EX-99.1 2 v446828_ex99-1.htm EXHIBIT 99.1

 

Exhibit 99.1

 

Xinyuan Real Estate Co., Ltd. Announces Second Quarter 2016 Financial Results

 

2016 Second Quarter Contract Sales Up 42.8% YoY to US$474.4 Million

2016 Second Quarter Net Income Up 37.6% YoY to US$27.8 Million

Raises FY16 Contract Sales and Net Income Growth Forecast

Doubles Quarterly Dividend Payment

 

BEIJING, China, August 12, 2016 - Xinyuan Real Estate Co., Ltd. (“Xinyuan” or the “Company”) (NYSE: XIN), an NYSE-listed real estate developer and property manager primarily in China and recently in other countries, today announced its unaudited financial results for the second quarter ended June 30, 2016.

  

Second Quarter 2016 Highlights

 

·Total second quarter revenue increased 36.9% to US$376.6 million from US$275.1 million in the second quarter of 2015 and increased 60.0% from US$235.4 million in the first quarter of 2016.

 

·Contract sales increased 42.8% to US$474.4 million from US$332.3 million in the second quarter of 2015 and increased 69.7% from US$279.6 million in the first quarter of 2016.

 

·Total gross floor area (“GFA”) sales increased 57.6% to 344,600 square meters from 218,700 square meters sold in the second quarter of 2015 and increased 66.8% from 206,600 square meters sold in the first quarter of 2016.

 

·Selling, General and Administrative (“SG&A”) expenses as a percent of total revenue decreased to 10.9% from 13.0% in the second quarter of 2015 and decreased from 13.4% in the first quarter of 2016.

 

·Net income was US$27.8 million, compared to US$20.2 million in the second quarter of 2015 and US$6.9 million in the first quarter of 2016.

 

·Diluted net earnings per American Depositary Share (“ADS”) attributable to shareholders were US$0.39, compared to US$0.27 in the second quarter of 2015 and US$0.09 in the first quarter of 2016.

 

·The Company repurchased 1,387,008 ADSs at a total cost of approximately US$7.0 million in the second quarter of 2016.

 

Mr. Yong Zhang, Xinyuan’s Chairman, stated, “We are very pleased with our second quarter operational and financial results as sales activity across our projects remained healthy in the second quarter. Our performance was supported by ongoing positive market momentum which helped support unit demand and ASPs at the majority of our projects. Year-over-year contract sales increased 42.8% to US$474.4 million and GFA sales increased 57.6% to 344,600 square meters resulting in 37.6% growth in net income to US$27.8 million.

 

In the U.S., our Oosten project is performing well. We pre-sold approximately 73% of the total units at this project through the end of June. We have also expanded our presence in New York City through our new Hudson Garden project in midtown Manhattan announced earlier this year as well as our newly acquired development project in Flushing, Queens announced earlier this month. These three projects together total approximately one million square feet of gross buildable square feet in New York City marking Xinyuan’s ascent into the New York metro real estate development market.

 

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In addition to our core real estate development operations in China and the U.S., we are also developing real estate related products and services that will complement our core real estate development and diversify the Company’s business operations. During the second quarter, the Company’s property management arm was awarded and ranked #14 among the top 100 property management companies in China by the National Property Management Association in 2016. Lastly, we are pleased to raise our full year financial forecast and increase our quarterly dividend payment, which represents a 100% increase from the first quarter 2016 dividend payment,” concluded Mr. Zhang.

 

Second Quarter 2016 Financial Results

 

Contract Sales

Contract sales totaled US$474.4 million in the second quarter of 2016 compared to US$332.3 million in the second quarter of 2015 and US$279.6 million in the first quarter of 2016. The Company’s GFA sales increased to 344,600 square meters in the second quarter of 2016 from 218,700 square meters in the second quarter of 2015 and 206,600 square meters in the first quarter of 2016. The average selling price (“ASP”) per square meter sold was RMB8,992 (US$1,377) in the second quarter of 2016 compared to RMB9,309 (US$1,519) in the second quarter of 2015 and RMB8,839 (US$1,354) in the first quarter of 2016.

 

The Company commenced pre-sales of one new project in the second quarter of 2016, Zhengzhou Fancy City II (South), which contributed 1.6% of total GFA sales.

