Shenzhen Metro

Shenzhen Metro Group Co., Ltd. (“Shenzhen Metro”) is a large wholly state-owned enterprise directly administered by the Shenzhen State-owned Assets Supervision and Administration Commission (SASAC). It is responsible for more than 95% of Shenzhen’s rail transit construction and operation, and is also active in investment and financing, station-city development, resource operation, property management, and engineering survey and design. Drawing for many years on the experience of Hong Kong’s MTR, Shenzhen Metro developed a “rail + property” model: it earns income from developing properties above stations and along its lines and uses that income to fill the funding gap in rail construction and operation, so that property feeds back into rail.

From July 2015, the battle for Vanke’s equity, in which Vanke was entangled with rivals including Baoneng, China Resources Group and China Evergrande for nearly two years, continued to escalate, and the contest for control ended only when Shenzhen Metro became a shareholder. In March 2016, Shenzhen Metro and Vanke signed a strategic cooperation memorandum, and the market for a time regarded Shenzhen Metro as a “white knight” brought in by Vanke. In June that year, Vanke disclosed a restructuring proposal with Shenzhen Metro, which was opposed by major shareholder China Resources; Evergrande’s subsequent entry added further complications, and in December that year Vanke announced the termination of its plan to issue shares to acquire Shenzhen Metro assets. China Resources then transferred its Vanke A shares, about 15.31% of Vanke’s total share capital, to Shenzhen Metro in early 2017, and five months later Evergrande sold its 1.553 billion shares (14.07% of total share capital) to Shenzhen Metro. In the first half of 2017, Shenzhen Metro took over a combined 29.38% of Vanke’s shares from China Resources Group and China Evergrande at a total cost of about 66.4 billion yuan, bringing its holding close to the threshold that would trigger a mandatory tender offer; it thereby became the largest shareholder of the Vanke group and brought Vanke into its consolidated statistical reporting. According to Caixin’s reporting at the time, before Shenzhen Metro acted, Shenzhen’s top leaders had issued an instruction to the effect that Shenzhen could do without one more state-owned enterprise, “but must never lose a Vanke”; Shenzhen intended in this way to preserve Vanke’s market-oriented system and its position as an industry leader. Lin Maode, then chairman of Shenzhen Metro, was elected vice chairman of Vanke’s board at Vanke’s 2016 annual general meeting, and publicly stated that Shenzhen Metro bore responsibility for Vanke’s development and would neither interfere nor participate in Vanke’s specific business; he pledged support for Vanke’s mixed-ownership structure, its strategy as an urban supporting-services provider, its business partner mechanism and its management team in running operations according to established strategic goals, and for deepening the “rail + property” development model.

In September 2017, Xin Jie was transferred to Shenzhen Metro, and in October he succeeded Lin Maode, who was retiring on reaching the age limit, as chairman. In Xin Jie’s early tenure, Shenzhen Metro’s results grew steadily: from 2017 to 2019, operating revenue rose from 14.094 billion yuan to 20.90 billion yuan, and annual net profit rose from 6.648 billion yuan to 11.667 billion yuan, with the simultaneous growth in scale and profit driven mainly by Vanke. In June 2020, Xin Jie joined Vanke’s board as a non-independent director through the board election; in the following years he stated publicly on several occasions that Shenzhen Metro would not interfere or participate in Vanke’s specific operations, and repeatedly made clear that it would support Vanke’s management team as a long-term strategic investor. At Vanke’s 2022 annual general meeting on June 30, 2023, Xin Jie said in his capacity as a shareholder that the industry had undergone profound change over the past three years, that Vanke had held the bottom line of safe operation, and that as a shareholder he was very gratified; he added that Yu Liang had called for “survival” in 2018, that time had proven the foresight of Vanke’s management, and that in the face of the industry’s drastic adjustment it had adopted prudent operating and sound financial strategies and firmly held the bottom line of avoiding systemic risk.

