CHLN.OB Forum Topics
- All Comments on CHLN.OB
- General Discussion on CHLN.OB
- Five China Stocks on This Week's Watch List [view article]
- China Housing & Land May Actually Benefit from New Property Taxes [view article]
- Another Lesson In Caution for Investors in Chinese OTC Companies [view article]
- China Housing & Land Captures The Hot Chinese Real Estate Market [view article]
- Interactive Q&A: Jing Lu, Investor Relations Director of China Housing and Land Development, Inc. (CHLN.OB) [view article]
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- 5 China Stocks I'm Watching This Week
- Five China Stocks on This Week's Watch List
- China Pharma Holdings' Choice of IR Firm Looks Promising
- China Housing & Land May Actually Benefit from New Property Taxes
- Four China Stocks to Watch This Week
- Another Lesson In Caution for Investors in Chinese OTC Companies
- The Long Case For China Housing & Land Development
- China Housing & Land Captures The Hot Chinese Real Estate Market
- Interactive Q&A: Jing Lu, Investor Relations Director of China Housing and Land Development, Inc. (CHLN.OB)
- Full List of Articles »
Editors
General Discussion on CHLN.OB
Is this a buy or a sell? ReplyFive China Stocks on This Week's Watch List [view article]
I don't know if there is anything specifically going on at SOBM, but it does seem that they have a lot of good projects going. Their blockbuster is of course, the malaria vaccine. I think this stock has gotten beaten down with most of the other small caps. It does seem like it might be a good buy now.I like your comments on chln also. The chart on that looks like it might be a good buy now too. The chart is definitely more promising than SOBM. However, SOBM is also a feel good stock. Who doesn't really want to invest in a malaria vaccine? The W.H.O. has even helped fund their research and approval trials. Reply
China Housing & Land May Actually Benefit from New Property Taxes [view article]
I am unclear whether there are property taxes in China (we own a condo in Shanghai since 1991). As to "socialistic backlash, etc", the language used by the poster is unbecoming. I got the impression that, in USA, people living in large houses pay higher taxes. So, what is new? kkin365 Replyinvestor
Another Lesson In Caution for Investors in Chinese OTC Companies [view article]
EPS is a calcuation of net income divided by Weighted Average Common Share Outstanding (WACSO).Given that some of these companies have only been public for a little more than one year, the WACSO figures are skewed by the WACSO figure when these companies were still shell companies.
For example:
1. CYXI filed a 8K to go public on May 2006. Its post reverse split common share total is 33.6 million and was effected in July 2006.
CYXI had net income of 1.7 million in 3rd quarter 2007 vs. 2.9 million in 3rd quarter 2006 (of which 2.2 million was due to a tax benefit provision). Normalized, income from operations for Q3 2007 was 1.7 million vs. 0.7 million in Q3 2006.
WACSO for the 3rd quarter 2007 was 40,309,204. For the 3rd quarter 2006 WACSO was 11,418,877.
2. CDSG filed a 8K to go public on November 2006. Its post reverse split common share total is 31.5 million and was effected in March 2007.
CDSG had net income of 22.6 million in 3rd quarter 2007 vs. 3.1 million in 3rd quarter 2006.
Normalizing both figures for tax, income from operations for Q3 2007 was 4.8 million vs. 4.6 million in Q3 2006.
WASCO for Q3 2007 was 31.5 million vs. 8.1 million for Q3 2006 (when it still reflected the financials of the shell company)
Reply
China Housing & Land Captures The Hot Chinese Real Estate Market [view article]
So with such a strong earnings potential, why isn't this stock at, let's say $30,-? It's just 15 times 2009 earnings per share. It's one of those stocks with an upward potential of 500%, and it might go down 50% if market conditions go bad. Do the math. Put 10 to 15 of these stocks with such upward potential in your portfolio, and even if some go the wrong way (which will happen), the upward potential of the others will compensate more then enough and on balance, you will come out on top in 3 - 5 years. ReplyEditors
Interactive Q&A: Jing Lu, Investor Relations Director of China Housing and Land Development, Inc. (CHLN.OB) [view article]
This Seeking Alpha interactive Q & A is now closed for further questions. Thank you very much to Jing Lu of CHLN, and to all of our readers who participated.~ The Seeking Alpha Team
Director of
IR, China
Housing
Land Develpo
ment, In
Interactive Q&A: Jing Lu, Investor Relations Director of China Housing and Land Development, Inc. (CHLN.OB) [view article]
Thanks for you question and we appreciate your interest in the Company.Unfortunately we have not provided quarterly projections or formal guidance to investors so I cannot comment on our future quarterly projections. However, you bring up an extremely important point that I would like to address with investors. Inherently, the land development business is lumpy and does not lend itself favorably both on the upside and downside to quarterly year over year comparisons as during any given quarter we may be developing projects while then focusing on sales the next. We believe the best way to look at our business currently is to focus on annual results. As I have mentioned in a previous response China Housing has shown the ability to put up substantial year over year annual growth in terms of both revenue and net income since the business was privatized in 1999. So we are certainly confident we can grow in the future. As it relates to our results for 2007, conceptually speaking the first half of this year we will be focusing on developing and preparing for our next two major projects being Baqiao and Junjing Garden II while selling off the remaining minority portions of our completed Junjing Garden I and 24G projects. We intend on breaking ground on the Junjing Garden II project in the second half of 2007 while engaging in the first 45 acres of land sales for Baqiao during the fourth quarter of 2007. We anticipate having Junjing Garden II complete by the second half of 2008 and we believe it will be a significant contributor to our results later that year. As it relates to Baqiao, we anticipate beginning the necessary infrastructure construction in the near term. This will facilitate the sale of the first piece later this year and is expected to be a significant contributor to our 2007 results.
