Xinyuan Real Estate Co., Ltd. Announces Fourth Quarter 2019 Financial Results

BEIJING, April 3, 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 fourth quarter ended December 31, 2019.

Full Year 2019 Highlights

• Total revenue increased 11.9% to US$2.5 billion from US$2.2 billion in 2018.
• For the year ended December 31, 2019, contract sales decreased 6.2% to US$2.1 billion from US$2.3 billion in 2018. In RMB terms, contract sales in 2019 decreased 2.2% to RMB14.6 billion yuan from RMB15.0 billion yuan in 2018. GFA sales increased 7.1% to 1,142,149 square meters from 1,066,192 square meters in 2018.
• Gross profit was US$560.3 million, or 22.6% of revenue in 2019, compared to a gross profit of US$615.5 million, or 27.8% of revenue in 2018.
• SG&A expenses were US$250.4 million, or 10.1% of revenue in 2019, compared to US$240 million, or 10.8% of revenue in 2018.
• Net income was US$83.0 million in 2019 compared to US$106.0 million in 2018. Diluted earnings per ADS were US$1.20 in 2019 compared to US$1.14 per ADS in 2018.
• On October 11, 2019, the property management service entity of Xinyuan, Xinyuan Property Management Service (Cayman) Ltd. has been listed on the main board of Hong Kong Stock Exchange, under code 01895.HK.

Fourth Quarter 2019 Highlights

• Total revenue was US$906.7 million in the fourth quarter of 2019 compared to US$1,092.2 million in the fourth quarter of 2018 and US$497.6 million in the third quarter of 2019.
• Net income was US$39.6 million in the fourth quarter of 2019 compared to US$104.1 million in the fourth quarter of 2018 and US$5.4 million in the third quarter of 2019.
• Diluted net earnings per ADS attributable to shareholders were US$0.62 in the fourth quarter of 2019 compared to US$1.13 in the fourth quarter of 2018 and US$0.07 in the third quarter of 2019.

Mr. Yong Zhang, Xinyuan's Chairman, stated, "Industry conditions remained challenging during the fourth quarter, but solid execution of our strategy enabled us to sustain an attractive level of profitability. Our growth strategy is sound. We build attractive homes for our customers by more tightly integrating real estate and technology. We believe our innovative business model and ability to execute will further differentiate us in the market and enable robust growth going forward."

Mr. Zhang continued, "On October 11, 2019, our property management service subsidiary has been listed on the main board of HKEX, which we anticipate will contribute to strengthen our core real estate business. For the year 2019, Xinyuan was again ranked in the Top 100 Chinese Real Estate Developers, an important benchmark for evaluating our operating strength and industry status. We are proud to have achieved this ranking for 15 consecutive years. Furthermore, we were also recently honored with the designation as a 'Top 5 Innovative Chinese Real Estate Developers'. That designation reflects our continual effort to improve our operations and further solidifies our position as one of the leading real estate developers in China.

"We started 2020 in a challenging environment due to the COVID-19 outbreak, which has adversely affected our first quarter sales. The most immediate impact was the closure of sales and construction sites. At the moment, China has contained the spread of the virus, and by the end of March 2020, all of our construction and sales sites have re-opened, except our Wuhan project, and we are striving to resume full operations."

Mr. Zhang concluded, "Although our business is experiencing short-term turbulence due to the virus outbreak, we are confident that consumer demand will rebound as the virus has been contained in China. We are optimistic about the long-term strength of the Chinese economy and the growth potential of China's real estate industry."

Fourth Quarter 2019 Financial Results

Contract Sales

Contract sales in China totaled US$653.6 million in the fourth quarter compared to US$724.0 million in the fourth quarter of 2018 and US$504.8 million in the third quarter of 2019.

The Company's GFA sales in China were 356,900 square meters in the fourth quarter of 2019 compared to 355,609 square meters in the fourth quarter of 2018 and 255,600 square meters in the third quarter of 2019.

The average selling price ("ASP") per square meter sold in China was RMB12,628 (US$1,831) in the fourth quarter of 2019 compared to RMB13,461 (US$2,036) in the fourth quarter of 2018 and RMB13,531 (US$1,975) in the third quarter of 2019.

The Company commenced pre-sales of one new project in the fourth quarter of 2019, Foshan Xinchuang AI International Science and Technology Innovation Valley. The presales contributed 3.0% and 3.6% of total contract sales and total GFA sales, respectively.

