UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
FOR THE MONTH OF MAY 2018
COMMISSION FILE NUMBER: 001-33863
XINYUAN REAL ESTATE CO., LTD.
27/F, China Central Place, Tower II
79 Jianguo Road, Chaoyang District
Beijing 100025
People’s Republic of China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ No x
If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-________.
This Form 6-K is hereby incorporated by reference into the registration statements of Xinyuan Real Estate Co., Ltd. (“Xinyuan” or the “Company”) on Form S-8 (Registration Numbers 333-152637, 333-198525 and 333-205371) and on Form F-3 (Registration Number 333-192046) and any outstanding prospectus, offering circular or similar document issued or authorized by the Company that incorporates by reference any of the Company’s reports on Form 6-K that are incorporated into its registration statements filed with the Securities and Exchange Commission, and this Form 6-K shall be deemed a part of each such document from the date on which this Form 6-K is filed, to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
TABLE OF CONTENTS
| Page | ||
| Signature | 2 | |
| Exhibit Index | 3 | |
| Exhibit 99.1 | Xinyuan Real Estate Co., Ltd. Press Release dated May 30, 2018 |
|
| Exhibit 99.2 | Announcement, dated May 30, 2018, of First Quarterly Dividend for 2018 |
| 1 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Xinyuan Real Estate Co., Ltd. | ||
| By: |
/s/ Yuan (Helen) Zhang | |
| Name: | Yuan (Helen) Zhang | |
| Title: | Chief Financial Officer | |
Date: May 30, 2018
| 2 |
EXHIBIT INDEX
Exhibit Number |
Description | |
| 99.1 | Xinyuan Real Estate Co., Ltd. Press Release dated May 30, 2018 |
|
| 99.2 | Announcement, dated May 30, 2018, of First Quarterly Dividend for 2018 |
| 3 |
Exhibit 99.1
Xinyuan Real Estate Co., Ltd. Announces First Quarterly Dividend for 2018
BEIJING, May 30, 2018 – Xinyuan Real Estate Co., Ltd. (“Xinyuan”) (NYSE: XIN), an NYSE-listed real estate developer and property manager operating primarily in China and also in other countries, today announced that its Board of Directors has declared a cash dividend for the first quarter of 2018 of US$0.05 per common share, or US$0.10 per American Depositary Share (“ADS”), which will be payable before June 22, 2018 to shareholders of record as of June 11, 2018.
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, 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.
Safe Harbor Statement
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 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, 2017. 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.
For more information, please contact:
In China:
Xinyuan Real Estate Co., Ltd.
Mr. Charles Wang
Investor Relations Director
Tel: +86 (10) 8588-9314
Email: irteam@xyre.com
ICR, LLC
Investors:
Mr. William Zima
In U.S.: +1-646-308-1472
In China: +86 (10) 6583 7511
Email: William.zima@icrinc.com
Media:
Mr. Edmond Lococo
In China: +86 (10) 6583-7510
Email: Edmond.Lococo@icrinc.com
Exhibit 99.2
Xinyuan Real Estate Co., Ltd. Announces First Quarter 2018 Financial Results
BEIJING, China, May 30, 2018 - Xinyuan Real Estate Co., Ltd. (“Xinyuan” or the “Company”) (NYSE: XIN), an NYSE-listed real estate developer and property manager primarily in China and also in other countries, today announced its unaudited financial results for the first quarter ended March 31, 2018.
