Wanda Commercial Real Estate HK $26 Billion 700 Million IPO Start

In December 15th,

Wanda Commercial real estate Limited by Share Ltd (hereinafter referred to as "Wanda Commercial real estate") ended in the open sale in Hongkong, and will start the trading on the main board of the stock exchange on the December 23rd eve of Christmas.

Reporters learned from a investment bank, in addition to previously disclosed cornerstone investors, Wanda Commercial real estate international placement has been 8 times oversubscribed, "mainstream brokerages gathered, international investors crowded the whole field, competing to subscribe, Hongkong stock market has not been so busy for a long time."

The person sighed.

The assets listed in Wanda Commercial real estate are regarded as the best three pieces of Wanda Group's long term investment in commercial property development leasing, development and sale of property and hotel management.

Yin Xufei, a real estate researcher at CIC, told reporters: after the listing of Wanda Commercial real estate, there are two important influences on enterprises.

The first is listing financing, which provides financial support for the development of enterprises.

Wanda Commercial real estate has a large number of assets, but many commercial properties occupy a lot of money, and some of the property rental income is poor, affecting the cash flow of Wanda Commercial real estate, through listing, can increase financing channels; on the other hand, Wanda Commercial real estate listing can enhance brand awareness, especially in the international arena to enhance awareness, and prepare for future strategic expansion.

More importantly, Wang Jianlin will form a real closed loop of consumption through online links.

It is not listed for high debt.

It is reported that Wanda Commercial real estate stock code "03699.HK" will be traded on the stock exchange's main board with 100 H-shares per hand.

According to the excess allotment of shares, the representative of the underwriter has the right to request the company to issue and issue at most 90 million shares of the offering shares at the same price as the international offering shares at the same price within 30 days after the date of the submission of the international sale agreement to the Hongkong International sale agreement, which is equivalent to about 15% of the initial offer shares, so as to make up for the excess distribution of the international sale.

If the excess allotment rights are fully exercised, the additional offering shares will account for about 1.97% of the company's share capital expansion following the completion of the global sale and the exercise of the excess allotment rights.

If the excess share option is not exercised, assuming that the selling price is HK $45.70 per share, the company estimates that the net proceeds from the global sale will be estimated at HK $26 billion 679 million after deducting the underwriting fees, commissions and estimated expenses paid for the global sale.

This is not a small gap from the market's expected $6 billion, but a person close to Wanda Commercial Real Estate said Wanda Commercial real estate was not listed on the high debt problem.

As the only commercial real estate enterprise to achieve nationwide layout, Wanda Commercial real estate projects currently cover more than 94% of China's provinces, municipalities and autonomous regions and more than 89% of the first and second tier cities.

The 159 Wanda Plaza and 8 Wanda cities completed and built by Wanda Commercial real estate are distributed in 112 cities in 29 provinces in China. The completed and built property area is close to 30 million square meters.

With the rapid development of Wanda Commercial real estate, its debt rate is also rising. As of 2011, 2012, the end of 2013 and June 30, 2014, the total amount of bank loans and other borrowings was 69 billion 747 million yuan, 93 billion 228 million yuan, 130 billion 318 million yuan and 172 billion 362 million yuan respectively, and the net debt rate reached 87.8% in the first half of this year.

"Net debt ratio reflects the relative relationship between the capital provided by the creditor and the capital provided by shareholders. The enterprises with a high net debt ratio may not be at risk, mainly depending on their debt structure, such as the proportion of long-term loans, and the same net debt ratio is not as low as possible, which means that the efficiency of business operation is not high," the aforementioned person told reporters.

In the 2011-2013 year, the asset liability ratio of Wanda Commercial real estate was also rising steadily, which was 47.4%, 45.9% and 49.4% respectively. As of June 30, 2014, this figure increased to 51.6%. However, compared with the asset liability ratio of 63% of the listed housing companies, Wanda Commercial real estate situation is much better.

It is worth noting that as of October 31, 2014, Wanda Commercial real estate has an independent bank credit limit of 144 billion 191 million yuan, of which 80 billion 368 million yuan has been spent, and 63 billion 823 million yuan has not yet been used.

In an earlier interview, when talking about the ultra high speed development of Wanda Commercial real estate, Wang Jianlin said: "Wanda is an enterprise that has pursued. Otherwise, we do not need to work so hard now. Now that is the case, I can completely rest while working, and many entrepreneurs who are younger than me are going to retire.

I just think that my goal is not yet achieved. After being the largest real estate company, I want to be one of the largest cultural groups.

According to Wanda Commercial real estate "hearing data" revealed that the third quarter, Wanda Commercial real estate contract sales total value of 40 billion 400 million yuan.

Prior to the September disclosure, Wanda Commercial real estate revenue in the past 2011-2013 years was 50 billion 772 million, 59 billion 91 million, and 86 billion 774 million yuan respectively, with net profit of 19 billion 779 million yuan, 27 billion 310 million yuan and 24 billion 581 million yuan respectively, and 23 billion 251 million yuan in the first half of 2014 and 4 billion 965 million yuan in net profit.

At the same time, Wanda Commercial real estate performance forecast for 2014 also increased.

