China’s once real estate giant Vanke Group is now facing deep financial troubles. The third-quarter report for 2025 showed that the company incurred a net loss of 28.02 billion yuan in the first three quarters, with a sales volume plummeting by 44.6% compared to the previous year. To survive the dire situation of having 362.9 billion yuan in interest-bearing debts and only 65.6 billion yuan in cash, Vanke has been relying completely on continuous loans from its major shareholder, the Shenzhen Metro Group, while also selling off assets in a bid to survive.
Vanke’s third-quarter report released on October 30 revealed that the company generated operating income of 56.07 billion yuan in the third quarter of this year, a 27.3% decrease year-on-year. Its net profit attributable to the parent company showed a loss of 16.07 billion yuan, plunging by 98.61% compared to the same period last year, with the quarterly losses exceeding the total losses in the first half of the year.
The overall revenue for the first three quarters of this year stood at 161.39 billion yuan, a 26.6% decline year-on-year, with a net loss of 28.02 billion yuan, marking an 83% decrease compared to the same period in the previous year, indicating a further widening loss margin than in the first half of the year.
Behind the losses lies a collapse in profitability. The pre-tax gross profit margin for the real estate development business was only 7.8%, and the post-tax gross profit margin was as low as 2.0%, indicating that Vanke is barely making any profit from property sales.
Adding insult to injury, during the reporting period, Vanke added a provision for inventory depreciation of 9.193 billion yuan, bringing the cumulative balance of inventory depreciation provisions to 22.732 billion yuan. Moreover, some asset transactions and equity disposals were priced below the book value, further dragging down the company’s performance.
As of the end of September, Vanke’s asset-liability ratio had climbed to 73.5%, with interest-bearing debts as high as 362.93 billion yuan, while its monetary funds amounted to only 65.68 billion yuan. The company candidly admitted in its report, “Sales continue to decline, the overall operating situation is extremely severe, the tight funding situation is further exacerbated, and debt repayment faces significant pressure.”
The core business of Vanke, real estate development, remains stuck in a quagmire. Data shows that from January to September this year, Vanke accumulated a total contracted sales area of 7.751 million square meters, with a total contracted sales amount of 100.46 billion yuan, plummeting by 41.8% and 44.6% respectively year-on-year.
Although the sales performance during the “Golden Week” holiday was decent – achieving a subscription amount of 4.77 billion yuan without new projects launched, with a target completion rate of 137% – the highlights of a single month cannot hide the overall downward trend for the year. As of the end of September, Vanke had unsold resources totaling 13.216 million square meters, corresponding to a contract amount of approximately 154.81 billion yuan, indicating that a large amount of sales revenue has yet to be converted into cash flow.
Announced on the same day as the third-quarter report was the Shenzhen Metro Group’s 11th loan support to Vanke. This time, Shenzhen Metro will provide Vanke with a loan of no more than 2.2 billion yuan specifically for repaying public market bond principal and interest. The loan term will not exceed three years and can be extended with Shenzhen Metro’s approval.
Up until now, the total shareholder loans provided by the Shenzhen Metro Group to Vanke have reached 29.13 billion yuan. These 11 loans come with favorable conditions: all 10 loans have a three-year term and allow for extensions, with an interest rate staying at around 2.34%, significantly lower than the current market level.
Shenzhen Metro currently holds a 27.18% stake in Vanke, making it the largest shareholder of the company. Its continuous financial support has become the lifeline for Vanke’s operations. It is worth noting that the earlier loans were mainly secured with Vanke shares of Evergrande, with a high pledge rate of 70%; however, since June 2025, the disclosures in the announcements no longer explicitly state the collateral.
Market analysts point out that this may indicate that Vanke’s high-quality assets have been largely pledged, leading to a tightening availability of core assets for financing. While Shenzhen Metro’s support is a lifesaver, it also means that Vanke’s debt burden continues to expand, deepening its reliance on the major shareholder.
To alleviate the liquidity crisis, Vanke is accelerating the disposal of non-core assets. In the first three quarters of this year, the company completed major bulk transactions for 19 projects, realizing a contracted amount of 6.86 billion yuan.
Regarding debt repayment, as of the disclosure date of the report, Vanke has repaid 28.89 billion yuan in public debt, with no concentrated maturity pressure for overseas public debt before 2027. Apart from shareholder loans, the company added new financing and refinancing of 26.5 billion yuan in the first three quarters, lowering the comprehensive cost of new domestic financing to 3.44%.
Since 2022, the real estate industry in China has been facing net losses for several years.
WIND data shows that as of October 31, 77 A-share listed real estate companies have disclosed their third-quarter reports for 2025. Looking at the performance in terms of revenue, 41 of these companies reported a net loss for the period, with a combined total loss of 87.216 billion yuan.