First Quarter 2018 Highlights
| · | Under ASC 606, the Company expects to recognize revenue for all contracts executed starting from January 1, 2018, on an “over time” basis using costs incurred, an input measure. |
| · | First quarter results reflect the adoption of ASC 606 and may not be directly comparable to prior periods. |
| · | The adoption of ASC 606 reduced first quarter reported revenues and net income by US$341.4 million and US$32.8 million, respectively. |
| · | Contract sales increased 24.7% to US$380.7 million from US$305.4 million in the first quarter of 2017 and decreased 53.8% from US$823.3 million in the fourth quarter of 2017. |
| · | Total revenue decreased 38.0% to US$174.1 million from US$280.7 million in the first quarter of 2017 and decreased 76.0% from US$725.7 million in the fourth quarter of 2017. |
| · | Gross profit decreased 38.2% to US$38.7 million, or 22.2% of total revenue, from US$62.6 million, or 22.3% of total revenue, in the first quarter of 2017 and decreased 78.5% from US$180.3 million, or 24.8% of total revenue, in the fourth quarter of 2017. |
| · | Selling, General and Administrative (“SG&A”) expenses as a percentage of total revenue increased to 22.9% from 12.6% in the first quarter of 2017 and increased from 10.8% in the fourth quarter of 2017. |
| · | Net loss was US$12.7 million compared to net income of US$7.4 million in the first quarter of 2017 and net income of US$35.4 million in the fourth quarter of 2017. |
| · | Diluted net loss per American Depositary Share (“ADS”) attributable to shareholders were US$0.16 compared to diluted net earnings per American Depositary Share(“ADS”) US$0.11 in the first quarter of 2017 and US$0.50 in the fourth quarter of 2017. |
Mr. Yong Zhang, Xinyuan’s Chairman, stated: “Despite the fact that the overall domestic real estate market is affected by the continuous government restrictions on purchases and prices, our contract sales in the first quarter of 2018 have increased 25% from the first quarter of last year.
“This quarter’s financial report reflects the normal seasonal adjustment of the real estate industry and the impact of the new changes in accounting standards.
| 1 |
In early 2018, Xinyuan adopted a strategy to become an international technology-driven property ecosystem, under which Xinyuan will place emphasis not only on the development of its traditional real estate business, but also on its five sub-businesses: industrial real estate; commercial property management; traditional property management; property construction management, and real estate technology. This combination of Xinyuan’s core real estate business with its five sub-businesses will form an ecosystem that functions as an integrated whole.
With the upgrade of our strategy, we expect the Group’s sales and net profits will grow better than last year, and we maintain a stable dividend policy this quarter. The management is optimistic about the financial outlook for the entire year of 2018, and will further enhance operational efficiency, optimize the capital structure, and build a first-class global real estate development operations and asset management group.”
First Quarter 2018 Financial Results
Contract Sales
Contract sales in China totaled US$375.5 million in the first quarter compared to US$240.8 million in the first quarter of 2017 and US$817.1 million in the fourth quarter of 2017.
The Company’s GFA sales in China were 149,800 square meters in the first quarter of 2018 compared to 140,300 square meters in the first quarter of 2017 and 443,600 square meters in the fourth quarter of 2017.
The average selling price (“ASP”) per square meter sold in China was RMB15,932 (US$2,506) in the first quarter of 2018 compared to RMB11,820 (US$1,717) in the first quarter of 2017 and RMB12,118 (US$1,794) in the fourth quarter of 2017.
Contract sales in the United States totaled US$5.2 million in the first quarter of 2018.
The Company commenced pre-sales of one new project in the first quarter of 2018, Tianjin Spring Royal Palace II, which contributed 1.8% and 1.5% of total GFA sales and total contract sales, respectively.
