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Xinyuan Real Estate Co., Ltd. Announces First Quarter 2014 Financial Results

May 16, 2014

– 1Q14 Contract Sales Exceeds Mid-Point of Previous Guidance by 20.4% –

BEIJING, May 16, 2014 /PRNewswire/ — Xinyuan Real Estate Co., Ltd. (“Xinyuan” or “the Company”) (NYSE: XIN), a residential real estate developer with a primary focus on high growth cities in China, today announced its unaudited financial results for the first quarter 2014.

Highlights for the First Quarter 2014

    --  Total first quarter revenues were US$226.4 million, a 21.7% decrease
        from US$289.2 million recorded in the fourth quarter of 2013 and a 33.6%
        increase from US$169.4 million reported in the first quarter of 2013.
        First quarter revenue exceeded the mid-point of previous guidance of
        US$197.5 million by 14.6%.
    --  Contract sales totaled US$273.9 million, a 27.4% decrease from US$377.5
        million recorded in the fourth quarter of 2013 and a 53.6% increase from
        US$178.3 million recorded in the first quarter of 2013. First quarter
        contract sales exceeded the mid-point of previous guidance of US$227.5
        million by 20.4%.
    --  Total gross floor area ("GFA") sales were 127,100 square meters, a 47.4%
        decrease from 241,700 square meters sold in the fourth quarter of 2013,
        and a 2.0% increase from 124,600 square meters sold in the first quarter
        of 2013.
    --  Selling, General, and Administrative ("SG&A") expenses as a percent of
        total revenue totaled 10.7% compared to 12.1% in the fourth quarter of
        2013 and 7.3% in the first quarter of 2013.
    --  Net income was US$10.1 million, a 68.0% decrease from US$31.6 million in
        the fourth quarter of 2013 and a 62.0% decrease from US$26.6 million
        reported in the first quarter of 2013.  First quarter net income
        slightly exceeded the mid-point of previous net income guidance.
    --  Diluted net earnings per American Depositary Share ("ADS") attributable
        to shareholders were US$0.12, compared to diluted net earnings per ADS
        of US$0.36 in the fourth quarter of 2013 and US$0.37 per ADS in the
        first quarter of 2013.
    --  Cash and cash equivalents, including restricted cash, decreased by
        US$182.2 million to US$655.0 million as of March 31, 2014 from US$837.2
        million as of December 31, 2013. Short and long term debt increased by
        US$136.2 million from US$811.0 million as of December 31, 2013 to
        US$947.2 million as of March 31, 2014.
    --  Book value was US$11.85 per ADS as of March 31, 2014.
    --  The Company repurchased 1.54 million ADSs at a total cost of
        approximately US$7.6 million in the first quarter.
    --  The Board of Directors of the Company has approved the payment of a
        quarterly dividend of US$0.05 per ADS payable on June 12, 2014 to
        shareholders of record as of May 30, 2014.
    --  The Company acquired three land parcels (for a total of three
        development projects) in Chengdu, Sanya and Changsha respectively, for a
        total GFA of 611,600 square meters.

Mr. Yong Zhang, Xinyuan’s Chairman said, “We experienced another strong quarter of sales exceeding our contract sales and revenue forecast as market conditions were generally stable in the cities in which we conduct operations. Of our five main projects this quarter, the majority experienced increases in average selling prices and our two main projects this quarter that experienced an ASP decrease were due to product mix. Importantly, we did not reduce prices at our available units in the first quarter. We also commenced pre-sales of one new project Beijing Xindo Park and acquired three new land parcels during the first quarter, along with one additional land acquisition in Shanghai in April.”

“As we look to the remaining quarters of the year, we expect our project activity will expand. Three new projects in China are scheduled to launch pre-sales in the second quarter, and we expect greater levels of year-over-year growth in the second quarter and the second half of the year. Our New York Oosten project in Williamsburg is expected to start pre-sales in late May. We remain committed to investing in our business for future development and growth,” concluded Mr. Zhang.

