Latest statement from Vanke's Chairman

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Author | Zhou Zhiyu

Editor | Zhang Xiaoling

A grim Q3 report made Vanke’s first extraordinary shareholders’ meeting of 2025, held on November 20, rather solemn.

Just half a month earlier, Vanke disclosed data showing a net loss attributable to shareholders of over 16 billion yuan for the third quarter alone. The former industry leader is now enduring the harshest winter since its founding.

Vanke’s recently appointed chairman, Huang Liping, did not shy away from addressing the severe situation the company faces. He told shareholders directly that the company is "in the painful period of digesting the burdens of the past 'three highs'," and said that business performance would continue to be under pressure.

Even with the full support of its major shareholder, Shenzhen Metro Group, Vanke’s management admitted: "The operational pressure has not been effectively alleviated; the difficulties are objectively real."

At this moment, when challenges must be faced directly, Huang Liping expressed hope that all parties maintain firm confidence and sufficient patience. He emphasized the need to unite collective wisdom and strength, to work together, and said that as the major shareholder, Shenzhen Metro would join all parties in unwavering efforts to help Vanke orderly resolve risks and overcome difficulties.

This patience is for both Vanke and the entire industry, which is in an adjustment cycle. Sitting next to him, Vanke’s Executive Vice President Yu Liang, although gave an optimistic view that the adjustment cycle may be passed, also cautiously defined it as a gradual process.

For Vanke today, although the major shareholder has done its best to provide liquidity support, whether they can truly overcome the difficulties ultimately depends on the support of all parties and how Vanke itself breaks through under pressure.

The focus of this extraordinary shareholders’ meeting was a proposal to seek shareholder authorization to complete asset pledge procedures.

Statistics show that so far this year, Shenzhen Metro Group has provided approximately 30.8 billion yuan in shareholder loans to Vanke. Facing Vanke’s funding pressure during a peak debt repayment period, Shenzhen Metro has shown decisiveness and efficiency—before the shareholder meeting approval process was completed, it had already provided part of the funds in advance to ensure Vanke’s liquidity.

But it should also be noted that even the rescue from the major shareholder must be built on strict principles of "market orientation and rule of law."

As the largest shareholder, Shenzhen Metro knows Vanke cannot afford to fail. For Vanke, pledging assets is the necessary guarantee to obtain this "lifesaving money." Fortunately, the major shareholder has shown significant sincerity—loan terms and interest rates are both better than those Vanke could obtain from financial institutions.

At a time when financing channels are generally tightening and funding costs are high, these low-cost, long-term funds have won Vanke much time and space this year. But Vanke still needs to answer the question: "How to restore self-sustaining profitability?"

The old "game rules" are no longer valid; relying on the old model of high leverage and rapid turnover is a thing of the past. In this new round, Vanke needs to determine its actions to reshape its position in the future market.

Huang Liping made clear the strategic direction for the future at the meeting: to maintain strategic focus and implement the requirements of "promoting high-quality development of real estate."

This strategy echoes Yu Liang’s assessment of macro trends. Yu Liang pointed out that the "Fifteenth Five-Year Plan" proposal specifically calls for optimizing supply of guaranteed housing and city-specific policies to increase the supply of improved housing. This means the industry will build a multi-level housing supply system in the future, creating more effective demand. He believes "good houses and good services" will be the foundation of industry competitiveness as well as the basis for fulfilling the mission of ensuring and improving people's livelihoods.

Vanke has not just rested on slogans, but delivered tangible business results. From January to October, Vanke achieved sales of 115.28 billion yuan. In specific business scenarios, Vanke has shown resilience in its products: Shanghai’s "Ideal Place" project was selected as one of the Ministry of Housing’s first good community cases, and the Shanghai "Gaofuyunjing" project set a recent single-day, single-project sales record. These figures demonstrate that even during market adjustment, high-quality products still have the capacity to transcend cycles—the market does not lack houses, but lacks "good houses."

At the same time, business services are becoming a new source of growth for Vanke. Data show that Onewo Cloud’s total revenue grew 3% year-on-year, its innovative flexible pricing model has been recognized by the market; long-term rental apartment occupancy rates exceeded 94%, with a significant increase in long-term client share; and the proportion of strategic clients in logistics business is continuously optimizing.

To adapt to the new market environment, Vanke has also undergone organizational changes this year. At the meeting, Vanke Executive Vice President Li Feng disclosed that the company improved operational efficiency through organizational restructuring, compressing the management hierarchy from the previous "three and a half levels" to "two levels." This not only shortened the management chain and strengthened headquarters functions but also improved decision efficiency.

Huang Liping summarized this as adhering to standardized operations, aiming to build a mechanism that is "well-governed, internally controlled, open and transparent," balancing enhanced control with vitality.

Meanwhile, faced with objectively existing operational pressure, Vanke is improving cash flow through more active capital operations. Management stated that going forward, the company will further divest some non-strategic businesses and assets to improve cash flow and its asset-liability structure.

In terms of stock resources, Vanke, with policy support, is orderly revitalizing resources via "collect-adjust-supply," index optimization, and resource substitution. In just the first ten months, 22.8 billion yuan in additional saleable goods value was added. This ability to “mine new value from old assets” is Vanke’s core competence in the era of stock assets.

Additionally, Vanke stressed the importance of “empowering through technology,” advocating the use of new-generation information technology and green low-carbon technology to build competitive products and services, and collaborating with partners to promote large-scale application of new scenarios.

The journey through the storm is certainly long. As management frankly stated at the meeting: “Operational pressure has not been effectively alleviated; difficulties are objectively real.”

During this inevitable “painful period,” the major shareholder’s full support has won precious time for Vanke. But whether it can truly emerge from winter ultimately depends on joint efforts and Vanke itself.

Yu Liang’s prediction of “gradually emerging from the adjustment cycle” is a slow and arduous uphill climb. Getting the ticket to the future is only the beginning of the new game.

The road ahead remains foggy; Vanke must keep moving.

Risk Warning and DisclaimerThe market holds risks; investment requires caution. This article does not constitute personal investment advice nor does it take into account individual users’ special investment objectives, financial situation, or needs. Users should consider whether any opinion, view, or conclusion in this article suits their specific situation. Investment is at your own risk accordingly. ```