Three days after receiving the CSRC's "small road strip", Wanda Commercial Management quickly disclosed its IPO prospectus on the Hong Kong Stock Exchange.
The 598-page prospectus contains a huge amount of information. The prospectus not only details the performance of Wanda Commercial Management after the restructuring, but also announces the situation of Wanda Commercial Management Pre-IPO investors that have been concerned by the outside world before. Many are familiar names, Country Garden, Tencent, Ant Financial, Chow Tai Fook...
Cat sister overnight interpretation, for everyone to sort out the following dry goods:
1. What is the performance of the asset-light Wanda commercial management?
2. Who will share this listing feast with a valuation of 180 billion yuan?
The performance of asset-light Wanda Commercial Management
First, let's take a look at the performance of Zhuhai Wanda Commercial Management after the restructuring.
According to the prospectus, as of June 30, 2021, Zhuhai Wanda Commercial Management has managed a total of 380 commercial plazas with a construction area of 54.2 million square meters under management.
In terms of the construction area under management, it ranks first in the world and in China, and its construction area under management in China even exceeds the sum of the second to tenth places.
At the same time, as of June 30, 2021, the company had 162 reserve projects with a total construction area of about 19.1 million square meters; of which 133 were reserve projects from independent third-party owners, with a total construction area of about 15.7 million square meters.
Needless to say, this is the world's largest commercial management firm seeking an IPO. However, due to a series of restructuring actions before the listing, the performance of Zhuhai Wanda Commercial Management was not stable.
According to the prospectus, in 2018, 2019, 2020 and the first half of 2021, Zhuhai Wanda Commercial Management achieved operating income of 11 billion yuan, 13.4 billion yuan, 17.2 billion yuan and 10.6 billion yuan, and net profit of 2 billion yuan, 1.2 billion yuan, 1.1 billion yuan and 656 million yuan, respectively.
The gross profit margin of the company was 41.29%, 34.09%, 36.89% and 42.43% respectively, while the net profit margin was 18.34%, 9.29%, 6.47% and 6.16% respectively.
For comparison, the gross profit margin and net profit margin of China Resources Vientiane Life, which has been listed, are 32.20% and 20.08% in the first half of 2021, respectively. However, a large part of CR Vientiane Life's revenue comes from the property income of properties such as residential and office buildings.
But even so, it can still be seen that as a pure commercial operation management company, Wanda Commercial Management's gross profit margin level performance is good, but the performance is not stable, and the company's net profit margin level in the past two years or so is at a low level, which is slightly disappointing.
What is even more surprising is that the asset-liability ratio of Wanda Commercial Management has been above the level of 80% for a long time. According to the financial report, in 2018, 2019, 2020 and the first half of 2021, the asset-liability ratio of Wanda Commercial Management reached 80.5%, 80.4%, 95.8% and 80.4% respectively.
In this regard, Wanda's interpretation of commercial management is due to the adjustment of the operating model. But as a light asset management company, such a debt level is even higher than that of real estate companies, which is indeed a bit incomprehensible.
Overall, the performance disclosed by Wanda Commercial Management was not much of a bright spot, and the performance of profits and liabilities was disappointing. Wang Shoufu has prepared this report card for nearly 6 years, and the performance is not satisfactory.
Who will share this feast of capital?
Still, going public often means the opening of yet another myth of wealth creation. And the capital giants who smell the breath of wealth have long been in action.
The prospectus discloses the final shareholding structure of Wanda Commercial Management before listing, showing that on April 26, 2021, Zhuhai Wanying increased its capital to Zhuhai Wanda Commercial Management by 2.174 billion yuan. After the completion of the capital increase, Zhuhai Wanda Commercial Management is held by Dalian Wanda Commercial, Zhuhai Wanying and Yinchuan Wanda with registered capital of about 69.99%, 30% and 0.01% respectively.
From 2 July 2021 to 30 August 2021, Zhuhai Wanying, Dalian Wanda Commercial and Zhuhai Wanda Commercial Management entered into a series of agreements with the investors, pursuant to which the investors agreed to acquire certain equity interests in Zhuhai Wanda Commercial Management from Zhuhai Wanying. The transfer price is determined by the parties at a pre-transfer valuation of US$28 billion or RMB180 billion by the reference company and through fair consultation.
After the completion of the investment, Dalian Wanda Commercial, Zhuhai Wanying, Yinchuan Wanda and the investors directly held 69.99%, 8.83%, 0.01% and 21.17% of the company's registered capital respectively.
In other words, the newly joined investors divided 21.17% of the equity of Wanda Commercial Management before listing.
Looking through this part of the list of investors and penetrating its shareholding structure, we can find many familiar figures:
Among them, Well Smart Developments Limited is behind Chow Tai Fook's agent, ultimately controlled by Cheng Ka Chun and other family members of Cheng Yu Tong (deceased), with an investment amount of 129 million yuan, accounting for 0.0718% of the shares;
Country Garden Property Hong Kong Holdings Limited is behind Country Garden Services, and Behind Jinyi Global is Country Garden Group, which invested 3.23 billion yuan respectively, accounting for 1.7945% of the shares.
BEHIND CCP Wing Investment Limited and CCP Wing II Investment Limited are BOTH CITIC Capital, with investments of US$500 million and RMB1.294 billion respectively, accounting for 1.7857% and 0.7187% of the shares.
The ultimate actual controller of Nantong Zhaohua No. 1 Emerging Industry Investment Fund (Limited Partnership) is China Merchants Steamship Co., Ltd., with an investment amount of 924 million yuan, accounting for 0.5133% of the shares.
AcceleratorI Ltd. and Shanghai Yunxin Venture Capital Co., Ltd. are behind Ant Technology, and the actual controller, Jack Ma, invested 837 million yuan and 1.8 billion yuan respectively, accounting for 0.4643% and 0.9778% of the shares.
Behind Huang River Investment Limited and Shenzhen Gaodeng Computer Technology Co., Ltd. are Tencent, and the actual controller Ma Huateng, with an investment amount of 1.3 billion yuan and 212 million yuan, accounting for 0.7222% and 0.1179% of the shares, respectively.
In fact, some of these people were already old friends of Wang Jianlin. As early as January 2018, Tencent, as the main sponsor, joined hands with Suning, JD.com, Sunac and others to invest in Wanda Commercial, and the four companies planned to invest about 34 billion yuan to acquire about 14% of the shares held by investors introduced when Wanda Commercial was delisted.
These giants all indirectly hold shares in Zhuhai Wanda Commercial Through Dalian Wanda Commercial. If the listing is successful, these giants will also have a share.
It is worth noting that Wanda Commercial Management also signed a VAM agreement with these investors, according to which Dalian Wanda Commercial and Zhuhai Wanying guarantee that Wanda Commercial Management's estimated actual net profit for 2021 and the company's audited net profit net profit net of non-recurring gains and losses in 2022 and 2023 will be no less than RMB5.19 billion, RMB7.43 billion and RMB9.46 billion respectively, and if not reached, Dalian Wanda Commercial and Zhuhai Wanying will transfer the relevant number of shares at zero consideration and pay cash to investors to compensate investors.
Referring to the non-net profit of 2.065 billion yuan in the first half of 2021, Wanda Commercial Management will be under great pressure in the future.
At the same time, according to the valuation of Zhuhai Wanying Equity Transfer, the valuation of Zhuhai Wanda Commercial Management is about US$28 billion or RMB180 billion. According to the net profit of 656 million yuan in the first half of 2021, the price-earnings ratio of Wanda Commercial Management will reach 138 times.
Can Wanda Commercial Management achieve such a high valuation? We'll see.