| 2 |
Breakdown of GFA Sales and ASPs by Project in China
| Project | Q1 2017 | Q4 2017 | Q1 2018 | |||
| GFA | ASP | GFA | ASP | GFA | ASP | |
| (m2 ’000s) | (RMB) | (m2 ’000s) | (RMB) | (m2 ’000s) | (RMB) | |
| Xingyang Splendid II | 8.6 | 6,710 | 1.6 | 11,650 | - | - |
| Kunshan Royal Palace | 2.3 | 21,222 | 1.3 | 24,232 | -0.2 | 22,314 |
| Jinan Royal Palace | 22.4 | 9,280 | 35.5 | 12,404 | 22.4 | 12,626 |
| Xuzhou Colorful City | 1.7 | 15,131 | 31.4 | 11,246 | 3.6 | 10,265 |
| Chengdu Thriving Family | 4.7 | 11,277 | 15.8 | 10,724 | 4.5 | 17,183 |
| Changsha Xinyuan Splendid | 9.7 | 9,050 | 4.2 | 18,379 | 2.6 | 15,130 |
| Sanya Yazhou Bay No.1 | 26.3 | 15,432 | 2.7 | 27,497 | 30.9 | 23,197 |
| Xi’an Metropolitan | 3.1 | 8,889 | 21.2 | 9,719 | 1.5 | 9,594 |
| Zhengzhou Xindo Park | 13.2 | 6,342 | 11.3 | 11,110 | 0.1 | 10,000 |
| Jinan Xin Central | 6.8 | 11,777 | 16.9 | 11,477 | 12.2 | 10,527 |
| Henan Xin Central I | 0.5 | 11,568 | 9.5 | 12,890 | 0.3 | 18,486 |
| Zhengzhou Fancy City I | 0.8 | 21,739 | 2.0 | 14,004 | 0.2 | 19,949 |
| Zhengzhou Fancy City II (South) | 10.1 | 12,394 | 4.4 | 15,899 | 1.2 | 13,031 |
| Tianjin Spring Royal Palace I (Tianjin Spring Royal Palace) | -0.1 | 6,844 | 2.5 | 12,590 | 1.1 | 14,631 |
| Kunshan Xindo Park | 4.4 | 18,244 | 12.7 | 22,311 | 2.3 | 23,009 |
| Zhengzhou International New City I | 0.9 | 10,834 | 33.9 | 4,401 | 2.4 | 13,322 |
| Henan Xin Central II | 15.0 | 10,955 | 10.4 | 11,858 | 7.7 | 11,768 |
| Xingyang Splendid III | - | - | 18.9 | 7,237 | 16.2 | 7,381 |
| Changsha Mulian Royal Palace | - | - | 21.6 | 12,899 | 2.0 | 16,177 |
| Zhengzhou International New City II | - | - | 76.7 | 13,711 | 11.8 | 13,739 |
| Zhengzhou International New City III | - | - | 73.6 | 14,058 | 20.4 | 13,802 |
| Zhengzhou Fancy City II (North) | - | - | 31.2 | 9,499 | 2.3 | 9,813 |
|
Tianjin Spring Royal Palace II (Tianjin Spring Royal Palace) |
- | - | - | - | 2.7 | 13,412 |
| Others | 9.9 | - | 4.3 | - | 1.6 | - |
| Total | 140.3 | 11,820 | 443.6 | 12,118 | 149.8 | 15,932 |
Revenue
In the first quarter of 2018, the Company’s total revenue decreased 38.0% to US$174.1 million from US$280.7 million in the first quarter of 2017 and decreased 76.0% from US$725.7 million in the fourth quarter of 2017. The revenue decrease was mainly due to the adoption of ASC606.
Gross Profit
Gross profit for the first quarter of 2018 was US$38.7 million, or 22.2% of revenue, compared to a gross profit of US$62.6 million, or 22.3% of revenue, in the first quarter of 2017 and a gross profit of US$180.3 million, or 24.8% of revenue, in the fourth quarter of 2017.
Selling, General and Administrative Expenses
SG&A expenses were US$39.8 million for the first quarter of 2018 compared to US$35.5 million for the first quarter of 2017 and US$78.2 million for the fourth quarter of 2017. As a percentage of total revenue, SG&A expenses were 22.9% compared to 12.6% in the first quarter of 2017 and 10.8% in the fourth quarter of 2017. The increase was due to costs associated with company expansion and the decrease of revenue.
| 3 |
Net Income
The Company experienced a net loss due to the decrease of revenue, increase of SG&A expenses, and increase of interest expenses due to an increase in debt during the quarter. Net loss for the first quarter of 2018 was US$12.7 million compared to net income of US$7.4 million for the first quarter of 2017 and net income of US$35.4 million for the fourth quarter of 2017. Net margin decreased from 2.6% in the first quarter of 2017 and 4.9% in the fourth quarter of 2017 to negative 7.3% for the first quarter of 2018. Diluted net loss was US$0.16 per ADS in the first quarter of 2018 compared to diluted net earnings of US$0.11 per ADS in the first quarter of 2017 and diluted net earnings of US$0.50 per ADS in the fourth quarter of 2017.
