Core Viewpoint - Vanke's defense strategy requires three conditions for success: continued liquidity support from Shenzhen State-owned Assets Supervision and Administration Commission and Shenzhen Metro Group, successful asset reduction to achieve deleveraging, and a genuine recovery in the real estate market [1][12]. Group 1: Financial Support and Borrowing - In 2025, Vanke received a loan of 1.681 billion from Shenzhen Metro Group, marking the ninth loan from shareholders this year, totaling 24.369 billion [3]. - The loans from Shenzhen Metro Group have favorable terms, with an interest rate of 2.34%, significantly lower than the national interbank lending rate [3][5]. - Vanke's borrowing has primarily been secured against its shares in Wanwu Cloud, with a pledge rate of 70%, indicating a high level of collateralization [4][8]. Group 2: Asset Management and Financing Challenges - Vanke has been selling projects to recover funds, such as the sale of the Shenzhen Super Headquarters and the transfer of 49% of the Red Tree Bay project's future investment rights [3]. - The company faces challenges in securing quality assets for financing, as many of its assets are now encumbered, limiting further pledging opportunities [4][8]. - The lack of quality assets for collateral is reflected in the recent loans, which include less desirable assets like non-listed company shares [8][9]. Group 3: Financial Performance and Market Conditions - Vanke is projected to report a net loss of approximately 9.85 billion for the first half of 2025, primarily due to a significant decline in project settlement scale and low profit margins [11]. - The company's financial struggles are expected to impact Shenzhen Metro Group's financial statements, as Vanke's losses affect its investment returns [10][11]. - The overall crisis at Vanke symbolizes broader industry challenges, necessitating intervention from state-owned entities to stabilize the situation [12].