China Vanke forecasts record US$6.2 billion loss, shuffles management
Embattled builder China Vanke , once the second-largest Chinese developer by sales, reshuffled its management while forecasting a record US$6.2 billion net loss for 2024 as it struggles to get out from under US$4.9 billion in debt maturing this year. The company named a chairman with a state-linked background, sending positive signals about its ability to pay its debts after a bond sell-off triggered ratings downgrades from Fitch Ratings and S&P Global a week ago. The news boosted prices of Vanke's bonds.
Yu Liang resigned as chairman due to 'work adjustment reasons', but would remain with the company as a director, Vanke said in a filing with the Hong Kong stock exchange on Monday. The new chairman Xin Jie is also chairman of state-owned Shenzhen Metro Group, the developer's largest shareholder.
With assets of more than 5 trillion yuan (US$689 billion), the Shenzhen State-owned Assets Supervision and Administration Commission (SSASAC) has 'the ability, strength and enough 'bullets' to support Shenzhen Metro Group to promote a stable development of Vanke through all possible means', an SSASAC representative said on Monday, according to state-owned newspaper Nanfang Daily.
The asking price of Vanke's bond maturing in 2025 advanced 11 per cent, while the asking price of its bond maturing in 2029 rose 9 per cent, according to Dealing Matrix, a bond information provider.
Vanke said in a separate filing that it expects a net loss of 45 billion yuan for 2024, down from a 12 billion yuan net profit in 2023, citing falling sales and profit margins, provisions for credit and inventory impairments, and losses in bulk asset and equity transactions.
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