Balance Sheet
As of March 31, 2018, the Company’s cash and cash equivalents (including restricted cash) decreased to US$1,191.8 million from US$1,461.2 million as of December 31, 2017. Total debt outstanding was US$3,814.2 million, which reflected an increase of US$502.4 million compared to US$3,311.8 million at the end of the fourth quarter of 2017. The balance of the Company’s real estate properties under development at the end of the first quarter of 2018 was US$3,457.1 million compared to US$1,996.0 million at the end of the fourth quarter of 2017.
Adoption of ASC606
On January 1, 2018, the Company adopted ASC 606: Revenue from Contracts with Customers (“ASC 606”) issued by the Financial Accounting Standards Board. The Company adopted ASC 606 using the modified retrospective approach and applied the adoption only to contracts not completed as of the date of adoption, with no restatement of comparative periods, and a cumulative-effect adjustment to retained earnings recognized as of the date of adoption.
The following tables show the actual annual 2017 operating results and the annual 2017 operating results if XIN had adopted ASC 606 on January 1, 2017.
2017 Financial Results Prior to ASC 606
| 2017 Total | 2017 Q1 | 2017 Q2 | 2017 Q3 | 2017 Q4 | |
| USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | |
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||
| Contract Sales | 2,465,663 | 305,382 | 732,476 | 604,520 | 823,285 |
| 1. Revenue | 1,976,907 | 280,714 | 488,165 | 482,373 | 725,655 |
| Gross Profit | 459,628 | 62,567 | 107,922 | 108,842 | 180,297 |
| Gross Profit Margin | 23.2% | 22.3% | 22.1% | 22.6% | 24.8% |
| SG&A | 212,568 | 35,505 | 47,894 | 50,976 | 78,193 |
| Interest Expense | 66,153 | 9,325 | 20,195 | 11,418 | 25,215 |
| 2. Profit Before Income Taxes | 193,228 | 22,042 | 46,678 | 38,895 | 85,613 |
| Income Taxes | 113,117 | 14,625 | 25,901 | 22,366 | 50,225 |
| 3. Net Profit | 80,111 | 7,417 | 20,777 | 16,529 | 35,388 |
| 4 |
2017 Financial Results Adjusted for ASC 606 Adoption
| 2017 Total | 2017 Q1 | 2017 Q2 | 2017 Q3 | 2017 Q4 | |
| USD'000 | USD'000 | USD'000 | USD'000 | USD'000 | |
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |
| Contract Sales | 2,465,663 | 305,382 | 732,476 | 604,520 | 823,285 |
| 1. Revenue | 1,584,038 | 354,572 | 184,834 | 247,499 | 797,133 |
| Gross Profit | 346,635 | 70,098 | 31,576 | 49,599 | 195,362 |
| Gross Profit Margin | 21.9% | 19.8% | 17.1% | 20.0% | 24.5% |
| SG&A | 212,568 | 35,505 | 47,894 | 50,976 | 78,193 |
| Interest Expense | 66,153 | 9,325 | 20,195 | 11,418 | 25,215 |
| 2. Profit Before Income Taxes | 80,235 | 29,573 | (29,669) | (20,347) | 100,678 |
| Income Taxes | 75,653 | 19,295 | 890 | 7,991 | 47,477 |
| 3. Net Profit | 4,582 | 10,278 | (30,559) | (28,338) | 53,201 |
Real Estate Project Status in China
Below is a summary table of projects that were active and available for sale in the first quarter of 2018.
