Vanke faces an even bigger crisis! A gap of hundreds of billions between debt and cash

Ask AI · How does executive turmoil impact Vanke’s debt crisis?

Although everyone knows that Vanke (02202, HK) will not have good performance last year, perhaps no one expected it to be this bad.

Core data is shocking

On the evening of March 31, Vanke announced its 2025 financial report, with several key figures startlingly alarming, showing an intensification of weakness:

·Net loss attributable to shareholders of 88.56 billion yuan, an increase of 79% from last year’s loss of 49.48 billion yuan, marking the second consecutive year of net loss attributable to shareholders;

·Revenue of 233.4 billion yuan, down 32% year-on-year, but gross profit only 1.26B yuan, plummeting 95% year-on-year;

·Interest-bearing debt maturing within one year is 160.56 billion yuan, but cash holdings are only 67.24 billion yuan, creating a huge gap of nearly 100 billion yuan.

However, perhaps the market has already digested this negative expectation, as Vanke’s A-shares and H-shares both rose on April 1. A-shares closed up 1.25%, at 4.04 yuan RMB per share; H-shares rose 2.41%, at 2.98 HKD per share, with a total market value of 48.2 billion yuan RMB.

Vanke states that the main reasons for the performance loss are fourfold, with the most important being a significant decline in the settlement scale of the company’s real estate development projects, with gross profit margins still at low levels.

The reason is that in 2025, the company’s real estate development business mainly involves digesting inventory of completed and near-completed properties acquired at high prices in previous years. Sales and gross profit margins are both below investment expectations, and high costs have led to a sharp reduction in gross profit.

Vanke also analyzed the weak industry situation, attempting to find external reasons for its performance: in 2025, nationwide commodity housing sales area and sales amount decreased by 8.7% and 12.6%, respectively.

But, “The Group achieved sales area of 10.25 million square meters and sales amount of 134.06 billion yuan, down 43.4% and 45.5% respectively year-on-year.”

This shows that Vanke’s sales area and sales amount declined much more than the national average, by about 5 times and 3.6 times respectively.

Therefore, the main problem still lies within Vanke itself.

Losses surpass peak net profit

Looking at the data over the past eight years, Vanke’s net profit attributable to shareholders peaked in 2020, earning 41.8 billion yuan for shareholders that year. But by 2024, the situation had completely reversed, with a net loss of 49.2 billion yuan, exceeding the peak net profit amount. In 2025, it was even a complete “collapse.”

In terms of revenue, Vanke’s peak over the past eight years was in 2022, with 503.8 billion yuan, but in 2025, revenue was directly halved.

The most tragic is gross profit: Vanke’s gross profit peaked at 132.2 billion yuan in 2019, shrank significantly in 2024 but still managed to stay at 27.8 billion yuan. In 2025, it plummeted to just 1.26 billion yuan, unable to even reach the zero mark of the peak, completely unable to cover 7.4 billion yuan in sales and marketing expenses and 9.2 billion yuan in management costs.

Looking at gross profit margins by business type, Vanke’s main businesses include “real estate development and related asset management” and “property services,” accounting for 81.7% and 15.2% of revenue respectively, with gross profit margins of -2.3% and 12.3%.

Although both margins declined compared to 2024, it can be seen that Vanke’s property services still make money, while the housing sales business is basically increasingly losing money.

Short-term liabilities nearly 100 billion yuan more than cash

In terms of liabilities, Vanke’s net debt ratio (interest-bearing debt minus cash holdings divided by total equity) is 123.5%, an increase of 42.9 percentage points from the end of 2024; the asset-liability ratio (total liabilities divided by total assets) is 76.9%, up 3.2 percentage points from the end of 2024.

The entire group’s interest-bearing debt totals 358.48 billion yuan, mostly bank loans, accounting for 71.9%.

Among them, the most critical and urgent is the interest-bearing debt due within one year, which is 160.56 billion yuan in 2025, slightly higher than 158.28 billion yuan in 2024, with a slight increase year-on-year. The proportion of interest-bearing debt also rose from 43.8% in 2024 to 44.8% in 2025.

Worse still, Vanke’s cash coverage ability has significantly deteriorated. In 2025, cash holdings are 67.24 billion yuan, a substantial decrease of 20.92 billion yuan from 88.16 billion yuan in 2024, a decline of 23.7%.

This means that in 2025, the gap between cash reserves and interest-bearing debt due within one year reaches 93.32 billion yuan, further increasing liquidity risk.

To cope with bank repayment pressure, Vanke has also made efforts.

In 2025, Vanke successfully deferred multiple public debt issuances and received shareholder support (Shenzhen Iron and Steel Group borrowed a total of 33.52 billion yuan) to ease the concentrated repayment pressure.

Vanke emphasized the latest developments in its annual report to reassure shareholders: on January 27, 2026, the main shareholder Shenzhen Iron and Steel Group will provide a shareholder loan of no more than 2.36 billion yuan RMB.

Executive turmoil storm

Compared to the eye-catching performance, Vanke’s executive turmoil is even more the talk of investors.

According to online rumors, in March 2026, Vanke founder Wang Shi, due to responsibilities related to the company’s historical operations and governance, was subject to actual outbound restrictions, and his 16-year consecutive attendance at United Nations Climate Conferences was completely interrupted.

Former Chairman Yu Liang, after reaching retirement age in January 2026, resigned from the company’s director and executive vice president positions, and has been in a restricted state, no longer making public appearances, with all related work and social interactions halted.

The former company secretary and A-share “golden secretary” Zhu Xu was formally required to refund all salary and performance bonuses received from 2021 to 2024, involving nearly 100 million yuan.

Meanwhile, former President Zhu Jiusheng was subjected to criminal compulsory measures in October 2025, and former Chairman Xin Jie, after only nine months in office, was taken away for investigation. High-level executives and project leaders in Vanke’s regions in Shenzhen, Sichuan, Yunnan, and other areas have also been involved in cases.

Under such a comprehensive accountability storm, Vanke’s disappointing annual report results were hardly surprising.

In the outlook for 2026, Vanke pointed out that it will “focus on risk mitigation and development as two major themes,” and will work on four key tasks: resolutely exit cities and businesses with poor prospects; continuously improve product and service capabilities; explore business model innovation; and strengthen AI technology empowerment.

The slogans are loud, but as for how to resolve the massive debt and turn losses into profits to make money for shareholders, Vanke has said little, and it seems there are no good solutions.