After 2020, the real estate industry gradually entered a period of adjustment, and Shenzhen Metro’s results also reached a turning point: that year, revenue fell 0.77% year on year to 20.828 billion yuan, and net profit fell 4.84% to 11.102 billion yuan. In 2021, revenue fell 21.28% to 16.397 billion yuan, and net profit plunged 73.97% to about 2.890 billion yuan. From 2022 to 2023, revenue recovered somewhat, but net profit kept declining. Vanke had long been regarded as the “top student” of China’s real estate industry. From the third quarter of 2021, the property market declined continuously and private developers defaulted one after another, while Vanke, as a mixed-ownership enterprise, struggled to hold its red line of “no default”. At the end of October 2023, real estate risk spread to mixed-ownership enterprises and Vanke suffered its first credit crisis: from October 26, the prices of several of its US dollar bonds maturing within a year dropped sharply, falling a cumulative 6% to 14% by October 31, with yields to maturity hovering around 50%, in junk-bond territory; domestic bond prices also kept falling, with some yields to maturity exceeding 15%. On the 27th of that month, Vanke’s board approved Xin Jie’s election as vice chairman of the board, intended to signal state-owned shareholder support; according to earlier Caixin reporting, the arrangement was mainly meant to stabilise capital market confidence, and Xin Jie did not actually become involved in Vanke’s management. On November 6, Vanke convened an online meeting with a number of financial institutions, at which Wang Yongjian, director of the Shenzhen SASAC, and others publicly backed Vanke, saying that if Vanke encountered extreme operational risk, the Shenzhen SASAC would certainly mobilise funds and resources and do its utmost, through market-based and law-based means, to help Vanke hold its bottom line; Xin Jie said that Shenzhen Metro would take over some of Vanke’s urban renewal projects in Shenzhen, in deals expected to exceed 10 billion yuan, to provide Vanke with new liquidity, and that other measures would be studied if needed. As of the end of September 2023, Shenzhen Metro held 27.18% of Vanke, close to the mandatory tender offer threshold, leaving little room to increase its stake further.

In early 2024, under short-term liquidity pressure, Vanke negotiated a second extension of non-standard debt with several insurance institutions and faced a second credit crisis, and the attitude of Shenzhen’s state-owned assets authorities began to change. According to Caixin, Shenzhen set up a working group on Vanke in the first half of that year, made up of officials from relevant local government departments and staff of the state-owned shareholder; at first the group merely heard reports from Vanke’s management on day-to-day operations, but by the end of 2024 it had fully moved into Vanke. Since 2024, Vanke has faced a dual crisis in both operations and funding. A profit warning issued on January 27, 2025 said Vanke expected a net loss attributable to shareholders of 45 billion yuan for 2024, a year-on-year decline of 470% and Vanke’s first annual loss since its listing. According to DM Chazhaitong statistics, Vanke had 16 domestic public bonds maturing or subject to put options in 2025, with outstanding principal totalling 32.64 billion yuan, and two offshore bonds also maturing that year, with outstanding principal of about 3.6 billion yuan. According to its financial reports, at the end of September 2024 Vanke’s parent company held about 1.189 billion yuan in cash, a net outflow of about 5.931 billion yuan from the end of June. Caixin previously learned that a preliminary assessment by parties related to Vanke concluded that defusing the risk would require roughly 100 billion yuan in external liquidity support. From December 18, 2024, investor anxiety about Vanke rose again, and the prices of several of its domestic and offshore bonds moved abnormally. According to statistics from the market research institution CRIC, as of September 2024 Vanke’s assets totalled 1.3571 trillion yuan, 1.8 times those of Shenzhen Metro, and its revenue was 17 to 18 times Shenzhen Metro’s; the institution believed that whether through taking over projects or providing shareholder loans, Shenzhen Metro’s full takeover of Vanke was positive, but its impact might be relatively limited. Vanke’s deteriorating results also dragged down Shenzhen Metro’s financial performance: in the first three quarters of 2024, Vanke’s net loss attributable to shareholders of about 17.943 billion yuan caused Shenzhen Metro to post a heavy net loss of 8.074 billion yuan over the same period; for the full year 2024, Shenzhen Metro’s revenue turned to decline and it recorded a net loss of 33.566 billion yuan. According to a Caixin report in February 2025, taking into account paper losses from Vanke’s falling share price and the funding cost of the original share purchase, Shenzhen Metro’s total loss on its 66.4 billion yuan investment had exceeded 33 billion yuan.

