Article | Market Value Observation, Author | Yuntan, Editor | Xiaoshimei
Wang Jianlin, China’s former richest man, continues to fight while some property companies lie flat.
On the evening of June 28, Zhuhai Wanda Commercial Management submitted its Hong Kong IPO application materials for the fourth time, more than 500 days after the first listing application.
In the past three years, Wang Jianlin’s life is not easy. The impact of the epidemic, the strictest supervision in the history of real estate, a group of once-famous real estate giants have collapsed.
Considering that the betting agreement with investors will take effect at the end of the year, if Zhuhai Wanda fails to list, then Wanda will face up to 40 billion share repurchase pressure.
For Lao Wang, going public is no longer the "icing on the cake". There are only 6 months left. Wang Jianlin, who does not admit defeat, must fight to the back.
"Wanda Commercial Management is Wanda’s core enterprise. I can lose any enterprise, but this cannot be lost."
But this "lifeblood" continued to be undervalued after it went public in 2014, so in 2016, Wang Jianlin decided to delist Wanda Commercial Management.
In the seven years since, the real estate industry has undergone a sudden change, and Wang Jianlin has always adhered to the "three major tasks" – reducing debt, light asset transformation and promoting re-listing.
During this period, Wanda Commercial Management introduced a number of investors, but also buried the risk of gambling.
In 2017, Wanda shares and debt double-kill, Wang Jianlin bite after the teeth, at the expense of borrowing to Sunac, let Sun Hongbin and R & F tension to 63.75 billion yuan to pick up 13 Wanda cultural tourism city and 77 hotels.
At the Wanda annual meeting in January the following year, Wang Jianlin was in tears:In 2017, Wanda experienced too many storms and hardships.
But the wave has not subsided, and another wave has come to attack.
There is no such thing as a free lunch in the world. The nine investors who helped Wanda privatize previously agreed with Wang Jianlin to go public at the end of 2018, otherwise Wanda would have to pay interest and buy back shares.
However, the road to listing of real estate companies is basically locked, Wang Jianlin can only ask for help from old friends, Pony Ma, Zhang Jindong, Sun Hongbin, Liu Jintao opened the purse generously, jointly funded 34 billion, to solve the urgent needs of Lao Wang.
Since then, Wang Jianlin has switched to H shares again, and the listed entity has been changed to Zhuhai Wanda Commercial Management.
On the eve of its listing in Hong Kong, Zhuhai Wanda Commercial Management launched a Pre-IPO financing, transferring 21.17% of its shares to multiple investors such as Country Garden, CITIC Capital, Ant Group, Tencent, PAG Pacific Alliance Investment Group, etc. A total of about 6 billion US dollars (43.50 billion yuan).
The price Wanda needs to pay is that it must complete the listing by the end of 2023, otherwise it needs to buy back investors’ shares. That is to say, if the listing cannot be completed by the end of this year, Wanda needs to use 40 billion funds to buy back the equity.
The same script played out again, but this time, the friends were already cash-strapped, and some of them could not even protect themselves, so there was no money to help others.
For Wanda, which is currently not well-off, the expenditure of tens of billions of dollars is undoubtedly adding to the woes.
The end of the bet is approaching, and the iron man Wang Jianlin must speed up his pace.
In the history of H-share listings, it is rare for such a large number of IPOs to be repeatedly tossed.
Due to the delay in obtaining the "big road" of the China Securities Supervision Commission, some analysts said that,Zhuhai Wanda Commercial Management has set a "record" for the slowest overseas listing of a private company.
As early as October 11, 2021, Zhuhai Wanda obtained the acceptance letter from the Securities Supervision Commission and submitted its first listing prospectus to the Hong Kong Stock Exchange ten days later. But to this day, Wang Jianlin has not yet received the "pass" he has been longing for.
According to past experience, it only takes 3 to 6 months to get from "small road" to "big road", but Wang Jianlin waited 627 days. In addition, several Wanda IPO applications have also stepped on the implementation node of the "Pilot Measures" for overseas listing, and the road to listing can be described as a difficult buff.
Under the pilot scheme, domestic companies seeking to list overseas or in H-shares must obtain, in addition to an acceptance letter from the Securities Supervision Commission, known as a "small road", "H-share issuance approval" issued by the Securities Supervision Commission, known as a "big road". Only after having the "big road" will the Hong Kong Stock Exchange conduct a listing hearing for the company and start the issuance, roadshow and listing work.
