FAST NEWS: Vanke’s sales tumble in January

The latest: China Vanke Co. Ltd.(2202.HK, 000002.SZ) announced on Thursday that its contracted sales area in January was 1.25 million square meters that sold for 19.45 billion yuan ($2.73 billion), down 32% year-on-year and 41% month-on-month.

Looking up: Although its sales fell, the company’s ability to record nearly 20 billion yuan in monthly sales outperformed most of its peers in China’s weak real estate market.

Take Note: The company added three new plots of land to its holdings last month, involving an investment of 930 million yuan and total construction area of ​​320,000 square meters in the cities of Guiyang, Kunming and Yinchuan.

Digging Deeper: Vanke is one of China’s leading real estate developers, though last year, like many of its peers, it was reportedly coming under financial pressure. Its major shareholder, Shenzhen Metro, immediately spoke up in its support, saying it would hold Vanke shares over the long term and, if necessary, inject new liquidity into the company and take over some of its urban renewal projects in Shenzhen. The Shenzhen State-owned Assets Supervision and Administration Commission also showed its support by saying Vanke has no financial or management risks, and Vanke also promised to make timely payments for its domestic and overseas debts. That strong government support helped Vanke regain investor confidence. 

Market Reaction: Vanke’s shares opened flat at HK$6.30 on Friday and closed down  7.3% at HK$5.84 by the midday break.

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