Past Events Of Wantong: Real Estate Thinkers, Equity Disputes And Lost 20 Years

Wantong, which has been forgotten by the real estate industry for a long time, recently came into the view of the outside world because of a "case".

According to media reports, the controlling shareholder of Wantong development, Jiahua Oriental holding (Group) Co., Ltd. (hereinafter referred to as "Jiahua Oriental") was recently put on file for investigation by the public security department. The reason is related to the suspected high interest loan transfer. The scale of the involved fund reaches hundreds of millions of yuan, which is an extremely serious case.

On March 23, the trading of Wantong development was suspended all day. However, on the evening of that day, the company announced that it had not received any notification documents from the public security department. There is no direct relationship between the controlling shareholders and the listed companies in the media reports, which will not affect the control rights of the listed companies.

In the morning of March 24, Wantong development said that the controlling shareholder Jiahua Dongfang confirmed that there was no high interest lending behavior reported by the media, and the stock trading resumed. But by the end of the day, the company's share price still fell 8.55% to 6.20 yuan per share.

Wantong real estate, formerly known as Wantong real estate, was once steered by the famous "real estate thinker" Feng Lun. However, since 2014, Feng Lun has gradually faded out, and Jiahua Oriental has become a major shareholder in 2016 and regained control.

For listed companies, Jiahua Oriental is not a stranger. At the beginning of Wantong's backdoor listing, Feng Lun used the means of capital operation to gain control from Jiahua construction industry, which was the predecessor of Jiahua Oriental. Ten years later, Jiahua Oriental made a comeback, and Wang Yihui, chairman of the board of directors, once a loser, became the actual controller of the company and forced Feng Lun to withdraw completely in 2017.

The dispute between the two sides lasted for more than ten years, which runs through the development history of Wantong. In a sense, it has become a history of equity disputes. Among them, there are desires and interests, intrigues and calculations. Some of them have made a comeback and some heroes are lonely. Perhaps because of this kind of dispute, Wantong, an old real estate enterprise, failed to take advantage of the real estate's dividend of the times, instead, it has been sinking again and again.

This paper attempts to find out the context and imprint of Wantong's rise and fall through the reduction of its development process.

The end of Qingping

In the autumn of 1994, "Wantong six gentlemen" held a meeting in Xishan, Guangxi. Due to different ideas, the "Six Gentlemen" who had cooperated for three years formally separated. Feng Lun returned to Beijing with "Wantong" brand, focusing on the development of real estate.

In the early years, the development of Wantong was smooth, and Feng Lun also hoped to list the company. After weighing it over and over, he decided to backtrack. Since then, Feng Lun has been eyeing a listed company named Xianfeng shares.

Xianfeng Co., Ltd., fully known as Beijing Xianfeng food and agriculture industry Co., Ltd., was established in 1998 by Zouping grain and oil, Zouping Xiwang, Yanji Jichen, Beijing Shuntong industry and the fifth construction company of China Construction First Engineering Bureau (hereinafter referred to as "the first Bureau and five companies"). In 2000, pioneer shares landed on the Shanghai Stock Exchange. Wang Yi, one of the founders of Yanji Jichen, will be vice chairman of the listed company.

In 2002, Wantong Xinghe, a subsidiary of Wantong real estate, became the fourth largest shareholder with 11.87% shareholding ratio. In 2004, Wantong real estate introduced strategic investor TEDA group. Through a series of dazzling capital operations, Wantong, which has expanded its capital fund, has entrusted 28.99% of the equity of pioneer shares and become a major shareholder.

But the original shareholders are not willing to be replaced. In 2005, part of the original shareholders of pioneer co founded Jiahua Construction Industry Co., Ltd., and Wang Yihui served as the chairman of the board. Jiahua Construction Industry Co., Ltd. holds 24.93% shares in total, closely following Wantong Xinghe.

In 2006, Feng Lun again used the skill of capital operation. On the one hand, Wantong Xinghe acquired the equity of the fifth company of the first Bureau and other small and medium-sized shareholders, and purchased part of the equity from Jiahua Construction Industry Co., Ltd., increasing the shareholding ratio; on the other hand, through the opportunity of fixed increase, Wantong Xinghe increased its holding substantially again, while the equity of the other party was diluted.

