Xinyuan Real Estate Co Ltd

Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
(Mark One)
☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Fiscal Year Ended December 31, 2024.
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
Commission file number: 001-33863
XINYUAN REAL ESTATE CO., LTD.
(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrant’s name into English)
Cayman Islands
(Jurisdiction of incorporation or organization)
27/F, China Central Place, Tower II
79 Jianguo Road, Chaoyang District
Beijing 100025
People’s Republic of China
(Address of principal executive offices)
Yong Zhang
Xinyuan Real Estate Co., Ltd.
27F, China Central Place, Tower II,
79 Jianguo Road, Chaoyang District
Beijing 100025
People’s Republic of China
Tel: (86-10) 8588-9255
Fax: (86-10) 8588-9300
Email: irteam@xyre.com
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of Each Class
    Trading Symbol(s)
    Name of Each Exchange on Which Registered
American Depositary Shares, each representing 20 common
shares, par value US$0.0001 per share
XIN
New York Stock Exchange
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
(Title of Class)
Indicate the number of outstanding shares of each of the Issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
112,812,481 common shares, par value US$0.0001 per share, as of December 31, 2024.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
☐ Yes ☒ No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
☐ Yes ☒ No

Table of Contents
Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from
their obligations under those Sections.
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days.
☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See
definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer ☒
Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to
use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards
Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any
of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP  ☒
International Financial Reporting Standards as issued by the International Accounting Standards Board  ☐
Other  ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐ Yes ☒ No
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
☐ Yes ☐ No

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i
TABLE OF CONTENTS
 
 
 
Page
INTRODUCTION
1
PART I
4
ITEM 1
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
4
ITEM 2
OFFER STATISTICS AND EXPECTED TIMETABLE
4
ITEM 3
KEY INFORMATION
4
 
A.
[Reserved]
9
 
B.
Capitalization and Indebtedness
9
 
C.
Reasons for the Offer and Use of Proceeds
9
 
D.
Risk Factors
10
ITEM 4
INFORMATION ON THE COMPANY
55
 
A.
History and Development of the Company
55
 
B.
Business Overview
55
 
C.
Organizational Structure
96
 
D.
Property, plant and equipment
96
ITEM 4A.
UNRESOLVED STAFF COMMENTS
97
ITEM 5
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
97
 
A.
Operating Results
97
 
B.
Liquidity and Capital Resources
121
 
C.
Research and Development, Patent and Licenses, etc.
132
 
D.
Trend Information
132
 
E.
Critical Accounting Estimates
132
ITEM 6
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
135
 
A.
Directors and Senior Management
135
 
B.
Compensation
137
 
C.
Board Practices
145
 
D.
Employees
147

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ii
 
E.
Share Ownership
148
ITEM 7
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
150
 
A.
Major Shareholders
150
 
B.
Related Party Transactions
150
 
C.
Interests of Experts and Counsel
150
ITEM 8
FINANCIAL INFORMATION
150
 
A.
Consolidated Statements and Other Financial Information
150
 
B.
Significant Changes
151
ITEM 9
THE OFFER AND LISTING
151
 
A.
Offer and Listing Details
151
 
B.
Plan of Distribution
151
 
C.
Markets
152
 
D.
Selling Shareholders
152
 
E.
Dilution
152
 
F.
Expenses of the Issue
152
ITEM 10
ADDITIONAL INFORMATION
152
 
A.
Share Capital
152
 
B.
Memorandum and Articles of Association
152
 
C.
Material Contracts
154
 
D.
Exchange Controls
155
 
E.
Taxation
155
 
F.
Dividends and Paying Agents
159
 
G.
Statement by Experts
159
 
H.
Documents on Display
159
 
I.
Subsidiary Information
159
ITEM 11
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
160
ITEM 12
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
162

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iii
 
 
 
PART II
164
 
 
 
ITEM 13
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
164
ITEM 14
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
164
ITEM 15
CONTROLS AND PROCEDURES
164
ITEM 16A.
AUDIT COMMITTEE FINANCIAL EXPERT
167
ITEM 16B.
CODE OF ETHICS
167
ITEM 16C.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
167
ITEM 16D.
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
167
ITEM 16E.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
167
ITEM 16F.
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
168
ITEM 16G. CORPORATE GOVERNANCE
168
ITEM 16H. MINE SAFETY
169
ITEM 16I.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
169
ITEM 16J.
INSIDER TRADING POLICIES
170
ITEM 16K. CYBERSECURITY
170
PART III
171
ITEM 17
FINANCIAL STATEMENTS
171
ITEM 18
FINANCIAL STATEMENTS
171
ITEM 19
EXHIBITS
171

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1
INTRODUCTION
Unless otherwise indicated and except where the context otherwise requires, references in this annual report on Form 20-F to:
●
“we,” “us,” “our company,” “the Company,” “our,” “the Group” or “Xinyuan” are to Xinyuan Real Estate Co., Ltd., its predecessor
entities and its subsidiaries;
●
“shares” or “common shares” are to our common shares, par value US$0.0001 per share;
●
“ADSs” are to our American depositary shares, each of which represents 20 common shares, and “ADRs” are to the American
depositary receipts that evidence our ADSs;
●
“China” or “PRC” are to the People’s Republic of China;
●
“U.K.” are to the United Kingdom of Great Britain and Northern Ireland;
●
“U.S.” or “United States” are to the United States of America;
●
“GFA” are to gross floor area. The amounts for “total GFA” in this annual report are the amounts of total saleable residential and
commercial GFA and are derived on the following basis:
●
for properties that are sold, the stated GFA is based on the sales contracts relating to such property; GFA may be adjusted
based on final examination upon delivery of the property;
●
for unsold properties that are completed or under construction, the stated GFA is calculated based on the detailed
construction blueprint and the calculation method approved by the PRC government for saleable GFA, after
necessary adjustments; and
●
for properties that are under planning, the stated GFA is based on the land grant contract and our internal
projection;
●
“RMB” or “Renminbi” are to the legal currency of China and “US$” or “U.S. dollars” refers to the legal currency of the United
States; and
●
“sq.m” are to square meters used as unit of area.
As of the date of this report, there is no uniform standard to categorize the different types and sizes of cities in China. In this annual report,
we refer to certain larger and more developed cities as tier I, tier II and tier III cities based on the categorization developed by China Business
Network Co., Ltd., a financial media group. Their ranking system relies on commercial data from over 170 brands, customer behavior data from 19
internet companies, as well as data from relevant statistics institutions.
Facts and statistics in this annual report relating to China, the Chinese economy and the China property development industry are sourced
from various publicly available government and official sources, as indicated herein and may include projections based on a number of assumptions.
Although we believe that the sources of this information are appropriate sources for such information, we cannot independently verify such
information. Further, if one or more of the assumptions underlying the market data turn out to be incorrect, the actual results may differ from the
projections based on these assumptions. However, we acknowledge our responsibility for all disclosures in this annual report.

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2
This annual report includes our audited consolidated financial statements for the years ended December 31, 2022, 2023 and 2024. Our
financial statements and other financial data included in this annual report are presented in U.S. dollars. Our business and operations are primarily
conducted in China through our PRC subsidiaries. The functional currency of our PRC subsidiaries is RMB. The functional currency of our U.S.
subsidiaries is the U.S. dollar. The financial statements of our PRC subsidiaries are translated into U.S. dollars, using published exchange rates in
China, based on (i) year-end exchange rates for assets and liabilities and (ii) average yearly exchange rates for revenue and expenses. Capital accounts
are translated at historical exchange rates when the transactions occurred. The effects of foreign currency translation adjustments are included as a
component of accumulated other comprehensive income in our shareholders’ equity. We make no representation that any RMB or U.S. dollar amounts
could have been, or could be, converted into U.S. dollar or RMB, as the case may be, at any particular rate or at all.
The RMB is not freely convertible into foreign currency. The PRC government imposes control over its foreign currency reserves in part
through direct regulation of the conversion of the RMB into foreign exchange and through restrictions on foreign trade. Since 2005, the People’s Bank
of China, or the “PBOC,” has allowed the RMB to fluctuate within a narrow and managed band against a basket of foreign currencies, according to
market demand and supply conditions.
Our common shares are traded on the New York Stock Exchange, or the NYSE, in the form of ADSs under the symbol “XIN.” Each ADS
represents 20 common shares. The closing price of our ADSs on the NYSE as of April 25, 2025 was US$2.565 per ADS.
FORWARD-LOOKING STATEMENTS
This annual report contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical
facts are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual
results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.
Shareholders can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “is expected to,”
“anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions or negatives of such
expressions. These forward-looking statements include, among others, statements about:
●
our anticipated growth strategies;
●
our future business development, results of operations and financial condition;
●
our expectations with respect to our ability to acquire adequate suitable land use rights for future development; and
●
our belief with respect to market opportunities in, and growth prospects of, our target markets.
We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends
that we believe may affect our financial condition, results of operations, business strategy and financial needs. However, a number of known and
unknown risks, uncertainties and other factors could affect the accuracy of these statements. Among the important factors to consider in evaluating our
forward-looking statements are:
●
our ability to continue to implement our business model successfully;
●
our ability to secure adequate financing for our project developments;
●
our ability to successfully sell or complete our property projects under construction and planning;
●
our ability to enter into new geographic markets or new lines of business and expand our operations;
●
the marketing and sales ability of our third-party sales agents;

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3
●
the performance of our third-party contractors;
●
laws, regulations and policies relating to real estate developers and the real estate industry in the markets in which we operate;
●
our ability to obtain permits and licenses to carry on our business in compliance with applicable laws and regulations;
●
our ability to satisfy our obligations under our debt securities and other indebtedness;
●
competition from other real estate developers;
●
the growth of the real estate industry in the markets in which we operate;
●
fluctuations in general economic and business conditions in the markets in which we operate; and
●
volatility of the trading price of our ADSs and risks associated with our ADSs if the trading price remains below US$1.00 or if the
average global market capitalization is less than $15,000,000 for 30 consecutive trading days or more.
Shareholders should read thoroughly this annual report and the documents that we refer to herein with the understanding that our actual
future results may be materially different from and/or worse than what we expect. We qualify all of our forward-looking statements by these
cautionary statements. Other sections of this annual report include additional factors which could adversely impact our business and financial
performance, including the risks outlined under “Item 3. Key Information — D. Risk Factors.” Moreover, we operate in an evolving environment.
New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all
factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained
in any forward-looking statement.
Shareholders should not rely upon forward-looking statements as predictions of future events. The forward-looking statements made in this
annual report relate only to events or information as of the date on which the statements are made in this annual report. We undertake no obligation to
update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by
applicable securities laws.

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4
PART I
ITEM 1 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not Applicable.
ITEM 2 OFFER STATISTICS AND EXPECTED TIMETABLE
Not Applicable.
ITEM 3 KEY INFORMATION
Our Holding Company Structure
Xinyuan Real Estate Co., Ltd.  is not a Chinese operating company but a Cayman Islands holding company with operations primarily
conducted through our PRC subsidiaries. Under this holding company structure, holders of our ADSs hold equity interests in the Cayman Islands
holding company and obtaining indirect ownership interests in the Chinese operating companies.
Risks Associated with Being Based in and Having the Majority of Our Operations in China
We face various legal and operational risks and uncertainties relating to doing business in China. Our business operations are primarily
conducted in China, and we are subject to complex and evolving PRC laws and regulations. For example, the PRC government has issued statements
and regulatory actions relating to areas such as regulatory approvals on overseas offerings and listings conducted by, and foreign investment in, China-
based issuers, anti-monopoly regulatory actions, and oversight on cybersecurity and data privacy, which may impact our ability to conduct certain
businesses, accept foreign investments, or list on a United States stock exchange. These legal and operational risks and uncertainties relating to doing
business in China may impact our ability to conduct certain businesses, accept foreign investments, or list and conduct offerings on a United States or
other foreign exchange. These risks could result in a material adverse change in our operations and the value of our ADSs, significantly limit or
completely hinder our ability to continue to offer securities to investors or cause the value of such securities to significantly decline or become
worthless. For a detailed description of risks relating to doing business in China, see “Item 3. Key Information — D. Risk Factors — Risks Related to
Doing Business in China.”
Risks and uncertainties regarding the enforcement of laws and quickly evolving rules and regulations in China could result in a material
adverse change in our operations and the value of our ADSs. The PRC legal system is a civil law system based on written statutes, and decided legal
cases may be cited for reference but have less precedential value. The legal system in China evolves rapidly, and the interpretations of many laws,
regulations and rules may change from time to time. Certain PRC laws, regulations, and legal requirements are constantly changing and may change
with little advance notice. In addition, their interpretation and enforcement involve uncertainties. See “Item 3. Key Information — D. Risk Factors —
Risks Related to Doing Business in China — Uncertainties with respect to the PRC legal system, including uncertainties with respect to the
interpretation, application, and enforcement of PRC laws and regulations, and sudden or unexpected changes of PRC laws and regulations with little
advance notice, could have a material adverse effect on our business, results of operations, financial condition and the value of our ADSs.”
The PRC government has significant authority in regulating our business and may intervene or influence our operations at any time. It may
exert control over our business, which could result in a material change in our operations and/or the value of our ADSs. It may also exert more
oversight and control over offerings conducted overseas by, and/or foreign investment in, China-based issuers, which could significantly limit or
completely hinder our ability to offer or continue to offer securities to investors and cause the value of our ADSs to significantly decline or be
worthless. The PRC government has recently indicated an intent to exert more oversight and control over offerings that are conducted overseas and
foreign investment in China-based issuers. Any such action could significantly limit or completely hinder our ability to offer or continue to offer
securities to investors. In addition, implementation of industry-wide regulations directly targeting our operations could cause the value of our
securities to significantly decline. Therefore, our company and our business face potential uncertainty from actions taken by the PRC government
affecting our business. See “Item 3. Key Information — D. Risk Factors — Risks Related to Doing Business in China — Significant oversight and
discretion by the PRC government over our business operations could result in a material change in our operations and the value of our ADSs.”

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5
The Holding Foreign Companies Accountable Act
Pursuant to the Holding Foreign Companies Accountable Act, as amended by Consolidated Appropriations Act of 2023, or the HFCA Act, if
the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspections by the Public
Company Accounting Oversight Board, or the PCAOB, for two consecutive years, the SEC will prohibit our ADSs from being traded on a national
securities exchange or in the over-the-counter trading market in the United States.
Our current auditor, Assentsure PAC (“Assentsure”), the independent registered public accounting firm that issues the financial reports
included elsewhere in this annual report on Form 20-F, is currently registered with the PCAOB. The PCAOB conducts regular inspections to assess its
compliance with the applicable professional standards. Assentsure is headquartered in Singapore. Our current auditor, Assentsure PAC is not subject to
the determinations announced by the PCAOB on December 16, 2021. On August 26, 2022, the PCAOB signed a Statement of Protocol Agreement
(the “SOP”) with the China Securities Regulatory Commission (the “CSRC”) and China’s Ministry of Finance. The SOP, together with two protocol
agreements governing inspections and investigations (together, the “SOP Agreements”), establish a specific, accountable framework to make possible
complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong Kong, as required under U.S. law. On
December 15, 2022, the PCAOB determined that the PCAOB was able to secure complete access to inspect and investigate registered public
accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should
PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB will consider the need to issue a new
determination. On June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, and on December 29, 2022,
legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”) was signed into law by President Biden, which
contained, among other things, an identical provision to the Accelerating Holding Foreign Companies Accountable Act and amended the HFCA Act
by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for
two consecutive years instead of three, thus reducing the time period for triggering the delisting of our Company and the prohibition of trading in our
securities if the PCAOB is unable to inspect our accounting firm at such future time. If trading in our ADSs is prohibited under the HFCA Act in the
future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, NYSE may determine to delist our
ADSs and trading in our ADSs could be prohibited. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China— The
enactment of the Holding Foreign Companies Accountable Act and the adoption of any rules, legislations or other efforts to increase U.S. regulatory
access to audit information could cause uncertainty and our securities listed on the NYSE could be delisted or prohibited from being traded “over-the-
counter” if we are unable to meet the PCAOB requirement in time.”
Cash and Asset Flows through Our Organization
Xinyuan Real Estate Co., Ltd. is a Cayman Islands holding company with no material operations of its own. We conduct our operations
primarily through our subsidiaries in China. As a result, the Company’s ability to pay dividends to our shareholders and to service our indebtedness
outside of China depends significantly upon dividends that we receive from our subsidiaries in China. To the extent our existing subsidiaries or any
newly formed ones incur indebtedness or losses on their own behalf in the future, such indebtedness or losses may impair their ability to pay dividends
or other distributions to us.
During the two fiscal years ended December 31, 2022 and 2023, subsidiaries of the Company transferred cash in a total amount of US$6.3
million and US$5.0 million, respectively, to the Company for working capital purposes.
During the fiscal year ended December 31, 2024, subsidiaries of the Company transferred cash out a total amount of US$4.1 million to the
Company for working capital purposes.
During the past three fiscal years, other than the cash transfers described hereto, there have been no other transfers of assets or cash dividends
among the Company and its subsidiaries, and the Company has not made any dividend payments or distributions to investors (including U.S.
investors).
For further discussion, see “Item 3. Key Information—D. Risk Factors— Risks Related to Our Business — We are a holding company that
depends on dividend payments from our subsidiaries for funding”, and “Item 10. Additional Information—E. Taxation.”

