(Yicai Global) Jan. 16 -- Dalian Wanda Group Co. saw more income and profit from services than property last year, meeting its goal of transformation one year ahead of schedule. The company plans to scale back its investment in real estate, Chairman Wang Jianlin said.
Last year was very important to Wanda and was a landmark year for the group, Wang said at the company's 2016 annual general meeting, according to a message posted via the group's official WeChat account yesterday.
Last year, the services segment accounted for 55 percent of Wanda's total revenue, overtaking the real estate segment for the first time. Net profit (unaudited) from the services segment contributed to more than 60 percent of the group's total and was higher than profit from property development.
In particular, though real estate income still surpassed income from other businesses such as rents at Dalian Wanda Commercial Properties Co. [HKG:3699], the group's core subsidiary, after its transformation, net profit from its leasing business is expected to account for about 55 percent of its total net profit. Profit from the non-property segment, which mainly consists of rents, exceeded that from property development.
Wanda will gradually scale back real estate investment, Wang said. Some 50 new Wanda plazas will open in 2017, 11 of which are asset-heavy projects and 39 are asset-light projects. Going forward, asset-heavy projects will be reduced to about five a year. After 2020, Wanda will no longer engage in asset-heavy projects and all of its new projects will be asset-light. Except for complementary housing projects for Wanda cities, the company will, no longer engage in new residential property development.
Starting from this year, Wanda will focus on a partnership model among asset-light models and will sign over 20 partnerships every year, Wang said.
Wang said that Wanda Group's goal this year is to achieve CNY900 billion (USD130 billion) in assets and CNY265.8 billion (USD38.5 billion) in revenue by 2017. It will continue to expand its presence in the culture sector, create its own intellectual property events and open an additional three Wanda cities.