Summary of Key Points
Over the past 500 days, Vanke has experienced two changes in its chairman (from Yu Liang to Xin Jie to Huang Liping), as well as a shift in management from Shenzhen Railway Group to a more conservative approach. The company's internal culture has shifted from a business-oriented to a compliance-focused one: employees have become more cautious and risk-averse, business processes have become more bureaucratic and inefficient, and attempts at self-rescue (debt reduction, project development on behalf of others, and revitalizing existing assets) have progressed slowly. The once-prominent "decentralized" and "peacock-like" talent culture is gradually fading away. Vanke, a giant in the real estate industry, is currently in a period of adjustment, akin to an aircraft experiencing a stall and spin, with everyone waiting for it to stabilize again.
I. Management Transition: From Aggressive Cash Collection to Compliance First
Vanke's business strategy has undergone two significant changes over these 500 days:
- 2024: Desperate efforts to collect cash
To secure liquidity, Vanke launched aggressive promotional campaigns across its locations, sometimes selling properties at a loss, with marketing fees reaching up to 23%. Funds were quickly reallocated to the group's support fund pool in pursuit of short-term cash flow.
- January 2025 and thereafter: Compliance took precedence
With the arrival of Shenzhen Railway Group's management, there was a dramatic shift: audits were intensified, expenses were cut by 30%-40%, and loss-making projects were immediately shelved. Personnel and financial affairs were thoroughly reviewed, and decisions had to be reported at multiple levels. Employees were instructed to avoid making mistakes or taking risks.
- October 2025 and beyond: Further tightening of controls
Huang Liping took over as chairman, implementing more stringent management measures: all contract, engineering, and procurement processes required approval before proceeding. Suppliers selected for projects were often rejected, forcing the company to rely on those from other regions. The decision-making process became longer, with many decisions remaining unresolved, leading employees to joke that there were no KPIs (Key Performance Indicators) due to a lack of bonuses and promotions.
II. Employee Attitudes: From Ambitious to Risk-Averse
Vanke's once-aggressive culture is disappearing:
- Fading cultural symbols
The "tough-guy" culture, once led by Yu Liang, is no longer prevalent; employees now wear white shirts and black pants during meetings, reflecting a more state-owned enterprise-like atmosphere. There are no explicit rules, but there is a general consensus to restrain individuality.
- Security over ambition
Middle-level employees focus on doing their jobs well without overstepping boundaries or collaborating with others. Some say, "Just do the basics; if you don't make mistakes, you won't get in trouble."
- Lack of motivation
In areas without new projects, teams "pretend to work" while waiting for layoffs and compensation (including a N+1 bonus). Projects working with state-owned enterprises are delayed or abandoned due to resistance to price cuts. Some even believe that doing nothing ensures compliance.
III. Business Struggles: Efficiency Hindered by Compliance
Compliance measures have created numerous obstacles:
- Inefficient processes
Previously, projects could be bid on first and then completed later, but now this is not allowed. Processes are repeatedly revised, causing delays and conflicts between different departments.
- Supplier issues
Local suppliers selected for projects are often rejected by the group, forcing the use of those from other regions. Payment delays and labor exchanges for housing have reduced the supplier pool, leading to a depletion of resources.
- Slow decision-making
Orders over 3 million yuan must be approved by the group, and decisions are delayed despite multiple discussions. This has affected the efficiency of frontline teams.
IV. Self-Rescue Efforts: Challenges in Debt Reduction, Project Development, and Asset Revitalization
Vanke is trying to save itself but faces many limitations:
- Debt reduction is crucial, but depends on external factors
The new president, Huang Yu (with a financial background), is expected to help, but the debt issue cannot be resolved alone without the cooperation of shareholders and creditors.
- Conservative approach to project development
While other companies rely on project development to build their teams, Vanke is cautious due to brand concerns and strict terms, making it difficult to secure partnerships.
- Asset revitalization
Some projects are converted into affordable housing or relocated to new sites, but many remain stuck. For example, industrial land converted for residential use faces new regulations, leading to losses. Acquiring new land is also a challenge that requires the consent of creditors and shareholders.
V. Cultural Transformation: From Decentralized to Conservative
Vanke's once-relevant culture is fading:
- Past: Decentralized and innovative
In its early days, Vanke was a platform-based company that encouraged innovation and talent from all levels, resembling internet companies with a national perspective.
- Present: Centralized control
The new management opposes the old culture and uses strict controls to address past issues. This has led to the loss of talented employees and a weakened corporate culture. Some feel a sense of confusion and lack of direction.
- Future concerns
Even if debt reduction is successful, teams that have not worked on new projects for a long time may lose their market skills, becoming outdated.
Conclusion: When Will Vanke's Stabilization Begin?
Vanke is like an aircraft in a stall, needing continuous adjustments to stabilize. The key priorities are making progress with debt reduction, stabilizing management, and restoring the morale of frontline teams. Everyone hopes for Vanke's recovery, as its success is crucial for the entire real estate industry. However, this process requires time and determination, and mistakes must be avoided during this critical period. Hopefully, Vanke can quickly find its course and emerge from this difficult situation.