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6
Restrictions and Limitations on Transfer of Cash and Cash Dividend Distribution
Subject to certain contractual, legal and regulatory restrictions, cash and capital contributions may be transferred among our Cayman Islands
holding company and the Chinese operating entities. If needed, our Cayman Islands holding company can transfer cash to the Chinese operating
entities through loans and/or capital contributions, and the Chinese operating entities can transfer cash to our Cayman  Islands holding company
through loans and/or issuing dividends or other distributions. There are limitations on the ability to transfer cash between the Cayman Islands holding
company, the Chinese operating entities or investors. Cash transfers from the Cayman Islands holding company to the Chinese operating entities are
subject to the applicable PRC laws and regulations on loans and direct investment. See “Item 3. Key Information—D. Risk Factors—Risks Related to
Doing Business in the PRC—PRC regulations of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us
from using the proceeds of our offshore financing to make loans or additional capital contributions to the operating entities, which could materially
and adversely affect our liquidity and business.”
Cash transfers from the Chinese operating entities to the Cayman Islands holding company are also subject to the current PRC regulations,
which permit the Chinese operating entities to pay dividends to their shareholders only out of their accumulated profits, if any, determined in
accordance with PRC accounting standards and regulations. To the extent cash or assets in the business is in China or a Chinese operating entity, the
funds or assets may not be available to fund operations or for other use outside of China due to interventions in or the imposition of restrictions and
limitations on the ability of our Company or the operating entities by the PRC government to transfer cash or assets. If we are considered a PRC tax
resident enterprise for tax purposes, any dividends we pay to our overseas shareholders may be regarded as China-sourced income and as a result may
be subject to PRC withholding tax. Relevant PRC laws and regulations permit the PRC companies to pay dividends only out of their retained earnings,
if any, as determined in accordance with PRC accounting standards and regulations. Additionally, the Company’s PRC subsidiaries can only distribute
dividends upon approval of the shareholders after they have met the PRC requirements for appropriation to the statutory reserves. Under PRC laws,
rules and regulations, each of our subsidiaries incorporated in mainland China is required to set aside at least 10% of its after-tax profits each year,
after making up for previous years’ accumulated losses, if any, to fund certain statutory reserves, until the aggregate amount of such fund reaches 50%
of its registered capital. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—We are a holding company that depends on
dividend payments from our subsidiaries for funding. To the extent funds or assets in the business are in the PRC or a PRC entity, the funds or assets
may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on
the ability of our company or the operating entities by the PRC government to transfer cash or assets” and “—Risks Related to Our Business—We
face risks related to our back-to-back loans.”
Cash transfers from the Cayman Islands holding company to the investors are subject to the restrictions on the remittance of Renminbi into
and out of China and governmental control of currency conversion. Our cash dividends, if any, will be paid in U.S. dollars. The PRC government
imposes controls on the convertibility of Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. The majority
of our income is received in Renminbi and shortages in foreign currencies may restrict our ability to pay dividends or other payments, or otherwise
satisfy our foreign currency denominated obligations, if any. Under existing PRC foreign exchange regulations, payments of current account items,
including profit distributions, interest payments and expenditures from trade-related transactions, can be made in foreign currencies without prior
approval from the State Administration of Foreign Exchange of China, or SAFE, as long as certain procedural requirements are met. Approval from
appropriate government authorities is required if Renminbi is converted into foreign currency and remitted out of China to pay capital expenses such
as the repayment of loans denominated in foreign currencies. The PRC government may, at its discretion, impose restrictions on access to foreign
currencies for current account transactions in the future, and in such event, we may not be able to pay dividends in foreign currencies to our
shareholders. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in the PRC—We are subject to PRC restrictions on
currency exchange.”
As a result of these and other restrictions under the PRC laws and regulations, our PRC subsidiaries are restricted to transfer a portion of their
cash or assets to the Company. Even though the Company currently does not require any such dividends, loans or advances from the PRC subsidiaries
for working capital and other funding purposes, the Company may in the future require additional cash resources from its PRC subsidiaries due to
changes in business conditions, to fund future acquisitions and developments, or merely declare and pay dividends to or distributions to the
Company’s shareholders.

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7
Permissions Required from the PRC Authorities for Our Operations and Overseas Securities Offering
We conduct our business primarily through our PRC subsidiaries. Our operations in China are governed by PRC laws and regulations. As of
the date hereof, each of our PRC subsidiaries is required to have, and does have, a business license issued by the PRC State Administration for Market
Regulation or its local counterparts. Our business model involves certain subsidiaries managing separate real estate projects in different regions. Under
the PRC laws and regulations, there are governmental licenses and permits that need to be obtained for each real estate project from local authorities.
As of the date hereof, except for the specific projects discussed below, all of our PRC subsidiaries have obtained, and have not been denied, all
requisite licenses and permits from the PRC government authorities that are required for their primary business operations in China. These include,
among others, real estate property registration certificates, land use rights certificates, construction site planning permits, construction work planning
permits, construction permits, pre-sale permits and completion acceptance certificates. However, given the uncertainties of interpretation and
implementation of relevant laws and regulations and the enforcement practice by relevant government authorities, we may be required to obtain
additional licenses, permits, filings or approvals for the functions and services in the future.
There are a few projects where certain subsidiaries have not yet obtained specific governmental permits and/or certificates, as detailed below.
These subsidiaries are actively in the process of applying for these permits and/or certificates or taking other remedial measures. The absence of these
permits or certificates does not have a material adverse impact on our business operations and financial results.
Project Name
Unobtained Licenses and Permits
Xinyun City Court No. 5
The construction planning verification letter
Shilipu New Village Court No. 6
The construction work permit
Shilipu New Village Court No. 7
The construction project completion and acceptance filing in relation to one building
Xinyuan City Court No. 7
The construction project completion and acceptance filing in relation to one building
Xinyuan City Court No. 9
The construction project completion and acceptance filing in relation to one building
Xingyang Xinyuanmingjia Sales Center
The construction project completion and acceptance filing
Xingyang Xinyuanmingjia Phase 5
Project
The construction project completion and acceptance filing
Xinyuanyuefu Project, Building No. 3
The pre-sale permit
Xinyuanyuefu Project, Building No. 7
The pre-sale permit
Xinyuanyuefu Project, Building No. 18
The pre-sale permit
Chengdu Xinyuan City No. 5
The construction project completion and acceptance filing

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8
As of the date hereof, we have not received any notice of warning or been subject to penalties or other disciplinary action from any PRC
authorities regarding conducting our business without requisite approvals or permits, except for the following instances where (i) a subsidiary was
fined a total of RMB80,000 in January 2025 for the failure to allocate migrant worker costs into the migrant workers special account, (ii) a subsidiary
was fined a total of RMB200,000 during the year of 2024 for the failure to fulfill the warranty obligation within the warranty scope and period for
construction work, (iii) a subsidiary was fined a total of RMB10,000 during the year of 2024 for the failure to cover construction waste with dust-
proof net materials, (iv) a subsidiary was fined a total of RMB10,000 during the year of 2024 for the failure to take effective dust and air pollution
prevention measures, (v) a subsidiary was fined a total of RMB652,683.61 during the year of 2024 for carrying out construction work without a
construction permit, (vi) a subsidiary was fined a total of RMB5,000 in January 2025 for carrying out real estate pre-sale and sale advertisements
without displaying the pre-sale or sale license number, and (vii) a subsidiary was fined a total of RMB3,350 in January 2025 for the failure to
implement government-guided prices or government-designated prices. However, we cannot assure shareholders that we will not be subject to any
penalty in the future due to a lack of such approvals or permits. If (i) we or our subsidiaries, do not receive or maintain any permission or approval
required of us or our subsidiaries, (ii) we or our subsidiaries inadvertently concluded that certain permissions or approvals have been acquired or are
not required, or (iii) applicable laws, regulations, or interpretations thereof change, and we or our subsidiaries become subject to the requirement of
additional permissions or approvals in the future, we may have to expend significant time and costs to procure them. If we are unable to do so, in a
timely manner or otherwise, we may become subject to sanctions imposed by the PRC regulatory authorities, which could include fines, penalties, and
proceedings against us, and other forms of sanctions, and our ability to conduct our business, invest in mainland China as foreign investments or
accept foreign investments, or list on a U.S. or other overseas exchange may be restricted, our business, reputation, financial condition, and results of
operations may be materially and adversely affected, and the value of our ADSs could significantly decline or become worthless. For more detailed
information, see “Item 3. Key Information — D. Risk Factors — Risks Relating to Our Business —We may fail to obtain or maintain, or may
experience material delays in obtaining, necessary government approvals for any major property development, which will adversely affect our
business.”
On December 28, 2021, the Cyberspace Administration of China, or the CAC, and certain other PRC governmental authorities jointly
released the Revised Cybersecurity Review Measures, which became effective on February 15, 2022. Pursuant to these measures, (i) operators of
critical information infrastructure that intend to purchase network products and services and online platform operators that conduct data processing
activities, in each case that affect or may affect national security, and (ii) operators of network platforms seeking listing abroad that are in possession
of more than one million users’ personal information must apply for a cybersecurity review. These measures set out certain general factors which
would be the focus in assessing the national security risk during a cybersecurity review, including, without limitation, risks of influence, control or
malicious use of critical information infrastructure, core data, important data or large amounts of personal information by foreign governments in
relation to listing abroad.
As of December 31, 2024, we had not received any notice that we are a critical information infrastructure operator from any government
authority, nor had we received any request from the CAC to undergo a cybersecurity review. As advised by our PRC counsel, ChangAn Law Offices,
as of the date of this annual report, neither the Company nor any of its subsidiaries currently are subject to the cybersecurity review process with
respect to the offering of our securities or the business operations of our PRC subsidiaries, as neither we nor any of our PRC subsidiaries qualifies as a
critical information infrastructure operator or has conducted any data processing activities that affect or may affect national security or holds personal
information of more than one million users. There remains uncertainty, however, as to how the Cybersecurity Review Measures will be interpreted or
implemented and whether the PRC regulatory agencies, including the CAC, may adopt new laws, regulations, rules, or detailed implementation and
interpretation related to the Cybersecurity Review Measures.
On February 17, 2023, the China Securities Regulatory Commission, or the CSRC, issued the Trial Administrative Measures of Overseas
Securities Offering and Listing by Domestic Enterprises, or the Overseas Offering and Listing Measures, which became effective on March 31, 2023,
and five supporting guidelines on CSRC’s official website. Pursuant to these measures, PRC domestic enterprises conducting overseas securities
offering and listing, either directly or indirectly, shall complete filings with the CSRC within three working days following the submission of
application for an initial public offering or listing. These filings shall include, among other documents, (i) a filing report, (ii) regulatory opinions,
filing or approval documents issued by the competent authorities of the industry concerned (if applicable), (iii) opinions on the security assessment
and review issued by the competent department of the State Council (if applicable), (iv) legal opinions and undertakings issued by PRC counsel, and
(v) the listing documents.

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9
Our PRC counsel, ChangAn Law Offices, has advised us that, based on their understanding of the currently effective PRC laws and
regulations, including the Overseas Offering and Listing Measures, as of the date of this annual report, we are not required to obtain any prior
approval or permission from or complete filing procedures with the CSRC or CAC for our historical offshore offerings to foreign investors which
have been completed, except for a private placement sale of the Company’s common shares to Central Plains Ltd. on December 27, 2023, for which,
under a conservative interpretation of the applicable PRC laws and regulations, we were required to make a filing with the CSRC but we have not
completed it. The PRC counsel has further advised us that the untimely filing may result in a correction order, an admonition, and a fine in the amount
of RMB1,000,000 to RMB10,000,000. Based on the foregoing, we do not expect that the uncompleted filing with the CSRC with respect to the
private placement transaction would per se have a material adverse impact on our business. The Company is actively consulting with its PRC counsel
with respect to potential remedial measures.
However, we are required to go through filing procedures with CSRC for our future issuance or offering of securities (including shares,
depository receipts, corporate bonds convertible into shares and other securities in nature of equity) to foreign investors if certain condition conditions
set forth in the Overseas Offering and Listing Measures are met so that they are considered “indirect overseas offerings and listings by a PRC
domestic company”. However, our PRC legal counsel has further advised us that there remains some uncertainty as to how relevant rules published by
the CSRC and the CAC will be interpreted or implemented, and its opinions summarized above are subject to any new laws, rules and regulations or
detailed implementations and interpretations in any form. We cannot assure shareholders that relevant PRC governmental authorities, including the
CSRC and the CAC, would reach the same conclusion as our PRC legal counsel, and hence, we may face regulatory actions or other sanctions from
them.
However, any future securities offerings and listings outside of mainland China by our company, including, but not limited to, follow on
offerings, secondary listings and going-private transactions, will be subject to the filing requirements with the CSRC under the Trial Administrative
Measures of Overseas Securities Offering and Listing by Domestic Enterprises and the supporting guidelines, and we cannot assure shareholders that
we will be able to comply with such filing requirements in a timely manner, or at all. If we fail to obtain the necessary approval or complete the filings
and other regulatory procedures in a timely manner, we may face sanctions by the CSRC or other PRC regulatory agencies, which may include fines
and penalties on our operations in mainland China, limitations on our operating privileges in China, restrictions on or prohibition of the payments or
remittance of dividends by our mainland China subsidiaries, delay of or restriction on the repatriation of the proceeds from our initial public offering
into mainland China, or other actions that could have a material and adverse effect on our business, financial condition, results of operations,
reputation and prospects, as well as the trading price of our ADSs. The CSRC or other PRC regulatory authorities also may take actions requiring us,
or making it advisable for us, to halt our offerings before settlement and delivery of the shares offered. Consequently, if investors engage in market
trading or other activities in anticipation of and prior to settlement and delivery, they do so at the risk that settlement and delivery may not occur. In
addition, if the CSRC or other regulatory authorities later promulgate new rules or explanations requiring that we obtain their approvals or accomplish
the required filing or other regulatory procedures for our initial public offering, we may be unable to obtain a waiver of such approval requirements, if
and when procedures are established to obtain such a waiver. Any uncertainties or negative publicity regarding such approval requirement could
materially and adversely affect our business, prospects, financial condition, reputation, and the trading price of our ADSs.
For detailed information, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—Failure to maintain the security of
our information and technology networks, including personally identifiable and customer information, as well as uncertainties with respect to the
interpretation and implementation of cybersecurity review procedures and proprietary business information, could significantly adversely affect us”,
“Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—The approval of the CSRC, may be required if we intend to do a follow-
on equity offering in the future, and, if required, we cannot predict whether we will be able to obtain such approval”, “Item 4. Information on the
Company — B. Business Overview — Regulation — China — Regulatory Developments On Data Privacy.”
A.
[Reserved]
B.
Capitalization and Indebtedness
Not Applicable.
C.
Reasons for the Offer and Use of Proceeds
Not Applicable.

