Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Chinese residential real estate developer Xinyuan Real Estate
With that in mind, let's take a closer look at Xinyuan's business and see what CAPS investors are saying about the stock right now.
|Headquarters (founded)||Beijing (1997)|
|Market Cap||$192.3 million|
|Industry||Real estate development|
|Trailing-12-Month Revenue||$519.24 million|
Founder/Chairman/CEO Yong Zhang
Co-Founder/COO Yuyan Yang
|Return on Equity (average, past 3 years)||4.2%|
|Cash/Debt||$333.9 million / $318 million|
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 97% of the 675 members who have rated Xinyuan believe the stock will outperform the S&P 500 going forward. These bulls include All-Star mrindependent, who is ranked in the top 15% of our community, and EinstiensBastard.
Earlier this summer, mrindependent tapped Xinyuan as just too cheap to pass up: "Although I am a little leery of chinese real estate, the 67% discount to book value is very attractive for this Chinese real estate company that possesses cash assets which are greater than its debt. No foreseeable liquidity issues."
In fact, as mrindependent points out, Xinyuan currently sports a particularly paltry price-to-book of 0.33. That represents a wide discount to U.S. counterparts such as D.R. Horton
CAPS member EinstiensBastard elaborates on the bargain opportunity:
Thus far at least, most of the problematic Chinese companies have been small reverse merger stocks which use less reputable investment bankers and corporate auditors. Xinyuan does not fall into this category. ...
The other concern weighing on XIN is the perception that Chinese real estate is in a bubble. One notable proponent of this is Jim Chanos, who expects the China bubble bursting to be 1,000 times the Dubai bubble. While we are concerned about possible fraud and excess leverage and debt, we have reached the conclusion that some fears are overblown. Specifically in regards to XIN, rental yields in tier II & III cities where XIN operates exceeds 5%, in addition high down payments and tight lending rules continue to keep a lid on the market.
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