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Xinyuan Real Estate Co., Ltd. Message Board

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  • growth.value growth.value Sep 28, 2012 11:11 AM Flag

    Congratulations, Longs

    Catnippss, thank you for convincing me to buy XIN. However, I just do not buy stocks in real estate developing industry. As a former industry consultant, I dislike RE industry as an investment. I have to say XIN's value is attempting. However, my way of investing approach is just like my ID, putting growth in front of value.

    Here is the risks I worried about XIN. First, American real estate developing is a highly competitive industry. Many many firms have much more financial resources than XIN to develop projects. The potential new comers can significantly shrink the margin in the business. Also, as a foreign RE firm, XIN has a long way to learn the American market well.

    Second, the backyard of XIN is still full of uncertainty. I hate to deal with uncertainties involving a lot of government. So, American health care industry is out.

    Third, the value is absolutely attempting, but the accounting fraud risk is still there even with a $54 million purchase. I never doubted XIN should at least have $100 cash on hand. Spending $54 million on a project is not something new to XIN.

    Fourth, don't worry. I will not let my money die with inflation. I have many other stock investments too, in the industry I like. XIN has value, but its risk adjusted appreciation potential is not higher than my other investments in my metrics.

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