Chairman delivers keynote address at meeting
It is a pleasure to have everyone gather here once again. Our hard work in the first half of the year has paid off rather well. This semi-annual summary differs from our annual meeting in that it is briefer and mainly summarizes our performance in the first half of the year and sets out the tasks for the second half of the year.
I. Completion of tasks in the first half of the year
In the first half of 2015, Wanda Group’s assets totaled RMB565.62 billion, up RMB33.68 billion or 6% from the end of 2014. Our revenue in the first half of the year came in at RMB108.47 billion, which was 40% of the planned target for the whole year and 103% of the planned target for the first half of the year. It was an increase of 18% YoY. Although the increase is smaller than the 20% increase posted in the first half of 2014, it is satisfactory given the current economic situation. Of the Group’s revenue in the first half of 2015:
Wanda Commercial’s revenue in the first half of 2015 came in at RMB73.41 billion, which was 39% of the target for the whole year and 101% of the target for the first half of the year. It increased by 12% YoY. Wanda Commercial’s revenue in the first half of 2015 included RMB61.24 billion in real estate contract revenue, which was 38% of the target for the whole year and 102% of the target for the first half of the year, and it increased by 10% YoY; returns in the first half of 2015 came in at RMB44.84 billion, which was 37% of the target for the whole year and 108% of the target for the first half of the year, and it fell by 2% YoY. The returns in the first half of 2015 shrank marginally YoY and a low target was set. Occupation of completed real estate in the first half of 2015 came in at RMB18.5 billion, which was 15% of the target for the whole year and 105% of the target for the first half of the year, and it increased by 26% YoY. Total construction area in the first half of 2015 was 57,609,000 square meters, up 6.2% YoY. A total of 4 new Wanda Plazas was opened in the first half of 2015. Total rental income in the first half of 2015 was RMB7.02 billion, which was 47% of the target for the whole year and 102% of the target for the first half of the year, and it increased by 33% YoY. Rent collection rate in the first half of 2015 was 100%. The figures contained analysis of highlights. Growth of the Group’s revenue outstripped real estate revenue growth. Wanda Commercial’s rental revenue growth, in particular, was nearly three times the real estate revenue growth and this is a welcome change, indicating rapid continued cash flow growth at Wanda. Customer traffic at Wanda Plazas in operation totaled 924 million in the first half of 2015, up 27.8% YoY and daily customer traffic averaged at 50,000 per Wanda Plaza. I predicted last year that total customer traffic of Wanda Plazas could reach 2 billion in 2015 and it can be said with certainty now that the figure will exceed 2 billion as only 4 new Wanda Plazas began operations in the first half of the year and 22 more are slated to open in the second half. A total of 24 Wanda Plazas were opened in 2014, accounting for only 22% of the total number of Wanda Plazas. As the newly opened Plazas are in the incubation period and their customer traffic has yet to reach the average level, the fact that total customer traffic achieved 27.8% growth indicates that most of the Wanda Plaza that were opened earlier on maintained double digit growth in daily average customer traffic. It is encouraging that Wanda Plazas can maintain double digit growth in customer traffic and revenue despite the economic slowdown and sluggish consumption in China. It is particularly worth mentioning that all stores in...
Chairman delivers keynote address at meeting
It is a pleasure to have everyone gather here once again. Our hard work in the first half of the year has paid off rather well. This semi-annual summary differs from our annual meeting in that it is briefer and mainly summarizes our performance in the first half of the year and sets out the tasks for the second half of the year.
