Wanda plans internet finance IPO, more M&A

Speaking at the Asian Financial Forum, chairman Wang Jianlin outlined his vision to turn Dalian Wanda into a multinational making 30% of its money outside of China.

China’s richest tycoon, Dalian Wanda chairman Wang Jianlin, plans to list the internet finance business of his entertainment-to-property conglomerate as part of an ongoing drive to secure the company’s future growth.

The planned initial public offering is the latest component of Dalian Wanda’s ambitious push to list its subsidiaries, notably its film production and distribution, tourism, sports, and children entertainment operations, Wang said at the Asian Financial Forum in Hong Kong on Monday.

Dalian Wanda Commercial Properties, China’s largest business property developer by sales, raised about $3.72 billion via a landmark Hong Kong IPO in December 2014 -- the city’s biggest IPO that year. Wanda Cinema, the country’s largest cinema operator, listed on the Shenzhen bourse in January 2015.

“If Wanda’s internet finance business can go public, it will create massive business value…What we have to do now is to expand its scale, then this firm can easily have a [good] valuation. The capital market is smart,” Wang said.

Wang declined to give any specific IPO timelines for any of his businesses but revealed some of his strategic targets for Dalian Wanda's internet finance operations, including a presence in at least 5,000 shopping centres and up to 800 million consumers by 2020.

The company also plans to issue 500 million membership cards, or so-called “Ffan” cards, over the next five years to attract clients. Ffan cards are part of Wanda’s newly implemented online-to-offline platform Feifan, which it set up in partnership with Chinese internet giants Tencent and Baidu last year. It supports various functions including online payment, credit card, loans, shopping and movie ticket booking services.

“Ffan cards will become the biggest asset of Wanda in the future,” Wang said.

He added that Wanda will have cleared Rmb300 billion ($45.6 billion) in online lending by 2020, of which individual lending will account for two thirds and corporate lending will take the rest.

More acquisitions 

Separately, Dalian Wanda announced on Monday that it plans to complete five “substantial” acquisitions this year, three globally and two domestically (excluding cinema chains).  

It also estimated that the group’s revenues will drop by 12% to Rmb254.3 billion in 2016, due to its sluggish property business, which Dalian Wanda has been diversifying away from in recent years, partly through a sustained overseas acquisitions spree.

It bought almost everything from a 20% stake in Spanish soccer club Atletico Madrid for $49.04 million in January 2015 to the US theatre chain AMC Entertainment for $2.62 billion in 2012.

“Many outsiders say all what Wanda knows is buying stuff, so we will keep buying [this year],” Wang joked at the Asian Financial Forum, adding that he will target established international brands, mainly firms that can localise in China. 

By way of example he pointed to the first-ever Ironman events that it plans to host in three Chinese cities this year, after acquiring the Florida-based World Triathlon Corporation in 2015.

Last week, Dalian Wanda’s $3.5 billion acquisition of US film studio Legendary Entertainment Group not only marked the fifth-largest Chinese purchase of a US company to date but also cemented its ambition to become an end-to-end Chinese entertainment company.

Other media-related acquisitions include Switzerland-based sports marketing company Infront Sports & Media for $1.19 billion in February 2015, its $272 million purchase of Muwei Fashion Culture Disseminate (Beijing) in June, and the $152 million purchase in the same month of 15 subsidiaries of Shimao Cinema Investment Development, according to Dealogic.

“Chinese companies will gradually shift from being the participant to be the main player in the international M&A market. This is an inevitable course,” Wang said.

He added that the group aims to generate 30% of its targeted $100 billion revenue from overseas by 2020.

“30% is a metric to measure a multinational company. I hope [Dalian Wanda] will become so by then.”

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