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South China Morning Post
28-01-2025
- Business
- South China Morning Post
China Vanke's reshuffle signals bailout for troubled developer, analysts say
Published: 2:30pm, 28 Jan 2025 The Shenzhen government is likely to bail out China Vanke , allowing the troubled mainland Chinese developer to overcome its liquidity problems, according to industry observers. Following the board changes announced on Monday, Vanke's shares surged by as much as 6.89 per cent on Tuesday, before paring gains to close 2.1 per cent higher at HK$5.78. Vanke, once China's second-largest developer by sales, named Xin Jie as its new chairman. Xin is also the chairman of state-owned Shenzhen Metro Group, or SZMC, the company's largest shareholder. The financial muscle of Vanke's main backer should be sufficient to rescue the developer, according to Raymond Cheng, managing director at CGS International. He pointed out that SZMC is backed by the Shenzhen State-owned Assets Supervision and Administration Commission, which has assets of more than 5 trillion yuan (US$689 billion), while SZMC has assets of 800 billion yuan of its own. 10:57 Boom, bust and borrow: Has China's housing market tanked? Boom, bust and borrow: Has China's housing market tanked? Cheng said a rescue 'could give rise to three positive changes for Vanke', namely give confidence to financial institutions to extend loans, reduce discounts on its asset sales and boost homebuyers' belief in its projects.
South China Morning Post
27-01-2025
- Business
- South China Morning Post
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.
