XIN has projected Q4 2012 earnings at around $0.27/ADR. This is about an 8% return for the next 6 weeks.
As far as I know, XIN has not projected Q1 2013 earnings....but if you assume $0.20/ADR, this is about a 6% return for Q1 at the current ADR price.
If these returns are not satisfactory....then you sell XIN and buy a company with a return more to your liking.
A rule of thumb, is that a company that will not grow earnings at all for the next 10-20 years should have a P/E of 8.....which gives the typical annual equity return of 13%.
I like their diversification into the USA but I am concerned as last night I read an article in Bloomberg, citing parts of it, it says:
...- "Xinhua cited the nation’s housing minister as saying the government won’t relax restrictions on home purchases in the short term.
Vanke, the nation’s biggest listed property developer, fell 1.3 percent to 8.45 yuan. Poly Real Estate, the second largest, lost 1.6 percent to 11.44 yuan.
The ministry is on “high alert” if both transaction volume and home prices increase “substantially,” Xinhua cited Minister of Housing and Urban-Rural Development Jiang Weixin as saying.
Home prices have risen about 155 percent nationwide since reforms that privatized the country’s housing market in 1998. The government imposed a property tax for the first time in Shanghai and Chongqing and raised down-payment and mortgage requirements in its more than two-year effort to curb the property market...."
Now what happens is lots of Chinese are cash rich and don't need bank loans, but then without a financial market, growth will be limited.
I am holding for now as I believe its metrics are just too good to pass up.