China Vanke Co.,Ltd. disclosed its first-quarter financial report for 2026 on the 29th, revealing continued significant operational pressure. During the reporting period, the company achieved operating revenue of 28.93 billion yuan, a sharp year-on-year decrease of 23.9%. The net loss attributable to shareholders of the listed company was 5.95 billion yuan, a slight improvement compared to the 6.25 billion yuan loss in the same period last year, representing a reduction of approximately 4.7%. This marks multiple consecutive quarters of losses for Vanke, with the persistent drag from its property development business remaining the core issue.
On a positive note, the overall gross profit margin recovered to 9.1%, an increase of 3 percentage points year-on-year, indicating initial success in cost control measures. Concurrently, the net cash outflow from operating activities significantly narrowed to 2.16 billion yuan from 5.79 billion yuan in the same period last year, an improvement of 62.7%, demonstrating some progress in reducing operational expenditures.
However, the downturn in the core property development business remains stark. The contracted sales value for the first quarter was only 16.77 billion yuan, plummeting 53.8% year-on-year. Recognized revenue from property development was 14.57 billion yuan, a decline of 36.1% year-on-year. Meanwhile, the asset-liability ratio remains high at 77.1%, with total interest-bearing debt amounting to 356.05 billion yuan, indicating continued substantial debt pressure.
**Revenue Decline of 23.9%, Development Business Drags Overall Performance** Vanke's total operating revenue for the first quarter was 28.93 billion yuan, down 23.9% year-on-year. Revenue from the property development business contributed 14.57 billion yuan, a decrease of 36.1%, constituting the primary factor dragging down overall revenue. In contrast, the business services segment performed relatively steadily, contributing 12.48 billion yuan in revenue, a slight increase of 1.7% year-on-year, acting as an important stabilizer for the company's performance.
Examining details of the income statement, non-operating expenses surged 139.5% year-on-year to 660 million yuan, primarily due to increased late payment fees, reflecting ongoing pressure related to debt repayments. Income tax expense showed an unusual spike, shifting from a tax benefit of 320 million yuan in the same period last year to an expense of 1.11 billion yuan this period. This was attributed to taxable profits generated by some subsidiaries despite the group's overall loss, combined with the reversal of deferred tax assets, further eroding profit margins.
**Significant Sales Slump, High Inventory Pressure Persists** Sales data for the property development business raised market concerns. In the first quarter, Vanke achieved contracted sales area of 1.401 million square meters and contracted sales value of 16.77 billion yuan, representing year-on-year declines of 42.2% and 53.8% respectively. The magnitude of these declines far exceeded the industry average.
As of the end of the first quarter, Vanke still had 10.533 million square meters of sold resources within the scope of its consolidated statements that were yet to be completed and recognized as revenue, corresponding to a contract value of 107.2 billion yuan. This substantial pool of unrecognized revenue represents a potential future income source but also signifies the need for continued capital investment to complete project deliveries.
The gross floor area for new project starts and restarts in the first quarter was 692,000 square meters, accounting for only 22.6% of the full-year plan. The completed gross floor area was 983,000 square meters, fulfilling 13.2% of the annual target. The overall pace of project initiation and completion appears slow, potentially linked to funding constraints and weak market demand. Notably, the company delivered 30 projects comprising 7,600 housing units as scheduled during the quarter, with 32.1% delivered 30 days ahead of schedule, indicating stable execution of its commitment to ensuring project deliveries.
**Business Services Segment: Diversified Growth Emerges as a Bright Spot** While the development business faces intense pressure, Vanke's diversified business services segment demonstrated relative resilience, becoming a crucial pillar supporting the company's foundation.
In property services, Onewo, leveraging its AI-powered property management system "Ling Shi," continued its expansion from residential complexes to diverse spaces like industrial parks and urban districts. During the quarter, it secured major projects including the Guangzhou University of Chinese Medicine Shunde Hospital and Xiamen University Affiliated First Hospital, showing initial success in its technology-enabled strategy.
