What's up with the margin compression? I can understand that they had more expenses due to the expansion, but still - revenue up greatly and earnings per share down that much? Q1 earnings guidance looks terrible at 9-12 million, and 2014 yearly earnings ate projected to not grow over 2013 at around 120 million?
Whatever the trade was that pushing XIN down for over three month, it seems to have ended. None of the major holders sold out last month so that was not driving the decline. Now stuck at these levels with little volume. Where is the dividend? Earnings? TPG?
Could be that this is related to "random" shorting of Chinese stocks, but it could also be that the short positions are to hedge long positions and protect from a market downturn. Some investors like to do that and there are many more institutional investors in XIN now than last year. We simply don't know.
Poly Real Estate and China Vanke are much bigger companies by market cap than XIN, but given the lack of growth at XIN in 2013 their metrics for the assessment of "fair price" for XIN are valid. Both trade at a PE ratio of 5-6 and at price per book ratio of 1.2x. So a fair value for XIN at this point would be $15 at 1.2x book value or $10-12 at a PE of 5-6. If the company growth accelerates in 2014 and they diversify their portfolio internationally maybe a little more than that.
Gone up to over 1 million shares. Still low in terms of % and in comparison to other stocks, but much higher than the 150k recorded in February of 2013. Not sure if this is a good or a bad sign.
1/31/2014 short: 1,016,054 average daily volume: 374,260. Days to cover: 2.714835
I sent the following to XIN 's IR firm ICR to get an idea if they are doing anything with regard to their webpage and PR:
"Dear Mr Zima, I am a US based investor in Xinyuan Real Estate (XIN). I realized that the company has not updated their English webpage since 2012, as evident by the listed development pipeline and news releases. I also have repeatedly found material information about the company's business (such as land acquisition) to be released on Chinese webpages and information terminals prior to release of information to US investors in English. I would like to ask why there is not a more proactive communication strategy in place? Unfortunately the company's perception in the US is poor due to this lack of appropriate IR/PR."
Response was as follows:
"Thank you for your insight. We’ve addressed this with management. They control what gets put up on their English website. We’re hoping to influence them to update the content for the benefit of US-based investors. Hopefully, you’ll see an update in the near future. Regards, Bill"
I agree with that. Seems like they are not following up on the buy back and there are delays in announcing the dividend and date for the quarterly earnings. It wouldn't surprise me if earnings are announced late due to the "interim CFO". The company technically has no controller right now. Lack of news releases regarding their business doesn't help either.
The 50d moving average has now clearly fallen below the 200d simple moving average. The last time this happened was in q4 of 2009 and it was followed by a long-term downward trend taking the stock below $2. Maybe this is just temporary this time, but the stock needs a high volume reversal taking it above $5.30 from here. We need a dividend announcement, clarity about the CFO, the auditor, and these guys really need to start telling investors when they purchase land in China or start pre-sales. Just announcing such developments in Chinese on their webpage or through the Chinese media doesn't do XIN any good. They actually have to disclose to investors any material developments affecting their business according to SEC regulations. Also wondering if the selling pressure comes from either Renaissance Technology or TPG selling out. Last time we went through a long-term downward trend Blueridge and Equity international sold their stakes causing downward pressure.
50d moving average has now fallen below the 200d average. Upward channel was broken through to the downside, 200d mov average forms new upper resistance. Not good, we still need the high volume reversal to take XIN above $5.50. Where's the dividend and when are earnings announced?
To be clear, go to the 5 year chart in technical analysis and overlay the 50d and 200d simple moving average. The upward channel is pretty clear, and we are overdue for an upward move. If it falls further from here, not good.
Stock has been pulling back for a long time now. We need a high volume reversal that takes it above the 50d moving average. Thought we were getting there on Wednesday but the trend is unfortunately broken now. From a technical perspective, the 50d moving average will fall below the 200d average. That's unfortunately bearish.
Acorisk explained it accurately. Max pain is the price point where the majority of options holders walk away with nothing. I was at $5 on Friday, and the stock closed at $5 in after hours trading. This can imply that there is some kind of manipulation going on, even though that is hard to prove. We will see if the stock reverses in the next two weeks with China IPOs restarted and China GDP for q4 2013 due. I still think chances are we will revisit 7.50 sometime in late February.
There is some progress I think (multiple permits filed, something related to pavements approved on 12/31), but the main dwelling and structural work are disapproved as of Jan 9th. At least it looks like they are pushing their way through the permitting process and they ((Wasa) are working to get the permits in place.
Too many options contracts on the $5 and $7.50 call. Those will all expire worthless this Friday. After that we may see a move up with Ex div date coming and possibly more news from the company.
INFN got kicked from the family. Beat uncle Vinny in Bocce and didn't pay for his gelato. He almost ended up in the Hudson with cement shoes for that one. That's how he got in the guide business.