After this operation, the shareholding ratio of Wantong Xinghe increased to 60%, and it was the largest shareholder. Feng Lun became the chairman and actual controller of the company, and the candidates from Wantong and TEDA occupied the mainstream of the board of directors. At the same time, pioneer shares were renamed Wantong Xianfeng and Wantong real estate successively, and Feng Lun further removed the "Jiahua" color of the company.

Although Jiahua construction is still the second largest shareholder, its shares have been diluted to 7.18%, which poses no threat to Wantong. In 2009, the shares of Jiahua construction industry decreased to less than 5% through two secondary market reductions.

Fenglun Era

Born in 1959, Feng Lun served in the Party School of the Central Committee, the Propaganda Department of the CPC Central Committee, the National Commission for restructuring, the Wuhan Municipal Economic Committee and the Hainan provincial Party committee. In 1991, he set up a business in the sea. Feng lunshan thought, export into a joke. In the early years, Wang Shi, Feng Lun and Hu Baosen were called "three swordsmen of real estate".

Feng Lun has brought many fresh ideas to the real estate industry. As early as 2008, Feng Lun put forward the development strategy of "Binhai New Area, American model and Wantong values" to take Cade land as a learning benchmark, and strive to complete the transformation to a real estate investment company in 5-10 years. Since then, Wantong has added "building a green company" to its strategy.

Among them, "Binhai New Area" refers to the regional strategic focus of Wantong, which benefits from the resource support of TEDA, the investor; "American model" emphasizes that real estate development should be completed by different professional companies, and real estate developers should focus on investment and financing links, so as to tend to light assets. The Singapore real estate company CapitaLand is good at investment, financing and asset operation. Although it is different from the American model, it has always been regarded as the benchmark of asset light operation. The core value of Wantong is "keeping the right and extraordinary", that is, the style is decent, but it can be flexible without deviating from the rules.

Subsequently, Wantong began to transform from "development company" to "investment company". Since 2008, Wantong has successively arranged in the fields of industrial real estate and commercial real estate. Among them, the joint acquisition of Z3 plot in Beijing CBD core area in 2010 has become an important step for Wantong to develop commercial real estate. At the same time, Feng Lun also began to promote the concept of three-dimensional city, and delimited several layout cities. In January 2015, Wantong real estate plans to acquire internet entertainment assets

According to Feng Lun's plan, from 2013 to 2015, the performance contribution of new businesses such as funds and direct investment will surpass the traditional real estate development business, and will be listed separately.

However, the new format of Wantong's layout has the problem of long return period, which can not bring short-term income. In addition, the fund business is not smooth, and Wantong's performance is affected. In 2009, the first year of transformation, Wantong real estate's revenue and profit suffered a cut. From 2011 to 2013, the net profits of Wantong real estate were 473 million yuan, 476 million yuan and 507 million yuan respectively.

As a comparison, the net profit of Vanke in 2013 has reached 15.1 billion yuan.

In 2014, Wantong's performance declined sharply, and its net profit shrank to 97.6391 million yuan, down 81% year on year. In 2015, Wantong had a net loss of 612 million yuan, a year-on-year decrease of 1457.78%.

The fluctuation of performance also challenged Feng Lun's authority. An old Wantong employee told the 21st century economic report that the management has always had different opinions on Feng Lun's idea. With the increase of fluctuation in performance, this kind of divergence has become more and more obvious, mainly focusing on three-dimensional city projects. In addition, the prospects of overseas projects such as New York and Taipei are also questioned.

He revealed that at the shareholders' meeting of Wantong Holdings (the parent company of Wantong real estate), Feng Lun had complained for many times that his transformation idea was not supported enough.

If Feng Lun can get enough support, will Wantong's transformation be successful? There is no hypothesis in history. The reality is that with the change of management of Wantong and other external reasons, many early transformation projects have not been promoted. Half a year after the news of the acquisition of cultural and entertainment assets came to an end; the three-dimensional city project ended; in 2015, Wantong withdrew its lease from the New York World Trade Center; in 2018, Wantong withdrew from the Z3 plot in the core area of Beijing CBD.

