Market Overview

Xinyuan Real Estate Co., Ltd. Announces Second Quarter 2019 Financial Results

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BEIJING, Aug. 16, 2019 /PRNewswire/ -- Xinyuan Real Estate Co., Ltd. ("Xinyuan" or the "Company") (NYSE:XIN), an NYSE-listed real estate developer and property manager operating primarily in China and in other countries, today announced its unaudited financial results for the second quarter ended June 30, 2019.

Highlights

  • First half contract sales of 2019 increased 3.4% to RMB6,676.3 million from RMB6,457.0 million in the first half of 2018.
  • Contract sales decreased 20.0% to US$507.4 million from US$633.9 million in the second quarter of 2018 and increased 5.8% from US$479.7 million in the first quarter of 2019.
  • Total revenue increased 71.3% to US$609.4 million from US$355.8 million in the second quarter of 2018 and increased 30.0% from US$468.9 million in the first quarter of 2019.
  • Gross profit increased 45.5% to US$159.2 million from US$109.4 million in the second quarter of 2018 and increased 21.5% from US$131.0 million in the first quarter of 2019.
  • Selling, General and Administrative ("SG&A") expenses as a percentage of total revenue decreased to 10.3% from 13.2% in the second quarter of 2018 and decreased from 12.0% in the first quarter of 2019.
  • Net income was US$19.8 million compared to net loss of US$9.3 million in the second quarter of 2018 and net income of US$18.2 million in the first quarter of 2019.
  • Current debt outstanding decreased 33.8% to US$1,207.2 million, or 33.6% of the total debt, from US$1,823.7 million, or 51.9% of the total debt, in the first quarter of 2019.
  • Diluted net earnings per American Depositary Share ("ADS") attributable to shareholders were US$0.19 compared to diluted net loss of US$0.10 per ADS in the second quarter of 2018 and diluted net earnings of US$0.33 per ADS in the first quarter of 2019.

Mr. Yong Zhang, Xinyuan's Chairman, stated, "In the first half of 2019, Xinyuan maintained stable growth and commenced pre-sales of three new projects in China. The total value of contracts signed in the first half was RMB7,323.2 million, representing a 12.0% increase compared to RMB6,537.4 million in the first half of 2018. Thanks to the outstanding sales performance, the company has achieved top- and bottom-line growth despite downward pressure on sales across the industry. In the first half of 2019, total revenue increased 103.5% year over year. Moreover, we were able to reduce SG&A expenses as a percentage of total revenue to 11.0% in the first half from 16.4% in the first half of 2018. As a result, gross profit increased by 96.0% year over year, and net income was US$38.0 million compared to a net loss of US$22.0 million in the first half of 2018. Furthermore, our overseas projects continued to proceed as planned, and presales of our Manhattan project are expected to launch at the end of the fourth quarter of 2019.

"At the same time, we are seeing a lasting impact from changes in the macro-economic environment and stringent government restriction policies on the Chinese housing market. However, we believe that our strategic focus on high quality tier-one and tier-two city projects as well as our strong execution capabilities enable us to further solidify our leading market position and deliver sustainable long-term growth. We remain committed to controlling our financial leverage and maximizing Xinyuan's financial health. We are also pleased to offer another quarterly dividend payment to our shareholders," concluded Mr. Zhang.

Second Quarter 2019 Financial Results

Contract Sales
Contract sales in China totaled US$507.4 million in the second quarter compared to US$630.3 million in the second quarter of 2018 and US$478.9 million in the first quarter of 2019.

The Company's GFA sales in China were 233,200 square meters in the second quarter of 2019 compared to 282,900 square meters in the second quarter of 2018 and 211,400 square meters in the first quarter of 2019.            

The average selling price ("ASP") per square meter sold in China was RMB14,755 (US$2,176) in the second quarter of 2019 compared to RMB14,173 (US$2,226) in the second quarter of 2018 and RMB15,269 (US$2,264) in the first quarter of 2019.

The Company commenced pre-sales of two new projects in the second quarter of 2019, Xinyang Splendid V, Suzhou Gusu Shade II. The presales contributed 5.9% and 3.6% of total GFA sales and total contract sales, respectively.

Breakdown of GFA Sales and ASPs by Project in China

Project

Q2 2018

Q1 2019

Q2 2019

GFA

ASP

GFA

ASP

GFA

ASP

(m2, 000s)

(RMB)

(m2, 000s)

(RMB)

(m2, 000s)

(RMB)

Xingyang Splendid II

0.3

9,939

10.2

7,478

3.6

7,330

Jinan Royal Palace

27.4

16,341

1.6

15,661

2.8

14,739

Xuzhou Colorful City

0.8

10,495

-

-

0.7

14,541

Chengdu Thriving Family

1.3

16,011

(0.1)

7,729

-

-

Changsha Xinyuan Splendid

3.7

15,869

-

-

0.1

18,658

Sanya Yazhou Bay No.1

12.0

25,758

0.4

25,615

0.3

38,158

Xi'an Metropolitan

4.5

7,480

0.6

11,253

0.1

12,896

Zhengzhou Xindo Park

0.4

7,560

-

-

0.7

8,661

Jinan Xin Central

9.2

14,073

0.1

13,170

0.1

18,954

Henan Xin Central I

1.0

15,342

0.1

14,887

0.7

7,942

Zhengzhou Fancy City I

1.2

10,989

(1.4)

15,073

0.5

13,714

Zhengzhou Fancy City II (South)

0.8

14,103

(0.1)

12,660

(0.1)

9,469

Tianjin Spring Royal Palace I

0.1

16,294

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