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Xinyuan Real Estate Co., Ltd. Message Board

  • wow1smallworld wow1smallworld Oct 20, 2012 9:15 AM Flag

    What do we expect in terms of earnings in 3 weeks?

    Is the current price of the stock reflective of what earnings are expected to be or could there be a surprise to the upside or downside in earnings? Thanks for your thoughts.

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    • Earnings come in at $0.45. XIN is selling above $4 a share by then and the earnings reinforcement drives it into the mid-4s.

      Brooklyn and Bloomberg are driving XIN now. Its price is still divorced from real numbers: 1.51 PE; EV/EBITDA 0.16; Price to Book 0.28. It's wrong to think that circumstances or even earnings will have a lasting effect on XIN's price. Trust in the honesty of XIN's numbers will be the only thing that has any long-term value.

      Brooklyn helps mightily because -- as another poster pointed out -- you can see XIN's tangible product from lower Manhattan. That makes XIN a real company with real earnings and the value-play of the decade. Bloomberg is a trusted source trumpeting XIN's success. When we get major brokerage coverage (2014?), the sky's the limit.

      • 3 Replies to nero2005
      • I might not agree with your prediction, but I still tip my hat to you (and also Smittensday) for applying a time constraint to your $4 predictions: just before (or just after) the next ER.

        Absent a time constraint, price predictions are meaningless. "XIN to $6" is a 100% profit prediction in a one year time frame, but only a 5% per year prediction over 20 years.

      • I truly wish your were right. Although the logic of fraud worries are mitigated by a US investment sounds compelling, the market has given it a big yawn if not a down tick. It is now old news and baked into the valuation.

        The problem with XIN's valuation is sadly external to the company's control.. Honestly, I have been very impressed by Tom's and, more so by, Yong's moves since I started tracking the company. These guys are the real deal and impressive. We will have to wait long term for the market to catch up to them. Unfortunately, this might be in the 10 years long term. In the meantime, enjoy an outstanding dividend yield.

      • If the number are as good as I expect, then we could see a surge up in PPS to $4. then slow pull back to low - $3.30's / $3.40's IMO.
        Either way holding and buying on dip-a-roooo's...
        GLTA investors, players

        Sentiment: Hold

    • @wow, Casey couldn't be more wrong. They have always been Conservative with earnings. They were expecting $.40 for Q3, but will come in around $.50 a share for Q3 earnings.

      If we can stay above $3.00 when earnings/conference call are announced, we should see a pop to $3.50, but the big question is, if we will come back down, like all of the other quarters?

      If we can hold $3.00 a share through earnings, and after earnings, we can hope that $3.00+ will be our new support. In the meantime the company will buy back another 2 million shares in Q4, and will have purchased the whole $20 million, or 6+ million shares by mid 2013.

      In 2013 they will increase the dividend from .04 to .05 a quarter, and will make $2.00+ EPS for all of 2013. Also, if the share price is still under $5.00 a share when they complete this buyback program, expect another announcement on a new buy back program of another $20 million.

      Sentiment: Strong Buy

    • @wow, you proved psychic on your other thread. Wednesday, you felt it was obvious I had a short position. Within 48 hours of my reply informing you I was all cash on XIN, I actually DID open a short position on XIN.

      Can you do that trick with lotto numbers?

      As to earnings expectations, there's either none or one analyst covering XIN, so numbers are tough to come by, but I think Casey's right that the Roth guy had his 3Q estimate at .40, but that's just from memory.

      • 1 Reply to hmmm26
      • Our Roth guy was in at .41. As I stated above there appears to be a reasonable cushion in the Balance Sheet for minor surprises and the pipeline has been normative. In theory, if they had a big hiccup in the development chain, they would need to disclose new guidance. Not saying they would, it would just be the best approach. Summarizing all the tea leaves, there is no big question mark blocking hitting expectations. It should in the .40ish.

        Back to the orginal question, if the quarter came in at .20, the stock would drop rapidly to 1.50 to 1.75 and slowly over a period of a month or two start trading again at 2.75 ish. If the hit expectations or exceed expectation, even if they hit .80ish, the stock is still going to go down after the earnings call. The difference is it will stop the decline at the 2.75ish mark.

        Thank you. I will be in the Boom-Boom Room at Harrah's all week reading your fortunes and palms.

    • The earnings will not effect the price in the long term. There might be some short term down turn, if there is a surprise. My take away on the Q2 is the company's balance sheet could withstand a slight surprise. I think it will be your typical XIN .40ish quarter.

      • 1 Reply to caseysxyz
      • @casey, you're absolutely right that earnings don't move XIN's price the way it does for other stocks. At a 2 P/E, the price impact of surprises in either direction is very muted.

        Last quarter showed that pretty clearly. These numbers are from memory, so maybe off a little, but I think expectations for 2Q were in the low .40's, but profits came in at .94 (with the one time item removed, .58, I think), yet after a brief pop to $3, the stock traded right back down to the same levels it was at before the ER, just with an even lower P/E (as low as 1.3 P/E, on a ttm basis).

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