Valuation Risk Analysis Report for China Vanke A (000002.SZ)

Based on the obtained data and charts, I will prepare a comprehensive and systematic Valuation Risk Analysis Report for China Vanke A (000002.SZ).

---

According to the latest market data, the core valuation indicators of China Vanke A show the following characteristics [0]:

Valuation Indicator	Value	Industry Comparison	Risk Warning
P/E (Price-to-Earnings Ratio)	-0.99x	Loss-making	A negative value indicates the company is in a loss-making state
P/B (Price-to-Book Ratio)	0.34x	Significantly lower	Share price is approximately 66% below book value
P/S (Price-to-Sales Ratio)	0.21x	Extremely low	Weak revenue monetization capability
Current Share Price	¥4.96	52-week range: ¥4.62-8.22	In the historical low range

The negative P/E ratio (-0.99x) of China Vanke A directly reflects that the company is currently in a loss-making state, with Earnings Per Share (EPS) of -¥5.01 [0]. This means that traditional profit-based valuation methods are no longer applicable, and the rationality of the company’s valuation needs to be re-examined from the perspective of asset value and liquidation.

From a long-term perspective, the valuation of China Vanke A has undergone drastic changes:

As clearly shown in the chart above [0]:

• 2020 Historical High
  : Share price was approximately ¥36.37 (2020 high), with the P/E ratio in a reasonable range at that time
• Early 2024
  : Share price was approximately ¥10, and the P/E ratio turned negative
• September 2025
  : Stimulated by policy benefits (the 924 Policy Package), the share price rebounded briefly above ¥10
• Current Level
  : Share price is ¥4.96, down
  over 85%
  from the historical high, and down about 50% from the beginning of 2025

• 1-year price change: -28.63%
• 3-year price change: -73.59%
• 5-year price change: -83.34%[0]

---

The profitability indicators of China Vanke A show that the company is experiencing severe operational difficulties [0]:

Profitability Indicator	Value	Interpretation
ROE (Return on Equity)	-31.07%	Severe erosion of shareholder equity
Net Profit Margin	-20.92%	Approximately ¥21 loss per ¥100 of revenue
Operating Profit Margin	-17.93%	Core business continues to lose money

Looking at the latest financial report data, the losses of China Vanke A are showing an expanding trend [0]:

Report Period	EPS	Revenue	Performance Interpretation
Q3 FY2025	-¥1.35	¥56.07 billion	Loss expanded 12 times compared to expectations
Q2 FY2025	-¥0.18	¥67.33 billion	Loss continued
Q1 FY2025	-¥0.53	¥37.99 billion	Loss persisted
Q4 FY2024	-¥2.66	¥123.28 billion	Largest single-quarter loss of the year

• Sales in Q3 2025 were only
  ¥100.46 billion
  , a
  44.6% year-on-year decrease
  [1]
• Cumulative net loss in the first three quarters of 2025 reached
  ¥28.016 billion
  [1]
• Q3 revenue exceeded expectations by 51.99%, but EPS missed expectations by a wide margin of 1284.68%[0]

---

The debt pressure faced by China Vanke A is one of the core sources of valuation risks [1]:

Debt Indicator	Value	Risk Level
Total Interest-Bearing Liabilities	¥364.26 billion	Extremely high
Proportion Maturing Within One Year	42.7%	Enormous short-term debt repayment pressure
Proportion of Bank Borrowings	72.5%	High dependence on bank credit

According to public information, China Vanke A faces intensive bond repayments in 2025-2026 [1]:

Time Node	Amount to Be Repaid	Remarks
December 15, 2025	¥2 billion	“22 Vanke MTN004” has applied for extension
December 28, 2025	¥3.7 billion	“22 Vanke MTN005”
November 2025 - June 2026	¥15.546 billion	Total principal and interest of domestic bonds
First half of 2026	¥7.7 billion	Statistic from DM Debt Collection Platform

China Vanke A’s recent attempt to extend a ¥2 billion bond has triggered a strong market reaction [1]:

• December 10, 2025
  : The extension proposal put forward at the first bondholder meeting received
  0 votes in favor
  and was rejected
• December 17, 2025
  : A revised new proposal was released
• Core Change
  : The originally agreed “Shenzhen Metro Group Guarantee” clause was
  removed
  , with China Vanke providing its own credit enhancement [1]

• The prices of multiple domestic bonds plummeted, some falling to around
  ¥24
  , a drop of over 50%
• The share price fell sharply, once hitting
  ¥4.7
  , a new low in nearly a decade
• The market’s expectation of state-owned enterprise endorsement fell through, exacerbating the trust crisis

---

According to industry research data (as of December 5, 2025) [2], the valuation comparison between China Vanke A and major peer companies is as follows:

