With a Staggering 90 Billion Loss Topping the "Loss Leader" List, Where Did Vanke's Money Go? The Ice and Fire of the 2025 Listed Property Developer Profit Rankings

Operating pressures have not eased, with 70% of companies still in the red. It is now mid-May 2026, and annual reports from property developers have mostly been released. The operational situation for 2025 is set, and even those with delayed reports cannot alter the overall industry trend. While it's truly a case of mixed fortunes, it would be more accurate to say 70% of companies have little to celebrate. Operating pressures remain high, and profits remain unattractive. Breaking even is considered a relatively good outcome, yet nearly 70% of companies are still reporting losses.

Examining the top 100 companies by full-year 2025 net profit as a sample, the data reveals characteristics consistent with the overall industry trend. Since the outbreak of corporate debt risks in 2021, financial statements reacted immediately, showing losses. This was followed by declining sales in 2022, 2023, 2024, and 2025. While financial statement feedback lags, the trend is consistent: profits declined and turned into losses. The total net profit loss for the top 100 developers in 2024 reached a staggering 362.1 billion yuan, the largest loss in recent years. Within this group of 100 companies in 2024 and 2025, 67 and 63 companies, respectively, reported negative net profit.

In 2025, the net profit/attributable net profit losses for these 100 companies narrowed from 358.7 billion/354.2 billion yuan in 2024 to 235.7 billion/208.6 billion yuan. Viewed in isolation, this might suggest improved corporate performance. However, the shift for some companies from massive losses to large profits was not due to operational improvements. The primary reason was one-time gains from asset restructuring, which are not sustainable. Excluding gains from factors like asset restructuring, nearly 70 companies would still have reported negative net profit in 2025. Overall, it can be said that 99% of companies either saw continued profit decline or remained in the red.

The reasons for declining profits or continued losses are well-worn topics discussed for four to five years. They primarily involve acquiring land at high prices but selling at low prices or being unable to sell, leading many companies to directly impair their inventory, squeezing profit margins to minimal levels.

000002 (China Vanke Co.,Ltd.), a developer at the center of public debate in recent years, saw its net profit and attributable net profit losses expand to 91.81 billion and 88.56 billion yuan respectively in 2025. The absolute loss amounts increased by 89% and 79%, making it the company with the largest loss among all developers. While others' losses are shrinking, why did Vanke incur such massive losses? Where did the money go?

Vanke cited four reasons in its annual report: (1) A significant decline in the scale of property development project settlements, with gross profit margins remaining low. The settlement profits for 2025 primarily corresponded to projects sold in 2023 and 2024, and completed and near-completed inventory digested in 2025. These projects had high land acquisition costs, and their sales performance and gross margins were below investment expectations, leading to a substantial reduction in total gross profit settled. (2) Increased credit and asset impairment provisions due to heightened business risk exposure. (3) Overall losses in some operational businesses after deducting depreciation and amortization, along with losses from some non-core financial investments. (4) Transaction prices for some bulk asset and equity deals were below book value. These explanations may not satisfy many observers.

A rather "perplexing" phenomenon emerges from the data: 01638 (KAISA GROUP) managed to completely reverse its fortunes, swinging from a loss of nearly 30 billion yuan to a profit of 52.3 billion yuan in 2025, ranking first in net profit across the industry—an almost unbelievable turnaround. Similarly, 01628 (YUZHOU GP-NEW), 00884 (CIFI HOLD GP), 00813 (SHIMAO GROUP), 03377 (SINO-OCEAN GROUP), and 02007 (COUNTRY GARDEN) all shifted from loss to profit. The fundamental reason, as mentioned earlier, is the substantial one-time gains from successful debt restructuring. These massive figures do not reflect actual operating conditions and are not sustainable; they appear in 2025 but will be absent in 2026, leading to a cliff-like fluctuation. Excluding these gains, the net profit of these companies in 2025 would also be negative. If the net profit of these six companies, including Kaisa Group, is excluded from the calculation, the net profit loss for the remaining 94 companies still amounts to 334.9 billion yuan.

Excluding these companies, the landscape of the top 10 companies by net profit changes significantly. The leader remains 01109 (CHINA RES LAND), holding a commanding lead. Its 2025 net profit was 32.819 billion yuan, 2.4 times that of the second-placed 00688 (CHINA OVERSEAS), and only 700 million yuan less than the combined net profit of the companies ranked second to sixth. It can be said that it single-handedly upholds the sector's reputation.

This landscape inevitably invites comparison between the two generations of "profit kings": China Overseas and China Resources Land. For many years, China Overseas was widely recognized in the industry for its profitability, stemming from its strong project cost control capabilities, which saved significant money and left peers far behind in profit performance. A decade ago, in 2016, China Resources Land's attributable net profit was only about half of China Overseas's. Starting in 2022, China Resources Land surpassed China Overseas in profit, and by the latest reporting period (2025), its net profit/attributable net profit was more than double that of China Overseas.

This shift reflects the immense impact of industry trends and the outcomes of respective strategic choices. As the entire market declined in 2022, industry profits also entered an adjustment cycle, similar to manufacturing's shift towards the bottom of the "smile curve." Companies primarily focused on property development undoubtedly saw profit volatility. Those unable to withstand the pressure defaulted on debts, incurring losses ranging from several billion to over 200 billion yuan. As leading companies, China Resources Land and China Overseas were inevitably swept along by the trend, with profits also declining. However, compared to the vast majority of peers, the profit performance of these two remains absolutely leading.

China Overseas's ability to maintain profits exceeding 10 billion yuan is purely due to its solid foundation and strong capabilities, effective cost and expense management, and a greater investment focus on high-tier cities, resulting in less pressure on inventory destocking and provision setting. In a favorable market, China Overseas's advantages can multiply, but when the market turns downward, its advantages in cost, expense, and investment can hardly reverse the established industry trend. This is likely a dilemma faced by 99% of companies in the last cycle; perhaps the most effective approach is to wait, endure until the industry clears, and rebound after hitting bottom.

China Resources Land's strength is inseparable from the support of its operations and services businesses. Through years of development, these non-property development segments have become capable of standing on their own, forming a stable foundation for corporate profits and helping to recoup losses from property development. In 2025, revenue from China Resources Land's development and sales business accounted for nearly 85%, but its contribution to core net profit was less than 50%. In contrast, the recurring business contributing 15% of revenue contributed 52% of core net profit, clearly demonstrating the superiority of its model.

While China Resources Land's model has advantages and is relatively mature, it is not applicable to the vast majority of companies in the industry. Taking the operations segment as an example, China Resources Land's commercial business has been cultivated for over 20 years; its first shopping mall, Shenzhen MixC, opened 22 years ago. Even if opportunities exist, how many would be willing to invest capital into a venture that may not yield results for decades?

Looking ahead, while the entire industry's profits are moving towards the bottom of the smile curve, whether it has reached the bottom is uncertain. Companies in better shape may progress faster, resolving historical issues more quickly. Those in slightly worse condition may take longer to navigate downward and complete the clearance process. One thing is certain: the industry's overall profit margin level will not return to previous heights.