China Vanke, a major property developer, is facing serious trouble and has reported a shocking loss of 45 billion yuan ($6.2 billion) for 2024. After this news, both the chairman and CEO have decided to leave their positions.
Chairman Yu Liang will step down but will stay as a director. He said he is leaving for “work adjustment reasons.” CEO Zhu Jiusheng is also resigning, but he mentioned he needs to focus on his health. Zhu will leave all his roles at the company.
Replacing Yu is Xin Jie, who is the chairman of Shenzhen Metro Group Co., Vanke’s biggest investor.
Vanke, based in Shenzhen, is struggling more than ever in China’s long property crisis. Many other developer companies have stopped paying their debts, and Vanke is facing similar challenges. The company is in a tough spot with a lot of debt to repay as home sales drop.
This loss is the first for Vanke since it began trading on the stock market in 1991. Analysts expected a smaller loss of about 21.8 billion yuan, making this news even more alarming. The full loss includes a big loss of 17.9 billion yuan in just the first nine months of last year, showing things got much worse in the last part of the year, even when the government tried to help the housing market.
Concerns about Vanke grew this month when factory rumors suggested something was wrong with CEO Zhu. Reports from a local newspaper claimed Zhu had been taken by the police, and the local government was involved with Vanke. However, these reports have been removed, and Vanke hasn’t given any official comments about it.
Before joining Vanke in 2012, Zhu worked at China Construction Bank. He has a Ph.D. in economics and managed many important projects at Vanke, including launching China’s first public real estate investment fund. He took over as CEO in 2018 from Yu Liang, who focused more on planning the company’s long-term future.
Yu Liang joined Vanke when it started changing from a trading company to a large real estate company. He played a key role in Vanke’s growth, dealing with listings and investments. He took the president’s role in 2017 after a power struggle that made a state entity Vanke’s biggest shareholder.
In recent years, Yu led Vanke into new businesses like rental apartments and logistics as cities grew. However, due to the property market’s decline, the company had to sell off some assets and focus back on its main operations. Local reports say that like Yu, he has climbed Mount Everest and run marathons.
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