On January 27, 2025, Vanke announced that Shenzhen Metro chairman Xin Jie had succeeded 60-year-old Yu Liang as chairman of Vanke’s board, that president Zhu Jiusheng had resigned from all positions, that Li Feng, Hua Cui and Li Gang from Shenzhen’s state-owned assets system had become Vanke vice presidents, and that Tian Jun had become board secretary. When the rescue began, the head of the Shenzhen SASAC said that by the end of 2024 the assets of Shenzhen’s municipal state-owned enterprises exceeded 5 trillion yuan, with full-year revenue of more than 1 trillion yuan, and that Shenzhen had the ability, the strength and enough “ammunition” to support Shenzhen Metro in promoting Vanke’s stable development by every possible market-based and law-based means; the official added that Shenzhen would coordinate assets, funds and resources and, building on existing support tools, proceed continuously and in batches through direct capital injections, asset transfers and other means to further lower Shenzhen Metro’s debt-to-asset ratio and strengthen its liquidity, helping it better perform its role as Vanke’s largest shareholder. At the same time, the heads of eight state-owned and joint-stock banks in Shenzhen publicly expressed firm confidence in Vanke’s future development and said they would continue to actively use loans, bonds, asset management, trusts and other financial instruments to meet Vanke’s reasonable financing needs.

On February 5, 2025, Vanke issued an internal notice proposing the appointment of ten new operating and management personnel, most of them from Shenzhen Metro or its real estate and other subsidiaries, distributed across core departments at Vanke headquarters and its main regional companies; on the same day it was made clear that Xin Jie would preside over the work of the Vanke group in full.

Substantive financial support from the state-owned shareholder arrived quickly. On the evening of February 10, 2025, Vanke announced that Shenzhen Metro planned to provide a shareholder loan of 2.8 billion yuan, to be used to repay Vanke’s maturing public debt; Vanke would provide credit-enhancement assets to Shenzhen Metro at a 70% pledge ratio, planning to pledge part of its stake in Onewo with a market value of 4 billion yuan. Onewo is the property services business spun off from Vanke and separately listed; Vanke directly and indirectly holds about 661 million Onewo shares, about 57.12% of the company. Caixin calculated that, excluding the portion pledged to Shenzhen Metro, Vanke still held Onewo shares with a total market value of about 8.65 billion yuan, and at a 70% pledge ratio could obtain about 6.06 billion yuan in additional funds by pledging them. On February 21, 2025, Vanke announced that Shenzhen Metro planned to provide a further shareholder loan of 4.2 billion yuan to repay its maturing public debt, with a term of three years and an interest rate of 2.34%. According to the announcement, the loan would first be guaranteed by Vanke subsidiaries Shanghai Vanke Investment Management Co., Ltd., Shenzhen Vanke Development Co., Ltd. and Vanke Apartment Management Co., Ltd.; within three months Vanke was to hold a shareholders’ meeting to approve the relevant resolutions and provide credit-enhancement assets worth 6 billion yuan in total at a 70% pledge ratio, after which the three companies’ guarantees would be released; if the credit-enhancement swap could not be completed on time, Vanke would have to repay the loan immediately or provide other qualified security. Vanke said the shareholder loans helped meet the company’s funding needs, that the interest rates on both loans were lower than those of its financing from financial institutions, and that the pledge ratios were higher than the customary market level of 30% to 60%, fully reflecting the major shareholder’s support. According to Caixin, Shenzhen Metro had helped Vanke defuse risk through project acquisitions, shareholder loans and other means, and the two shareholder loans alone had directly injected 7 billion yuan into Vanke.

