1862 key employees of Vanke stood in the front

Author | Cao Anxun

Editor | Zhou Zhiyu

As the aftermath of the industry adjustment storm lingers and the effects of new policies begin to show, the determination and actions of self-rescue have become the sharp sword for real estate companies to navigate through the storm. Vanke understands this well and has launched a new round of shareholding plans.

On July 9th, Vanke announced that 1,862 key management personnel of the company plan to raise funds of 200 million yuan within 6 months to increase their holdings of the company's A-share stocks.

This is also the largest amount and number of participants in the ten years that the Vanke management team has increased their holdings of Vanke stocks. Unlike many listed companies that set a price limit in their shareholding plans, Vanke's shareholding this time does not set a price range, and the shares held will be voluntarily locked for two years.

Vanke stated that the management team and key personnel of the company are making the maximum effort within their capabilities to increase their holdings, in order to express full confidence in the company's prospects and a firm determination to work together.

Some industry experts believe that Vanke's shareholding this time, whether in terms of amount, price range, or lock-up period, reflects a sincere willingness to spare no cost, which is also more confidence-boosting for the market.

Fang Peng, an analyst at Guojin Securities, stated that in the first half of the year, Vanke pursued cash flow, increased inventory turnover, and asset disposals, leading to increased performance pressure. However, the behavior of key employees planning to increase their holdings of the company's A-share stocks has enhanced investor confidence.

According to Vanke's forecast on July 9th, the net profit attributable to shareholders in the first half of the year is expected to be a loss of 7 to 9 billion yuan.

This forecast for the most difficult half-year in history is a side view of Vanke's experience in the transformation and adjustment storm. The Vanke management has made a frank explanation, stating that the expected loss in net profit is mainly due to a significant increase in settlement scale in the second quarter compared to the first quarter, as well as losses from some asset disposals starting in the second quarter.

For Vanke's interim report, the market has long anticipated it. The lag in real estate settlement requires Vanke to still foot the bill for the land acquired around 2021. The willingness of Vanke's management to increase their holdings with real money, standing shoulder to shoulder with the company, facing difficulties head-on, also shows investors the determination of this leading player in the real estate industry.

As of the close on July 12th, Vanke's A-share price was 6.95 yuan per share, up 2.06%, rising for two consecutive days.

For Vanke, the current focus should be on the operation and cash flow situation, which is crucial for Vanke to smoothly overcome the pains.

It is gratifying that Yu Liang's "slimming and strengthening" solution has begun to show results.

Currently, Vanke's financing cash flow is sufficient. Several state-owned and commercial banks such as China Merchants Bank, Bank of China, and Agricultural Bank of China are supporting Vanke. In the first half of the year, Vanke obtained over 60 billion yuan in new financing and refinancing, corresponding to the repayment of over 50 billion yuan in debt.

Among them, the 20 billion yuan syndicated loan led by China Merchants Bank, which only top central enterprises have been able to obtain in the past few years, is one of the largest single loans in the real estate sector in recent years, allowing Vanke to safely pass a hurdle.

Having passed the peak of debt repayment in the first half of the year, Vanke has no more overseas public bonds in the second half of the year, with only 2 domestic public bonds remaining, which will be repaid through operating cash flow, syndicated loans, and other channels At the same time, Vanke is also speeding up its "slimming down" process. In the first half of the year, Vanke realized a return of 9.34 billion yuan through asset transactions. Even assets such as Qibao Vanke Plaza and Nanxiang Impression City MEGA, which were previously kept in reserve, have been put on the shelves.

While accelerating cash flow, Vanke is also pushing towards focusing on three main businesses: comprehensive residential area development, property services, and rental apartments.

In terms of development business, Vanke achieved a total sales revenue of 126.72 billion yuan in the first half of the year, ranking third in the industry. The gross profit margin of sold parts of projects exceeded 18%; the rental housing sector also maintained a leading position in the industry, with Vanke Bo Yu's GOP profit margin reaching 90.1% in the first half of the year, expanding to 15,000 units, an 85.3% year-on-year increase.

Vanke's cloud business has also matured and its profitability has increased against the market trend. After achieving double-digit growth in revenue and core net profit since its listing last year, it has entered a stage of refined operation, with nearly 200 million yuan in efficiency improvement in the first half of the year.

Some investors have expressed that whether in operations or financing, Vanke has improved significantly compared to the beginning of the year, and the worst-case scenario has most likely passed.

Looking back at Vanke's situation this year, it has experienced several ups and downs, but also managed to overcome challenges.

After unveiling a comprehensive "slimming down and getting fit" plan, Vanke received support from major shareholders such as Shenzhen Metro and various financial institutions. Coupled with the "divine assistance" of new policies in the four major first-tier cities' real estate markets, Vanke has overcome adverse effects such as the simultaneous decline in stocks and bonds, landing safely.

Taking a longer-term perspective, as an old real estate company that has experienced various challenges such as the "Jun Vanke dispute" and the "Bao Vanke dispute", this may just be a wave in Vanke's forty-year history.

After more than half a year of exploration and waiting for the storm to pass, Yu Liang, the center of the storm, and the Vanke management team have a clearer understanding of the road ahead.

Vanke stated that in the second half of the year, they will spare no effort to actively implement a comprehensive plan for business restructuring and debt risk resolution, with confidence and determination to quickly return the company to a healthy development track.

They firmly believe that policies will continue to provide sustained support to the market, and the current supply level is insufficient both in terms of total quantity and structure. The demand in the next ten years can fully guarantee an annual starting volume of 10-12 billion square meters. "As long as the industry survives, there will definitely be opportunities."

Data from CRIC shows that in June, the total sales amount of the top 100 real estate companies increased by 32.5% month-on-month, with a narrowing year-on-year decline, and multiple core cities showed signs of stabilization in transactions. Since April, Vanke's own sales have also been increasing month by month.

Compared to real estate companies like Gree Real Estate and Midea Property that are "de-realizing", it is even more rare to see industry stalwarts. It is the presence and innovation of these stalwarts that will gradually modernize and standardize the industry's development.

Riding on the warm breeze of the recovery in core city real estate markets, with continued efforts, Yu Liang is also expected to lead the management team and core staff to see clearly and return to the path of development, providing a positive example for the industry's transformation