Wanda Commercial Valuation: What Lessons Need to be Learned in the Roadmap for a Market Value of RMB 500 Billion? Wanda predicts that Wanda Commercial’s price-to-earnings ratio in the mainland market will reach 20 times after listing on the A-share market. Calculated based on a price-to-earnings ratio of 20 times, the stock market value will reach 500 billion yuan. RMB. Wanda Commercial, which failed to become a capital winner in the H-share market, seems to have drawn up a blueprint for its market value after listing in the A-share market after announcing that it would be privatized. On April 19, according to the Wall Street Journal, Wanda expects Dalian Wanda Commercial Real Estate Co., Ltd.’s price-to-earnings ratio in the mainland market to reach 20 times after returning to A, which means that its stock’s future market value will reach 500 billion yuan. RMB. It is worth noting that the current market capitalization of Wanda Commercial in the Hong Kong stock market based on total share capital is only about HK$220 billion. Industry insiders pointed out that this is why Wanda Commercial decided to end this period only one and a half years after its H-share listing. The root cause of "unhappy Hong Kong stock market trip". According to Guan Guan Real Estate New Media, the reason why Wanda Commercial failed to become a blue chip in Hong Kong’s capital market is also because the capital market has many doubts about Wanda’s business model. One is doubts about its debt ratio; the other is doubts about cash flow; and the third is that it believes that its business profitability Is the model sustainable? Therefore, some senior investors believe that after Wanda is privatized and returned to A, Wanda Commercial still needs to make up a few lessons in order to achieve the "market value blueprint" of a high valuation of 500 billion in the future. 500 billion market value roadmap On April 19, according to the Wall Street Journal, Wanda Group Chairman Wang Jianlin has initiated the process of acquiring the Hong Kong-listed shares of commercial real estate company Wanda Commercial and relisting the company on the mainland stock exchange. A senior investment banker in Hong Kong also revealed in an interview with Guan Guan Real Estate New Media that Wanda Commercial has now locked in investors in the mainland. "From our understanding, they have hired an investment bank for privatization. We believe Wanda Commercial will soon propose a proposal." A formal privatization program”. It is reported that Wanda Commercial has requirements for investors. Documents reported by the Wall Street Journal show that Wanda seeks private investors willing to write checks of at least US$500 million and take on additional debt to boost returns. In addition, Wanda does not want investors to resell its holdings to small and medium-sized investors, as domestic securities regulators will conduct comprehensive reviews of investors before listing on the mainland. Wanda said it hopes investors already have funds offshore as the mainland government's recent tightening of capital controls has made it more difficult for investors to convert yuan into Hong Kong dollars or U.S. dollars to finance acquisitions. Despite the many demands, according to the above-mentioned Hong Kong person: "The initial investor response is still relatively good." In addition, reports from the capital market also say that many founders of Chinese-funded companies are currently acquiring shares from foreign shareholders. The stock is intended to be sold to local Chinese investors at a higher valuation. "This is driven by money from local investors who are eager to get a piece of the overseas-listed companies, believing that they are of higher quality than those currently listed on local exchanges. In the process, private equity funds and other investors will Help raise funds to acquire stocks and then relist them in China." It is reported that Wanda has promised private investors who have joined in the acquisition of shares in its US$4 billion commercial real estate business that their investment will triple after Wanda Commercial is listed in the mainland. Wanda expects that Wanda Commercial’s price-to-earnings ratio in the mainland market will reach 20 times after listing on the A-share market. Based on a price-to-earnings ratio of 20 times, Wanda Commercial’s stock market value will reach 500 billion yuan after listing on the A-share market. It is worth mentioning that Vanke, the first domestic real estate company with the same prefix "wan", currently has a price-to-earnings ratio of 17.15 in A-shares. It is worth comparing that the current price-to-earnings ratio of Wanda Commercial's H-shares based on earnings in the past 12 months is about 6 times, and its market value based on total share capital is only about HK$220 billion. An Unhappy Journey to Hong Kong Stocks Now, Wanda Commercial’s depiction of a beautiful valuation blueprint for the future A-share market also reflects Wanda’s management’s “unhappiness” with the low valuation given to it by the Hong Kong market. According to past reports from Guan Guan Real Estate New Media, at the Wanda Commercial Performance Conference in March last year, Wanda Commercial executives present expressed some "emotional" comments: "Wanda has a great reputation in the mainland, but the Hong Kong media seems to have no regard for Wanda." I don’t know much about it.” In fact, in the nearly one and a half years since Wanda Commercial’s H-share listing, the capital story it tells has not yet fully won the favor of foreign capital investors. According to the on-site record of Guandian Real Estate New Media, on December 23, 2014, Wanda Commercial, the largest IPO of the year, was listed on the H-share market. At that time, Wanda Commercial, whose stock code was 3699, had a maximum opening price of HK$48.2, and then it fluctuated slightly at HK$48. After that, the stock price performance was relatively stable. In the following nearly one and a half years, Wanda Commercial's stock price reached its highest point of HK$78 on June 30, 2015, but later fell to its lowest point of HK$31.1 on February 29 this year due to the stock market downturn. Now its stock price has rebounded and is currently around HK$48.