... and the disconnect with XIN won't last forever. Stock will move up after the Nov earnings call.
I appreciate you posting these updates, but still want to know why this company refuses to release any news regarding their business progress to US investors in English. One day some of these news will be perceived negative, it will filter through to US media via Chinese sites, the stock will fall, and XIN will be hit with a shareholder lawsuit for not disclosing material information. That is the concern, and in addition their non-existent PR and IR just doesn't fit their aspirations to become one of the leading real estate companies.
New home prices in China declined for a sixth straight month in October, according to a private survey, though the pace of the fall slowed markedly.
The average price of a new home in 100 major cities was 10,629 yuan per square metre in October, down 0.4 percent from September, the China Index Academy said Friday, smaller than the 0.92 percent fall recorded in September.
The People's Bank of China, the central bank, announced steps at the end of September seen as bolstering demand for housing, including allowing borrowers who had paid off previous mortgages to be treated as first-time buyers and thus enjoy preferential policies.
"We believe the property market is reacting favourably in the second half of October to the government easing measures," Mizuho Securities economists Shen Jianguang and Michael Luk said Monday in a research note.
Acadian asset Management and other institutional Investors are selling XIN. Their algorithms may be set to sell when the broader market goes up. Hence the selling pressure on market up days.
At least 9 filed as of 9/30 so far, and blackrock and group one trading sold out. Acadian asset management, the largest institutional holder after TPG, sold 1.6 million ADS in Q3. My take on this is that they are liquidating their position completely and should be done by the end of Q4. Other institutional reports are due by 11/15.
Not sure if this is good news. An alternative explanation is that TPG wants to exit and hence the redemption of notes by the company. Or worse, the CEO is planning to take it private at these low levels for a minute premium and must redeem TPGs notes to avoid a minority shareholder lawsuit.
what exactly are the covenants that XIN was technically in default of? This is a strong statement and I wonder what your basis for it is. With regard to TPG, yes if they convert and sell the presuing will mount. But at the same time the Chinses markets are going up due the Shanghai/Hong-Kong connection with the SSE up 20% since it bottomed out earlier this year, In 2011 Blueridge sold all of their shares of XIN causing the shareprice to fall below $2 short term only to move up swiftly once the selling was over. In the last quarter Acadian Asset Management sold 1.6 million ADR and this has been a big part of the selling pressure on XIN. If TPG sells out, there might be 2 additional quarters of selling with the stock stuck where it is, but I do not believe it will fall much further (unless the divident is cancelled).
One way for XIN to go from here would be to stop the share repurchase program as they just reduced possible dilution form the TPG convertibles
What is the earnings outlook for Q4? Any statement regarding redemption of the convertible notes?
From what I read in the PR statement, that's all expected. And the NY Oosten is 20% under contract with revenue recognized in 2016 upon delivery, so I don't think that property will have much bearing on the share price in the short-term (but it may long-term). What is important now is whether the margins improve over the next six month.
I am buying back in at this point. Said all along the point of return was at $2.50 per ADS or after the November conference call. Time to buy and hold ....
Thanks. Q4 guidance is lower than what was projected for 2014 in the Q1 conference call based on the full year guidance.
Don't think so. They have to pay 13% and any outstanding interest for the redemption of TPGs convertibles, and that could be the reason why Q4 earnings is low despite of increasing revenue. Looks like a short term problem to me.