Alibaba IPO uses a structure called a VIE (Variable Interest Enterprise). The US stockholders have no direct ownership in the assets in Alibaba. This structure has been consistently used by the Chinese to steal western investors money.
For example Sino Tech Energy used the same structure to go public in the NASDAQ in 2012, Like Alibaba the management and owners of Sino Tech were also high ranking officials in the Chinese Communist Party.(CCP) There is ample evidence the company was just a large cash transfer. The company quickly went dark without using the IPO's issue for any company pursuit. The SEC alleged the company simply transferred the funds to the owners or a CCP controlled company. It is still alleged because the Chinese government has thwarted any efforts to investigate the company. The company and its owners are doing quite well in China today.
Three years ago Allbaba transferred the Pay Pal equivalent of the business to another company. Yahoo found out about it through a fax press release service. Alibaba never recorded anything for transferring the business.
XiN is a Chinese real estate company. Real Estate is allegedly a booming business in China. Sam Bass was a heavy backer of the company when it went public The company has never had a financial scandal. It trades on the NYSE at about a 20 % of discount of price/cash. The market is not even willing to bid the company to it cash balance.
Longtop was a darling of the New China. The company developed the premiere banking software for the People's Republic of China. It seemed like a license to print money. The company was sitting on huge cash balances. The auditors one day decided to confirm the cash balances with province headquarters at the bank rather than at the local bank. The cash balances were bogus. Not only was the company a fraud the bank was too. The company went dark, taking every cent of investor's money. They are still doing quite well. It took a visit between President Obama and Chairman Xi Jinping to allow the SEC to see audit work papers of the company.
You think you bought the hottest entry into the world's largest consumer market. Wrong, you really own nothing. This model has been repeated hundreds of times in the People's Republic of China. The company is controlled a few Chinese nationals who are beyond the supervision of the SEC. Those nationals are in turn beholding to the Chinese Communist Party (CCP) These Chinese always turn out badly. The Chinese IPOs are designed to enrich the sovereign fund of the CCP. The Chinese are very good and experienced at running this scam. If you are long on this stock, kiss your money good bye.
The ADS traded as Xinyuan Real Estate Company are shares in a Cayman Island Company. That company owns virtually nothing. It does not have Chinese subsidiaries and does not own anything in the People's Republic of China. It has a modest cash balance. It does have contracts and agreements that in a non-Chinese lawyer's opinion allows it to control the real estate company in China. The Chinese government has repeatedly stated the agreements and contracts are not enforceable in China. No attempt to enforce these agreements and contracts has ever been successful.
What a ADS shareholder owns is only based on the goodwill of the CEO of Xinyuan, who in turn is beholding to the Chinese Communist Party. It could all disappear tomorrow without notice.