 

Breakdown of GFA Sales and ASPs by Project

 

Project Q2 2015 Q1 2016 Q2 2016

Unsold

GFA

GFA ASP GFA ASP GFA ASP
(m2000) (RMB) (m2000) (RMB) (m2000) (RMB) (m2000)
Zhengzhou Xin City 9.4 15,992 0.1 4,393 -0.1 13,136 4.9
Zhengzhou Thriving Family 4.6 7,214 0.2 6,169 0.1 10,446 16.2
Xingyang Splendid I 3.9 5,291 0.5 5,249 2.1 5,281 41.6
Xingyang Splendid II 0.9 12,957 0.9 5,599 8.6 5,253 120.2
Kunshan Royal Palace 28.8 9,120 24.6 11,096 29.0 15,586 26.8
Suzhou Lake Royal Palace 22.8 9,293 15.2 16,718 10.6 21,575 29.3
Jinan Xinyuan Splendid 7.3 7,598 0.7 10,498 1.3 9,499 9.4
Jinan Royal Palace 18.9 6,318 13.3 5,985 32.0 6,874 257.0
Xuzhou Colorful City 8.7 8,449 2.0 11,256 2.9 9,895 57.7
Beijing Xindo Park 8.1 26,720 - - -0.3 31,469 13.9
Chengdu Thriving Family 12.6 5,647 10.6 5,292 30.7 5,639 105.6
Changsha Xinyuan Splendid 18.1 5,804 24.6 5,486 39.2 6,355 105.5
Sanya Yazhou Bay No.1 1.6 12,753 - - 4.2 12,438 101.0
Xi’an Metropolitan 28.1 6,359 25.9 6,407 21.7 7,133 120.7
Shanghai Royal Palace 5.1 21,314 5.2 24,649 7.0 30,594 21.2
Zhengzhou Xindo Park 10.2 9,593 2.0 7,504 10.2 6,448 100.4
Jinan Xin Central 28.5 9,328 12.6 9,089 11.9 10,793 103.0
Henan Xin Central I - - 26.2 7,730 29.9 8,083 128.8
Zhengzhou Fancy City I - - 29.6 8,239 29.0 8,970 50.5
Zhengzhou Fancy City II (South) - - - - 5.6 8,897 77.8
Tianjin Spring Royal Palace - - 12.8 9,032 68.5 7,429 179.0
Others 1.1 - -0.4 - 0.5 - 4.4
Total 218.7 9,309 206.6 8,839 344.6 8,992 1,674.9

 

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Revenue

In the second quarter of 2016, the Company’s total revenue increased 36.9% to US$376.6 million from US$275.1 million in the second quarter of 2015 and increased 60.0% from US$235.4 million in the first quarter of 2016.

 

Gross Profit

Gross profit for the second quarter of 2016 was US$77.3 million, or 20.5% of revenue, compared to a gross profit of US$60.9 million, or 22.2% of revenue, in the second quarter of 2015 and a gross profit of US$48.9 million, or 20.8% of revenue, in the first quarter of 2016.

 

Selling, General and Administrative Expenses

SG&A expenses were US$41.0 million for the second quarter of 2016 compared to US$35.8 million for the second quarter of 2015 and US$31.5 million for the first quarter of 2016. As a percentage of total revenue, SG&A expenses were 10.9% compared to 13.0% in the second quarter of 2015 and 13.4% in the first quarter of 2016.

 

Net Income

Net income for the second quarter of 2016 was US$27.8 million, compared to US$20.2 million for the second quarter of 2015 and US$6.9 million for the first quarter of 2016. Net margin was 7.4%, compared to 7.3% in the second quarter of 2015 and 2.9% in the first quarter of 2016. Diluted earnings per ADS were US$0.39, compared to US$0.27 per ADS in the second quarter of 2015 and US$0.09 per ADS in the first quarter of 2016.

 

Balance Sheet

As of June 30, 2016, the Company’s cash and cash equivalents (including restricted cash) decreased to US$899.0 million from US$1,028.6 million as of March 31, 2016. Total debt outstanding was US$1,978.9 million, a decrease of US$170.7 million, compared to US$2,149.6 million at the end of the first quarter of 2016. The balance of the Company’s real estate property under development at the end of the second quarter of 2016 was US$2,082.7 million, compared to US$2,042.7 million at the end of the first quarter of 2016.

 

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Real Estate Project Status in China

Below is a summary table of projects that were active and available for sale in the second quarter of 2016.

