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Xinyuan Real Estate Co., Ltd. Announces Third Quarter 2020 Financial Results

2020-11-27 23:34 8985

BEIJING, Nov. 27, 2020 /PRNewswire/ -- Xinyuan Real Estate Co., Ltd. ("Xinyuan" or the "Company") (NYSE: XIN), an NYSE-listed real estate developer and property manager operating primarily in China and in the U.S., today announced its unaudited financial results for the third quarter ended September 30, 2020.

Third Quarter 2020 Highlights

  • Total revenue in the third quarter of 2020 increased 130.5% to US$ 655.4 million from US$284.4 million in the second quarter of 2020.
  • Net income in the third quarter of 2020 was US$ 29.5 million, compared to net loss of US$30.1 million in the second quarter of 2020.
  • Diluted net income per ADS attributable to shareholders in the third quarter of 2020 was US$0.46, compared to diluted net loss of US$0.49 in the second quarter of 2020.

Mr. Yong Zhang, Xinyuan's Chairman, stated, "I am glad to share our third quarter business results, in which we made remarkable progress from last quarter. We believe that consumer spending has broadly been restored across China, driving better business conditions. Our contract sales recovered with several major projects in Zhengzhou and Qingdao launched for presale as planned, reaching around 11.8 billion RMB or US$1.68 billion accumulatively by the end of third quarter. We also made encouraging progress on projects in Beijing and Xi'an, which should be able to launch in the fourth quarter. With a burgeoning pipeline in Tier-1 and Tier-2 cities, we are confident that Xinyuan can withstand market fluctuations and capitalize on opportunities."

Mr. Zhang continued: "Balance sheet optimization has always been our top mission. In this quarter, we further reduced the proportion of short-term debt from 46% in December 2019 to 37% in September 2020, a $240 million reduction from $1.49 billion to $1.25 billion, and it's fully covered by our cash position. Liquidity improved due to ample cash collection and issuance of offshore bonds in third quarter, and recently further strengthened after the landing of RMB 900 million onshore corporate bonds. Stronger balance sheet brings additional resources needed to drive our growth strategy and to build a diverse and dynamic real estate ecosystem."

Third Quarter 2020 Financial Results

Revenue

In the third quarter of 2020, the Company's total revenue increased 31.7% to US$ 655.4 million from US$497.6 million in the third quarter of 2019 and increased 130.5% from US$284.4 million in the second quarter of 2020.

Gross Profit

Gross profit for the third quarter of 2020 was US$ 105.3 million, compared to gross profit of US$123.5 million in the third quarter of 2019 and a gross profit of US$19.2 million in the second quarter of 2020.

Selling, General and Administrative Expenses

SG&A expenses were US$ 57.9 million for the third quarter of 2020, compared to US$57.6 million for the third quarter of 2019 and US$51.4 million for the second quarter of 2020. As a percentage of total revenue, SG&A expenses were 8.8% compared to 11.6% in the third quarter of 2019 and 18.1% in the second quarter of 2020.

Net Income

Net income for the third quarter of 2020 was US$ 29.5 million, compared to net income of US$5.4 million for the third quarter of 2019 and net loss of US$30.1 million for the second quarter of 2020. Net margin was 4.5% compared to 1.1% in the third quarter of 2019 and negative 10.6% in the second quarter of 2020. Diluted net earnings per ADS was US$0.46, compared to diluted net earnings of US$0.07 per ADS in the third quarter of 2019 and diluted net loss of US$0.49 per ADS in the second quarter of 2020.

Balance Sheet

As of September 30, 2020, the Company's cash and restricted cash was US$ 1,252.0 million, which reflects an increase of US$ 252.2 million from US$ 999.8 million as of June 30, 2020.

As of September 30, 2020, short term debt outstanding was US$ 1,255.6 million, total debt outstanding was US$ 3,374.6 million.

The balance of the Company's real estate properties under development at the end of the third quarter of 2020 was US$ 2,592.0 million compared to US$ 3,094.9 million at the end of the second quarter of 2020.

Real Estate Project Status in China

The Company commenced pre-sales of two new project in the third quarter of 2020, Zhengzhou Xinyuan Palace I and Qingdao Lingshan Bay Dragon Seal.

Below is a summary table of projects that were active and available for sale in the third quarter of 2020.

