Vanke's 2025 revenue is 233.4 billion yuan; overcoming risks and challenges is still a work in progress.

What are the underlying factors behind AI · Vanke’s expanding losses?

Jiemian News Reporter | Wang Yuhan

On the evening of March 31, Vanke disclosed its 2025 annual report. The financial report shows that the company’s total operating revenue for the year was 233.43 billion yuan, down 32.0% year-on-year; net profit attributable to the parent was -88.56 billion yuan, with losses expanding by 78.98% compared to 2024; contracted sales amounted to 134.06 billion yuan, a decrease of 45.5% year-on-year; and the company delivered over 117k units of housing throughout the year.

In the annual report “To Shareholders,” Vanke management frankly stated: “In 2025, the company’s performance was affected by multiple factors, and results fell far short of shareholders’ expectations, with losses further widening compared to 2024. For this, the company’s management sincerely apologizes to all shareholders.” At the same time, management noted, “Resolving the burdens and issues formed by the past ‘high debt, high turnover, high leverage’ growth model still requires time.”

Despite the deep losses, Vanke has continued to push forward in risk mitigation over the past year. Through revitalizing existing resources, large-scale asset transactions, and support from major shareholder Shenzhen Metro Group, Vanke completed 33.21 billion yuan in public debt repayments for the year, accumulated asset value of 33.85 billion yuan, and since November last year, the company has successively initiated negotiations for extensions on three public bonds, which have been approved.

Performance Under Pressure

Looking at the revenue structure, real estate development remains Vanke’s core segment, contributing 190.65 billion yuan for the year, a 36.7% decrease year-on-year, making it the main reason for revenue decline, accounting for 81.7%; property management services performed relatively steadily, contributing 35.52 billion yuan, up 7.2%, accounting for 15.2%.

Sales pressure is also significant. In 2025, Vanke achieved a sales area of 10.25 million square meters and sales amounting to 134.06 billion yuan, with both figures decreasing by over 40% compared to the previous year.

Vanke’s financial overview, screenshot from Jiemian News based on the financial report

Regarding the performance losses, Vanke provided four explanations in the financial report: First, the settlement scale of real estate development projects declined significantly, and gross profit margins remained low. The settlement profit mainly relates to projects sold in 2023 and 2024, and the inventory of completed homes to be digested in 2025. These projects have high land costs, and sales have fallen below expectations.

Second, additional provisions for credit impairment and asset impairment were made. The report disclosed that in 2025, Vanke added inventory impairment provisions of 20.83 billion yuan based on market conditions and project realities, with total asset impairment losses reaching 21.93 billion yuan, a 205.9% increase year-on-year. Even excluding impairment impacts, the company still recorded substantial operational losses for the year.

Third, some operating businesses incurred overall losses after depreciation and amortization, along with losses from some non-core financial investments. Fourth, the prices of some large-scale asset and equity transactions were below book value.

Debt Repayment Pressure Remains

On the financial front, as of the end of 2025, Vanke’s interest-bearing liabilities totaled 358.48 billion yuan, with 160.56 billion yuan due within one year, accounting for 44.8%. The company held 67.24 billion yuan in cash and equivalents, a decrease from the beginning of the year. The net debt ratio rose to 123.5%, an increase of 42.9 percentage points from the end of 2024, with the asset-liability ratio at 76.9%.

From the cash flow statement, the net cash flow from operating activities for the year was -0.99 billion yuan, and net cash outflow from financing activities was 24.92 billion yuan, reflecting ongoing liquidity pressures.

In response to debt pressures, Vanke’s major shareholder Shenzhen Metro Group continues to play a key supportive role. The financial report shows that as of the report date, Shenzhen Metro Group had provided a total of 33.52 billion yuan in shareholder loans to Vanke, with loan interest rates and collateral levels better than market norms.

Notably, starting from November 2025, Vanke has initiated extension negotiations for two medium-term notes, “22 Vanke MTN004” and “22 Vanke MTN005,” as well as “H1 Vanke 02” (formerly “21 Vanke 02”) corporate bonds. As of the report disclosure date, the extension proposals had been approved by bondholder meetings, marking an important turning point in Vanke’s public market debt management.

