Without control, Wang Jianlin was "backstabbed" by two major shareholders
After Wanda Films did not have the surname Wang, the management came to change blood.
On January 12, Wanda Film announced a major personnel adjustment, with Chairman Zhang Lin and Director Yin Xiangjin both resigning and will no longer hold any positions in the company.
Zhang Lin has worked in Wanda Culture Group for a long time, and he has served as a trader for many major projects in sports, film and other sectors, while Yin Xiangjin has been Zhang Lin's partner for many years. With the departure of the two Wanda veterans, the announcement further announced that Chen Xi and Gong Qiao will become candidates for non-independent directors.
Selling the control of Wanda Films, transferring the first- and second-tier Wanda Plaza, a series of thunderous means, allowed Wang Jianlin to survive the debt difficulties in 2023, and people were once again shocked by the strength of the richest man's circle of friends.
What I didn't expect was that as soon as Lao Wang's front foot passed the high pressure of the debt threshold, the back foot was "backstabbed" by the shareholders - in the face of a plan related to Lao Wang's major interests, the shareholders suddenly changed their faces and no longer bought it.
On the evening of January 8, 2024, Wanda Film held the first extraordinary general meeting of shareholders in 2024, and the content of the meeting was to consider a proposal on adjusting the performance commitments of issuing shares to purchase assets and related party transactions. According to Wang Jianlin's wishes, he plans to extend the original profit commitment for 2022 to 2023, and emphasizes that "the total profit remains unchanged." ”
Judging from the announcement data, Wanda Film and Television will achieve a net profit of -710 million yuan in 2022, but according to the net profit estimate of 270 million yuan in the first three quarters of 2023, it will achieve a net profit of at least 270 million yuan for the whole year. Compared with the two, if the adjustment bill is successfully passed, Wang Jianlin can pay more than 980 million less for the performance difference.
But to the surprise of many, this plan was voted against by the shareholders on the spot, with 70.68% of the votes against it. And this situation is rare for Wanda movies that previously believed in militarized management and attached importance to strong execution culture.
Everyone knows that Wanda Film is Wang Jianlin's "heart", and if it weren't for Wanda Commercial Management's complete hopelessness to go public within the year, Wang Jianlin would not give up Wanda Film. And now, with the change in the shareholder structure of Wanda Films, all parties have also fallen into wrestling, and the days of Lao Wang's "Yiyantang" can never go back.
01. Who led the negative vote?
The content of the shareholders' meeting is to adjust the original performance commitment period of Wanda Film and Television. Judging from the voting results disclosed in the announcement, 27.4759% of the shares voted in favor of the scene, while 70.6811% voted against, and 1.8430% abstained.
According to the statistics of the number of voters and the corresponding number of shares disclosed in the announcement, the "City Boundary" divided all shareholders according to the nature of small and medium-sized shareholders and major shareholders, and the proportion of small and medium-sized shareholders against the votes reached 28%, and there were 53.7 million votes against, but it did not completely control the situation. The two major shareholders who hold a total of 315 million shares have the right to decide whether this proposal is decided.
So, who are the two major shareholders who voted against it? At the time of this vote, Ruyi Investment had not yet completed the final equity transfer. Therefore, judging from the list of the top ten shareholders of listed companies as of the end of the third quarter, there are 4 major shareholders of Wanda Film with a shareholding ratio of more than 5%.
Among them, because the top two shareholders are related parties, the announcement shows that there is no vote, and many people are no strangers to the identity of the third and fourth largest shareholders of Wanda Films. At present, the third largest shareholder of Wanda Film is Lu Lili, the proprietress of Oriental Fortune. She bought an 8.26% stake in Wanda Film for 2.173 billion yuan in July last year, with a transfer price of 12.07 yuan per share.
The fourth largest shareholder is Hangzhou Zhenxi Investment Management Co., Ltd. (hereinafter referred to as Hangzhou Zhenxi), with a shareholding ratio of about 6.19%. Hangzhou Zhenxi is a subsidiary of Alibaba. At the earliest, Hangzhou Zhenxi became the second shareholder of Wanda Film at a total price of 4.676 billion yuan in April 2018, with a shareholding ratio of 7.66%, and the unit price of share transfer was 51.96 yuan per share.
Coincidentally, the two major shareholders hold a total of 315 million shares, accounting for 14.45% of Wanda Film's latest total share capital of 2.179 billion. According to the "City Boundary" compared with its shareholding ratio in the third quarter of last year, the total shareholding ratio of Lu Lili and Hangzhou Zhenxi happened to reach 14.45%.
▲ (List of the top ten shareholders of Wanda Film)
However, Wanda Film did not further disclose the true face of the major shareholders who voted against it in the announcement. And a Wanda film investor said to the "City Boundary" analysis that Lu Lili and Hangzhou Zhenxi are entirely likely to vote against it.
"The purchase price of Hangzhou Zhenxi was already high, and now the investment income has been cut off, so it is not surprising to vote against it. The new three shareholders, Lu Lili, bought 12.07 yuan per share in July last year, but it was higher than Tencent's Shanghai Confucianism at the same time," said the above-mentioned person.