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10
D.
Risk Factors
Risks Related to Our Business
We are a holding company that depends on dividend payments from our subsidiaries for funding. To the extent funds or assets in the business are in
the PRC or a PRC entity, the funds or assets may not be available to fund operations or for other use outside of the PRC due to interventions in or the
imposition of restrictions and limitations on the ability of our company or the operating entities by the PRC government to transfer cash or assets.
We are a holding company established in the Cayman Islands; we operate most of our business and operations through our subsidiaries in
China. Our ability to pay dividends to our shareholders and to service our indebtedness outside of China depends significantly upon dividends that we
receive from our subsidiaries in China. To the extent our U.S., Malaysia and U.K. operations continue to grow, we may in the future also depend on
dividends from our U.S., Malaysia, or U.K. subsidiaries. If our subsidiaries incur indebtedness or losses, such indebtedness or losses may impair their
ability to pay dividends or other distributions to us. As a result, our ability to pay dividends and to service our indebtedness will be restricted.
Regulations in China currently permit payment of dividends only out of accumulated after-tax profits upon satisfaction of relevant statutory conditions
and procedures, if any, determined in accordance with Chinese accounting standards and regulations. Each of our PRC subsidiaries, including wholly
foreign-owned enterprises and domestic companies, is required to set aside at least 10.0% of its after-tax profits each year, if any, to fund certain
reserve funds until the cumulative amount of such reserves reaches 50.0% of its respective registered capital and, with the approval of a shareholder
meeting or general shareholder meeting, a PRC subsidiary may set aside a certain amount of after-tax profits to its discretionary general reserves. As
of December 31, 2024, our statutory reserves amounted to US$180.2 million. Our statutory reserves are not distributable as cash dividends. Dividends
paid by the PRC subsidiaries may also be subject to PRC withholding tax. In addition, restrictive covenants in bank credit facilities, bonds, other long-
term debt agreements, joint venture agreements or other agreements that we or our subsidiaries currently have or may enter into in the future may also
restrict the ability of our subsidiaries to pay dividends or make other distributions to us and our ability to receive distributions. Therefore, these
restrictions on the availability and usage of our major source of funding may impact our ability to pay dividends to our shareholders and to service our
indebtedness.
Our business and prospects are heavily dependent on and may be adversely affected by the performance of the PRC property markets, particularly in
Zhengzhou.
Our business and prospects depend on the performance of the PRC property market. As of December 31, 2024, we had a total of 104
property projects covering 20 cities in China at various stages of development. We intend to continue to enhance our presence in targeted high-growth
cities in China. These property markets may be affected by local, regional, national and global factors, including economic and financial conditions,
speculative activities in local markets, demand for and supply of properties, investor confidence, availability of alternative investment choices for
property buyers, inflation, government policies, interest rates and availability of capital. Any market downturn in China generally or in cities in which
we have or expect to have operations may materially and adversely affect our business, financial condition, and results of operations. Moreover, any
oversupply of properties or potential decline in demand for or prices of properties in these cities could also have a material adverse impact on us. In
particular, the PRC property market is affected by the recent slowdown of China’s economic growth. There have been increasing concerns over the
sustainability of the real estate market growth in China. Any slowdown in the PRC’s economic development could lead to tighter credit markets,
increased market volatility, sudden drops in business and consumer confidence and dramatic changes in business and consumer behaviors. In response
to their perceived uncertainty in economic conditions, consumers might delay, reduce or cancel purchases of homes, and our homebuyers may also
defer, reduce or cancel purchases of our units. We have experienced volatilities in demand from time to time in the recent years due to the strict
mortgage policy and other measures taken by the PRC government to slow down the rapid increase in housing prices. To the extent any fluctuations in
the Chinese economy significantly affect homebuyers’ demand for our units or change their spending habits, our results of operations may be
materially and adversely affected. The PRC’s economy also faces challenges in the short to medium term. Continued turbulence in the international
markets and prolonged declines in consumer spending, including home purchases, as well as any slowdown of economic growth in China, may
adversely affect our liquidity and financial condition.

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11
Our business requires access to substantial financing. Our failure to obtain adequate financing in a timely manner could severely adversely restrict
our ability to complete existing projects, expand our business, or repay our obligations and affect our financial performance and condition.
Our property development business is capital intensive. To date, we have funded our operations primarily through bank borrowings, proceeds
from sales and pre-sale of our properties and proceeds from issuance of equity and debt securities. We obtain commercial bank financing for our
projects through credit lines extended on a case-by-case basis. Our ability to secure sufficient financing for land use rights acquisition and property
development and repayment of our existing onshore and offshore debt obligations depends on a number of factors that are beyond our control,
including lenders’ perceptions of our creditworthiness, sufficiency of collateral, if any, market conditions in the capital markets, investors’ perception
of our securities, the PRC economy and PRC government regulations that affect the availability and cost of financing for real estate companies or
property purchasers.
Since 2003, PRC commercial banks have been prohibited, under the guidelines of the PBOC, from advancing loans to fund the payment of
land use rights. We generate significant cash flow through pre-sale, which are subject to government restrictions. In particular, PRC regulations on the
pre-sale of properties generally provide that the proceeds from the pre-sale of a real estate project may only be used for the construction of such
project. Any additional potential government restrictions on pre-sale could significantly increase our financing needs. Moreover, our ability to move
cash through inter-company transfers or transfer funds from onshore subsidiaries to our offshore parent company is limited by PRC government
regulations, which limits our ability to use excess cash resources in one subsidiary to fund the obligations of another subsidiary or our offshore parent
company. In addition, reserve requirement applicable to PRC commercial banks generally limits, and any increases in such reserve requirements could
further limit, the amount of commercial bank credit available to businesses in China, including us.
Furthermore, various other PRC regulations restrict our ability to raise capital through external financing and other methods, including,
without limitation, the following:
●
we cannot borrow from a PRC bank for a particular project if we do not have the land use rights certificate for that project;
●
we cannot pre-sell uncompleted residential units in a project prior to achieving certain development milestones specified in related
regulations;
●
we cannot borrow from a PRC bank for a particular project unless we fund at least 35% of the total investment amount of that
project from our own capital;
●
property developers are strictly restricted from using the proceeds from a loan obtained from a local bank to fund property
developments outside the region where that bank is located; and
●
PRC banks are prohibited from accepting properties that have been vacant for more than three years as collateral for loans.
On February 13, 2017, the Asset Management Association of China issued the Administrative Rules for the Filing of Private Equity and
Asset Management Plans by Securities and Futures Institutions No. 4—Investment in Real Estate Developers and Projects by Private Equity and Asset
Management Plans, or “Rule 4.” Rule 4 provides that the Asset Management Association of China will temporarily suspend accepting any private
equity and asset management plan which makes a direct or indirect investment in any ordinary residential property project located in specified cities
where the property prices are considered to have risen too fast, including Beijing, Shanghai, Guangzhou, Suzhou, Tianjin, Wuhan, Zhengzhou, Jinan
and Chengdu, where the Company operates. In addition, a private equity and asset management plan may not be used to finance any real estate
developer, whether in the form of bank entrusted loans, trust plans or transfers of beneficial interests in assets, for the purpose of acquiring land use
rights or supplementing working capital.
On August 20, 2020, PBOC and Ministry of Housing and Urban-Rural Development, or the “MOHURD,” jointly held a conference with 12
major real estate development companies in China. At the conference, PBOC and MOHURD proposed a pilot plan to regulate the financing activity of
real estate development companies. The pilot plan sets three goals for real estate development companies: the debt asset ratio will not exceed 70%
after deducting advance proceeds from projects sold; net debt to equity ratio will not exceed 100%; and the ratio of balance of cash and cash
equivalent to short-term borrowings will be at least 1. Based on the number of goals completed, the upper limit of annual growth rate of interest-
bearing liabilities of a real estate development company varies from 5% to 15%. The pilot plan was supposed to become a formal policy in 2021;
nevertheless, the governmental authority has not issued any relevant regulations or policies.

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12
On December 31, 2020, PBOC and the China Banking and Insurance Regulatory Commission, or “CBIRC”, collectively issued the Notice on
the Establishment of a Concentration Administration System for Real Estate Loans from Banking Financial Institutions, or the “2021 Notice”, which
took effect on January 1, 2021. The 2021 Notice divides all Chinese-funded banks into five (5) levels and sets different limitation on banks in different
levels to provide real estate loans. For example, the amount of outstanding real estate loans of a bank in Level 1 must not account for more than 40%
of its total outstanding RMB loans, while the amount of outstanding real estate loans of a bank in Level 5 must not account for more than 12.5% of its
total outstanding loans denominated in RMB.
While the PRC government has adopted or adjusted the measures mentioned above and may adopt or adjust other measures in the future
seeking to support the healthy development of the residential real estate market in China, the government policies significantly impacted the
residential real estate market in the past few years. For example, a few real estate developers, such as China Evergrande Group, Kaisa Group Holdings
Ltd., Yango Group Co. and us, have experienced decreasing transaction volumes in the Chinese residential real estate market, closing of certain
financing opportunities and significant challenges and pressure on short-term liquidity in 2021. The crisis has also led to notable bankruptcies, with
China’s largest developer, Country Garden, causing investor concerns about potential loan defaults. China Evergrande filed for U.S. bankruptcy in
August 2023 while restructuring its debt, having defaulted on a massive US$300 billion debt in 2021; it was ordered to liquidate by Hong Kong High
Court in January 2024. In May 2024, Zhenro Properties Group failed to repay a US$200 million offshore bond, triggering cross−defaults on US$6.2
billion in debt. In August 2024, Sinic Holdings was liquidated by a Hong Kong court after failing to restructure US$2.3 billion in liabilities. In March
2025, Sunac China completed a debt-equity swap covering US$9 billion in obligations, diluting existing shareholders by 35%. CIFI Holdings
suspended trading in Hong Kong since January 2025 pending “material debt restructuring negotiations.” We cannot assure shareholders that the PRC
government will not adopt additional and more stringent industry policies, regulations and measures in the future, nor can we assure shareholders
when or whether the existing policies and regulations will be eased or reversed, or otherwise enhanced to some extent in their implementations. If the
policies remain unchanged or become more restrictive, they may continue affecting the growth rate of the Chinese residential real estate market, some
of which may cause a decline in transaction volumes and average selling prices, prevent developers from raising the capital they need, increase
developers’ costs to start new projects and increase the burdens on developers to secure financing on favorable terms or at all. In addition, the
slowdown of China’s economic growth as well as the housing market may result in the banks and other financial institutions becoming more cautious
in their lending activities, and therefore adversely impact our ability to secure financing. As a result, our business and results of operations may be
materially and adversely affected.
In the United States, we currently have three development projects in the Brooklyn, Manhattan and Queens boroughs of New York City. Pre-
sale proceeds (i.e., deposits and other sales proceeds received before the conveyance of title to the buyer) cannot be used to finance project
construction under local laws and regulations applicable to the New York projects, so we are financing their development through internal funds and
bank loans, causing us to utilize more of our own funds to undertake larger construction debt obligations and to bear higher borrowing costs. In
January 2024, two of our subsidiaries in the United States filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code. On
December 6, 2024, Hudson 888 Debtors completed a transaction to pay off the remaining secured claims in the Hudson 888 Debtors’ chapter 11 cases
for approximately US$48 million. This transaction represents the successful culmination of the Hudson 888 Debtors’ reorganization around the retail
portion of The Bloom on Forty Fifth Condominium. See “Item 8. Financial Information—A. Consolidated Statements and Other Financial
Information—Legal Proceedings.”
As of December 31, 2024, our contractual obligations amounted to US$3,373.1 million, primarily arising from contracted construction costs
or other capital commitments for future property developments, operating lease obligations and debt obligations. Of this amount, US$2,475.8 million
was due within one year.
There can be no assurance that our internally generated cash flow and external financing will be sufficient for us to meet our contractual and
financing obligations in a timely manner. Due to the current measures imposed by the PRC government (as well as other measures that may be
imposed in the future) which limit our access to additional capital, as well as restrictions imposed on our conduct under existing debt arrangements,
we cannot assure shareholders that we will be able to obtain sufficient funding to finance intended purchases of land and land use rights, develop
future projects or meet other capital needs as and when required at a commercially reasonable cost or at all. Our failure to obtain adequate financing in
a timely manner and on reasonable terms could severely adversely restrict our ability to complete existing projects, expand our business or repay our
obligations and affect our cash flow, liquidity, financial performance and condition.

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13
We are subject to certain restrictive covenants and risks normally associated with debt financing which may limit our ability to take certain corporate
actions, including incurring additional debt, which could materially and adversely affect our business and financial condition.
We are subject to certain restrictive covenants in our loan agreements with certain commercial banks. Certain loan agreements contain
covenants providing that, among other matters, we or our relevant PRC operating subsidiaries may not enter into mergers, joint ventures or
restructurings, decrease our registered share capital, transfer material assets, including shares of subsidiaries, engage in material investments,
liquidate, change our shareholding, or distribute dividends without the relevant lenders’ prior written consent or unless we fully settle the outstanding
amounts under the relevant loan agreements. In addition, certain of our loan agreements contain cross-default clauses. If any cross-default occurs,
these banks are entitled to accelerate payment of all or any part of the loan under their relevant loan agreements and to enforce all or any of the
security for such loans. Further, the onshore corporate bonds issued by Xinyuan (China) Real Estate, Ltd., or “Xinyuan China”, our wholly-owned
PRC subsidiary, contain restrictions on certain business activities of Xinyuan China when in default on payment of interest or principal, including,
among others, limitations on distributions of net income, limitations on certain expenditures, or business combination transactions. Our future bank
and other borrowings may contain similar restrictions or cross-default provisions.
Our outstanding debt securities also contain certain covenants that restrict our ability to take other corporate actions. The indentures
governing our senior secured notes contain covenants that, among other things, restrict our ability and our restricted subsidiaries’ abilities (as defined
in the relevant indenture) to incur additional debt or issue preferred stock, to make certain payments or investments, to pay dividends, to purchase or
redeem capital stock, sell assets, or make certain other payments, subject to certain qualifications and exemptions and satisfaction of certain
conditions.
As a result of any such covenants in current or future financing documents, our ability to pay dividends or other distributions on our common
shares and ADSs may be limited. Such covenants may also restrict our ability to raise additional capital in the future through bank borrowings,
mortgage financings, and debt and equity issuances and may restrict our ability to engage in some transactions that we believe to be of benefit to us.
The occurrence of any of the above events may have a material adverse effect on our business, financial condition and operating results, as well as
cash flow and cash that is available for distributions.
In addition, our obligations under our senior secured notes are guaranteed by various of our subsidiaries, and the guarantee by our wholly-
owned subsidiary, Xinyuan Real Estate, Ltd., which indirectly holds all our assets and operations in China, is secured by a pledge of our shares of the
other guarantor subsidiaries subject to limited exceptions. If we default under any of the senior secured notes, the holders thereof may enforce their
claims against those shares. In such an event, the holders of the notes could gain ownership of the shares of Xinyuan Real Estate, Ltd., and, as a result,
own and control all our subsidiaries in China. We conduct substantially all of our operations in China, and if we default under any of the notes, we
could lose control or ownership of our assets and operations in China.
We are overdue on our debt, and we may not be able to work out a viable debt restructuring plan or otherwise maintain our liquidity and financial
position. We are exposed to risks associated with our debt restructuring, and our other measures to maintain and improve our liquidity and financial
position may not be successful.
As of December 31, 2024, our short-term bank loans and other debt, and current portion of long-term bank loans and other debt amounted to
US$1,145.0 million. We did not make payments in full for the June 2022 Senior Secured Notes (as defined below) at maturity on June 29, 2022. The
total amount due and payable, including principal and interests, was RMB545.3 million. The default also triggered cross-default of other senior notes
issued by us. On August 18, 2023, eligible holders of the defaulted senior notes in the aggregate principal amount of US$307.36 million exchanged
their notes and the Company delivered the September 2027 Senior Secured Notes in the aggregate principal amount of US$331.3 million due on
September 30, 2027 and US$1.54 million in cash consideration in full satisfaction of the exchange consideration to those eligible holders. The
carrying amount of senior notes still in default was US$391.9 million as of December 31, 2024. We also breached certain covenants relating to bank
and other borrowings of US$409.9 million as of December 31, 2024. See “Item 5. Operating and Financial Review and Prospects—B. Liquidity and
Capital Resources—Debt Securities—Senior Secured Notes.”

