Correct me if I am wrong, most of their ships are not lock in the long term contract like other ships. So they should beneift the most from the upswing..
this should support supramax rate. At the current supramax rate, EGLE should have a positive 20 million cash flow a quarter. Of course, they won't get all these benefit. Anyone, this quarter, the results should improve marktable compare with last quarter and next quarter should be even better.
Your argument is true. But nothing wrong for using the average in this case. They raised 400 Million dollar in August, should they invested the money, You will get a payout ration small then 75%:).
Sentiment: Strong Buy
The book value is at 11, basically all tangiable. They had IPO at 14 all they claimed to be very profitable since IPO, so why make you think the stock is only worth 5.50. What is the return for their land purchase ?
Chinese real estate had huge boom over the last several years, XIN should make lots of money during this time.
Then how much they returned to share holders, you could argue the 30 million buy back and 30 million dividend during the last several years, also don't forget
they raised over 200 million from the us share holders in the IPO at 14, also, they raise again 140 million senior debt at 14% this year and another 100 million equity at under $6 this year, so net, net they took out more money then they paid even if we forget about the ipo. It looks like a scam for me.
So we care how much money they are going to make, investors so far have not seen a dime from the profit. At least they should return the money they raised from US investors.
The spent billion of dollars to buy back their shares, What happen?
They issue more shares despite the buy back.
I don't have any doubt that XIN was making over the last couple of years.
In theory, XIN's tangable asset is cash, almost no building/machine(they have sub contract to do all the constriction), so If I were the CEO, I would just use cash flow to every shares when it was traded below its book. Forget about land acquision, after all, you buy land and build the house to make money, but you can get 100% right away for buying your own stocks.
SO why the CEO sold stocks for half of the tangable value is beyond my understanding., it's like give away your own money.
So the big question: what is the real tangable value for XIN? Only CEO knows.
Chinese banks typical charge credit worthy customer with around 6%-75\% interest rate. The question was raised for 13.25% bond issuing during conference calls, their argument was
1) They could wire the money from China, but they have to pay 10% tax chinese government in order to wire the money, for 13.25%, not mentioned the fee paid to investment bankers, for 10% tax, it's still make sense to wire the money from China.
2) They had 40 million loans was due this year, the interest on that loan was like 15-16% plus stock warrent, so 13% was a bargin relative to the 15%
3) They need to preserve the cash in China plus the money from US to do a major land acquision in the very near future, it's been 4 months, they have not bought any land.
Now they need more money.
Well, the company was supposed to very profitable since 2007, the real estate value was skyrocketing during this time. Most of the homebuilders made pretty good money during this time.
So after so many good years, they still need to get a loan for paying 13% interest and sell a convertable bond with converting price below market(This is highly unusual). Can they get a loan with reasonable rate from the banks?
The problem I have, is, XIN went to IPO at 14, after so many years, the company should be more valuable, so why the heck management thought this company only worth 5.48?
What happened to 60 million share buy back? was that real?
How about 600 million unrestrict cash balance in the bank?
Currently, lots of chinese stocks are on the upswing. Even the junk had big run like ZSTN. XIN was clearly on the break out.
If not for this news, XIN should be traded over 8 in couple of weeks, and then they could do a secondary at that time.
CEO owns 40% of the company, Why did they do the deal right now. It sure will bring the fraud debate one more time. I still don't understand why!
They had 2 buyback and dividend for last couple of years, then if you look all the money they raised, which is significantly much more then the total they spent on the dividend and buy back.
I am a believe of this company for some times and make some pretty good money. I have to suspect the management steal the money from the company. Real estate is very profitable in China, otherwise, where are the money they made all these years? Don't tell me they need the money to buy more land.
They got like 100 million from selling 20% of the company at the same time they tried to spend 60 million to buy back company's stock. So Why? IT does not add up no matter what you see it.