Wanda Revenues Climb 10% Following Overseas Acquisition Spree

Dalian Wanda Group reported a 10.6 percent increase in revenue to RMB 119.9 billion ($18 billion) for the first half of 2016, outperforming expectations of flat growth. The conglomerate controlled by billionaire Wang Jianlin saw its revenues rise thanks largely to a 57.1 percent increase in its entertainment business revenue compared to the same period last year, following a series of entertainment-related acquisitions.

Wanda Cultural Industry Group, the company’s entertainment and leisure arm which includes Shenzhen-listed Wanda Cinema Line Corp, saw revenues rise to RMB 29 billion ($4.39 billion), including a 43 percent increase in revenues, to RMB19.1 billion ($2.89 billion), for Wanda Film Holdings and a 33 percent rise in Wanda Tourism’s revenue to RMB 6.03 billion ($913 million).

Business Diversification Brings in New Revenues

The positive financial results follow a string of overseas acquisitions in the lifestyle and entertainment industry since late 2014, including the $743 million buyout of Aussie theater chain The Hoyts Group in 2014, and the 2016 acquisitions of Swiss sports marketing firm Infront Sports & Media, and US-based Legendary Entertainment. Wanda made headlines internationally in 2012 acquiring AMC Entertainment, the second-largest theater chain in America, for $2.6 billion.

Wanda’s tourism business has also been boosted by the opening of theme parks and other attractions in China’s Jiangsu, Jiangxi and Yunnan provinces in the last two years.

Overseas Deals Now Generating Returns

Long one of China’s most aggressive cross-border investors, Wanda has also started to show some income from the group’s acquisitions of real estate projects in Australia, the US and Europe. Overall overseas revenue for the group climbed to RMB17.7 billion ($2.68 billion) in the January-June period this year, up more than 78 percent compared to the same period in 2015.

Wang’s fast-growing group sold more than $200 million in condos at its Wanda Vista Tower in Chicago during April and May of this year. The project, which includes some of Chicago’s most expensive residences, began sales this year.

Wanda kicked off sales at its Jewel project on Australia’s Gold Coast during the second half of last year, and began marketing units at its first overseas project — One Nine Elms in London — during late 2014.

Wanda Property Business Struggling

In the same time, sales at its Hong Kong-listed Dalian Wanda Commercial Properties, which primarily invests in development of commercial properties on the mainland, declined to RMB 50.6 billion ($7.5 billion), down 17.3 percent compared to the first six months of last year. China’s retail sector has been grappling with a slowdown in consumer spending growth in recent years, a condition which is exacerbated by a bumper crop of new malls in many areas.

The company has been hoping to replace revenue from property sales with rental revenues, which rose by 27 percent compared to the first six months of last year. However, at RMB 8.48 billion in the period through June 30th, the group’s rental income remains a fraction of its sales revenues.

China’s richest man and founder of Dalian Wanda Group Wang Jianlin cut the full-year sales target of the conglomerate’s property arm 40 percent to RMB 100 billion ($15 billion) after the results were published.

Wanda Still Pushing Re-listing Plan

Share trading in the giant mall builder was halted earlier this year in Hong Kong as part of a $4 billion plan to privatize and then re-list the firm on a mainland market. Wang made detailed promises including a guaranteed minimum return of at least 12 percent on the share buy-back plan as part of a move to relist the company on a mainland exchange.

The re-lsting plan has appeared to make little progress in recent months, however, with some investors in Wanda Commercial complaining that Wang’s buyout offer was too low.