Vanke liquidates its stake in Beike

According to information from the Shenzhen Stock Exchange's interactive platform, on November 24th, Vanke A officially replied to investors' questions, stating, "The company has sold all of its shares in Beike."

Image source: Shenzhen Stock Exchange's interactive platform

 01

Vanke's investment in Beike can be traced back to April 19, 2017, which was before Beike was established. Vanke invested 3 billion yuan in the Lianjia Group and obtained approximately 7.2% of the equity. Among this, 2.6 billion yuan was invested in Lianjia Real Estate, and 400 million yuan was invested in another company within the Lianjia system. Subsequently, after the dilution from Lianjia's Series D financing, Vanke's shareholding ratio dropped to approximately 5.5%.

In April 2018, Lianjia was reorganized into Beike Zhaofang. Soon after, Vanke's equity in Lianjia was proportionally converted into Beike shares.

Image source: Tianyancha

On August 13, 2020, Beike successfully listed on the New York Stock Exchange. As a strategic investor, Vanke became one of Beike's important shareholders. With Beike's listing, Vanke's shareholding ratio was further diluted to approximately 4.13%.

The IPO price of Beike's US stocks was $20 per share, and it once reached a peak of $79.4 per share. This peak value once pushed Beike's market value to exceed $90 billion.

Calculated at Beike's highest market value, the value of Vanke's shares in Beike once reached approximately $3.7 billion, equivalent to approximately 26 billion yuan. Compared with Vanke's investment of 3 billion yuan, it means a return rate of more than 7 times.

However, after 2021, with the downturn of the entire real - estate market, Beike's stock price dropped rapidly and has been hovering around $20 this year. The latest stock price is $17.32, and the total market value is approximately $20.2 billion. Even calculated at this price, Vanke's investment in 2017 still has a quite good return rate.

On June 26, 2023, an investor asked Vanke questions about its shares in Beike on the Shenzhen Stock Exchange's interactive platform. At that time, Vanke's reply was, "As of now, the company still holds some shares in Beike."

But since the end of 2023, Vanke has been in a serious financial crisis.

As Vanke's debt pressure has been increasing, the risks from various aspects such as concentrated debt maturities, declining sales, and restricted financing channels have overlapped, resulting in severe pressure on the company's cash flow. Institutions such as S&P and Moody's have successively downgraded Vanke's credit rating. Since then, Vanke has started to actively save itself.

On April 30, 2024, Vanke officially proposed a package plan of "focusing on the main business and streamlining operations", clearly stating "exiting non - core businesses". At the same time, it prioritized selling non - core assets, inefficient assets, and assets with low synergy with the main business.

After that, Vanke successively sold part or all of the equity in projects such as Shanghai Qibao Vanke Plaza, Shanghai Songjiang Impression City, Shenzhen Bay Super Headquarters Base Project, Shanghai Nanxiang Impression City, Chengdu High - tech Vanke Building, and Shenzhen Hongshuwan Project. It also transferred 75% of the equity in Jilin Songhua Lake International Resort and Beijing Wanbingxue Sports to China Travel Service (Hong Kong) Limited.

At the investor relations event held on August 22nd this year, when answering questions from research institutions, Vanke's management mentioned that in the first half of this year, the company completed large - scale transactions for 13 projects, covering office, commercial, apartment, education and other business forms, with a total contract value of 6.43 billion yuan. The company is currently establishing a "3 + 3" strategic exit channel for its future development model, including three REITs and three PRE - REITs funds. At the same time, it is also exploring new trading paths in combination with opportunities such as the government's efforts to revitalize existing assets.

The sale of its shares in Beike is another important move for Vanke to relieve its debt pressure in the second half of this year.

 02 

As one of the most important "channels" in the industry, Beike used to be an unavoidable topic for developers. Therefore, when Lianjia launched external financing and prepared to be reorganized into Beike for listing, Vanke, Sunac, and New Hope Group, which has real - estate business, successively made direct investments and became Beike's strategic investors.

Beike's new - home business can be traced back to 2014. Starting from the joint sales of new and second - hand homes, in April 2014, Beike reached strategic cooperation with well - known developers such as Vanke, Poly, and China Resources to explore new models.

In 2015, Lianjia fully acquired the Gaoce Real Estate Service Agency, officially announcing its entry into the new - home marketing service field, completing the layout of the entire real - estate industry chain, and putting forward the strategic goal of "having equal proportions of new - home and second - hand home business within three years".

By 2016, Lianjia's new - home business had been deployed in 25 cities across the country, covering more than 2,000 real - estate projects.

In April 2018, Lianjia was reorganized into Beike Zhaofang, and the new - home business was incorporated into the Beike platform system, officially forming the "one body with two wings" strategy. After that, Beike increased its efforts in the development of the new - home business, put the new - home business under the management of the COO line, and fully invested in the construction of the new - home system.

In the year of its listing in 2020, the GTV of the new - home business reached 1.38 trillion yuan, and the annual revenue from the new - home business was 37.9 billion yuan, accounting for half of the company's total revenue.

The information disclosed by Beike at that time mentioned that as of the end of 2020, the number of new - home projects on the Beike platform reached 8,600, and the cooperation rate with top 100 national developers such as Evergrande, Sunac, and Vanke was as high as 85%. This shows its influence on development enterprises.

In the third quarter of this year, Beike's financial report showed that its GTV was 736.74 billion yuan, and the revenue was 23.05 billion yuan. Among this, the GTV of the new - home business in the third quarter was 196.27 billion yuan, and the revenue was approximately 6.64 billion yuan. The revenue proportion dropped to approximately 28.8%.

During the overall contraction period of the industry, Beike has also faced greater performance pressure.

Both Vanke and Beike have long been leaders in their respective fields and once considered a deep - binding relationship at the capital and business levels. But looking back now, as time has passed, the strategic vision has finally become just a transaction.