Vanke

Vanke was founded in May 1984, originally named the Modern Science and Education Instrument Exhibition and Sales Center, and started out in trading. In 1988 its joint-stock reform plan was approved: net assets of 13.24 million yuan were converted into shares, with the state holding 60% and employees 40%; a further 28 million shares were issued to raise 28 million yuan, and in the same year the company entered real estate. Shenzhen SEZ Development Company (Shentefa) held 30% as the largest shareholder, and Wang Shi served as chairman. The company listed A shares in 1991, and in 1993 issued B shares raising HK$451.35 million, which were invested in real estate. In 1992 it established real estate as its core business, with residential property as the mainstay. In March 1994 it faced a hostile takeover launched by Jun’an Securities and others; Yu Liang helped Wang Shi communicate with the China Securities Regulatory Commission, and Vanke obtained the first trading suspension in the history of the Chinese stock market. Yu Liang travelled to Hainan in person and won the support of Hainan Securities, holding 1.1%, and within five days the episode ended with Vanke announcing a decisive victory in the “Jun’an–Vanke battle”.

In 1997 total profit was 250.43 million yuan and after-tax profit was 187.12 million yuan, both up 25%; the share of profit from real estate rose to 67.5%. In 1999 revenue was 2.91239 billion yuan and net profit was 229.14 million yuan. In January 2000 a rights issue raised 625 million yuan, and China Resources was brought in as the largest shareholder with a 15.08% stake, remaining only a financial shareholder for more than a decade thereafter. In 2000 revenue was 3.8733 billion yuan and net profit was 301.23 million yuan; at year-end its land bank stood at 4.5 million square metres. In 2001 revenue was 4.45506 billion yuan and net profit was 373.75 million yuan. It transferred 72% of Wanjia to China Resources, exiting the retail business. In February it appointed Yu Liang as general manager.

In 2002 revenue was 4.57436 billion yuan and net profit was 382.42 million yuan. At the end of the period, resources pending development totalled 7.06 million square metres, and it issued 1.5 billion yuan of convertible bonds. In 2003 revenue was 6.38 billion yuan and net profit was 542 million yuan. Regional management centres were formed in Shenzhen, Shanghai and Shenyang. In 2004 revenue was 7.667 billion yuan and net profit was 878 million yuan. On the company’s 20th anniversary, it put forward a ten-year plan. From 2001 it positioned itself as a professional urban residential developer and established three major strategies: customer segmentation, focus on city clusters, and product innovation. In 2005 sales revenue was 13.95 billion yuan and net profit was 1.35 billion yuan. In 2006 it became the first real estate company to enter the national list of the top 100 taxpayers.

When Yu Liang became general manager at 36, operating revenue from the real estate business was 2.449 billion yuan; he removed the more abstract performance indicators and focused on financial metrics such as return on capital, profit margin and inventory turnover, and five years later Vanke’s sales exceeded 10 billion yuan. He drew up a plan for sales to exceed 100 billion yuan within ten years, and in 2007 Vanke was the first to surpass a scale of 50 billion yuan. During the 2008 financial crisis Vanke recorded its first negative earnings growth, after which Yu Liang pushed the fast-turnover model even more firmly. In 2009 sales recovered to 60 billion yuan, and in 2010 they passed 100 billion yuan. Rapid expansion also brought concerns about quality. Wang Shi said that in 2011 he issued a strict order that Vanke’s sales must not exceed 140 billion yuan; sales that year were 121.54 billion yuan.

In 2007 many residential developers grew rapidly, and by year-end a wait-and-see mood hung over the industry. Vanke believed the fundamentals supporting the market had not fundamentally changed. Its 2008 letter to shareholders said the prosperity of 2007 was like a castle built on sand. In the fourth quarter of 2007 the company put forward its “turning point theory”. In 2008 it proposed the “5986” high-turnover model. In its letter to shareholders, Vanke said the company had been the world’s largest residential company for two consecutive years. In 2010 sales exceeded 100 billion yuan. It reaffirmed the “quality growth” proposed in 2004, centred on shareholder returns with return on assets as the primary financial indicator. Its 2011 letter to shareholders set out the stability of its business strategy, with units under 144 square metres accounting for nearly 90%. It insisted on not hoarding land, not holding back units from sale, and not becoming a “land king” by paying record prices. In 2012 Yu Liang said the industry had entered its second half.

On June 27, 2013, Vanke announced for the first time its transformation from a traditional residential developer into an “urban supporting services provider”. In 2014 it judged that the industry had moved from a golden age into a silver age. Residential property would remain its most important business over the next decade. In March 2014 it introduced a business partner system; the partners’ company bought a cumulative 3.1 billion yuan of shares through Ying’an, holding 3.2% and becoming the second-largest shareholder. In 2017 its strategic positioning was upgraded to “urban and rural development and living services provider”, formally established in 2018. Its 2019 letter to shareholders noted that the rules of competition in the industry were shifting from land dividends and financial dividends to management dividends. The settled gross margin of Vanke’s real estate business rose from 19.46% in 2015 to 29.7% in 2018, then declined steadily, falling to 8.6% in 2025.

