China’s largest listed developer, Vanke (万科A), has told investors it expects a net loss of about ¥82 billion for 2025, a sharp widening from a ¥49.5 billion loss a year earlier. The company said a steep drop in the scale of development project settlements, persistently low gross margins and newly booked credit and asset impairments are the main drivers of the deterioration.
Vanke’s statement also cites operational weaknesses beyond development margins: several operating businesses incurred overall losses after depreciation and amortisation, some non-core financial investments posted losses, and a number of large asset and equity disposals completed at prices below book value. Those factors combined to force heavier provisions and write‑downs that dominate the headline figure.
There are, however, operational glimmers. During the reporting period Vanke completed quality handovers of 117,000 homes and its property‑management and services revenue remained steady. Management says it has cut development overheads and kept management expenses falling for a second consecutive year, reflecting an ongoing internal push to shave costs and improve cash flow.
The scale of Vanke’s expected loss matters because the firm has long been treated as a bellwether for the health of China’s housing sector. A single corporate loss of this magnitude — driven largely by asset impairments and deal‑price gaps — underlines how much the sector’s recalibration has moved from headline sales weakness to balance‑sheet repair, and it will reverberate through bond, bank and supplier channels.
For creditors and investors the announcement sharpens short‑term risks. Heavy impairments increase the likelihood of asset disposals, equity raisings or debt restructurings; bondholders will watch upcoming coupon and maturity events closely. For local governments and banks the concern is less about immediate system‑wide collapse and more about slower credit recovery and the fiscal and banking friction that prolonged deleveraging can create.
Vanke says it will press ahead with reforms to resolve risks, refocus strategy and use technology to improve efficiency and multi‑scenario development capabilities. Yet the company also warns that performance will remain under pressure: the combination of weak project settlements, low margins and carried‑over impairment risk makes a rapid return to profitability unlikely without either stronger housing demand or further balance‑sheet relief.
The near‑term market question is whether Vanke can execute disposals and operational fixes at scale without further eroding asset prices, which would perpetuate impairments. Policy makers have more tools today than during past crises — from directed refinancing to cautious fiscal support — but they face a trade‑off between propping up large developers and maintaining market discipline across a fragmented industry. Investors should watch Vanke’s progress on asset sales, any proposed recapitalisation, and changes in property policy as signals of how deeply the sector must restructure before normal credit conditions return.