Since stepping back from Wantong, Feng Lun has kept a low profile in the real estate business, but he has recently made significant moves by acquiring stakes in two major real estate companies. Is it finally time for his "real estate philosophy" to come to fruition?
At 66, the real estate thinker Feng Lun has seized the moment to implement his ideas. On October 16, the board of directors of *ST Jinke (000656.SZ) completed its reorganization, appointing Feng Lun, the founder of Wantong Group, as the chairman of the company's expert advisory committee.
While this title may not seem glamorous, it does not detract from Feng Lun's influence within Jinke. Last month, Jinke successfully completed its bankruptcy restructuring, and Feng Lun's Shanghai Pinqi Management Consulting Co., Ltd. (hereafter referred to as “Shanghai Pinqi”) emerged as the largest shareholder.
In addition to acquiring Jinke, which has assets exceeding 100 billion yuan, this year, Feng Lun's affiliated company also became a restructuring investor for Chongqing Xiexin Yuanchuang Industrial Co., Ltd. (hereafter referred to as “Xiexin Yuanchuang”), securing its core commercial operating assets.
Ten years after his exit from Wantong, Feng Lun’s bold investments in Jinke and Xiexin Yuanchuang—both previously ranked among the top three "Chongqing real estate companies"—underscore that his strategy has been in the making for a long time.
Acquisitions in Two Key Projects Jinke was once a leading developer in Chongqing, ranked among China's top 100 companies in 2004 with sales hitting 184 billion yuan in 2021, only to face a debt default the following year. In April of last year, its application for bankruptcy restructuring was approved, making it the first large real estate company in recent years to enter restructuring in A-shares, naturally drawing significant attention to whether its restructuring would be successful.
Half a year later, the Shanghai Pinqi consortium became Jinke's restructuring investors. This consortium, consisting of Shanghai Pinqi and Beijing Tianjiao Green Garden Real Estate Development Co., Ltd. (hereafter referred to as “Beijing Tianjiao”), is fully controlled by Pinqi, which is headed by Feng Lun.
In September of this year, heavily indebted Jinke—with liabilities of 147 billion yuan—announced its revival as the successful restructuring concluded. A transfer of 3 billion yuan of stock was completed, with the Shanghai Pinqi consortium acquiring approximately 600 million shares and 393 million shares, collectively holding 9.34% of the company's total equity. Huang Hongyun's stake fell to 7.29%, marking his departure from the company he originally founded.
Feng Lun did not spend excessively to gain control of Jinke. Under the restructuring plan, the Shanghai Pinqi consortium was required to invest 1.506 billion yuan, which included 756 million yuan for acquiring shares and a commitment to provide no less than 750 million yuan in loans. In essence, Feng Lun has secured the position of the largest shareholder of Jinke for less than 800 million yuan, while Jinke's current market value stands at around 15 billion yuan, making this a lucrative deal.
Feng Lun’s experience is evident in this acquisition of Jinke. Shortly before Jinke's bankruptcy restructuring was announced, the restructuring investor for Xiexin Yuanchuang emerged in March of last year, with Shanghai Lingyu Enterprise Development Company (hereafter referred to as “Shanghai Lingyu”) being one of the three investors, where Feng Lun owned 17.8% as the third-largest shareholder.
Under the management of three asset management companies, Xiexin Yuanchuang's assets were divided into two parts, with the three investors acquiring key assets while the remaining assets were placed into a five-year service trust to gradually realize their value and service their debts, thus resolving over 60 billion yuan worth of debt. Shanghai Lingyu paid 187 million yuan to acquire the core commercial operating assets of Xiexin Yuanchuang, including commercial management companies and shopping mall parking spaces. According to reports, legal consultants involved in the transaction indicated that these assets generate annual rental returns of over 80 million yuan, with parking spaces being a scarce resource.
Feng Lun's decisive moves into two meaningful restructuring projects in one year indicate a significant change in his approach after a decade of relative quiet in the real estate sector, sending a clear signal about his ambitions.
The Strategist Back in August 2014, after years of rivalry, Wang Yihui took control of Wantong Real Estate, becoming the actual controller of the company. At the beginning of the 1990s, Feng Lun founded Wantong with Wang Gongquan, Wang Qiufeng, Liu Jun, Yi Xiaodi, and Pan Shiyi in Hainan, and the company quickly rose to prominence, known as the “Six Gentlemen of Wantong.” However, several years later, the other five left due to differing business ambitions, leaving Feng Lun to steer the company alone.
When Wang Yihui took control, it was inevitable for Feng Lun, who had been in the real estate field for over two decades, to feel regret over his loss. Now, entering Jinke signifies one of the key outcomes of his years of strategic planning.
In 2015, after being ousted from Wantong, Feng Lun founded Yufeng Group, and Beijing Pinqi, which secured the largest shareholder position at Jinke, is actually an asset management institution focusing on health real estate under Yufeng Group. Major shareholders behind this company include Zhang Yong, the founder of Xinyuan Real Estate, Wang Qian, the founder of Yufeng Real Estate, and real estate media figure Shan Dazhuang. Additionally, Feng Lun brought in Ma Weihua, the former president of China Merchants Bank, to serve as the honorary chairman of Beijing Pinqi.