Financial Results for the First Quarter 2014

Contract Sales

Contract sales totaled US$273.9 million in the first quarter compared to US$377.5 million in the fourth quarter of 2013 and US$178.3 million in the first quarter of 2013. The Company’s GFA sales were 127,100 square meters in the first quarter of 2014 versus 241,700 square meters in the fourth quarter of 2013 and 124,600 square meters in the first quarter of 2013. The average selling price (“ASP”) per square meter sold was RMB13,181 (US$2,155) in the first quarter of 2014 versus RMB9,678 (US$1,562) in the fourth quarter of 2013 and RMB8,985 (US$1,431) in the first quarter of 2013. The Company commenced pre-sales of the Beijing Xindo Park project in the first quarter with total saleable GFA of 132,400 square meters. Sales of Beijing Xindo Park contributed approximately 28.2% of GFA sales, and 44.6% of contract sales in the first quarter 2014.

Breakdown of GFA Sales and ASP’s by Project


                         Q1 2013      Q4 2013         Q1 2014      Unsold
                         -------      -------         -------      ------

                           GFA          ASP             GFA         ASP             GFA         ASP             GFA
                           ---          ---             ---         ---             ---         ---             ---

               Project (m(2) 000)      (Rmb)        (m(2) 000)     (Rmb)         (m(2) 000)    (Rmb)        (m(2) 000)
                        ---------       ----         ---------      ----         ---------      ----         ---------

    Zhengzhou
     Royal Palace                17.2         9,093            1.2        23,351           0.4       33,539              0.5

    Zhengzhou
     Century East
     A                           19.4         9,209            1.9        13,319           1.2       15,309              1.4

    Zhengzhou
     Century East
     B                           21.1         8,822            2.3        16,831           0.2        9,147              0.7

    Zhengzhou Xin
     City                           -             -           53.7         9,972          33.6       10,672             66.1

    Kunshan Intl
     City Garden                 18.3         8,519            8.8        11,209           1.1       12,887              2.4

    Kunshan Royal
     Palace                         -             -           42.5         9,265           7.0       10,615            238.9

    Suzhou Xin
     City                           -             -           52.6         8,577          19.4        9,369             25.4

    Jinan Xinyuan
     Splendid                    40.8         8,764           45.7        10,372          23.8        9,746             90.2

    Xuzhou
     Colorful City                  -             -           31.3         8,820           4.0        6,954             94.0

    Beijing Xindo
     Park                           -             -              -             -          35.8       20,867             96.6

    Others                        7.8             -            1.7             -           0.6            -              3.9
                                  ---           ---            ---           ---           ---          ---              ---

      Total                     124.6         8,985          241.7         9,678         127.1       13,181            620.1
                                -----         -----          -----         -----         -----       ------            -----

Revenue

In the first quarter of 2014, the Company’s total revenue was US$226.4 million compared to US$289.2 million in the fourth quarter of 2013 and US$169.4 million in the first quarter of 2013.

Gross Profit

Gross profit for the first quarter of 2014 was US$59.4 million, or 26.2% of revenue, compared to a gross profit of US$94.9 million, or 32.8% of revenue, in the fourth quarter of 2013 and a gross profit of US$55.7 million, or 32.9% of revenue, in the first quarter of 2013. The gross margin decrease was mainly due to cost increases of two near completion projects and two lower margin projects which contributed 35% of total revenue in the first quarter.

Selling, General and Administrative Expenses

SG&A expenses were US$24.3 million for the first quarter of 2014 compared to US$35.1 million for the fourth quarter of 2013 and US$12.4 million for the first quarter of 2013. As a percentage of total revenue, SG&A expenses were 10.7% compared to 12.1% in the fourth quarter of 2013 and 7.3% in the first quarter of 2013. The decrease in SG&A expenses compared to the 2013 fourth quarter was mainly due to a fourth quarter year end performance based bonus payments and selling and marketing expenses related to robust sales in the fourth quarter of 2013.