Shareholder loans were only the first step in the rescue by the Shenzhen government and the state-owned shareholder. According to Caixin, before the state-owned shareholder took over, Vanke had drawn up a preliminary debt resolution plan, intending to pledge its stakes in Onewo and Boyu to banks to obtain more new loans and resolve its public bond problem, with the two assets initially valued at more than 50 billion yuan; however, with the property market persistently depressed, assets losing value and banks strongly risk-averse, the banks offered a pledge ratio of no more than 70% and required half of any new loans to be used to replace existing debt, making it very difficult for Vanke to obtain new funds. After Shenzhen further assumed its local responsibility, it was also coordinating banks to increase financing support for Vanke, especially by providing more new loans. Several bankers said that after state-owned representatives moved in, banks treated Vanke as a special borrower comparable to a state-owned enterprise, and their willingness to lend increased. Several real estate industry figures said that the state-owned shareholder’s takeover of Vanke would help boost capital market confidence and stabilise Vanke’s share and bond prices in the short term; since financial institutions still practise “ownership discrimination”, the state-owned shareholder’s move could also provide more substantive credit enhancement for Vanke’s new financing. Vanke’s debt situation finally began to turn. In 2024, Vanke rescued itself through “selling everything”-style asset disposals and financing by pledging some assets, getting through the difficult period with great hardship; but by 2025 it could no longer escape danger on its own strength, with 9.89 billion yuan of domestic public bonds due for repayment in the first quarter alone.

In 2025, Shenzhen Metro stepped in 13 times as major shareholder, providing Vanke with shareholder loans totalling 31.46 billion yuan; Vanke actually drew 30.797 billion yuan and repaid 30.49 billion yuan of public debt on time. Public data show that collateral had been put in place for nearly 10 billion yuan of these more than 31 billion yuan of shareholder loans; since 2025, Vanke has used all of its equity in Onewo, all of its equity in the Hangzhou Vanke Zhigu project, all of its equity in its project company in Jiaxing, and two self-held office assets and three long-term rental apartment projects as credit-enhancement assets for the shareholder loans. As of December 2025, more than 21 billion yuan of the loans Vanke had drawn from Shenzhen Metro remained unsecured. On November 2, 2025, the two parties signed a framework agreement on shareholder loans, under which, from 2025 until the date in 2026 on which Vanke holds its 2025 annual general meeting, Shenzhen Metro would provide shareholder loans in batches with total principal capped at 22 billion yuan, and Vanke would have to provide pledge or mortgage security for every loan actually drawn; the agreement was retroactive, with the 22 billion yuan quota covering both new loans after the agreement took effect and loans Vanke had drawn from the start of 2025 to November 2 without providing substantive collateral, while loans already secured were excluded from the cap. Under the agreement, Vanke would provide credit enhancement to Shenzhen Metro at a pledge ratio of 50% to 70% of asset valuation or equity value; on this basis, Vanke would still need to provide Shenzhen Metro with collateral worth about 30.5 billion to 42.7 billion yuan in total. On November 20, 2025, Vanke held its first extraordinary general meeting of 2025, which approved the framework agreement on shareholder loans. According to Caixin, in the first 11 months of 2025 Shenzhen Metro provided more than 30 billion yuan of liquidity support to Vanke; with Shenzhen Metro’s annual revenue at only a little over 20 billion yuan, providing more than 30 billion yuan in shareholder loans to Vanke, though fully pledged and retroactive, already went far beyond its own “risk comfort zone”. According to Caixin, after Shenzhen Metro brought Vanke into its consolidated statistical reporting, the Vanke stake appeared in its statements under “investment income”, so Vanke’s heavy net losses attributable to shareholders put pressure on Shenzhen Metro’s profits; combined with its continued high infrastructure investment and rapidly growing financing, Shenzhen Metro could hardly keep “transfusing blood” to Vanke with its own funds alone, so some of the 2025 shareholder loans were very likely bank loans Shenzhen Metro took out in its own name and then on-lent to Vanke. In early November 2025, Shenzhen Metro suddenly announced quota management of shareholder loans; according to people familiar with the matter, from then on various parties in Shenzhen began sending signals aimed at managing financial institutions’ expectations of rigid repayment by Vanke.

