Xinyuan Real Estate Co., Ltd.

Revenue for Q3 2020 was $655.4 million, up 130.5% year over year and 31.7% sequentially. Gross profit was $105 million, versus a $19.2 million gross loss in Q2 2020. Net income was $29.5 million, compared with a $30.1 million net loss in Q2, and net margin improved to 4.5% from negative 10.6%. SG&A was $57.9 million, up from $51.4 million in Q2. On the balance sheet, cash and restricted cash rose to over $1.25 billion, short-term debt was 37% of total debt versus 46% at the start of the year, and total debt was $3.4 billion. For guidance, management expects full-year 2020 contract sales of around RMB18 billion, including about RMB6 billion in Q4, and said the company expects to end the year in a profit position.

CEO Yong Zhang framed the quarter as a strong recovery driven by rapid economic normalization, pandemic control, and resumed residential demand. He said several major projects began pre-sales in Q3, helping the company recover from top line to bottom line, and pointed to upcoming launches in Beijing and Xi’an in Q4. He emphasized continued balance-sheet optimization, saying short-term debt was covered by cash on hand and that the company would remain careful in balancing growth with financial health.

CFO Brian Chen cited the main financial turnaround: revenue of $655.4 million, gross profit of $105 million, and net income of $29.5 million, with 130.5% year-over-year revenue growth. He also detailed the financing and deleveraging steps: HK$127 million from the follow-on offering in the property management company, RMB514.5 million of senior notes due 2022, RMB300 million of senior notes due 2023, and RMB900 million of corporate bonds issued in November. He said cash and restricted cash increased to over $1.25 billion, short-term debt fell to 37% of total debt, and the company’s total debt was $3.4 billion. He also noted total projects on the balance sheet of $3.2 billion, including $2.6 billion under development and $657 million completed, and said Q4 contract sales should be about RMB6 billion.

Analysts focused on the new Hudson Garden and China residential projects, asking whether Target had opened and how much sales were happening on-site versus through existing customer relationships. Management said Target occupies most of the basement and first floor, is expected to open soon, and that New York sales interest has been positive but final deals have not yet closed. Another analyst asked about taxes, and CFO Brian Chen explained that the elevated tax rate includes land appreciation tax, while the core corporate income tax is about 25%. Questions also covered dividends and buybacks; management said the dividend remains at about one-quarter of last year’s level for now, with a return toward prior levels only when business normalizes and liquidity stays satisfactory.