Vanke Intensifies Self-Rescue Efforts Amid Liquidity Crisis as SZMC Provides Major Support

In the midst of continued challenges within the real estate sector, Vanke's every move has drawn close market scrutiny. Between June 10 and 12, the company executed a rapid divestment of 72.956 million A-shares via centralized bidding, at an average price of RMB 6.57 per share, generating RMB 479 million in just three days. This action underscores the urgency of Vanke's broader self-rescue efforts.

Facing its most severe liquidity pressures to date, Vanke is contending with a record debt peak. According to its annual report, as of the end of 2024, the company’s short-term interest-bearing debt stood at RMB 158.28 billion, while monetary funds amounted to only RMB 88.16 billion, resulting in a cash-to-short-term debt ratio of just 0.56. Its net gearing ratio rose to 80.6%, an increase of 25.9 percentage points from the prior year, while its asset-liability ratio, excluding pre-sales, climbed to 68.5%.

As of now, Vanke’s domestic bonds total RMB 37.001 billion, with RMB 20.807 billion maturing within one year, accounting for 56.31%. The peak repayment period will fall in July, when RMB 6.263 billion is due. At the same time, the company's operating performance has weakened. In 2024, Vanke posted a net loss of RMB 49.48 billion, with revenue declining by 26.3% year-on-year to RMB 343.18 billion. Contracted sales area decreased by 26.6%, and contracted sales value fell by 34.6% to RMB 246.02 billion.

By the end of Q1 2025, monetary funds stood at RMB 75.5 billion. Short-term borrowings totaled RMB 22.855 billion, and non-current liabilities due within one year reached RMB 132.9 billion. The asset-liability ratio increased to 73.5%, signaling sustained liquidity pressure. As of May 2025, daily average turnover in the Hong Kong stock market rose 1.2 times year-on-year to HKD 242 billion.
Shenzhen Metro Group (SZMC), Vanke’s largest shareholder since acquiring a controlling stake in 2017 for RMB 66.4 billion, has become a key force in stabilizing the situation. In February 2025, SZMC assigned over ten state-owned enterprise executives to take over core positions in Vanke. This included appointing Xin Jie, Chairman of SZMC, as Vanke’s new Chairman. Management now operates with dual oversight in critical departments such as finance and legal.

Publicly, the Shenzhen SASAC reaffirmed its capacity and resources to support SZMC’s efforts through capital injections and asset transfers, aiming to ensure Vanke’s operational stability. Since the start of the year, SZMC has extended five shareholder loans to Vanke—RMB 2.8 billion, RMB 4.2 billion, RMB 3.3 billion, RMB 1.552 billion, and RMB 3 billion—amounting to a total of RMB 14.852 billion. The loans, offered at a 2.34% annual rate and due at maturity, are designated for repaying public bond principal and interest.

Simultaneously, Vanke has accelerated its asset disposal strategy. In January, it sold a 49% stake and management rights in the Hongshuwan Project to SZMC for RMB 1.292 billion, well below its book value of RMB 3.4 billion. From June 10 to 12, the company also sold repurchased shares acquired in 2022 for RMB 1.292 billion, generating RMB 479 million in liquidity. Though the sale occurred at a loss, it allowed the firm to raise critical funds quickly.

Internally, Vanke is realigning its business model. Since 2024, the company has refocused on its core sectors: residential development, property services, and long-term rentals, while exiting areas like logistics and education. In Q1 2025, revenue from its long-term rental business rose 6% year-on-year to RMB 884 million. Government-subsidized rentals comprised 47% of its 125,000-unit portfolio, achieving a 93.9% occupancy rate.

Contracted sales in Q1 reached 2.54 million square meters and RMB 34.92 billion, with collection rates exceeding 100%. Several projects—such as "Ideal Huadi" in Guangzhou and properties in Shanghai, Hangzhou, and Tianjin—achieved clearance rates above 80%.

Policy support has also played a role. Since the central government’s call in September 2024 to “stabilize and reverse the property market decline,” commercial housing sales from January to February fell just 5.1% year-on-year, improving from the 2024 full-year drop. Local governments are also expanding subsidized housing programs to absorb existing inventory.

New monetization strategies are also emerging. On May 22, Hangzhou Anju Group acquired two blocks of Vanke’s “He Yu Guangnian” project, marking the city’s first conversion of commercial property into public rentals. This transaction unlocked 4,152 square meters in assets.

Vanke has also begun acquiring low-cost land in Zhengzhou and Wuhan, employing a “small-scale, fast-turnover” approach to improve cash flow. In tandem, its long-term rental platform “Boyu” recently partnered with SZMC Real Estate, establishing a leasing operation agreement under the Transit-Oriented Development (TOD) model. This aligns infrastructure and residential developments to maximize asset value and rental income.

While industry headwinds remain, Vanke’s multi-pronged strategy—backed by state capital and internal reforms—aims to stabilize operations and rebuild cash flow. Ultimately, its survival depends not only on meeting debt obligations, but also on restoring the financial viability of its core business.