| Project | GFA | ||
| (m2 ’000s) | |||
| Total Active Project | Sold to date | Unsold to date | |
| Xingyang Splendid II | 137.3 | 81.5 | 55.8 |
| Kunshan Royal Palace | 280.6 | 278.8 | 1.8 |
| Jinan Royal Palace | 449.5 | 372.4 | 77.1 |
| Xuzhou Colorful City | 130.1 | 118.8 | 11.3 |
| Chengdu Thriving Family | 203.4 | 195.7 | 7.7 |
| Changsha Xinyuan Splendid | 251.6 | 241.4 | 10.2 |
| Sanya Yazhou Bay No.1 | 117.6 | 89.4 | 28.2 |
| Xi’an Metropolitan | 290.6 | 261.0 | 29.6 |
| Zhengzhou Xindo Park | 144.4 | 127.5 | 16.9 |
| Jinan Xin Central | 194.4 | 169.2 | 25.2 |
| Henan Xin Central I | 262.2 | 251.1 | 11.1 |
| Zhengzhou Fancy City I | 166.7 | 158.6 | 8.1 |
| Zhengzhou Fancy City II (South) | 84.1 | 80.7 | 3.4 |
| Tianjin Spring Royal Palace I (Tianjin Spring Royal Palace) | 139.2 | 130.9 | 8.3 |
| Kunshan Xindo Park | 89.0 | 76.1 | 12.9 |
| Zhengzhou International New City I | 360.5 | 330.0 | 30.5 |
| Henan Xin Central II | 109.7 | 97.4 | 12.3 |
| Xingyang Splendid III | 121.1 | 98.8 | 22.3 |
| Changsha Mulian Royal Palace | 91.2 | 56.5 | 34.7 |
| Zhengzhou International New City II | 176.0 | 157.4 | 18.6 |
| Zhengzhou International New City III | 222.2 | 94.2 | 128 |
| Zhengzhou Fancy City II (North) | 108.5 | 41.9 | 66.6 |
| Tianjin Spring Royal Palace II (Tianjin Spring Royal Palace) | 140.6 | 2.7 | 137.9 |
| Others | 80.9 | - | 80.9 |
| Total active projects | 4,351.4 | 3,512.0 | 839.4 |
| 5 |
As of May 20, 2018, the Company’s total saleable GFA was approximately 5,899,100 square meters for active projects and under planning stage projects in China. Below is a summary of all of the Company’s planning stage projects:
|
Unsold GFA (m2 ’000s) |
Pre-sales Scheduled |
||
| Tongzhou Xinyuan Royal Palace (Beijing Liyuan project) | 102.3 | To be determined | |
| Changsha Furong Thriving Family | 72.3 | 2018Q3 | |
| Xinyuan Chang’an Royal Palace (Xi’an Aerospace City Project) | 226.0 | 2018Q4 | |
| Xinyuan Golden Water View City (Zhengzhou Heizhuzhuang Project) | 340.0 | 2018Q4 | |
| Kunshan Xinyu Jiayuan (Kunshan Zhongyu Project) | 109.3 | 2018Q3 | |
| Zhengzhou International New City IV | 864.6 | 2018Q2 | |
| Zhengzhou International New City V(newly added) | 871.0 | To be determined | |
| Zhuhai Xin World (Zhuhai Prince Project) | 70.0 | To be determined | |
| Lingshan Bay Dragon Seal (Qingdao New Project) | 380.0 | To be determined | |
| Zhengzhou Fancy City III | 83.0 | To be determined | |
| Zhengzhou Hangmei Project I | 230.8 | 2018Q2 | |
| Zhengzhou Hangmei Project II(newly added) | 204.7 | To be determined | |
| Zhengzhou Zhongmou Project | 480.0 | To be determined | |
| Suzhou Yinhewan Project | 89.7 | To be determined | |
| Suzhou Wujiang New City | 63.0 | To be determined | |
| Chengdu Xinyuan City (Chengdu Wucaicheng Project) | 873.0 | To be determined | |
| Total projects under planning | 5,059.7 | ||
| Total active projects | 839.4 | ||
| Total of all Xinyuan unsold projects in China | 5,899.1 |
Real Estate Project Update in the United States
As of March 31, 2018, a total of 174 units out of 216 total units were sold and closed at the Company’s Oosten project in Brooklyn, New York City, with total revenue from this project reaching US$255.7 million. During the first quarter of 2018, two units were sold, and revenues were US$5.2 million.
