Vanke wishes for a ninth victory: Financial institutions are Vanke's allies

Author | Zhou Zhiyu

According to Wall Street News, at the performance meeting on March 29th, when discussing the recent turmoil at Vanke, Vanke's President Zhu Jiusheng stated that the impact of rating agencies on Vanke is limited. Banks that Vanke has long-term cooperation with, including insurance companies and other financial institutions, are Vanke's allies.

Zhu Jiusheng pointed out that Vanke has long-term cooperation with 26 banks, all of which support Vanke and work together to control risks. In the current situation where industry sales are declining and receivables are decreasing, banks are allies of Vanke in risk prevention.

Zhu Jiusheng stated that in the past, the cooperation with banks was mainly credit financing. With changes in regulatory policies, it is necessary to switch to project collateral financing. It is difficult to switch overnight, so cooperating banks have given Vanke a 1-3 year transition period to gradually make the switch. During this transition, banks are concerned about three main points: where the money goes, where the assets are, and whether there is enough cash flow, asset value, and operating cash flow. Vanke openly and honestly addresses the banks' concerns, mainly focusing on these three questions. With satisfactory answers, the support from banks is definitely sufficient. Last year, Vanke also added financing of 89.7 billion yuan.

Of course, each bank has different risk preferences and strategies. Zhu Jiusheng mentioned that at this time, it is necessary to consolidate similar items and work together to solve problems. Vanke is open to and actively discussing suggestions from banks. Overall, the cooperation with banks is at a stable and sustainable level.

Zhu Jiusheng also addressed the cooperation with insurance funds. He mentioned that Vanke has long-term cooperation with major insurance companies. Since 2014, Vanke has shifted towards operating service businesses, exploring various tracks and forming a diversified portfolio of operating assets, making Vanke a natural asset trader for insurance companies.

Insurance funds support Vanke more in terms of debt plans corresponding to operating businesses, with terms of 10 years or even longer. Zhu Jiusheng pointed out that in the plan, there are time points set for redemption deadlines, with choices for both the company and the other party. As the redemption deadline approaches, both parties need to sit down and discuss whether to exercise the option.

Zhu Jiusheng expressed special thanks to major insurance companies such as China Life, Ping An, and New China for their support to Vanke. It is with their support and the patient long-term funds that Vanke appears more composed and resilient in the layout of its operating business. This support also strengthens Vanke's determination and confidence in its transformation journey.

Zhu Jiusheng emphasized that overall, Vanke will continue to adhere to a multi-channel financing strategy in the long term, working together and achieving mutual success with any financial institution. Especially during challenging times for the entire industry, Vanke is particularly grateful for the support from financial institutions, bankers, and insurance companies