Net Income

Net income for the first quarter of 2014 was US$10.1 million compared to US$31.6 million for the fourth quarter of 2013 and US$26.6 million for the same period in 2013. Net margin was 4.4%, compared to 10.9% in the fourth quarter of 2013 and 15.7% in the first quarter of 2013. Diluted earnings per ADS were US$0.12, compared to US$0.36 per ADS in the fourth quarter of 2013 and to US$0.37 per ADS in the same period in 2013.

Balance Sheet

As of March 31, 2014, the Company reported US$655.0 million in cash and cash equivalents (including restricted cash) compared to US$837.2 million as of December 31, 2013. Total debt outstanding was US$947.2 million, an increase of US$136.2 million compared to US$811.0 million at the end of the fourth quarter of 2013. The cash decrease was largely due to the payment of US$376.3 million for land acquisitions and deposits, partially offset by the proceeds from bank loans and other debts in the aggregate of US$192.4 million. The balance of the Company’s real estate property under development at the end of the first quarter was US$868.7 million compared to US$932.5 million at the end of the fourth quarter of 2013.

Project Status

Below is a summary table of projects that were active and available for sale in the first quarter of 2014.


                                                   GFA                         Contract Sales                Project
                                                                                                         Cost % Complete
                                                                                                         ---------------

                             (m2 000)        (US$ millions)
                              -------         -------------

                              Project       Total      Sold to date       Total      Sales to date % Sold
                                      Active Projects               Active Projects
                                      ---------------               ---------------

    Zhengzhou Royal Palace                      132.4         131.9           241.7          238.9    98.8%            91.0%
    ----------------------                      -----         -----           -----          -----    ----             ----

    Zhengzhou Century East A                     77.3          75.9           127.5          124.9    98.0%            95.0%
    ------------------------                     ----          ----           -----          -----    ----             ----

    Zhengzhou Century East B                    166.5         165.8           247.1          246.0    99.6%            96.9%
    ------------------------                    -----         -----           -----          -----    ----             ----

    Zhengzhou Xin City                          185.0         118.9           330.1          195.7    59.3%            62.5%
    ------------------                          -----         -----           -----          -----    ----             ----

    Kunshan Intl City Garden                    497.9         495.5           613.4          608.8    99.3%           100.0%
    ------------------------                    -----         -----           -----          -----    ----            -----

    Kunshan Royal Palace                        288.4          49.5           511.3           76.4    14.9%            41.3%
    --------------------                        -----          ----           -----           ----    ----             ----

    Suzhou Xin City                             126.8         101.4           187.1          142.6    76.2%            71.6%
    ---------------                             -----         -----           -----          -----    ----             ----

    Jinan Xinyuan Splendid                      565.2         475.0           795.3          669.5    84.2%            85.2%
    ----------------------                      -----         -----           -----          -----    ----             ----

    Xuzhou Colorful City                        129.3          35.3           198.9           49.6    24.9%            45.1%
    --------------------                        -----          ----           -----           ----    ----             ----

    Beijing Xindo Park                          132.4          35.8           461.0          122.3    26.5%            68.9%
    ------------------                          -----          ----           -----          -----    ----             ----

    Others remaining GFA                          3.9
    --------------------                          ---

      Total active projects                   2,305.1       1,685.0         3,713.4        2,474.7    66.6%            78.0%
      ---------------------                   -------       -------         -------        -------    ----             ----

As of May 15, 2014, the Company’s total saleable GFA was approximately 2,457,700 square meters for active projects and under planning stage projects. Below is a summary of all of our planning stage projects:


                                  Unsold GFA         Pre sales
                                                     Scheduled
                                  (m(2) 000)
                                  ---------

    Zhengzhou Xindo Park                       293.4   Q2 2014
                                               -----   -------

    Suzhou Lake Royal Palace                   171.9   Q2 2014
                                               -----   -------

    Xingyang Splendid                          240.2   Q2 2014
                                               -----   -------

    New York Oosten                             37.1   Q2 2014
                                                ----   -------

    Jinan Royal Palace                         420.5   Q3 2014
                                               -----   -------

    Newly Acquired Chengdu Land                225.0   Q4 2014
                                               -----   -------