Foundation work was completed in the first quarter of 2018 for the Company’s Hudson Garden project in Manhattan, New York City. After optimizing the internal layout of the building, the Company now expects 92 units to be available for sale, an increase from the original 82.
The Company continues to execute on the planning, governmental approvals, and pre-development activities of its ground-up development project in Flushing, New York City. The Landmark Protection Committee has approved the Company’s landmark protection plan and awarded the Company a Certificate of Appropriateness. The Company has begun transferring and protecting crucial parts of the landmark RKO theater as scheduled.
| 6 |
Real Estate Project Update in the United Kingdom
During the first quarter of 2018, construction continued to progress at the Madison Project in London. All below-ground work has been completed, including the formation of the extensive basement and all piling work. The structural core of the building has been constructed up to the 12th floor, out of a total 53 floors. Central mechanical and electrical installations also began during the quarter, and cladding work commenced shortly after the period end. Construction remains on schedule for completion in 2020.
Of the 423 residential units in the Madison Project, all of the 104 Affordable Housing apartments have been pre-sold to a regulated affordable housing provider. At the end of the first quarter 2018, pre-sale contracts had been exchanged on 128 of the 319 market sale units, representing GBP 89.6 million of gross development value, or 40% of available market sale units. Enquiry levels remained robust during the period, tempered by a competitive market environment and a backdrop of ongoing political uncertainty.
Update on Construction Management Service Business
Xinyuan started its construction management service business in the third quarter of 2017 with its first project in Guangzhou, and this business developed well in the first quarter of 2018. Under this asset-light business model, Xinyuan charges a service fee for providing the construction management service. Xinyuan may also charge an interest spread if it provides financing support by means including, without limitation to, establishing limited partnerships with financial institutions. Below is a summary of the Company’s active construction management service projects:
|
Project GFA |
|
| (m2, 000s) | |
| Guangzhou Project | 55.0 |
| Zhengzhou Derun Southern District Project | 1,029.0 |
| Zhengzhou Qinglongshan Project | 357.0 |
| Shandong Heze Project | 233.0 |
| Zhengzhou Derun Northern District Project | 181.0 |
| Qiqihar Project | 797.0 |
| Total of all Xinyuan construction management service projects | 2,652.0 |
Business Outlook
The 2018 business outlook reflects the modified retrospective adoption of ASC 606 and may not be comparable to prior year periods.
For the second quarter of 2018, the Company expects contract sales to be approximately US$530 million.
For 2018, the Company expects an increase in contract sales of about 10% and an increase in consolidated net income of 15% to 20% over 2017.
| 7 |
Conference Call Information
The Company will hold a conference call at 8:00 am ET on May 30, 2018 to discuss first quarter 2018 results. Listeners may access the call by dialing:
US Toll Free: 1-800-347-6311
International: 1-323-794-2094
A webcast will also be available through the Company's investor relations website at http://ir.xyre.com.
A replay of the call will be available through June 5, 2018 by dialing:
US: 1-844-512-2921
International: 1-412-317-6671
Access code: 5602971
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, 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 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, 2017. 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.
| 8 |
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:
In China:
Xinyuan Real Estate Co., Ltd.
