Wanda posts 14% sales decline

Dancers perform at the opening ceremony of the Wanda City project in Hefei, capital of Anhui province, in September. [Photo provided to China Daily]

Dalian Wanda Group Co's 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 conglomerate.

Sales, which included property-contracted sales, declined 14 percent in 2016 from a year earlier, according to a Wanda statement on Saturday, more than a January 2016 forecast of a 12 percent drop.

Revenue at Dalian Wanda Commercial Properties Co, the group's real estate unit, declined 25 percent to 143 billion yuan ($20.7 billion).

Wanda's operating income 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.

Speaking to employees at Wanda's annual meeting in Hefei, the capital city of Anhui province in eastern China, Wang said Ffan.com, a unit that includes internet financing and credit-rating businesses, would 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 delisted Dalian Wanda Commercial Properties last year in Hong Kong under a plan to eventually seek a listing in the Chinese mainland, where valuations tend to be higher. The company has been in takeover talks with several candidates to execute a backdoor listing, sources said in November.

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, 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 will be the growth driver for Wanda.

Bloomberg