The Wanda Group’s Funds Management Model Study

The most prominent feature of Modern Corporation system is manifested as the principal-agent relationship for layer by layer, especially in the development mode of the group company, the principal-agent relationship shows more complexity and hierarchy across time and space.In the current Chinese real estate industry, many estate enterprises implement the development model of cross regional, national layout, this model make the original organization management system of the real estate enterprises changed, and at the same time, the real estate industry is a capital intensive industry, how to implement remote management and monitoring effectively to funds distributed in many regions of the subsidiary company,become the important issueof group company to prevent financial risk and achieve strategic objectives and sustain competitive advantage.As one of the large-scale real estate enterprises in China, Wanda Commercial Real Estate attract more attention because of the speed of development and the expansion of the scale in recent years, its original "made to order" mode of production, excellent ability to integrate resources and strong brand appeal constitutes an important part of Wanda mode. Capital is the blood of enterprise,for the real estate enterprises is even more so.Wanda mode has been successfully copied and application, actually making secure funding chain as the premise, therefore, it can be said it is the premise to success for Wanda mode by improving the fund management.The real estate business income accounted for the proportion of group income and commercial real estate income were67%and86%, which also shows that the main source of funding of Wanda Group is the real estate section.The vast majority of the real estate business income come from the sale of property, it also shows that Wanda Group funds mainly come from the sale of property of sub companies. Therefore, to ensure the realization of the overall strategic goal of Wanda Group,the bases is to keep the subsidiary funds chain safe, and do the subsidiary capital management. Fund management system in Wanda mode consists of two layers, namely the company financial department and the subsidiary company financial department, financial department of group company has indirect management through the budget management system to subsidiary capital, while subsidiary company has the direct management within the scope of authorization by the group companies.As the capital of dispatching console, financial department of group company guide and supervise the fund management of the subsidiary company by designing the budget management system,including pre project planning and financial planning,capital management and budget adjustments in medium-term and post evaluation,to ensure the subsidiary business objectives consistent with the group strategic objectives.Capital management of the Subsidiary mainly focus on dealing with the relations with the bank, the work includes get the right to obtain bank loans and the development of bank mortgage loan. Finally, implementation of each subsidiary company business target is the result of the capital management, which provides the financial support and finance the company through the sale of the property for the upright property.This paper take A company as the research object,which is a wholly owned subsidiary of Wanda company,to analysis financial management of Wanda mode, and hope to contribute to the fund management practice and theoretical research. The main contents of this paper are as follows:The main content of the first chapter include research background, purpose and significance,the research content and methods,and the innovation.The second chapter is literature review. This part is based on the research of this thesis, by summarizing and arranging the main ideas of the relevant literature.It includes two parts:one is the literature review on the relationship between capital management and enterprise management mode, the other one is the literature review of real estate and banking relationship.The third chapter is about the concepts related to capital management, including the concentration of funds, fund management,structure and centralized management of group fund.The fourth chapter is the concrete describination and analysis on A company’s capital management.The fund management in Wanda mode use the double main body management,thatis,financial department of group company has indirect management through the budget management system to subsidiary capital, while subsidiary company has the direct management within the scope of authorization by the group companies.The fifth chapter put forward suggestions and measures in view of the existing fund management problems. This paper carries on the analysis to the fund management model in A company, combined with the general characteristics of the real estate enterprise fund management mode and Wanda funds management mode, to provide the reference version for many real estate enterprises, but also to put forward the improvement suggestions for Wanda existing fund management model.This research can draw the following conclusions:(1) A company funds management mode is the path of real estate enterprises to seek survival and development choices,in the case of imperfect development of capital market and the asymmetry of Macro policy on the real estate industry in China,In recent years, especially after the subprime crisis, the government virtually shut down the real estate enterprises to enter the A stock financing path, resulting in Wanda, green,CITIC Real estate can notlisted,although had submitted a listing request,caused such a phenomenon that many real estate enterprises can only rely on a single bank credit, bring a severe test to the real estate enterprises by seeking to expand size.In addition, in order to avoid excessive prices and curb speculative demand, in recent years the country has promulgated many regulations and control policies for the real estate industry, while the low-income groups are the main consumer groups in A company’s commercial housing, comply with the regulate direction of the real estate industry.It can choose the sale property and upright property development at the same time, through the sale of residential housing to get the capital for commercial real estate, a certain extent make up for the defects that can not enter the A shares to raise funds.(2) The fund centralized management can improve the level of enterprise financial management.At present, the financial management of enterprises is still stop in a profit center level, has not yet formed the management mode as the core in cash.The centralized management of funds replan the management framework for enterprises, clear that the enterprise put fund management as the goal.The establishment of funds centralized management system can support for the major decisions of enterprises, and improve financial management level effectively.The research contributions and shortcomings:At present, the domestic research on the real estate business, most is about the listed or small and medium-sized real estate enterprises, but the study of Wanda model can be counted on one’s fingers, especially in the case that it has become a large number of real estate enterprises to imitate. This article based on the author’s actual experience in Wanda A company,combined with the relevant theory and knowledge of management,give a deep analysis to capital management of Wanda mode, to fill in the blank of research in this area, if this model can be generalized in the real estate industry, it can promote the overall progress of the real estate industry,but also can enrich the existing literature.However,because of the author’s participation in the A company’s working capital management is in a short time,observation and understanding of the funds management system is not comprehensive and detailed,more is to analysis this model by limited experience and understanding of the information, may cause the omissions and even overgeneralization problem.In addition, knowledge that I have mastered about fund management theory is not enough, so it is hard to make this research to achieve adequate theoretical height.