Against the backdrop of declining operating revenue, sustained losses, and debt pressures, whether the new team can leverage state-owned enterprise advantages to achieve a turnaround has become a focal point of industry attention.

With a single agreement, China Vanke Co.,Ltd. has sold off its once-promising ice and snow business.

According to Hong Kong CITS' interim results disclosure, on August 26, Hong Kong CITS signed equity transfer agreements with Vanke's Changchun Vanke, Vanke Hotel Management, and related parties to acquire 75% stakes in Jilin Songhua Lake International Resort Development Co., Ltd. and Beijing Wanice Snow Sports Co., Ltd.

The Jilin Songhua Lake Resort project is the highest-quality ice and snow asset under Vanke's portfolio. According to Vanke's previous vision, it planned to deeply cultivate and expand in the ski resort industry, becoming a flagship and benchmark in China's skiing industry.

"Facing the current situation, revitalizing these resources is particularly important for Vanke. We realize that developing new projects is easier than managing existing assets," Vanke's management stated a few days ago.

Meanwhile, Vanke is internally completing its largest organizational restructuring in 30 years: dissolving the development and operations headquarters and all regional companies, reorganizing headquarters into 13 parallel centers, and establishing 16 city companies. This represents the largest management transformation since Shenzhen Metro Group's entry.

"The goal of this adjustment is to achieve a key balance between strengthening organizational control and maintaining market vitality, striving to achieve dual improvements in governance efficiency and business development," Vanke stated.

When asked for more details, Vanke did not respond. A real estate industry observer noted that both the sale of the ice and snow business and organizational restructuring are based on the same core consideration: during the real estate industry's deep adjustment period, Vanke is making every effort to "slim down and strengthen," focusing on core main businesses, recovering funds, reducing debt, and improving operational efficiency to "survive" and meet future competition.

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Divesting Ice and Snow Business

At Vanke's 2025 mid-year work conference, management stated that the past management system had certain deficiencies, with multi-track expansion exceeding the company's carrying capacity, resulting in substantial inefficient investments that led to passive operations, requiring strategic transformation and organizational change. It now appears that the ice and snow business may be one such "inefficient investment."

This transaction mainly includes two core assets: the heavy-asset Songhua Lake Resort and the light-asset Wanice management platform.

According to disclosures, Songhua Lake Company holds Jilin Province's Songhua Lake Ski Resort, operating Songhua Lake Ski Resort, Seibu Prince Hotel, Zhanyun Salomon Hotel, Qingshan Apartments, and commercial streets. Wanice Company focuses on snow resort development planning, construction consulting, operations management, marketing promotion, and ski instruction, cumulatively managing 9 renowned ski resorts.

The acquirer, Hong Kong CITS, established in July 1992, is the flagship for tourism investment and operations under China Tourism Group, a major tourism central enterprise directly supervised by the State-owned Assets Supervision and Administration Commission of the State Council.

Wang Fan, Deputy General Manager of Hong Kong CITS International Investment Co., Ltd., stated, "CITS Songhua Lake Resort has a mature customer base and good service standard system. We will focus on further developing it into an internationally renowned tourism and vacation destination, becoming a new benchmark for China's ice and snow tourism. Through acquiring Wanice Company, we also gain professional ice and snow talent teams and resource systems."

Currently, neither buyer nor seller has disclosed the specific acquisition price for this transaction.

Vanke's entry into the ice and snow industry dates back to 2011, when Vanke built Songhua Lake Resort to enter the Jilin market. In 2017, Vanke officially announced the establishment of an ice and snow business division, positioning it alongside commercial real estate and long-term rental apartments as a core new business.

Vanke invested substantially in the ice and snow business. In 2014, it disclosed that the Jilin Songhua Lake Tourism Resort project had a total planning area of approximately 20 square kilometers, with total investment reaching 40 billion yuan. The project began development in 2010, with the entire cycle lasting 20 years. Vanke founder Wang Shi endorsed this project at the time.

However, the ice and snow industry requires "large investment, long cycles, and slow returns." Vanke could only subsidize investments and operations of ski resorts, hotels, and commercial streets within the resort through "land-subsidized snow" methods.

Using 2016-2017 data as an example, Vanke's Songhua Lake project generated only 110 million yuan in snow season operating revenue, while resort real estate sales exceeded 300 million yuan. The 2020 annual report showed that Vanke's ice and snow business operating revenue accounted for only 1.03% of the group's total operating revenue. By the end of 2020, Vanke dissolved the independent ice and snow business division, merging it into the hotel and resort business division.

