(Yicai Global) March 18 -- Shares of China Vanke plunged after the leading property developer said sales slid more than 35 percent last month from a year earlier as the coronavirus outbreak froze the real estate market. Its chairman also warned that the sector could be in peril.

Vanke [SHE:000002] ended 6.4 percent lower today at CNY26.30 (USD3.74), after earlier dropping as much as 7.5 percent. The benchmark Shenzhen Component Index came off 1.7 percent.

Most developers closed their sales offices after the Covid-19 epidemic broke out at the year's start, so sales of new homes ground to a halt. Vanke's February sales stood at CNY28 billion (USD4 billion), according to data the Shenzhen-based company released yesterday. The contracted sales area fell almost 30 percent to about 1.7 million square meters.

Highlighting the plight of China's real estate sector, Chairman Yu Liang told an earnings press conference yesterday that mere survival is now a realistic aim.

Net profit rose 15 percent to CNY38.9 billion (USD5.54 billion) in the year ended Dec. 31 on a 24 percent gain in revenue to CNY367.9 billion, the company's earnings report revealed yesterday. Vanke sold 41.1 million square meters for CNY631 billion last year and had a 4 percent domestic market share.

Its relative immunity mainly resulted from a focus on customers and cash flow, Yu said.

The company earned CNY45.7 billion in net operating revenue to stay in the black for 11 straight years. It had CNY166.2 billion of cash in hand at the end of 2019, an amount that dwarfed its CNY93.9 billion debt, which is set to fall due within a year. Vanke's net asset-debt ratio reached about 34 percent, low for the industry.

Chinese cities will attend more to warehousing and logistics facilities post-epidemic, and Vanke's corresponding services will thus afford it the chance for further growth, Yu added.

The company's VX Logistic Properties unit will allow access to its 59 logistics parks in 27 Chinese cities free of charge to support the fight against Covid-19, it announced on Feb. 9.

Editor: Ben Armour