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14
We are currently exploring a variety of measures to maintain and improve our liquidity and financial position. We have been proactively
making effort to resolve debts both from domestic and foreign institutions since June 2022 and have engaged Alvarez & Marsal Corporate Finance
Limited to advise on certain debt matters. We have reached or agreed into resolution or settlement with institutions through various approaches. As of
December 31, 2023, we had accumulatively completed debt restructurings amounting to US$880.6 million, including the rollover of the onshore
corporate bonds issued by Xinyuan China, and an exchange offer of the senior secured notes issued by the Company completed in August 2023. In
2024, while no additional large-scale restructurings have been finalized to date, we remain engaged in constructive discussions with relevant creditors
to explore further liability management solutions.
However, there is no assurance as to whether such debt restructuring may be completed or successful. If we cannot work out successfully
complete such debt restructuring, we may not be able to maintain our liquidity and continue our normal business operation. Even if we successfully
enter into arrangements to restructure or resolve our debt, it is possible that our existing creditors and potential financing providers may impose
additional conditions, increase interest rates and demand payment of extension fees or penalties in connection with such arrangements, leaving little or
no value for our shareholders.
Additionally, we have been named in multiple bankruptcy-related proceedings, which may materially impact our financial position and
operational flexibility. For additional information, see “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information
—Legal Proceedings.”
Our auditor has issued a “going concern” audit opinion, and our ability to continue as a going concern is dependent on our ability to significantly
improve our liquidity position.
We experienced net losses of US$258.7 million and US$46.0 million in 2022 and 2024, respectively, and net income of US$30.5 million in
2023. We may continue to incur losses in the future. There is material uncertainty associated with our ability to continue as a going concern. See “Item
5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources.”
In addition, our independent auditor has indicated in its report on our audited financial statements that there exists material uncertainty that
could raise doubt about our ability to continue as a going concern. These doubts regarding our ability to continue as a going concern relate to the
conditions including that our ability to generate funds to meet short-term operating cash requirements and loan repayments is reliant on our ability to
sell the real estate properties we hold, or to obtain alternative financing, and that the timing of these sales is uncertain and as a result the we are
currently reliant on long-term investor loans being renewed when they come up for repayment. Such a “going concern” opinion could impair our
ability to finance our operations through the sale of equity, incurring debt, or other financing alternatives.
Our liquidity and our ability to continue as a going concern is dependent on various factors, to generate cash flows from operations and to
arrange adequate financing arrangements to support our working capital requirements, and there are no assurances that we will be successful in our
efforts to maintain a sufficient cash balance, report profitable operations in the future or pay our debts as they fall due, any of which could impact our
ability to continue as a going concern. Any such inability to continue as a going concern may result in our shareholders losing their entire investment.
If we are unable to manage successfully our expansion into other cities in China, we will not be able to execute our business plan.
A key aspect of our historical business plan has been to expand our residential property development operations into high-growth cities in
China, from our initial focus on Zhengzhou. The development of real estate projects in other cities will impose significant demands on our
management and other operational resources. Moreover, we will face additional competition and will need to establish brand recognition and market
acceptance for our developments in these new markets. Each city has its unique market conditions, customer requirements and local regulations
related to the local real estate industry. If we are unable to successfully develop and sell projects outside of our existing markets, our future growth
may be limited and we may not generate adequate returns to cover our investments in these new markets. In addition, if we expand our operations to
other cities with higher land prices, our costs may increase, which may lead to a decrease in our profit margin, or impairments resulting from land
value decreases.

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We are in the early stages of expanding into markets outside of China, in which we have limited or no development experience and which may require
us to spend significant resources, and there can be no assurance that we will be able to succeed in any such market.
While our primary focus continues to be residential real estate markets in high-growth cities in China, we have begun expanding into other
markets on an opportunistic basis. In the U.S., we currently have two completed projects, one in the Williamsburg neighborhood of Brooklyn or the
“New York Oosten Project” and another one in Manhattan, or the “Hudson Garden Project.” We also have an early-stage project in the Flushing
neighborhood of Queens, New York. Any change in federal income tax laws that increase the effective costs of owning a home would have an adverse
effect on the demand for homes in the United States, which could negatively affect any properties we may develop in the United States. In 2014, we
acquired 100% of the shares of a Malaysian company, which owns offshore landfill development rights for a total area of 170 acres (approximately
687,966 square meters). The reclamation work has been completed as of December 31, 2020. In 2018, we acquired a 50% equity stake in Madison
Developments Limited, or “MDL,” the developer of the Amory Tower project (previously named as the Madison project), a 0.38-hectare
(approximately 0.94 acre) development located adjacent to Canary Wharf, in London, United Kingdom. See “Item 4. Information on the Company—
B. Business Overview” for more information on our projects outside China.
Given our limited experience in markets outside of China market, it may be difficult for us to forecast accurately our future revenue and
expenses related to existing and future projects in the United States, the U.K., or Malaysia. Further, locating appropriate future projects in those and
other non-China markets and generating future revenue from such projects may require us to expend significant capital and management resources.
In addition, we may not be able to develop a successful property development business in any given market. Our ability to develop a
successful property developments business in any given market will depend on a number of factors including many outside of our control, such as the
status of the country’s/region’s economy in general and in our target markets, consumer confidence levels, unemployment levels, interest rates and the
ability of potential purchasers to obtain mortgage financing.
Our business is sensitive to the general economic conditions in the countries, cities and specific target markets in which we operate. A severe or
prolonged downturn in the global economy generally and particularly in the countries or regions in which we have development projects could
materially and adversely affect our revenue and results of operations.
The real estate market is sensitive to general economic conditions, financial conditions, including interest rates, availability of capital,
employment rates, and other economic and financial conditions in the local market and the broader region or country as well as global economic
conditions. Significant downturns and instability in the global economy or in the country and local markets in which we operate or the perception that
they could occur, could depress economic activity and restrict our access to capital. In addition, any such events could negatively affect our customers
in one or more markets, including their access to financing or willingness to engage in a major financial transaction, such as purchasing a home. As a
result, our business, financial condition and results of operations could be negatively affected.
In our China markets, our results of operations, financial condition and prospects are influenced by social, economic, political and legal
developments in China. See “—Risks Related to Doing Business in China—Changes in social conditions, political and economic policies of the PRC
government may affect our business, financial condition and results of operations and may result in our inability to sustain our growth and expansion
strategies.” In response to their perceived uncertainty in economic conditions, consumers might delay, reduce or cancel purchases of homes, and our
homebuyers may also defer, reduce or cancel purchases of our units. We have experienced volatilities in demand from time to time in the recent years
due to the strict mortgage policy and other measures taken by the PRC government to slow down the rapid increase in housing prices. To the extent
any fluctuations in the Chinese economy significantly affect homebuyers’ demand for our units or change their spending habits, our results of
operations may be materially and adversely affected.
The PRC economy also faces challenges in the short to medium term. Continued turbulence in the international markets and prolonged
declines in consumer spending, including home purchases, as well as any slowdown of economic growth in China, may adversely affect our liquidity
and financial condition.

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Our U.S. property developments are sensitive to the general economic conditions in the United States and the condition of the U.S. housing
market in particular. The U.S. housing industry is highly cyclical and is significantly affected by changes in industry conditions, as well as in global
and local economic conditions, such as changes in employment and income levels, availability of financing for buyers, interest rates, levels of new and
existing homes for sale demographic, trends and housing demand. Deterioration in industry conditions in the United States or in broader economic
conditions could have additional material adverse effects on our business expansion in the United States and financial results.
Changes in U.S. trade policies and international relations with respect to China.
The U.S. government has recently implemented measures that could lead to shifts in both U.S. and international trade policies. These
measures include multiple rounds of tariffs and export control restrictions on certain Chinese products, as well as increased scrutiny on companies
with significant operations in China. Additionally, there is a potential for legislation to be introduced that could ultimately restrict or prohibit U.S.
investments in certain China-based companies. These actions are part of ongoing changes to U.S. trade policies that have created significant
uncertainty about the future relationship between the U.S. and China, as well as other nations.
The impact of new tariffs, export controls and other regulatory changes on our industry remains uncertain. If such measures are implemented
or existing trade agreements are renegotiated, particularly in response to the rising tensions between the U.S. and China, our business may be
negatively impacted, potentially leading to adverse consequences for our financial condition and operational results.
We may be unable to acquire desired development sites at commercially reasonable costs.
Our revenue depends on the completion and sale of our projects, which in turn depends on our ability to acquire development sites. Our land
costs are a major component of our cost of real estate sales and increases in such costs could diminish our gross margin. In China, the PRC
government controls the supply of land and regulates land sales and transfers in the secondary market. As a result, the policies of the PRC
government, including those related to land supply and urban planning, affect our ability to acquire, and our costs of acquiring, land use rights for our
projects. In recent years, the PRC government has introduced various measures attempting to moderate investment in the property market in China.
Although we believe that these measures are generally targeted at the luxury property market and speculative purchases of land and properties, we
cannot assure shareholders that the PRC government will not introduce other measures in the future that would adversely affect our ability to obtain
land for development. We currently acquire our development sites primarily by bidding for government land, supplemented in some instances by
direct negotiations with local governments prior to land auctions or by acquisition of local developers or by investment in an entity that holds land use
rights or by cooperating with our business partners through joint ventures and associated companies. Under current regulations, land use rights
acquired from government authorities for commercial and residential development purposes must be purchased through a public tender, auction or
listing-for-sale. Competition in these bidding processes has resulted in higher land use rights costs for us over the past few years, and we may not
successfully obtain desired development sites due to the increasingly intense competition in the bidding processes. Moreover, the supply of potential
development sites in any given city will diminish over time, and we may find it increasingly difficult to identify and acquire attractive development
sites at commercially reasonable costs in the future.
We rely on third-party contractors who may not perform at acceptable quality levels or in a timely manner.
Substantially all of our project construction and related work are outsourced to third-party contractors, and their performance may not meet
our level of standards or specifications. Negligence, delay or poor work quality by contractors may result in defects in our buildings or residential
units, which could in turn cause us to suffer financial losses, harm our reputation or expose us to third-party claims. If the performance of any third-
party contractor is not satisfactory or is delayed, we may need to replace such contractor or take other actions to remedy the situation, which could
adversely affect the cost and construction progress of our projects, and which could cause the completion of our property developments to be delayed.
We work with multiple contractors on different projects and cannot guarantee that we can effectively monitor their work at all times. Although our
construction and other contracts contain provisions designed to protect us, we may be unable to successfully enforce these rights and, even if we are
able to successfully enforce these rights, the third-party contractors may not have sufficient financial resources to compensate us. Moreover, the
contractors may undertake projects from other property developers, engage in risky undertakings or encounter financial or other difficulties, such as
supply shortages, labor disputes or work accidents, which may cause delays in the completion of our property projects or increases in our costs. In
addition, consistent with what we believe is the customary industry practice in China, our contractors typically do not maintain insurance coverage on
our properties under construction.

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We may be unable to complete our property developments on time or at all and any construction delays, or failure to complete a project according to
our planned specifications or budget, may delay our property sales, which could adversely affect our revenue, cash flows and our reputation.
The progress and costs for a development project can be adversely affected by many factors, including, without limitation:
●
delays in obtaining necessary licenses, permits or approvals from government agencies or authorities;
●
changes in government policies, rules or regulations;
●
shortages of materials, equipment, contractors and skilled labor or increased labor or raw material costs;
●
disputes with our third-party contractors;
●
failure by our third-party contractors to comply with our designs, specifications or standards;
●
difficult geological situations or other geotechnical issues;
●
onsite labor disputes or work accidents;
●
natural catastrophes or adverse weather conditions, including strong winds, storms, floods, and earthquakes; and
●
geopolitical challenges and uncertainties (including wars and other forms of conflict, terrorist acts and security operations), such as
the escalating conflict between Russia and Ukraine and the severe economic sanctions and export controls imposed by the U.S. and
other governments against Russia and Russian interests.
Any construction delays, or failure to complete a project according to our planned specifications or budget, may delay our property sales,
which could adversely affect our revenue, cash flows and our reputation.
Under PRC laws and regulations and our pre-sale contracts, we are required to compensate purchasers for late delivery of or failure to
complete our pre-sold units. If the delay extends beyond the contractually specified period, the purchasers may become entitled to terminate the pre-
sale contracts and claim damages. We are also unable to guarantee that any legal proceedings or renegotiations resulting from delays or failures to
deliver will have a favorable outcome. For more information, see “—We may become involved in legal and other proceedings from time to time and
may suffer significant liabilities or other losses as a result.”
Proceeds from pre-sale of our properties are an important source of financing for our property developments. Under PRC laws, we are not
permitted to commence pre-sale until we have completed certain stages of the construction process for a project. Consequently, a significant delay in
the construction of a project could restrict our ability to pre-sell our properties, which could extend the recovery period for our capital outlay. This, in
turn, could have an adverse effect on our cash flow, business and financial position.
Changes of laws and regulations with respect to pre-sale may adversely affect our cash flow position and performance.
We depend on cash flows from pre-sale of properties as an important source of funding for our property development projects. Under current
PRC laws and regulations, property developers must fulfill certain conditions before they can commence pre-sale of the relevant properties and may
only use pre-sale proceeds to finance the construction of the specific developments. In addition, a number of provinces and cities in which we are
operating business, such as Tianjin, Sichuan, Zhejiang and Qingdao, have established local rules and conditions for the pre-sale permits application,
especially for the custody of pre-sale funds. Such local regulatory measures have not materially affected or restricted our operation or our use of pre-
sale funds yet. However, we cannot assure shareholders that the PRC national government or the local governmental authorities will not implement
further restrictions on the pre-sale of properties, which may affect our cash flow position and force us to seek alternative sources of funding for much
of our property development business.