As I mention previously, there is huge potential in Xián real estate market. In 2006, xián ‘s population is over 8 million, and average living area per person is 157 sq.ft , compared to 268 sq.ft national average. And local government targets in 2020 the population will reach to 10 million, and average living area will reach to 269 sq.ft. that will be 1.26 billion sq.ft new development needed to be created by 2020. these demand will drive property appreciated in next 10 years. In 2006 housing price in XIán is 50% or 75% cheaper than Beijing and Shanghai respectively. There still is further room for housing appreciated. Additional Land appreciation in Xi’an we remain quite bullish on the market. The Xi’an market has increased about 50% over the last several years but we believe based on factors discussed previously that there is still further room for appreciation. And also according to local government “xián 10 years development plan”, in next ten years the Baqiao area will be main middle and upper-middle residential area of xián city. The government will invest 50 billion RMB to improve the infrastructure of this area in next ten year. The land appreciation in this area will very fast in the next four years.
Regards
Jing
Director of
IR, China
Housing
Land Develpo
ment, In
Interactive Q&A: Jing Lu, Investor Relations Director of China Housing and Land Development, Inc. (CHLN.OB) [view article]
Thanks Doug. As I mentioned in a previous answer we believe the real estate market in Xi’an is dramatically undervalued in relation to other major metropolitan areas in China. Subsequently, while Xi’an has experienced an approximate 50% increase in land appreciation over the last several years we have modeled for much more conservative growth as it relates to Baqiao. At current estimated prices we would need to see approximately a 10% CAGR in property prices over the next four years to achieve the $500 million revenue target. Based on prior appreciation and the outlook for Xi’an we feel this is a very realistic expectation. In regards to cost the $309 million will be used for land improvement and the cost to relocate current residents or farmers on the land. The $309 million estimate has been calculated to increase commiserate with the appreciation in raw land sale prices. Hence these costs will be much lower in the first year and then increasing as we move through year four. Right now we are estimating an approximate 25% net margin on the raw land sales for Baqiao.We do employ subcontractors for work but based on our experience and readily available access to labor we do not feel that this is a risk at the present time.
Regards
Jing
Interactive Q&A: Jing Lu, Investor Relations Director of China Housing and Land Development, Inc. (CHLN.OB) [view article]
Hi Jing,A correction for my previous mistake. I understand that Baqiao will be your major profit maker this year as you mentioned previously. Then I come up with other questions besides previous ones.
Will Baqiao be able to generate at least $14mm Net Income this year, if you assumed the sales of 24G and Junjing are flat in 2007? Besides, from an annoucement of Xi'an Land Exchange, I noticed that recently a residential land in Baqiao was sold at a price of $500,000/acre. Is it a good indication for your land price? Or will yours be much higher? And why?
Well, together with the above comment, I may raise too many questions for you. I really appreciate your answers, and wish all the best to you and your company.
MN
Interactive Q&A: Jing Lu, Investor Relations Director of China Housing and Land Development, Inc. (CHLN.OB) [view article]
Don't worry about those bubble-preachers. In an inflationary economy, its very natural for the property prices to appreciate according to the supply and demand.The UK property prices are highest in the world and have risen alot over the past decade. Many americans have been yelling about bubble-burst in the UK housing market, but on the other hand, some economists predicted no bubble in the american housing market. In fairness, if the americans' predictions should be taken seriously, the UK housing market should collapse first.
Interactive Q&A: Jing Lu, Investor Relations Director of China Housing and Land Development, Inc. (CHLN.OB) [view article]
Hi Jing, thanks for taking questions.After reading your previous replies, I am quite positive about the company. However, after finding out that the Net Income for 2007 1Q is $0.8mm, I couldn't help but wondering what you will do to hit the $16.3mm "Make-Good" target. As you mentioned before that the company is confident on achieving the target. Therefore, could you please say something about your 2Q performance and your 3Q and 4Q forecasts?
Since 24G and Jujing Garden are your major profit makers in 2007, would you please talk about their sales? Till now, what are the sold-out percentage of residentials and commercials for 24G? And for Jujing Garden?
Besides, what do you think about the future housing prices in Xi'an? I definitly think it will increase, but may not as much as Shenzhen and Shanghai. Do you have any expected growth range for Xi'an? And would you please compare CHLN's price growth with Xi'an's?