From July 2015, Vanke faced a battle for control lasting nearly two years involving Baoneng, China Resources, China Evergrande and others. On June 17, 2016, Vanke first announced a preliminary restructuring plan with Shenzhen Metro, which was vetoed by China Resources’ three votes; on December 18 it announced the termination of the share issuance to acquire Shenzhen Metro assets. Subsequently China Resources and Evergrande each transferred their shares to Shenzhen Metro; in the first half of 2017 Shenzhen Metro spent about 66.4 billion yuan to acquire a combined 29.38% stake, overtaking Baoneng as the largest shareholder, which brought the “Baoneng–Vanke battle” to an end. Shenzhen Metro stated that as a cornerstone shareholder it would neither interfere nor participate in Vanke’s specific business. At the end of June 2017, Yu Liang succeeded founder Wang Shi, then 66, as chairman of the board.

In 2020 new construction starts covered about 39.604 million square metres, down 6.6% year on year; completions were about 33.817 million square metres, up 12.4%. It acquired 168 new projects, with attributable land costs of about 138.15 billion yuan. In 2021 revenue was 452.8 billion yuan, up 8.0%; net profit attributable to shareholders was 22.5 billion yuan, down 45.7%, the third decline in its 31 years as a listed company. Yu Liang acknowledged that investment had chased high prices and been reckless. In 2022 revenue was 503.84 billion yuan, up 11.3%, more than 340,000 units were delivered, and net operating cash flow was positive for the 14th consecutive year; Onewo’s revenue exceeded 30 billion yuan for the first time and it was spun off and listed.

On June 30, 2023, Yu Liang said the industry was in a transition between old and new models, and that Vanke had problems such as reckless investment and wide variation in product execution. In 2023 sales were 376.12 billion yuan, down 9.8%, ranking second in the industry; 289,000 units were delivered; net operating cash flow was positive for the 15th consecutive year; and it planned to cut interest-bearing debt by more than 100 billion yuan within two years. In 2023 revenue from Port Apartment (Boyu) was 3.46 billion yuan, up 6.8% year on year, achieving overall profitability under the cost method for the first time. In October 2023, Yu Liang said housing demand had moved from “whether there is housing” to “whether it is good”, that the central level of future residential construction would be 1.0 to 1.2 billion square metres, and that the current level of housing construction had fallen excessively.

In 2023 the group’s total operating revenue was 465.74 billion yuan, down 7.6% year on year; attributable net profit was 12.16 billion yuan, down 46.4% year on year. Development business revenue was 401.6 billion yuan, down 9.6% year on year. The company made inventory impairment provisions of 4.85 billion yuan. At the end of 2023, Vanke’s total interest-bearing debt rose to 320.1 billion yuan, its net gearing ratio was 54.7%, and the coverage of short-term debt by cash fell to 1.6 times. On October 18, 2023, Fitch downgraded Vanke from “BBB+” to “BBB”; on November 24, Moody’s downgraded it from “Baa1” to “Baa3”. In March 2024, both agencies further downgraded it to speculative grade. On April 5, 2024, Vanke said the Shenzhen State-owned Assets Supervision and Administration Commission had coordinated several state-owned enterprises to work with Vanke, which was expected to help the company release more than 10 billion yuan of liquidity.

From the end of 2023, Vanke accelerated its asset disposals. In December 2023 it sold the management rights to the Banyan Tree hotel for 480 million yuan; in January 2024 it transferred a 6.16% stake in Shenzhen High-Tech Investment to Shenzhen Investment Holdings Co., Ltd.; and in February it sold half of its equity in Shanghai Qibao Vanke Plaza at a 30% discount for 2.384 billion yuan. In 2023, Vanke’s operating and service businesses generated total revenue of 55.81 billion yuan on a full-scope basis, up 8.9% year on year. Its major shareholder Shenzhen Metro stepped in twice to help Vanke out of difficulty. Zhu Jiusheng said the company held 99.8 billion yuan in cash at the end of 2023, with a cash-to-short-term-debt ratio of 1.6 times.

In 2024 revenue was 343.18 billion yuan, more than 180,000 units were delivered, and sales were 246.02 billion yuan, down 34.6% year on year; it repaid 29.2 billion yuan of onshore and offshore public bonds and ABS. The company admitted to problems including reckless investment, an overly large multi-track layout, and failure to transform its financing model in time. In April 2024 the board decided not to pay a cash dividend for the time being. Its financing model was shifting from credit loans to project-based financing with secured collateral and closed-loop supervision. In 2024 revenue from the rental housing business was 3.702 billion yuan, up 7% year on year. A January 2025 earnings preview said net profit attributable to shareholders for 2024 was expected to be a loss of 45 billion yuan, its first annual loss since listing. In the first half of 2024 Shenzhen set up a working group, and by the end of the year the working group had fully moved into Vanke.

