China Housing & Land Development, Inc. (NASDAQ:CHLN)

my china pick

Just got beat up. Will recover 10% in a week.

a stock that will benefit from the real estate bubble in China.

The growing economy will give millions of people the $$$ to aford good housing.

China is working on new development. This comp would play a major role in the development progream.

Housing in China. Has to be a up. And not too high PE ratio with decent insider holdings.

China has been trying to push its population West for decades, but is finally putting real money behind it. China's five year plans inevitably succeed, and CHLN looks to be well positioned to ride the stimulus wave to greater profits.

China industrialization.

One of many reasons to love CHLN: they own a 487 acre development site (Baqiao) that is 6km from central Xi'an, China (home of the teracotta army) that is valued, very conservatively, at $1 mil per acre or over $14 per share (based on a recent sale of 25 acres). The Xi'an government approved a plan for the area in May 2008 that calls for expenditure of $7 billion in infrastructure development including a new subway line linking the site to downtown and the international airport. The Xi'an plan calls for acommodation of 900,000 new residents in middle- and upper-income housing in this area over the next few years. CHLN is the largest residential developer in Xi'an and has a 1 billion RMB line of credit from the China Construction Bank. More reasons: the company was listed on NASDAQ in July 2008 (the only Chinese real estate developer listed there), and has an excellent track record of profitable large-scale development. Finally, management must hit a make-good after-tax profit target in order to receive stock-based bonuses for 2008. If they hit the make-good target for 2008 it will be over $1 per share earnings, making the 2008 P/E about 3.5, with a full pipeline of lucrative development deals stretching to the horizon for the next several years as they build out the Baqiao site.

Nostalgia junkies beware, we are not talking about Billy the Kid, the Oregon Trail, or thousands of miles of white hot railroad, but China’s “Go West” initiative is, nonetheless, the real deal. And small-cap company China Housing & Land has adroitly positioned itself to reap maximum benefit. While our Olympic host country’s eastern cities (Beijing et al.) are experiencing a well-earned residential real estate correction, western cities such as CHLN-served Xi’an are chugging along nicely thanks to a growing middle class and government sponsored economic initiatives. Of course, there are downsides to this little stock. CHLN reports earnings as a percentage of projects completed, which makes for lumpy and downright ugly quarters, as well as offends the delicate, jittery sensibilities of many Western investors. In addition, there is the case of heavy borrowing by Chinese municipalities in order to fund expansion, which, if such a pattern were to suddenly alter course, would largely yank the concrete and reebar out from under CHLN’s operations. Risks acknowledged, we are living in a market that aims to eliminate all risk and/or excise the guilt of greed by applying equal measures of paranoia across the ticker, and such a situation has mired CHLN’s stock price in a drainage ditch. I’m the first to admit that I come up with nada when trying to identify a near-term catalyst for the stock, but I’m an optimistic guy, and sooner or later, John Wayne always rides into town.

China Housing and Land has good management, an important credit line and is in a rapidly expanding market. It also has a low P/E and other good financial numbers.

CHLN is a company in china that is in the business of developing and selling realestate. CHLN's largest amount of property is currently in Xian. They received the land from the government for a cheap price and now have to develop the land (install sewer systems, streets and sidewalks, electric, etc...) They are going to sell a portion in the beginning to build more capital. (it is much harder to borrow money in China) CHLN wil then develop the remaining land building its own buildings. CHLN has free reign to build any type of structure along with a few other companies in the area. The barriers to entry in the industry are large, there is a minimal five year process for a new company to legally develop all types of structures in the areas CHLN is working in. The population of XIan is supposed to increase by 8 million over the next decade and the govenment will help to fund the process. Although chinese stocks have been getting hit hard I like the niche CHLN is in. Good Long-Term investment.

This stock was picked by TMFMmbop for the 2008 Stockpicking Contest.

Tremendous growth, great financing package announced recently with redemptions at $5.80 (roughly), their region has not been affected by housing woes as some others.

Very streaky stock, build over time.

While Chinese real estate market booming, this one is set to fly north.

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OOH OOH another pinksheet to short! And this one even has "China" in the name!