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Xinyuan Real Estate Co., Ltd. Message Board

ksn_44 162 posts  |  Last Activity: 4 hours ago Member since: Jun 28, 1998
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  • Reply to

    Zillow + Trulia

    by michaellipka Jul 26, 2014 3:04 PM

    More notes on the deal

    **********************************************************************

    Z
    Zillow/Trulia predict major cost savings, other synergies
    Zillow's (Z -1.5%) purchase of Trulia (TRLA +13.3%) signals Zillow plans to create a portfolio of online real estate assets much as InterActiveCorp has created a portfolio of online dating assets, says CEO Spencer Rascoff. "What's taking shape is the creation of a real estate media company." Move (MOVE +8.9%) investors might be pleased to hear that.
    Though Trulia's brand will stay independent, Zillow and Trulia predict the deal will yield at least $100M/year in cost savings by 2016. Other expected synergies include: 1) Better real estate data for consumers thanks to data-sharing between Zillow/Trulia. 2) Common ad services/marketing platforms that can yield a better ROI. 3) Broader listing distribution.
    The companies note they still only account for 4% of estimated U.S. real estate marketing spend of $12B/year. Zillow has 83M monthly unique users, and Trulia 54M (some overlap exists).
    Street commentary has been quite positive. Macquarie: "This could pave the way to these companies becoming more profitable more quickly." CRT Capital: "At the end of the day, this provides scale. And scale ultimately leads to more advertising on the overall network."

  • LEJU jumps a buck the first half hour and I do not sell and wait 1/2 hour for the $.70 pullback generally 30 minutes later to buy it back again, OK?

  • Reply to

    Zillow + Trulia

    by michaellipka Jul 26, 2014 3:04 PM

    venetian, the Shanghai Composite has a PE of 8. It is GROSSLY undervalued. Why? I have no idea but I think generally distrust of the Chinese in general is an issue. Underlying that is corruption I would imagine.

    ***************************************************************************

    Shanghai climbs another 2.4%

    "Sentiment has turned in favor of growth and cheap valuations in the Chinese market," says a Hong Kong-based fund manager. Shanghai "has been lagging for a long time so [it's catching] up with world markets. The policy changes in China are favorable.”
    Among the more recent measures are the cutting of reserve requirements, accelerated infrastructure spending, and loosened property curbs.

  • Reply to

    Zillow + Trulia

    by michaellipka Jul 26, 2014 3:04 PM

    Keep in mind, Z isn't even making money, and the stock is 150!!!

    ********************************************************************************************

    Zillow, Trulia add to gains amid positive merger commentary
    "It's a blockbuster ... What this says is, Zillow has been and has locked up the absolute dominant position in online real estate in the United States,” says real estate analyst Steve Murray on reports Zillow (Z +4.6%) is looking to acquire Trulia (TRLA +2%).
    Barclays' Christopher Merwin predicts a merger would "dramatically increase the combined entity's pricing power" with real estate agents, and would yield more leverage in price negotiations with MLSs. Zillow just bought MLS data-integration software platform provider Retsly.
    Murray admits there could be a backlash to the deal, stating "the industry will be concerned ... if you have one huge, overwhelmingly dominant player" for whom agents "will be almost compelled" to list on.
    Bloomberg reports Zillow could pay for 1/3 of the purchase in cash (implies a $667M cash payment at a $2B acquisition price), and 2/3 in stock. Zillow had $446M in cash/investments at the end of Q1.
    While Zillow and Trulia continue to rally, Move (MOVE -2.8%) is now below where it traded before the first merger report broke.

  • Let’s talk about E-House China Holdings Ltd (EJ).

    E- House is a real, complete real-estate proxy play for China's real estate market. Now, I know, before we get up in arms, it’s been a pretty sloppy market. Even the management of this company admits there’s been a lot of softness in certain cities, and it’s going to linger. But here’s the thing: it can also create opportunities, there’s going to be pricing discounts, there’s probably going to be some relaxed policies -- and all of that generates activity. This company makes a lot of money from that activity, not just the prices of homes going up or down.

    In fact, in the second quarter, they had standout segments including: e-commerce (up 238%), sales agency service (which is traditional up only 5%, but still up in a sloppy market), online real estate (up 97%), real estate information (up 52%). And execution is phenomenal. In the last four quarters they beat the Street by 83%, 43%, 18% -- and the last time out 100%. Revenue was up more than 40%.

    I see one more hurdle: $12. After that, I think this stock rallies to $16.

