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FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of April 2008
Commission File Number: 001-33863
XINYUAN REAL ESTATE CO., LTD.
No. 18 Xinyuan Road
Zhengzhou, Henan 450011
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 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- N/A
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XINYUAN REAL ESTATE CO., LTD.
Form 6-K
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The Company commenced its non-deal road show scheduled for April 3, 2008 to April 11, 2008. A copy of the non-deal road show presentation materials is attached hereto as Exhibit 99.1.
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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/ Yong Zhang | |
| Name: | Yong Zhang | |
| Title: | Chief Executive Officer | |
Date: April 3, 2008
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EXHIBIT INDEX
| Exhibit No. |
Description | |
| 99.1 | Presentation Materials |
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Xinyuan Real Estate Co., Ltd
Corporate Presentation
April 2008
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Important Notice
This non-transaction related presentation is not and does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire securities of Xinyuan Real Estate Co., Ltd. (“Xinyuan” or the “Company”) in any jurisdiction or an inducement to enter into investment activity, nor may it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. Specifically, this presentation does not constitute a “prospectus” within the meaning of the U.S. Securities Act of 1933, as amended (the “Securities Act”).
The information contained in this presentation has not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. None of the Company or any of its affiliates, advisors or representatives will be liable (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation.
This presentation contains forward-looking statements within the meaning of Section 27a of the Securities Act and Section 21e of the U.S. Securities Exchange Act of 1934, as amended. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Statements that are not historical facts, including statements concerning our beliefs, forecasts, estimates and expectations, 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 risks related to: the risk that certain performance measures used herein may not be indicative of future performance or of our operating results when prepared in accordance with U.S. generally accepted accounting principles; the risk that we may be unable to complete our property developments on time or at all; the risk that our results of operations may fluctuate from period to period; the risk that the PRC government may adopt further measures to curtail the overheating property sector; the risk that we face intense competition from other real estate developers; the risk that PRC economic, political and social conditions as well as government policies can affect our business and other risks outlined in our public filings with the U.S. Securities and Exchange Commission, including our registration statement on Form F-1, as amended. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
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Agenda
I. Company Overview
II. Operating and Financial Update
III. Recent Market Updates, Risks and Business Model
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Company Overview
Over Ten Years of Operating Experience in China
Standardized and Replicable Business Model
Rapid Asset Turnover, Efficient Working Capital Management and Strict Cost Control
Proven Track Record of Disciplined Expansion
Target Market
Second Tier Cities
35 second tier cites with population over 215mm
Increasing urbanization, high economic growth and growing disposable income
Sustainable land supply for future developments
Strong demand for affordable housing
Middle Income Consumer
Targeted customers demanding quality mid-sized residential units in large community developments
Encouraged by governmental policies promoting the development of more low- and mid- priced housing
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2007 Operating Highlights
2007 Operating Highlights Xinyuan’s Diversified Markets and Property Portfolio
Acquired 9 parcels of land with a total developable GFA of 1.7mm sqm
Launched 6 new projects with a total developable GFA of .9mm sqm
Completed 3 projects with a total GFA of .4mm sqm
Asset turnover(1) at 0.6x and Bid-to-Development-Launch averaging 4 months
Xinyuan’s Present Markets
Six strategically selected second tier cities with a combined population of more than 34.5 million people
New Markets Targeted for Expansion
Eight second tier cities with strong demand for high quality, affordable housing
Shenyang
Tianjin
Jinan Qingdao Xi’an Zhengzhou Suzhou Hefei Chengdu Kunshan
Wuhan
Hangzhou
Chongqing Changsha
Q1 2007 – Pre sale only in 2 cities, Zhengzhou and Jinan Q1 2008 – Pre sale in 5 cities
Source: Company data as of December 31, 2007; China Statistical Year Book, 2006 Edition
