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Risk And Reward With Xinyuan Real Estate

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Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k) Edgar (US Regulatory) - 1/26/2021 4:25:37 PM
Xinyuan Real Estate Co., Ltd. Announces Issuance of US$170 million of 14.0% Senior Notes Due 2024 PR Newswire (US) - 1/25/2021 5:00:00 PM
Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k) Edgar (US Regulatory) - 12/31/2020 5:05:25 PM
Xinyuan Real Estate Announces Changes to Board of Directors PR Newswire (US) - 12/31/2020 4:40:00 PM
Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k) Edgar (US Regulatory) - 12/22/2020 4:02:02 PM
Xinyuan Real Estate Co., Ltd. Announces Results of its 2020 Annual General Meeting PR Newswire (US) - 12/22/2020 8:30:00 AM
Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k) Edgar (US Regulatory) - 12/11/2020 4:40:25 PM
Xinyuan Real Estate Announces Early Payment of RMB1 Billion of Bond Due December 28, 2020 PR Newswire (US) - 12/11/2020 8:30:00 AM
Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k) Edgar (US Regulatory) - 11/30/2020 4:06:30 PM
Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k) Edgar (US Regulatory) - 11/27/2020 3:20:08 PM
Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k) Edgar (US Regulatory) - 11/27/2020 1:06:14 PM
/C O R R E C T I O N -- Xinyuan Real Estate Co., Ltd./ PR Newswire (US) - 11/27/2020 10:34:00 AM
Xinyuan Real Estate Co., Ltd. Announces Third Quarterly Dividend for 2020 PR Newswire (US) - 11/27/2020 5:35:00 AM
Xinyuan Real Estate Co., Ltd. Announces Third Quarter 2020 Financial Results PR Newswire (US) - 11/27/2020 5:30:00 AM
Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k) Edgar (US Regulatory) - 11/23/2020 4:03:16 PM
Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k) Edgar (US Regulatory) - 11/23/2020 4:02:21 PM
Xinyuan Real Estate Co., Ltd. to Report Third Quarter 2020 Unaudited Financial Results on November 27, 2020 PR Newswire (US) - 11/23/2020 8:45:00 AM
Xinyuan Real Estate Announces Payment of 8.875% Senior Notes Due November 22, 2020 PR Newswire (US) - 11/23/2020 8:30:00 AM
Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k) Edgar (US Regulatory) - 11/16/2020 4:03:45 PM
Xinyuan Real Estate Co., Ltd.'s China Subsidiary Completes the Issue of RMB900 million of Onshore Corporate Bonds in China PR Newswire (US) - 11/16/2020 8:30:00 AM
Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k) Edgar (US Regulatory) - 11/12/2020 6:06:05 AM
Xinyuan Real Estate Co., Ltd. to Hold Annual General Meeting of Shareholders on December 18, 2020 PR Newswire (US) - 11/11/2020 8:30:00 AM
Xinyuan Real Estate Co., Ltd. Announces Completion of Partial Repurchases of Senior Notes GlobeNewswire Inc. - 9/24/2020 4:34:26 PM
Report of Foreign Issuer (6-k) Edgar (US Regulatory) - 9/18/2020 4:01:56 PM
Xinyuan Real Estate Co., Ltd. Announces Issuance of US$300 million of 14.5% Senior Notes Due 2023 PR Newswire (US) - 9/18/2020 8:30:00 AM
TrueTrades   Tuesday, 04/14/15 07:57:42 AM
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Risk And Reward With Xinyuan Real Estate
Apr. 14, 2015 7:30 AM ET | About: Xinyuan Real Estate Co., Ltd. (XIN)

Here's a stock that has been on a roller coaster in the last 4 years, but one that could become a rocket any time now. As far as being a Ben Graham net current asset trade, its margin of safety is extremely high.

As of the latest quarterly statement, Xinyuan’s (NYSE:XIN) balance sheet shows a net current asset value of $782 million. Compared to the market capitalization of $242 million, that presents explosive upside potential. Especially, given that they are one of the few companies that are net current asset positive and are also profitable. This is not a company that many look at from a growth perspective, because despite the fact that revenue and income both more than doubled from 5 years ago, the stock is trading at about the same (or even lower) price, and shareholders now receive an annual dividend payment of 6.23%.
Balance Sheet

Screen Shot 2015-04-12 at 9.34.41 AM
Price Chart

(click to enlarge)

Of course, the biggest factor for many of these Chinese companies has been fraud. Yet, with Xinyuan, I think it’s fair to say that the company is real and the books are correct. I was recently in New York and it reminded me of the Williamsburg project the company has in Brooklyn, which has been selling condos for around $1,100 a square foot.

The project (Oosten) has a total of 400,000 square feet, which means total sales from the project are likely to exceed $400 million. The cost is to be less than $250 million, so when expenses and interest are taken out, XIN could add more than $100 million to its cash position. That alone is worth close to one half (½) of the current market capitalization.

Do they have inventory piling up? Yes, over 2,000 active projects are still unsold. But so what? It’s not like a used car that’s depreciating as it sits on the lot and gets older. If anything, the value of the company’s holdings will be getting more valuable.

Fourth quarter revenues of $362 million, a 121% increase from third quarter of 2014; contract sales of $402 million, which is a 140% increase from the third quarter of 2014. The annual comparisons show the company surviving the downturn in the Chinese market with revenues up 2.5% to $920 million in 2014; floor area sales down 5.5% to 629,000 square meters; and net income down 61% from $126 million in 2013 to $48 million in 2014. For me this is not a big deal as long as they are adding to Book Value, which XIN seems to be doing very well.

In fact, the book value is close to $13 per share. With the Brooklyn project coming to an end and sold by next year, XIN could tack on another $1 on its book value.

The stock sits at $3.20. It’s a bargain. The risk would be if the company is truly a fraud; I don’t believe that’s the case. The reward is for a patient investor to see 100% gains in the next few years, or sooner.

Disclosure: No positions
Risk And Reward With Xinyuan Real Estate



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