China Vanke's Liquidity Still Subject to High Uncertainty, but Should Continue to Receive Support

As one of the primary developers in China focusing on middle- to high-end properties, China Vanke experienced an more than-20% revenue CAGR from 2014-19 as the market boomed. Property development remains the largest contributor to Vanke revenue with an over-80% mix, but the housing demand slowdown and price decline since 2021 have weighed on sales. We expect the downsizing to persist for Vanke in the short run as sales in lower-tier cities continue to underperform. Looking beyond the near-term headwind, an uptick in homebuyers’ confidence, revival of landbank acquisition, and easing home purchase restrictions will lead to sales rebound for Vanke, in our view. As delivery of housing projects will likely require a multiyear cycle, we think Vanke’s property development will resume more meaningful growth starting in 2026.