Thursday, March 8, 2012

January Zhengzhou Sales in Top50

In our previous post, we noted that SouFun reported on property sales in Zhengzhou in the month of February, and several Xinyuan projects were listed in the top 50.

We discovered that SouFun also had reported on project sales in Zhengzhou in January.

Here is a link to the SouFun article reporting January sales.   Using Google Translate, we think we have been able to ascertain the number of sales, area, turnover, and average sale price for three of XIN's projects in Zhengzhou in January. 

In 15th place was Zhengzhou Yipinxiangshan, with 35 sales covering an area of 3,212.1 square meters.  The turnover was RMB¥25,217,727.  In $USD this is $3,992,668.  Average sale price (per square meter) in this project was RMB¥7,851.16.  In February, this project was in 5th place with 120 sales, turnover of USD$13,576,942, and average sale price of RMB¥7,348.90.  So the ASP in this project declined slightly in February, but sales volume was up (which was also likely due to the fact that Chinese New Year celebrations ended).  By way of comparison, contract sales for Q4 2011 for this project were approximately USD$34.4m.

In 17th place was Zhengzhou Century East B with 30 sales covering an area of 2,065.19 square meters.  The turnover for this project was RMB¥17,794,281.  In $USD this is $2,817,335.  Average sale price (per square meter) in this project was RMB¥8,616.29.  In February, this project was in 28th place with 37 sales, turnover of USD$4,278,832, and average sale price of RMB¥7,784.59.  So ASP's actually ticked up in February for this project.  By way of comparison, contract sales for this project for Q4 2011 were approximately USD$17.5m. 

In 43rd place was Zhengzhou Modern City with 6 sales covering an area of 898.27 square meters.  The turnover for this project was RMB¥14,837,267.  In $USD this is $2,349,160.  Average sale price (per square meter) in this project was RMB¥16,517.6.  In February, this project was in 40th place with 24 sales, turnover of USD$9,116,367, and average sale price of RMB¥15,867.85.  So ASP's declined slightly in February for this project.  By way of comparison, contract sales for this project for Q4 2011 were approximately USD$33.6m

All in all, Xinyuan Real Estate appears to have sold approximately USD$50m in Zhengzhou in January and February 2012. The reported sales total $49.5m.  However, Zhengzhou Royal Palace did not make it into the TOP50 for January, and if it sold a few properties it likely brought in US$1-US$2m as well because ASP is higher for that project.

If sales in March are equal or better than February (longer month, less overhang from New Year celebrations), then XIN is looking to bring in at least  $90m in Zhengzhou in Q1 2012.   During the previous quarter, Q4 2011, 60.6% of XIN's income came from Zhengzhou, and applying the same percentage to Q1 2012 would suggest total sales of approximately $150m for Q1 2012. 

However, the percentage of sales coming from Zhengzhou as opposed to other cities has been trending up over the past few quarters; it was 38.5% in Q2 2011, 49.3% in Q3 2011, and 60.6% in Q4 2011.  If 70% of sales activity takes place in Zhengzhou in Q1, and Zhengzhou sees $90m in sales volume, the total Q1 2012 sales volume would be approximately US$129m. 

So a big question mark is how sales are performing outside of Zhengzhou.  On this question, it should be noted that approximately 38.7% of XIN's remaining project space to be sold is in Zhengzhou, so sales there have certainly outpaced the other areas, and it is this fast pace of sales in Zhengzhou that has accounted for much of XIN's earnings beats over the last few quarters it seems. 

Again, caution must be urged when relying on the SouFun data.  For one, we are relying on machine translations of the article.  It's possible that we are missing some crucial information, or that we don't fully understand what the numbers represent.  If anyone understands Chinese and can confirm these figures and the import of the article, that would be great.  Regardless, it is interesting to see sales figures reported in real time from Zhengzhou, which is where a substantial amount of XIN's projects are located.

Disclosure: Long $XIN

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