Dalian Wanda Group Co’s (萬達集團) revenue fell for the first time in at least 11 years after a slump in its property business outweighed growth from entertainment operations at billionaire Wang Jianlin’s (王健林) conglomerate.
Sales, which includes property-contracted sales, declined 14 percent last year from a year earlier, according to a Wanda statement on Saturday, more than a January last year forecast of a 12 percent drop.
Revenue at Dalian Wanda Commercial Properties Co (大連萬達商業地產), the group’s real-estate unit, declined 25 percent to 143 billion yuan (US$20.7 billion).
Wanda’s operating revenue rose 3.4 percent to 255 billion yuan, while profit grew more than 10 percent, it said, without giving specifics.
China’s second-richest man has been acquiring Hollywood assets — he bought film producer Legendary Entertainment last year — to help Wanda diversify away from its real-estate roots.
Wang, speaking to employees at Wanda’s annual meeting in Hefei, the capital city of Anhui Province in eastern China, said Ffan.com, a unit that includes Internet financing and credit-rating businesses, will raise 10 billion yuan via a private placement this year.
He ultimately plans to list the unit by 2020 and target profit of more than 10 billion yuan.
Wang last year delisted Dalian Wanda Commercial Properties in Hong Kong under a plan to eventually seek a listing in China, where valuations tend to be higher.
The company has been in takeover talks with several candidates to execute a backdoor listing, people familiar with the matter said in November last year.
Wang has taken an “asset-light” strategy for his real-estate business in recent years, reducing reliance on property sales and increasing his focus on leasing and management. The transition has resulted in sales volatility, but could improve the group’s cash flow and earnings stability.
Wanda Cultural Industry Group Co (北京萬達文化產業), which includes most of Wanda’s theme parks, film production and exhibition businesses, saw sales climb 25 percent to 64.1 billion yuan last year. The increase also reflected income from newly acquired businesses including Legendary Entertainment.
Entertainment is to be continue the growth driver for Wanda.
Wang, who plans to build a global movie-distribution network, aims to achieve 10 billion yuan profit in its film business and 20 percent market share in the global movie industry by the end of the decade.
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