Last week, China Vanke Co.,Ltd. (Vanke) saw its stock price plunge below the critical 6-yuan mark and continue its downward spiral due to news of bond extensions. Today, it approached the 5-yuan threshold, further widening Shenzhen Metro Group's floating losses on its investment in Vanke.
Is the sharp decline in Vanke's stock price solely due to debt extensions? Likely not—this may just be the trigger, or even the beginning. Investors, shareholders, retail traders, and creditors alike are witnessing a rapid erosion of confidence in Vanke, signaling a collapse in its creditworthiness. Here’s a brief rundown of Vanke’s recent debt-related developments: 1. **Bond Extensions**: Multiple Vanke bonds faced intraday trading halts. 2. **Rating Downgrade**: S&P abruptly slashed Vanke’s rating to CCC-. 3. **Collateralization of Onewo**: Vanke pledged its subsidiary Onewo as collateral, with Shenzhen Metro injecting 22 billion yuan in relief. 4. **Loan Rejections**: Vanke was reportedly denied loans by several banks, prompting state-backed intervention. 5. **Equity Freeze**: 570 million yuan worth of Vanke’s equity holdings were frozen.
Since a series of negative reports and the exposure of Vanke’s off-balance-sheet financing model, public perception of its executives has soured. Indeed, how can top managers enjoy lavish salaries and perks while the company, shareholders, and employees suffer massive losses—with even employee co-investments left unpaid? Beyond legal scrutiny, these executives must be held accountable for decisions that eroded stakeholder value and squandered state assets. Resigning isn’t enough—justice must prevail. The nation’s watchful eye will ensure these "termites" face reckoning.
The chasm between professional managers and true entrepreneurs lies in integrity, social responsibility, and moral boundaries. Vanke’s leadership, devoid of such principles, has turned a once-exemplary real estate giant into a personal profit vehicle, leaving it battered and unstable.
Should Vanke collapse, the fallout would be catastrophic: state asset depletion, surging bank bad loans, shareholder wealth destruction, investor losses, and unpaid employee wages—let alone co-investments. If you’re tied to Vanke’s ecosystem, stay vigilant—litigate, secure assets, divest holdings, and monitor executives to prevent asset stripping, debt evasion, or worse.
Our skepticism isn’t about Vanke’s potential but the absence of accountability among its leaders.
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