|Can Lao Wang still turn the tide like he did back then?
Shang Xiaoshu
Video|Shang Xiaomei
Produced by|Huaxiang Famous Finance and Economics
"Most innovators become martyrs, and a few become advanced."
"The size of the heart is the size of the stage, and the size of the ambition determines your probability of success."
"Let the wind and waves rise, and sit firmly on the fishing boat."
On the "Hurun Report" in 2022, Wang Jianlin once again became the richest man in real estate with a net worth of 100 billion.
Just when many people thought that this powerful business tycoon had "changed his life" against the sky, Wang Jianlin ushered in a new test:
Wanda Commercial Management IPO was stranded again...
Blessing and misfortune depend on each other, crisis and opportunity coexist, this time, can Lao Wang still turn the tide like he did back then?
On April 25, the Hong Kong Stock Exchange showed that the prospectus status of Zhuhai Wanda Commercial Management Group Co., Ltd. was updated to invalid, which is the third prospectus submitted by Wanda Commercial Management.
A few days ago, Wanda Group had just held a meeting of senior executives, and Wang Jianlin admitted that the IPO of Zhuhai Wanda Commercial Management was currently experiencing stage difficulties, and said that "Wanda will never lie flat, let alone go bankrupt."
As Wang Jianlin's core business that Wang relies on the most, Wanda Commercial Management's IPO has run aground, and it seems that there are early signs.
On March 21 this year, the CSRC's website published an inquiry letter regarding the application documents of Dalian Wanda Commercial Management Group Co., Ltd. (hereinafter referred to as Wanda Commercial Management Group) to professional investors to publicly issue corporate bonds.
According to the content of the inquiry letter, Wanda's long-promoted listing process of Wanda Commercial Management Hong Kong stocks and its impact on its solvency have attracted attention. In this regard, Wanda Group said that there is no external response.
Not only that, the outside world's doubts about Wanda Commercial Management's fraudulent performance, as well as the news of the extension of Wanda Real Estate Bonds, have cast a layer of heavy uncertainty on the listing of Wanda Commercial Management.
Wanda Commercial Management, formerly known as Wanda Commercial, was listed on the Hong Kong Stock Exchange in December 2014, becoming the largest IPO on the Hong Kong Stock Exchange that year, with an issue price of HK$48 per share at that time.
However, just 637 days after Wanda Commercial's listing, Wanda Commercial completed privatization and delisted from the Hong Kong Stock Exchange due to Wang Jianlin's dissatisfaction with the valuation and liquidity of Hong Kong stocks.
However, Wang Jianlin at that time may not have realized that the golden decade of the real estate industry is fleeting, and the capital market will bid farewell to the era when casual storytelling can blow bubbles and support valuations.
Due to the deep binding with the parent company and the large number of related party transactions, the outside world has frequently questioned the business independence, profitability and sustainable operation ability of Wanda Commerce. Coupled with the market downturn, IPO regulations have been tightened simultaneously, which has also led to Wanda's commercial listing journey has not been heard.
On February 16, 2020, a user signed "CEIBS Song Xinglong" posted a report letter on Weibo entitled "Real-Name Report that Dalian Wanda Commercial Real Estate Co., Ltd. Does Not Meet the Listing Requirements, and Dong Gaojian is Suspected of Committing a Crime", reporting in his real name that Wanda Commercial Management does not meet the listing requirements and that Dong Jiangao is suspected of committing a crime.
At the same time, Wanda Commercial Management's multiple financial indicators warned. By the end of 2022, Dalian Wanda Commercial Management's short-term borrowings increased ninefold to RMB5.046 billion, and non-current liabilities due within one year increased sharply to RMB68.768 billion, a year-on-year increase of up to 3 times.
What is even more deadly is that Wanda Commercial Management cannot complete the listing at the end of this year, and Wang Jianlin and his Wanda Group will also face the payment of 30 billion yuan in share repurchase, which is not a small amount.
There doesn't seem to be much time left for Wang Jianlin. Under pressure, he and his executives began to seek a variety of ways to "save themselves" to alleviate the liquidity crisis.
Some media revealed that in January this year, Wang Jianlin and his concerted actors pledged 65.04% of their shares in Wanda Hotels to Singapore's sovereign wealth fund Temasek and its subsidiaries in exchange for loan financing provided by Temasek's subsidiaries.
People close to Wanda Group told the outside world that "Wanda Group" will cut 30% of its workforce by June, when executives may be demoted and salaries.
