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Xinyuan Real Estate Co., Ltd. Message Board

  • sawyvalue sawyvalue Aug 27, 2012 1:11 PM Flag

    There is a reason to worry about China

    Contrarian value investing makes sense on many companies in the past. However, the fundamentals are a dynamic concept, which works in contrarians' favor when an economy is resilient. The US economy is a perfect example while the Japanese economy is the opposite example. Investing value stocks in Japan 10 years ago would not offer too much return for value investors.

    China is not the US. China's economy has many structure problems, which will ultimately curb China's growth unless a real change happens. The market boom leaded by real estate investment and export is coming to an end.

    Trusting XIN is your own choice. XIN may be a $10 stock some day. But ignoring the difference between the Chinese and US economy may be a costly mistake.

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    • What you've listed here is just the diagram with the company boxes and the arrows, except without the actual boxes and arrows.

      True, all XIN's subs are wholly owned by the parent, but that's exactly the same form that VIE's take.

      VIE parent companies own 100% of their subs.

      Don't let the contract right thing throw you off. It's a totally different thing, completely unrelated to a parent company's percentages of ownership in its subsidiary companies.

    • I don't think we've managed a meeting of the minds on this one.

      That's OK; this stuff's extremely complicated.

    • check this mess out below .. remember you only have to control 51% but you can claim 100% of the revenue,you belive that???



      China Direct Industries, Inc.
      Subsidiaries of the Registrant


      Item Name Country of Incorporation
      1. China Direct Investments, Inc., a wholly owned subsidiary of China Direct Industries, Inc. USA - Florida
      2. CDI China, Inc., a wholly owned subsidiary of China Direct Industries, Inc. USA - Florida
      3. CDII Trading, Inc., a wholly owned subsidiary of China Direct Industries, Inc. USA - Florida
      4. International Magnesium Group, Inc., a wholly owned subsidiary of China Direct Industries, Inc. USA - Florida
      5. International Magnesium Trading Corp., a wholly owned subsidiary of International Magnesium Group, Inc. Brunei
      6. CDI Shanghai Management Co., Ltd., a wholly owned subsidiary of CDI China, Inc. China
      7. Capital One Resource Co., Ltd., a wholly owned subsidiary of CDI Shanghai Management Co., Ltd. Brunei
      8. Shanghai Lang Chemical Co., Ltd. a 51% majority owned subsidiary of CDI China, Inc. China
      9. Taiyuan Changxin Magnesium Co., Ltd., a company organized under the laws of the PRC and a 51% owned subsidiary of CDI China China
      10. Taiyuan Changxin YiWei Trading Co., Ltd., a wholly owned subsidiary of Taiyuan Changxin Magnesium Co., Ltd. China
      11. Excel Rise Technology Co., Ltd., a Brunei company and a wholly owned subsidiary of Taiyuan Changxin Magnesium Co., Ltd. Brunei
      12. CDI Magnesium Co., Ltd., a 51% majority owned subsidiary of Capital one Resources Co., Ltd. Brunei
      13. Asia Magnesium Corporation Ltd., a wholly owned subsidiary of Capital One Resource Co., Ltd. Hong Kong
      14. Shanxi Gu County Golden Magnesium Co., Ltd., a 100% majority owned subsidiary of Asia Magnesium Corporation, Ltd. China
      15. Baotou Changxin Magnesium Co., Ltd., a 51% majority owned subsidiary of CDI China, Inc. and a 39% owned subsidiary of Excel Rise Technology Co., Ltd. China
      16. CDI Jingkun Zinc Industry Co., Ltd., a 95% majority owned subsidiary of CDI Shanghai Management, China
      17. CDI Jixiang Metal Co., Ltd., a wholly owned subsidiary of CDI China, Inc. China
      18. Shanghai CDI Metal Material Co., Ltd. (a/k/a Shanghai CDI Metal Recycling Co., Ltd.), a wholly owned subsidiary of CDI Shanghai Management Co., Ltd. China
      19. CDI (Beijing) International Trade Co., Ltd., a 51% majority owned subsidiary of CDI Shanghai Management Co., Ltd. China
      20. Taiyuan Ruiming Yiwei Magnesium Co., Ltd., an 80% majority owned subsidiary of CDI China. China
      21. Beauty East International, Ltd., a 100% subsidiary of CDI China. Hong Kong

