Vanke, China Overseas Land see signs of recovery after historical profit slump

[BEIJING] China Vanke and China Overseas Land and Investment are among the major developers reporting next week amid signs of recovery in the Chinese property sector.

A string of recent profit warnings could be a positive future signal, Bloomberg Intelligence (BI) said. “Steep write-offs could set these companies up for a better profit outlook in 2025, which could improve earnings profiles, lift equity valuations and aid potential equity financing, which in turn could boost liquidity.”

Still, the recovery in the housing market remains fragile, as new-home prices experienced a more rapid decline in February, marking the first deterioration in six months. Continued government support will be a key to sustain the recovery, analysts at CGS International estimate. More cities including Shenzhen and Changsha are easing policies to boost the property market.

For last year though, aggregate core earnings for the top five developers – which also include China Resources Land, Longfor Group Holdings and Greentown China Holdings – were seen down 93 per cent over the year, according to CGS International. 

Over in the energy sector, PetroChina is set to post its highest annual net income in at least two decades as better prices for gas offset lower selling prices for oil. The company is also slated to be a beneficiary should China unveil more economic stimulus measures, BI said. 

In the consumer space, Kweichow Moutai’s slower growth in the fourth quarter may signal a tough 2025, and revenue headwinds could linger throughout the year as consumer sentiment is still subdued, BI said. BLOOMBERG