Wang Jianlin "cut meat" for the New Year

The following article comes from Jianwen Real Estate, written by Cao Anxun

Author: Cao Anxun Editor: Zhang Xiaoling

Wanda Group's annual meeting was once the most high-profile corporate "Spring Festival Gala", chairman Wang Jianlin sang four songs in a row at the annual meeting, the most famous is the song "Fake Monk", superimposed on the halo of the richest man, becoming a vivid footnote to the real estate industry's rapid progress and high spirits in the past.

However, times have changed. The 2023 year is approaching, most of the real estate companies are quiet, and the 2023 annual meeting of Wanda Group held on January 14 has also ended silently, no longer the grand and lively of the past.

Wanda's official website shows that Wang Jianlin, who is keen to sing indulgently at the annual meeting, has closed the wheat, and in the photos on the official website, he summarized the work in 2023 with a serious face and deployed the work tasks in 2024.

Source: Wanda official website

According to relevant sources in Wanda, the company believes that the biggest thunder in 2023 has passed. But now the company is still under financial pressure, so the theme for 2024 is to reduce costs and increase efficiency. This is also one of the tasks for 2024 mentioned by Wang Jianlin at the annual meeting.

Behind the simplicity of Wanda's annual meeting, although Wang Jianlin lifted the listing VAM crisis, he still had to "cut meat" and sell assets for the New Year, and lived frugally.

This is the second time that Wang Jianlin has survived with a broken arm. Compared with other real estate tycoons, his situation is already good, and he no longer has to worry about debt collectors coming to his door this year, or running around for a debt crisis. Wanda can also operate with peace of mind and build momentum for the new year.

Sell assets

According to the enterprise investigation, on January 16, the commercial management of Xiamen Dianqian Wanda Plaza, which is responsible for the operation of Xiamen Huli Wanda Plaza, was transferred. Xiamen Jinshengyang Real Estate replaced Zhuhai Wanda Commercial Management (hereinafter referred to as Wanda Commercial Management) as the company's new wholly-owned shareholder.

A little earlier, Wang Jianlin made a series of moves, and in the five days from December 25 to December 29, 2023, he changed hands four Wanda Plazas, namely Suzhou Taicang Wanda Plaza, Huzhou Wanda Plaza, Guangzhou Luogang Wanda Plaza and Shanghai Jinshan Wanda Plaza.

Taking over these four Wanda Plazas is Zoomlion Qianyuan Real Estate Fund Management Co., Ltd. (hereinafter referred to as Zhonglian Fund), which is a fund management company focusing on innovative real estate finance business with REITs as the core.

According to incomplete statistics from Wall Street, so far in 2023, Wanda has changed hands about 10 Wanda Plazas, involving Xiamen, Foshan, Shanghai, Huzhou, Guangzhou, Xining, Jiangmen and other cities.

This is infinitely embarrassing.

Wanda Plaza is Wang Jianlin's treasure and reliance at the bottom of the box. He once proudly and publicly stated that when Wanda's rental income reaches 100 billion yuan in a few years, Wanda Group will be able to "sit firmly on the fishing boat regardless of the wind and waves".

The words are still in my ears, but now things are wrong.

Prior to this, Wang Jianlin had already sold Wanda Films to Shanghai Ruyi, a Tencent-backed company, and its major shareholder Ke Liming, and even introduced new investors such as PAG Group to Wanda Commercial Management at the cost of declining valuations and diluting his own equity.

In more than a month, Wang Jianlin has successively lost a number of Wanda Plazas, Wanda Films, China's largest cinema chain, and Wanda Luxury Hotel Shanghai Wanda Reign Hotel, and no longer has absolute control over Wanda Commercial Management.

According to the new agreement with the investor, Dalian Wanda Commercial Management's shareholding in Wanda Commercial Management will be reduced from 78.83% to 40%, and the Wang Jianlin family's shareholding will be reduced to about 20%.

Behind Wang Jianlin's painful cutting of meat for the New Year, in addition to raising money to redeem the shares of war investment, Wanda is also facing debt repayment pressure.

According to the interim report of Dalian Wanda Commercial Management's 2023 corporate bonds, as of the end of June 2023, Dalian Wanda Commercial Management's consolidated interest-bearing liabilities were 141.283 billion yuan, of which 29.257 billion yuan were interest-bearing liabilities due within one year. In the same period, Dalian Wanda Commercial Management only had about 16.015 billion yuan of monetary funds in hand.