Project

GFA

(m2, 000s)

Total Active
Projects as of
September 30,
2020

Sold as of
September 30,
2020

Unsold as of
September 30,
2020

Xingyang Splendid II

118.5

98.3

20.2

Jinan Royal Palace

449.8

441.5

8.3

Xuzhou Colorful City

130.8

123.3

7.5

Sanya Yazhou Bay No.1

119.2

119.0

0.2

Xi'an Metropolitan

286.0

276.3

9.7

Jinan Xin Central

195.7

192.0

3.7

Henan Xin Central I

261.5

253.4

8.1

Zhengzhou Fancy City I

166.7

160.4

6.3

Tianjin Spring Royal Palace I

139.7

131.6

8.1

Zhengzhou International New City I

356.7

353.1

3.6

Xingyang Splendid III

120.9

119.2

1.7

Zhengzhou International New City II

176.0

170.3

5.7

Zhengzhou Fancy City II (North)

108.7

102.4

6.3

Tianjin Spring Royal Palace II

144.6

91.4

53.2

Zhengzhou International New City III D

46.1

45.2

0.9

Zhengzhou Hangmei International Wisdom City I

64.7

59.0

5.7

Zhengzhou International New City III B

118.8

118.5

0.3

Changsha Furong Thriving Family

72.0

72.0

0.0

Chengdu Xinyuan City

741.6

402.9

338.7

Kunshan Xinyu Jiayuan

107.9

64.2

43.7

Xingyang Splendid IV

151.8

107.8

44.0

Suzhou Suhe Bay *

62.6

62.6

-

Zhengzhou Hangmei International Wisdom City II

78.4

42.4

36.0

Qingdao Royal Dragon Bay

161.9

108.1

53.8

Jinan Royal Spring Bay

116.9

80.5

36.4

Xinyuan Golden Water View City-Zhengzhou

331.4

120.2

211.2

Zhengzhou Fancy City III

80.6

77.4

3.2

Zhengzhou International New City III C

82.3

75.7

6.6

Zhengzhou International New City IV A12

199.7

185.4

14.3

Zhengzhou International New City IV B10

92.3

69.5

22.8

Suzhou Galaxy Bay

76.5

73.4

3.1

Suzhou Gusu Shade I

12.0

9.4

2.6

Dalian International Health Technology Town I

103.8

63.8

40.0

Xingyang Splendid V

80.5

66.1

14.4

Suzhou Gusu Shade II **

14.3

10.0

4.3

Zhengzhou International New City V A04

104.9

51.3

53.6

Huzhou Silk Town ***

146.7

33.4

113.3

Foshan Xinchuang AI International Science and
Technology Innovation Valley

194.4

42.4

152.0

Suzhou Linhu Lake****

156.4

12.6

143.8

Zhengzhou Xinyuan Palace I

122.0

19.0

103.0

Qingdao Lingshan Bay Dragon Seal*****

381.2

25.5

355.7

Others

56.5


56.5

Total active projects

6,733.0

4,730.5

2,002.5

* The Company owns a 16.66% equity interest in Suzhou Hengwan Real Estate Co., Ltd.. which develops Suzhou Suhe Bay. The Company accounts for its investment under the equity method.

** The Company owns a 19.99% equity interest in Suzhou Litai Real Estate Co., Ltd., which develops Suzhou Gusu Shade II. The Company accounts for its investment under the equity method.

*** The Company owns a 51% equity interest indirectly in Huzhou Xinhong Renju Construction Development Co., Ltd., which develops Huzhou Silk Town. Based on the articles of association, the company cannot exercise control of Huzhou Silk Town, but has the ability to exercise significant influence over Huzhou Silk Town's operating and financial decisions and accounted for it as an equity method investment.

**** The Company owns a 24% equity interest in Suzhou Rongjingchen Real Estate Co., Ltd., which develops Suzhou Linhu Lake. The Company accounts for its investment under the equity method.

***** The Company owns a 49% equity interest in Qingdao Wisdom City Industry Development Co., Ltd. , which develops Qingdao Lingshan Bay Dragon Seal. The Company has the land use rights and property development and accounted for it as an equity method investment.