I. Completion of tasks in the first half of the year
In the first half of 2015, Wanda Group’s assets totaled RMB565.62 billion, up RMB33.68 billion or 6% from the end of 2014. Our revenue in the first half of the year came in at RMB108.47 billion, which was 40% of the planned target for the whole year and 103% of the planned target for the first half of the year. It was an increase of 18% YoY. Although the increase is smaller than the 20% increase posted in the first half of 2014, it is satisfactory given the current economic situation. Of the Group’s revenue in the first half of 2015:
Wanda Commercial’s revenue in the first half of 2015 came in at RMB73.41 billion, which was 39% of the target for the whole year and 101% of the target for the first half of the year. It increased by 12% YoY. Wanda Commercial’s revenue in the first half of 2015 included RMB61.24 billion in real estate contract revenue, which was 38% of the target for the whole year and 102% of the target for the first half of the year, and it increased by 10% YoY; returns in the first half of 2015 came in at RMB44.84 billion, which was 37% of the target for the whole year and 108% of the target for the first half of the year, and it fell by 2% YoY. The returns in the first half of 2015 shrank marginally YoY and a low target was set. Occupation of completed real estate in the first half of 2015 came in at RMB18.5 billion, which was 15% of the target for the whole year and 105% of the target for the first half of the year, and it increased by 26% YoY. Total construction area in the first half of 2015 was 57,609,000 square meters, up 6.2% YoY. A total of 4 new Wanda Plazas was opened in the first half of 2015. Total rental income in the first half of 2015 was RMB7.02 billion, which was 47% of the target for the whole year and 102% of the target for the first half of the year, and it increased by 33% YoY. Rent collection rate in the first half of 2015 was 100%. The figures contained analysis of highlights. Growth of the Group’s revenue outstripped real estate revenue growth. Wanda Commercial’s rental revenue growth, in particular, was nearly three times the real estate revenue growth and this is a welcome change, indicating rapid continued cash flow growth at Wanda. Customer traffic at Wanda Plazas in operation totaled 924 million in the first half of 2015, up 27.8% YoY and daily customer traffic averaged at 50,000 per Wanda Plaza. I predicted last year that total customer traffic of Wanda Plazas could reach 2 billion in 2015 and it can be said with certainty now that the figure will exceed 2 billion as only 4 new Wanda Plazas began operations in the first half of the year and 22 more are slated to open in the second half. A total of 24 Wanda Plazas were opened in 2014, accounting for only 22% of the total number of Wanda Plazas. As the newly opened Plazas are in the incubation period and their customer traffic has yet to reach the average level, the fact that total customer traffic achieved 27.8% growth indicates that most of the Wanda Plaza that were opened earlier on maintained double digit growth in daily average customer traffic. It is encouraging that Wanda Plazas can maintain double digit growth in customer traffic and revenue despite the economic slowdown and sluggish consumption in China. It is particularly worth mentioning that all stores in operation in the Wuhan Central Cultural Zone posted a whopping 60% revenue growth on the average from 2014. The opening of two major cultural projects was certainly a contributing factor as well.
Two new hotels came into operation in the first half of 2015, increasing the number of hotels in operation to 73 and the number of suites by 548. 64 of these 73 hotels are under Wanda Commercial. The number of hotel suites totaled 22,847, with 19,716 under Wanda Commercial; total hotel revenue came in at RMB2.38 billion, which was 40% of the target for the whole year and 102% of the target for the first half of the year, and it increased by 27.6% YoY. Owner’s profits totaled RMB290 million, which was 49% of the target for the whole year and 148% of the target for the first half of the year, and it increased by 36% YoY. The performance of hotel management was good, with a significant increase in owner’s profits compared to the target in particular. The area of property in possession increased by 829,000 square meters in the first half of 2015. The total area of property under the possession of the Group was 23,046,000 square meters, of which, 22,396,000 square meters were under the possession of Wanda Commercial. There were 25 new development projects in the first half of 2015, including 5 heavy asset projects and 16 light asset projects; there were 4 batches of successful bidding of land for cultural/tourism projects. Wanda categorizes projects with sales property as heavy assets and projects without sales property as light assets. The Group’s project development in the first half of 2015 showed that the Group’s light asset strategy made rapid progress even though it was only rolled out last year. Light assets are set to take the lead come next year. In addition, the Group entered into a Beijing Fengtai cooperation project. Situated in Beijing Zhengnan Sanhuan, the project has a very good location. As it is very difficult to acquire land in Beijing, we opted for another mode of cooperation, whereby another party provides the land and investment and we share the revenue generated in a 3:7 ratio. It is a good mode of cooperation. Collaborative projects are another important channel for the development of light assets. The development center will focus on promoting such a mode of cooperation going forward. Once we open our minds, other development projects are possible at Beijing Erhuan. We are also constantly being approached by other cities and companies. Many companies in the country can only handle residential projects and are at a loss when it comes to commercial projects. The development center plans to set up a cooperation corner at Wanda’s website to attract more parties to work with Wanda. Our land bank expanded by 9.94 million square meters in the first half of 2015, reaching 87,152,000 square meters in total. As the land in light asset projects does not belong to us, our land bank is set to shrink gradually as we push ahead with our light asset strategy. This will greatly reduce the pressure on our capital. The other revenue of Wanda Commercial came in at RMB2.72 billion.
The Cultural Industry Group posted revenue of RMB18.47 billion in the first half of 2015, which was 41% of the target for the whole year and 110% of the target for the first half of the year, and it increased considerably by 30% YoY. The said revenue included:
AMC’s revenue of US$1.47 billion, which was 49% of the target for the whole year and 100.2% of the target for the first half of the year, and it increased by 6.1% YoY.
Wanda Cinema Line’s revenue of RMB3.48 billion, which was 57% of the target for the whole year and 135% of the target for the first half of the year, and it increased by 41% YoY. Its box office takings totaled RMB2.85 billion, which was 59% of the target for the whole year and 138% of the target for the first half of the year, and it incre
