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4-Traders Homepage  >  Equities  >  Stock Exchange of Hong Kong  >  Sunac China Holdings Ltd    1918   KYG8569A1067

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China cracks down on Dalian Wanda's overseas deals: sources

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07/17/2017 | 11:52am CEST
Dalian Wanda Group's Wanda Plaza building is pictured in Beijing

China's regulators have told banks to stop providing funding for several of Dalian Wanda Group's overseas acquisitions as Beijing looks to curb the conglomerate's offshore buying spree, sources familiar with the matter said on Monday.

This is in line with Beijing's measures to control potential systemic risk, including problems posed by domestic companies acquiring more global assets. China launched a clampdown on capital outflows and overseas direct investment last year.

The curbs on funding for Wanda, announced at a meeting in June, focus on six overseas acquisitions, four of which have already been completed, according to an internal bank document seen by Reuters.

Banks have been told not to finance the deals or to allow Wanda to use its offshore assets as collateral for financing.

The property-to-entertainment giant will also not be allowed to inject cash from its onshore business to help the offshore subsidiaries, according to the document.

Nor will overseas units be allowed to be folded into Wanda's locally listed firms, it added. Relevant government bodies should not provide support to help Wanda sell its overseas assets to Chinese buyers, according to the bank document.

One of the sources said Wanda was perceived to have violated Beijing's measures brought in last year to tighten controls on money moving out of the country.

Wanda declined to comment on the document or its contents.

The China Banking Regulatory Commission (CBRC) did not immediately respond to a request for comment.

The Wall Street Journal first reported earlier in the day that banks met regulators and were advised of restrictions around Wanda's assets.

This comes after a Reuters report last month that showed CBRC had ordered a group of lenders to assess their exposure to offshore acquisitions by some firms that have been on a buying spree, including Wanda.

Run by China's richest man, Wang Jianlin, Wanda is one of a handful of Chinese conglomerates that have expanded aggressively abroad over the past few years, into areas well beyond their original business - in this case, property.

Wanda, which owns a stake in soccer club Atletico Madrid, has over the past few years bought film producer Legendary, theater chains AMC Entertainment Holdings, Odeon & UCI Cinemas and Nordic Cinema Group, as well as a UK luxury yacht maker.

Last week, it sold a portfolio of tourism projects and hotels to developer Sunac China Holdings (>> Sunac China Holdings Ltd) for $9.3 billion - a major step back for Wanda's billionaire owner who had said his "wolf pack" of theme parks would beat U.S. rival Walt Disney Co (>> Walt Disney Company (The)).

(Reporting by Shu Zhang and Matthew Miller in BEIJING, Julie Zhu and Kane Wu in HONG KONG; Editing by Clara Ferreira Marques and Himani Sarkar)

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Financials ( CNY)
Sales 2017 49 839 M
EBIT 2017 7 124 M
Net income 2017 5 409 M
Debt 2017 46 727 M
Yield 2017 1,10%
P/E ratio 2017 22,50
P/E ratio 2018 17,01
EV / Sales 2017 3,18x
EV / Sales 2018 2,15x
Capitalization 112 B
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Mean consensus HOLD
Number of Analysts 17
Average target price 15,2  CNY
Spread / Average Target -44%
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Managers
NameTitle
Meng De Wang Chief Executive Officer & Executive Director
Shu Ping Huang Executive President & Executive Director
Hong Bin Sun Chairman
Shao Zhong Li Executive Director & Vice President
Xun Chi Executive Director
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