Company	Stock Code	P/E (25E)	P/E (26E)	P/B	Rating
China Vanke A	000002.SZ	Loss-making	Loss-making	0.34x	Distressed
Poly Developments	600048.SH	20.4x	17.9x	0.4x	Stable
China Merchants Shekou	001979.SZ	19.8x	17.7x	0.8x	Stable

Company	Stock Code	P/E (25E)	P/E (26E)	P/B	Status
China Overseas Land & Investment	0688.HK	7.9x	7.5x	0.3x	Profitable
Longfor Group	0960.HK	12.5x	11.3x	0.4x	Profitable
China Vanke A (HK)	2202.HK	Loss-making	Loss-making	0.2x	Distressed

1. China Vanke A is the
   only
   mainstream real estate enterprise that has sustained losses and cannot provide profit guidance
2. Although its P/B ratio of 0.34x is similar to that of some state-owned central enterprises and local state-owned enterprises, it is based on sustained losses
3. Compared with state-owned central enterprises that can maintain profitability (such as Poly Developments and China Merchants Shekou), China Vanke A lacks fundamental support

---

The

(-0.99x) of China Vanke A sends the following market signals:

Signal Type	Specific Performance
Profit Expectation	The market expects the company to be unable to return to profitability in the short term
Risk Pricing	Investors demand a higher risk premium
Value Reassessment	Shift from growth stock valuation to distressed/bankruptcy valuation

Based on the above analysis, we assess the extent to which current valuation reflects risks:

1. Liquidity Risk Not Fully Priced In
   • The plummeting bond prices (some falling to ¥24) show the market’s high vigilance against default risk
   • The removal of Shenzhen Metro’s guarantee may trigger a chain reaction, increasing the risk of cross-default [1]

2. Questionable Asset Quality
   • In the downward real estate cycle, inventory and investment properties may face further impairment
   • Although the P/B ratio of 0.34x is low, if asset quality deteriorates, the actual liquidation value may be even lower

3. Sustained Negative Operating Cash Flow
   • The decline in sales (-44.6%) and the expansion of losses form a vicious cycle [1]
   • The lack of “self-hematopoietic capability” means the company is highly dependent on external financing

1. Expectation of State-Owned Enterprise Support
   • Shenzhen Metro Group has provided over ¥30 billion in loan support within the year [1]
   • If policy intervention increases, additional liquidity support may be obtained

2. Expectation of Industry Bottoming Out
   • Real estate sector valuations have continued to recover (multiple policy benefits were released in 2025) [2]
   • The worst period for the industry may be coming to an end

Risk Dimension	Risk Level	Extent of Valuation Reflection	Remarks
Solvency Risk	🔴 Extremely High	~70%	Large-scale debt maturing in 2026
Operational Risk	🔴 Extremely High	~80%	Sales and profits continue to deteriorate
Liquidity Risk	🔴 Extremely High	~75%	Negative operating cash flow
Policy Risk	🟡 Medium-High	~50%	Uncertain intensity of state-owned enterprise support
Industry Cycle Risk	🟡 Medium-High	~60%	Uncertain timing of industry bottoming out
Valuation Risk	🔴 Extremely High	~90%	Negative P/E has fully reflected the situation

---

Specifically:

1. Negative P/E Ratio Is a True Reflection
   : The company’s EPS is -¥5.01, ROE is -31.07%, and sustained losses have rendered traditional valuation methods invalid [0]

2. P/B Ratio Hides Risks
   : The P/B ratio of 0.34x seems cheap, but the actual liquidation value may be lower under asset impairment pressure

3. Debt Risk Is the Core Contradiction
   : 42.7% of the ¥364.26 billion in interest-bearing liabilities will mature within one year, creating enormous repayment pressure [1]

4. State-Owned Enterprise Endorsement Is Weakening
   : The removal of Shenzhen Metro’s guarantee marks a marginal weakening of liquidity support, exacerbating the market trust crisis [1]

• Delisting Risk
  : If sustained losses continue, the company may face delisting risk warnings
• Default Risk
  : After the bond extension proposal was rejected, the risk of cross-default increased
• Downward Valuation Center
  : Before industry consolidation is completed, valuations may remain under pressure for a long time

Valuation Method	Valuation Range	Applicability
P/E Valuation	Not Applicable	Company is loss-making
P/B Valuation	¥3.5-5.5	Range considering asset impairment
Liquidation Value	¥2-4	Most pessimistic scenario
Scenario Analysis	¥5-8	Neutral scenario under policy intervention

---

[0] Jinling AI Financial Database - Real-time Quotations, Financial Analysis and Technical Indicator Data for China Vanke A (January 9, 2026)

[1] Sina Finance - “China Vanke’s Self-Rescue Fails, Changes Are Coming” (https://finance.sina.com.cn/roll/2025-12-18/doc-inhcfepp3198164.shtml)

[2] CMB International - “Real Estate: Total Shrinkage Continues, Price Bottoming Deepens” Industry Research Report (https://www.cmbi.com.hk/upload/202512/20251219277407.pdf)