War of control

On August 8, 2014, Wantong real estate held the fifth extraordinary general meeting of shareholders in 2014 to restructure the board of directors. At the meeting, a new list of board members was announced. Xu Li, former chairman of Wantong real estate, Yun Dajun, general manager, and Zheng Yi, deputy general manager of Wantong real estate, were replaced. Jiang Hongyi, Tu Lishen and Li Hong, new people, were added. Yao Peng, Zhao Zhen and Ma Jian continued to be on the list. In addition, Sun Hua, the former director, left the seat on the board of directors was reduced from seven to six.

After the reshuffle, only Yao Peng was left to represent the "fenglun system". Therefore, the meeting was regarded as the retreat of the "fenglun system" and the return of the "Jiahua system". Since then, on September 19, Jiang Hongyi of "Jiahua Department" was elected as the chairman of the board.

In fact, during the nearly ten years when Feng Lun was at the helm, although the "Jiahua system" once lost control, it did not leave and was ready to fight back at any time.

In 2014, when Wantong real estate's performance declined, Jiahua construction industry changed its name to Jiahua Oriental. In this year, Jiahua Oriental invested 330 million yuan to purchase the equity of Wantong, the parent company of Wantong real estate, and became the second shareholder after TEDA group, and has continuously increased its holding since then. In 2016, Jiahua Oriental held 76.48% of the shares of Wantong holdings and became a major shareholder.

In the same year, Jiahua Oriental increased its shareholding of Wantong real estate to 35.66% through non-public offering, becoming a major shareholder. As a result, through direct and indirect shareholding, Jiahua Oriental regained control of the listed company, and Wang Yihui, chairman of Jiahua Oriental, also became the actual controller of Wantong real estate.

The "counterattack" was swift and thorough, and its skill was no less than that of Wantong Xinghe. As a real pusher, Wang Yihui has been "invisible" for many years. Since 2002, Wang Yihui was not on the board of directors of listed companies after his term of office ended. However, he has been the chairman of Jiahua construction industry and seized the opportunity to kill him back in 2014.

Wang Yihui, born in 1954, was not exposed much, and little was known about his style of conduct. But from this "counterattack" point of view, its endurance and grasp of the opportunity is extraordinary.

According to the analysis of some securities dealers, Jiahua Oriental regained its position, which was surprisingly similar to that of Wantong Xinghe in that year. Both of them were "increasing the secondary market and breaking down each ally". History reincarnates again, but things are different. In addition to Wang Yi's meeting, among the board of directors of Jiahua Oriental, only Yueshan of Zouping Xiwang was an ally at that time.

After that, the "fenglun system" withdrew. Since resigning as chairman in 2011, Feng Lun has not held any positions in listed companies. In 2017, Feng Lun withdrew from Wantong holding and bid farewell to Wantong completely. Xu Li, Yun Dajun, Zheng Yi and other senior officials of Wantong all left their posts from Listed Companies in 2014. After Yao Peng left in 2018, "fenglun system" completely disappeared from Wantong.

Wang Yi will take over from Feng Lun in 2017 and become the chairman of Wantong holdings. In 2019, Wang Yi will become the chairman of Wantong real estate.

Although Feng Lun's failure was due to his poor performance during his time at the helm, which led to opportunities for his opponents, in the eyes of the outside world, he was indeed in bad luck.

In 2015, Tianjin TEDA transferred its holding shares of Wantong and officially withdrew. TEDA started the cooperation with Wantong in 2004 and was once the major shareholder of Wantong. In addition to playing the role of financial investors, TEDA also imported many resources from Tianjin Binhai New Area for Wantong. For a long time, TEDA has been an ally of Feng Lun.

There are different opinions on the reasons for TEDA's exit. One is that Wantong's performance is poor, which makes TEDA start to withdraw. Another is related to an accident. On the evening of April 19, 2014, Liu Huiwen, former chairman of Tianjin TEDA Investment Holding Co., Ltd., who was 60 years old, died in an accident. Liu Huiwen is a key figure in Wantong's introduction of TEDA into Tianjin. His death may speed up the withdrawal of TEDA.

However, no matter what the real reason is, when Jiahua Oriental increased its stake in Wantong holdings by a large margin in 2016, Feng Lun was weak due to lack of allies and eventually lost the control.