    Newly Acquired Sanya Land                  118.2   Q1 2015
                                               -----   -------

    Newly Acquired Shanghai Land                62.9   Q1 2015
                                                ----   -------

    Newly Acquired Changsha Land               268.4   Q1 2015
                                               -----   -------

    Total projects under planning            1,837.6
                                             -------

    Total active projects                      620.1
                                               -----

    Total all Xinyuan projects               2,457.7
                                             -------

Second Quarter Outlook

The Company expects contract sales in the second quarter of 2014 to reach approximately US$277 million. Revenue is expected to total US$230 million in the second quarter while net income is expected to reach US$23 million which includes certain tax expense benefits to be realized in the second quarter.

Conference Call Information

The Company will hold a conference call at 8:00 am ET on May 16, 2014 to discuss first quarter 2014 results. Listeners may access the call by dialing 1-913-312-1427. A webcast will also be available through the Company’s investor relations website at http://www.xyre.com. A replay of the call will be available through May 23, 2014 by dialing 1-858-384-5517, access code: 6996086

About Xinyuan Real Estate Co., Ltd.

Xinyuan Real Estate Co., Ltd. (“Xinyuan”) (NYSE: XIN) is a developer of large scale, high quality residential real estate projects aimed at providing middle-income consumers with a comfortable and convenient community lifestyle. In China, Xinyuan primarily focuses its development projects in Tier II cities, including Hefei, Jinan, Kunshan, Suzhou, Zhengzhou, Xuzhou and Chengdu. The Company’s U.S. development arm, XIN Development Group International, Inc. ,is a pioneer amongst Chinese real estate residential developers, entering the US market in 2012. Xinyuan is the first real estate developer from China to be listed on the New York Stock Exchange. 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, 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 into new geographic markets and expand our operations; 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, 2013. 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:

In China:

Ms. Helen Zhang

Interim Chief Financial Officer

Tel: +86 (10) 8588-9398

Email: irmanager@xyre.com

ICR, LLC

In U.S.: +1-646-308-1472

In China: +86 (10) 6583-7511

Email: William.zima@icrinc.com


                                     XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

                                 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                      (All US$ amounts and number of shares data in thousands, except per share data)

                                                         Three months ended
                                                         ------------------

                                           March 31,                                   December 31,                        March 31,

                                                 2014                                                     2013                           2013
                                                 ----                                                     ----                           ----

                                         (unaudited)                       (unaudited)                          (unaudited)

    Total revenue                             226,412                                                  289,160                        169,429

    Total costs of
     revenue                                 (167,043)                                                (194,228)                      (113,762)
                                             --------                                                 --------                       --------

    Gross profit                               59,369                                                   94,932                         55,667

    Selling and
     distribution
     expenses                                  (4,781)                                                  (9,443)                        (2,788)

    General and
     administrative
     expenses                                 (19,494)                                                 (25,650)                        (9,574)
                                              -------                                                  -------                         ------

    Operating income                           35,094                                                   59,839                         43,305

    Interest income                             1,531                                                    3,084                          1,635

    Interest expense                           (8,641)                                                  (6,411)                             -

    Other income                                    -                                                    1,539                              -

    Share of loss of
     equity investee                             (217)                                                    (117)                             -
                                                 ----                                                     ----                            ---

    Income from
     operations before
     income taxes                              27,767                                                   57,934                         44,940

    Income taxes                              (17,717)                                                 (26,303)                       (18,325)
                                              -------                                                  -------                        -------

    Net income                                 10,050                                                   31,631                         26,615
                                               ======                                                   ======                         ======

    Net income
     attributable to
     Xinyuan Real Estate
     Co., Ltd.
     shareholders                              10,050                                                   31,631                         26,615
                                               ======                                                   ======                         ======

    Earnings per ADS:

      Basic                                      0.13                                                     0.41                           0.37

      Diluted                                    0.12                                                     0.36                           0.37

    ADS used in computation:

      Basic                                    77,801                                                   77,616                         71,043

