Wanda Push " Heavy And Heavy " Strategic Pformation

Plan to set up Wanda Commercial fund management company "Disenchantment" heavy assets.

Despite the overall downturn in the mainland real estate market last year, Wanda business (03699.HK) still delivered a good first annual report.

"Last year, we not only overfulfilled the annual plan, but also made gross margins far ahead of other competitors, mainly due to our unique commercial real estate leasing model."

Wanda Commercial chairman Ding Benxi in March 31st in Hongkong performance meeting said.

By the end of last year, the sales volume of the company's contracts was 160 billion 150 million yuan, up 26.65% from the same period last year, and the growth rate was 32 percentage points higher than that of the whole industry.

In 2014, the gross profit margin of its main business sector declined slightly, but still up to 42.57%, while the industry average was 35.2%.

For the market to question whether there is "moisture" in its gross margin data, Ding Benxi responded that the proportion of residential projects accounted for only 40% of sales, while the remaining 60% were investment projects such as shops and Malospka Residence with Wanda Plaza as a bundling complex, and 50% of the second tier cities. Therefore, despite the downturn in residential real estate last year, Wanda business still had the potential to grow against the trend.

At the same time, he said that the Wanda Plaza is usually located in the core area of the city. In the next few years, the company will make full use of the land reserve available at low prices to continue to develop in a comprehensive mode, so as to maintain steady growth in performance.

At present, Wanda Commercial real estate still has 75 million 940 thousand square meters of under construction and agent construction property, and the new land reserve cost of the company last year was only 1187 yuan / square meter.

Wanda Commercial Director and CEO Qu Dejun said that this year plans to open 26 shopping centers, most of which are located in second tier cities in mainland China. This year's overall sales target will grow by 5%.

30 rooms.

"At present, there are about more than 160 cities in China with a population base of about 1 million to 3 million. At present, we have completed the layout in only more than 60 cities, so there is still much room for development in the future."

He continued.

In the rapid expansion of enclosure expansion over the past few years, Wanda has always relied on the heavy asset model of "selling rents", that is, the balance of cash needed to fund investment through property sales, but the direct consequence is that the company's asset liability ratio has risen all the way.

According to Wanda commercial prospectus and annual report data, from 2011 to the end of 2014, its asset liability ratio was 47.4%, 45.9%, 49.4% and 53.8% respectively.

By the end of last year, the net debt ratio of the company was 56.68%, up 3.7 percentage points from 52.98% at the end of 2013.

At the same time, the total liabilities of the company increased by 35% to 181 billion yuan last year, and the net interest expense was as high as 7 billion 132 million yuan.

At the same time, "

Under the mode, the net cash flow of Wanda Commercial real estate has been maintained in a huge amount for many years. In 2012, it was 18 billion 551 million yuan, and it was 37 billion 900 million yuan in 2013, and it surged to 53 billion 800 million yuan last year.

At the same time, its investment activities maintain huge net cash outflows every year. Last year, the net cash outflow amounted to 45 billion 900 million yuan, up 92.15% over the same period last year.

The masters of Wanda Group

It has been realized that this model lacks long-term sustainability, and has begun to carry out the strategic pformation of "light weight and simultaneous measures", which effectively replenish the short board of the original mode and lighten the heavy financial pressure.

This pformation strategy has been reflected in the annual report. By the end of 2014, the net cash inflow of the company's business activities totaled 8 billion 830 million yuan, up about 30% from the 6 billion 800 million yuan at the end of 2013, reversing the downward trend of net cash inflow in the past few years.

Liu Xiaobin, chief financial officer of the company, revealed that the company plans to issue lower interest bonds in the domestic market, replacing the past higher cost bonds, and expects that the cost of financing this year will be reduced from 7.51% in 2014 to less than 7%.

In addition, the management revealed that Wanda Commercial fund management company is currently planning to set up a capital operation platform for the company to implement the strategic pformation of light assets.

At the same time, the company actively explores asset securitization such as REITs (real estate investment trusts), external investment and Internet finance, thereby reducing dependence on sales property.

Among them, the Internet finance is actively studying products, mainly through the integration of e-commerce platform, and the group's acquisition of "fast money" business, hoping to combine with light assets strategy in the future.

The company plans to build a solid network sales platform this year, and will run the O2O platform by the end of June.