The Shenzhen-based developer reported a net loss of 9.85 billion yuan (US$1.4 billion) for the first six months of 2024, swinging from a profit of 9.87 billion yuan for the comparable period in 2023, according to a filing with the Hong Kong stock exchange late on Friday.
The company’s first interim loss since 2003 came in 9.4 per cent higher than the top of a range the company defined in a profit warning last month.
China Vanke’s revenue fell by 29 per cent year on year to 142.8 billion yuan, dragged by discounts offered to homebuyers in an effort to reduce inventory, the company said.
Contracted home sales declined 37.6 per cent year on year to 127 billion yuan. The developer will not pay an interim dividend.
“The new-home market remained under correction over the reporting period … and it will take time to restore homebuyers’ confidence even though the declines in home sales narrowed in the second quarter with a set of supporting policies,” China Vanke said.
Looking ahead, the company will “firmly implement” measures to focus on “ensuring home delivery, ensuring paying debts, as well as transformation of high-quality development”, it added.
Though China has pledged to purchase unsold homes to reduce inventory and revive the sector, a historic rescue package including a 300 billion yuan fund for that purpose, announced in May, has failed to lift sales amid slow implementation.
Transacted sales generated by the top 100 Chinese developers shrank 39.5 per cent to 1.85 trillion yuan in the first six months of the year, according to China Real Estate Information Corporation (CRIC). In July, sales fell 36.4 per cent from June to 279 billion yuan, CRIC data showed.
China Vanke shares rose nearly 10 per cent to HK$4.11 on Friday before the announcement, as the Hang Seng Index advanced 1.3 per cent to a seven-week high.