Wanda Commercial real estate is expected to increase its net profit from no less than 19 billion 993 million yuan to no less than 24 billion 27 million yuan in 2014, and the core net profit (excluding fair value income) has increased from no less than 13 billion 235 million yuan to no less than 14 billion 302 million yuan.

In the face of the biggest IPO in Hongkong market in recent years, various agencies have already been ready to fight. In December 9th, the updated prospectus showed that the number of cornerstone investors increased to 12, and the value of the total shares subscribed by cornerstone investors also increased to about 2 billion 94 million US dollars (about HK $15 billion 600 million). Among them, Kuwait Investment Bureau, China Life and Ping An insurance committed 300 million US dollars, Och-Ziff invested 250 million US dollars, and Holland retirement fund APG committed to invest 200 million US dollars. The new Fubon Life will subscribe for 100 million US dollars worth of shares.

In the middle price issue, it accounts for about 59.22% of the shares sold.

Compared with the first disclosure in September, the new prospectus also shows: Wanda Commercial real estate has sold all the shares of Xishuangbanna international tourism and Holiday Resort Development Co., Ltd., Qingdao Wanda Yacht Industry Investment Co., Ltd. and Dalian Jinshi Culture Tourism Investment Co., Ltd. in October this year, to Wanda Group, the parent company.

It is disclosed that the three companies operating Xishuangbanna project, Qingdao Yacht Industrial Park and Dalian Jinshi international resort project are all Wanda Commercial real estate. They just took over from Wanda Group in January this year, and were put into the market assets portfolio, and now they were taken away.

Through this sale, Wanda Commercial real estate has recovered 4 billion 135 million yuan.

Although tourism projects have been listed in the investment period, the potential of these projects is still promising.

Earlier, Wang Jianlin said in an interview with the media: "the Xishuangbanna project will not be fully opened until 2015. It is a mountain tourism project combined with the local Dai culture. It is sure that the local tourism is very stimulating, and the appreciation can be expected."

In order to cooperate with tourism projects, Wanda Group set up Wanda tourism industry 1 years ago, and set off huge waves of mergers and acquisitions in a year, and acquired 11 travel agencies in Hubei, Beijing, Jiangxi, Anhui, Shenzhen, Qingdao, Wuxi, Zhejiang and Nanjing.

Prior to this, Wanda travel industry has said that it expects to earn 10 billion yuan annually in 2015 and become a resource controlled travel agency in China's tourism industry. In 2016, it expects revenue to reach 40 billion yuan and sprint the top 20 of the world cultural group.

After the acquisition, the Wanda tourism industry will play a role as a needle in the war, linking Wanda tourism industry, hotel industry and department store industry. In addition, Wang Jianlin also said that the future may enter the aviation industry and make the industry chain of the tourism industry complete.

In October 30th, when 100th Wanda Plaza opened in Kunming, Wang Jianlin also told reporters: "within 3 years, the revenue of Wanda travel agency should reach 20 billion yuan, the largest in the country. In 2020, the number of visitors to Wanda tourism project (holiday resort, Wanda city and hotel) will receive more than 200 million people, and become the world's largest tourism enterprise, surpassing the largest tourist company in the world, Disney (the number of people receiving 130 million in 2013)."

In the view of many analysts, the Wanda Group's move is due to valuation considerations.

But sometimes, when Wanda Group's tourism industry is mature, it is possible to split it separately.

According to the updated prospectus, "Teng million" (Tencent, Baidu, Wanda) jointly set up the O2O platform formally incorporated into the listed companies, giving investors greater imagination for this traditional real estate development enterprise.

In August of this year, Wanda Group, the controlling shareholder of Wanda Commercial real estate, joined hands with Tencent and Baidu to carry out cross-border cooperation. "Teng million" is going to set up an e-commerce joint venture and establish an e-business business mode from online to offline, that is, O2O. It is expected to realize the integration of some online businesses and services that Tencent, Baidu and its affiliates operate, and the offline business and services of Dalian Wanda Group and its affiliates, as well as cooperation based on big data.

The company called "Wanda Information" was registered in the British Virgin Islands in January 16, 2014. Wanda Commercial Real Estate (Hongkong) Limited and Wanda Investment Holding Co. Limited currently own 50% of their shares.

According to the agreement, Dalian Wanda Group, Tencent and Baidu hold 70%, 15% and 15% shares of the joint venture respectively, and plan to invest 5 billion yuan to complete the injection within 3 years.

This also means that Wanda Commercial real estate will assume some investment in O2O business in the future.

"At present, O2O has just started in China, and there are few successful cases. This mode is very suitable for service consumption. Many traditional department stores are also keen on this mode of electric shock," Lv Bowang, chief consultant and chief analyst, told reporters.

In June 30th of this year, the first domestic community service operator, who was split from the flower group, was listed on the Hongkong stock exchange. After listing, the stock price roared, and the 70 times static price earnings ratio was much higher than that of Vanke and China's overseas housing companies.

The company, which is called "ten times potential stocks" by Zhang Changxin, a senior Internet analyst at Founder Securities, is not the most attractive investor.