In addition to the two "tickets", it also needs to be filed with the Securities Supervision Commission and approved. In other words, Zhuhai Wanda Commercial Management has an additional hurdle of approval.
Previously, Wanda’s listing information had expired three times, and the fundamental reason was that the "big road" had not been approved. On June 2, the China Securities Regulatory Commission raised six major questions to Zhuhai Wanda and asked for supplementary materials. Compared with the ease of listing in 2014, Wang Jianlin’s IPO can be described as even more difficult.
Therefore, in response to the supplementary material requirements of the Securities Supervision Commission, whether Wanda’s reply can pass the customs will be the key to the sprint listing.
Looking at the requirements of the Securities Supervision Commission, it can be seen that the problem mainly focuses on compliance, including corporate governance, capital exchanges with major shareholders, the authenticity of rental rate data, share repurchase, debt repayment arrangements, and high proportion of dividends.
According to the requirements, the issuer should supplement the materials within 30 working days. That means Wanda has about two weeks to prepare this response.
However, it is better to receive a reply than no news. Wanda also pointed out that "requesting supplementary materials is a normal process, and the listing is still in progress."
Just leave Wang Jianlin time is not much, in the face of the Securities Supervision Commission questions, Wanda iron also need their own hard.
If the "big road" is successfully obtained, coupled with the current policy atmosphere to support the real estate market, it is not impossible for Wanda to accelerate its listing.
Wang Jianlin is a man who refuses to admit defeat.
16 years of military experience have created his character of integrity, perseverance, and perseverance.
At the beginning of his business, he ran supermarkets, factories, elevator factories, substations, and eventually waded into the field of real estate development. But real estate is a capital-intensive industry. Due to his lack of experience, he has walked to the edge of the cliff many times due to capital chain problems.
At first in order to obtain a 20 million loan, he has more than 50 times hope to meet the leader of a bank, sometimes in the bank gate a stand is a whole day, but at that time Wanda is still a little-known small business, the bank is not willing to take risks, the final loan or not down.
On the one hand, he was exhausted for loans, and on the other hand, he was unable to start the project for a long time. Wang Jianlin didn’t sleep for nine days and nights at that time, and on the tenth day, he was directly unconscious in the company and was rushed to the hospital.
"You can’t be afraid of humiliation, you can’t be afraid of setbacks. The living can’t be suffocated to death by urine, and the bank can’t find it, so think of other ways." Wang Jianlin finally rescued Wanda, which was on the verge of bankruptcy, by issuing bonds.
In 2000, Wang Jianlin decided to switch to commercial real estate, but Wanda’s troubles still did not stop. In the first three years, Wanda mainly sold, and the merchants who purchased the shops directly sued Wanda in court for poor management.
In just three years, Wanda has fought 222 lawsuits. Although it has lost only two, the company is struggling to cope. Many people left Wanda at that time to find other ways.
Wang Jianlin did not flinch. In the face of difficulties, he believed in the thinking of "actual combat" and explored innovation and solved problems in practice. "When you reach the Yellow River, you will not die, and if you hit the south wall, you will not look back. When you reach the Yellow River, you will build a bridge and pass, and if you hit the south wall, you will turn over with a ladder."
He came up with an "urban complex" model. "Make a commercial center, build office buildings and apartments next to it. Sell apartments, office buildings, get cash flow, and the shops will run themselves."
This "combination of rental and sale" has allowed Wanda to rapidly expand its territory across the country and gradually grow into the country’s leading commercial real estate enterprise.
From an operational perspective,Wanda Commercial Management is China’s largest and most profitable business operations service provider.
According to the prospectus, Zhuhai Wanda achieved 17.196 billion yuan, 23.481 billion yuan and 27.12 billion yuan respectively in 2020, 2021 and 2022; its net profit during the same period reached 1.112 billion yuan, 3.512 billion yuan and 7.534 billion yuan respectively.
It can be seen that after the epidemic was released, Wanda bottomed out and rebounded, successfully achieved a V-shaped reversal, and its profitability increased significantly. Moreover, the profitability level from 2021 (adjusted by a specific algorithm) to 2022 has exceeded the gambling requirements. Considering the signs of consumption recovery, it will also be a high probability event to complete the betting profit requirement of 9.46 billion yuan in 2023.
The parent company Dalian Wanda Business Management Group is even larger, in 2022, Dalian Wanda Business Management revenue 49.314 billion yuan, net profit 12.301 billion yuan.