Dalian Wanda Commercial Management said frankly that the stock of interest-bearing liabilities is large, the scale of debt due within one year is high, there is a certain debt pressure, and the open market refinancing channels have not yet recovered.

Some people who have invested in Wanda Dingrong products said that they have negotiated several rounds of extension with Wanda, and Wanda wants to expand for three years, but investors can't accept it and are still negotiating.

The person said that Wang Jianlin was willing to sell so many assets, and he was very bold, but the general environment was not good, and everyone had to work slowly. "The foundation is still there, it depends on the general environment and regulatory turn."

Regarding Wanda's move to sell asset packages in exchange for liquidity, some industry insiders believe that there is no shame in surviving with broken wrists. In 2017, Wang Jianlin also encountered a liquidity crisis, and he decisively sold Wanda Cultural Tourism and hotels to Sunac and R&F at a discount, and only then did he get through that hurdle.

New year

In the past, Wanda was a unique existence among Chinese real estate companies, and the effect of Wanda's annual meeting was extremely out of the circle, with strong singing and dancing, and a party of 10,000 people.

In 2016, Wang Jianlin became the richest man in China for the third time. That year, Wanda's annual meeting was held in the Wanda International Resort in Xishuangbanna, and Wang Jianlin sang four songs in one breath: "Fake Monk", "Unrequited Love of a Flower", "The Shadow of the Fence Wall" and "My Roots in the Grassland", which attracted applause from everyone inside and outside the circle, which was the highlight moment of Lao Wang.

And now, Wang Jianlin has to break his arm twice to survive, and the vigorous and large-scale asset disposal makes people sigh at Lao Wang's courage and determination.

It's just that seeing the "cultural and tourism empire" that has been built for many years is divided, Wang Jianlin is inevitably exhausted, and he is much older and thinner, and now he has no intention of singing and celebrating.

Next, Wang Jianlin needs to go all out to improve his operation, and only in this way can he withstand the financial pressure and lead this giant ship to move forward safely in the weak recovery of commercial real estate.

In this business battle, changes in the economic situation, Wang Jianlin's will to survive and sincerity will determine where Wanda will go.

It can be expected that with the recovery of consumption in offline physical shopping malls, the performance of Dalian Wanda Commercial Management is also improving.

In the first half of 2023, Dalian Wanda Commercial Management achieved a total operating income of about 25.452 billion yuan, a year-on-year increase of 4.3%, and a net profit attributable to the parent company of about 6.729 billion yuan, a year-on-year increase of 0.43%.

Huaan Securities said that the commercial real estate stock market is highly competitive, and the market has a strong demand for professional commercial operation service providers. Wanda's standardized management process of the whole industry chain, diversified shopping mall operation experience and large brand partners are conducive to further enhancing Wanda's expansion capabilities and maintaining a leading attitude.

At the same time, Wang Jianlin is also accelerating the implementation of the asset-light strategy with the help of the action of selling assets.

A person familiar with the matter said that although Wanda has sold the Shanghai Ruihua Hotel, the hotel is still managed by Wanda, retaining the Wanda brand and implementing asset-light management. "Behind the new owner of Shanghai Ruihua Hotel is a diversified large multinational company, which recognizes Wanda Hotel Management Company, and does not rule out entrusting its own other domestic and foreign hotels to Wanda Management in the future."

In addition, recently, Dalian Wanda Commercial Management, a subsidiary of Dalian Wanda Commercial Management, was established, mainly engaged in commercial complex management services. The registered capital of up to 16.207 billion yuan also shows Wang Jianlin's new ambition and fighting spirit in the field of business management.

The relationship between Xinda Alliance Commercial Management and Zhuhai Wanda Commercial Management and War Investment needs to be further clarified in the future.

Real estate rivers and lakes, ups and downs for another year. Some people resigned and returned to their hometowns, and some people rushed to the field in the starry night. Wang Jianlin still faces difficulties, but he is much better off than his other fallen peers, and he still has so many assets and businesses to do.

It's just that, no matter what, Wang Jianlin will never be able to return to the past era of indulgence and complacency. The new real estate rivers and lakes will be an era of steady and far-reaching development, relying on business technology to make small money and hard money.

This article does not constitute personal investment advice, does not represent the views of the platform, the market is risky, investment needs to be cautious, please make independent judgment and decision-making.