China Vanke Profit Slumps Amid Property Sector Downturn

By Tracy Qu

China Vanke's earnings could remain strained for some time amid the downturn of the Chinese real-estate market, which the developer said led to a sharp drop in net profit last year.

The company, one of China's largest property developers, made a net income of 12.16 billion yuan ($1.68 billion) for the year ended December, down 46% from 2022.

Revenue fell 7.6% to CNY465.74 billion over the period.

China's property sector has been mired in a downward spiral as its economy makes a slow, uneven recovery and consumer sentiment struggles to rebound. The country has rolled out a series of measures to bolster the sector, like a "white list" to provide loans to developers.

China Vanke's profits are "under pressure," it said in a stock exchange filing on Thursday. "During the period of excessive scale expansion, some investment judgments were over-optimistic, and it will take some time for these projects to be digested," it said.

The company said it aims to reduce its interest-paying debt by CNY100 billion in the next two years. It plans to make use of a financing mechanism for the property sector that the government announced earlier this year.

Write to Tracy Qu at tracy.qu@wsj.com

(END) Dow Jones Newswires

March 28, 2024 20:48 ET (00:48 GMT)

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