Mr. Charles Wang
Investor Relations Director
Tel: +86 (10) 8588-9314
Email: irteam@xyre.com
ICR, LLC
Investors:
In U.S.: +1-646-308-1472
In China: +86 (10) 6583-7511
Email: William.zima@icrinc.com
Media:
Mr. Edmond Lococo
In China: +86 (10) 6583-7510
Email: Edmond.Lococo@icrinc.com
| 9 |
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 | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2018 | 2017 | 2017 | ||||||||||
| (unaudited) | (unaudited) | (unaudited) | ||||||||||
| Total revenue | 174,097 | 725,656 | 280,714 | |||||||||
| Total costs of revenue | (135,394 | ) | (545,358 | ) | (218,147 | ) | ||||||
| Gross profit | 38,703 | 180,298 | 62,567 | |||||||||
| Selling and distribution expenses | (12,174 | ) | (28,274 | ) | (10,488 | ) | ||||||
| General and administrative expenses | (27,592 | ) | (49,920 | ) | (25,017 | ) | ||||||
| Operating (loss)/income | (1,063 | ) | 102,104 | 27,062 | ||||||||
| Interest income | 6,350 | 4,431 | 2,599 | |||||||||
| Interest expense | (29,785 | ) | (25,215 | ) | (9,325 | ) | ||||||
| Net realized gain on short-term investments | 1,237 | 4,012 | 588 | |||||||||
| Unrealized gain/(loss) on short-term investments | (242 | ) | (2,116 | ) | 1,254 | |||||||
| Other income | 207 | 2,170 | 159 | |||||||||
| Loss on extinguishment of debt | - | - | - | |||||||||
| Exchange gains/(loss) | 11,639 | 1,043 | (51 | ) | ||||||||
| Share of loss of equity investees | (921 | ) | (816 | ) | (243 | ) | ||||||
| Loss/(income) from operations before income taxes | (12,578 | ) | 85,613 | 22,043 | ||||||||
| Income taxes | (142 | ) | (50,226 | ) | (14,625 | ) | ||||||
| Net (loss)/income | (12,720 | ) | 35,387 | 7,418 | ||||||||
| Net loss/(income) attributable to non-controlling interest | 2,315 | (2,375 | ) | 42 | ||||||||
| Net (loss)/income attributable to Xinyuan Real Estate Co., Ltd. shareholders | (10,405 | ) | 33,012 | 7,460 | ||||||||
| (Loss)/earnings per ADS: | ||||||||||||
| Basic | (0.16 | ) | 0.51 | 0.12 | ||||||||
| Diluted | (0.16 | ) | 0.50 | 0.11 | ||||||||
| ADS used in computation: | ||||||||||||
| Basic | 64,821 | 64,754 | 63,995 | |||||||||
| Diluted | 65,805 | 65,927 | 64,944 | |||||||||
| 10 |
XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(All US$ amounts and number of shares data in thousands)
| March 31, | December 31, | March 31, | ||||||||||
| 2018 | 2017 | 2017 | ||||||||||
| (unaudited) | (audited) | (unaudited) | ||||||||||
| ASSETS | ||||||||||||
| Current assets | ||||||||||||
| Cash and cash equivalents | 813,736 | 894,551 | 916,029 | |||||||||
| Restricted cash | 378,077 | 566,676 | 329,909 | |||||||||
| Short-term investments | 123,478 | 57,740 | 41,113 | |||||||||
| Accounts receivable | 10,912 | 100,553 | 26,884 | |||||||||
| Other receivables | 49,422 | 73,194 | 31,804 | |||||||||
| Deposits for land use rights | 97,669 | 103,716 | 100,804 | |||||||||
| Other deposits and prepayments | 674,320 | 272,022 | 276,914 | |||||||||
| Advances to suppliers | 45,524 | 36,731 | 30,433 | |||||||||
| Real estate properties development completed | 813,542 | 840,393 | 429,254 | |||||||||
| Real estate properties under development | 3,457,139 | 1,996,001 | 1,848,471 | |||||||||
| Amounts due from related parties | 187,644 | 125,662 | 20,284 | |||||||||
| Amounts due from employees | 5,187 | 2,174 | 2,277 | |||||||||