  • The online real estate space heats up some more with Realogy's (NYSE:RLGY) all-cash, $166M deal to buy ZipRealty (NASDAQ:ZIPR). The price works out to $6.75 per share vs. today's close of $3.02.
    The purchase adds ZipRealty's residential brokerage operations with 23 U.S. offices and its integrated real estate technology platform to Realogy's operations. ZIPR last year closed $2.7B in property sales, giving it $76M in revenue and $32M of gross profit. Realogy expects EBITDA contribution from the purchase to be about $20M annually within the next three years.

  • Reply to

    Z buying Trulia

    by babbeo6 Jul 24, 2014 2:56 PM
    ksn_44 ksn_44 Jul 24, 2014 11:05 PM Flag

    Here is the deal. Keep in mind, EJ trades at 1.97X sales as of the moment and LEJU 6.54. But keep in mind LEJU's sales are growing exponentially and that number could be cut by 30% with next Q's revenue numbers. But look at where Z trades and what they are paying for Trulia.....

    Note also, the P:S ratios noted below are for '15, currently Z's P:S ratio is 22 whereas Trulia's is 8.6. And further note.......BOTH OF THEM ARE LOSING MONEY!!

    Z closed today at 145!!

    *****************************************************************************************************************

    More on Zillow/Trulia
    A source tells B berg Zillow (Z +18.8%) could value Trulia (TRLA +28.7%) at up to $2B in a deal. That would imply an acquisition price of ~$54/share.
    The source adds a deal could be announced as soon as next week. B berg cautions talks remain ongoing.
    The rumored price represents a ~33% premium to Trulia's Wednesday close. Nonetheless, it values the company at 6x 2015E sales, a multiple well below the 12x sported by Zillow as of yesterday's close.
    Perhaps more importantly, there's plenty of enthusiasm on the Street for a deal that would create a clear-cut leader in what remains a very fragmented online real estate market that still only accounts for a small (but growing) fraction of total U.S. real estate services spend.
    Earlier: Zillow reportedly looking to buy Trulia

  • SHANGHAI, July 24 -- Shanghai home buyers will have access to discounted loan rates next month while high price, oversupply and credit tightening continue to drag down the property sector.

    The Agricultural Bank of China, one of China's Big Four banks, said on Thursday that it will offer a 5 percent discount on interest rates to clients borrowing at least 2 million yuan for their first homes.

    The relaxation, although small, caught market attention as the property policy of the biggest Chinese city is deemed the wind vane of the whole country's real estate policy, which puts containing prices its priority.
    Other big banks have not made similar moves yet.

    The central government has not indicated any shift in nationwide property policy. Instead, quicker reforms, loosening credit and infrastructure construction have been used to offset the impacts of the real estate slowdown.

  • Reply to

    Wonder how it got established that EJ

    by ksn_44 Jul 24, 2014 10:30 AM
    ksn_44 ksn_44 Jul 24, 2014 2:27 PM Flag

    All good points, Michael, but 30% of market cap? I hear you on the limited downside though.

    And what is up with Zillow up 20% today? Now the PE is probably 150.

  • is valued 25-30% less than LEJU????

  • NEW YORK (AVAFIN) -- E-House witnessed a record number of call and put contracts during the busy trading session. There were 1.4 call contracts traded for each put contract yielding a 0.71 put/call ratio where 5,931 put and 8,382 call contracts exchanged hands.
    Put/Call ratio can be regarded as a predictor of investment sentiment, indicating what experienced investors are doing in preparation for a move of an underlying equity. A high put/call ratio suggests that the investor sentiment is bearish and that investors are expecting the underlying stock price to decrease. On the other hand, a low put/call ratio implies that the investor sentiment is bullish and that investors are expecting the underlying stock price to increase. Thus, unusual volume provides reliable clues that the stock is expected to make a move.

  • “We may be close to near-term bottom of the property sector,” Michael Wang, an emerging-markets strategist at Amiya Capital LLP, said by e-mail from London. The easing measures “obviously help commodities, cement and property stocks. The economy should look OK from a growth perspective, and we should see another sequential acceleration.”

    Banks will resume preferential mortgage rates, according to 74 percent of analysts and economists in a survey conducted from July 14 to July 17. Fifty-six percent forecast lower minimum down payments, while 59 percent said they expected the central bank to ease its mortgage restrictions. A total of 29 economists and analysts responded to the survey.

    *************************************************************************************

    About 40 Chinese cities have eased home-purchase restrictions. Wenzhou City in the eastern Chinese province of Zhejiang removed its curb on housing purchases in June via verbal notice, the National Business Daily reported yesterday, citing an unidentified executive with a property developer. Suzhou City, a tourist town in the east, also relaxed some limits for buying homes, the Xinhua News Agency reported July 21.

