China’s Dalian Wanda Group, the world’s largest cinema chain operator, is planning five “substantial” acquisitions this year to counter a drop in the sales of its core real estate business. The company, owned by China’s richest man Wang Jianlin, made the announcement Monday after an annual meeting over the weekend.
The conglomerate will look to complete three overseas purchases and two domestic ones, excluding cinema chains, it said in a statement. Dalian Wanda, which is also China’s largest real estate company, forecast that sales would fall 12 percent in 2016 due to a slowdown in the property markets, but said net profit is expected to maintain a double-digit growth rate.
Revenue from its property arm is expected to be 130 billion yuan ($19.8 billion) in 2016, 32 percent lower than last year's 190.5 billion yuan ($28.9 billion) — the first time it has forecast a drop since at least 2009, when the firm started disclosing annual targets. The group, which has diversified into entertainment, amusement parks, movies as well as financial services business, said it expects its entertainment and leisure operations to be the future drivers of growth.
In a November interview with Chinese business daily Caixin, cited by Bloomberg, Wang said that his firm is diversifying as it is “risky” to rely solely on property investments.
Last week, the conglomerate announced plans to buy Legendary Entertainment, the U.S.-based producer of movies such as "Jurassic World," "Godzilla" and "The Dark Knight Trilogy." The $3.5 billion deal made Wang the first Chinese owner of a major Hollywood studio.
By the end of 2015, the group had spent over $15 billion on overseas investments and acquisitions, with two-thirds of the projects in the U.S., according to the company's website.
Speaking at the Asian Financial Forum Monday, Wang also said that Dalian Wanda is planning an initial public offering for its internet finance business, but did not give a timeline. The billionaire, estimated to have a fortune of $30 billion, according to Bloomberg's billionaire's index, said the IPO is part of a broader plan to capitalize other units, including its film, tourism and sports businesses via stock listings.