a major move, it is inevitably questioned. Looking over a long period of time, Wang Jianlin's business thinking and strategic determination are beyond imagination.
A "light boat" at the forefront
In "Flowers", the uncle said to Mr. Bao, "The weather will not always be good, and people will not always have the upper hand." In the business market, it is important to maintain momentum and plan ahead. Sobriety is equally important.
The real estate industry is in turmoil, and many radical companies are treading heavily and falling into debt. However, Wanda, through its asset-light transformation, is like a "light boat" sailing through the mountains.
public data shows that in 2003, the first Wanda Plaza opened, and in 2014, Wanda Plaza ushered in the era of 100 stores. In 2019, the 300th Wanda Plaza opened. In 2021, the 400th Wanda Plaza will open. At the beginning of 2024, the number of Wanda Plazas reached 498.
It took Wanda 12 years to go from 1 to 100; it only took 9 years for Wanda to go from 100 to nearly 500.
What is even more noteworthy is that Wanda’s commercial asset-light operation was not understood at first, but has become an industry consensus. It can be said that "the world is extremely broad for a moment." In addition to Wanda, powerful players such as Longfor Commercial, Xincheng Holdings, China Resources Vientiane Lifestyle, and Joy City are vying to enter the market.
For example, Longfor Commercial launched a "simultaneous emphasis on light and heavy" strategies in early 2021. According to public information from Longfor, 6 asset-light and 5 asset-heavy projects may be unveiled in 2023. In 2023, Seazen Holdings will open a total of 22 Wuyue Plazas, including 14 self-owned projects and 8 managed projects.
China Resources Vientiane Life also plans to open 150 shopping malls by 2025, including at least 50 third-party expansions.
Looking at Wanda’s report card, 28 Wanda Plazas will open in 2023, 26 of which are asset-light projects. Whether in terms of total number or proportion of asset-light projects, Wanda is the leader among its peers.
It can be said that Wang Jianlin turned around and once again brought a group of followers.
Wanda, which leads among powerful players, is like a "hexagonal warrior", integrating a good brand reputation, deep operational and management experience, rich third-party business development capabilities, leading technological capabilities, and professional talent reserves. .
At present, Wanda has formed a positive cycle of "strong brand output and management capabilities - high-level occupancy rates - an increase in the number of cooperative merchants - attracting more cooperative merchants to drive performance growth".
According to Frost & Sullivan, as of the end of 2022, Wanda Commercial Management ranked first in the world in terms of floor area under management. From 2020 to 2022, the average occupancy rate of commercial plazas managed by Wanda Commercial Management was 98.6%.
With the advancement of the asset-light strategy, Wanda Commercial Management has performed well in its financial data and brought generous returns to shareholders.
According to public data, Zhuhai Wanda Commercial Management (the main operating entity of Wanda Plaza) will have after-tax income (estimated) of 29.3 billion yuan in 2023, with an average annual growth of about 12% in the past three years, and after-tax profit (estimated) of 9.5 billion yuan , with an average growth rate of 34% in the past three years. In the past three years, the company's dividends to shareholders were 4.6 billion yuan in 2021, 6.7 billion yuan in 2022, and 8.5 billion yuan in 2023 (estimated).
Recently, Wanda was able to obtain 60 billion investment from investors such as PAG and CITIC Capital, which once again confirmed this point. Huang Dewei, partner of PAG Investment Group and president of PAG China, said in an interview with media reporters: "The reason why we are firmly optimistic about Wanda is because since we invested in Wanda in August 2021, Wanda has not only exceeded its performance targets for three consecutive years, but also achieved In addition to continuing to pay dividends to shareholders, the dividend will reach 8.8 billion yuan in 2023. Wanda's cash flow is very good, and this is 'real money'."
From a series of data, Wanda's operating efficiency is based on its asset-light strategy. constantly improving.Recently, Wanda has sold assets one after another and focused more on improving its commercial asset-light operation and management capabilities. This move will help increase the return on assets and Wanda will also gain more sustained growth.
The apes on both sides of the Taiwan Strait can't stop crying, and the boat has passed the Ten Thousand Mountains. How wide is Wanda’s commercial asset-light path? My uncle said that today’s sun won’t be enough to dry tomorrow’s clothes. Time determines everything.
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