    • Here is Xins equity interst in all the companies listed as subsidiaries..EQUITY means owns...!!!! its all in the 20-f

      Xinyuan Real Estate Co., Ltd.

      List of Subsidiaries as of March 31, 2012




      Company Name

      Jurisdiction of

      Incorporation

      Parent Company

      Equity
      Interest


      Xinyuan Real Estate, Ltd. Cayman Islands Xinyuan Real Estate Co., Ltd. 100%
      Xinyuan International Property

      Investment Co., Ltd.
      Cayman Islands Xinyuan Real Estate Co., Ltd. 100%
      Xinyuan International (HK) Property Investment Co., Limited. Hong Kong Xinyuan International Property

      Investment Co., Ltd.
      100%
      XIN Development Group International Inc. United States Xinyuan International Property

      Investment Co., Ltd.
      100%
      South Glory International Ltd. Hong Kong Xinyuan Real Estate, Ltd. 100%
      Victory Good Development Ltd. Hong Kong Xinyuan Real Estate, Ltd. 100%
      Elite Quest Holdings Ltd. Hong Kong Xinyuan Real Estate, Ltd. 100%
      Xinyuan (China) Real Estate Ltd. China Xinyuan Real Estate, Ltd. 100%
      Henan Xinyuan Real Estate Co., Ltd. China Xinyuan (China) Real Estate Ltd. 100%
      Suzhou Xinyuan Real Estate Development Co., Ltd. China Xinyuan (China) Real Estate Ltd. 100%
      Anhui Xinyuan Real Estate Co., Ltd. China Xinyuan (China) Real Estate Ltd. 100%
      Xinyuan Real Estate (Chengdu) Co., Ltd. China Xinyuan (China) Real Estate Ltd. 100%
      Kunshan Xinyuan Real Estate Co., Ltd. China Xinyuan (China) Real Estate Ltd. 100%
      Beijing Xinyuan Wanzhong Real Estate Co., Ltd. China Xinyuan (China) Real Estate Ltd. 100%
      Beijing Heju Construction Material Co., Ltd. China Xinyuan (China) Real Estate Ltd. 100%
      Xinyuan Renju (Beijing) Asset Management Co., Ltd. China Xinyuan (China) Real Estate Ltd. 100%
      Xuzhou Xinyuan Real Estate Co., Ltd. China Xinyuan (China) Real Estate Ltd. 100%
      Henan Jiye Real Estate Co., Ltd. China Xinyuan (China) Real Estate Ltd. 100%
      Henan Wanzhuo Real Estate Co., Ltd. China Henan Xinyuan Real Estate Co., Ltd. 100%
      Henan Wanzhong Real Estate Co., Ltd. China Henan Xinyuan Real Estate Co., Ltd. 100%
      Qingdao Xinyuan Xiangrui Real Estate Co., Ltd. China Henan Xinyuan Real Estate Co., Ltd. 100%
      Shandong Xinyuan Real Estate Co., Ltd. China Henan Xinyuan Real Estate Co., Ltd. 100%
      Xinyuan Property Service Co., Ltd. China Henan Xinyuan Real Estate Co., Ltd. 100%
      Zhengzhou Mingyuan Landscape Engineering Co., Ltd. China Henan Xinyuan Real Estate Co., Ltd. 100%
      Zhengzhou Xinyuan Computer Network Engineering Co., Ltd. China Henan Xinyuan Real Estate Co., Ltd. 100%
      Zhengzhou Jiantou Xinyuan Real Estate Co., Ltd. China Henan Xinyuan Real Estate Co., Ltd. 100%
      Zhengzhou Jiantou Xinyuan United Real Estate Co., Ltd. China Zhengzhou Jiantou Xinyuan Real Estate Co., Ltd. 52%

    • Don't be confused by the contract right, which is nothing more than an equation designed to mimic some combination of the Operating Companies' stocks' prices (the only 'real' companies, the ones incorporated and existing in the PRC), with how the parent owns those companies in the first place (the regular, boring old wholly owned sub route).

