Recently, Shanghai Jinshan Wanda Plaza Investment Co., Ltd. has undergone a shareholding change. Its major shareholder has been changed from "Dalian Wanda Commercial Management Group Joint Stock Company" to "Suzhou Lianshang No. 2 Commercial Management Co., Ltd." Coupled with several transactions in late 2023, Wanda has sold the assets of four Wanda Plaza and Shanghai Ruihua Hotel. By the end of 23, Wanda managed 498 large commercial centers in 227 prefecture-level and above cities across the country. It is a leader in commercial real estate. Its every move is often regarded as a bellwether by the market. After its continuous asset sales were amplified by the market, rumors spread everywhere.
According to sources close to the deal, "although the assets of Wanda Plaza were sold, the subsequent management and service of Wanda will still be carried out by Wanda, and the Wanda brand will be retained." This is the normal model of Wanda’s asset-light strategy in recent years, that is, the assets are held by the investors, and the operation and management are handled by Wanda Commercial.
Previously, it was reported that Wanda continued to sell Wanda Plaza assets, in fact, because the capital is still very tight. Considering that in mid-December, Wanda Group has reached an agreement with Pacific Alliance Investment, which not only lifted the 38 billion yuan debt problem that may be caused by the failure to list on time, but also brought in 30 billion yuan of incremental funds. It is expected that Wanda’s liquidity situation should be greatly eased. "Wanda’s recent asset transfer, in addition to the consideration of continuing to deleverage and increase asset security, should accelerate the implementation of the light asset strategy that Wanda has adhered to in recent years, should be the main reason," the above-mentioned source said.
Sale of multiple assets in a row
On December 25 and 26, 2023, Wanda Commercial managed Huzhou Wanda Plaza and Taicang Wanda Plaza, and added Suzhou Lianshang No. 3 Commercial Management Co., Ltd. (hereinafter referred to as Suzhou Lianshang No. 3) and Suzhou Lianshang Wuhao Commercial Management Co., Ltd. (hereinafter referred to as Suzhou Lianshang Wuhao) as the sole shareholders of the two companies;
On December 29, Wanda withdrew from Guangzhou Luogang Wanda Plaza Co., Ltd. and added a new shareholder, Suzhou Lianshang Commercial Management Co., Ltd. (hereinafter referred to as Suzhou Lianshang).
Recently, Shanghai Jinshan Wanda Plaza Investment Co., Ltd. has undergone a change in its shareholding. Its major shareholder has changed from "Dalian Wanda Commercial Management Group Joint Stock Company" to "Suzhou Lianshang No. 2 Commercial Management Co., Ltd.", and the company’s legal representative has also changed from Zhang Jing to Mu Zhou.
On December 26, 2023, Shanghai Wanda Hotel Investment Co., Ltd. was changed from 100% holding of Wanda Business Management to 100% holding of Beijing Yinglang Commercial Management Co., Ltd.
"This is a business conduct in itself, the key is to look at the price, and sell it when the price is right," the above-mentioned source said, which is also the normal work progress of Wanda’s asset-light transformation.
Wanda continues to advance its asset-light strategy
A few years ago, Wang Jianlin had interpreted Wanda’s asset-light strategy, the core of which is to "invest in the construction of Wanda Plaza, and all the funds will be paid by others. Wanda is responsible for site selection, design, construction, investment promotion and management. The rental income generated by using the Wanda Plaza brand will be shared by Wanda and the investor in a certain proportion."
In order to achieve rapid development and focus on achieving rapid growth in business scale through brand resources and management capabilities, Wanda has adopted an asset-light model to expand its new Wanda Plaza since 2015. In recent years, it has increased the pace of asset-light development. The newly developed Wanda Plaza is basically an asset-light management model, with Wanda responsible for planning and design, construction investment, operation management, and other service output.
In 2023, Wanda will sell a number of projects such as Shanghai Songjiang Wanda Plaza, Xining Haihu Wanda Plaza, Jiangmen Taishan Wanda Plaza, and Shanghai Wanda Ruihua Hotel, and the follow-up operation rights will still be reserved by Wanda Commercial Management. "This is an important step in Wanda’s asset-light strategy, and it will also help Wanda focus more on improving its commercial asset-light operation and management capabilities," said a market analyst.
Wanda Commercial’s profitability is good
Previously, some media analyzed that Wanda sold commercial assets because the real business was greatly impacted by the network economy, and Wanda Plaza no longer made money from rental income. Therefore, Wanda had to "cut off its arm to survive" and "stop losses in time".
However, according to public data, since 2021, Zhuhai Wanda Commercial Management (the main body of Wanda Plaza operation) has exceeded the performance target for three consecutive years. The after-tax income in 2021 is 23.50 billion yuan, 27.10 billion yuan in 2022, and 29.30 billion yuan in 2023 (estimated). The average annual growth rate is about 12%. The after-tax profit in 2021 is 5.30 billion yuan, 7.50 billion yuan in 2022, and 9.50 billion yuan in 2023 (estimated). The annual growth rate is 34%. In the past three years, the company has paid a total of about 10 billion yuan in taxes, and the dividends to shareholders are 4.60 billion yuan in 2021, 6.70 billion yuan in 2022, and 8.50 billion yuan in 2023 (estimated).
"From the above data, it is clear that the operating efficiency of Wanda Plaza is still growing. On the one hand, this is due to the positive trend of China’s overall social and economic recovery, and on the other hand, it is also inseparable from the implementation of Wanda’s asset-light strategy." By uniting strong investors, Wanda can export its brand and operational capabilities, and achieve high-speed growth without investing a lot of money.
It is expected that with this round of readjustment of the layout, Wanda will place more emphasis on exporting brands and management. Asset transfer is in line with its active deleveraging, debt reduction, and asset-light development strategy, which will help to improve the return on assets. Wanda’s asset-light model is also being optimized.
(Note: This article belongs to the commercial information published on the Central Broadcasting Network. The content of the article does not represent the views of this website and is for reference only)
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