 

Project GFA Contract Sales  Project Cost % Complete  
(m2 000) (US$ millions)  
Total Active Project Sold to date Total Active Project Sales to date % Sold  
 
Zhengzhou Xin City 211.1 206.2 362.2 329.4 90.9% 94.5%  
Zhengzhou Thriving Family 131.5 115.3 154.3 127.6 82.7% 85.1%  
Xingyang Splendid I 117.3 75.7 85.4 59.3 69.4% 75.8%  
Xingyang Splendid II 136.9 16.7 143.7 16.5 11.5% 50.0%  
Kunshan Royal Palace 279.9 253.1 480.5 392.9 81.8% 91.9%  
Suzhou Lake Royal Palace 169.6 140.3 379.7 253.4 66.7% 97.3%  
Jinan Xinyuan Splendid 572.2 562.8 758.2 751.7 99.1% 99.4%  
Jinan Royal Palace 448.9 191.9 671.2 187.8 28.0% 63.1%  
Xuzhou Colorful City 130.2 72.5 197.8 101.3 51.2% 77.3%  
Beijing Xindo Park 133.0 119.1 459.9 367.4 79.9% 96.9%  
Chengdu Thriving Family 211.4 105.8 381.2 88.7 23.3% 84.9%  
Changsha Xinyuan Splendid 252.7 147.2 359.0 128.8 35.9% 76.2%  
Sanya Yazhou Bay No.1 116.8 15.8 303.1 32.3 10.7% 68.1%  
Xi’an Metropolitan 290.5 169.8 483.4 167.6 34.7% 68.5%  
Shanghai Royal Palace 57.8 36.6 294.8 132.4 44.9% 96.0%  
Zhengzhou Xindo Park 144.4 44.0 202.3 54.7 27.0% 55.3%  
Jinan Xin Central 194.7 91.7 366.0 135.2 36.9% 63.1%  
Henan Xin Central I 262.2 133.4 366.2 157.7 43.1% 56.8%  
Zhengzhou Fancy City I 166.7 116.2 240.1 147.6 61.5% 52.2%  
Zhengzhou Fancy City II (South) 83.4 5.6 136.7 7.7 5.6% 42.6%  
Tianjin Spring Royal Palace 274.3 95.3 399.4 114.1 28.6% 31.3%  
Others remaining GFA 4.4 - - - - -  
Total active projects 4,389.9   2,715.0 7,225.1 3,754.1 52.0% 76.1%  

 

As of June 30, 2016, the Company’s total sellable GFA was approximately 2,500,800 square meters for active projects and under planning stage projects in China. Below is a summary of all of the Company’s planning stage projects:

 

　 Unsold GFA

Pre sales

Targeted
  (m2 000)
Zhengzhou Fancy City II (North) 119.6 Q3 2016
Zhengzhou International New City I (Zhengzhou Shilipu project) 362.7 Q3 2016
Kunshan Xindo Park 95.0 Q3 2016
Xingyang Splendid III 37.4 Q4 2016
Beijing Liyuan project 102.3 Q4 2016
Henan Xin Central II 108.9 Q4 2016
Total projects under planning 825.9  
Total active projects 1,674.9  
Total all Xinyuan projects in China 2,500.8  

 

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Real Estate Project Update in the U.S.

 

As of the end of the second quarter, the Company had pre-sold approximately 73% of the total units at its Brooklyn-based Oosten project.

 

The Company’s second New York project, announced in January 2016, and located in midtown Manhattan, is in the planning and design stage. The Company has recently submitted its official building permit application to the New York City Department of Buildings.

 

In August 2016, Xinyuan announced a new land acquisition in Flushing, Queens, New York City. Xinyuan estimates construction to begin on this property once the Company’s Oosten project construction is completed.

  

Business Outlook

 

For the full year 2016, the Company is raising its previously announced financial forecast and now expects full year contract sales to grow approximately 30% and net income to grow approximately 50% compared to 2015.

  

Conference Call Information

 

The Company will hold a conference call at 8:00 am ET on August 12, 2016 to discuss second quarter 2016 results. Listeners may access the call by dialing:

 

US: 1-888-637-7734

International: 1-913-312-0975

 

A webcast will also be available through the Company’s investor relations website at http://ir.xyre.com.

 

A replay of the call will be available through August 19, 2016 by dialing:

 

US: 1-877-870-5176

International: 1-858-384-5517

Access code: 2411439

 

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About Xinyuan Real Estate Co., Ltd.