On October 13, 2025, Vanke announced a change of chairman: Xin Jie resigned as chairman in writing and was succeeded by Shenzhen Metro general manager Huang Liping. In the same month, the “Leadership Message” page on Shenzhen Metro’s website removed Xin Jie’s photo and name, leaving only the title “Party Secretary and Chairman of the Group” as the signature; in November 2025, Shenzhen Metro’s legal representative was also changed from Xin Jie to Huang Liping. Caixin had earlier learned from multiple sources that Xin Jie lost contact in September 2025, and in the middle and latter part of that month word spread in Shenzhen that he had been taken away by the relevant authorities to assist an investigation. On April 29, 2026, Shenzhen Metro announced that Xin Jie had stepped down as chairman, saying the position was currently vacant, that the new chairman would be disclosed in a timely manner, and that the personnel change would not have a material adverse effect on the company’s day-to-day management, production and operations, or debt repayment ability. Xin Jie was born in June 1966 and holds the titles of professor-level senior engineer and senior economist. His career has been rooted in Shenzhen’s state-owned assets system: after graduating from Shenyang University of Technology in 1988 he joined Shenzhen Foreign Trade Group, later joined Shenzhen Great Wall Property and rose to deputy general manager within the Shenzhen Great Wall Investment Holdings system, moved to Tagen Group in October 2009 and rose to Party secretary and chairman, and was transferred to Shenzhen Metro in September 2017, leading it for the past eight years. After Xin Jie’s departure, Huang Liping, born in 1968, ranked first in Shenzhen Metro’s senior management team; he also serves as deputy Party secretary and a director of Shenzhen Metro.

On November 26, 2025, Vanke announced that it was seeking an extension of its medium-term note “22 Vanke MTN004”, and subsequently launched extensions on several more onshore bonds, as its debt risk formally erupted. On January 27, 2026, Vanke announced that Shenzhen Metro planned to provide a further 2.36 billion yuan in shareholder loans to repay principal and interest on Vanke’s public bonds. According to Caixin, as of the end of March 2026, Vanke’s overall debt disposal plan had not yet been finalised and awaited a decision by the local government; for Vanke to fulfil the down-payment commitments of its bond extensions, it would very likely still need Shenzhen’s state-owned assets authorities to continue providing liquidity support.

Shenzhen Metro’s profitability and liquidity remain under pressure. In 2025 it posted a loss for the second consecutive year, with the loss widening 10.82% year on year to about 37.197 billion yuan; at the end of 2025, its short-term borrowings and non-current liabilities due within one year totalled about 36.183 billion yuan, up 57.12% from the end of 2024, and its net assets were about 290.499 billion yuan, nearly 11 billion yuan less than at the end of 2024. In an announcement on April 29, 2026, Shenzhen Metro said its 2025 loss was equivalent to 12.34% of its net assets for the period; because its associate Vanke suffered huge losses during the period, Shenzhen Metro had to recognise losses on its long-term equity investment in Vanke and make provisions for investment impairment. Over the past four-plus years, as the property market remained depressed and Vanke’s results deteriorated, Vanke became one of the main factors affecting Shenzhen Metro’s performance. According to Caixin, as of mid-2025 Shenzhen Metro held 27.18% of Vanke’s shares.