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The results of our operations may fluctuate from period to period as we derive our revenue principally from the sale of properties and we rely on our
unsold inventory of units.
We derive the majority of our revenue from the sale of properties that we have developed. Our results of operations tend to fluctuate from
period to period due to a combination of factors, including the overall schedule of our property development projects, the timing of the sale of
properties that we have developed, the size of our land bank, our revenue recognition policies and changes in costs and expenses, such as land
acquisition and construction costs. The number of properties that we can develop or complete during any particular period is limited due to the size of
our land bank, the substantial capital required for land acquisition and construction, as well as the development periods required before positive cash
flows may be generated. For real estate sales contracts for which we have an enforceable right to payment for performance completed to date, revenue
is recognized over time by measuring the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a
point in time when the customer obtains control of the asset. In addition, several properties that we have developed or that are under development are
large scale and developed in multiple phases over the course of one to several years. The selling prices of the residential units in larger-scale property
developments tend to change over time, which may impact our sales proceeds and, accordingly, our revenue for any given period. Furthermore, our
property development projects may be delayed or adversely affected by a combination of factors beyond our control, which may in turn adversely
affect our revenue recognition and consequently our cash flows or results of operations. As a result of the fluctuations in our operating results, our
period-to-period comparisons of results of operations and cash flow positions may not be indicative of our future results of operations and may not be
taken as meaningful measures of our financial performance for any specific period.
The recognition of our real estate revenue and costs is dependent upon our estimation of our total project revenue and costs.
For real estate sales contracts for which we have an enforceable right to payment for performance completed to date, revenue is recognized
over time by measuring the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a point in time
when the customer obtains control of the asset. See “Item 5. Operating and Financial Review and Prospects—A. Operating Results—Critical
Accounting Policies.” Under both methods, revenue and costs are calculated based on an estimation of total project costs and total project revenue,
which are revised on a regular basis as the work progresses. Any material deviation between actual and estimated total project revenue and costs may
result in an increase, a reduction or an elimination of reported revenue or costs from period to period, which will affect our gross profit and net
income.
We face risks related to our back-to-back loans.
With our operations in the U.S. markets and now other non-PRC jurisdictions, we have seen and expect to continue to experience an
increasing need of non-RMB financings with respect to project developments and future expansions. We currently satisfy our non-RMB denominated
financing requirements through four ways: dividends distributions from our PRC subsidiaries, which are subject to 10% withholding tax payment,
back-to-back loan arrangements, high-yield bond issuances and construction loan financing from local banks. Under back-to-back loan arrangements,
our PRC subsidiaries make deposits denominated in RMB into banks in China as collateral to request the banks in China to issue standby letters of
credit denominated in U.S. dollars or other currencies in the same amount as the RMB collateral to their outbound branches, and our project
companies outside the PRC enter into loans denominated in U.S. dollars or other currencies with such outbound branches in the same amount
specified in such standby letters of credit in accordance with to the Provisions on the Administration of Foreign Exchange for Cross-border Guarantee
issued by the State Administration of Foreign Exchange of the People’s Republic of China, or the “SAFE,” effective June 1, 2014. SAFE registration
requirements apply to overseas back-to-back loan arrangements and the use of proceeds of such loans must comply with certain requirements. On
August 4, 2017, the National Development and Reform Commission, or the “NDRC,” Ministry of Commerce, or the “MOFCOM,” PBOC and
Ministry of Foreign Affairs, or the “MFA,” jointly issued Guiding Opinions on Further Directing and Regulating the Direction of Overseas
Investments, or “Opinion 74.” Under Opinion 74, outbound investment into real estate industry is restricted. The back-to-back loan arrangement may
face strict scrutiny by banks in China. Any change in laws or regulations to restrict or forbid back-to-back loan transactions in the future may
adversely affect our non-PRC companies’ financing. In addition, we are exposed to exchange rate fluctuation and foreign exchange control risks under
the current back-to-back loan model, which may adversely affect our business condition and results of operation.

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We rely on our key management members and the loss of their services or investor confidence in such personnel could have a material adverse effect
on our business, results of operations and financial condition.
We depend on the services provided by key management members. Competition for management talent is intense in the property
development sector. We rely on the leadership, expertise, experience and vision of our directors and senior management team. In particular, we are
highly dependent on Mr. Yong Zhang, our founder and Chairman. We do not maintain key employee insurance. In the event that we lose the services
of any key management member, we may be unable to identify and recruit suitable successors in a timely manner or at all, which will adversely affect
our business and operations and we may incur additional expenses to recruit, train and retain qualified personnel. Moreover, we may need to employ
and retain more management personnel to support an expansion into high-growth cities on a much larger geographical scale as well as our expansion
in the U.S., Malaysia, the U.K. and other areas. If we cannot attract and retain suitable personnel, especially at the management level, our business and
future growth will be adversely affected.
We provide guarantees for the mortgage loans of our customers in China, which expose us to risks of default by our customers.
We pre-sell properties before actual completion and, in accordance with PRC industry practice, our customers’ mortgage banks require us to
guarantee our customers’ mortgage loans. Typically, we provide guarantees to PRC banks with respect to loans procured by the purchasers of our
properties for the total mortgage loan amount until the completion of the registration of the mortgage with the relevant mortgage registration
authorities, which generally occurs within six to 12 months after the purchasers take possession of the relevant properties. In line with what we believe
to be industry practice, we rely on the credit evaluation conducted by mortgagee banks and do not conduct our own independent credit checks on our
customers. The mortgagee banks typically require us to maintain, as restricted cash, up to 10% of the mortgage proceeds paid to us as security for our
obligations under such guarantees. If a purchaser defaults on its payment obligations during the term of our guarantee, the mortgagee bank may deduct
the delinquent mortgage payment from the security deposit. If the delinquent mortgage payments exceed the security deposit, the banks may require
us to pay the excess amount. If multiple purchasers’ default on their payment obligations, we will be required to make significant payments to the
banks to satisfy our guarantee obligations. Factors such as a significant decrease in housing prices, increase in interest rates or the occurrence of
natural catastrophes, among others, could result in a purchaser defaulting on its mortgage payment obligations. If we are unable to resell the properties
underlying defaulted mortgages on a timely basis or at prices higher than the amounts of our guarantees and related expenses, we will suffer financial
losses. We paid US$4,068,840, US$2,286,938 and US$603,930 to satisfy guarantee obligations related to customer defaults in 2022, 2023 and 2024,
respectively.
As of December 31, 2023 and 2024, our outstanding guarantees in respect of our customers’ mortgage loans amounted to US$1,926.4 million
and US$1,708.9 million, respectively. If substantial defaults by our customers occur and we are called upon to honor our guarantees, our financial
condition, cash flow and results of operations will be materially adversely affected.
Our level of indebtedness could have an adverse effect on our financial condition, diminish our ability to raise additional capital to fund our
operations and limit our ability to explore business opportunities.
As of December 31, 2024, the outstanding balance of our total indebtedness amounted to US$1,804.7 million. Our level of indebtedness
could have an adverse effect on us. For example, it could:
●
require us to dedicate a large portion of our cash flow from operations as well as the proceeds from certain financings and asset
dispositions to fund payments of our debt, thereby reducing the availability of our cash flow to fund working capital, capital
expenditures and other general corporate purposes;
●
make it more difficult for us to satisfy our obligations under our debt securities and other indebtedness;
●
increase our vulnerability to adverse general economic or industry conditions;
●
limit our flexibility in planning for, or relating to, changes in our business or the industry in which we operate;
●
limit our ability to raise additional debt or equity capital in the future or increase the cost of such funding;
●
restrict us from making strategic acquisitions, exploring business opportunities or selling assets;

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●
place us at a competitive disadvantage compared to any competitors that have less debt; and
●
make it more difficult for us to satisfy our obligations with respect to our debt.
Our ability to make payments on and to refinance our indebtedness will depend on our ability to generate cash in the future, which in turn is
dependent on various factors. For a discussion of these factors, see “Item 5. Operating and Financial Review and Prospects — A. Operating Results —
Principal Factors Affecting Our Results of Operations.”
Our financing costs are subject to changes in interest rates.
The rates of interest payable on our PRC long-term bank loans are adjustable based on the range of 92.63% to 189.47% of the PBOC
benchmark rate, which fluctuates from time to time. As of December 31, 2024, the principal amount of our aggregate outstanding variable rate debt
was US$665.7 million. A hypothetical 1% increase in annual interest rates would increase our interest expenses by US$6.7 million based on our debt
level on December 31, 2024. In connection with our U.S. projects and U.K. projects, we enter into U.S. dollar and British pound denominated loans,
which will subject us to additional interest rate fluctuation risks, including fluctuations of the Secured Overnight Financing Rate, or SOFR. For a
further discussion of interest rate sensitivity, see “Item 11. Quantitative and Qualitative Disclosures About Market Risk—Interest Rate Risk.”
We are subject to potential environmental liability.
We are subject to a variety of laws and regulations concerning the protection of health and the environment. The particular environmental
laws and regulations that apply to any given development site vary significantly according to the site’s location and environmental condition, the
present and former uses of the site and the nature of the adjoining properties. Environmental laws and conditions may result in delays, may cause us to
incur substantial compliance and other costs and can prohibit or severely restrict project development activity in environmentally-sensitive regions or
areas. Although the environmental investigations conducted by local PRC environmental authorities have not revealed any environmental liability
related to our China projects that we believe would have a material adverse effect on our business, financial condition or results of operations to date,
it is possible that these investigations did not reveal all environmental liabilities and that there are material environmental liabilities of which we are
unaware. We cannot assure shareholders that future environmental investigations will not reveal material environmental liability. Also, we cannot
assure shareholders that the PRC, United States, Malaysian or U.K. governments will not change the existing laws and regulations or impose
additional or stricter laws or regulations, the compliance of which may cause us to incur significant capital expenditure. See “Item 4. Information on
the Company—B. Business Overview—Environmental Matters.”
Our business expansion and business diversification require proper allocation of our management resources and qualified employees.
In recent years, we expanded our operations into the U.S., Malaysia and the U.K. while also expanding our operations in China. Such
expansions, with more diversified business focuses in terms of market regions and types of business, demand proper allocation of our management
resources. In addition, our Malaysia acquisition which involves land reclamation activities, our acquisitions of Beijing Ruizhuo Xitou Development
Co., Ltd., or “Xitou,” Beijing Ruizhuo Xichuang Technology Development Co., Ltd., or “Xichuang,” and Beijing I-Journey Science and Technology
Development Co., Ltd., or “I-Journey,” which extends the Group’s business to providing real estate and property management related technology
services, in which we have no prior experience and which presents risks we have not previously encountered or dealt with, may require additional skill
sets on the part of our management. If our management fails to satisfy these increased demands, we may not be able to carry out our business
expansion and project development successfully. In addition, if we are unable to recruit or retain a sufficient number of qualified employees for the
continuation and expansion of our business, our business and prospects may be adversely affected.

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New lines of business or new products and services may subject us to additional risks.
From time to time, we may implement new lines of business or offer new products and services within existing lines of business. There are
substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. There may be
license and compliance requirements regarding new lines of business, including special requirements for foreign-invested enterprises. The
development and marketing of new lines of business or new products and services could distract our management from our core business. In addition,
we may invest significant time and resources into these new lines of business or new products and services. Initial timetables for the introduction and
development of new lines of business or new products and services may not be achieved and price and profitability targets may not prove feasible.
External factors, such as compliance with regulations, competitive alternatives, and shifting market preferences, may also impact the successful
implementation of a new line of business or a new product or service. Furthermore, any new line of business or new product or service could have a
significant impact on the effectiveness of our system of internal control. Particularly, we cannot assure that our investment in certain technology
development activities, including our development of smart home technology products, cloud-based enterprise resource planning software and online
property sales platform will be successful or have positive impacts on our business. Failure to successfully manage these risks in the development and
implementation of new lines of business or new products or services could have a material adverse effect on our business, results of operations and
financial condition.
Failure to maintain the security of our information and technology networks, including personally identifiable and customer information, as well as
uncertainties with respect to the interpretation and implementation of cybersecurity review procedures and proprietary business information, could
significantly adversely affect us.
In China, the government is still ramping up regulations with regard to personal information protection. On October 1, 2020, the Information
Security Technology—Personal Information Security Specification (GB/T 35273-2020), or the “2020 Specification,” took effect. Although the 2020
Specification is a recommended guideline, and it is not enforceable by law, the authority will use this standard to evaluate our compliance with
China’s legal guidelines and regulations regarding personal information protection. On August 20, 2021, the Standing Committee of the National
People’s Congress, or “SCNPC,” promulgated the Personal Information Protection Law of the PRC, or the “Personal Information Protection Law,”
which integrates various rules with respect to personal information rights and privacy protection. The Personal Information Protection Law, which
took effect on November 1, 2021, seeks to protect the personal information rights and interests, regulating the processing of personal information,
ensuring the orderly and free flow of personal information in accordance with the law and promoting the reasonable use of personal information. The
Personal Information Protection Law applies to the processing of personal information within China, as well as certain personal information
processing activities conducted by entities outside China for natural persons within China, including those for the provision of products and services to
natural persons within China or for the analysis and assessment of acts of natural persons within China. The Personal Information Protection Law
provides severe punishment for violations of the regulations relating to the processing of personal information.

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The relevant regulatory authorities in China continue to monitor websites and networks in relation to the protection of personal data, privacy
and information security, and may impose additional requirements from time to time. For example, the SCNPC promulgated the PRC Data Security
Law, which took effect on September 1, 2021. The Data Security Law provides for a security review procedure for data that may affect national
security. Furthermore, on December 28, 2021, the Cyberspace Administration of China, or the “CAC,” the NDRC, the Ministry of Industry and
Information Technology, or the “MIIT,” and several other administrations jointly published the Measures for Cybersecurity Review, which became
effective on February 15, 2022. The Measures for Cybersecurity Review provide that certain operators of critical information infrastructure engaged in
the purchasing of network products and services, and certain network platform operators carrying out data processing activities that affect or may
affect national security, must apply with the Cybersecurity Review Office to conduct a cybersecurity review. On July 30, 2021, the State Council
issued the Security Protection Regulations for Critical Information Infrastructure, or the “Regulation for CII,” which became effective on September
30, 2021. The Regulation for CII specifies that CII refers to important Internet facilities and information systems in significant industries, such as
public communication, information services, energy, traffic, hydraulic engineering, financing, public services, e-government, national defense
technology, and other facilities that once destroyed, lost function or data leakage, may seriously endanger national security, national economy,
people’s livelihood, and public interest. However, the scope of operators of “critical information infrastructure” under the current regulatory regime
remains unclear and is subject to further decisions of competent PRC regulatory authorities.
On November 14, 2021, the CAC published a draft version of the Administrative Measures for Internet Data Security, or the “Draft Measures
for Internet Data Security,” which propose that data processors conducting the following activities would also need to apply for cybersecurity review
procedures: (i) mergers, reorganizations or divisions of Internet platform operators that have acquired a large number of data resources related to
national security, economic development or public interests that affect or may affect national security; (ii) overseas listings, if the data processor
processes an amount of personal information relating to over one million users; (iii) listings in Hong Kong which affect or may affect national
security; or (iv) other data processing activities that affect or may affect national security. There currently is no public timetable as to when or whether
the Draft Measures for Internet Data Security will be enacted. As such, substantial uncertainties still exist with respect to the potential timing of
obligations, the regulation’s final content, as well as its interpretation and implementation. Regardless of such uncertainties, if in the future these or
other regulations were to require us to perform a cybersecurity review, then any failure to obtain approval or clearance from the regulatory authorities
with respect to our cybersecurity review could materially constrain our liquidity and have a material adverse impact on our business operations and
financial results, especially if any additional capital or financing were to be needed.
The PRC regulatory authorities have also undertaken recent efforts to enhance the supervision and regulation of cross-border data
transmissions. On July 7, 2022, the CAC promulgated the Measures for the Security Assessment of Cross-border Data Transmission, which came into
effect on September 1, 2022 and regulate security assessment procedures with respect to cross-border data transfers by data processors of important
data and personal information that is collected and generated during operations within the PRC. The Measures for the Security Assessment of Cross-
border Data Transmission provide a six-month transition period (beginning from the regulation’s effective date) for data processors to rectify their
compliance with the security assessment requirements with regard to cross-border data transfers carried out before these measures take effect
(September 1, 2022). On March 22, 2024, the CAC issued the long-awaited Provisions on Facilitating and Regulating Cross-Border Data Transfers,
effective as of the same date. The CAC simultaneously updated the Guidelines to Applications for Security Assessment of Outbound Data Transfers
and the Guidelines for Filing the Standard Contract for Outbound Cross-Border Transfer of Personal Information to harmonize the current rules
applicable to cross-border data transfers. These regulations benefit many multinational companies that are involved in the transfer of personal
information and other data out of China. The essence of these regulations consists of exceptions to existing data compliance requirements (such as the
need to conduct “security assessments” and to complete “standard contracts”) set out under pre-existing laws and regulations concerning outbound
cross-border data transfers.

