Vanke's June Contracted Sales Rose Slightly by 13.6% Month-on-Month; Focus Remains on Debt Resolution and Asset Disposal Progress

In June 2024, Vanke recorded contracted sales amounting to RMB 20.12 billion—a 13.6% increase compared to the previous month but a 38.4% decline compared to the same period last year. The company sold a total of 1.372 million square meters, with an average price per square meter at RMB 14,659. Across the first half of 2024, accumulated contracted sales reached RMB 114.71 billion, showing a year-on-year drop of 45.6%, with the total sales area coming in at 8.75 million square meters.

Soochow Securities observed that while June’s figures displayed a moderate recovery from May, the overall sales results continued to face downward pressure. In June 2023, Vanke posted sales of RMB 32.66 billion, marking the noted 38.4% year-over-year decline. Despite remaining relatively low, the June 2024 figure slightly outperformed market forecasts. The firm commented that although the real estate sector remains subdued, leading developers are exhibiting comparative strength, and policy support may contribute to a mild recovery in the latter half of the year.

Beyond the sales uptick, Vanke reinforced market confidence through its refinancing efforts. On July 22, the company issued a RMB 1.5 billion medium-term note with a 3+2-year structure and a 3.19% coupon rate. Classified as a green and sustainable bond, the capital raised is earmarked for construction projects and debt restructuring. This issuance falls under a RMB 12.5 billion medium-term note program approved by the Shanghai Stock Exchange in March 2024, with RMB 6.5 billion already issued and RMB 6 billion still remaining.

Vanke has actively pursued asset divestment throughout 2024. A source familiar with company operations reported the sale of various holdings, including shares in publicly listed firms, stakes in commercial and logistics ventures, and land reserves. On July 19, Vanke announced that its wholly owned subsidiary, Shenzhen Vanke Logistics Development Co., Ltd., finalized a capital increase agreement with Shenzhen Metro Hong Kong Investment Co., Ltd. Under this arrangement, the subsidiary’s registered capital rose by RMB 1.79 billion, with Shenzhen Metro investing RMB 2.13 billion for a 30% ownership stake. These funds were fully received by June 28.

Shenzhen Metro’s disclosure on the same day revealed that Vanke Logistics operates 27 warehouse logistics parks across 20 major cities, including Beijing, Shanghai, Shenzhen, Guangzhou, Hangzhou, and Suzhou. For 2023, the logistics division reported revenue of RMB 1.588 billion and net profit of RMB 73 million. By year-end, total assets stood at RMB 17.486 billion, with net assets valued at RMB 5.429 billion. Shenzhen Metro emphasized that the capital increase aligns with its strategic goal to grow logistics and commercial businesses, further strengthening its collaboration with Vanke.

According to one market analyst, although Vanke’s logistics holdings do not represent core profit centers, the Shenzhen Metro investment highlights their capacity to generate cash. The backing from a state-owned entity also signifies robust external financial support.

In contrast to the swift completion of the logistics deal, the Shenzhen Bay Super Headquarters Base project remains unresolved. A source told Jiemian News that multiple investors have shown interest in acquiring the project since early 2024, but no agreement has been finalized. The source noted that while negotiations continue over technical and financial terms, both parties demonstrate strong intent to proceed.

The project spans a proposed construction area of roughly 1.3 million square meters. Vanke previously reported receiving a RMB 2 billion deposit and confirmed that its subsidiary signed an equity transfer agreement involving Shenzhen Qianhai Youyou Property Co., Ltd. The transaction value is estimated at RMB 13.435 billion, though the buyer’s identity remains undisclosed. The deal includes provisions for termination and refund of the deposit under specific conditions. No formal updates have been provided since the original announcement.

Vanke is managing notable debt levels, with interest-bearing obligations totaling RMB 345.48 billion at the end of 2023. As announced in May, the company intends to cut these liabilities by over RMB 100 billion by 2025. Approximately RMB 30 billion had already been reduced by the time of disclosure.

Soochow Securities reported that over 70% of Vanke’s interest-bearing debt matures beyond 2026, indicating a balanced debt timeline. By the close of Q1 2024, the company held RMB 42.8 billion in unrestricted monetary resources. Vanke also possesses a strong portfolio of high-quality rental housing and commercial assets, which continue to yield steady cash flow. From a long-term financial perspective, Soochow Securities assesses the company's solvency as stable, with minimal risk of default.

Nevertheless, the firm also highlighted that both sales performance and debt reduction in the first half of the year were considerably below expectations. Going forward, Vanke’s stock valuation is likely to hinge on the tangible progress of refinancing efforts and ongoing asset sales.