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Xinyuan Real Estate - Some Good News

Apr. 09, 2020 1:27 AM ETXinyuan Real Estate Co., Ltd. (XIN)24 Comments
Elliott R. Morss profile picture
Elliott R. Morss


  • The world is entering a global recession that will not end soon.
  • It all started in China.
  • But it is worth taking another look at this Chinese real estate company.

Elliott R. Morss, Ph.D. ©All Rights Reserved

With all the talk of virus, global recession, etc., one might have expected bad news from Xinyuan Real Estate’s (NYSE:XIN) latest report. At least for the entire year 2019, the total revenue increased 11.9% to $2.5 billion from $2.2 billion in 2018. But looking on a quarter-by-quarter basis, the numbers are not spectacular:

(Source: SEC Report)

And these numbers should get worse before they get better: they cover the last three months of 2019, just before the virus hit Wuhan.

That having been said, there are several reasons to be optimistic about XIN going forward.


First, XIN maintained its 10 cent dividend or near-16% dividend yield. At least to Western investors, this continued dividend payment is important: it symbolizes the company’s concern for its stockholders and a solid cash flow since 2011.

New IR Firm

Second, its ridiculously attractive financial numbers (dividend rate 10%, price/earnings ratio of 2.2) suggest that word is not getting out on the company. So, it switched its IR firm to the Blueshirt Group. Hopefully, this will help.

TPG Liquidation

And finally, you might remember:

BEIJING, Aug. 26, 2013 /PRNewswire/ -- Xinyuan Real Estate Co., Ltd. (NYSE: XIN, "Xinyuan" or "the Company"), a real estate developer with a focus on high growth cities in China, announced today that the Company has entered into an agreement with TPG, one of the world's leading private investment firms, under which TPG will invest US$108.6 million through the purchase of convertible notes and common shares.

Under the agreement, TPG has agreed to purchase 1) convertible notes due 2018 in the aggregate principal amount of US$75.8 million, and 2) US$32.9 million worth of common shares. The convertible notes carry an annual cash coupon rate of 5.0% and will be convertible into Xinyuan's common shares at an initial conversion price

This article was written by

Elliott R. Morss profile picture
Elliott Morss has spent most of his career teaching and working as an economic consultant to developing countries on issues of trade, finance, and environmental preservation. Dr. Morss received a B.A. from Williams College in 1960 and a Ph.D. in political economy from The Johns Hopkins University in 1963. He has taught at the University of Michigan, Harvard, Boston University, Brandeis, and most recently at the University of Palermo in Buenos Aires. For several years, he worked in the Fiscal Affairs Department of the International Monetary Fund. He later helped establish Development Alternatives, Inc. (dai.com), a firm that became the largest contractor to the U.S. foreign assistance program (AID). Since his first IMF assignment in Ghana in 1966, he has worked in 45 countries. He has been the President of the Asia-Pacific Group, a British Virgin Islands for profit company with investments in Cambodia, China, and Myanmar. With Dr. Zhu Jia-Ming, he established Green China, an American NGO with the mission to increase the dialogue in China on the trade-offs between economic growth and environmental preservation. Dr. Morss has co-authored six books and published more than 50 articles in professional journals. He is currently available for consulting assignments.

Analyst’s Disclosure: I am/we are long XIN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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