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Regulatory requirements on cybersecurity and data privacy are constantly evolving and can be subject to varying interpretations or significant
changes, resulting in uncertainties about the scope of our responsibilities in that regard. In particular, the Draft Measures for Internet Data Security are
still uncertain and in a draft state, and we cannot assure that, once implemented (if they are ever implemented), relevant governmental authorities will
not interpret or implement this and other laws or regulations in ways that may negatively affect us. Security breaches and other disruptions of our
information and technology networks could compromise our information and expose us to liability, reputational harm and significant remediation
costs, which could cause material harm to our business and financial results. In the ordinary course of our business, we collect and store sensitive data,
including our proprietary business information, and information relating to our customers and information of our employees, contractors and vendors,
in our networks. Despite our security measures, and those of our third-party service providers, our information technology and infrastructure may be
vulnerable to attacks by third parties or breached due to employee error, malfeasance or other disruptions. A significant theft, loss, corruption,
exposure, fraudulent use or misuse of customer, employee or other personally identifiable or proprietary business data, noncompliance with our
contractual or other legal obligations regarding such data could result in significant remediation and other costs, fines, litigation or regulatory actions
against us. Such an event could additionally disrupt our operations, harm our relationships with contractors and vendors, damage our reputation, result
in the loss of a competitive advantage, which could adversely affect our business, revenue, competitive position and investor confidence. Additionally,
we rely on third parties to support our information and technology networks, and as a result have less direct control over our data and information
technology systems. These third parties are also vulnerable to security breaches and compromised security systems, for which we may not be
indemnified and which could materially adversely affect us.
We may fail to obtain or maintain, or may experience material delays in obtaining, necessary government approvals for any major property
development, which will adversely affect our business.
The real estate industry in China is strictly regulated by the PRC government. Property developers in China must abide by various laws and
regulations, including implementation rules implemented by local governments to enforce these laws and regulations. Before commencing, and during
the course of, development of a property project, we need to apply for or renew various licenses, permits, certificates and approvals, including but not
limited to, land use rights certificates, construction site planning permits, construction work planning permits, construction permits, pre-sale permits
and completion acceptance certificates. We need to satisfy various requirements to obtain these approval certificates and permits, and to meet specific
conditions in order for the government authorities to renew relevant approval certificates and permits. We cannot guarantee that we will not encounter
serious delays or difficulties in the future. Some of our subsidiaries were not in compliance with certain construction or pre-sale PRC laws and
regulations, such as commencing construction works and pre-sale before obtaining the requisite approvals or permits. Although we have improved our
internal control procedures, we cannot guarantee that we will be able to adapt to new rules and regulations that may come into effect from time to time
with respect to the property industry or that we will not encounter material delays or difficulties in fulfilling the necessary conditions to obtain and/or
renew all necessary certificates or permits for our operations in a timely manner, or at all, in the future. In the event that we fail to obtain the necessary
governmental approvals for any of our major property projects, or a serious delay occurs in the government’s examination and approval process, we
may not be able to maintain our development schedule and our business and cash flows may be adversely affected.
Moreover, as the real estate industry is closely monitored by the PRC government, we anticipate that new policies will be promulgated from
time to time in relation to the conditions for issuance or renewal of such approvals, licenses or permits. We cannot guarantee that such new policies
will not present unexpected obstacles toward our ability to obtain or renew the required permits, licenses and certificates or that we will be able to
overcome these obstacles in a timely manner, or at all. Loss of or failure to renew our permits, licenses and certificates may stall the progress of our
major property development projects.
If (i) we or our subsidiaries, do not receive or maintain any permission or approval required of us or our subsidiaries, (ii) we or our
subsidiaries inadvertently concluded that certain permissions or approvals have been acquired or are not required, or (iii) applicable laws, regulations,
or interpretations thereof change, and we or our subsidiaries become subject to the requirement of additional permissions or approvals in the future,
we may have to expend significant time and costs to procure them. If we are unable to do so, in a timely manner or otherwise, we may become subject
to sanctions imposed by the PRC regulatory authorities, which could include fines, penalties, and proceedings against us, and other forms of sanctions,
and our ability to conduct our business, invest in mainland China as foreign investments or accept foreign investments, or list on a U.S. or other
overseas exchange may be restricted, our business, reputation, financial condition, and results of operations may be materially and adversely affected,
and the value of our ADSs could significantly decline or become worthless.

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Regulations in the United States could increase the cost and limit the availability of our project development in these jurisdictions and adversely affect
our business or financial results.
As we expand our business in the U.S., we will continue to be subject to extensive and complex regulations in these jurisdictions that affect
land development and home construction, including zoning, density restrictions, building design and building standards, as well as environmental
laws. These regulations often provide broad discretion to the administering governmental authorities as to the conditions we must meet prior to being
approved, if approved at all. We are subject to determinations by these authorities as to the adequacy of water and sewage facilities, roads and other
local services. New housing developments may also be subject to various assessments for public improvements. Any of these regulatory issues can
limit or delay construction and increase our operating costs. We are also subject to a variety of local, state and/or federal laws and regulations
concerning protection of health, safety and the environment. These matters may result in delays, may cause us to incur substantial compliance,
remediation, mitigation and other costs or subject us to costs from fines, penalties and related litigation. These laws and regulations can also prohibit
or severely restrict development and homebuilding activity in environmentally sensitive areas.
Increases in the price of raw materials or labor costs may increase our cost of sales and reduce our earnings.
We outsource the design and construction of our projects under development to third-party service providers. Our third-party contractors are
responsible for providing labor and procuring almost all of the raw materials used in our project developments. Our PRC construction contracts
typically provide for fixed or capped payments, but the payments are subject to changes in PRC government-suggested prices for certain raw materials
we use, such as steel and cement. In addition, China’s overall economy and the average wage in China have increased in recent years and are expected
to grow in the near future. The average wage level for the employees has also increased for the past periods. Any increase in raw materials costs, labor
costs or other costs which may result in adjustments in payments under any of our construction contracts could result in an increase in our construction
costs. In the event that the price of any raw materials, including cement, concrete blocks and bricks, or labor cost increase in the future, such increase
could be passed on to us by our contractors, and our construction costs would increase accordingly. Passing such increased costs to our customers may
result in reduced sales and delay our ability to complete sales for our projects. Any input cost increase could reduce our earnings to the extent we are
unable to pass these increased costs to our customers.
Retail and commercial investment properties and properties held for sale are generally illiquid investments and the lack of alternative uses of such
properties could limit our ability to respond to changes in the performance of our properties.
As of December 31, 2024, we had approximately 86,951, 116,288, 12,187, 18,936 and 3,904 square meters of retail investment properties in
Zhengzhou, Xi’an, Changsha, Chengdu and Kunshan, in China, and approximately 28,090 square feet of retail investment properties in New York,
respectively. As of December 31, 2024, we also had four projects under construction at which we plan to develop commercial property for lease with a
planned GFA of approximately 203,270 square meters. We anticipate that we may prudently and gradually increase our retail and commercial
investment properties as appropriate opportunities arise in the future. Any form of real estate investment is difficult to liquidate and, as a result, our
ability to sell our properties in response to changing economic, financial and investment conditions is limited. In addition, we may also need to incur
operating and capital expenditures to manage and maintain our properties, or to correct defects or make improvements to these properties before
selling them. We cannot assure shareholders that we can obtain financing at a reasonable cost for such expenditures, or at all.
Furthermore, aging of retail and commercial investment properties or properties held for sale, changes in economic and financial conditions
or changes in the competitive landscape in the PRC or U.S. property markets, may adversely affect the amounts of rentals and revenue we generate
from, as well as the fair value of, these properties. However, our ability to convert any of these properties to alternative uses is limited as such
conversion requires extensive governmental approvals in the PRC or may require zoning or other approvals in the United States and involves
substantial capital expenditures for the purpose of renovation, reconfiguration and refurbishment. We cannot assure shareholders that such approvals
and financings can be obtained when needed. These and other factors that impact our ability to respond to adverse changes in the performance of our
retail and commercial investment properties, as well as properties held for sale, may adversely affect our business, financial condition, cash flow and
results of operations.

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We may be adversely affected by material issues that affect our relationships or business ventures with our joint venture and associated company
partners.
We have partnered with a number of business partners and established joint ventures with third parties and may continue to do so in the
future. The performance of such business ventures has affected, and will continue to affect, our results of operations and financial position. We and
our business venture partners provided capital to our jointly established project companies in proportion to our shareholding percentages in order to
fund such project companies’ land acquisition efforts and working capital requirements. Once these project companies commence pre-sale and
generate cash flow, they will repay such capital to us on demand. Therefore, the timing of such business ventures’ capital requirements, the financial
performance of these business ventures and their ability to repay may materially and adversely affect our results of operations. With respect to our
subsidiaries with minority interest holders, our consolidated financial results may be directly impacted and the profit attributable to our Group may be
diluted. With respect to joint ventures and associates, we generally expect to incur share of loss in such joint ventures or associates until their
respective development of property projects completes and starts to contribute revenue. As of December 31, 2022, 2023 and 2024, we had a total of
14, 14 and 15 joint ventures, respectively.
We may engage in joint ventures, which could result in unforeseen expenses or disruptive effects on our business.
From time to time, we have engaged and may consider engaging in joint ventures with other businesses to develop a property. Any joint
venture that we determine to pursue will be accompanied by a number of risks. We may not be in a position to exercise sole decision-making authority
regarding the joint ventures. We may not be able to control the quality of products produced by the joint venture. Depending on the terms of the joint
venture agreement, we may require the consent of our joint venture partners for the joint venture to take certain actions, such as making distributions
to the partners. A joint venture partner may encounter financial difficulties and become unable to meet obligations with regard to funding of the joint
venture. In addition, our joint venture partners and the joint ventures themselves may hold different views or have different interests from ours, and
therefore may compete in the same market with us, in which case our interest and future development may be materially adversely affected. Further,
since we may not have full control over the business and operations of our joint ventures and associated companies, we cannot assure that they will be
in strict compliance with all applicable PRC laws and regulations. We cannot assure shareholders that we will not encounter problems with respect to
our joint ventures and associated companies or our joint ventures and associated companies will not violate PRC laws and regulations, which may
have an adverse effect on our business, results of operation and financial condition.
Any future investments or acquisitions could expose us to unforeseen risks or place additional strain on the management and other resources.
As part of our business strategy, we regularly evaluate investments in, or acquisitions of, subsidiaries, joint ventures, and we expect that we
will continue to make such investments and acquisitions in the future. Any potential future acquisition may be accompanied by a number of risks,
including risks relating to the evolving legal landscape in China. An acquired business may underperform relative to expectations or may expose us to
unexpected liabilities. Acquisitions of entities that own real estate may involve risks in addition to the risks inherent in a real estate acquisition,
because the acquisition of an entity generally includes all of the liabilities of the entity — known and unknown, fixed and contingent — rather than
only the liabilities related to the real estate. These liabilities, which could be material, may include liabilities not disclosed by the seller of the entity or
not discovered during our due diligence. In addition, the integration of any acquisition could require substantial management attention and resources.
If we were unable to successfully manage the integration and ongoing operations, or hire and retain additional personnel necessary for the running of
the expanded business, the results of our operations and financial performance could be adversely affected.
Acquisitions may result in the incurrence and inheritance of debts and other liabilities, assumption of potential legal liabilities in respect of
the acquired businesses, and incurrence of impairment charges related to goodwill and other intangible assets, any of which could harm our
businesses, financial condition and results of operations. In particular, if any of the acquired businesses fails to perform as we expect, we may be
required to recognize a significant impairment charge, which may materially and adversely affect our businesses, financial condition and results of
operations. As a result, there can be no assurance that we will be able to achieve the strategic purpose of any acquisition, the desired level of
operational integration or our investment return target.

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Our failure to successfully manage our business expansion would have a material adverse effect on our results of operations and prospects.
Our expansion has created, and will continue to place, substantial demand on our resources. Managing our growth and integrating the
acquired businesses will require us to, among other things:
●
comply with the laws, regulations and policies applicable to the acquired businesses, including obtaining timely approval for the
real estate construction as required under the PRC law;
●
maintain adequate control on our business expansion to prevent, among other things, project delays or cost overruns;
●
manage relationships with employees, customers and business partners during the course of our business expansion;
●
attract, train and motivate members of our management and qualified workforce to support successful business expansion;
●
access debt, equity or other capital resources to fund our business expansion, which may divert financial resources otherwise
available for other purposes;
●
divert significant management attention and resources from our other businesses; and
●
strengthen our operational, financial and management controls, particularly those of our newly acquired subsidiaries, to maintain
the reliability of our reporting processes.
Any difficulty meeting the foregoing or similar requirements could significantly delay or otherwise constrain our ability to implement our
expansion plans or result in failure to achieve the expected benefits of the combination or acquisition or write-offs of acquired assets or investments,
which in turn would limit our ability to increase operational efficiency, reduce costs or otherwise strengthen our market position. Failure to obtain the
intended economic benefits from the business expansion could adversely affect our business, financial condition, results of operations and prospects.
In addition, we may also experience mixed results from our expansion plans in the short term.

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Regulations in the PRC may make it more difficult for us to pursue growth through acquisitions.
A number of PRC laws and regulations have established procedures and requirements that could make merger and acquisition activities in
China by foreign investors more time-consuming and complex, including the Regulations on Mergers and Acquisitions of Domestic Enterprises by
Foreign Investors, or the “M&A Rules,” which became effective on September 8, 2006 and was amended on June 22, 2009, and the Implementing
Rules Concerning Security Review on the Mergers and Acquisitions by Foreign Investors of Domestic Enterprises, or the “Security Review Rules,”
issued by MOFCOM in August 2011. These laws and regulations impose requirements in some instances that MOFCOM must be notified in advance
of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise. In addition, the Anti-Monopoly Law of
PRC requires that the anti-monopoly enforcement agency be notified in advance of any concentration of undertaking if certain thresholds are
triggered. On February 7, 2021, the Anti-Monopoly Committee of the State Council published the Anti-Monopoly Guidelines for the Internet Platform
Economy Sector, which stipulates that any concentration of undertakings involving variable interest entities is subject to anti-monopoly review.
Moreover, the Security Review Rules specify that mergers and acquisitions by foreign investors that raise “national defense and security” concerns
and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise “national security”
concerns are subject to strict review by the MOFCOM, and prohibit any attempt to bypass a security review, including by structuring the transaction
through a proxy or contractual control arrangement. On December 19, 2020, the NDRC and the MOFCOM jointly issued the Measures for the
Security Review for Foreign Investment, which took effect on January 18, 2021. These measures set forth the provisions concerning the security
review mechanism on foreign investment, including, among others, the types of investments subject to review, and the review scopes and procedures.
In the future, we may grow our business by acquiring complementary businesses. On January 22, 2024, the Provisions of the State Council on Filing
Thresholds for Business Concentrations came into effect, which raised the filing threshold concerning the revenues of parties participating in business
concentrations to be consistent with the current Anti-Monopoly Law of PRC, and, to a certain degree, to alleviate the burdens of PRC regulatory
compliance applicable to acquisition activities. Complying with the requirements of the relevant regulations to complete such transactions could be
time consuming, and any required approval processes, including approval from the MOFCOM and other PRC government authorities, may delay or
inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share. We believe that
our business is not in an industry related to national security. However, we cannot preclude the possibility that MOFCOM or other government
agencies may publish interpretations contrary to our understanding or broaden the scope of such security review in the future. Although we have no
current plans to do so, we may elect to grow our business in the future in part by directly acquiring complementary businesses in China.
The approval of the CSRC, may be required if we intend to do a follow-on equity offering in the future, and, if required, we cannot predict whether we
will be able to obtain such approval.
The M&A Rules require an overseas special purpose vehicle, or “SPV,” formed for listing purposes through acquisitions of PRC domestic
companies and controlled by PRC persons or entities to obtain the approval of the China Securities Regulatory Commission, or the “CSRC,” prior to
the listing and trading of such SPV’s securities on an overseas stock exchange. The interpretation and application of the regulations remain unclear,
and any follow-on offering of securities that we may conduct in the future may be subject to approval of the CSRC. If the CSRC approval is required,
it is uncertain whether we can or how long it will take us to obtain the approval and any failure to obtain or delay in obtaining the CSRC approval for
such future offering would subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which could include fines and penalties
on our operations in China, restrictions or limitations on our ability to pay dividends outside of China and other forms of sanctions that may materially
and adversely affect our business, financial condition and results of operations.

