XIN at end of 2011 had $6.59 cash/equivilants per ADS share.
XIN's book value per ADS share at the end of 2011 was $8.59.
After Q1 reporting both cash/equivilants and book value will have gone up from end of Q4.
XIN was calling for earnings of .25 per ADS share for Q1 when last years Q1 was only .16 a share which shows year over year growth of 50%+.
XIN will be one of few Chinese stocks to actually have a "quarterly" dividend, which will attract dividend investors.
XIN has been buying back shares, and was supposed to have completed last buyback of $10 million in Q1 2012.
No matter the dividend, it will give reason for dividend investors to look at XIN.
The dividend will increase confidence in XIN.
Their cash/equivilants and book value will only go up each quarter of 2012.
If XIN announces another $10 million buyback program, on current prices, they could buy back another 2.8 million shares, or 4% of outstanding shares.
If XIN continues with another $10 million in share buybacks, and beats expected Q1 2012 results, they will get to over $6.00 PPS.
No matter the price for XIN right now, XIN will be between $6.59, and $8.59 by end of 2012, or 90% and 147% increase in PPS.
After share price of XIN gets above $5.00 most institutional investors, and mutual funds will start to also look at adding XIN to their porfolios.
I will hold until at least $6.59 a share, and then maybe think of selling some shares.
I def agree on the risks of a Chinese housing meltdown, but for some reason, that risk has been priced into XIN as if it's already happened.
It's like the default's been turned upside down. Usually, when there's a potential risk to a stock, the stock price doesn't decline until and unless the risk actually turns out to be true.
In XIN's case, the market's priced it as if a Chinese real estate collapse is already a reality. If it never happens, I think that means upside pressure on XIN's price (whereas normally when a risk doesn't happen a stock's price remains the same -- it's that upside down default thing).
The other housing micro's I've seen tend to have 'normal' P/E's. For whatever reason, the market's not pricing in the potential housing collapse for those stocks until it actually happens, whereas it's already priced the collapse into XIN.
Poor XIN's always getting picked on.
It is a lack of confidence in China and Chinese stocks, but that will go away, but in the meantime if XIN can continue to grow at any rate, make money, buyback shares, and pay down debts, they will go up.
Luckily XIN rebounded today, and hopefully can do so tomorrow. I don't see us getting under $3.00 a share any more. Now we have to work at $4.00+ being the new normaly.
Thank you for your quick recognition. I would say this year's rally for XIN comes primarily from China's real estate policy relaxation speculation. So, we know how much the market care about the Chinese real estate industry rather than the fraud fear. There are two fraud cases last week in Hang Kong, but they have no effect on XIN at all.
Based on my past experience, the long-term industry cloud is more difficult to deal with. Even though XIN delivers good earning this year, people will worry about next year. If Chinese real estate price goes up, people will worry about an eventual crash. The current P/E reflect the discount on these uncertainties. So, during the next few years. XIN will have a few short-term rally and a few short-term slump. Unless the big uncertainty about the Chinese real estate industry clears, the stock has limited chance for a prolonged rally.
If I forgot to include the fact that many folks hold the view that a Chinese housing crash, a la US '08 - '09 is about to start, in my special risks list, then that was an oversight by me.
Excellent post; good thread. I had a few thoughts on your comments:
I really like your point about the upcoming dividend announcement getting XIN attention from dividend investors. I would add that beyond alerting dividend investors, it's possible that the dividend announcement itself gets picked up and mentioned in an article somewhere. Publicity always give XIN a pop.
On the Institutional Investors stuff -- I like your optimism here, but let's not kid ourselves too much. Chinese, micro cap, VIE structured, non Big 4 accounting housing market stocks don't exactly appeal to that crowd, over five bucks or no.
Cash and Cash Equivalents point -- The one objection I have to your post is your method of 'calculating' cash and cash equivalents. Having read your post, it's obvious you're too smart not to realize you're publicizing a wildly misleading number.
That's fine for people accustomed to reading financial statements, but I would humbly suggest that the brightest posters on any board should take extra care -- I would even call this a duty -- not to mislead the inexperienced.
Would you consider it a friendly amendment to substitute for your $6.59 per ADS figure (calculated strictly by taking the cash on hand and dividing by the shares outstanding) the figure of $2.63 per ADS (cash on hand minus short and long term debt, divided by shares outstanding)?
If it were me, I'd also add that the $2.63 figure is a snapshot in time that assumes forward operating expenses (salaries, etc.) of zero dollars, obviously problematic. Still, I can live with leaving forward expenses out, but I think folks should be set straight on the $6.59 number, agreed?
I am not negative but realistic. I'm a XIN investor as well. I like it go up more. However, as an investor, you need to look at everything together not just the positive things. If you want to say something to inspire people here, you'd better come up with something more concrete. Most people here, even the most optimistic cheerleaders here won't take the 100 pre-market trade seriously.