
A Wanda Plaza mall in Harbin, China (Getty Images)
Chinese regulators have asked Dalian Wanda Commercial Management to provide additional details on its application for a Hong Kong initial public offering, fuelling worries over the ability of the country’s largest commercial developer to meet its listing deadline this year.
China Securities Regulatory Commission (CSRC) has requested Zhuhai Wanda Commercial Management Group, a Wanda subsidiary responsible for managing its portfolio of 425 malls, to further explain some related party transactions as well as its dividend policy, as part of its IPO application, with credit agency S&P Global Ratings seeing the request as adding to uncertainty over the group’s ability to secure regulatory approval for a public listing which has already been delayed three times.
“There is now less clarity on whether Zhuhai Wanda would be listed by the end of 2023, in our view. We have no clear guidance on the timing of the regulator’s final feedback,” S&P said in a note on Tuesday.
The IPO setback prompted the ratings agency on Monday to downgrade Wanda Commercial’s credit, with the mall management unit of Wang Jianlin’s Dalian Wanda Group also now caught up in a legal battle after a Shanghai court reportedly froze RMB 1.98 billion ($278.18 million) of its shares earlier this week.
Wanda Draws Scrutiny
In a letter dated 2 June, the CSRC asked Wanda Commercial to provide additional information on related party transactions and commitments that the IPO proceeds will not be used in property development as well as the rationale behind its cash dividend policy.

Wang Jianlin of Dalian Wanda Group
The regulator has also questioned Wanda Commercial’s data regarding its shopping malls, and asked for more details on the short-term debt servicing risk of its controlling shareholder, among other matters.
It also asked the company to provide safeguard measures that will prevent misappropriation of funds by related parties and to avoid extending guarantees to controlling shareholders.
S&P noted that it has been over six weeks since the CSRC received Zhuhai Wanda’s application for an overseas listing in April, a process that typically just takes 20 working days, and the long waiting period is testing the relationship of both Wanda Commercial and Dalian Wanda Group with their lenders.
“We believe DWG’s financing channels could further narrow if no positive feedback is received on Zhuhai Wanda’s IPO for an extended period,” the ratings agency said. “Weaker property sales than we expected for Wanda Properties, a sister company of Wanda Commercial, have worsened the situation for the group.”
Zhuhai Wanda’s previous application for a Hong Kong listing had lapsed on 25 April as it failed to get approval prior to its deadline that same month. That marked the firm’s third failed attempt to list on the HKEX since mainland billionaire Wang Jianlin first tried to bring his mall business back to the stock exchange in October 2021.
Debt Profile Deteriorates
S&P lowered Wanda Commercial to BB from BB+ as its parent firm struggles with weakening liquidity. The downgrade comes just a week after Fitch Ratings cut the company’s credit rating to BB- from BB+.
S&P said it may lower its rating on the company further if it confirms that Zhuhai Wanda’s IPO attempt has fizzled, or if the group fails to roll out alternative measures to shore up liquidity. It said weak sales from Dalian Wanda Group’s property development business may further dent the group’s credit profile.
“We may affirm the rating if Wanda Commercial and DWG can maintain their liquidity by implementing solid backup plans and sustaining solid financing channels, in the event that Zhuhai Wanda’s IPO fails or is significantly delayed,” it added.
If Zhuhai Wanda is not listed by the end of this year, Wanda Commercial and Dalian Wanda Group will have to buy back all the pre-IPO shares and compensate for investment returns at an estimate overall cost of RMB 40 billion, according to S&P.
Investors which provided $1.3 billion in pre-IPO debt financing for the company include PAG, CITIC Capital, Country Garden Holdings, Ant Group, Tencent and the Cheng family of New World Development.
Chinese Builders at Risk of Delisting
Although Zhuhai Wanda Commercial Management Group hauled in RMB 46.45 billion in operating income last year — two and a half times that of its nearest competitor — Wang’s Wanda Group has become the latest in growing squad of financially troubled mainland developers.
At present, 11 real estate companies are facing delisting from the Shanghai and Shenzhen stock exchanges after their share prices have sunk below RMB 1 each for more than 20 straight trading days — putting them in violation of bourse rules, according to a separate report from S&P.
The ratings agency said the firms have a total of $21 billion in outstanding bonds — both onshore and offshore — which will be at risk of nonpayment should the companies lose their public listings.
“Delisting adds strain to a sector that has had a really difficult couple of years,” said Esther Liu, an analyst at the ratings agency. “The event closes options for Chinese developers to recover, and for investors to get their money back.”
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