Having said that, XIN is different why?
1) All the XIN's project/sales area/sales price/sales number could be independently verify. During my investment process, I personally verify some of the sales price/area with independent real estate sales agents in China. For instance, XIN sold 52 apartment in JiNAN two weeks ago and sold less then 25 apartment in JINAN last week. Sales price is around 8,000 - 11,500 chinese/Square meter in JINAN.
2) Homebuilders is very profitable in China.
XIN could hide some other thing, but at least it's basic business model is sound. The risk is very small for the fraud.
XIN is not a reverse merger, came public. Also pays a dividend. Not to many "frauds" pay a dividend. I have 18k shares, and wouldn't if I though there was any chance of being a fraud. I have 1k shares of LPH, which I may never see again, but only bought 1k shares due to it's risk factor.
You are missing the point. The international investor believes, and rightfully so, there is fraud in the Chinese financial system. The discounting for fraud have nothing to do with reverse mergers, dividends, cash balances, auditor/management integrity, or any company specific issues. Fraud is a high degree of risk in Chinese company because fraud occurs often rather than infrequently in Chinese companies.
An investor will never see a reasonable valuation in a fine company, such as XIN, until China cleans up its act..