New | Vanke holds its ground, reiterates management’s preference for Shenzhen Metro as its white knight
A “railway plus property” strategy can help Vanke tap projects with high traffic flow for growth, management says
China Vanke Co., mired in a shareholders’ tussle for control, on Monday reiterated its preference for Shenzhen’s subway operator to become its owner, saying that Shenzhen Metro’s land bank around its subway network can help grow its business.
“We still believe if Shenzhen Metro becomes a major shareholder of Vanke, it can bring lots of benefits to the company’s growth,’ Vanke’s executive vice president Wang Wenjin told reporters in Hong Kong.
Vanke’s net profit missed analysts’ expectations in the first six months, rising 10.4 per cent to 5.35 billion yuan (HK$6.27 billion), as gross margin shrank by 3.49 percentage points to 17.55 per cent, according to its earnings statement on Sunday.
Vanke’s founder and chairman Wang Shi and president Yu Liang both skipped the company’s Monday earnings press conference in Hong Kong, instead leaving it to other executives to face the media.
China’s largest developer has been embroiled in an eight-month takeover tussle for control, when conglomerate Baoneng Group emerged from nowhere to become Vanke’s largest shareholder with a 25 per cent stake. To deter Baoneng, Vanke’s chairman Wang and his senior management team sought out Shenzhen Metro, the state-owned city subway operator, as the white knight.
According to a plan proposed in June, Vanke planned to issue 45.6 billion yuan of shares for two of Shenzhen Metro’s projects with a combined 1.8 million square metres of gross floor area. The plan would have given Shenzhen Metro a 20.7 per cent controlling stake in Vanke, and would have diluted Baoneng’s stake to 19.9 per cent.