Refinancing strain: December refinancing concerns revived default fears despite policy support.

Shorts trim exposure: Short interest has eased from highs, signaling profit-taking rather than a sentiment shift.

Borrow stress builds: October utilization spikes preceded a sharp rise in short borrow costs in December.

Shorts trim exposure to China Vanke as shares hit new lows, signaling profit-taking amid persistent funding stress.

China Vanke (2202 HK) shares have continued to fall to new lows, while short interest has begun to ease. The divergence suggests profit-taking by shorts, with refinancing concerns and weak confidence in private developers still weighing on sentiment.

Vanke remains a key test case for China’s property sector and policy credibility. While government support has helped stabilize near-term risks, securities lending and positioning data point to ongoing stress beneath the surface.

Short Interest and Price

Vanke short interest climbed through the fall, rising from about 350 million shares in early October to a peak near 500 million shares by late November as refinancing risks came into focus. Short positioning eased as shares fell to new lows in early December, with short interest retracing to 390 million shares at present, in part a reflection of tighter borrow availability rather than a broad shift in bearish conviction.

Borrow conditions began tightening well ahead of the early-December selloff, with borrow utilization rising sharply in October, a signal that typically precedes increases in borrow costs. That risk was realized in early December, when renewed default concerns triggered a spike in borrow rates. Despite a modest pullback in short interest, borrow costs have remained elevated, indicating that funding stress persists.

Shorts may be trimming exposure, but elevated financing costs signal that stress and skepticism around Vanke’s outlook remain unresolved. From crowding and concentration to funding stress and conviction, S3 data helps investors identify where risk is building before it shows up in price.

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