Why is Sun Hongbin not short of money after he dumped 100 billion in half a year?

Lianjia, LeTV, Wanda, all big and small bidders are included in the bag. Since 2017, Sun Hongbin has spent 100 billion yuan on land acquisition and investment.

Although Sun Hongbin has always attached great importance to high turnover and cash flow, the reason why he is not short of money lies in his cooperative development model with many central and state-owned enterprises. Sunac currently has 240 projects. According to incomplete statistics, at least 1/5 of the projects are in cooperation with large-scale central and state-owned enterprises such as Poly and Franshion Real Estate.

On the afternoon of July 18, 2017, Sunac China Chairman Sun Hongbin admitted in a group interview with the media at the Ritz-Carlton Hotel in Huamao, Beijing, that the big deal with Wanda caused the bank’s risk control department to attention, banks are investigating Sunac’s financing. But he said, "This is completely normal. If the bank does not investigate and do due diligence, it will be derelict in its duties."

On the same day, affected by this news, the price of Sunac China’s (01918.HK) bonds due in December 2019 fell below the face value, the largest drop since its issuance in December 2014; Sunac’s stock price also fell for a time It fell by more than 13%, while Sunac’s share price has soared by 220% in the past year.

Before this double-kill of stocks and bonds, Sun Hongbin earned enough attention by investing in a series of large-scale projects such as Lianjia, LeTV, and Wanda. According to estimates by the rating agency S&P, since 2017, Sunac has spent 100 billion yuan on land acquisition and investment.

Many people exclaimed - Sunco is back! Regarding this statement, Sun Hongbin showed great disgust on several occasions. Sunchi was the first real estate company founded by Sun Hongbin in 1994. It quickly surpassed its competitors by virtue of its good cash flow management, and even targeted Vanke. However, during the macroeconomic control period in 2006, it was sold to others due to depletion of cash flow.

On July 19, 2017, Sunac and Wanda held a signing ceremony at the Sofitel Wanda Hotel in Beijing. The signing ceremony, originally scheduled for 4 p.m., was postponed for one hour. R&F Properties temporarily joined the contract and took over Wanda's hotel assets on behalf of Sunac.