China Vanke, mainland’s second largest developer, says coronavirus is making survival difficult for the sector

China Vanke, the country’s second-largest property developer by sales, said the coronavirus pandemic is taking a toll on its business and surviving could become a real issue for the company and the industry as a whole, according to chairman Yu Liang.

“Survival is a real issue now,” Yu said late on Tuesday after Vanke reported an increase in annual profit and sales that was much slower than the previous year. He added that when the company adopted “to survive” slogan during the annual staff meeting in 2018, he never thought it would become a major issue as the coronavirus threatens the survival of the industry.

The company said there will be a delay in handing over about 39,000 homes to buyers this year as the outbreak delays construction.

Zhu Jiusheng, president and chief executive officer, said the coronavirus has had a huge impact on the company, as it has lost out on 51 billion yuan (US$7.3 billion) in sales in February and the first half of March, as it hardly sold any property in Hubei province, including Wuhan, Ezhou and Yichang.

The central Chinese province has been at the epicentre of the coronavirus outbreak, forcing the authorities to put dozens of cities in complete lockdown for weeks to contain the spread of the virus that causes the Covid-19 respiratory illness.

“As a result, our liquidity has been largely compromised,” Zhu said. “We will feel higher downward pressure in the next one to two years because of the virus.”