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Xinyuan Real Estate Co., Ltd. Message Board

  • savvyvalue savvyvalue Sep 6, 2012 1:02 PM Flag

    Will XIN outperform S&P500 in comming months???

    I think the answer is NO. Blue Ridge will continue selling XIN well into next year. Also, year end tax loss selling will comming in soon. All these will put pressures on XIN shares. If you get into XIN last year, you will be up 40% - 50% for year 2012. This is very good. If you got in at current price $2.8 or higher level this year, you will most likely post a loss on your investment for year 2012.

    For traders, it makes all the sense to sell XIN now and buy back sometime next year after Blue Ridge finishing selling its 11 million+ XIN ADRs. Really no need to complain XIN's poor performance today and in comming weeks/months. Just sell your XIN shares and invest somewhere where you think you can get better returns.

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    • I am sure I have not connected all the dots.

      There are two positions for a long XIN.

      The first position is not associated with XIN but rather the market shorting China. The numbers produced out of Mainland companies are either poor quality, at best, or bogus. The market is unwilling to risk any money until those issues are resolved.

      Consider today’s environment for a micro or small cap manger considering a Chinese bet. The bet goes south a plaintiff attorney will have a field day pointing at the gross negligence of the manger. A fund manager embraces risk but is it risky to play Russian roulette without an empty chamber?

      After the Chinese hurdle, whether XIN is a good bet depends on how much China will fully embrace capitalism or depends on guanxi to drive the economy. What will actually happen will be somewhere between these extremes but guanxi is not going away quickly, and in China quickly is measured in hundreds of years.

      Our company position is not ideal for a China economy based on guanxi. There is no mention of the chairman’s membership in influence building activities, such as the party congress. There is no mention of his membership in the Communist Party, a good thing for the shareholder.

      There is a caveat. Wives can exert a significant amount of behind the scene pressure. The XIN chairman’s wife has every indication of being such a woman.

      I love my company on the Chinese capitalism end of the spectrum. In a market unfettered by regulatory risk, my company’s cost of capital should be superior to the competitionbecause of the regulations in China in the real estate market that is huge. My company should outperform in a bear or bull real estate market in China.

    • Walt's talking moderate politics. Cheerleaders are offering objective analysis.

      What's up with this board lately? Is it a full moon, or something?

    • You might be right. I buy dips only and hold stocks to collect dividends. Meanwhile, let the company buyback more shares and further increase per-share value.

      I had 2.5 years of patience, and am willing to wait it out.

      • 2 Replies to connor.jin
      • I think long term investor will make a lot of money in XIN. However, those who feel sick if XIN does not go up a lot in near term should really sell all their shares and stay away from XIN. Why stick with XIN while XIN causes so much pain on you so you feel XIN is a POS?

        This applies to many most productive (in terms of messages posted) posters here on this message board. Anyone has any doubt on a stock should sell that stock and stay away from it for the benefit of his/her own well being. Anyone agree with me on this?

      • I am getting 8.6% dividend rate on my monies, and starting in November I can sell some shares at long term capital gains rate.

        I am still expecting share price to be between cash/equivilants per share and book value per share by years end, or $8.26+ share price.

        Sentiment: Strong Buy

    • Yes, they will outperform S&P500 for rest of the year, and into 2013.

      Nah... Blue Ridge will not sell all of their 11 million shares, and XIN can buyback up to 6 million of those shares for less than 1/3 their value, so don't see large downward pressure because of Blue Ridge.

      A person wants to stay in XIN if they want "long term" capital gains.
      Earnings per share will beat for Q3, and buybacks will continue.
      In the first quarter of 2013 they will increase the dividend by at least .04 yearly (.01 x 4 quarters).

      There is more risk to sell now, then it is to hold.

      Sentiment: Strong Buy

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