According to public data, in terms of domestic debt, the total balance of Wanda Group's due claims and exercise claims in 2023 will be about 15.445 billion yuan. In terms of foreign debt, Dalian Wanda Commercial Management has a US dollar bond that will mature in July this year, corresponding to a scale of US$400 million.
If the IPO cannot be completed by the end of 2023, the strategic investor has the right to exercise the right to resell and require its parent company, Dalian Wanda Commercial Management, to repurchase capital, which will undoubtedly become a huge test for Wang Jianlin, who has just "slimmed down" successfully.
It is conceivable that it is no accident that Wanda Commercial Management has frequently broken in the capital market. In order to gain market recognition, Wanda Commercial needs to demonstrate the company's standardized operation ability, need management to improve internal control and compliance awareness in daily operations, and abandon the obsession with scale and valuation to let the market see the potential growth possibilities.
After all, strict supervision of the asset market and the survival of the fittest for listed companies are the trend of the future. Even if Wanda Business succeeds in breaking through with the blessing of capital, if the company's own fundamentals are not up to par, what should Wang Jianlin take to support the valuation of 180 billion?
The problem of Wanda Business is actually only a microcosm of the development of Wanda Group.
In the past, under the leadership of Wang Jianlin, Wanda greatly reduced its debt ratio through the strategic transformation of light assets and successfully avoided the crisis of the downward trend of the real estate chain.
37 department stores were sold to Suning, 77 hotels were sold to R&F, 13 cultural tourism cities were sold to Rong, all overseas assets were emptied, Wanda Sports was delisted, and the company's shares were sold to Tencent and Ali...
Compared with companies such as Sunac and R&F, which are still struggling in the real estate vortex, Wanda Group has gradually contracted its front, and its textbook "selling assets" action can be called a model of self-help success.
But, is that really the case? From now on, Wanda's transformation can hardly be said to have achieved real success, and it is too early to say that Wang Jianlin has completely "landed".
First of all, Wanda Group is still relatively "short of money". From the perspective of asset-liability ratio, Dalian Wanda Commercial has total liabilities of about 302.448 billion yuan, total assets of 598.254 billion yuan, and a debt ratio of about 50.56%, although this ratio is not high, but the overall amount is still very amazing. In particular, the proportion of short-term debt is too high, which has caused many investors to worry.
At the same time, the coupon rate of the two overseas bonds issued by Wanda at the beginning of this year was as high as 11%, which shows that Wanda's financing costs have risen.
In May, Moody's downgraded the Wanda Commercial Management Family to "Ba2" due to concerns about Wanda's commercial liquidity, placing it on a downgrade watch list. This means that Wang Jianlin's subsequent overseas financing will be more difficult.
It is not difficult to see that although Wanda Group is developing in a healthy direction as a whole, its asset structure still lacks rationality, which is probably related to its excessive investment in fixed assets and insufficient current assets, resulting in pressure on the company's cash flow in the short term.
In 2022, when Wang Jianlin hit the bottom of the real estate industry, he opened a vigorous "bottom-hunting mode". In March of that year, Wanda signed a strategic cooperation agreement with real estate developer Henan Xinyuan, and a number of commercial projects under Xinyuan were transferred to Wanda for trusteeship.
In April, Wanda Commercial Management officially announced that it had won the overall operation and management rights of Beijing SOLANA Blue Harbor and Beijing Wukesong Zhuozhan Shopping Center. In July, Wanda took over a project in Hefei. In September, Wanda began taking over five Oaks Plazas across the country.
Previously, Wang Jianlin also invested 150 billion yuan to establish multi-functional large-scale health industrial parks such as health, medical treatment, and vacation, with the intention of cutting into the health market under the aging trend.
While shouting the slogan of reducing debt, while unable to suppress the impulse to "buy, buy, buy", the result is that after Wanda Group has taken on new burdens, the asset-liability ratio has declined very slowly, and the optimization of financial structure has not been remarkable.
As a high-quality asset under the group, although Wanda Commercial Management's revenue and profit have maintained stable growth, its cash flow has been in a net outflow state, indicating that its operating costs are high and its ability to collect payments is weak.
Of course, in investing in some new projects, today's Wang Jianlin prefers to intervene through the management of "light assets", but it should be noted that light assets are "light", it needs to pay a cost after all, in the case of its own hematopoiesis and profitability is still lacking, Wanda has just gained a respite again stretched out the pace of crazy expansion, is the price of trial and error too expensive?
People, you can't fall twice in the same pit. In the face of the cruel fact that Zhuhai Wanda Commercial Management's IPO was stranded and burdened with performance gambling pressure, Wang Jianlin may be able to understand what is truly "sober in the world".