Four Months Of "Three Sales" Return Blood Of 7 Billion Yuan, Reaching The Goal Of "Arm Broken Survival"

Wanda, once silent after the "Century Trading", is facing the biggest crisis in recent years.

In the morning of July 30, Wanda Hotel announced that the company had sold its Chicago real estate project for us $270 million after the market closed on July 24, generating revenue of about HK $94 million. So far, Wanda has emptied all overseas real estate projects.

Prior to that, Wanda sold baby Wang's early education business on July 20, with an amount of about 420 million yuan according to industrial and commercial data.

This year, Ironman will sell for 351 million people, equivalent to about $751 million in the world.

The total recoverable cash of these three assets is about 7 billion yuan. Although it can't compare with the scale of "Century Trading" three years ago, it is the largest asset sale after "Century Trading".

Analysts believe that in addition to the poor operation of some projects, the outbreak of new crown pneumonia is bringing serious impact on Wanda's film and television, sports, business and other businesses. Within Wanda, a self-help of "breaking arms for survival" is unfolding.

Selling three assets in succession

The Chicago project was acquired in 2014. It is located in the core area of Chicago City, with a total planned building area of about 176000 square meters, and its geographical location is very superior. According to the plan, it will be built into a five-star hotel with a height of 361 meters and 101 floors (more than 200 guest rooms are expected to be built) and high-grade apartment project, which will become the third tallest building in Chicago and a new landmark of the city.

Although the pre-sale of the project started in September 2015, Wanda encountered a tight capital chain in 2017 and began to sell its projects. In July of that year, Wanda transferred 77 hotels to Fuli at a price of 19.906 billion yuan, and transferred 91% equity of 13 cultural and tourism projects to rongchuang at a price of 43.844 billion yuan. This is also known as the "century deal.".

Wang Jianlin, chairman of Wanda Group, said at that time, "we have actively responded to the call of the state and decided to put our major investment in China."

Under this guiding ideology, Wanda began to sell overseas real estate projects. Since the end of 2016, Wanda has successively sold projects in Madrid, London, Sydney, Gold Coast and other places. According to media reports, Beverly Hills in California was also sold at the end of 2018.

After the Chicago project was sold, Wanda's overseas real estate investment, once in full swing, officially ended.

The baby Wang early education, which was sold earlier, belongs to the baby King brand of Wanda culture. Wanda Baby King was officially released in August 2014. It has three business sectors, including paradise, early education and IP, corresponding to Wanda Baby King paradise, Wanda baby Wang early education and children's culture development company. The business to be sold is baby Wang Zaojiao.

According to the financial data disclosed by Wanda Group, in 2018, baobaowang company's revenue was 2.08 billion yuan, an increase of 44.3%; 69 Baby King paradise and 50 early education schools were opened, with an annual passenger flow of 199 million person times, an increase of 36% year-on-year. According to the latest information on Wanda's official website, Wanda Baby King is not only a famous brand in China, but also a new pillar industry of Wanda. However, in recent years, Baby King has started asset light transformation, and rumors of its asset heavy business being sold have appeared from time to time.

The world Ironman company was acquired by Wanda in 2015 with a total amount of US $650 million. The company's business involves a large number of global public participation sports, including triathlon, running, cross-country running, cycling and mountain biking.

This is one of the core businesses of Wanda sports. Wanda sports is also affiliated to Wanda culture group, which is composed of three main businesses: public participation sports business, ornamental sports business and digital media business, respectively corresponding to three companies: World Ironman company, Yingfang sports group and Wanda Sports China company.

According to the annual report, although the mass sports business led by the world Ironman company increased by 7.6% year-on-year, in 2019, Wanda sports had a revenue of 1.03 billion euro, a year-on-year decrease of 9%, a gross profit of 344 million euro, a year-on-year decrease of 6%, and a net loss of 274 million euro.

Multiple business setbacks

Although the logic of these three sales can be traced, it is still not considered a coincidence that these three sales occurred in recent months.

Yan Yuejin, a financial commentator, told reporters of the 21st century economic report that the epidemic has had a significant impact on business, cultural tourism, film and television industries, which happens to be several important core businesses of Wanda. These are different from the traditional real estate business in terms of long-term profit margin and low operating cycle. Therefore, even if the epidemic situation is controlled, it will also face a long recovery period. In contrast, selling projects to recover funds is a more direct and effective choice.

Among Wanda's four major business groups (business management, culture, real estate and investment), the cultural group, which includes film and television, sports, baby king and cultural tourism, has suffered the most.

Take the baby wangzaojiao, which was sold this time, as an example. Affected by the new crown pneumonia epidemic, Wanda's baby Wang early education and Baby King paradise in China have been closed since February this year, but they have not yet fully opened.

Since Wanda sports landed on NASDAQ in July 2019, its performance has been in a state of loss. Due to the excessive debt scale, Liao Honghui, CEO of Wanda sports, once said, "Wanda sports will focus on reducing debt, improve the cooperation level of the whole Wanda sports, and make full use of asset light business model and healthy operating cash flow."

At present, the company is in a state of stagnation due to the global sports agency, but the other source of sports events is basically not optimistic, except for the global sports agency agreement. Some media reported in March this year that Yingfang China team received a large-scale layoff notice. While retaining individual employees, other employees may be dismissed or integrated into other business lines.

Wanda films are affected by the naked eye. As the film industry once fell to the freezing point, Wanda films lost 600 million yuan in the first quarter of this year from a profit of 426 million yuan in the same period of last year. Wanda film's performance forecast shows that it is expected to make a net profit loss of 1.5-1.6 billion yuan in the first half of the year.

Wanda Commercial Management, another business group, also suffered heavy losses. Due to the rent reduction of merchants during the epidemic period and the impact of the epidemic on passenger flow, Wanda's revenue was affected and the debt pressure was increased.

According to the public information, as of April 15, 2020, the public bonds of Wanda Commercial management that will mature within one year and one to two years are 43.694 billion yuan and 25.866 billion yuan respectively. As of the end of 2019, the amount of monetary capital was not up to 65.67 billion yuan.

Yan Yuejin pointed out that Wanda's real estate business contributed relatively little cash flow, which was difficult to form effective support for other business lines. Therefore, in addition to speeding up the pace of financing, selling projects is the fastest way to solve the problem. According to the statistics of real estate enterprises in China, e-ju ranked No.8 billion yuan in sales in 2019.

According to public information, since this year, Wanda Commercial Management has raised more than 20 billion funds by issuing public offering bonds and medium-term notes. However, the financing amount of other business lines is relatively limited.

Yan Yuejin also believes that Wanda is experiencing the biggest crisis in recent years. At present, although the domestic epidemic situation has nearly completely recovered, there are still big doubts about when the company's business can return to normal, especially the recovery cycle of sports events may be longer. Therefore, it is expected that the performance of various businesses of the company will bear greater pressure this year. If the situation fails to improve, Wanda may even continue to sell assets.

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