Wanda's crisis source is listed for gambling, but Wang Jianlin said that he would not cash out, why did Wanda have to go public?

Wang Jianlin sold 51% of Wanda Investment's shares, which made him lose control of his number one Wanda Film, and after four rounds of sales, Wang Jianlin returned nearly 10 billion funds to Wanda Film.

In addition to selling most of the shares of Wanda Film, it is reported that Wang Jianlin is also seeking the opportunity to sell part of the first- and second-tier Wanda Plaza to recoup funds.

In fact, since the beginning of this year, Wanda has sold five Wanda Plazas, including Shanghai Zhoupu Wanda Plaza, Guangxi Hepu Wanda Plaza, Shanghai Songjiang Wanda Plaza, Jiangmen Taishan Wanda Plaza and Qinghai Xining Wanda Plaza.

Behind all this is the listing of about 30 billion yuan of Zhuhai Wanda Commercial Management, some people say 30 billion, some people say 38 billion.

Around July 2021, Zhuhai Wanda Commercial Management received a total of more than 30 billion yuan of financing from Country Garden, Singapore PAG, Ant Financial and other companies, but the two parties agreed that Zhuhai Wanda Commercial Management must complete the listing before the end of 2023, otherwise it must repurchase all shares and pay a certain amount of compensation.

However, Zhuhai Wanda Commercial Management has failed to hit the listing three times in a row, and now the fourth application has not been approved until now, and it seems that there are more than 20 days left in 2023. Wang Jianlin and Wanda were naturally very anxious. If it is not successfully listed, can Wanda come up with about 40 billion yuan to repurchase shares? This answer is very obvious.

Since the Wanda crisis comes from the listing VAM, why does Wang Jianlin have to go public?

Back in 2014, Wanda was listed in Hong Kong, and Wang Jianlin was also very beautiful that year, with the aura of China's richest man, he became a top boss in everyone's eyes.

But two years later, Wang Jianlin suddenly announced that Wanda would be delisted from Hong Kong, on the grounds that he felt the company was undervalued in Hong Kong. In order to delist, he took 30 billion yuan from 9 consortia to privatize Wanda, and signed a VAM agreement with the consortium, promising to complete the A-share listing in 2018.

The problem is that the supervision of real estate companies in A-shares later became stricter, so Wanda did not succeed in listing on A-shares. So this year, Wang Jianlin used his relationship and brought in Tencent, JD.com, Suning, and Sunac, and they took out 34 billion to take over the shares.

Of course, some media asked Wanda whether the investment signed with Tencent and JD.com involved VAM. At that time, Wanda responded no. Since there is no bet, Wanda can theoretically stop and collect rent.

In 2017, Wang Jianlin also launched a round of selling, selling, selling, greatly reducing the company's debt ratio. In 2018, Dalian Wanda Commercial Management's debt ratio was 57.59%, and in the third quarter of 2023, it was reduced to 49.6%.

At this point, if Wanda no longer pursues listing, collects rent, and dividends, life seems to be good. In 2018, Wanda released data that can be checked, and the rental income is as high as 32.88 billion yuan.

But what is very strange is that Wang Jianlin later restarted the listing plan. In order to return to the Hong Kong listing, this time he split Zhuhai Wanda Commercial Management and was responsible for the operation of light assets. Dalian Wanda Commercial Management is responsible for heavy assets.

After the establishment of Zhuhai Wanda Commercial Management, it got the VAM investment of more than 30 billion yuan we mentioned above. Actually, it's very strange here. It stands to reason that an asset-light company is not a capital-intensive enterprise, so why does it need so much capital?

However, it has always been a mystery how much profit Wanda Plaza has brought to Wanda Group over the years. Wanda has not announced specific profits for many years, only revenue, rent and other data, and when it comes to profits, they will mention a profit completion rate, but do not announce specific profits.

Judging from the financial report of Dalian Wanda Commercial Management in 2022, in fact, life is still good, with a net profit of 12.499 billion yuan and a rental income of 50.85 billion yuan.

Since Wanda can make money, and the debt ratio is much lower than that of real estate companies such as Evergrande and Country Garden, why does Wang Jianlin have to be obsessed with going public?

There are only two purposes for going public, one is to raise funds, and the other is to cash out. In 2018, Wanda has received 34 billion yuan of financing from several companies such as Tencent and JD.com, which solved the problems left over from the delisting at that time and solved the VAM crisis.

Why did we have to continue to split up asset-light companies in order to go public, and then continue to raise more than 30 billion yuan in VAM financing? This thing does not seem to be in line with common sense.

If you don't have bad money and don't cash out, why should you go public? The reason why Wanda was delisted from Hong Kong in 2016 is also very strange, and it is that the valuation is too low. The Hong Kong stock market does not give a high valuation to commercial real estate companies, and the price-to-earnings ratios of several commercial real estate companies in Hong Kong that are better than Wanda are also not high.

This matter can be traced back to the source, and it is all linked one by one. Wang Jianlin can invest so many Wanda Plazas in China in just over 20 years, but in fact, he relied on a trick to rent and sell at the same time.

Traditional commercial real estate companies build a shopping mall, and then slowly collect rent, make money, and continue to invest in a second one. Because the payback period is very long, the rate of expansion is very slow.

However, Wang Jianlin has combined the sales strategy of real estate with commercial real estate. Wang Jianlin is not a pure sales model, nor is it a purely self-sustaining model. Every time a Wanda Plaza is developed, Wang Jianlin will build other apartments, office buildings, shops, and real estate. With the sale of other properties to recoup the funds, self-sustaining the construction of Wanda Plaza.

Wang Jianlin said that after the sale of other properties, the cost of Wanda Plaza will come back, and the rest of the mall will be self-sustaining. This mode does look very good.

But since everything looks so perfect, why is Wang Jianlin still obsessed with going public? In fact, there is a problem in China, how to build a company based on a business model, in the end, it is impossible to develop for a long time.

What does this mean? BYD, Huawei, and Fuyao Glass can stand tall in the market for a long time, but on what basis? It is not the business model, but the technological superiority.

There is no threshold for the business model, once others see through it, everyone will rush in, and an involution will be formed, and the cost will rise. Real estate companies are a prime example. You will rent and sell at the same time, and other companies will also do this, so people will also come to grab land with you, and building shopping malls and houses itself is not technical.

Freezing three feet is not a day's cold, Wanda's problem looks like the problem of more than 30 billion bets, but after analyzing it layer by layer, you will find that the problem was buried before it went public in 2014.