The "5+2+2" structure implemented in October 2024 has been cancelled and integrated into three major organizational categories: "Group Headquarters," "Regional Companies," and "Business Divisions."

On September 17, China Vanke Co.,Ltd. (000002.SZ/02202.HK) officially announced a new round of organizational restructuring, finally confirming the widely circulated market rumors about structural adjustments.

Following the adjustment, Vanke Group will form a new framework of "Group Headquarters, Regional Companies, and Business Divisions," formally dismantling the "5+2+2" structure (5 regional companies, 2 general companies, and 2 directly managed companies) that was implemented in October last year.

For real estate development business, Vanke has abolished all regional companies, streamlining the organizational structure to a two-tier "headquarters-city company" management model, with headquarters directly managing 16 city companies.

This represents the largest-scale personnel changes and organizational restructuring at Vanke since Shenzhen Metro Group Limited became the controlling state-owned shareholder and took control of Vanke's management team in January this year.

A real estate analyst from a leading brokerage firm stated that Vanke's organizational restructuring aims to further strengthen headquarters management functions and accelerate power consolidation. This move can both improve internal decision-making efficiency and enhance risk prevention capabilities, accelerating Vanke's debt reduction process and achieving unified coordination across the organization.

Vanke's organizational restructuring is not an isolated case. Among the 65 companies closely monitored by CRIC, a comprehensive real estate information service provider, 14 major real estate companies have conducted 19 adjustments since the beginning of this year, with seven of the top ten real estate companies making adjustments.

CRIC Group Chairman Ding Zuyu analyzed that their adjustment directions all center on "eliminating intermediate levels and strengthening headquarters control and city-level execution capabilities." In the short term, real estate companies' profit scale and profitability levels will continue to face pressure, with leading real estate companies responding to the industry's deep adjustment through "flattened" organizational restructuring.

Vanke did not respond to requests for more details regarding this structural adjustment.

**Strengthening Headquarters Management and Accelerating Power Consolidation**

Following this adjustment, Vanke will be divided into three types of organizations: "Group Headquarters," "Regional Companies," and "Business Divisions," formally dismantling the "5+2+2" structure (5 regional companies, 2 general companies, and 2 directly managed companies) that was implemented in October last year.

The "Group Headquarters" is positioned as the group's risk control center, strategic operations center, asset value center, and technology innovation center, responsible for formulating group development strategies, daily operations management and decision-making, and various risk controls. Beyond the existing Board Office and Group Office/Party Affairs Office, Vanke has added 11 functional centers including the Audit and Supervision Center, Human Resources Center, and Finance and Capital Center.

"Regional Companies" are positioned as coordination and execution centers for the group's frontline business, responsible for group development business and coordinating the specific implementation of business services in their territories. Based on factors such as business volume, development prospects, and asset value, Vanke has split the original 5 regional companies (Beijing Region, East China Region, Central China Region, etc.) into multiple city companies, eliminating regional-level management. After the split, Vanke has a total of 16 city companies, including Beijing Company, Guangfo Company, and Shenzhen Company, all directly managed by group headquarters.

"Business Divisions" are positioned as professional operation centers for the group's business services, responsible for daily operations management of various business services and providing professional light-asset operation capabilities. After adjustment, Vanke has established 8 business divisions including Property Services Division, Commercial and Hotel Division, and Office Division.

The group management team has also undergone certain changes.

First, Bu Lingqiu has been appointed as Group Chief Financial Officer. Bu Lingqiu comes from the "Shenzhen Metro system," having previously worked at Shenzhen Tianjian (Group) Co., Ltd., Shenzhen Tianjian Asphalt Road Engineering Co., Ltd., Shenzhen Municipal Engineering Corporation, and other companies, and served as General Manager of the Finance Department at Shenzhen Special Economic Zone Construction Group Co., Ltd. In early September this year, Bu Lingqiu officially became a non-executive director of Onewo Inc. Additionally, Han Huihua, a "veteran" who joined Vanke in 2008, continues to serve as Vanke's Executive Vice President and Chief Financial Officer.

Second, former regional company heads have begun leading specific functional departments, such as Wu Di, former Chief Partner and General Manager of East China Regional Management Department, who was promoted to Vanke's Chief Marketing Officer; and Li Wei, former Chief Partner and General Manager of Southwest Regional Management Department, who was promoted to General Manager of the Group Investment and Development Center.