In January 2025, top decision-makers required that Shenzhen’s local responsibility be firmly enforced, and the Shenzhen government engaged CICC as financial adviser to conduct due diligence at Vanke. On January 27, Shenzhen Metro chairman Xin Jie succeeded Yu Liang as chairman of the board, with Yu Liang remaining as executive vice president; Zhu Jiusheng resigned from all positions. According to Caixin, Shenzhen Metro as the major shareholder stepped in 13 times, providing Vanke with a cumulative 31.46 billion yuan in shareholder loans. According to Caixin, Xin Jie became unreachable in September 2025 and resigned as Vanke chairman on October 13, being succeeded by Shenzhen Metro general manager Huang Liping. In 2025 as a whole, 117,000 units were delivered, and contracted sales in the development business were 134.06 billion yuan. Inventory at the end of the period was 519.01 billion yuan, down 26.0%.

In 2025, Vanke achieved full-year operating revenue of 233.43 billion yuan, down 32.0% year on year; net loss attributable to shareholders of the listed company was 88.56 billion yuan, with the loss widening 79.0% year on year. It delivered 117,000 units with assured quality over the year and achieved sales of 134.06 billion yuan; full-basis revenue from operating and services businesses was 58.01 billion yuan; it completed bulk transactions for 31 projects with a contracted value of 11.3 billion yuan; and it exited the ice and snow business segment. As of the end of 2025, its net gearing ratio was 123.5%, up 42.9 percentage points from the end of 2024; the overall cost of existing financing was 3.02%.

As of the end of 2025, Vanke’s interest-bearing debt totalled 358.48 billion yuan, accounting for 35.1% of total assets. Of this, 160.56 billion yuan was due within one year, accounting for 44.8%. By type of financing, bank loans accounted for 71.9%, bonds payable 8.2% and other borrowings 19.9%. Secured interest-bearing debt was 150.15 billion yuan, accounting for 41.9%. The company said that in 2026 it still faced public bonds maturing totalling 14.68 billion yuan, of which 11.27 billion yuan was concentrated between April and July. The large loss in 2025 stemmed from prominent settlement losses in the development business and large new impairment provisions, among other factors. The company is making technology-driven development the core lever of its transformation and upgrading. On November 26, 2025, Vanke announced that it was seeking an extension of the medium-term note “22 Vanke MTN004” with an outstanding balance of 2 billion yuan, marking the formal eruption of its debt risk; it subsequently also sought extensions for “22 Vanke MTN005” and “21 Vanke 02”. Vanke initially planned a one-year extension without conditions such as a cash down payment, which met explicit opposition from holders. On January 15, 2026, Vanke submitted supplementary proposals for the three bonds, offering conditions including an additional small cash repayment of 100,000 yuan per bond and payment of 40% of bond principal in cash as a down payment. On January 21 and 27, 2026, the extension plans for the three bonds were approved in turn; their outstanding principal totalled 6.732 billion yuan. On January 27, 2026, Vanke announced that Shenzhen Metro planned to provide a further 2.36 billion yuan in shareholder loans.

Yu Liang fully withdrew from all positions at Vanke on January 8, 2026, formally retiring. According to Caixin, former president Zhu Jiusheng had earlier been placed under criminal compulsory measures, and after Yu Liang’s retirement media also reported that he had become unreachable. In the first quarter of 2026, Vanke’s operating revenue was 28.93 billion yuan, down 23.9% year on year; net loss attributable to shareholders was 5.95 billion yuan. At the end of the period it had cash of 60.49 billion yuan, total interest-bearing debt of 356.05 billion yuan, and a debt-to-asset ratio of 77.1%. In the first half of 2026 Onewo achieved revenue of 19.112 billion yuan, up 5.4% year on year; core business net profit was about 1.1 billion yuan, up 7.3% year on year. Revenue from recurring businesses was 17.35 billion yuan, accounting for 90.8% of total revenue. As of the end of the first half, the number of its Butterfly City (Diecheng) bases had grown to 708. On April 21, 2026, the extension plan for Vanke’s “23 Vanke MTN001” received 100% approval at the holders’ meeting; the bond had a balance of 2 billion yuan and a coupon of 3.11%, and was originally due on April 23, 2026; the extension plan consisted of a small cash repayment of 100,000 yuan, a cash down payment of 40% of principal, and a one-year extension of the remaining 60%, with credit enhancement through a pledge of receivables of three project companies. According to Caixin, as of the end of March 2026 Vanke’s overall debt resolution plan had not yet been clarified; at the end of 2025 Vanke held cash of about 67.24 billion yuan, down 20.92 billion yuan year on year, and cash before consolidation (roughly reflecting funds available to the group headquarters) was about 850 million yuan. In 2025 Vanke’s average monthly sales were only 11.17 billion yuan, net operating cash outflow was about 990 million yuan, and new financing and refinancing for the year totalled 28 billion yuan (excluding shareholder loans).