Wanda Commercial withdraws its A-share IPO application or seeks to return to the Hong Kong stock market?

Yes, on March 24, Wanda Group announced that it had withdrawn its application for the A-share IPO of Wanda Commercial.

The announcement stated that based on the study and judgment of its own strategy, Dalian Wanda Commercial Management Group Co., Ltd. (hereinafter referred to as "Wanda Commercial") decided to engage in light asset commercial operations, technology, data, personnel and other related resources of the company. Reorganize to achieve domestic and overseas listings as soon as possible.

At this point, Wanda Commercial’s five-year A-share IPO queue has come to an end.

As early as December 2014, Wanda Commercial was listed on the Hong Kong Stock Exchange, becoming the largest IPO on the Hong Kong Stock Exchange that year. However, due to low valuations and long-term sluggish stock prices, in March 2016, more than a year after listing on the Hong Kong Stock Exchange, Wanda Commercial announced its delisting and sought to return to A.

In fact, it is understood that the return to A process was initiated in September 2015. At that time, Wanda Commercial’s planned assets were shopping malls (including shopping mall management and operations), hotels (including hotel management and operations) and cultural tourism. There are mainly three types of projects, with strong real estate attributes. Since then, Wanda Commercial has fully transformed into an asset-light enterprise. After adjustments, Wanda Commercial’s listed entities have changed from three to one, becoming the commercial part dominated by Wanda Plaza.

On March 1, 2018, Dalian Wanda Commercial Real Estate Co., Ltd. changed its name to Dalian Wanda Commercial Management Group Co., Ltd. From "commercial real estate" to "commercial management", Wanda Commercial announced that it will no longer conduct real estate development and become a pure commercial management operation enterprise.

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Despite this, Wanda Commercial’s A-share IPO is still far away

This time Wanda Commercial took the initiative to withdraw its A-share IPO application in order to achieve domestic completion as soon as possible It is not difficult to think of the current high valuation attractiveness of Hong Kong stocks for property service companies. Among the previously listed property service companies, there are also some who are known for their business management capabilities, such as China Resources Vientiane Life, Excellence Business Services, Finance Street properties, etc.

At present, the valuation of property service companies in the Hong Kong capital market is significantly higher than the valuation of real estate development companies. The Economic Observer Network has comprehensively collected statistics on 15 property management companies listed on the Hong Kong stock market and the corresponding real estate development companies. According to the company's 2019 annual report data, the average price-to-earnings ratio of property management companies is about 38 times, and the average price-to-earnings ratio of real estate development parent companies is 7 times. The premium of the property sector to the real estate development parent company is more than 5 times.

Securities Star-Wanda Commercial withdraws its A-share IPO application or seeks to return to Hong Kong stock market