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Xinyuan Real Estate Co., Ltd. Message Board

  • victorcreo victorcreo Jun 12, 2013 9:37 AM Flag


    I only bought Xin a few weeks ago. I know lots of people think Chinese stocks are all frauds, so I had a question. Has anyone received dividend payments from XIN? If they have, that would add a lot to their credibility. Combined with every analyst I can find considering them a BUY, makes me think they're legitimate. Also, the fact they bought land in Brooklyn to develop makes me pretty happy.

    Main question, has anyone owned XIN for a while, and recieved dividends?

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    • There are no problems with dividend. Please note there is a Chinese dividend tax that is passed on to the shareholder. The tax is likely in violation of the Chinese tax treaty but it is a refundable credit to a US tax payer. Unless the US government protest, which is remote, that will be the status quo.

      Buying real estate in Brooklyn sucks from a shareholder's perspective. If you want to invest in US real estate then why not buy a US real estate developer. The Chinese company has to pass through two layers of taxation and has insane cost of capital before you see dollar one. Everything being equal a US developer will beat a Chinese developer in US real estate all day long. Brooklyn was a smart move by management only because it was easy to delude a retail shareholder. As XIN has no consequential institutional holders, this is focus of management's attention. If there were any institutional investors in the stock there would have been a 10 % shift downward in valuation. It is noteworthy that the last IPO participant, Blue Ridge, liquidated shortly before the company started buying in the US,

      This is an easy pick for an analyst as it will show up at the top of a filtered listed consistent. What is not to like from an analyst stand point? The company has a solid dividend and earnings record. Management has signaled its intention to pay the dividend for the foreseeable future. The company is trading at discount to cash per share. From an analyst perspective, given a deadline, this one is a no-brainer.

      Yet, there is a substantial risk to the stock. The risk is beyond the company's control. This risk explains why a stock with a supportable $ 15 per share is trading at current levels. The Chinese financial and regulatory system is abysmal and the Chinese don't understand the problem. Chinese companies using the VIE structure, which is XIN structure, have not honored shareholder's ownership with support of the Chinese court.

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