Huge loss of 88.5 billion yuan! Under the trillion-yuan funding gap, Vanke stands on the edge of a cliff

(Source: Caixin)

Is the worst annual report still coming in the next year?

On the evening of March 31, Vanke A released its 2025 annual performance report. This financial report, issued under the shadow of a liquidity crisis, announced to the market with record-breaking losses that this leading real estate company is suffering through deep industry adjustments. When “survive” shifts from a slogan to a real challenge, Vanke’s financial data is no longer just a reflection of operational results but also a survival record of self-rescue on the edge of a cliff.

Financial report amid massive losses

In 2025, Vanke delivered its worst-ever performance in company history. The financial report shows that during the reporting period, the company achieved operating revenue of 233.43B yuan, down 31.98% year-over-year; net profit attributable to shareholders recorded a loss of 88.56B yuan, an 78.98% increase in loss compared to the same period last year.

This figure not only broke the annual loss record for A-share real estate companies but also exceeded the previously estimated loss of 82 billion yuan.

More notably, the composition of the losses is worth attention. In 2025, Vanke A added credit impairment losses of 34.17B yuan and asset impairment losses of 21.93B yuan, totaling 56.1B yuan, accounting for 63.35% of the total net loss.

This means that over 60% of Vanke’s losses in 2025 did not come from cash losses on sales but from management’s “revaluation of book assets.”

The dramatic changes in the balance sheet directly reveal the depth of the crisis. By the end of 2025, Vanke’s total assets were 1.02 trillion yuan, a decrease of 20.65% from the end of the previous year; net assets attributable to shareholders of the listed company were only 116.9 billion yuan, down 42.32% from the previous year. The asset-liability ratio rose to 76.89%, and the net debt ratio soared from 80.60% to 123.48%.

Regarding inventories and other receivables, as of the end of 2025, Vanke’s newly provisioned inventory impairment was 10.2k yuan, mainly for projects such as Foshan Puyue Mountain, Guangzhou Zengcheng Vanke City, and Shenzhen Luohu Food Building, which had higher acquisition costs; the balance of other receivables was 237.1 billion yuan, with corresponding bad debt provisions of 61.7 billion yuan; at the same time, bad debt losses recognized in profit and loss for other receivables reached 33.7 billion yuan.

It is worth noting that at the end of 2025, Vanke held 20.83B yuan in cash and cash equivalents, while short-term loans and non-current liabilities due within one year reached 67.24B yuan and 136.65 billion yuan respectively. Considering that nearly 6 billion yuan of the company’s cash is restricted, Vanke’s funding gap exceeds 100 billion yuan.

Additionally, in 2025, Vanke’s net operating cash flow turned negative, with a net outflow of 988 million yuan, indicating that its core business’s cash-generating ability is now very weak.

Debt rescue and liquidity crisis

Facing concentrated debt maturities, Vanke is using extensions as its core strategy, exchanging time for space. The annual report clearly states that starting from November 2025, the company has been negotiating extensions for two medium-term notes, “22 Vanke MTN004” and “22 Vanke MTN005,” as well as the “H1 Vanke 02” corporate bonds, and has obtained approval from bondholders’ meetings before the report was disclosed.

Extension agreements do not come without costs. The financial report reveals that the traces of debt restructuring are hidden in multiple accounts. According to the report, Vanke’s major shareholder, Shenzhen Iron and Steel Group, had provided a total of 33.52 billion yuan in shareholder loans by the end of 2025, which has become a critical lifeline for maintaining short-term liquidity.

More concerning are the off-balance-sheet contingent liabilities and risks. The report shows that by the end of 2025, Vanke’s actual guarantee balance for subsidiaries reached 26.33B yuan, accounting for over 80% of net assets. Among these, guarantees for debtors with direct or indirect asset-liability ratios exceeding 70% totaled 63.1 billion yuan. This means that if any guaranteed party experiences operational deterioration or defaults, Vanke will have to fulfill the guarantee obligations, causing a secondary impact on its already fragile cash flow.

A series of financial data reveal a harsh reality: Vanke is currently undergoing a “shock-style” financial restructuring. The record losses are not solely due to the genuine evaporation of operating cash flow but also from the concentrated liquidation of assets accumulated under high leverage and high land prices. Even after all non-operational impairments are accounted for, Vanke’s short-term debt repayment gap in 2026 remains huge, and its reliance on shareholder extensions and borrowings to sustain operations—against a backdrop of negative operating cash flow—means its “safety cushion” remains fragile. Whether this “worst-ever annual report” marks the beginning of Vanke’s rebirth or the prelude to an even deeper crisis remains to be seen over time.