| (1) |
Asset turnover is based on total revenue divided by simple average of current and previous year’s total assets |
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Projects Overview (1)
Chengdu
Hefei
Jinan
Kunshan
Suzhou
Zhengzhou
Total
Properties under Construction
No. of Projects
1
1
3
—
2
1
8
No. of Units
4069
1,649
4931
—
3,283
920
14,852
GFA completed (Sq.m)
232,583
145,452
348,702
—
278,310
67,578
1,072,625
Properties under Planning
No. of Projects
1
—
—
1
1
3
6
No. of Units
3,113
—
—
5,147
3,209
5,207
16,676
GFA (Sq.m)
217,711
—
—
501,244
208,372
498,617
1,425,944
Completed Projects
No. of Projects
—
—
1
—
—
13
14
No. of Units
—
—
786
—
—
8,645
9,431
GFA (Sq.m)
—
—
61,066
—
—
939,995
1,001,061
Total No. of Projects
2
1
4
1
3
17
28
Total Units
7,182
1,649
5,717
5,147
6,492
14,772
40,959
Total GFA (Sq.m)
450,294
145,452
409,768
501,244
486,682
1,506,190
3,499,631
Note (1): Company data as of December 31, 2007
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Financial Results
Net Revenue
($ mm) $400 $350 $309.7 $300 7 % $142.4
| 05. |
$250 = 1
GR CA
$200 $150 $100 $61.9 $35.6 $50 $0
2004 2005 2006 2007 (1)
Profit Margin
| 31.2% |
32.8% |
26.0%
24.0% 15.4%
13.7%
| 11.1% |
11.3% |
2004 2005 2006 2007 (1)
Gross Margin Net Margin
Net Income
($ mm) $50 $42.5
$40 .7 %
121
R=
$30 AG
C
$20 $9.6 $16.1
$10 $3.9 $0
| (1) |
2004 2005 2006 2007
Q1 08 Contracted Sales Pre-Announcement
0 % 6 9
=
?RMB mm a t e RMB 1,063
hr w t r o
Yg
Y O
RMB 134
Q107 Q108E (2)
(1): Unaudited results for 2007
(2): Contracted sales does not represent revenue recognized in our statement of operation. Under the POC method, revenue is recognized based on contracted sales multiplied by the ratio of actual cost incurred over total budgeted costs
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Xinyuan’s Model
Regulatory
Land for commodity housing developments
Land Grant
shall only be granted by way of competitive
Subject to
bidding, public auction or listing-for-sale
Public Auction
(Effective on July 1, 2002)
Imposition of a charge on land that remains undeveloped for one year (Effective on April
28, 1999)
Cancellation of land use rights for land that remains undeveloped for two years (Effective
Immediate
on April 28, 1999)
development is
a mandatory
Local government should submit special
requirement
report to State Council regarding disposition of idle land by June, 2008
Local tax authorities levy Land Appreciation
Tax based on progressive rates ranging from
30% to 60% on the appreciation of land value
Xinyuan’s Business Model
Adhere to
Consistent
Acquire land through public auctions, which
Land
comes with clean titles and is ready for
Acquisition
development
Strategy
Continue toadhere to
Begin development immediately after land
immediate
acquisition; Do not tie up capital on idle land
development
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Risks and Xinyuan’s Right Business Model
Risks
Regulatory Risk Landbank Execution Risk
Xinyuan’s Model
Although the PRC government has introduced various measures to cool down the real estate markets, such measures are primarily targeted at the luxury residential sector
Xinyuan focuses on providing mid-sized residential properties in second tier cities in China. Its target clients are middle income customers who buy house for self use, rather than speculation
Land appreciation tax limited to Xinyuan. Company’s policy not to rely on profit from land appreciation gains. Fast asset turnover business model.
Xinyuan typically acquires land through a transparent government auction system
Land supply through the auction system in the target markets is abundant; The future business development will not be constrained by land supply
Xinyuan has developed a successful standardized and scalable development model, which accelerate its development cycle, release its capital quickly from land acquisition cost and mitigate its exposure to market risk
Government policy imposed penalty for sitting on idle land, which provides strong support to Xinyuan’s fast development model
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Risks and Xinyuan’s Right Business Model (Con’d)
Risks
Tightened Bank Lending Policy
Sustainability of Growth
Liquidity
Xinyuan’s Model
Current cash flow is good enough for existing projects
Speed up capital turnover by selling certain units of selected projects
Xinyuan uses short period land collateral loan and is a preferred client to many major
Chinese banks
Entered into Strategic Cooperation Agreement with major banks, which provide Xinyuan and our customers with priority status in receiving loans
Get smaller amounts of loans in several phases based on project progress
Standard business model which can be easily replicated to other cities
Track record of successfully expanding into six cities
Well trained team of managers, ensuring the same execution quality in other cities
Fast development cycle secures cash flow generated by new projects to improve credit metrics
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Thank you!
Q&A
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