As of September 30, 2020, the Company's total saleable GFA was approximately 4,056,500 square meters for active projects and under planning stage projects in China. Below is a summary of all of the Company's projects in China:


Unsold GFA as of
September 30,
2020

 (m2, 000s)

Pre-sales

Scheduled




Tongzhou Xinyuan Royal Palace-Beijing

102.3

Q4, 2020


Xinyuan Chang'an Royal Palace-Xi'an

226.0

Q4, 2020


Zhengzhou International New City Land Bank(all land is grouped together and
will be developed gradually)

862.4

To be determined


Zhuhai Xin World

70.0

To be determined


Zhengzhou Hangmei Project Land Bank(all land is grouped together and will be
developed gradually)

201.1

To be determined


Wuhan Hidden Dragon Royal Palace

182.9

To be determined


Dalian International Health Technology Town II

44.4

To be determined


Foshan Xinchuang AI International Science and Technology Innovation Valley II

236.8

To be determined


Taizhou Yihe Yayuan *

128.1

To be determined






Total projects under planning

2,054.0



Total active projects

2,002.5



Total of all Xinyuan unsold projects in China

4,056.5



* The Company owns 40% equity interest in Taizhou Yiju Real Estate Co., Ltd. which develops Taizhou Yihe Yayuan.

Update on United States Real Estate Projects

At the Oosten project in Brooklyn, New York City, as of September 30, 2020, a total of 179 units out of 216 units were sold. Total revenue from this project has reached US$261.0 million. Of the remaining 37 unsold units, 21 are rented with lease terms ranging from 12 months to 24 months.

At the Hudson Garden project, BLOOM ON FORTY FIFTH, in the Hell's Kitchen area of Manhattan, New York City, as of September 30, 2020, the Company had completed superstructure construction, precast concrete facade, and windows installation. Of the total sellable 34,903 square feet of retail/commercial space, a total of 28,090 square feet have been leased to the U.S. department store retailer Target for a 20 year term and another 1,910 square feet have been leased to a dermatologist's office for a 15 year lease term. Target's grand opening was on October 25, 2020.

The substantial completion of construction is expected in December 2020 and under budget. The temporary certification of occupancy of entire building is expected by the end of December 2020. The onsite sales office and model apartments were fully furnished during the second quarter 2020. The residential unit sales strategy started with a first phase launch in China during Q4 2019 in which we exhibited in five Tier 1 and Tier 2 cities, leveraging Xinyuan's own client database and established third-party channels. The second phase of sales was officially launched in New York City during Q3 2020.

At the RKO project in Flushing, New York, the Company continued to execute on the planning, governmental approvals, and pre-development activities. As of September 30, 2020, we have engaged GKV Architects to develop new architectural plans, and completed the schematic design for the condo and hotel mixed-use development. The demolition is expected to be completed by the end of the first quarter 2021. The procurement of general contractor for the construction started during Q3 2020.

Update on the United Kingdom Real Estate Project

During the third quarter of 2020, work on site continued to progress, primarily focused on internal fit out, but completion will be delayed from the contract completion date of October 2020 due to the impact of Covid-19 on construction sites. Our current forecast is that construction will be completed in first quarter 2021, assuming no further restrictions on working conditions.

Of the 423 residential units in The Madison, all of the 104 Affordable Housing apartments have been pre-sold to a regulated affordable housing provider. Of the remaining 319 apartments, 151 apartments have been sold.

Business Outlook

We remain optimistic and positive for the remainder of 2020. But in light of future uncertainties relating to COVID-19 developments and economical fluctuations, as well as the government restrictions on the real estate industry, the Company expects 2020 contract sales of around RMB 18 billion.

Conference Call Information

The Company will hold a conference call at 8:00am ET on November 27, 2020, to discuss its third quarter 2020 results. Listeners may access the call by dialing:

US Toll Free:

1-800-458-4121

Toll/International:

1-323-794-2093

Mainland China:

4001 209101

Hong Kong Toll Free:

800 961 105

United Kingdom Toll Free:

0800 358 6377

A webcast will also be available through the Company's investor relations website at http://ir.xyre.com.

A replay of the conference call may be accessed by phone at the following numbers until December 4, 2020:

US:

1-844-512-2921

International:

1-412-317-6671

Access code:

4456736

A live and archived webcast of the conference call will be available at http://ir.xyre.com.

About Xinyuan Real Estate Co., Ltd.

Xinyuan Real Estate Co., Ltd. ("Xinyuan") is an NYSE-listed real estate developer and property manager primarily in China and in other countries. In China, Xinyuan develops and manages large scale, high quality real estate projects in over ten tier one and tier two cities, including Beijing, Shanghai, Zhengzhou, Jinan, Xi'an, and Suzhou, among others. Xinyuan was one of the first Chinese real estate developers to enter the U.S. market and over the past few years has been active in real estate development in New York City. Xinyuan aims to provide comfortable and convenient real estate related products and services to middle-class consumers. For more information, please visit http://www.xyre.com.

