Wanda Eyes More Cinemas, Parks in 2017
(Beijing) — Conglomerate Wanda Group forecast a slight acceleration in revenue growth this year on a rapid expansion of its newer movie and cultural businesses to offset its sputtering property unit.
Wanda has been transforming itself into a more-diversified company over the last five years, seeking to lessen its dependence on the cyclical real estate market. That drive has been focused mostly on entertainment-related assets, including billions of dollars in overseas buying of film production companies and movie theaters, and a series of theme-park openings in China.
Wanda said it expects its operating revenue to rise 4.2% this year to 265.8 billion yuan ($38.5 billion), marking a slight pickup from the 3.4% growth in 2016, according to a report released over the weekend. It added that profit grew by a “double-digit” amount last year, but did not provide a forecast for the current year.
“The year 2016 has become a thing of the past and been replaced by the unfolding 2017, generally considered to be a very challenging year for the global economy as well as for the Chinese economy,” said Wanda founder Wang Jianlin in a speech detailing the company’s 2016 performance and 2017 goals.
He added that investment in international acquisitions and other offshore projects in the cultural and entertainment realm will continue to be a focus in 2017, as Wanda continues building up that part of the business. Last year alone, Wanda announced major acquisitions of two cinema operators in the U.S. and Europe and two Hollywood film production companies, each worth $1 billion or more.
As a result of that focus, the company expects revenue from its movie-related business to jump 50% this year, up sharply from 31.4% growth in 2016. But a potentially less-welcoming reception from less-China-friendly U.S. President-elect Donald Trump also led Wang to warn last month that trying to tamper with his recent Hollywood buying spree could jeopardize the 20,000 people he employs if things are “handled poorly.”
Wang said Wanda expects to keep expanding aggressively in the cinema operation business, with a goal of controlling 20% of the global market by 2020, nearly double its current 12% share. It said such a strategy will give it a global film distribution network capable of competing with the current “big six” Hollywood studios.
In addition Wanda plans to launch two cultural and tourism projects this year, one in India and the other in Paris. It also aims to sign a new deal for an international location for one of its signature Wanda City complexes that combine theme parks, residential and retail components.
“It is impossible to build a top brand at one go. We have to build a considerable scale first,” Wang said. “Some people don’t believe that Chinese cultural enterprises can compete with American ones, and this is a kind of xenophobia, based on the unexamined blind belief that the Americans can and the Chinese cannot. Wanda is determined to prove with action that we not only can do it but can catch up and overtake.”
Contact reporter Yang Ge (firstname.lastname@example.org)
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