China Vanke chairman abruptly resigns from stressed builder

[SHENZHEN] China Vanke’s recently appointed chairman has resigned from the role, in another blow to the embattled developer facing liquidity challenges.

Xin Jie, who stepped in the chairman role amid an abrupt management overhaul in January, has applied to resign from positions including the chairman, the developer said in an exchange filing to the Hong Kong stock exchange on Monday (Oct 13). Xin’s resignation is due to personal reasons, according to the filing.

Vanke also elected Huang Liping, deputy party chief and general manager at Shenzhen Metro, and as the chairman. Huang has served as a board member at Vanke since 2021.

The surprise twist threatens to further cloud the outlook of Vanke, whose financial position is already vulnerable ahead of a wall of onshore debt maturities. Vanke has been relying on steady liquidity support from its largest state-owned shareholder, Shenzhen Metro Group, which Xin has led as chairman for the past eight years.

Xin, 59, spent the majority of his career in state-owned firms in southern Shenzhen city. He earned a bachelor degree of engineering from a university in the industrial city of Shenyang in the 1980s, when China’s economy was in the early stages of opening up.

After working in a variety of sectors in Shenzhen, ranging from foreign trade to hotels, Xin in 2009 joined the city’s state construction firm Shenzhen Tagen Group, where he later took on the chairman role.

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Xin was appointed chairman of Shenzhen Metro, the city’s state-owned transit firm, since late 2017. Just before his appointment, the company became Vanke’s largest shareholder after a bitter ownership battle.

This January, Xin took over as Vanke’s chairman from Yu Liang amid the firm’s steepening losses. Once China’s largest developer, the company has become the latest flashpoint in the nation’s prolonged property crisis, underscoring the severity of the sector’s challenges.

Vanke reported a loss of 12 billion yuan (S$2.2 billion) in the first half, widening from a year earlier. Fitch Ratings also downgraded its long-term issuer score to CCC- in August, reflecting further weakening in China Vanke’s liquidity.

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This year, Shenzhen Metro offered multiple loans totalling about 23.9 billion yuan, according to Vanke’s interim report. The loans are all earmarked to help Vanke repay the principal and interest on publicly issued bonds. In September, Vanke said that it would secure another loan of as much as 2.1 billion yuan from Shenzhen Metro.

“Vanke’s strong relationship with the state and asset disposals might be key in addressing its funding gap,” Bloomberg Intelligence analysts Daniel Fan and Hui Yen Tay wrote in a recent report. BLOOMBERG