Forward Looking Statements

Certain statements in this press release constitute "forward-looking statements". These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements includes statements about estimated financial performance and sales performance and activity, among others, and can generally be identified by terminology such as "will", "expects", "anticipates", "future", "intends", "plans", "believes", "estimates" and similar statements. Statements that are not historical statements are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including, but not limited to, our ability to continue to implement our business model successfully; our ability to secure adequate financing for our project development; our ability to successfully sell or complete our property projects under construction and planning; our ability to enter successfully into new geographic markets and new business lines and expand our operations; the impact of the COVID-19 pandemic on the real estate markets and economies of the cities and countries in which we operate; the marketing and sales ability of our third-party sales agents; the performance of our third-party contractors; the impact of laws, regulations and policies relating to real estate developers and the real estate industry in the countries in which we operate; our ability to obtain permits and licenses to carry on our business in compliance with applicable laws and regulations; competition from other real estate developers; the growth of the real estate industry in the markets in which we operate; fluctuations in general economic and business conditions in the markets in which we operate; and other risks outlined in our public filings with the Securities and Exchange Commission, including our annual report on Form 20-F for the year ended December 31, 2019. Except as required by law, we undertake no obligation to update or review publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statement is made.

Notes to Unaudited Financial Information

This release contains unaudited financial information which is subject to year-end audit adjustments. Adjustments to the financial statements may be identified when the audit work is completed, which could result in significant differences between our audited financial statements and this unaudited financial information.

For more information, please contact:

Xinyuan Real Estate Co., Ltd.
Mr. Charles Wang
Investor Relations Director
Tel: +86 (10) 8588-9376
Email: irteam@xyre.com

The Blueshirt Group

In U.S.: Ms. Julia Qian
Email: Julia@blueshirtgroup.com

In China: Ms. Susie Wang
Mobile: +86 (138) 1081-7475
Email:  susie@blueshirtgroup.com

 

 

XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(All US$ amounts and number of shares data in thousands, except per share data)




Three months ended




September 30,



June 30,



September 30,




2020



2020



2019




(unaudited)



(unaudited)



(unaudited)















Total revenue



655,412




284,361




497,638


Total costs of revenue



(550,074)




(265,143)




(374,134)


Gross profit



105,338




19,218




123,504















Selling and distribution expenses



(20,327)




(15,943)




(21,067)


General and administrative expenses



(37,581)




(35,434)




(36,556)


Gain on disposal of property held for lease



82,806




-




-















Operating income/(loss)



130,236




(32,159)




65,881















Interest income



3,409




4,322




4,245


Interest expense



(36,496)




(30,434)




(31,338)


Gain on short-term investments



3,410




3,460




2,486


Other (loss)/gain



(330)




(1,114)




6,493


Net (loss)/income on debt extinguishment



(277)




332




(2,272)


Exchange gain/(loss)



1,656




(1,960)




(7,655)


Share of gain/(loss) of equity investees



8,851




473




(2,142)















Income/(loss) from operations before income taxes



110,459




(57,080)




35,698















Income tax (expenses)/benefits



(80,910)




27,021




(30,256)















Net income/(loss)



29,549




(30,059)




5,442


Net (loss)/income attributable to non-controlling interest



(6,181)




3,819




(1,298)


Net income/(loss) attributable to Xinyuan Real Estate Co.,
Ltd. shareholders



23,368




(26,240)




4,144















Earnings /(loss) per ADS:













Basic



0.46




(0.49)




0.07


Diluted



0.46




(0.49)




0.07


ADS used in computation:













Basic



53,588




53,639




56,329


Diluted



53,591




53,639




56,624


 

 

XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(All US$ amounts and number of shares data in thousands, except per share data)




Nine months ended






September 30,



September 30,






2020



2019






(unaudited)



(unaudited)













Total revenue





1,065,542




1,575,930


Total costs of revenue





(912,880)




(1,162,162)


Gross profit





152,662




413,768













Selling and distribution expenses





(42,610)




(61,106)


General and administrative expenses





(110,693)




(115,543)


Gain on disposal of property held for lease





82,806




-













Operating income/(Loss)





82,165




237,119













Interest income





11,900




13,294


Interest expense





(97,193)




(84,028)


Gain on short-term investments





7,771




4,162


Other (expense)/income





(1,652)