Taking Zhuhai Wanda as a reference, its revenue is 3 times and 6 times that of Xincheng Holdings and China Resources Vientiane Life Business Management, and 3.4 times that of the entire China Resources Vientiane Life Profit (2.206 billion yuan).
As of the end of 2022, Zhuhai Wanda had 472 projects under management, covering an area of 65.60 million square meters, making it the world’s largest business operations service provider and the only service provider in China to export large-scale management to third parties.
This asset-light model is not only what Wang Jianlin hopes to achieve, but also favored by capital markets. In Hong Kong stocks, the price-to-earnings ratio of China Resources Vientiane Life is nearly 5 times that of China Resources Land. The market value of Country Garden Services once exceeded that of Country Garden, which is mainly engaged in real estate development. Vanke also split All Things Cloud and listed it in Hong Kong.
The "limit for betting" has been reduced, and the listing battle of Zhuhai Wanda will most likely determine the fate of the real estate kingdom. But Wang Jianlin, a soldier, will not easily admit defeat. For now, this big gamble continues.
In April last year, Wang Jianlin took over the 10-year operation rights of the commercial project owned by Hu Baosen, "the first brother of Henan Real Estate"; five months later, two Wanda workshops in Zhengzhou opened at the same time.
In addition, Wang Jianlin also worked with Xinyuan Zhang Yong and Shanxi Tian Sen Du Yinwu, and took over the operation rights of Beijing Blue Harbor and Wukesong Zhuozhan Shopping Center. In 2022 alone, Wanda Commercial Management was involved in more than a dozen transactions.
Taking advantage of the recovery in consumption after the epidemic, Wanda is back on the road. The latest data shows that Wanda Commercial Management Group opened 12 Wanda Plaza in the first half of 2023, with a total of 484 openings. Total rental income in the first half reached 26.32 billion yuan, an increase of 4.5% year-on-year;
In addition, compared with other business management service providers, Wanda is more efficient, with a rental rate of 98.2% in the first half of the year and a 100% rent collection.
In addition to the core sector of business management, Wang Jianlin also pointed out at the annual meeting that in 2023, in addition to promoting the listing of Zhuhai Wanda Business Management, there will be cultural tourism "starting again".
After selling a number of cultural tourism assets to collect funds, Wanda Cultural Tourism "came back" in 2023. After the Lunar New Year, the once-quiet Wang Jianlin made frequent appearances, appearing in Luoyang White Horse Temple, Luoyi Ancient City, Guizhou Danzhai and other places, and immediately signed a number of cultural tourism projects.
Not only that, Wanda also issued a recruitment announcement called "Return to the Goose Plan", which is intended to bring back people who have worked at Wanda Hotels. More than 100 Wanda hotels are said to have participated in the campaign.
Residential real estate has also begun to return to the public eye. Wanda Real Estate (residential sector) focuses on Wanda’s commercial development and has been located in Wuhan, Guiyang and other places.
"In China’s real estate industry, Wang Jianlin deserves to be ranked first in terms of strategic execution and tactical discipline." Hu Baosen said of Wang Jianlin.
From surviving with a broken arm in 2017 to today’s massive counteroffensive, Wang Jianlin has taken precautions and acted countercyclically, which is the key to Wanda’s long-term survival.
Wang Jianlin once said: "Wanda’s difficulties are only temporary and phased, and Wanda will never lie flat." However, since the beginning of the year, the negative news lingering on Wanda has continued to ferment, causing Wanda, who originally "went ashore early", to once again fall into doubt.
However, these negative news are not completely real, and there are still many controversies. For example, the previously frozen equity of Dalian Wanda Commercial Management 1.90 billion, which Wanda said was worth far more than 1 billion yuan in property disputes. Wanda is using legal channels to safeguard the legitimate rights and interests of the company.
Previously, Dalian Wanda suspended the small public debt of 6 billion yuan, taking into account the current market conditions and voluntarily giving up the issuance, and will not have a direct impact on the listing of Zhuhai Wanda.
In fact, after the crisis in 2017, after Wanda repaid more than 200 billion in debt, the "debt nuclear bomb" has been dismantled. The decisive transformation to light assets has also made Wanda lighter.
Moreover, compared with the crazy leveraging companies such as Sunac and Evergrande, Wang Jianlin has a more forward-looking strategic vision. He often takes precautions before the storm, even at the risk of breaking his wrists, ultimately escaping disaster.
At another crucial crossroads, the former richest man in China is facing a crucial battle.
As his favorite song sings: "I want to go from south to north, and I want to go from white to black." At the age of 69, he chose to stubbornly continue to fight.
