Chinese real estate developer Vanke, a major state-owned enterprise under Shenzhen SASAC, continued to experience significant losses in the first quarter of 2025, following a nearly 50 billion yuan net loss in 2024. This indicates the increasing operational pressures faced by this large-scale real estate enterprise.
On April 29, Vanke Corporation released its first-quarter report for 2025. The report revealed that the company achieved an operating income of 37.995 billion yuan in the first quarter, a 38.31% decrease compared to the previous year. The net profit attributable to the company’s shareholders was a loss of 6.246 billion yuan, a significant drop of 1625.63% year-on-year. This performance reflects the severe operational challenges that Vanke is confronting amid the prolonged downturn in the real estate industry.
In the previous year, Vanke’s 2024 financial report had already shown a full-year net loss of 49.478 billion yuan, a decrease of 506.79% compared to the previous year, making it one of the A-share market’s largest loss-making listed companies in 2024. The company’s operating income in 2024 was 343.176 billion yuan, down 26.32% year-on-year, primarily affected by decreased settlement income from real estate development business, declining gross profit margin, and asset impairment provisions. The further decline in revenue and net profit in the first quarter of 2025 indicates that industry risks have not been fully resolved.
According to the report, Vanke’s first-quarter losses in 2025 mainly stemmed from the shrinking scale of settlement income in real estate development business and the continued pressure on gross profit margins. The company’s settlement income from real estate development business saw a year-on-year decline, and the gross profit margin further decreased compared to the same period in 2024. Additionally, the company made significant provisions for credit losses and inventory write-downs, which significantly impacted its profit performance. Moreover, in order to expedite fund recovery, Vanke accelerated the disposal of assets and equity, with some transaction prices lower than book values, leading to additional losses.
In terms of business progress, Vanke completed the delivery of 10,400 housing units in the first quarter, achieving a total contract sales amount of 34.92 billion yuan, a decrease of 39.8% year-on-year. The contract sales area was 2.54 million square meters, down by 35.1% year-on-year. The settlement area reached 2.031 million square meters, with a settlement amount of 22.8 billion yuan, showing declines of 36.2% and 51.1% respectively.
Vanke Group is one of China’s largest real estate developers, with operations including residential development, property management, and commercial real estate, headquartered in Shenzhen. Since 2017, Shenzhen Metro Group has been the largest shareholder of Vanke, and the former is under Shenzhen SASAC. As of March 31, 2025, Vanke’s total debt amounted to 914.065 billion yuan.
Facing liquidity pressures, Vanke has implemented various self-rescue measures, including continued support from Shenzhen SASAC and Shenzhen Metro Group. In February 2025, the two entities provided a total of 7 billion yuan in shareholder loans to Vanke to help alleviate short-term debt pressures. However, as of the end of 2024, Vanke’s interest-bearing debt was as high as 361.28 billion yuan, with 43.8% of debt maturing within a year, and the short debt coverage ratio of monetary funds was only 55.7%, indicating that liquidity risk cannot be overlooked.
Data released by the China Index Research Institute previously indicated that the total annual sales of China’s top 100 real estate companies decreased by 30.6% in 2024, with a further 9.8% year-on-year decline in sales for the first quarter of this year. Industry analysts suggest that the underperformance in the real estate market and the incomplete manifestation of policy effects are the main reasons for the pressure on Vanke’s performance.