Another Quarterly Loss, Weaker Sales
Vanke disclosed on Thursday that it recorded a 8.99 billion yuan loss in the September quarter, equal to $1.35 billion. The deficit improved from the 16.1 billion yuan loss in the prior-year period but extended a string of red ink.
Demand stayed soft. Contracted sales fell 48.3% from a year earlier in the quarter. Over the first nine months, revenue dropped 35% to 105 billion yuan.
Home-price declines have started to moderate as policymakers support the market, yet prices are still falling in a wide range of provincial centers and smaller municipalities that host the bulk of Vanke's projects. Vanke has remained current on its debts even as the downturn grinds on, but it has dealt with a cash squeeze for over two years and has repeatedly sought deadline extensions from bond investors.
Balance Sheet Strain and State Support
Liquidity tightened further, as cash and cash equivalents fell by over 20% to 46.86 billion yuan; interest-bearing debt stood at roughly 348.8 billion yuan. The company flagged ongoing headwinds, including heavier debt obligations and tax-related legal disputes involving subsidiaries.
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Shenzhen Metro has been a critical funding backstop. The state-owned rail operator provided loans exceeding 30 billion yuan last year that helped retire public debt, and it added roughly 4.5 billion yuan this year. While that backing tapered late last year, improved terms agreed in May signaled the lender has not walked away.
Meanwhile, Shenzhen authorities have assumed full control of Vanke's board. Chairman Xu Enli joined in July after nearly twenty years at state-owned entities in the city, and President Huang Yu previously worked at the local financial regulator. Also in July, six non-independent directors were elected, all hailing from various state-owned firms in Shenzhen.
A Bond Maturity Test Is Coming
The next pressure point lands in mid-December, when a 3% yuan bond - already extended from its original due date late last year - reaches maturity. It is unclear whether Shenzhen Metro will step in again as more bond payments approach.
Vanke said it will prioritize reducing risks, upgrading product quality, and continuing to refine asset sale plans. The bottom line: watch how the company navigates the December bond, whether state-linked support widens, and how cash, sales, and asset disposals trend. Those signals will ripple through Chinese property exposure across credit and equities.
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