China Vanke Co., an embattled developer grappling with severe liquidity challenges, has announced the resignation of its recently appointed chairman, Xin Jie. This departure, attributed to personal reasons, marks another significant blow to the company's precarious financial standing. Xin Jie, who assumed the chairman role in January amidst an abrupt management overhaul, has applied to resign from all related positions, as disclosed in an exchange filing to the Hong Kong stock exchange.

In response to Xin Jie's resignation, China Vanke has elected Huang Liping, the deputy party chief and general manager at Shenzhen Metro, as the new chairman. Huang Liping brings continuity to the role, having served as a board member at Vanke since 2021. This leadership change comes at a critical juncture for Vanke, whose financial position is already highly vulnerable, particularly with a significant wall of onshore debt maturities approaching.

The surprise twist of Xin Jie's departure is particularly impactful given his extensive history with Shenzhen Metro Group Co., Vanke's largest state-owned shareholder. Xin Jie had led Shenzhen Metro as chairman for the past eight years, making his resignation a notable event for the developer, which has heavily relied on consistent liquidity support from its principal shareholder.

Vanke, once recognized as China's largest developer, has become a prominent symbol of the nation's prolonged property crisis, highlighting the deepening severity of the sector's challenges. The company reported a substantial loss of 11.95 billion yuan in the first half of the year, a widening deficit compared to the previous year. Furthermore, Fitch Ratings downgraded Vanke's long-term issuer score to CCC- in August, citing a further weakening in the company’s liquidity profile.

To mitigate its financial pressures, Vanke has continued to lean on Shenzhen Metro. According to Vanke's interim report, Shenzhen Metro has provided multiple loans totaling approximately 23.9 billion yuan, specifically earmarked to assist Vanke in repaying the principal and interest on its publicly issued bonds. In September, Vanke also secured an agreement for another loan of up to 2.06 billion yuan from Shenzhen Metro, underscoring the ongoing crucial financial lifeline provided by its state-owned backer.

Xin Jie, 59, built the majority of his career within state-owned enterprises in the southern city of Shenzhen. His educational background includes a bachelor's degree in engineering from a university in Shenyang, earned in the 1980s during the early phases of China’s economic opening. After gaining experience across various sectors in Shenzhen, including foreign trade and hospitality, Xin Jie joined Shenzhen Tagen Group, a state construction firm, in 2009, eventually becoming its chairman. His appointment as chairman of Shenzhen Metro occurred in late 2017, a period just preceding the company's ascension to Vanke's largest shareholder following a contentious ownership battle. His brief tenure as Vanke's chairman began in January, succeeding Yu Liang, amid the developer’s escalating losses.

Bloomberg Intelligence analysts Daniel Fan and Hui Yen Tay have commented on Vanke’s situation, suggesting that the developer's strong relationship with the state, coupled with strategic asset disposals, will likely be pivotal in bridging its existing funding gaps and navigating the turbulent market conditions.