Third, heads of all headquarters centers and regional companies have been reassigned to build an entirely new management team. According to previous reports, all headquarters centers have been equipped with general manager positions, with more than half of the general managers being former chief partners of Vanke's regional companies, city companies, or development and operations headquarters. The general managers of regional companies are primarily former Vanke executives, with only the Beijing region having Li Gang, Chairman of Shenzhen Metro Commercial Management Co., Ltd., and Wang Zhiyu, Deputy General Manager of Shenzhen Metro Real Estate Group Co., Ltd., appointed by Shenzhen SASAC as the top two leaders respectively.

In recent years, Vanke has undergone multiple organizational restructurings.

During the real estate boom period, Vanke attempted to eliminate the original functional departments at headquarters, instead establishing Business Development Centers, Management Centers, and Support Centers, while building a business partner mechanism. This decentralized approach helped Vanke achieve rapid business growth.

By 2021, as real estate entered a downturn, Vanke experienced shrinking sales scale and declining profitability. At the annual results conference held in March 2022, then-Chairman Yu Liang stated that with increasingly fierce competition and more large, complex projects, the fully authorized, distributed management approach faced challenges. Additionally, Vanke's city companies had varying capabilities and disparate project management, with some projects performing below average and dragging down overall business returns.

Previous reports indicated that Vanke's adjustment follows the core principle of "strengthening control while stimulating vitality," aiming to achieve a crucial balance between strengthening organizational control and maintaining market vitality, striving for dual improvements in governance effectiveness and business development.

Ding Zuyu noted that new problems will emerge alongside real estate companies' organizational restructuring. For example, management adjustments and changes often face challenges of cascading team personnel changes and talent loss. Additionally, the transition period of organizational restructuring brings new challenges, such as coordination and integration between headquarters and regional personnel. These are key points that companies need to balance urgently after adjustments.

**Operations Continue Under Pressure**

Vanke currently still faces significant operational pressure and severe liquidity crisis.

Concurrent with the organizational restructuring, on the evening of September 16, Vanke announced that Shenzhen Metro Group would provide loans not exceeding 2.064 billion yuan to Vanke for repaying public debt principal and interest. This marks the tenth capital injection by Shenzhen Metro this year, having cumulatively provided nearly 26 billion yuan in funding for Vanke.

In 2025, Vanke faces over 36 billion yuan in maturing or exercisable domestic and overseas public debt. Although Vanke has timely repaid 24.39 billion yuan in public debt, liquidity difficulties remain unresolved.

According to Vanke's 2025 interim report, the company posted a net loss of approximately 10.865 billion yuan in the first half, with losses expanding 27.51% year-over-year. Attributable net profit losses reached approximately 11.947 billion yuan, increasing 21.25% compared to the same period last year. Vanke's sales continued declining, with first-half 2025 sales of 69.11 billion yuan, with the year-over-year decline expanding from 37.6% in the first half of 2024 to 45.7%.

Vanke explained that one reason for the performance losses was the significant decline in real estate project settlement scale, with gross margins remaining at low levels. In 2025, Vanke's development business settled 5.336 million square meters with settlement revenue of 74.05 billion yuan, declining 39.3% and 33.7% year-over-year respectively.

However, in the first half of 2025, Vanke's development business settlement gross margin was 8.1%, up 1.3 percentage points year-over-year. This marks the first turnaround after six consecutive years of declining gross margins for Vanke's development business.

The more significant reason for Vanke's profit losses was inventory impairment and provision charges. In the first half of 2025, the company made inventory impairment provisions of approximately 5.114 billion yuan, surging approximately 165% year-over-year; the company made inventory impairment provisions of 2.92 billion yuan for non-consolidated projects, increasing 2.75 billion yuan year-over-year.

Losses from joint venture projects also affected Vanke. Financial reports show that in the first half of 2025, joint venture companies contributed equity profit losses of 805 million yuan, resulting in overall investment income losses of 568 million yuan for Vanke. In the same period of 2024, joint venture companies contributed 496 million yuan in equity profits for Vanke.

As of the end of June 2025, Vanke's total assets were approximately 1.194 trillion yuan, down 7.16% compared to the end of 2024; total liabilities were approximately 872.988 billion yuan, down 7.85% compared to the end of 2024; net assets were approximately 321.161 billion yuan, shrinking by 17.694 billion yuan compared to the end of 2024, a decline of 5.22%.