China Real Estate Information Corporation (CRIC – a subsidiary of E-House) released estimated 2017 sales data for the country’s top 200 property developers (LINK). Xinyuan China is shown at #78 with estimated sales of 23.3Bn RMB year-to-date, which means 7.51Bn RMB for 4Q.
CRIC does not have access to any official company records and compiles its estimates from 3rd party sources like municipal data. “Sales” estimated by CRIC are never going to equal “contract sales” reported under US GAAP financial statements and “contract sales” are also different from “revenues” reported by Xinyuan under percentage of completion accounting. Some of the sales in the CRIC data do not end up being closed and some are recognized in later periods (Xinyuan does not book a “contract sale” until it has received 30% of the price in cash). CRIC data was a good indication of the trend in Xinyuan results in the past, but the quarterly correlation has weakened in the past year.
In November Xinyuan provided guidance that 4Q contract sales would be in a range of 4.6-4.8Bn RMB (earnings transcript)
CRIC noted the increasing concentration of the real estate industry in China with the top 100 firms taking 55.5% of national sales volume in 2017, up from just 40.0% two years ago. Scarcity of land and tighter access to financing favor larger and better capitalized developers.
