Shan Weijian, a symbol with magical powers

In 2005, Shan Weijian returned to the Gobi Desert in Inner Mongolia, after a 30-year absence, he traveled to two universities in the United States, investment bank JPMorgan Chase, and until he became the managing partner of Newbridge Capital at that time.

How many 30 years can there be in a lifetime? "When I was farming in the Gobi, I often didn't have three meals, and in Xinqiao, I often went in and out of hundreds of millions or billions of dollars", and it is no wonder that Shan Weijian sighed when he wrote his book that life is full of drama.

To this day, when Shan Weijian was in his prime, the book was still being written, and PAG PAG Investment Group, which was in charge of tens of billions of dollars in assets, has become one of the most powerful capital tycoons in Asia.

In the past few days, a piece of news has spread in the capital market, with a small number of words, but it is quite heavy:

According to the Financial Associated Press, "on the afternoon of April 20, led by the People's Government of Haimen District, Nantong City, Zhongnan Urban Construction, the controlling shareholder of Zhongnan Construction, negotiated cooperation with Asia's famous private equity investment company PAG Investment Group (PAG) and Jiangsu Asset Management and other institutions on debt resolution and equity transactions. ”

That night, the news was also confirmed by China Securities Journal and CSI Taurus from the Zhongnan Construction Office.

A brief look at the background of the event. Zhongnan Construction is an A-share listed real estate company in Nantong, Jiangsu Province, and one of the largest local real estate developers in Jiangsu, with a contracted sales amount of more than 220 billion yuan in 2020, ranking 17th among national real estate enterprises. It was also that year, when other real estate companies were cautious about acquiring land, Zhongnan Construction was still acquiring land at a premium of more than 100% in some cities.

However, what happened cannot be changed, in short, the real estate companies have not had a good time recently, and even the "big brother" Vanke has fallen into a financial crisis, and Zhongnan Construction is the same.

From April 3 to 17, Zhongnan Construction's stock price has been below 1 yuan for 9 consecutive trading days, and according to the delisting rules, if the stock is lower than the face value of 1 yuan for 20 consecutive trading days, it will trigger mandatory delisting. You must know that in 2023, many A-share real estate companies, including Sunshine City, Tahoe, and Jiakai City, will be delisted.

As the controlling shareholder of Zhongnan Construction, Zhongnan Urban Construction obviously cannot sit back and watch this happen, and the importance of having a listed platform is needless to say, and the local government obviously does not want to watch a local benchmark real estate company delisted.

All parties have taken a series of "rescue" measures, including holding investor research activities, increasing executive holdings, and the government's "seven support measures".

Therefore, on April 17, Zhongnan Construction rose strongly by 8.75%, out of a low open and high white line. However, it is a pity that the decline could not be stopped, and it fell again on April 18 and 19 and hit a new low of 0.76 yuan / share.

The turning point appeared on April 23, the first trading day of "negotiating debt resolution, equity trading and other cooperation with PAG and other institutions", Zhongnan Construction had a strong limit. But I didn't expect the "bad news" to follow. First, the company's shares will implement ST's risk warning from the 24th, and second, the Shenzhen Stock Exchange quickly issued a letter of concern on market information, requiring explanations on the authenticity of media reports and other circumstances.

Real estate is really hard now, from the perspective of Zhongnan Construction, just started to contact with PAG and other institutions, most of them just benefited from the government's matchmaking to talk about it first, and there is no thing about it.

However, if the tone is too tight, it is not appropriate, let's not talk about whether we can "keep" the secret, after all, in any case, "negotiating debt resolution, equity trading and other cooperation with PAG" is obviously an undisclosed event that may have a significant impact on the stock price.

In short, this kind of unresolved matter, choose to let the media announce it, the degree of disclosure is controllable, the responsibility is easy to divide, and the effect is immediate, and the stock price immediately rises and falls. Of course, the regulator is also very conscientious and quickly issued a letter of concern - don't try to fool around.

At present, the latest development is that Zhongnan Construction suspended trading on April 23, and said at the performance meeting held in the afternoon of the same day that the controlling shareholder Zhongnan Urban Construction has indeed negotiated with relevant institutions on cooperation matters, "At present, the company has not received further information...... We will urge the controlling shareholder to perform the information disclosure business in a timely manner." The next day, after the "cap", the fall limit was closed all day.

Or Mu Xin said, "The fate of geniuses is all used, and everyone takes what they need". When it comes to such a major investment decision, from contact to due diligence, negotiation, signing of agreements to substantive investment, it is still very early to talk about the results and landing, but after such an operation, you really can't find a loser.

Shan Weijian also expressed such views in "Money Game", to the effect that after the acquisition of the First Bank of Korea, he lamented that behind a major investment, whether it is due diligence, negotiation, or later agreement signing and even exit, all kinds of gossip for different purposes are always there.

However, "no losers" is in line with Shan's trading philosophy. And PAG was "pinned on high hopes" this time, not only because Shan Weijian was a man who helped Wang Jianlin tide over the difficulties, but also for domestic real estate companies, Shan Weijian is no less than a symbol with magic power.