Xinyuan Real Estate Co., Ltd. (“Xinyuan”) is an NYSE-listed real estate developer and property manager primarily in China and recently in other countries. In China, the Company develops and manages large scale, high quality real estate projects in over ten tier one and tier two cities, including Beijing, Shanghai, Zhengzhou, Jinan, Xi’an, Suzhou, among others. Xinyuan was one of the first Chinese real estate developers to enter the U.S. market and over the past few years has been active in real estate development in New York. The Company aims to provide comfortable and convenient real estate related products and services to middle-class consumers. For more information, please visit http://www.xyre.com.

  

Forward Looking Statements

Certain statements in this press release constitute “forward-looking statements”. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements includes statements about estimated financial performance, sales performance and activity, among others and can generally be identified by terminology such as “will”, “expects”, “anticipates”, “future”, “intends”, “plans”, “believes”, “estimates” and similar statements. Statements that are not historical statements are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including, but not limited to, our ability to continue to implement our business model successfully; our ability to secure adequate financing for our project development; our ability to successfully sell or complete our property projects under construction and planning; our ability to enter into new geographic markets and expand our operations; the marketing and sales ability of our third-party sales agents; the performance of our third-party contractors; the impact of laws, regulations and policies relating to real estate developers and the real estate industry in the countries in which we operate; our ability to obtain permits and licenses to carry on our business in compliance with applicable laws and regulations; competition from other real estate developers; the growth of the real estate industry in the markets in which we operate; fluctuations in general economic and business conditions in the markets in which we operate; and other risks outlined in our public filings with the Securities and Exchange Commission, including our annual report on Form 20-F for the year ended December 31, 2015. Except as required by law, we undertake no obligation to update or review publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statement is made.

  

Notes to Unaudited Financial Information

This release contains unaudited financial information which is subject to year-end audit adjustments. Adjustments to the financial statements may be identified when the audit work is completed, which could result in significant differences between our audited financial statements and this unaudited financial information.

 

For more information, please contact:

 

In China:

 

Xinyuan Real Estate Co., Ltd.

Ms. May Shen
Investor Relations Director
Tel: +86 (10) 8588-9376

Email: irteam@xyre.com

  

ICR, LLC

In U.S.: +1-646-308-1472

In China: +86 (10) 6583-7511

Email: William.zima@icrinc.com

 

Media:

Edmond Lococo

In China: +86 (10) 6583-7510

Email: Edmond.Lococo@icrinc.com

 

 

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XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(All US$ amounts and number of shares data in thousands, except per share data)

　　　　　　　

　  Three months ended 
　  June 30,   March 31,   June 30, 
　  2016   2016   2015 
　  (unaudited)   (unaudited)   (unaudited) 
　  　   　   　 
Total revenue   376,623    235,384    275,066 
　               
Total costs of revenue   (299,317)   (186,490)   (214,122)
Gross profit   77,306    48,894    60,944 
　               
Selling and distribution expenses   (8,801)   (8,121)   (11,380)
General and administrative expenses   (32,197)   (23,408)   (24,395)
　               
Operating income   36,308    17,365    25,169 
　               
Interest income   4,223    8,471    6,463 
Interest expense   (5,063)   (5,000)   (4,492)
Net realized gain on short-term investments   807    109    645 
Unrealized (loss)/gain on short-term investments   (153)   920    (3)
Other income/(expense)   4,101    7    (36)
Exchange gains/(loss)   182    54    (31)
Share of gain/(loss) of equity investees   (641)   42    566 
                
Income from operations before income taxes   39,764    21,968    28,281 
　               
Income taxes   (11,960)   (15,073)   (8,115)
                
Net income   27,804    6,895    20,166 
Net (income)/loss attributable to non-controlling interest   (1,278)   (776)   15 
Net income attributable to Xinyuan Real Estate Co., Ltd. shareholders   26,526    6,119    20,181 
　               
Earnings per ADS:               
Basic   0.40    0.09    0.27 
Diluted   0.39    0.09    0.27 
ADS used in computation:               
Basic   66,005    68,613    73,522 
Diluted   68,164    71,345    73,725 

 

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XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(All US$ amounts and number of shares data in thousands, except per share data)

　　　　　　　

　  Six months ended 
   June 30,   June 30, 
　  2016   2015 
　  (unaudited)   (unaudited) 
　  　   　 
Total revenue   612,007    441,784 
　          
Total costs of revenue   (485,807)   (332,859)
Gross profit   126,200    108,925 
　          
Selling and distribution expenses   (16,922)   (18,647)
General and administrative expenses   (55,605)   (44,793)
　          
Operating income   53,673    45,485 
　          
Interest income   12,694    11,911 
Interest expense   (10,063)   (9,951)
Net realized gain on short-term investments   916    762 
Unrealized gain on short-term investments   767    19 
Other income   4,108    4,722 
Exchange gains/(loss)   236    (5)
Share of gain of equity investees   (599)   478 
           