Many thanks and good luck,
MN
Interactive Q&A: Jing Lu, Investor Relations Director of China Housing and Land Development, Inc. (CHLN.OB) [view article]
Thanks for those answers. A follow up question - you have previously said you expect $500 million in revenues from Baqiao. What is your assumption on Baqiao land value (per acre) appreciation per year?You have also said you purchased the property for $34 million and expect $309 million in improvement costs. Are there relocation costs, and if so are they included in those numbers? Also, are relocation costs weighted more to later years? Put another way, will margins on the project, if you assumed flat $ per acre sales prices thru 2010, be similar in all years?
Finally, my impression is you employ subcontractors for work. Do you also use subcontractors for design and engineering? And is the work related to Baqiao different from your historical area of expertise and does this create additional execution risk?
Thanks!
Doug
Director of
IR, China
Housing
Land Develpo
ment, In
Interactive Q&A: Jing Lu, Investor Relations Director of China Housing and Land Development, Inc. (CHLN.OB) [view article]
Before the Land sale, our company is responsible for the installation and maintenance of all basic infrastructure, including water, electricity, gas supply, telecommunication and sewer systems . Thanks for your question.Jing
Director of
IR, China
Housing
Land Develpo
ment, In
Interactive Q&A: Jing Lu, Investor Relations Director of China Housing and Land Development, Inc. (CHLN.OB) [view article]
Thank Doug for your questions.For the first part of your question related to timing of Baqiao land sales please refer to the response I provided for RUF. If you need further elaboration please don’t hesitate to ask another question.
As it relates to property rights the Chinese Government owns all the land in China. However beginning in 1992 major Chinese cities began selling state-owned housing causing a structural shift in demand from state-owned private homes. Later in 1998 the Government abolished the policy of state allocation of housing. The situation currently is that residential owners will purchase a property and now have ownership for 70 years. The current issue that the Central Government is dealing with is in regards to the transfer of those rights of ownerships to related family members upon death of the owner. Recently, in the convening of the National People’s Congress in March 2007 the Government discussed enhanced protection and transfer of these rights for property owners and buyers. While no definitive rules have been set most are operating with the understanding the Government will be setting fourth new rules that clearly articulate individual’s property rights and the facilitation of the transfer of these assets in the near future.
Jing
Director of
IR, China
Housing
Land Develpo
ment, In
Interactive Q&A: Jing Lu, Investor Relations Director of China Housing and Land Development, Inc. (CHLN.OB) [view article]
Thanks for your question.As you mentioned and as part of our May 2007 private placement management of China Housing put 510,000 of their personal shares into escrow as it relates to a “make good” net income target for 2007 and 2008. These “make good” targets have called for the Company to achieve net income of $16.3 million and $35.8 million for 2007 and 2008 respectively. If these targets are not met for each fiscal year, management of China Housing would forfeit the shares in escrow to participants in the private placement. At this point I believe it is worthwhile to share our previous financial results to provide investors with a perspective as to how we plan on achieving these numbers.
Since 1999, when the Company was privatized by current management we have increased sales from approximately $2.4 million to $54.01 million in 2006 with net income increasing from a loss in 1999 to over a $9 million in 2006. In 2006 total revenue increased 65% to $54.01 million with net income increasing 91% to $9.1 million and earnings per weighted average fully diluted share increasing 88% to $0.45.
We have been able to grow the business to date with very little external financing and as you can see we have a definitive track record of profitable growth. As it relates to results this year, the proceeds of our private placement have been used to acquire 487 acres of land within the Baqiao Hi-Tech Zone. This is part of a larger 2,224 acre Xian-based development which will include residential housing, retail and light commercial space, aerospace research and a logistical center. This area has been designated by Xian government to be the new satellite city and the government will invest over $7 billion USD over the next ten years for infrastructure development such as roads and a planned subway to connect the center of Xi’an to this new area.
Additionally, according to the governments 10 year development plan, the government will move approximately 600,000 citizens from the center of the city out to this new area, bringing the total population to approximately 900,000. We have now acquired the exclusive rights to develop 487 acres of some of the most attractive portions of the total property for residential development. Our plan is to invest the necessary capital expenditures for electricity and water to prepare the area to be sold as raw land beginning in the fourth quarter of 2007. Our plan is to have discussions with major international developers to sell approximately the first 45 acres this year and another subsequent 128 acres in 2008. We have stated that in total our 487 acres we believe will generate approximately $500 million in revenue for China Housing over the next four years.
The “make good” net income targets previously mentioned were predicated on these high margin land sales in addition to the development of our Junjing Garden II project. As a matter of reference and in addition to Baqiao we are optimistic on the prospects for Junjing Garden II based on our favorable experience developing Junjing Garden I. Junjing Garden II is expected to be a 1,500 unit complex encompassing over 2.5 million in total square feet and we believe will command higher prices than that of Junjing Garden I. We anticipate that both Baqiao and Junjing Garden II will substantially contribute to our 2007 and 2008 results and will help us to achieve our “make good” targets.
Jing