In December last year, PAG signed a new investment agreement with Wanda Commercial Management to join other investors to continue investing in Wanda. Once the decision is made, the follow-up implementation is also quite fast. At the end of March this year, PAG, together with Wanda Commercial Management's long-standing shareholders CITIC Capital and Ares Management, as well as the Abu Dhabi Investment Authority and Mubadala, announced an investment of 60 billion yuan in New Wanda, accounting for 60% of the shares (see "Wanda Goes Again, Raised 60 Billion at a Time").

In addition, on March 28 this year, Shan Weijian also released an article on his personal public account "The Housing Market Can Be Saved", the article has a clear point of view, that there is no serious surplus of real estate in China, and the policy needs to further loosen the potential demand, repair the self-regulation function of the market, and restore the role of the real estate pillar industry. However, to solve the debt crisis of the real estate company, the major shareholder needs to compensate the creditor with equity or other assets in exchange for the approval of the creditor.

The last sentence simply and directly expresses Shan Weijian's intention to invest in Wanda, which is to ask for your equity.

However, PAG's investment in Zhongnan Construction is still confusing and even worrisome. The biggest reason is naturally what Shan Weijian has emphasized in different interviews: it is not terrible to miss opportunities, but it is most terrible to lose money. ("Shan Weijian× Yang Xiaolei: I lose investment opportunities every day Talking about the day).

What's more, the reason why PAG invested in Wanda again is not just to save people, but also to save itself. Wanda Pre-IPO round from PAG and other institutions to raise more than 38 billion, the listing did not succeed and faced the financial pressure of the failure of the VAM, in the face of Wanda Commercial Management such assets with good cash flow, no one wants to break the tank and take the road of bankruptcy liquidation, which is the same as a few days ago Hillhouse Chi aid minimally invasive shares "the same" ("Hillhouse invested an unexpected amount of money").

Then I have to start with Shan Weijian's personal talk, thanks to his habit of writing books, this kind of inward can deeply examine himself, and outward can let the industry know a lot of specific transaction details, which must be beneficial to the industry, and it is worth learning more from domestic capital predators.

In that issue of "Picking Up the Day", Shan Weijian said at the beginning that he could only agree with half of the view that "the only element of success is almost perseverance", "If you get it in the wrong direction, especially investment...... You're going to waste it. These words reminded me that he had been digging an aqueduct in the Gobi for several months with his comrades-in-arms day and night, and he was about to complete it, but the leader told him to dig in the wrong direction.

People who have experienced this kind of thing, can't imagine how much he hates blind investment without strategy and planning, yes, Shan Weijian is optimistic about China's real estate, but only from this "government organization, PAG singing", an afternoon of communication, I am afraid it is difficult to make any specific and effective decisions.

What's more, judging from the results of PAG's investment in Wanda, it is still unknown how much "blood" will be put into the transaction to make Zhongnan Construction, and even Wang Jianlin, who lost his controlling stake in the new company, did not attend the signing ceremony of the "Dalian Xinda League".

But doing business with Shan Weijian, I guess it may be uncomfortable, it may be aggrieved, but it will definitely not be dissatisfied. Because he's the kind of person who puts everything on the surface and breaks it up with you. In "Money Game", experiencing various capriciousness with the South Korean government from contact to negotiation to execution, it can be said that the more complex the situation, the more beneficial it is for Shan Weijian.

The trick to dealing with this complex situation is also very simple, that is, "empathy", for example, when Shimbashi acquired the First Bank of Korea, it was at an impasse, and Shan Weijian simply opened up the revenue measurement model to the South Korean government, clearly telling the South Korean government how Shimbashi would make money and how much money it might make.

In short, Shan Weijian is playing Yangmou. And in order to reach a deal, as long as it is not a principled clause, it can be accommodated, and even if it is a principled clause, as long as there is room for flexibility, it is not non-negotiable. I think that's what he said, "A single transaction should satisfy everyone." ”

You can be uncomfortable, you can be aggrieved, but you can't be dissatisfied, you have to accept his honesty and his calculations. It's not a top deal maker, I really don't have this quality.

For example, in the transaction of PAG's acquisition of Yingde Gas, Shan Weijian and Yingde's major shareholders agreed as follows: if a third party bids higher than PAG's 5%, then Yingde's major shareholder can withdraw from the previous transaction commitment, but at the same time, if PAG is also willing to raise the price by 5%, it has the right of first refusal.

This not only ensures its own interests, but also satisfies the psychological needs of Yingde shareholders in pursuit of higher prices.

Finally, there is Shan Weijian's "insisting on Qingshan and not relaxing", which is a bit similar to an investor's dialogue with China Investment, "People who have experienced that era have a spirit".

For another example, when Shan Weijian was in the Gobi of Inner Mongolia, he lost the opportunity to go back to Beijing for the first time to go to university because of his love of reading, so he decided to have a good relationship with everyone (note everyone) and set aside an hour a day to chat with someone.

"One hour a day to 'contact the masses', strictly controlled, no more, no less. "Really, if Shan Weijian is an I-person, it is simply "masochism".

As for running 10 kilometers a day rain or shine or something, that's even more basic for him. Therefore, if Shan Weijian really takes a fancy to Zhongnan Construction, then I am afraid that there will be a real grind in the future.