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In addition, on February 17, 2023, the CSRC promulgated the Overseas Listing Trial Measures and five relevant guidelines on the application
of the Regulatory Rules, which took effect on March 31, 2023, requiring the overseas securities offerings or listings of Chinese domestic companies to
be filed with the CSRC. The Overseas Listing Trial Measures clarify the scope of overseas offerings or listings by Chinese domestic companies which
are subject to the filing and reporting requirements thereunder, and provide, among other things, that Chinese domestic companies that have already
directly or indirectly offered and listed securities in overseas markets prior to the effectiveness of the Overseas Listing Trial Measures must fulfill their
filing obligations and report relevant information to the CSRC within three working days after conducting a follow-on securities offering on the same
overseas market, and follow the relevant reporting requirements within three working days upon the occurrence and public disclosure of any specified
circumstances provided thereunder, including any (i) change of control; (ii) investigations or sanctions imposed by overseas securities regulatory
agencies or other relevant competent authorities; (iii) change of listing status or transfer of listing segment; or (iv) voluntary or mandatory delisting. In
addition, where the main business of an issuer undergoes a material change after an overseas offering and listing, and is therefore beyond the scope of
the business stated in the original filing documents, such issuer shall follow the relevant reporting requirements within three working days after
occurrence of such changes.
As of the date of this annual report, we are not required by the CSRC to make the above filings. However, if we conduct a new issuance of
securities on the stock market, we are required by the Overseas Listing Trial Measures to fulfill relevant filing obligations within three working days
upon the competition of the new securities offering. If we are found in violation of these provisions or measures, the competent Chinese authorities
may impose administrative regulatory measures, such as orders for correction, warnings, and fines, and may subject us to legal liability in accordance
with PRC laws and regulations, which could include fines and penalties on our operations in the Chinese mainland, and other forms of sanctions that
may materially and adversely affect our business, financial condition and results of operations.
Our development plan may be adversely affected in the event that relocation issues related to government housing expropriations are not successfully
settled by the relevant PRC governmental authorities.
We acquire property for development through bidding, auctions and listing procedures held by the government or through acquisitions of
third parties. Some of the property we acquire from the government may have been made available through expropriation. On January 21, 2011, the
PRC State Council issued the Regulations on the Expropriation and Compensation of Houses on State-owned Land, which provides that government
entities at the city and county level are responsible for overseeing housing expropriation and compensation within their respective administrative
regions. The regulations mandate that a compensation agreement be entered into between the relevant housing expropriation department and the
entities or individuals whose houses have been expropriated addressing, among others things, the mode of payment and the amount of compensation,
the period of payment, the removal expenses, temporary placement or transitional housing expenses, losses from the closure of business operations,
the time period within which the entities or individuals must vacate the expropriated premises, the type of transitional accommodation and the period
of transition. The compensation payable may not be less than the market value of property of a similar nature as of the date of issuance of the
expropriation notice. Under the regulations, property developers are prohibited from participating in the relocation arrangements. Given the fact that
the completion of the relocation procedures is the condition precedent for the relevant PRC governmental authorities to grant land use rights, any
failure of the PRC governmental authorities in handling the relocation issues may cause substantial delays in the granting process of land use rights. If
we cannot obtain the land use rights from the relevant governmental authorities in time, our development plan may be delayed, and we may not be
able to complete the development and sell the property according to plan. This will, in turn, adversely affect our business operations.
We do not have insurance to cover potential losses and claims.
We do not maintain insurance policies for properties that we have delivered to our customers, and we maintain only limited insurance
coverage against potential losses or damages with respect to our properties in the PRC before their delivery to customers. Although we require our
contractors to carry insurance, we believe most of our contractors do not comply with this requirement. Our contractors may not be sufficiently
insured themselves or have the financial ability to absorb any losses that arise with respect to our projects or pay our claims. In addition, there are
certain types of losses, such as losses due to earthquakes, which are currently uninsurable in China. While we believe that our practice is in line with
the general practice in the PRC property development industry, there may be instances when we will have to internalize losses, damages and liabilities
because of the lack of insurance coverage, which may in turn adversely affect our financial condition and results of operations. In addition, while we
carry limited insurance on our operations in the United States, Malaysia and the U.K., such insurance may not be adequate to compensate us for any
losses, damages and liabilities we might incur with regard to our properties.

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We may suffer a penalty or even forfeit land to the PRC government if we fail to comply with procedural requirements applicable to land grants from
the government or the terms of the land use rights grant contracts.
According to the relevant PRC laws and regulations, if we fail to develop a property project according to the terms of the land use rights
grant contract, including those relating to the payment of land premiums, specified use of the land and the time for commencement and completion of
the property development, the PRC government may issue a warning, may impose a penalty or may order us to forfeit the land. Specifically, under
current PRC laws and regulations, if we fail to pay land premiums in accordance with the payment schedule set forth in the relevant land use rights
grant contract, the relevant PRC land bureau may issue a warning notice to us, impose late payment penalties or even require us to forfeit the related
land to the PRC government. The late payment penalties are usually calculated based on the overdue days for the land premium payments.
Furthermore, if we fail to commence development within one year after the commencement date stipulated in the land use rights grant contract, the
relevant PRC land bureau may issue a warning notice to us and impose an idle land fee on the land of up to 20% of the land premium. If we fail to
commence development within two years, then upon approval by the competent local branch of the PRC government, the land may be subject to
forfeiture to the PRC government without any compensation. Even if the commencement of the land development is compliant with the land use
rights grant contract, if the developed GFA on the land is less than one-third of the total GFA of the project that should have been under construction
and development or the total capital invested is less than one-fourth of the total investment of the project and the suspension of the development of the
land continues for more than one year without government approval, the land will also be treated as idle land and be subject to penalty or forfeiture.
We cannot assure shareholders that circumstances leading to significant delays in our own land premium payments or development schedules
or forfeiture of land will not arise in the future. If we pay a substantial penalty, we may not be able to meet pre-set investment targeted returns for a
given project and our financial conditions could be adversely affected. If any of our land is forfeited, we will not only lose the opportunity to develop
the property projects on such land, but may also lose a significant portion of the investment in such land, including land premium deposits and the
development costs incurred.
Any non-compliant GFA of our uncompleted and future property developments will be subject to governmental approval and additional payments or
even revocation of qualification certificate.
The local government authorities inspect property developments after their completion and issue the completion acceptance certificates if the
developments are in compliance with the relevant laws and regulations. If the total constructed GFA of a property development exceeds the GFA
originally authorized in the relevant land grant contracts or construction permit, or if the completed property contains built-up areas that do not
conform with the plan authorized by the construction permit, the property developer may be required to pay additional amounts or take corrective
actions with respect to such non-compliant GFA before a completion acceptance certificate can be issued to the property development. Furthermore, if
the total constructed GFA of a property development exceeds the constructed GFA limitation specified in the real estate development qualification
obtained by the property developer, the property developer may be fined up to RMB100,000, or even have its qualification certificate and business
license revoked.
We obtained completion acceptance certificates for all of our completed properties as of December 31, 2024. However, we cannot be certain
that local government authorities will not determine that the total constructed GFA upon completion of our existing projects under development or any
future property developments exceed the relevant authorized GFA. Any such non-compliance could lead to additional payments or penalty, which
would adversely affect our financial condition. We have not incurred material amounts of any such payments or penalties since the founding of our
company.

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We may not be able to continue obtaining qualification certificates, which will adversely affect our business.
Real estate developers in the PRC must obtain a formal qualification certificate in order to carry on a property development business in the
PRC. According to the PRC regulations issued on the qualifications of property developers, a newly established property developer must first apply
for a temporary qualification certificate with a one-year validity, which can be renewed for not more than two years. If, however, the newly
established property developer fails to commence a property development project within the one-year period during which the temporary qualification
certificate is in effect, it will not be allowed to renew its temporary qualification certificate. All qualification certificates are subject to inspection on an
annual basis and shall be renewed upon expiration. Under government regulations, developers must fulfill all statutory requirements before they may
obtain or renew their qualification certificates. In accordance with the provisions of the rules on the administration of qualifications, the real estate
developer qualifications are classified into four classes and the approval system for each class is tiered. A real estate developer may only engage in the
development and sale of real estate within the scope of its qualification certificate. See “Item 4. Information on the Company — B. Business
Overview — Regulation — China — Regulations on Qualifications of Developer.”
There can be no assurance that some of our project companies that are in the process of applying for or renewing proper qualification
certificates will be able to obtain such certificates on a timely basis to commence their planned real estate projects development on schedule. There
can be no further assurance that we and our project companies will continue to be able to extend or renew the qualification certificates or be able to
successfully upgrade the current qualification class to a higher qualification. If we or our project companies are unable to obtain or renew qualification
certificates, the PRC government will refuse to issue pre-sale and other permits necessary for the conduct of the property development business, and
our results of operations, financial condition and cash flows will be adversely affected. In addition, if any of our project companies engages in the
development and sale of real estate outside the scope of its qualification certificate, it may be ordered to rectify such conduct within a prescribed
period, be fined up to RMB100,000, or even have its qualification certificate and business license revoked.
Our failure to assist our customers in applying for property ownership certificates in a timely manner may lead to compensatory liabilities to our
customers and our reputation and results of operations may be thus adversely affected.
We are statutorily required to assist our customers in their application process for property ownership certificates within 90 days after
delivery of property, or such other period contracted with our customers, including in the way of submitting required materials to the real estate
administration of the place where the house is located within 60 days from the day of delivery, passing various governmental clearances, formalities
and procedures. If we fail to submit the required materials for property right registration within such period, we may be given a disciplinary warning
and be ordered to take remedial measures within specified time limit, or be fined not less than RMB20,000 but not more than RMB30,000. Under our
typical sales contract, we are liable for any delay in the submission of the required documents as a result of our failure to meet such requirements, and
are required to compensate our customers for delays. In the case of delays of submission of required documents, we are required under contracts with
our customers to pay compensation to our customers and our reputation and results of operations may be adversely affected.
The property development business is subject to claims under statutory quality warranties.
Under PRC law, all property developers in the PRC must provide certain quality warranties for the properties they construct or sell. We are
required to provide these warranties to our customers. Generally, we receive quality warranties from our third-party contractors with respect to our
property projects. If a significant number of claims were brought against us under our warranties and if we were unable to obtain reimbursement for
such claims from third-party contractors in a timely manner or at all, or if the money retained by us to cover our payment obligations under the quality
warranties was not sufficient, we could incur significant expenses to resolve such claims or face delays in remedying the related defects, which could
in turn harm our reputation, and materially adversely affect our business, financial condition and results of operations.

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We may become involved in legal and other proceedings from time to time and may suffer significant liabilities or other losses as a result.
We have been, in the past, and may be, in future, involved in disputes with various parties relating to the acquisition of land use rights, the
development and sale of our properties or other aspects of our business and operations. These disputes may lead to legal or other proceedings and may
result in substantial costs and diversion of resources and management’s attention. Disputes and legal and other proceedings may require substantial
time and expense to resolve, which could divert valuable resources, such as management time and working capital, delay our planned projects and
increase our costs. Third parties that are found liable to us may not have the resources to compensate us for our incurred costs and damages. We could
also be required to pay significant costs and damages if we do not prevail in any such disputes or proceedings. In addition, we may have
disagreements with regulatory bodies in the course of our operations, which may subject us to administrative proceedings and unfavorable decrees that
result in pecuniary liabilities and cause delays to our property developments. Any unfavorable judgment in our current legal proceedings or any
involvement in further legal proceedings or disputes may materially and adversely affect our business, financial condition and results of operations.
See “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings.”
The relevant PRC tax authorities may challenge the basis on which we have been paying our land appreciation tax obligations and our results of
operations and cash flows may be affected.
Under PRC laws and regulations, our PRC subsidiaries engaging in property development are subject to land appreciation tax, or “LAT,”
which is levied by the local tax authorities. All taxable gains from the sale or transfer of land use rights, buildings and their attached facilities in the
PRC are subject to LAT at progressive rates ranging from 30% to 60%. Exemptions are available for the sale of ordinary residential properties if the
appreciation values do not exceed certain thresholds specified in the relevant tax laws. Gains from the sale of commercial properties, luxury
residential properties and villas are not eligible for this exemption.
We have accrued LAT payable on our property sales and transfers in accordance with the progressive rates specified in relevant tax laws, less
amounts previously paid under the levy method applied by relevant local tax authorities. However, provision for LAT requires our management to use
a significant amount of judgment with respect to, among other things, the anticipated total proceeds to be derived from the sale of the entire phase of
the project or the entire project, the total appreciation of project value and the various deductible items. Given the time gap between the point at which
we make provisions for and the point at which we settle the full amount of LAT payable, the relevant tax authorities may not necessarily agree with
our apportionment of deductible expense or other bases on which we calculate LAT. As a result, our LAT expenses as recorded in our financial
statements of a particular period may require subsequent adjustments. If the LAT provisions we have made are substantially lower than the actual LAT
amounts assessed by the tax authorities in the future, our results of operations and cash flows will be materially and adversely affected. For a range of
reasonably possible losses in excess of the amounts we have accrued for LAT, to the extent such estimates are determinable, see Note 15 of our
Consolidated Financial Statements in this report.
Our operations may be affected by the real property taxes to be imposed by the PRC government.
According to the Interim Regulations on Real Property Tax of the PRC, or the “Real Property Tax Regulations,” which were amended on
January 8, 2011, real property tax shall be paid by the property owners based on the residual value of real property following a subtraction of 10% to
30% from the original value of the property, and the specific range of subtraction, the tax payment period and the detailed implementing rules shall be
decided or formulated by the local governments of provinces. Although the PRC government has been considering imposing real property tax on a
nationwide scale, most of the provinces have not promulgated any detailed implementing rules about real property tax or levy the real property tax yet.
In another attempt to cool the real estate market, the PRC government has designated Shanghai and Chongqing as trial regions to impose the real
property tax, and in response, on January 27, 2011, both Shanghai and Chongqing implemented local rules regarding the imposition of real property
tax, with these rules taking effect on January 28, 2011, with Chongqing amending its rules on January 13, 2017. On February 20, 2013, the PRC State
Council, in an executive meeting, stated a new policy regarding the real property tax that the government would select more trial regions for the real
property tax that year. However, most provinces still have not implemented any local rules regarding the imposition of real property tax yet. Real
property tax regulations may eventually be officially implemented at the national level; any such regulation could significantly impact the real estate
market. In light of these developments, we cannot guarantee that our operations will not be adversely affected.