From 2022-2024, Vanke's ice and snow business operating revenue was 280 million yuan, 280 million yuan, and 310 million yuan respectively, showing some growth, but still representing an extremely small proportion of Vanke's total business revenue.

In recent years, accompanying the real estate industry's deep adjustment, Vanke's liquidity pressure has continued to intensify, making divestment of non-core business projects for quick capital recovery the preferred choice. Financial report data shows Vanke lost 49.48 billion yuan in 2024 and 11.947 billion yuan in the first half of this year.

The acquirer Hong Kong CITS also faces challenging financial conditions. In the first half of this year, Hong Kong CITS achieved revenue of 1.974 billion Hong Kong dollars, down 7.6% year-on-year; shareholders' attributable loss was 86.853 million Hong Kong dollars, mainly from fair value declines in investment properties and impairment provisions for certain projects. Among these, tourism attraction and related business revenue was 871 million Hong Kong dollars, with attributable losses of 112 million Hong Kong dollars.

In this acquisition, Hong Kong CITS obtained from Vanke 6 outdoor ski resorts (ski areas), 1 indoor ski facility, and 11 ski schools distributed across Jilin, Inner Mongolia, Beijing, Henan, Zhejiang, Hebei, and other locations, effectively filling gaps in its ice and snow tourism sector. However, under performance pressure, how to effectively integrate resources and break through in the ice and snow business remains an important test for Hong Kong CITS.

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Major Management Position Adjustments

While divesting "inefficient investments," Vanke's other major move is "internal surgery," comprehensively reshuffling and reshaping from headquarters to regions, from organizations to personnel, with power further centralized to headquarters and Shenzhen Metro Group.

In this adjustment, Vanke dissolved the development and operations headquarters, reallocating its functions and reorganizing into 13 major functional centers/departments with clearly designated responsible persons and redefined powers and responsibilities.

For example, the investment revitalization, asset disposal, and operations functions of the former development and operations headquarters were merged into the newly established Investment Development Center at headquarters, with former Southwest Regional Chief Li Wei as the responsible person; former Development and Operations Headquarters General Manager Zhang Hai serves as Product Management Center head; former East China Regional Chief Wu Di serves as Chief Marketing Officer; former Beijing Regional Chief Cao Jiangwei serves as Engineering Management Center head; former Ningbo Vanke General Manager Ding Ning serves as Brand Marketing Center head; veteran Hu Bo, who left 10 years ago, returns to serve as Digital Intelligence Technology Center head.

Early this year, when the Shenzhen Metro team entered Vanke, Yu Liang was demoted to Executive Vice President, Zhu Jiusheng resigned and left, and while Zhang Hai's position remained largely unchanged, Li Feng, as an important representative of Shenzhen state-owned assets, was appointed as Vanke Executive Vice President, responsible for development and operations business management and overseeing the Development and Operations Business Group.

With development and operations functions now centralized to headquarters, Li Feng will assist Board Chairman Xin Jie in presiding over Vanke Group's daily work, overseeing engineering, human resources, and other areas, while liaising with Shenzhen, Guangfo, Dongguan, and other city companies. This executive, who has long served in Shenzhen's state-owned asset system, has effectively assumed the responsibilities of Vanke's president.

Vanke's 10-month structure of "5 regional companies + 2 headquarters-directly managed companies + 2 head office companies" has completely changed, replaced by 16 city companies reporting to headquarters. This also means Vanke has moved from three-tier control to two-tier flat management.

Most general managers of the 16 city companies are Vanke veterans, such as Guangfo Company General Manager, former Southern Regional Chief Zhou Yiqun; Shanghai Company and Northeast Company general managers continue to be served by Geng Bing and Zeng Wei respectively; former Central China Regional Chief Yi Ping'an continues as Central China Company General Manager; veteran Tang Jiyang, who left years ago, has been recalled to serve as Shenzhen Company General Manager. Beijing Company General Manager Li Gang comes from major shareholder Shenzhen Metro Group, having "parachuted" into Vanke as Vice President early this year.

This organizational restructuring directly targets improving group coordination efficiency and compressing decision-making chains. According to reports, in Vanke's internal announcement, newly appointed management personnel were required to "reverse operational decline with shame-driven hearts, undertake mission responsibilities with grateful hearts, reinvigorate production and operations with progressive hearts, and adhere to bottom lines without crossing red lines with reverent hearts."

This is not just structural adjustment, but also a local power reshuffle. Against the backdrop of declining operating revenue, sustained losses, and debt pressures, whether the new team can leverage state-owned enterprise advantages to achieve a turnaround has become a focal point of industry attention.