A company with a strong background in real estate development, commercial real estate management, real estate marketing channels, and financial expertise is well-positioned to make an impact in the industry.
However, the successful acquisition of Jinke's restructuring would not have been possible without Beijing Tianjiao Green Garden’s contributions. Reports indicate that the joint investor brought in by Beijing Tianjiao is Feng Biao’s son, Feng Guo.
Known for his stock trading background, Feng Biao became famous for his operation of Zinc Industry Shares and has invested in various companies through the Oriental Capital Matrix, possessing control over several listings, including Hainan Coconut Island and Jiaying Pharmaceutical. Feng Guo has also ventured into managing bankruptcy projects for a number of listed companies.
In an announcement released in October last year, Jinke stated that Dongfang Yinyuan (Beijing) Materials Co., Ltd. (hereafter referred to as “Dongfang Yinyuan”) became a concerted actor with Huang Hongyun, the eventual controller, making commitments to increase their stakes in Jinke within six months. Dongfang Yinyuan is a company controlled by Feng Guo, suggesting he may play a critical role in Jinke’s restructuring.
Previously, Great Wall Asset Management was viewed as the preferred industrial investor for Jinke’s restructuring but eventually primarily served as a financial investor. Given Feng Lun and Yufeng Group's strengths, it is not easy to secure an industrial investor.
The new management structure set for Jinke may also offer some insights. According to announcements, Li Gen, CEO of Beijing Pinqi, joined Jinke's board as the executive vice president, while Wang Xiaoqing from Feng Guo's side assumed the vice-chairmanship, with Yang Peng, an associate of Wang Xiaoqing during his tenure at Hainan Coconut Island, serving as Jinke's board secretary. Although Feng Lun and Ma Weihua both hold positions at Jinke, their titles as members of the expert advisory committee and party committee secretary carry more symbolic than practical significance. Feng Lun appears to be acting as a "think tank" pushed forward by capital.
However, Feng Lun's ability to build platforms and harness the power of capital to accomplish a significant acquisition minimizes regrets from his departure from Wantong a decade ago, which can be considered a success.
A Waiting Period Ahead Feng Lun's real estate philosophy is starting to materialize. At Jinke’s annual performance meeting in May, Feng Lun, speaking as a representative of Jinke’s industrial investors, stated that the company aims to “create more valuable spaces” and will transform into a comprehensive real estate operator.
In September, Feng Lun conducted an industry seminar at Jinke Center, reiterating the essence of real estate as creating the most valuable fixed artificial space, suggesting a shift to a post-development era in real estate where companies need to pivot vertically, focusing on becoming comprehensive operators with a financial landscape.
Years prior, Feng Lun had begun voicing his perspectives on real estate transformation in various settings, and even earlier, he tested the waters with a light-asset model. Back in 2008, during his tenure at Wantong, he proposed using CapitaLand as a learning benchmark while actively expanding in the fields of industrial and commercial real estate, along with investment and funding operations, aiming to reestablish Wantong as an investment-focused real estate entity.
This transformation was considered quite aggressive at the time and adversely affected Wantong's performance, leading Feng Lun to face skepticism within the company. However, the current landscape compels real estate companies to adapt, thereby increasing the likelihood of Feng Lun's many ambitions coming to fruition. This could explain why he has chosen to make strategic acquisitions of quality real estate projects at this juncture.
After leaving Wantong, Feng Lun engaged in media, hosted programs, and established the “Feng Lun Feng Ma Niu” IP, gaining a widespread reputation as a "real estate thinker." He has published multiple bestsellers, navigating the business world as an author.
He founded the National Real Estate Strategic Alliance, and established networks such as the China Entrepreneur Club, One Foundation, Alashan SEE Ecology Association, and Lakeside University, building considerable connections in the business community.
Nonetheless, an article by "He Jia Yan" once critiqued Feng Lun, indicating that “his notable reputation today is partly based on early contributions from Wantong, partly from constant networking, and partly from writing success. Relying solely on business accomplishments, the reality does not quite match the fame.”
Feng Lun’s ambitions remain intact, and perhaps only through real estate can he prove his capabilities once again. When asked by an entrepreneur why he continued in the real estate business, he responded, “First, this is all I know how to do; second, our company is still standing. Since there’s no plan to shut down, let’s give it another shot, even if it’s a bit arduous.”
Yet, the projects he has acquired—Xiexin Yuanchuang and Jinke—have not entirely escaped the shadow of debt crises. For instance, in Jinke’s case, the debt repayment work is still pending, and hundreds of projects' existing assets require a capable operator to manage and revitalize them.
Feng Lun has previously stated, “Greatness is brewed through persistence,” suggesting that his potential “greatness” in the real estate business may still require further endurance.
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