      This is some pretty rough stuff, but if you scroll down a bit on this extremely well written article, you can see BIDU's entire VIE structure. Notice how it still owns its subsidiaries in exactly the same way any other ADR corporate structure would: http://www.fool.com/investing/international/2010/11/17/dont-get-blindsided-by-these-chinese-companies.aspx

      The contract right itself is set up as the function of one of those subs ("Online Network", if you're int), but it has nothing to do with how those companies are owned.

      Clear as mud?

    • No, they fully own all their subs, in exactly the same way that any other corporate structure would.

      All VIE structures are several levels, but the 'top' company, usually a US or Caribbean holding company wholly owns the companies below them, which, in turn, wholly own the subs below them, etc.

      The contractual arrangement you're talking about has nothing to do with how the corporation's companies own one another.

      PS: O'Melveny? Meh. I'm not taking the word of a B list firm. (jk).

    • yes most vie's just have a contactual agreement they dont own anything.. Xin own its subs..

    • Your point is valid and taken. But I also want to say that you have a reason to worry about anything -- an asteroid might hit the earth some day. The important thing is to consider the odds.

      The odds are that China is going to continue to grow for a period of time, for a number of reasons. One is that there is still enormous internal potential for growth. Look at this(Xin's newly acquired Suzhou land): http://suzhou.house.sina.com.cn/news/2012-08-28/160155439.shtml . Depending on how you look at it, you can see ghost city, or you can see a vibrant new Suzhou in the making. Urbanization in China is half way done, but not done yet.

      The other is politics and policy. You sense "resilience of economy", but I think policy making is more important. The united states economy has been resilient, but if the politicians continue bickering and dodge tackling important issues, the economy might have a decade or two of tepid growth. The Japanese system is probably even worse. Chinese policy making has been much more decisive and proactive.

      The third, probably more important one, is the culture. On this I tend to agree with Jim Rogers that the Chinese in general are extremely motivated and driven. This is probably the most important underlying element that will continue to drive the growth of Chinese economy.

      • 1 Reply to leopoldli
      • leo, I appreciate you understand the merits of Chinese people. As you said, Chinese in general are more motivated and driven than people from many other countries.

        However, since you mentioned politics, I have to say politics is the biggest concern that causes all uncertainty in Chinese economy. China will welcome the once a decade transition the end of this year. How well is it going to be? Nobody knows. How well will the next generation of leaders reform the country? Nobody knows. Motivated Chinese people work in a far from ideal system, resulting a huge loss of efficiency. That's why the previous stimulus caused another round of housing bubble and a deeper wealth gap. Unlike the US system, China's system lacks transparency, which also reflects on a lot of companies' financials.

    • What is your motivation posting messages here? Do not tell me you are just helping others.

      • 1 Reply to connor.jin
      • My motivation is to make people aware of the risk of investing in China. Obviously, as a stakeholder of XIN, you will hate me. But it is a free country here. If you want to label me something ugly, it will be fine.

        Jin, you must leave China too long so that you are too optimistic about China. I know there are many China bears bashing China for decades, but who knows if they are right this time. Again, it is always fine to invest in companies in China as long as you know your risks. I just see many people in this board do not know China very well. They just blindly believe the miracle of China in the last 30 years will continue for sure.

 
XIN
3.19+0.17(+5.63%)Jul 2 4:06 PMEDT