"Ruthless" Wang Jianlin: Wanda headquarters building and Wanda Film have changed hands, and assets have shrunk by 130 billion in two years

Source: Visual China

Author | Yue Jiachen 

Edit | Wang Weikai

Produced by | Prism Tencent Xiaoman Studio  

1.63 million square meters, equivalent to the total construction area of 6.3 bird's nests. This is the total floor area of the 11 Wanda Plazas sold by Wanda Group since 2023.

"Selling, selling, selling" has become the key word of Wanda in the past year, from Wanda Film equity, to Wanda Plaza and Wanda Hotel's heavy assets, and then to the group's headquarters building...... Wanda has almost sold its most prized asset.

On April 12, the equity of Beijing Wanda Plaza Industrial Co., Ltd. was changed, and the company held Beijing Wanda Plaza, where Wanda headquarters is located.

Following the change of ownership of Wanda's headquarters, Wanda Films also officially changed hands. On April 17, Wanda Film issued the "Announcement on the Completion of the Equity Transfer of Indirect Controlling Shareholders and the Change of Control of the Company", and the shares held by Wanda Culture Group and Wang Jianlin have completed the industrial and commercial change registration, and the transferee is Shanghai Ruyi.

With the sale of the assets of the headquarters building and the change of the equity of Wanda Film, Wanda Film has begun to move, from the original group headquarters to Block B, Wanda Plaza, No. 93 Jianguo Road, Chaoyang District, Beijing, to Laijin Cultural and Creative Industry Park.

"Mr. Wang has always been resolute and resolute, and he is a ruthless person. When the company encountered a crisis, he dared to break his wrist and sell his most precious assets. A former Wanda employee told the author.

According to the "2024 Hurun Global Rich List" released by the Hurun Research Institute, Wang Jianlin's family wealth has fallen by 80 billion yuan in the past year, a decrease of 72%. And in 2023, the wealth of Wang Jianlin's family will drop by 50 billion yuan.

In just two years, Wang Jianlin's assets have shrunk by 1,300 "small goals". After a series of asset sales, Wang Jianlin's family wealth is only 30 billion yuan.       

Sell off the headquarters building

Recently, Beijing Wanda Plaza Industrial Co., Ltd. has undergone a change in equity, the original wholly-owned shareholder Dalian Wanda Commercial Management Group Co., Ltd. withdrew, and the new shareholder Kunhua (Tianjin) Equity Investment Partnership (Limited Partnership) holds 99.99% of the shares and is the controlling shareholder, and Kunyuan Chenxing (Xiamen) Investment Management Consulting Co., Ltd. holds 0.01% of the shares.

This has drawn attention to Wanda's sale of the group's headquarters.

"Block B of the office building of Beijing Wanda Plaza has always been self-sustaining by us. A staff member of the leasing department of Beijing Wanda Plaza Industrial Co., Ltd. said to the author of "Prism". The office building is home to Wanda's headquarters in Beijing.   

A former Wanda employee also told the author that Beijing Wanda Plaza had previously been held by Wanda Group.

Beijing Wanda Plaza is composed of three buildings, Block A, Block B and Block C, located at No. 93 Jianguo Road, close to the CBD of China World Trade Center and the new site of CCTV. According to the person in charge of the lease, Block A is currently owned by a small owner, while Blocks B and C are self-owned, with Block C currently being Wanda Vista Beijing and Block B being an office building.

An employee of the company in charge of bidding and an employee of the Mandarin Hotel also told the author of Prism that the company holds the assets of Blocks B and C of Beijing Wanda Plaza, which are the core assets of Wanda Group in Beijing.

At present, in addition to the headquarters building of Wanda Group, Block B of Beijing Wanda Plaza is also renting out some floors. According to the person in charge of the lease, the rent of the office building is as low as 8 yuan per square meter per day, and the office is located in the same building as Wanda Group.

Beijing Wanda Plaza Tower C was once the Wanda Sofitel Hotel, but in 2007 it was renamed Wanda Vista Hotel. Wanda Group's annual meetings in recent years have been held at the hotel. Tianyancha shows that Wanda Vista Hotel is a subsidiary of Beijing Wanda Plaza Industrial Co., Ltd.

Beijing Wanda Plaza Industrial Co., Ltd. was established in 1999 and was formerly known as Beijing Wanda Plaza Real Estate Development Co., Ltd. The Company is the developer of the above-mentioned Wanda Plaza in Beijing.

According to Wanda's official website, Beijing Wanda Plaza opened in December 2006. In 2008, Wanda's headquarters moved from Dalian to Beijing Wanda Plaza.   

