| | | | | | 1. | What does Xinyuan do? | | | Xinyuan Real Estate Co., Ltd. is a fast-growing, experienced developer of modern, large scale,
quality residential projects focused on strategically selected Tier II cities in China. Our
developments aim to provide China’s middle-income consumers with comfortable and convenient
community lives.
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| 2. | When was Xinyuan founded? | | | Xinyuan was founded in Zhengzhou City, Henan province, China in 1997 by Mr. Yong Zhang, our chairman and chief executive officer. Mr. Zhang has more than 20 years of experience in China's real estate industry and in 2004 he was elected as one of the “Top 10 Rising Entrepreneurs in China's Real Estate Industry” by the China International Real Estate & Architecture Fair. Mr. Zhang is also vice chairman of the Henan Real Estate Association, a member of the China Democratic National Construction Association, deputy to the 12th People's Congress of Zhengzhou City and deputy to the 11th People’s Congress of Henan Province. |
| 3. | What is Xinyuan’s goal? | | | Xinyuan’s goal is to become the leading residential property developer focused on Tier II cities in China. We will continue to work toward this goal by utilizing our standardized and scalable business model which emphasizes rapid asset turnover, efficient capital management and strict cost control as we strive to meet the needs of China’s growing middle class. |
| 4. | What is Xinyuan’s business model? | | | Our business model focuses on a standardized property development process designed for rapid asset turnover. We believe that this model differentiates us from our peers in three ways: first - efficient land acquisition. We acquire land from public auction and obtain unencumbered land use rights so that we can commence development immediately. Second - high asset turnover. We don’t sit on idle land; we bid to build and strictly adhere to the timeline that we planned for. It usually takes us approximately three months to facilitate planning and design and an average of 15 months for construction, amounting to approximately 20 months from land acquisition to delivery. Third - efficient cash management. In terms of funding, we typically allocate approximately 25% of equity to buy land and 15% to secure bank loans for construction. The remaining 60% comes from customer deposits on presales. Among our existing clients, 40% pay by cash and 60% use mortgages, while 80% of units are purchased by self-using, first-time home buyers and 20% of units are purchased for investment.
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| 5. | How does Xinyuan acquire land? | | | We constantly seek and assess land acquisition opportunities in selected Tier II cities through the governmental land auction system. We have established a centralized and efficient system to research land acquisition opportunities and we only bid on land which meets our pre-set requirements. We are currently actively monitoring the land market in Tier II cities. Given the uncertainty of the current market, we remain cautious and will make land purchase decisions when the appropriate opportunities arise. |
| 6. | Does Xinyuan have any international partners? | | | In 2006, Blue Ridge China and Equity International invested in our company. Blue Ridge China is a China-focused private equity fund and Equity International is a privately-held investment company specializing in real estate investments outside the United States, founded and led by Samuel Zell and Gary Garrabrant. Equity International’s portfolio companies include Homex in Mexico and Gafisa in Brazil, both of which are publicly traded in the United States. Each shareholder has appointed a director to our board of directors. Since 2006, they have been proactive in contributing their expertise in corporate governance best practices, financial management and accessing global capital. |
| 7. | What are Xinyuan’s strengths? | | | With over 10 years experience building large communities of modern, mid-sized residential properties, we have a profound understanding of the residential needs and preferences of a growing demographic of middle-income customers in Tier II cities. Our standardized and scalable business model has delivered attractive investment returns over the last few years, and a focus on rapid asset turnover is one of the key elements to our model. We have an experienced management team supported by a well-trained and highly motivated workforce. Mr. Yong Zhang, our founder and chairman, has more than 20 years experience in developing residential projects. Most of our senior managers have been working with Xinyuan for more than five years and have on average more than 10 years of experience in the Chinese real estate industry along with considerable strategic planning and business management expertise. We have a strong relationship with our two distinguished institutional shareholders; Blue Ridge China and Equity International (see earlier discussion on our international partners). Both shareholders are active in major board-level decisions and provide valuable guidance on our strategies and corporate governance practices. |
| 8. | When was Xinyuan’s initial public offering on the New York Stock Exchange? | | | Xinyuan began trading its American Depositary Shares (ADS) on the New York Stock Exchange on December 12, 2007 under the symbol XIN. |
| 9. | When does Xinyuan’s fiscal year end? | | | Xinyuan’s fiscal year ends on December 31st. |
| 10. | Where is Xinyuan headquartered? | | | Xinyuan’s corporate headquarters are in Beijing, China. The company’s address is:
Xinyuan (China) Real Estate, Ltd.
27/F, China Central Place,
Tower II, 79 Jianguo Road
Chaoyang District,
Beijing, P.R. China 100025 |
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