At the investor conference, Vanke management also assessed the company’s current debt situation: “Affected by multiple internal and external factors, the company’s current operating situation remains very severe.” They admitted that historically, the company failed to timely break free from the inertia of “high debt, high turnover, high leverage,” leading to issues such as “scattered investment layouts, over-expansion across multiple sectors, and heavy reliance on headquarters financing,” which pose significant challenges to current risk resolution efforts.

Regarding debt repayment plans for 2026, Vanke revealed that a total of 14.68 billion yuan of public bonds will mature within the year, with a peak from April to July, when about 11.27 billion yuan of debt will be due. Vanke stated it will maintain honest and pragmatic communication with creditors, “earnestly requesting continued understanding, support, and tolerance, and giving the company time and space to resolve risks.”

In addition to relying on major shareholder support, Vanke is actively seeking self-rescue through various means. In asset revitalization, the company completed 31 large-scale asset transactions in 2025, covering office, commercial, apartment, and hotel sectors, with a total signed amount of 11.3 billion yuan and realized cash inflows of 5.75 billion yuan. Through revitalizing existing resources, the company added and optimized capacity worth 33.85 billion yuan.

Relatively Stable Operating Business

Contrasting with the decline of traditional development business, Vanke’s operating services maintained growth. In 2025, this segment’s total revenue reached 58.01 billion yuan, further increasing its proportion of total revenue.

Specifically, Vanke Cloud achieved revenue of 37.36 billion yuan (including income from services provided to Vanke Group), up 2.5%. During the reporting period, Vanke Cloud completed over 300 efficiency upgrades for the Butterfly City project, and the large-scale application of AI intelligent agents helped reduce management costs by 10.1%.

The long-term rental apartment business “Boju” managed 270.2k units, with 197.8k units opened, and a leasing rate of 95.4%, including 132k units in affordable rental housing; in commercial development and operation, the projects managed by Inly had an overall occupancy rate of 94.5%, with Shanghai Qianwan Impression City MEGA successfully opening, becoming a new city-level benchmark; logistics and warehousing revenue reached 4.28 billion yuan, up 8.0%, with cold chain revenue increasing by 25.5%.

“The company’s various operating service businesses have become relatively independent and have achieved scale and brand advantages,” Vanke management said at the analyst meeting.

Additionally, on the financing side, Vanke added 28 billion yuan in new financing and refinancing in 2025 (excluding shareholder loans). The average cost of existing financing was 3.02%, down 85 basis points from the end of last year.

However, the inventory structure still exerts pressure on Vanke. As of the end of 2025, inventory amounted to 373.74 billion yuan, including 114.45 billion yuan of completed development products (existing homes), accounting for 30.6%.

Focus on Risk Resolution and Development

Looking ahead to 2026, Vanke proposed in its annual report to focus on two themes: “risk resolution” and “development.” On one hand, the company will firmly promote urban and business focus, decisively exit cities and sectors with poor prospects, weak profitability, and heavy historical burdens, overhaul investment mechanisms, and concentrate on key cities, core sectors, and advantageous products.

On the other hand, Vanke will continue to enhance product and service capabilities, aiming for “good housing” standards, integrating product strength, construction quality, delivery, and service. It will also explore business model innovation, providing full-cycle, full-chain real estate operation services for high-quality corporate clients.

In terms of technological empowerment, Vanke plans to fully promote AI technology applications across all stages of real estate development and operation, accelerate building a large membership system and enterprise customer platform, and achieve precise customer acquisition.

When asked about valuation enhancement, Vanke management admitted that the stock price performance since early 2025 has “indeed been unsatisfactory, and has not created ideal returns for investors.”

They stated that valuation recovery depends on debt resolution, optimization of debt-asset structure, stabilization of development operations, and substantial improvement in profitability. The company will continue to divest businesses and assets with low strategic alignment, further optimize cash flow and asset-liability structure.