In line with the previous sale of Wanda Plaza in other cities, the sale of Beijing Wanda Plaza Industrial Co., Ltd. is still to alleviate liquidity pressure.

According to Tianyancha, Beijing Wanda Plaza Industrial Co., Ltd. has a registered capital of 200 million yuan, and in September last year, the company's equity has been pledged to Huaxin International Trust Co., Ltd.

$19.6 billion in cash on hand and $114.3 billion in short-term debt

Two weeks before the sale of the headquarters building's assets, Wanda had just received a 60 billion yuan investment.

On March 30, Dalian Wanda Commercial Management officially signed an investment agreement with five institutions, including PAG Investment Group and CITIC Capital, and the five investors jointly invested about 60 billion yuan in Dalian Xinda League, holding a total of 60% of the shares. After the completion of the investment, Dalian Wanda Commercial Management will hold 40% of the shares.

"Even with an investment of 60 billion yuan, the unstoppable asset sale means that Wanda has not yet reached the real safety zone. A long-time follower of Wanda told the author.

Wanda's debt seems to be a bottomless pit. According to the 2023 tracking rating report of Dalian Wanda Commercial Management released by China Chengxin International, as of the end of the first quarter of 2023, Dalian Wanda Commercial Management's liabilities totaled 310.536 billion yuan.   

As of the end of 2022, Dalian Wanda Commercial Management had 19.631 billion yuan in cash and cash equivalents, and as much as 114.3 billion yuan of debt due within a year. This also explains why Wang Jianlin will start to frantically sell assets to "return to blood" from 2023.

"Fortunately, Wanda still has a lot of high-quality assets to liquidate. Many Wanda Plazas are located in the center of the city and have a huge flow of people. A former employee of Wanda Group told the author.

Since 2023, Wanda Group has transferred 11 Wanda Plazas to heavy assets. From December 25 to 30, 2023 alone, four Wanda Plazas were intensively transferred, namely Suzhou Taicang Wanda Plaza, Huzhou Wanda Plaza, Guangzhou Luogang Wanda Plaza and Shanghai Jinshan Wanda Plaza.

Previously, in October 2023, the insurance institution Dajia Insurance acquired Shanghai Zhoupu Wanda Plaza. At the end of May 2023, we will also include three shopping malls: Shanghai Songjiang Wanda Plaza, Xining Haihu Wanda Plaza and Jiangmen Taishan Wanda Plaza.

On March 20 this year, Tianjin Jizhou District Wanda Plaza Commercial Co., Ltd. underwent industrial and commercial changes, Dalian Wanda Commercial Management Group withdrew, and Beijing Tianding Kunyang Technology Co., Ltd. became a wholly-owned shareholder.

According to the equity change information, funds and insurance companies are the main buyers of Wanda Plaza. From the perspective of the nature of the transaction, the "fire sale" of Wanda Plazas are all heavy assets, which means that Wanda Group is no longer the owner of the above-mentioned Wanda Plazas, but is still the operator of these Wanda Plazas.

Wanda did not disclose the consideration for the deals. However, according to a former Wanda employee, when the assets are sold, it is estimated that each Wanda Plaza can be sold for 700 million yuan, but the transaction amount varies from project to project.

Asset-light transformation

In the past, the four products of Wanda Plaza, Wanda Film, Wanda Hotel, and Wanda Cultural Tourism City were like carriage heads, pulling Wanda's huge business empire. However, with these former precious assets being disposed of one after another, what is left of Wang Jianlin's Wanda?

Wang Jianlin's first assets to sell were hotels and cultural tourism cities. In 2017, Wang Jianlin sold 77 hotels to R&F and 13 cultural tourism cities to Sunac. The deal was then known as the "Deal of the Century."

"It's not good business to own a large luxury hotel. A real estate industry insider said, "The return on capital of a five-star hotel is too low. Today, R&F Group, which took over Wanda's 77 hotels, has long been filed for bankruptcy reorganization.

With the recent equity transfer of Beijing Wanda Plaza Industrial Co., Ltd., Wanda has lost its flagship hotel assets in the two core cities of Beijing and Shanghai. On December 26 last year, the Wanda Reign Hotel in Shanghai changed hands. Wanda Reign is the most high-end brand of Wanda Hotels.

2020 was another turning point for Wanda. In September 2020, Wanda Commercial Management announced that it would no longer develop asset-heavy projects, no longer invest in Wanda Plaza properties, and fully implement the asset-light strategy.   

