Wanda’s Wang Jianlin Doubles Money on US Theatre Investment

Wanda's Wang Jianlin

Wanda’s Wang Jianlin seems to be making a point

Billionaire Wang Jianlin got $900 million richer in eighteen months by making a US investment that many observers at the time dismissed as an ego move.

The chairman of China’s Dalian Wanda has seen his original $800 million share purchase in American theatre chain AMC more than double since he acquired a controlling stake in the company in August 2012.

With AMC’s stock closing at $22.89 per share on Friday the stake owned by Wang, who was named China’s richest man by the Forbes China rich list in 2013, has seen the value of his AMC holdings jump to $1.73 billion. While some estimates now have Baidu founder Robin Li’s wealth surpassing Wang, the property magnate was also voted the Forbes China businessman of the year for 2013.

Following the 2012 buy-out of Kansas-based AMC, Dalian Wanda holds an 80 percent stake in the theatre chain.

Better Movies Driving Bigger Profits

At the time of Wanda’s AMC acquisition many analysts saw little opportunity for growth in the US theatre market, however, the company’s recent results seem to be indicating the industry may still have a bit of life left in it.

In an earnings call last week, AMC’s CEO Gerry Lopez, attributed the company’s improved stock performance to a record year for Hollywood films in 2013, improvements in customer service and a rising stock market overall.

The film executive explained to the Hollywood Reporter that, “When the grass is green, the baseball is played better.”

Leading China’s Outbound Investment Wave

AMC dine-in theatre

An AMC dine-in theatre

Wang’s AMC acquisition was among the first major deals in China’s outbound investment wave, and the former military man has continued to be one of the most aggressive Chinese acquirers of overseas assets.

In June Wanda announced the acquisition of a site in London for a $1.1 billion property development including a five star hotel. During the same month, the company also unveiled plans for a $1 billion hotel in New York.

The London hotel deal was announced at the same time that Wang put down more than US$500 million to purchase UK luxury yacht maker Sunseeker, and in November the tycoon’s company spent $28.2 million on a Picasso at auction at Christie’s in New York.

More Investments to Come

Despite the size of his companies bets, Wang appears undaunted by the risks involved.

Half of international acquisitions are going to fail, especially for China, which is just going international, but Chinese companies will become international companies sooner or later, so we have to take this step. Failures are our tuition,” Wang told the Wall Street Journal last year.

In the world of real estate, Wang has predicted that following his New York and London deals Wanda will have hotels in eight to ten cities across the world within the next decade.

Overall, Wang is predicting that his firm will invest US$5 billion a year overseas over the coming years, and earlier this year told British Prime Minister David Cameron in a conversation at the Davos Summit that he plans to invest up to $5 billion in projects in the United Kingdom.

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