Breakdown of GFA Sales and ASPs by Project in China

Revenue

In the fourth quarter of 2019, the Company's total revenue decreased 17.0% to US$906.7 million from US$1,092.2 million in the fourth quarter of 2018 and increased 82.2% from US$497.6 million in the third quarter of 2019.

Gross Profit

Gross profit for the fourth quarter of 2019 was US$146.5 million, or 16.2% of total revenue, compared to gross profit of US$318.2 million, or 29.1% of total revenue, in the fourth quarter of 2018 and a gross profit of US$123.5 million, or 24.8% of total revenue, in the third quarter of 2019.

Selling, General and Administrative Expenses

SG&A expenses were US$73.8 million for the fourth quarter of 2019 compared to US$105.6 million for the fourth quarter of 2018 and US$57.6 million for the third quarter of 2019. As a percentage of total revenue, SG&A expenses were 8.1% compared to 9.7% in the fourth quarter of 2018 and 11.6% in the third quarter of 2019.

Net Income

Net income for the fourth quarter of 2019 was US$39.6 million compared to US$104.1 million for the fourth quarter of 2018 and US$5.4 million for the third quarter of 2019. Net margin was 4.4% compared to 9.5% in the fourth quarter of 2018 and 1.1% in the third quarter of 2019. Diluted net earnings per ADS were US$0.62 compared to US$1.13 per ADS in the fourth quarter of 2018 and US$0.07 per ADS in the third quarter of 2019.

Balance Sheet

As of December 31, 2019, the Company's cash and restricted cash (including bank deposit for long-term debt) increased to US$1,102.6 million from US$688.4 million as of September 30, 2019.

Total debt outstanding was US$3,215.1 million, which reflects an increase of US$3.4 million from US$3,211.7 million at the end of the third quarter of 2019.

The balance of the Company's real estate properties under development at the end of the fourth quarter of 2019 was US$3,254.4 million compared to US$3,589.8 million at the end of the third quarter of 2019.

Real Estate Project Status in China

Below is a summary table of projects that were active and available for sale in the fourth quarter of 2019.

As of December 31, 2019, the Company's total saleable GFA was approximately 4,553,700 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:

Update on United States Real Estate Projects

At the Oosten project in Brooklyn, New York City, as of December 31, 2019, a total of 177 units out of 216 units were sold. Total revenue from this project has reached US$260.1 million.

At the Hudson Garden project, BLOOM ON FORTY FIFTH, in the Hell's Kitchen area of Manhattan, New York City, as of December 31, 2019, the Company had completed superstructure construction, precast concrete facade, and windows installation. During the past year, the project's design drawings were optimized, increasing the number of residential units from 82 to 92. 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.

The construction is currently ahead of schedule and under budget. The building will have 92 condominium units from floors two through seven with a unit mix consisting of 17 studios, 45 one-bedroom units, 24 two-bedroom units, 2 three-bedroom duplex units, 2 three-bedroom pent house units, and 2 four-bedroom duplex units. The onsite sales office and model apartments are expected to be fully furnished during the second quarter 2020 and ready to show to brokers and potential buyers. 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 will start in New York City in the second quarter 2020.

At the RKO project in Flushing, New York City, the Company continued to execute on the planning, governmental approvals, and pre-development activities. As of December 31, 2019, we have engaged GKV Architects to develop new architectural plans, and completed the schematic design for the condo and hotel mixed-use development.

Update on the United Kingdom Real Estate Project

During the fourth quarter of 2019, construction progressed as on schedule on the Madison project in London. Cladding to the building was completed in the period, and the internal fit out continues to progress well. The project remains on course for completion in 2020.

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, 135 apartments have been sold.

Business Outlook

The company expects 2020 contract sales of 20 to 22 billion RMB, with consolidated net income similar to 2019.

However, the above outlook is based on information available as of the date of this press release and reflects the Company's current expectations, which may be subject to change in light of uncertainties and situations related to how COVID-19 develops.

Conference Call Information

The Company will hold a conference call at 8:00am ET on April 3, 2020, to discuss its fourth quarter 2019 results. Listeners may access the call by dialing:

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 April 10, 2020:

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, 2018. 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: [email protected]

The Blueshirt Group

In U.S.: Ms. Julia Qian
Email: [email protected]

In China: Ms. Susie Wang
Mobile: +86 (138) 1081-7475
Email: [email protected]

SOURCE Xinyuan Real Estate Co., Ltd.