After that, Wanda Plaza was divided into two modes: light and heavy. Among them, the asset-heavy platform is Dalian Wanda Commercial Management, which owns the Wanda Plaza property. The asset-light operation platform is Zhuhai Wanda Commercial Management, which was previously planned to be listed, does not hold properties, and its income mainly includes operation and management service fees, property management fees and value-added service fees.

Through equity penetration, Dalian Wanda Commercial Management is the core asset of Wanda Group, which is wholly owned by Wang Jianlin and his sons.

Judging from the names of subsidiaries, the names of Dalian Wanda Commercial Management subsidiaries are mostly "XX Wanda Plaza Investment Co., Ltd.", and its 194 subsidiaries hold Wanda Plaza assets across the country. In the past year, most of the Wanda Plaza assets sold by the parent company are Dalian Wanda Commercial Management.

Zhuhai Wanda Commercial Management was invested and established by Dalian Wanda Commercial Management in 2021, and most of its subsidiaries are named "XX Wanda Plaza Commercial Management Co., Ltd."

At that time, Wanda's asset-light strategy was mainly due to the fact that it was easier for light assets to be favored by the capital market, but this did not mean that it would stop developing and holding heavy assets. "At that time, the group's strategy was not to avoid real estate, but Wanda Commercial Management wanted to divest real estate, which would help increase valuation. A Wanda insider explained to the author.

Wanda originally planned to package these operation service businesses into the listing of Zhuhai Wanda Commercial Management, however, Wanda Commercial Management's listing road eventually failed.

At the end of last year, it was reported that Wanda also planned to sell about 40 Wanda Plazas in first- and second-tier cities, and was in communication with potential buyers. However, the authors of Prism consulted a number of Wanda employees or former Wanda employees, who could not confirm that as many as 40 Wanda Plazas were being sold.   

After "selling blood", how to "make blood"?

Under the "selling, selling, selling", Dalian Wanda Commercial Management's "hematopoietic" ability is also weakening. In 2022, the net cash inflow of Dalian Wanda Commercial Management's operating activities was 9.685 billion yuan, a year-on-year decrease of 57%.

After the sell-off, what sustainable "hematopoietic" assets are left in Wang Jianlin's hands?

After the sale of most of its cultural tourism and hotel assets in 2017, the business management business became a core asset of Wanda Group.

According to the previous prospectus, from 2020 to 2022, Zhuhai Wanda Commercial Management's revenue was 17.196 billion yuan, 23.481 billion yuan and 27.12 billion yuan respectively, and its net profit was 1.112 billion yuan, 3.512 billion yuan and 7.534 billion yuan respectively. As a light asset management company, Zhuhai Wanda Commercial Management mainly provides services such as investment promotion, management and operation, and security for Wanda Plaza.

According to the introduction of the previous prospectus, Wanda Commercial Management's asset-light model is divided into leasing operation mode and entrusted management model, leasing operation refers to Wanda Commercial Management's leasing of the owner's assets for rent, and entrusted management is that the owner entrusts Wanda to attract investment and operation, and pays a certain service fee.

As an asset-light operating company, the ability to expand projects is crucial. According to the data, in the three years from 2020 to 2022, Wanda Plaza added 149 new stores, of which asset-light projects accounted for more than 80%.

According to the prospectus previously disclosed by Wanda Commercial Management, as of December 31, 2022, Zhuhai Wanda Commercial Management managed a total of 472 commercial plazas, of which 184 were owned by independent third parties, accounting for 39% of the total number of commercial plazas under management.

At that time, the prospectus said that in 2022, the average occupancy rate of Wanda Commercial Management's commercial plazas under management was as high as 98.6%.

In terms of hotels, as of the end of 2023, Wanda Hotel Development has 157 hotels under management. Wanda Hotel Development's prospectus discloses the operating model of the hotel business, including leasing operation, management model and franchising. Under the management model, Wanda grants the relevant brand license to the owner, and Wanda appoints a hotel management team to be responsible for the management of the hotel and collects management fees from the owner.

Wanda Hotel's brands include 9 brands, including Wanda Ruihua, Wanda Veva, Wanda Realm and Wanda Jinhua.

However, in 2023, the occupancy rate of Wanda Hotel is only 55.9%. In 2023, Wanda Hotel's development revenue will only be 983 million yuan, and its net profit will be 191 million yuan, a year-on-year decrease of 18%, with a total market value of only 921 million yuan.

In addition, Wanda Films has now officially changed hands. On December 6 last year, Wanda Film announced that Wang Jianlin planned to transfer 51% of the equity of Beijing Wanda Investment to Shanghai Ruyi. With the completion of industrial and commercial changes, Wang Jianlin has lost control of Wanda Films.