Income from operations before income taxes   61,732    53,421 
　          
Income taxes   (27,033)   (28,747)
           
Net income   34,699    24,674 
Net income attributable to non-controlling interest   (2,054)   - 
Net income attributable to Xinyuan Real Estate Co., Ltd. shareholders   32,645    24,674 
　          
Earnings per ADS:          
Basic   0.49    0.34 
Diluted   0.47    0.34 
ADS used in computation:          
Basic   67,309    73,518 
Diluted   69,492    73,619 

 

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XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(All US$ amounts and number of shares data in thousands)

 

   June 30,   March 31,   December 31, 
   2016   2016   2015 
   (unaudited)   (unaudited)   (audited) 
ASSETS               
Current assets               
Cash and cash equivalents   416,829    454,313    387,528 
Restricted cash   482,125    574,295    363,137 
Short-term investments   32,398    13,041    1,245 
Accounts receivable   17,228    41,501    42,040 
Other receivables   28,331    146,732    147,652 
Deposits for land use rights   49,765    46,431    46,199 
Other deposits and prepayments   261,492    186,920    254,048 
Advances to suppliers   55,850    55,383    50,534 
Real estate properties development completed   21,987    30,314    24,077 
Real estate properties under development   2,082,680    2,042,690    1,887,322 
Amounts due from related parties   45,591    21,470    58,630 
Amounts due from employees   1,872    1,804    351 
Other current assets   115    238    201 
                
Total current assets   3,496,263    3,615,132    3,262,964 
                
Real estate properties held for lease, net   68,664    71,251    71,133 
Property and equipment, net   36,778    38,633    39,323 
Other long-term investment   31,108    31,340    31,108 
Investment in joint ventures   11,009    7,639    6,125 
Deferred tax assets   28,807    28,505    15,489 
Deposits for land use rights   78,417    153,269    107,798 
Other assets   13,310    15,534    14,943 
                
TOTAL ASSETS   3,764,356    3,961,303    3,548,883 

 

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XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(All US$ amounts and number of shares data in thousands)

 

   June 30,   March 31,   December 31, 
   2016   2016   2015 
   (unaudited)   (unaudited)   (audited) 
LIABILITIES AND               
SHAREHOLDERS’ EQUITY               
Current liabilities               
Accounts payable and notes payable   457,770    441,164    471,176 
Short-term bank loans and other debt   226,679    308,897    222,226 
Customer deposits   63,833    57,021    64,452 
Income tax payable   98,037    96,010    106,034 
Deferred tax liabilities   44,369    72,995    57,692 
Other payables and accrued liabilities   105,787    139,703    106,127 
Payroll and welfare payable   8,788    7,333    22,966 
Amounts due to related parties   15,080    -    - 
Current portion of long-term bank loans and other debt   809,094    851,524    594,834 
Current maturities of capital lease obligations   3,002    3,081    3,066 
Mandatorily redeemable non-controlling interests   1,206    2,786    2,310 
                
Total current liabilities   1,833,645    1,980,514    1,650,883 
                
Noncurrent liabilities               
Long-term bank loans   51,022    73,516    13,860 
Other long-term debt   892,098    915,684    897,504 
Deferred tax liabilities   20,711    17,817    13,500 
Unrecognized tax benefits   18,081    17,976    17,842 
Capital lease obligations, net of current maturities   16,549    17,484    18,111 
Mandatorily redeemable non-controlling interests   452    1,238    1,232 
TOTAL LIABILITIES   2,832,558    3,024,229    2,612,932 
                
Shareholders’ equity               
Common shares   16    16    16 
Treasury shares   (45,262)   (38,216)   (24,046)
Additional paid-in capital   533,955    533,881    531,233 
Statutory reserves   79,255    79,927    80,050 
Retained earnings   344,197    320,374    317,765 
Accumulated other comprehensive income   11,516    38,456    30,952 
Total Xinyuan Real Estate Co., Ltd. shareholders’ equity   923,677    934,438    935,970 
Non-controlling interest   8,121    2,636    (19)
Total equity   931,798    937,074    935,951 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   3,764,356    3,961,303    3,548,883 

  

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