| Other current assets | 454 | 799 | 140 | |||||||||
| Total current assets | 6,657,104 | 5,070,212 | 4,054,316 | |||||||||
| Real estate properties held for lease, net | 287,457 | 277,933 | 163,541 | |||||||||
| Property and equipment, net | 32,707 | 32,386 | 33,610 | |||||||||
| Long-term investment | 982,714 | 829,773 | 16,479 | |||||||||
| Deferred tax assets | 153,558 | 82,006 | 49,701 | |||||||||
| Deposits for land use rights | 23,854 | 22,956 | 28,988 | |||||||||
| Amounts due from related parties | 30,871 | 24,666 | - | |||||||||
| Other assets | 46,809 | 44,502 | 24,740 | |||||||||
| TOTAL ASSETS | 8,215,074 | 6,384,434 | 4,371,375 | |||||||||
| 11 |
XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(All US$ amounts and number of shares data in thousands)
| March 31, | December 31, | March 31, | ||||||||||
| 2018 | 2017 | 2017 | ||||||||||
| (unaudited) | (unaudited) | (audited) | ||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| Current liabilities | ||||||||||||
| Accounts payable and notes payable | 462,161 | 690,839 | 423,413 | |||||||||
| Short-term bank loans and other debt | 264,130 | 247,758 | 130,448 | |||||||||
| Customer deposits | 2,429,980 | 438,342 | 168,829 | |||||||||
| Income tax payable | 159,391 | 169,839 | 106,396 | |||||||||
| Other payables and accrued liabilities | 279,251 | 300,120 | 208,466 | |||||||||
| Payroll and welfare payable | 8,973 | 31,445 | 4,626 | |||||||||
| Current portion of long-term bank loans and other debt | 1,987,650 | 1,648,233 | 574,802 | |||||||||
| Current maturities of capital lease obligations | 4,647 | 4,472 | 3,945 | |||||||||
| Mandatorily redeemable non-controlling interests | 16,522 | 15,593 | - | |||||||||
| Amounts due to related parties | 140,993 | 128,178 | 67,949 | |||||||||
| Total current liabilities | 5,753,698 | 3,674,819 | 1,688,874 | |||||||||
| Non-current liabilities | ||||||||||||
| Long-term bank loans | 100,523 | 11,019 | 350,887 | |||||||||
| Other long term debt | 1,461,869 | 1,404,814 | 1,270,978 | |||||||||
| Deferred tax liabilities | 120,320 | 164,204 | 105,086 | |||||||||
| Unrecognized tax benefits | 31,231 | 31,231 | 20,492 | |||||||||
| Capital lease obligations, net of current maturities | 10,701 | 11,415 | 14,876 | |||||||||
| Amounts due to related parties | 31,831 | 29,919 | - | |||||||||
| TOTAL LIABILITIES | 7,510,173 | 5,327,421 | 3,451,193 | |||||||||
| Shareholders’ equity | ||||||||||||
| Common shares | 16 | 16 | 16 | |||||||||
| Treasury shares | (67,792 | ) | (67,792 | ) | (60,915 | ) | ||||||
| Additional paid-in capital | 544,911 | 543,338 | 539,763 | |||||||||
| Statutory reserves | 105,848 | 105,660 | 95,965 | |||||||||
| Retained earnings | 81,185 | 382,124 | 354,905 | |||||||||
| Accumulated other comprehensive loss/(income) | 51,382 | 29,226 | (30,652 | ) | ||||||||
| Total Xinyuan Real Estate Co., Ltd. shareholders’ equity | 715,550 | 992,572 | 899,082 | |||||||||
| Non-controlling interest | (10,649 | ) | 64,441 | 21,100 | ||||||||
| Total equity | 704,901 | 1,057,013 | 920,182 | |||||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 8,215,074 | 6,384,434 | 4,371,375 | |||||||||
Note: The adoption of ASC 606 reduced first quarter total equity 33.31% to US$704.90 million from US$1,057.01 million in the fourth quarter of 2017.
| 12 |