Vanke: Cash flow key to mitigating fallout from outbreak

China Vanke Co, one of China's largest property developers, admitted to being heavily bruised by the novel coronavirus and regarded cash flow as the means of mitigating the outbreak's economic fallout.

"In 2018, we proposed the concept 'to survive', or to keep vigilant, but today 'to survive' has become literal", said Vanke Chairman Yu Liang at an online press conference Tuesday night.

He stressed Vanke can survive the crisis only if it can ensure the safety of cash flow. So far, 92 percent of the company's products are small and medium- sized houses, which can guarantee sufficient cash flow, he added.

In 2019, the company's net operating cash inflow reached 45.69 billion yuan ($6.52 billion) and it has realized positive cash flow for 11 consecutive years, according to its latest annual report.

The report also shows the developer raked in 367.89 billion yuan revenue in 2019, up by 23.6 percent, and its net profit recorded year-on-year growth of 15 percent.

Also worth noting is its property management sector, which surged 29.7 percent in revenue and became another business unit with revenue above ten billion yuan in addition to its property unit.

But Yu Liang claimed they have no plan to list Vanke's property management business on the stock market yet.

As to the developer's performance after the coronavirus outbreak began, its president Zhu Jiusheng said about 80 percent of project construction has resumed and 72 percent of its staff is back to work at present.

However, he reckoned sales were reduced by 51 billion yuan in February and March compared to the same period last year.

Moreover, most projects under construction have been delayed over one month, meaning about 39,000 clients could expect delayed house delivery in 2020.