"Profit Warning" CHINA VANKE forecasts last year's loss to expand to 82 billion RMB

China Vanke (02202.HK) issued a profit warning, expecting a loss of 82 billion RMB for the fiscal year 2025, compared to a loss of 49.478 billion RMB in the previous year. This is mainly due to a significant decrease in the settlement scale of real estate development projects, with gross profit margins remaining low. During the period, the profit from the settlement of real estate development business mainly corresponds to projects sold in 2023 and 2024, as well as the inventory of completed and nearly completed properties to be digested in 2025. The land acquisition costs for related projects are relatively high, resulting in a substantial decrease in the total gross profit from settlements during the reporting period.

At the same time, due to increased business risk exposure, new provisions for credit impairment and asset impairment have been made; some operational businesses incurred overall losses after deducting depreciation and amortization, along with losses from certain non-core financial investments; and some bulk asset transactions and equity transaction prices were below book value