What’s new: Real estate giant China Vanke Co. Ltd. (000002.SZ) has reported a 45.7% plunge in net profit attributable to shareholders to 22.5 billion yuan ($3.5 billion) for 2021, according to annual earnings published this week.
At a press conference Wednesday, Vanke Chairman Yu Liang attributed the decline to a lower gross profit margin and falling returns from some investments. Revenue of the Guangdong province-based company rose 8% to 452.8 billion yuan last year.
To lift investors’ confidence, Vanke plans to buy back some of its Chinese mainland-traded A-shares using 2 billion yuan to 2.5 billion yuan over the next three months.
The context: China’s real estate sector has faced a liquidity crunch since late last year as regulatory curbs on borrowing have left many private developers struggling to pay back their debts, weakening confidence among investors and homebuyers and driving a slump in sales.
Although Vanke, a state-owned company, has not been hit by a debt and liquidity crisis, its chairman said the company is facing a battle this year for “life or death” as it plans to cut some unnecessary positions at its headquarters to save money.
Related: Facing a Tough Year Ahead, Chinese Developers Trim Fat
Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Flynn Murphy (flynnmurphy@caixin.com)
Get our weekly free Must-Read newsletter.
