Xinyuan Science & Technology Service (XSTS), the property management subsidiary of Xinyuan Real Estate, filed its 2017 Annual Report (LINK). Even though XSTS shares are not yet trading publicly, the NEEQ listing provides visibility into the rapid growth in Xinyuan’s recurring revenues and income from this business. Highlights:
The company’s NEEQ listing was approved on 3/15/17 (LINK), but the ownership structure shows that no shares are yet publicly held:
Combining Xinyuan STS year-end results with valuation ranges of Hong Kong listed competitors suggests a fair value of $74-183mm.
It would be very positive to see a public placement of Xinyuan STS shares that brings attention to the value of this asset light business with sustainable and growing revenues. Placement of Xinyuan STS shares at a premium to book value would be significantly accretive at the parent company level.
Xinyuan Real Estate has not yet filed its 2017 20-F annual report. The 2016 20-F filing (LINK) disclosed that the company managed 9.0mm sqm of residential units. The Xinyuan STS report discloses total area under management of about 31mm sqm (vs 25mm one year ago) which includes public spaces.
Minor revisions may be made to this article after Xinyuan files its 2017 20-F.
Disclosures:
At the time of publication the author is a public shareholder of Xinyuan Real Estate. The author believes that information in this article may be of interest to other public shareholders. The author does not make any recommendation regarding any investment in Xinyuan and investors are encouraged to check all of the key facts cited here from SEC and HKEX filings prior to making their own investment decisions.
Koneko Research 
As always, Thanks John
Sun Myung
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John, 2017 annual is out. No PR that I’ve seen
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Yes, I read it. Didn’t see any big surprises. I think it’s an exchange requirement to issue a press release disclosing that the report was filed. So I’m sure they’ll get to it. This was last year’s http://ir.xyre.com/phoenix.zhtml?c=217254&p=irol-newsArticle&ID=2256893
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I wish Xinyuan disclosed more facts in English, I believe the first step to unlocking value in Xinyuan is to update its English IR page to Chinese. Great article anyways!
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Thanks.
My understanding is that the Wechat channel and Chinese website are handled by a Public Relations department. I think it does a good job of communicating the company’s news and strategy.
My understanding is that a separate Investor Relations department is responsible for the English website and press releases. I think it does a poor job.
I think the Chairman and CEO need to do more to show leadership to investors and make sure these two communication departments are cooperating to tell the same story.
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@John,i still own my shares in XIN. There are a lot of Questions for me open that i need to understand before i invest more. Do you have an idea about why blockchain can be important for them? https://finance.sina.com.cn/blockchain/roll/2020-06-24/doc-iircuyvk0220011.shtml
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If XIN can’t explain what it is doing in blockchain then there’s no point attributing value to it. A year ago they told me they were planning to sell a stake in the business to an outside investor and that transaction would provide visibility into the value. Obviously nothing happened.
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@YE are you still invested in XIN?
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Anyone of you still invested in XIN ?
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No. See my my recent articles. Especially https://konekoresearch.com/2019/10/03/xinyuan-real-estate-very-high-risk/
If you own it then be prepared for the dividend to be suspended.
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Many thanks, for the warning. I only have a small position. I only buy if they announce another dividend today. The recent upgrade by fitch can be helpful, but only if the dividend is coming. I hope that they made cash the placement at HSE. Maybe it is a good idea to seek a second listing at HSE. What is your opinion?
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XIN’s Oct 2021 bond is trading at over a 25% yield. The risk here for shareholders is extremely high so I am no longer paying much attention to the company.
XIN received none of the proceeds of the property management IPO. They were retained by the sub so that did nothing to help the parent’s liquidity.
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they sold 25% at the IPO and are holding 75%. Is my info wrong?
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Xinyuan sold no shares in the property management IPO.
Xinyuan owns 60%. Insiders and ex-insiders own 15%. The public owns 25%.
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The Reason for the sharp increase in share price of Xinyuan Services can be found here: http://en.xywyfw.com/Private/NewsImgs/637322167006079028704978825.pdf
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