5,720


Net loss on debt extinguishment





(1,055)




(8,816)


Exchange loss





(1,154)




(8,464)


Share of gain/(loss) of equity investees





8,300




(5,444)













Income from operations before income taxes





9,082




153,543













Income taxes





(48,732)




(110,086)













Net (loss)/income





(39,650)




43,457


Net loss attributable to non-controlling interest





(2,745)




(9,050)


Net (loss)/income attributable to Xinyuan Real Estate Co., Ltd. shareholders





(42,395)




34,407













(Loss)/earnings per ADS:











Basic





(0.79)




0.60


Diluted





(0.79)




0.60


ADS used in computation:











Basic





53,710




57,404


Diluted





53,710




57,758


 

 

XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(All US$ amounts and number of shares data in thousands)




September 30,



June 30,



December 31,




2020



2020



2019




(unaudited)



(unaudited)



(audited)


ASSETS













Current assets













Cash and restricted cash



1,068,754




820,769




989,587


Short-term investments



22,431




5,850




5,596


Accounts receivable



95,474




88,103




97,912


Other receivables



412,095




330,833




287,300


Deposits for land use rights



29,956




28,816




26,375


Other deposits and prepayments



318,785




300,348




277,463


Advances to suppliers



75,029




66,317




44,358


Real estate properties development completed



657,079




415,430




458,205


Real estate properties under development



2,591,955




3,094,871




3,254,388


Amounts due from related parties



251,950




266,735




200,758


Amounts due from employees



3,480




1,594




2,351


Other current assets



5,279




18,186




772















Total current assets



5,532,267




5,437,852




5,645,065















Restricted cash, non-current



183,206




179,059




112,998


Real estate properties held for lease, net



490,391




511,800




515,869


Property and equipment, net



40,561




40,043




43,004


Long-term investment



614,611




593,547




613,620


Deferred tax assets



198,536




188,034




260,153


Deposits for land use rights and properties



33,773




32,488




32,969


Amounts due from related parties



41,188




39,465




82,687


Contract cost assets



21,945




20,703




23,093


Operating lease right-of-use assets



7,266




8,635




11,801


Other assets



85,855




76,415




80,405















TOTAL ASSETS



7,249,599




7,128,041




7,421,664


 

 

XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(All US$ amounts and number of shares data in thousands)




September 30,



June 30,



December 31,




2020



2020



2019




(unaudited)



(unaudited)



(audited)


LIABILITIES AND













SHAREHOLDERS' EQUITY













Current liabilities













Accounts payable and notes payable



902,557




992,679




1,166,660


Short-term bank loans and other debt



16,420




56,881




73,419


Customer deposits



973,004




1,224,998




1,106,099


Income tax payable



152,639




155,914




298,228


Other payables and accrued liabilities



455,920




530,436




323,164


Payroll and welfare payable



10,554




10,269




24,224


Current portion of long-term bank loans and other debt



1,239,211




1,177,657




1,418,955


Lease liability, current portion



6,412




7,143




11,284


Mandatorily redeemable non-controlling interests



7,326




6,981




8,857


Amounts due to related parties



88,302




53,667




53,682















Total current liabilities



3,852,345




4,216,625




4,484,572















Non-current liabilities













Long-term bank loans



734,282




747,387




686,065


Other long-term debt



1,384,679




1,026,103




1,036,691


Deferred tax liabilities



377,434




299,468




338,593


Unrecognized tax benefits



116,309




114,085




73,605


Lease liability



2,574




3,373




10,187


Amounts due to related parties



-




24,853




-















TOTAL LIABILITIES



6,467,623




6,431,894




6,629,713















Shareholders' equity













Common shares



16




16




16


Treasury shares



(115,091)




(114,454)




(113,720)


Additional paid-in capital



562,505




546,022




543,291


Statutory reserves



175,002




175,002




175,008


Retained earnings



77,247




37,301




135,873


Accumulated other comprehensive loss



(25,152)




(44,843)




(50,167)


Total Xinyuan Real Estate Co., Ltd. shareholders' equity



674,527




599,044




690,301


Non-controlling interest



107,449




97,103




101,650


Total equity



781,976




696,147




791,951















TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY



7,249,599




7,128,041




7,421,664


 

 

Cision View original content:http://www.prnewswire.com/news-releases/xinyuan-real-estate-co-ltd-announces-third-quarter-2020-financial-results-301181115.html

Source: Xinyuan Real Estate Co., Ltd.
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