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Photo = Yonhap news |
[Alpha Biz= Paul Lee] Amid the prolonged downturn in China’s real estate sector, major property developer China Vanke Co., Ltd. is expected to post a net loss of RMB 10–12 billion (approx. KRW 2.3 trillion) for the first half of 2024, according to reports from Economic Daily, United Daily News, and ON.cc on July 16.
Citing Vanke’s latest financial guidance, the reports note that the company’s losses could rise by as much as 22% compared to the RMB 9.85 billion loss recorded in the same period last year, as the sluggish market shows no signs of recovery.
Vanke attributed the increased loss to a reduction in the scale of its property development business and declining gross margins. The company also noted that it had to recognize asset impairment losses following revaluation of its real estate holdings due to the market downturn.
Once China’s top home seller, Vanke delivered 45,000 residential units in the first half of the year, generating RMB 69.11 billion in revenue—down about 40% year-on-year in both units delivered and sales revenue.
In a statement, Vanke expressed “regret” over the significant loss and pledged to devote its full efforts to improving management and returning to a path of sound development.
Vanke had already posted a net loss of nearly RMB 50 billion in 2023. In response, its largest shareholder—Shenzhen Metro Group, which holds about a 30% stake—replaced Vanke’s management in January as part of a broader restructuring effort.
Earlier this year, the Chinese government announced plans to provide RMB 50 billion in financial support to ease Vanke’s liquidity crunch. The measures include RMB 20 billion in special local government bonds to help the developer repay public and private debts, as well as government purchases of unsold housing units and undeveloped land.
Authorities have also given the green light for Vanke and its affiliates to raise capital through new bond issuances and bank loans to address their outstanding liabilities.
AlphaBIZ Paul Lee(hoondork1977@alphabiz.co.kr)
