In fact, the professionalism of A-share and H-share capital markets is different, so the valuation of Wanda will not be the same. According to the value theory of Hong Kong stocks, Wanda's valuation is reasonable.

there are three main points: first, the logic of valuation of Hong Kong stocks is not to look at how quickly an enterprise's assets increase, because the asset increase of an enterprise does not prove that the enterprise has the ability, just has the resources or the general trend is good, so the value of asset revaluation is not recognized in Hong Kong stocks; Second, Hong Kong stocks are unwilling to give value to the profits obtained through some political and business relations rather than pure market competition; Third, Hong Kong stocks mainly look at a company's cash flow. If a company can have good cash flow, it is a profitable company.

In overseas markets, the more recognized real estate model is that it values assets, values operation and finance. For example, the tishman speyer model develops independent funds as GPs and becomes fund managers. At the same time, it has the ability to value assets and export services, so as to make profits without relying on assets.

a research report shows that in the first-tier cities in China, the net rental return rate of most properties is often less than 3% after deducting expenses. This means that if investors use financial leverage to buy assets, there will be a negative leverage effect. Wanda's rental return rate is only over 3%, and the market will not give a high valuation for such a low rental return rate.

1. It is unsustainable to expect to adopt the business model that the property sales support company holds the property for a long time, and it is necessary to borrow heavily to supplement the cash flow. Because the rental return rate of commercial real estate is 2%-3%, this model is not enough to support the company's loan interest, forming negative leverage, making the operating cash flow of non-sales business negative, and the investment property occupies a large amount of the company's investment cash flow, making the rental income unable to pay the debt expenditure;

2. The high property tax and rental tax of commercial real estate, the tax paid to ZF in the rental of commercial real estate is 1/4 of the rental amount, which greatly reduces the rental return rate. In addition, the high maintenance and operation costs of commercial real estate make the rental return rate below 3%. Holding commercial real estate for a long time is a low-return investment, and it is also an unattractive investment to the capital market, far lower than the rental return rate of 6%-7% expected by the capital market;

3. The iron and blood military regulations of commercial real estate are mature business circles and people flow. In many cities with weak consumption power, taking land at low prices and developing urban complexes will bear the risk of imbalance between supply and demand in the upcoming downward passage of real estate, and these risks will emerge in the future. Making money by taking land at a low price is actually based on the premise that real estate will continue to rise rapidly.

4. Many people think that Wanda knows ZF, so the land cost is very low, but in fact, the low land cost should have been reflected in Wanda's gross profit margin in the past years, and the low land cost has been eroded by the rising construction cost, labor cost, operating cost and financial cost;

5. Wanda's low land cost is because it has chosen many non-mainstream cities. The difference between the cost of building commercial properties in third-and fourth-tier cities and the cost of building commercial properties in first-and second-tier cities will not exceed 15% at the same level, but the rental return rate is several times different, the turnover rate of sales is much different, and the price can be 1-3 times worse. In other words, if you build a commercial property in an immature place, the real cost is actually higher, because what is missing is only the cost of land acquisition and a small amount of construction cost, which accounts for no more than half of the cost of property sale, but the difference between the sales amount and the unit price of rental income is 1-3 times.

Wanda had planned to list on A shares, but it was later terminated. There are many reasons for termination, but to a large extent it may be because its high asset-liability ratio is difficult to pass the audit of the CSRC. According to the latest financial report, its debt ratio was 73% in 215, and the operating mode of leverage and full-load investment will obviously not be recognized by Hong Kong stocks.

not only that, recently, the Lee Shau Kee family sold off Hong Kong real estate sharply, waiting for an opportunity to sell domestic real estate; Ryan stopped listing in Xintiandi and reduced his holdings of China real estate; It is said that Li Ka-shing is also reducing its investment, and Hong Kong investment tycoons have been cautious about the real estate market in China, not to mention the revaluation without cash flow.

Summary

The mode of real estate recognition by Hong Kong stocks runs counter to the current situation of Wanda Commercial. The mode of recognition by Hong Kong stocks is as follows:

1. Value generation is highly dependent on operations rather than assets, such as Starwood;

2. Basically, they don't hold any assets and rely on management and operation output to make money, such as dtz and Jones Lang LaSalle;

3. They often get most of the value in the development stage, but don't take most of the risks, and make money by using asset management and risk-free financial leverage, such as tishman speyer and Hans Real Estate.

therefore, it makes sense that Wanda's commercial valuation is low.