However, the postponement of performance commitments is a matter of great importance to Wang Jianlin. Previously, due to the failure to complete the performance commitment target of the year, Wanda had twice compensated for performance through "1 yuan price cancellation". Among them, in 2020, Wanda Film repurchased 43.754 million shares at a total price of RMB 1 and cancelled them due to the failure to meet the 2019 performance commitment.
On June 9, 2022, due to the failure to complete the 2021 annual performance commitment, Wanda Film announced that it would repurchase and cancel the corresponding compensation shares at a total price of 1 yuan again at a total price of 1 yuan compared with the compensation method in 2019.
If the extension is unsuccessful this time, Wanda Film will once again stimulate the compensation model of "1 yuan price repurchase and cancellation". According to the previous Wanda Film announcement, this part of the compensation will be borne by Shenxian Rongzhi with all the shares of Wanda Film held by it.
The actual controller of Shen County Rongzhi is Wang Jianlin. Although Wang Jianlin is no longer the actual controller after Wanda Film changed hands, he still indirectly controls 10.9% of Wanda Film's shares through Wanda Culture Group, Xinxian Rongzhi and Lin Ning, making it the second largest shareholder of Wanda Film.
However, if it is compensated according to the previous performance commitment, Shen County Rongzhi needs to cancel a large amount of shares. And this also means that Wang Jianlin, who has just lost the position of actual controller, will face the risk of losing the second largest shareholder.
02. What do investors buy?
For Wang Jianlin, the deferred performance compensation can reduce his compensation difference by nearly 1 billion, and the account book is much better. But it's hard for investors to say yes, because they could get a higher yield according to the original plan. What's more, this is not the first time that such a deferred payment has been made.
Many investors' confidence in Wanda Film can be traced back to Wanda Film's gratifying performance. From 2015 to 2017, Wanda Film's net profit was 1.186 billion yuan, 1.366 billion yuan and 1.516 billion yuan respectively, a year-on-year increase of 48.05%, 15.23% and 15.16%.
In May 2019, Wanda Film launched a major asset restructuring - integrating Wanda Film and Television into Wanda Film, a listed company, and issuing shares to 20 companies including Wanda Investment, with a valuation of up to 10.5 billion yuan. In order to give investors confidence, Lao Wang signed a VAM plan.
Wanda Film has announced that it promises that the net profit of Wanda Film and Television from 2018 to 2021 will not be less than 763 million, 888 million, 1.069 billion, and 1.274 billion respectively.
In 2018, Wanda Film and Television achieved its performance target with a net profit of 799 million yuan. However, in 2019, Wanda Film and Television achieved a performance of 301 million yuan, but did not fulfill its current performance commitments.
In 2020, the theater industry was hit by a "black swan" into a cold winter, and Wanda Film chose to "put pressure on the next year", announcing that it would extend the performance commitment period by one year, that is, bypassing 2020, and extending the performance commitment to 2021 and 2022, with a net profit of 1.069 billion yuan and 1.274 billion yuan respectively.
To this end, in April 2021, Wanda Film announced that the performance commitment period was extended by one year, and corresponding performance compensation was also made, and about 51 million shares were repurchased and cancelled at 1 yuan, and the compensation amount should be 1.705 billion yuan. However, this did not dispel investors' concerns about Wanda Film and Television.
Judging from the later performance, in 2021 and 2022, Wanda Film and Television still has not completed its profit target. This also means that in the 4 years of gambling, Wanda Film and Television has had 3 uncompleted performance bets.
Now, if you want to reassure investors about it, the postponement alone will not work. If you want to give investors confidence, the key is to start with the most fundamental performance growth.
As of the first three quarters of 2023, Wanda Film's performance has ushered in a recovery, achieving operating income of 11.348 billion yuan, a year-on-year increase of 46.98%, and net profit attributable to the parent company of 1.115 billion yuan, turning losses into profits.
Previously, in order to solve the pressure of the listing of another business segment, Wanda Commercial Management, even though the company's stock price was at a historical low, Wang Jianlin had to sell the equity of Wanda Film many times. But up to now, the total market value of Wanda Film is still only 27.329 billion yuan, and the latest closing price is 12.54 yuan per share.
How can we further increase the stock price? This is one thing that all shareholders of Wanda Film are happy to see. Just a few days after the announcement of the postponement of the performance commitment, on January 12, Wanda Film announced another major personnel adjustment, with chairman Zhang Lin and director Yin Xiangjin both resigning and will no longer hold any positions in the company. Chen Xi and Gong Qiao will be candidates for non-independent directors.
Chen Xi is the executive director of China Ruyi and the president of Ruyi Films, known as a 10 billion producer, and is one of the "most profitable" film traders in the industry. Previously, she had bet on popular models many times, such as "Detective Chinatown", "Animal World", "Send You a Little Red Flower", "Hello, Li Huanying" and so on.
On the day the "new official" was announced, there were major changes in Wanda Film's business operations. Wanda Film's announcement proposed to suspend Wanda's "new cinema project" and "2022-2023 cinema construction project", and use the remaining raised funds to permanently replenish liquidity and improve the efficiency of fund use.
The emergence of the new management is bound to inject a new layer of strength into Wanda Films. Under the alternation of old and new forces, Wang Jianlin, the former founder of Wanda Films, still needs to pass the last performance compensation mark, can he successfully pass the customs?
Author | amuse
Edit | Sun Chunfang
Operations | Xie Yifan