In the rental housing sector, revenue reached 724 million yuan in the first quarter. By the end of March, the company managed 251,000 long-term rental apartments, with an overall occupancy rate stabilizing at 93.7%. The average lease term for existing contracts increased to 366 days, 51 days longer than the same period last year, indicating enhanced customer retention.
In commercial development and operations, revenue reached 2.08 billion yuan (including non-consolidated entities), a year-on-year increase of 7.3%. The overall occupancy rate for commercial projects managed by Yinli reached 93.1%. Through brand events like the "Fa Fa Season," foot traffic in comparable properties increased 6.8% year-on-year, and sales value rose 6.1%.
In logistics and warehousing, revenue was 1.09 billion yuan, up 9.8% year-on-year. Revenue from the cold chain business surged 28% to 640 million yuan, while service revenue grew 38% to 410 million yuan. Revenue from the top 30 cold chain clients increased 59% year-on-year, showing strong growth momentum.
**High Debt Load, Continued Reduction in Financing Costs** As of the end of the reporting period, Vanke held monetary funds of 60.49 billion yuan. Total interest-bearing debt stood at 356.05 billion yuan, with an asset-liability ratio of 77.1%, indicating a persistently tight debt structure. Total current liabilities amounted to 557.1 billion yuan, of which non-current liabilities due within one year were a substantial 136.68 billion yuan, highlighting significant short-term repayment pressure.
Regarding debt management, Vanke continued to receive support from financial institutions in the first quarter. The overall weighted average cost of existing financing decreased to 2.88%, down 14 basis points from the end of the previous year. The weighted average cost of onshore financing was even lower at 2.62%. Its major shareholder, Shenzhen Metro Group, provided additional shareholder loans totaling 2.73 billion yuan year-to-date as of the disclosure date, with a comprehensive financing cost of only 2.34%. Shenzhen Metro also agreed to extend the repayment period for shareholder loan principal and interest of 274 million yuan originally due in the first quarter, providing crucial liquidity support.
Furthermore, proposals to extend three medium-term notes ("22 Vanke MTN004", "22 Vanke MTN005", "23 Vanke MTN001") and one corporate bond ("H1 Vanke 02") were approved by bondholders, providing some mitigation of short-term liquidity risks.
**Improved Cash Flow, Steady Progress on Asset Disposals** Positive changes emerged in cash flow. The net cash outflow from operating activities in the first quarter was 2.16 billion yuan, a significant 62.7% improvement from the net outflow of 5.79 billion yuan a year earlier, primarily due to effective control over operational spending. The net cash outflow from financing activities was 4.0 billion yuan, a decrease of approximately 58.9% year-on-year, indicating a notable reduction in debt repayment scale compared to the same period last year.
Regarding asset disposals, Vanke completed the disposal of the Guangzhou Yuncheng parking lot asset package in the first quarter, with a transaction value of 87 million yuan, achieving an orderly exit from non-core assets. Additionally, the Shiniushan project in Licang District, Qingdao, was revitalized by converting a commercial plot to residential land using a "acquisition, planning adjustment, re-listing" model. The Shanghai Xinyao Zhongcheng project enhanced asset efficiency by 240 million yuan through the relaxation of restrictions on self-held rental housing, indicating multi-pronged efforts to activate existing resources.
**Stable Shareholding Structure, Continued Support from Shenzhen Metro** In terms of shareholder structure, Shenzhen Metro Group remains the largest shareholder with a 27.18% stake, representing 3.24 billion shares. This state-owned background provides Vanke with important credit support. Shenzhen Metro reported a loss of approximately 37.197 billion yuan in 2025, recognizing an investment loss from its long-term equity investment in Vanke.
As of the reporting period end, the company's total share capital was 11.93 billion shares, comprising 9.72 billion A-shares and 2.21 billion H-shares. The shareholding structure remained stable with no major changes.
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