  • SFUN volume is off the charts, and this is about the highest i have ever seen for LEJU. EJ caught a bunch of 100K plus purchases in the last hour.

  • Wenzhou, in eastern Zhejiang province, removed its home-purchase restrictions last month, the National Business Daily reported, citing an unidentified executive with a property developer. The government won’t strictly examine how many homes a buyer owns, it said. Wenzhou joins cities including Jinan and Wuhan that have loosened curbs to prevent falling home prices from undermining their economies.

    “Possible loosening makes property stocks’ valuations attractive,” said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai.

    China’s central bank refrained from draining funds using repurchase agreements for the second time in a month as cash demand tightened before share sales.

  • Reply to

    Differing opinions..........think tank vs EJ

    by ksn_44 Jul 21, 2014 3:27 PM
    ksn_44 ksn_44 Jul 22, 2014 3:31 PM Flag

    And I believe LEJU added in their CC that their desire to keep margins constant was based on the fact that they were constantly absorbing input from the Developers as to what upgrades, additions, etc., to make to their online tools more desirable. They want to keep the value in the service. As the COO added on the CC, the real battle lies not in the cost OF the product/service but the cost put INTO the product/service.

  • Reply to

    Replacing Real Estate Agents

    by michaellipka Jul 21, 2014 8:05 PM
    ksn_44 ksn_44 Jul 22, 2014 3:27 PM Flag

    Michael, still waiting on the formal ratification of their agreement with Z. I have been asking IR for more clarification. Must still have a few T's to cross and I's to dot. The article I posted a few days ago basically said it was up and running. Now, how do you split up the monies the two will make off of it.

  • The downturn in China’s real estate market and the rising popularity of internet finance are driving a shake-up in the property service industry, in which firms are closing unprofitable shops and seeking alliances for new businesses.

    E-House (China) announced last week the launch of its real estate financial services platform, through which the property consultancy and partners including Sina would raise funds online to finance homebuyers.

    The move came a few days after E-House’s main rival and the mainland’s largest real estate website operator, Soufun, teamed up with the country’s No 1 and No 3 brokers of new homes – Worldunion and Hopefluent – to develop internet and real estate financing services, as well as cooperating in traditional business lines including advertising, home listing services and consultancy.

    Meanwhile, Century 21 Real Estate, the world’s largest franchisor of residential real estate agencies, confirmed in an e-mailed statement on Monday it had pulled out of Shenzhen as part of its strategy to survive in the cooling housing market.

    “Property developers are going through rapid consolidation. I believe the consolidation among property agencies will be even faster,” Chen Jinsong, chairman of Shenzhen-based Worldunion, told reporters when announcing the firm’s tie-up with Soufun.

    “Everyone is looking for a new business model to perfectly integrate the three keywords of internet, property and finance,” said Ding Zuyu, co-president of E-House (China).

    “Whoever finds the model first will enjoy the first opportunities.”

  • ksn_44 by ksn_44 Jul 21, 2014 11:23 PM Flag

    were out today pro SFUN. Volume was three times normal selling puts.

  • Reply to

    Replacing Real Estate Agents

    by michaellipka Jul 21, 2014 8:05 PM
    ksn_44 ksn_44 Jul 21, 2014 11:22 PM Flag

    Z has been on to it for several years now. As for recognition, all you need to do is look at the multiple on their stock price. It is literally 10 is not more times that of both EJ and LEJU.

    SFUN was scrambling the other day by tying up with two of China's biggest RE agencies, so when they acknowledge it as the number one realtor provider in China, you know you are on to something.

  • Reply to

    Differing opinions..........think tank vs EJ

    by ksn_44 Jul 21, 2014 3:27 PM
    ksn_44 ksn_44 Jul 21, 2014 11:18 PM Flag

    No question there are an O2O leader and your point about the new home market taking off will be true for at least 10 years to come. Note that EJ's gross margins were 67% last Q while the net margins were like 13%. In their CC, execs indicated they wanted to keep their margins stable....it was a wash between having already scaled in the costs vs constantly spending to add new features to their systems.

    I would presume LEJU's margins are a bit higher as they are not as involved in the lower margin transactional business, correct?

    If they could get to even 8% that would be total domination. Your point about the Baidu, Tencent, Sina and Weibo-wechat relationships is that they could eventually get them there and you are so correct.

    I still feel the Z partnership, when it is formally announced as up and running, should be another high gross margin addition. Perhaps the one that will get them the recognition they currently lack.

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