Lost 20 years

In the post fenglun era, Wantong continued its transformation. In January 2017, Wang Yi will try to transfer the 34% equity of Wantong real estate to Beijing Zhongrong Dingxin Investment Management Co., Ltd. under Zhongzhi system. In July 2018, Wantong real estate plans to purchase 78.284% equity of Xingheng power with a total of 3.17 billion yuan, so as to invest heavily in cross-border transformation of new energy. In March 2020, Wantong holdings announced that it would take over Tianjin Tianhai football club. But for various reasons, these attempts failed.

In 2020, Wantong real estate will take "new city science and technology + life comprehensive operation service provider" as the transformation goal, while shrinking the real estate business and starting to "de real estate". In August of that year, Wantong real estate officially renamed Wantong development, and the word "real estate" has disappeared.

In fact, since 2019, Wantong has little new land reserves, instead, it has been selling its real estate projects. In the field of real estate, Wantong's only progress is to introduce industrial real estate giant pros in March 2019.

At present, the focus of Wantong is in the field of equity investment. The company participates in some equity funds and directly or indirectly holds the equity of dozens of enterprises, mainly technology companies.

The traditional real estate business has shrunk. In 2019, the real estate sales scale of Wantong development is only 827 million yuan; in the first half of 2020, the sales scale is 340 million yuan. In the real estate industry, almost reduced to "fly scale".

Affected by this, Wantong's performance appears again "pains". According to the performance forecast in 2020, the net profit of Wantong is only 40 million yuan to 60 million yuan, a sharp decline.

Due to various reasons, Wantong, an old real estate enterprise, has missed the "golden age" of China's real estate for more than 20 years. At a time when many latecomers have become bigger, Wantong has almost become the "small transparency" of the industry, which is a pity.

When Feng Lun was in office, he had a reflection on the development of the company. In April 2014, he said in an on-the-job MBA class at the National Development Institute of Peking University: "after 2002, Wantong has just paid off its debts. We don't want to be in high debt. We use high leverage to leverage the market. As a result, Wantong has lost a good period of development. Although Wantong still makes money at this time, its innovation is gone. So slowly, security has become the biggest goal of the enterprise. Wantong began "suffocating death."

Even if it is innovation, Wantong does not seem to have really started its pace, and the fundamental reason is still conservative. In his speech to the chairman of Wantong holding's 2013 annual report, Feng Lun once said: "from today's point of view, after such exploration and grasp, I think there are some aspects that seem to be too conservative. For example, if the debt ratio is too low, it is not enough to inject new incremental resources into the transformation of the company. "

Bai Wenxi, vice president of China enterprise capital alliance, believes that before Feng Lun's exit, Wantong's development path has been deeply imprinted with Feng Lun's personal character, that is, he is good at thinking and innovation, but he is too cautious and conservative in strategy.

He told reporters in the 21st century economic report that Feng Lun belonged to the "92 faction" and started in Hainan in the 1990s, but he was also a very lucky "escapee" in Hainan's "housing disaster" in the early 1990s. These entrepreneurs have always been more cautious and less adventurous, so they have lost the opportunity of several large rises in the mainland property market.

In his opinion, from the perspective of Wantong's corporate strategy in the era of Feng Lun, it is obvious that Wantong has strong innovation ability and is too conservative in terms of investment and development, and dare not boldly use financial leverage and vigorously promote the turnover speed. Therefore, it was quickly overtaken by peers and degenerated into an opportunistic company. On the contrary, some enterprises with rough strategy are growing bigger, and gradually improve the level of strategic management and enterprise operation in the process.

Therefore, how to make a good judgment of the general situation of the industry and path selection is an important enlightenment for the practitioners of Wantong.

There is also a view that Feng Lun's thinking is too advanced, so that in that era, he appeared "born out of time". The Kaide model advocated by Feng Lun has been regarded as the standard by many developers. Diversified layout and green real estate are also the development direction of the industry. Feng Lun's emphasis on financial security is in line with the regulatory requirements under the "three red lines" - since its listing, the asset liability ratio of Wantong has not exceeded 80%, and it has been maintained below 35% in recent two years.

But these are no longer important, today's Wantong development, has completely lost the opportunity to turn over in the real estate market.