      Diluted                                  90,810                                                   91,097                         72,292


                                                              XINYUAN REAL ESTATE CO., LTD. AND ITS SUBSIDIARIES

                                                                     CONDENSED CONSOLIDATED BALANCE SHEETS

                                                           (All US$ amounts and number of shares data in thousands)

                                                                                                                   March 31,             December  31,

                                                                                                                                   2014                    2013
                                                                                                                                   ----                    ----

                                                                                                                  (unaudited)              (audited)

    ASSETS

    Current assets

    Cash and cash equivalents                                                                                                   348,096                 587,119

    Restricted cash                                                                                                             306,857                 250,098

    Accounts receivable                                                                                                          24,986                   8,528

    Other receivables                                                                                                           143,813                  10,593

    Restricted deposit                                                                                                           11,411                  11,514

    Deposits for land use right                                                                                                 480,739                 297,389

    Other deposits and prepayments                                                                                              106,026                 103,790

    Advances to suppliers                                                                                                        20,175                  15,317

    Real estate property held for sale                                                                                            5,524                   5,524

    Real estate property development completed                                                                                   17,036                  21,260

    Real estate property under development                                                                                      868,679                 932,519

    Amounts due from related party                                                                                                1,301                     820

    Amounts due from employees                                                                                                      586                      59

    Other current assets                                                                                                             34                       -
                                                                                                                                    ---                     ---

    Total current assets                                                                                                      2,335,263               2,244,530
                                                                                                                              ---------               ---------

    Real estate properties held for lease, net                                                                                   61,534                  60,410

    Property and equipment, net                                                                                                  45,688                  46,706

    Other long-term investment                                                                                                      242                     242

    Investment in joint venture                                                                                                   5,676                   5,945

    Deferred tax assets                                                                                                          10,593                  10,191

    Deferred charges                                                                                                              8,699                   9,049

    Other assets                                                                                                                  4,940                   5,028
                                                                                                                                  -----                   -----

    TOTAL ASSETS                                                                                                              2,472,635               2,382,101
                                                                                                                              =========               =========

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities

    Accounts payable                                                                                                            171,161                 194,403

    Short-term bank loans and other debts                                                                                       113,782                  23,291

    Customer deposits                                                                                                            81,805                  75,285

    Income tax payable                                                                                                          106,833                 121,642

    Deferred tax liabilities                                                                                                     85,821                  78,958

    Other payables and accrued liabilities                                                                                       79,881                  73,446

    Payroll and welfare payable                                                                                                   4,610                  19,638

    Current portion of long-term bank loans and other debt                                                                      231,015                 217,964

    Current maturities of capital lease obligations                                                                               2,721                   2,746
                                                                                                                                  -----                   -----

    Total current liabilities                                                                                                   877,629                 807,373
                                                                                                                                -------                 -------

    Non- current liabilities

    Long-term bank loans                                                                                                         61,768                  32,804

    Other long term debts                                                                                                       540,662                 536,943

    Deferred tax liabilities                                                                                                      9,385                   9,385

    Unrecognized tax benefits                                                                                                    16,167                  16,314

    Capital lease obligations, net of current  maturities                                                                        25,742                  26,646
                                                                                                                                 ------                  ------

    TOTAL LIABILITIES                                                                                                         1,531,353               1,429,465
                                                                                                                              ---------               ---------

    Shareholders' equity

    Common shares                                                                                                                    16                      16

    Treasury shares                                                                                                             (10,696)                 (3,085)

    Additional paid-in capital                                                                                                  535,169                 534,937

    Statutory reserves                                                                                                           68,547                  68,547

    Retained earnings                                                                                                           250,447                 244,310

    Accumulated other comprehensive income                                                                                       97,799                 107,911
                                                                                                                                 ------                 -------

    TOTAL EQUITY                                                                                                                941,282                 952,636
                                                                                                                                -------                 -------

    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                2,472,635               2,382,101
                                                                                                                              =========               =========

SOURCE Xinyuan Real Estate Co., Ltd.


Source: PR Newswire



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