BRIEF: Vanke swings to $6.82 billion loss as debt pressure mounts

Property developer China Vanke Co. Ltd. (2202.HK; 000002.SZ) announcedon Monday it recorded a net loss of 49.5 billion yuan ($6.82 billion) in 2024, reversing a profit of 12.2 billion yuan in 2023, as its revenue fell 26.3% over the period to 343 billion yuan. Despite the revenue decline, the company’s contracted sales of 246 billion yuan for the year was enough to make it the industry’s leader for that metric.

Vanke attributed the negative turn to several factors, including a sharp decline in settlement volume and gross margin in its development business, reflecting ongoing pressure in China’s real estate market. Vanke also made further provisions for credit impairment and inventory write-downs, and losses from some non-core financial investments weighed on its bottom line as well. Vanke added it took aggressive steps to raise cash by disposing of assets and equity stakes, sometimes at prices below their book value, further impacting its bottom line.

Vanke’s net debt ratio had risen to 80.6% by the end of last year, up 25.9 percentage points from the start of the year. Its gearing ratio edged up to 73.7%, while its total interest-bearing debt reached 361 billion yuan, accounting for 28.1% of total assets. In February, major shareholder Shenzhen Metro Group provided two shareholder loans totaling 7 billion yuan to help the company repay bond principal and interest on its publicly held debt.

Vanke’s stock opened 0.5% lower on Tuesday in Hong Kong and closed up 0.9% at HK$5.59 by the midday break.

By Lee Shih Ta

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