Xinyuan Up 6% on Re-classification by Fitch Ratings

It was erroneously reported that the company had a $160.8 million shore bond redemption due in the first half of 2020.

Anthony Russo
    Feb 21, 2020 12:00 PM  PT
Xinyuan Up 6% on Re-classification by Fitch Ratings
author: Anthony Russo   

The stock in Xinyuan Real Estate Co. Ltd. (NYSE: XIN) got a 6% boost to $3.21 per American depositary share by midday Friday after the company announced that U.S. credit rating agency Fitch Ratings had re-classified it as a low refinancing risk.

The Beijing-based real estate developer said in a statement today that Fitch Ratings mistakenly reported on Feb. 17 that the company had a $160.8 million shore bond redemption due in the first half of 2020. It turns out that Fitch Ratings made an error; that bond was from 2019, not 2020. 

At the time, Xinyuan was considered a high risk refinancing company, joining six other small-to-medium real estate developers on Fitch Ratings' report. In a revised report on Feb. 19, Fitch Ratings changed Xinyuan from high to low risk after Xinyuan corrected Fitch Ratings on its mistake. 

While its stock wasn't impacted by the incorrect report earlier this week, shares of Xinyuan have fallen in the past year. In February 2019, the stock hit $5.06 per share. As of midday Friday, the stock was trading at $3.21 per share. 

Founded in 1997, Xinyuan has real estate projects in more than 10 cities in China, including Beijing and Shanghai. According to its statement, Xinyuan claims it was one of the first Chinese real estate developers to enter the U.S. market and has been active in New York City.

The company posted $1.6 billion in revenues for the nine months ended September 30, 2019, up from $1.1 billion in the same period of the prior year, an increase of 40%. Over the same period, net income was $43.5 million, up from $1.8 million.

Last month, Xinyuan approved a bond repurchase program of up to $50 million.

Looking ahead, Xinyuan said it has "high-quality projects" in the works and that the coronavirus has had a limited impact on the company.


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