Author | Anjou Cao

Editor | Zhou Zhiyu

Shenzhen Metro, the majority shareholder of Vanke, has taken another step to support Vanke with real money.

On May 27, at the last minute before Vanke's Shenzhen Bay Super Land listing ended, Vanke and others arrived for the “White Knight”. An announcement from the Shenzhen Public Resources Exchange Center showed that Shenzhen Railway and Baishuo Yinghai, a state-owned company in Nanshan District of Shenzhen, jointly competed for the plot for 2,235 billion yuan.

The plot of land has been in use for 30 years, with 23 years and 7 months remaining. The main use is commercial offices and hotels, and 70% self-ownership is required.

Vanke said that Shenzhen Railway's participation in the competition for land use rights for the project shows that the majority shareholders support Vanke with real money in a market-based and rule-of-law manner. The completion of the transaction will help reduce the use of capital by non-main business assets, and focus on improving resources and strengthening the three main businesses.

Industry insiders analyzed that although the current real estate policy has shown significant benefits, it is expected that it will take time to reflect a recovery in market sales. For housing enterprises such as Vanke, keeping cash flow safe is still a top priority at this stage.

“In particular, non-main business assets, such as commercial plots, have a high self-ownership ratio and take up a large amount of capital, and require long-term operation and cultivation after completion to see results. In the current market situation, Vanke's transfer of non-main business assets to quickly return capital is obviously a smarter choice, and it can also help it cope with market changes and its own strategic adjustments.” The person mentioned above said.

In recent months, Shenzhen Railway has intensively supported Vanke. Not only has Shenzhen Railway Chairman Xin Jie stated that he will continue to support Vanke's healthy development and will not be wavered by market fluctuations, but he is also working with Shenzhen state-owned investors to offer real money, or subscribe to CICC Yinli REIT, or buy shares in Vanke's subsidiaries or take over oversized land.

Shenzhen Iron can be seen at many important development stages of Vanke.

Zhu Xu, secretary of Vanke's board of directors, revealed at the performance meeting that Shenzhen state-owned assets have adopted four major measures to help Vanke dispose of real estate, long-term equity investment, project cooperation, and actively coordinate financial resources to help and support Vanke in a market-based manner. If all of these measures are implemented, it is expected to help Vanke release more than 10 billion yuan in liquidity.

Just like that, after implementing the multi-pronged approach of major shareholders, financial institutions, and Vanke's “slimming and fitness” campaign, Vanke went ashore safely.

On May 23, Vanke received a 20 billion yuan syndicated loan led by China Merchants Bank. In addition to previous bank loans and CMBS, within 10 days, Vanke's total financing total had reached 30 billion yuan, which resolved the liquidity crisis and gave the market a reassurance pill, bringing the industry's growing credit risk under control.

However, the launch of the “517” epic new real estate policy has greatly improved market expectations. Real estate stocks have also ushered in a wave of ups and downs, and there has been a marked increase in popularity in Tier 1 and 2 cities, allowing housing companies such as Vanke that are still holding on to it to see more light. Zhang Dawei, chief analyst at Central Plains Real Estate, said that the “517” New Deal reflects the central government's firm determination to stabilize the real estate market, and it can already be expected to bottom out and stabilize.

As the new policy takes effect and the market picks up steadily, Vanke is also expected to complete the subtraction and transition to a new development model as soon as possible with the support of Shenzhen Railway. As the most representative and forward-looking housing enterprise in the industry, how to live well after going ashore safely is Vanke's new proposition, which will also inspire other housing enterprises to transform.