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Xinyuan Real Estate Co., Ltd. Announces Third Quarter 2018 Financial Results

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BEIJING, Nov. 13, 2018 /PRNewswire/ -- Xinyuan Real Estate Co., Ltd. ("Xinyuan" or the "Company") (NYSE:XIN), an NYSE-listed real estate developer and property manager primarily in China and also in other countries, today announced its unaudited financial results for the third quarter ended September 30, 2018.

Third Quarter 2018 Highlights

  • On January 1, 2018, the Company adopted ASC 606 to recognize revenue for contracts executed after the adoption on an "over time" basis using costs incurred, an input measure. As such, third quarter results reflect the adoption of ASC 606 and may not be directly comparable to prior periods.
  • Contract sales decreased 5.5% to US$571.3 million from US$604.5 million in the third quarter of 2017 and decreased 9.9% from US$633.9 million in the second quarter of 2018.
  • Total revenue increased 23.4% to US$595.5 million from US$482.4 million in the third quarter of 2017 and increased 67.4% from US$355.8 million in the second quarter of 2018.
  • Gross profit increased 37.1% to US$149.2 million, or 25.1% of total revenue, from US$108.8 million, or 22.6% of total revenue, in the third quarter of 2017 and increased 36.4% from US$ 109.4 million, or 30.7% of total revenue, in the second quarter of 2018.
  • Selling, General and Administrative ("SG&A") expenses as a percentage of total revenue decreased to 8.0% from 10.6% in the third quarter of 2017 and 13.2% in the second quarter of 2018.
  • Net income increased 44.8% to US$23.9 million from US$16.5 million in the third quarter of 2017 and increased from a net loss of US$9.3 million in the second quarter of 2018.
  • Diluted net earnings per American Depositary Share ("ADS") attributable to shareholders were US$0.31 compared to diluted net earnings per ADS of US$0.22 in the third quarter of 2017 and net loss per ADS of US$0.10 in the second quarter of 2018.

Mr. Yong Zhang, Xinyuan's Chairman, stated, "Contract sales during the third quarter of 2018 once again experienced downward pressure because of a slowing economy and continued tight regulations on China's property market. However, we were able to offset these market uncertainties due to our strategically located projects in tier-two cities and our strong operational execution, resulting in a 67.4% increase in our top line from the prior quarter and a 23.4% increase from the prior year period. This translated into bottom-line growth of 44.8% year-over-year."

Mr. Zhang added, "In the third quarter of 2018, we commenced pre-sales of four projects, mainly in tier-two cities where housing demand continues to be strong, including Changsha Furong Thriving Family, Chengdu Xinyuan City I, Kunshan Xinyu Jiayuan, and Xingyang Splendid IV. We were also able to expand our land bank with the strategic acquisition of Dalian International Health Technology Town. This acquisition helps unlock our growth potential in Northeastern area of China. With an enlarged land bank, and an expanded global footprint, we are well positioned for long-term growth.

"We remain optimistic about our revenue growth and contract sales for the fourth quarter and we remain focused on our strategic priorities of rolling out projects in tier-one and tier-two cities. Our effective execution will help strengthen our ability to meet our goals for the fourth quarter. We're also pleased to announce another quarterly dividend payment to shareholders," concluded Mr. Zhang.

Third Quarter 2018 Financial Results

Contract Sales

Contract sales in China totaled US$571.3 million in the third quarter compared to US$597.5 million in the third quarter of 2017 and US$630.3 million in the second quarter of 2018.

The Company's GFA sales in China were 277,500 square meters in the third quarter of 2018 compared to 369,500 square meters in the third quarter of 2017 and 282,900 square meters in the second quarter of 2018.

The average selling price ("ASP") per square meter sold in China was RMB13,406 (US$2,059) in the third quarter of 2018 compared to RMB10,994 (US$1,616) in the third quarter of 2017 and RMB14,173 (US$2,226) in the second quarter of 2018.

The Company commenced pre-sales of four new projects in the third quarter of 2018, Changsha Furong Thriving Family, Chengdu Xinyuan City I, Kunshan Xinyu Jiayuan, and Xingyang Splendid IV, which contributed 37.2% and 32.0% of total GFA sales and total contract sales, respectively.

 

Breakdown of GFA Sales and ASPs by Project in China

Project

Q3 2017

Q2 2018

Q3 2018

GFA

ASP

GFA

ASP

GFA

ASP

(m2 '000s)

(RMB)

(m2 '000s)

(RMB)

(m2 '000s)

(RMB)

Xingyang Splendid II

1.4

6,973

0.3

9,939

1.2

13,900

Kunshan Royal Palace

6.2

25,987

0.2

22,313

-

-

Jinan Royal Palace

29.7

12,457

27.4

16,341

25.9

16,426

Xuzhou Colorful City

0.6

11,138

0.8

10,495

0.1

10,989

Chengdu Thriving Family

10.2

15,061

1.3

16,011

1.1

8,012

Changsha Xinyuan Splendid

7.4

13,726

3.7

15,869

0.2

19,771

Sanya Yazhou Bay No.1

1.6

15,313

12.0

25,758

-0.9

23,515

Xi'an Metropolitan

7.2

9,497

4.5

7,480

1.8

10,546

Zhengzhou Xindo Park

8.1

8,552

0.4

7,560

4.1

8,015

Jinan Xin Central

9.2

12,151

9.2

14,073

1.3

12,839

Henan Xin Central I

28.5

4,093

1.0

15,342

0.3

18,931

Zhengzhou Fancy City I

18.8

5,155

1.2

10,989

0.2

17,481

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