(Bloomberg) -- China Vanke Co., the nation’s second-largest developer by sales, arrested an earnings slump by posting 22.6 billion yuan ($3.3 billion) in annual profit, underscoring the divide between private firms and those with state support amid a liquidity crisis. 

The company’s profit growth was largely flat for 2022, after dropping 46% a year earlier, the Shenzhen-based company said in a filing on Thursday.

Vanke’s stabilization underscores the importance of state-backing as China undergoes a record slump in the property market. The divergence between real estate companies is crystallizing, paving the way for higher-quality developers to consolidate market share. 

While Chairman Yu Liang repeated his view that the housing market peaked in 2021, he brushed off concerns that sales nationwide may fall from a cliff. Housing demand can still sustain sales at around 1.2 billion square meters, slightly above the 1.1 billion square meters last year following a record plunge. 

“If the external environment doesn’t change drastically, the housing market can stay at that level for a while,” Yu said in a post-earnings briefing on Friday. “While there’s a ceiling of new-home demand, there’s a floor too.” 

Yu’s forecast stands in sharp contrast with the chairman of smaller rival Greenland Holdings Corp., who expects the market to slump again this year. It’s also more upbeat than the chief executive officer at Greentown Management Holdings Co., who estimates sales will stay at around 1 billion square meters for a long time. 

Responding to concerns that China’s housing recovery looks short-lived with a sales rebound waning in March, Yu said the market remains in a “mild” recovery, adding industry transactions this month still topped most months in 2022. 

Vanke’s revenue reached 503.8 billion yuan in 2022, topping estimates. Sales at the developer rose 2.6% in February from a year earlier, gaining for the first time since April 2021. 

Still, shares of Vanke fell 3.3% in Hong Kong trading at 2:39 p.m. on Friday, taking this year’s decline to 21%. That’s more than the 12% drop in a Bloomberg Intelligence gauge of Chinese developers. 

The company raised HK$3.9 billion ($500 million) from a share placement in Hong Kong in March. It proposed to raise as much as 15 billion yuan onshore in mainland China. 

“Vanke might have found the bottom for its construction capacity,” Bloomberg Intelligence property analysts Kristy Hung and Patrick Wong wrote in a note before the earnings release. “This is poised to pave the way for the developer’s 2023 sales pickup.”

Earlier on Thursday, larger rival Country Garden Holdings Co. reported its first full-year loss since its 2007 listing in Hong Kong.

(Updates with chairman’s comments from fourth paragraph)

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