The association business of Wanwu Cloud has shrunk to 6%, and the "de-Vanke-ization" is nearing completion.

Collecting property management fees is becoming more difficult, impacting property management companies’ earnings.

The negative news from the real estate development business downturn is still being passed down into the property management industry.

On March 20, listed property company Vanke Cloud (02602.SZ) disclosed at its 2025 results press conference that for the full year, the company achieved total revenue of RMB 37.272 billion, up 2.7% year over year. Core net profit was RMB 2.128 billion, up slightly 0.8% year over year; if the impact of the developer business is excluded, core net profit was RMB 1.708 billion, up 11.1% year over year.

Cyclic business revenue—Vanke Cloud’s main source of income—was about RMB 33.402 billion, up 8.5% year over year, accounting for 89.7% of total revenue. This business segment includes three major lines: residential property services, property and facility management services, and BPaaS solution offerings. Revenue from each was RMB 20.555 billion, RMB 9.806 billion, and RMB 1.346 billion respectively, and all of them achieved year-over-year growth.

Although revenue scale continued to grow, the profitability of each business segment showed fluctuations. The gross margin fell 0.5 percentage points year over year to 11.6%; residential property services, the company’s “core” business, saw its gross margin decline 0.7 percentage points to 11.7%.

Regarding the fluctuation in gross margin, He Shuhua, executive director and chief operating officer of Vanke Cloud, analyzed that the rigid increase in costs was offset to an extent, staying basically flat versus 2024; meanwhile, on the revenue side, there are impacts from the ramp-up period of newly onboarded projects and the decline in collection rates.

On the ramp-up period for new projects, He Shuhua said that Vanke Cloud’s expansion in residential property management has shifted from incremental growth to stock-based competition. “Since it’s stock-based competition, projects flowing into the market may have various issues, such as service quality or customer-group relationships. Therefore, in the early stage of takeover, there may be extra costs needed, so the gross margin of early projects will tend to be lower.”

Vanke Cloud’s chairman Zhu Baquan also mentioned that for projects that have been under management for one year, the collection rate and gross margin are at their lowest levels. As the length of the takeover increases, gross margin and collection rates rise year by year. After five years of takeover, they will reach a relatively reasonable level.

Difficulty in collecting property management fees is a problem facing the entire industry. A research report released by CRIC recently shows that in 2025, the average collection rate of the top 500 property companies nationwide fell to 71%, having declined for four consecutive years; among listed property companies, the average collection rate was 78%.

“From internal data analysis, the current high housing vacancy rate is an important factor affecting collection rates.” He Shuhua said that in projects newly taken on in 2025, because developers have not sold out or, after delivery, homeowners do not accept the properties, resulting in about a 30% vacancy rate. “Charging for this portion is quite difficult, and there is also a discount risk.” At the same time, affected by fluctuations in residential prices, homeowners’ willingness to pay is also decreasing.

Regarding the issue of vacancy rates, Zhu Baquan described it as “beyond expectations.” “Houses are not easy to sell right now. In a delivered residential community, there may be more than 30% unsold homes. Should we take on such projects?”

Zhu Baquan said that while 70% of the delivered community’s units have been sold, the remaining 30% that developers need to pay for in vacancy property management fees is something the company has to passively accept—and the receivables for this portion often turn into bad debt. To reduce receivables, the company has to participate in all real estate firms’ arrangements where they provide property in lieu of debt to suppliers, but the properties provided in lieu of debt often face impairment. In addition, there are also many vacancy rates for homes already purchased by homeowners, which increases the burden on homeowners who do pay.

In facing these challenges, Vanke Cloud, on the one hand, tries to increase operational efficiency to offset pressure from rising costs through its Diecheng strategy, leveraging labor reuse and technology applications; on the other hand, it does so through its Pulin business line to help developers clear out unsold inventory at the tail end of projects. The money used to clear out tail-end inventory is prioritized for paying property management fees for vacant properties.

“This year, we have also set stricter bottom-line standards for taking on new projects to prevent projects that could bring operational risks from flowing into our core business.” He Shuhua explained. At the same time, for previously accumulated projects that have already become loss-making, the company conducts special governance. Using the logic of flexible pricing, it negotiates with customers to reach a consensus that quality and price match. For projects that cannot be turned around to profit, it exits in a timely manner.

Regarding related-party business transactions that the market generally pays attention to, during the reporting period, Vanke Cloud continued to make efforts to reduce their impact.

Vanke Cloud’s financial负责人王绪斌 said that on one hand, it conducts proactive management to push the share of related-party business to continue declining. In 2025, related-party transaction revenue was RMB 2.24 billion, down by about RMB 1.2 billion year over year. The share of total revenue decreased from 9.5% to 6%. “This change will bring some pressure to the company in the short term. Because the contraction of related-party business will cause revenue and gross profit to decline to some extent. But from a long-term perspective, this is also the inevitable path for the company to optimize its revenue structure, improve operating quality, and strengthen the independence of its business.”

On the other hand, Vanke Cloud’s core business has become increasingly clear in moving toward market-oriented operations and non-developer-related business. In 2025, Vanke Cloud’s non-related-developer business revenue was RMB 34.72 billion, up 8.4% year over year.

In addition, for stock-related party receivables, Vanke Cloud continues its collection efforts and addresses them by comprehensively using methods such as cash repayments and asset transfers in lieu of debt. In 2025, it累计 achieved RMB 2.85 billion in related-party repayments. By year-end, the absolute value of outstanding receivables decreased by RMB 0.38 billion, a drop of about 15.6%. In January to February this year, it also recovered RMB 0.48 billion again. “Overall, our related-party receivables scale is declining, and the risk exposure has been continuously shrinking.”

However, looking only at the 2025 performance data, the impact brought by related parties still remains. During the reporting period, Vanke Cloud accrued credit impairment losses of RMB 0.74 billion, up by about RMB 0.48 billion year over year. This also led to Vanke Cloud’s profit during the year being RMB 0.77 billion, down sharply 38% year over year. Wang Xubin said that in 2026, related-party transactions with Vanke will further decline.

Zhu Baquan also mentioned that the accrual for impairment on this related payment made the net profit figures in the annual report look less favorable. “The first half of 2026 will be relatively volatile, but the full year will be stable.”