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Dividends we receive from our subsidiaries located in the PRC may be subject to PRC withholding tax.
The Enterprise Income Tax Law of the PRC, or the “EIT Law,” became effective as of January 1, 2008 and was amended on February 24,
2017 and December 29, 2018, and the Implementation Rules for the EIT Law issued by the PRC State Council became effective as of January 1, 2008
and was amended on April 23, 2019. The EIT Law provides that a maximum income tax rate of 20% may be applicable to dividends payable to non-
PRC investors that are “non-resident enterprises,” to the extent such dividends are derived from sources within the PRC, and the State Council has
reduced such rate to 10% through the Implementation for the EIT Law. We are a Cayman Islands holding company and substantially all of our income
may be derived from dividends we receive from our PRC subsidiaries. Thus, dividends paid to us by our subsidiaries in China may be subject to the
10% income tax if we are considered a “non-resident enterprise” under the EIT Law. If we are required under the EIT Law to pay income tax for any
dividends we receive from our PRC subsidiaries, it will materially and adversely affect the amount of dividends received by us from our PRC
subsidiaries.
We may be deemed a PRC resident enterprise for PRC tax purposes under the EIT Law and be subject to the PRC taxation on our worldwide income.
The EIT Law also provides that enterprises established outside of China whose “de facto management bodies” are located in China are
considered “resident enterprises” and are generally subject to the uniform 25% corporate income tax rate as to their worldwide income. Under the
Implementation Rules for the EIT Law, “de facto management body” is defined as a body that has material and overall management and control over
the manufacturing and business operations, personnel and human resources, finances and treasury, and acquisition and disposition of properties and
other assets of an enterprise. Under the Notice on the Issues Regarding Recognition of Overseas Incorporated Domestically Controlled Enterprises as
PRC Resident Enterprises Based on the De Facto Management Body Criteria, or “Circular 82,” which was retroactively effective as of January 1,
2008 and amended on November 8, 2013, January 29, 2014 and December 29, 2017, an overseas incorporated, domestically-controlled enterprise will
be recognized as a PRC resident enterprise if it satisfies certain conditions. Further, the State Administration of Taxation, or the “SAT,” issued the
Administrative Measures of Enterprise Income Tax of Chinese-controlled Offshore Incorporated Resident Enterprises (Trial), or “Bulletin 45,” which
became effective on September 1, 2011, and was amended on April 17, 2015, June 28, 2016 and June 15, 2018, to provide further guidance on the
implementation of Circular 82. Bulletin 45 clarified certain issues relating to the determination of PRC tax resident enterprise status, post-
determination by administration and the authorities responsible for determining offshore-incorporated PRC tax resident enterprise status. Bulletin 45
specifies that when provided with a copy of a Chinese tax resident determination certificate issued by the in-charge tax authorities from an offshore-
incorporated PRC tax resident enterprise, the payer should not withhold 10% income tax when paying Chinese-sourced dividends, interest and
royalties to the offshore incorporated PRC tax resident enterprise. However, as Circular 82 and Bulletin 45 only apply to enterprises incorporated
under laws of foreign jurisdictions that are controlled by PRC enterprises or groups of PRC enterprises, it remains unclear how the tax authorities will
determine the location of “de facto management bodies” for overseas incorporated enterprises that are controlled by individual PRC residents or non-
PRC enterprises such as our company. It is still unclear whether PRC tax authorities would require us to be treated as a PRC resident enterprise. If we
are treated as a resident enterprise for PRC tax purposes, we will be subject to PRC tax on our worldwide income at the 25% uniform tax rate, which
could have an impact on our effective tax rate and an adverse effect on our net income and results of operations. Notwithstanding the foregoing, the
EIT Law also provides that, if a PRC resident enterprise already invests in another PRC resident enterprise, the dividends received by the investing
resident enterprise from the invested resident enterprise will be exempt from PRC income tax, subject to certain qualifications. Therefore, if we are
classified as a PRC resident enterprise, the dividends received from our PRC subsidiaries may be exempt from income tax in China. However, it
remains unclear how the PRC tax authorities will interpret the PRC tax resident treatment of an offshore company with indirect ownership interests in
PRC resident enterprises through intermediary holding companies.

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Dividends payable by us to our non-PRC investors and gain on the sale of our ADSs may become subject to taxes under PRC tax laws.
Under the Implementation Rules for the EIT Law, a PRC income tax rate of 10% is applicable to dividends payable to investors that are
“non-resident enterprises,” which do not have an establishment or place of business in the PRC, or which have such establishment or place of business
but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends have their sources within
the PRC. Similarly, any gain realized on the transfer of ADSs by such investors is also subject to 10% PRC income tax if such gain is regarded as
income derived from sources within the PRC. For non-PRC individual investors, under the PRC Individual Income Tax Law, if we are deemed as a
PRC “resident enterprise,” there could be a PRC income tax at a rate of 20% for such dividends or gains, if such income is considered as having been
derived from within China. It is unclear whether dividends we pay with respect to our ADSs, or the gain shareholders may realize from the transfer of
our ADSs, would be treated as income derived from sources within the PRC and be subject to PRC tax. If we are required under the Implementation
Rules for the EIT Law to withhold PRC income tax on dividends payable to our non-PRC investors that are “non-resident enterprises,” or non-PRC
individuals, or if a shareholder is required to pay PRC income tax on the transfer of our ADSs, the value of such shareholder’s investment in our
ADSs may be materially and adversely affected.
Indirect Transfers of Equity Interests in PRC Tax Resident Enterprises by Non-resident Enterprises May Cause Uncertainty on Tax Liabilities.
On February 3, 2015, the SAT issued the Circular on issues of enterprise Income Tax on Indirect Transfer of Assets by Non-PRC Resident
Enterprise, or “Circular 7,” which extends its tax jurisdiction to transactions involving transfer of other taxable assets through offshore transfer of a
foreign intermediate holding company. In addition, Circular 7 provides clear criteria for assessment of reasonable commercial purposes and has
introduced safe harbors for internal group restructurings and the purchase and sale of equity through a public securities market. Circular 7 also brings
challenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets. In October 2017, SAT
issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at
Source, or “SAT Bulletin 37,” which came into effect on December 1, 2017. The SAT Bulletin 37 further clarifies the practice and procedure of the
withholding of non-resident enterprise income tax. Where a non-resident enterprise transfers taxable assets indirectly by disposing of the equity
interests of an overseas holding company, which is an indirect transfer, the non-resident enterprise as either transferor or transferee, or the PRC entity
that directly owns the taxable assets, may report such Indirect Transfer to the relevant tax authority. Using a “substance over form” principle, the PRC
tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the
purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such indirect transfer other than transfer of shares or ADSs
acquired and sold on public markets may be subject to PRC enterprise income tax, and the transferee or other person who is obligated to pay for the
transfer is obligated to withhold the applicable taxes, currently at a rate of 10%. Both the transferor and the transferee may be subject to penalties
under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.
We face uncertainties as to the reporting and other implications of certain past and future transactions that involve PRC taxable assets, such
as offshore restructuring, sale of the shares in our offshore subsidiaries and investments. Our Company may be subject to filing obligations or taxed if
our Company is transferor in such transactions, and may be subject to withholding obligations if our company is transferee in such transactions, under
Circular 7 or SAT Bulletin 37, or both. However, since Circular 7 specifies that it does not apply if a non-resident enterprise obtains the proceeds from
indirect transfer of Chinese taxable property by trading stocks of a listed foreign enterprise in the open market, for most of our investors, who either
are not enterprises, or are non-resident enterprises but only trade stocks in the open market, they will not be required to pay tax under Circular 7 or
SAT Bulletin 37.
If the value of our brand or image diminishes, it could have a material adverse effect on our business and results of operations.
We intend to continue promoting the “Xinyuan” brand in selected cities in our target markets by delivering quality products and attentive real
estate-related services to our customers. Our brand is integral to our sales and marketing efforts. Our continued success in maintaining and enhancing
our brand and image depends to a large extent on our ability to satisfy customer needs by further developing and maintaining the quality of our
services across our operations, as well as our ability to respond to competitive pressures. If we are unable to satisfy customer needs or if our public
image or reputation were otherwise hindered, our business transactions with our customers may decline, which could in turn adversely affect our
results of operations.

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We may be required to record impairment charges in the future.
We record our real estate properties projects, completed and under development, at the lower of carrying amounts or fair value less selling
costs. In accordance with ASC 360, “Property, Plant and Equipment,” real estate property projects, completed and under development, are subject to
valuation adjustments when the carrying amount exceeds fair value. An impairment loss is recognized if the carrying amount of the assets is not
recoverable and exceeds fair value. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash flows expected to be
generated by the assets. We have not recognized any fair value losses from our real estate properties projects, completed and under development. If the
projected profitability of a given project deteriorates due to a decline in the pace of unit sales, a decline in selling prices, or some other factor, such
project is reviewed for possible impairment by comparing the estimated future undiscounted cash flows for the project to its carrying value. If the
estimated future undiscounted cash flows are less than the project’s carrying value, the project is written down to its estimated fair value. If business
conditions deteriorate, there is a potential risk that impairment charges will be recorded, which may have a material adverse effect on our results of
operation.
Failure to protect our brand or trademark may adversely affect our business.
We own trademarks for “鑫苑” in the form of Chinese characters and our company logo in the PRC, the United States, the U.K., EU, New
Zealand, Australia, Singapore and Korea. We rely on those countries’ intellectual property and anti-unfair competition laws and contractual
restrictions to protect brand name and trademarks. We believe our brand, trademarks and other intellectual property rights are important to our
success. Any unauthorized use of our brand, trademarks and other intellectual property rights could harm our competitive advantages and business.
Monitoring and preventing unauthorized use are difficult. The measures we take to protect our intellectual property rights may not be adequate.
Furthermore, the application of laws governing intellectual property rights in China and abroad is uncertain and evolving, and could involve
substantial risks to us. If we are unable to adequately protect our brand, trademarks and other intellectual property rights, our reputation may be
harmed and our business may be adversely affected.
In the PRC, the registration and protection of a company’s corporate name is regional and limited to its related industry. Although we have
registered our corporate name “Xinyuan” in certain provinces where we operate, we cannot prevent others from registering the same corporate name
in other provinces or in other industries. If another company is the first to register “Xinyuan” as its corporate name in a province other than Beijing,
Tianjin, Henan Province, Shandong Province, Jiangsu Province, Anhui Province, Sichuan Province, Hunan Province, and Shaanxi Province or in
another industry, we will have to adopt another corporate name if we plan to enter that market or industry. Moreover, the use of “Xinyuan” by another
company may lead to confusion in the marketplace and reduce the value of our brand name.
We may be subject to additional payments of statutory employee benefits.
According to PRC laws and local regulations, we are required to pay various statutory employee benefits, including pensions, housing fund,
medical insurance, work-related injury insurance, unemployment insurance and childbearing insurance to designated government agents for the
benefit of all our employees. Since the Social Insurance Law of the PRC came into effect on July 1, 2011, which was amended on December 29, 2018,
the legal framework regulating employee social insurance has been further strengthened. The requirement of employee benefits has not been
implemented consistently by the local governments in China, given the different levels of economic development in different locations.While we
believe that our PRC subsidiaries have appropriately accrued for and paid statutory employee benefits, we cannot be certain the relevant PRC
authorities may not interpret local requirements differently and require payments of additional employee benefit amounts in the future.
Our property development schedule may be delayed and our development costs may increase as a result of delayed governmental demolition and
resettlement processes if we were to acquire land requiring demolition of existing properties.
According to the Regulations on the Expropriation and Compensation of Houses on State-owned Land, local PRC governments are
responsible for the expropriation and compensation of houses on State-owned land and may authorize entities like us to carry out the expropriation
and compensation work. However, in practice, we may be required to pay the corresponding demolition and resettlement costs. If the party subject to
expropriation is not satisfied with the compensation, an administrative reconsideration or an administrative action can be brought, which may delay
the project. Our practice generally has been to acquire land where demolition of existing properties and resettlement of residents is not required.
However, if we were to acquire land where such actions are required, issues in the demolition and resettlement processes may affect our reputation,
increase our costs and delay the pre-sale of the relevant project, which may in turn adversely affect our business, financial position and operational
performance.

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To the extent demolition and resettlement are required in any of our future property developments, we may be required to compensate
existing residents an amount calculated in accordance with local resettlement compensations standards. These local standards may change from time
to time without advance notice. If such compensation standards are changed to increase the compensation we are required to pay, our land acquisition
costs may increase, which could adversely affect our financial condition and results of operations. In respect of projects in which the resettlement
costs are borne by us, if we or the local government fail to reach an agreement over the amount of compensation with any existing owner or resident,
any party may apply to the relevant authorities for a ruling on the compensation amount. Dissenting owners and residents may also refuse to relocate
or even initiate legal proceedings to challenge our land use rights, permits or approvals. Any administrative process, legal proceedings, resistance or
refusal to relocate may delay our future project development schedules, and an unfavorable final ruling may result in us paying more than the amount
required by the local standards or even losing the relevant certificates, permits or approvals. Any occurrence of the above factors may result in
increases in our future development costs or delay the development schedule of the relevant project which can adversely affect our cash flows,
financial condition and results of operations.
We could be adversely affected by potential violations of the United States Foreign Corrupt Practices Act.
The United States Foreign Corrupt Practices Act, or “FCPA,” generally prohibits companies and their intermediaries from making improper
payments to public officials for the purpose of obtaining or retaining business. Our internal policies mandate compliance with these anti-corruption
laws. We operate and retain employees in China, the United States, Malaysia and the U.K., and we rely on our management structure, regulatory and
legal resources and effective operation of our compliance program to direct, manage and monitor the activities of our employees. Despite our training,
oversight and compliance programs, we cannot assure shareholders that our internal control policies and procedures always will protect us from
deliberate, reckless or inadvertent acts of our employees or agents that contravene our compliance policies or violate applicable laws. Our continued
expansion in China and the United States could increase the risk of such violations in the future. Expansion into other countries could expose us to
additional anti-bribery or anticorruption laws, and we could face additional risks if expand our operations into countries where the compliance culture
is less robust. Violations of the FCPA, or allegations of such violations, could disrupt our business and result in a material adverse effect on our results
of operations or financial condition.
Risks Related to the Residential Property Industry in China
Our operations are highly subject to government policies and regulations in the real estate market.
The real estate industry in China is subject to constant and drastic policy changes by the PRC government. Since 2010, the PRC government
has been tightening its control of the real estate market with the aim of curbing increases in property prices while also, since early 2015, trying to
stimulate the market to reduce inventory. A number of rules and regulations have been set forth by various PRC authorities concerning the real estate
market. See “Item  4. Information on the Company — B. Business Overview — Regulation — China” for more details on some of the PRC
regulations.

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Since 2016, the local governments of several cities in the PRC have implemented a series of measures designed to stabilize the growth of the
property market on a more sustainable level. These tightening measures have affected some of the cities where we operate, including Zhengzhou,
Suzhou, Chengdu, Jinan, Tianjin, Beijing, Xi’an and Changsha. Since 2017, certain local governments in the PRC further implemented measures to
control the increase of property sale prices and stabilize the real estate market. For example, in March 2017, the municipal city of Tianjin requested
non-local residents to provide social insurance certificates and individual income tax contribution certificates issued by Tianjin’s competent authorities
before such non-local residents were permitted to purchase a residential property. In April 2018, Hainan province adopted measures to limit each local
resident from purchasing more than one residential property. In September 2020, the city of Chengdu adopted a five-year limit for residents to transfer
or sell newly purchased residential property. These measures regulate various aspects of the property market, including: (i) land acquisition financing,
(ii) pre-sale management, (iii) sale price restriction (for example, Suzhou requires developers to file sale prices at the price filing systems of relevant
authorities), (iv) purchaser qualification and (v) purchaser financing. These local measures may also cause adverse and material impacts on our
business operations and financial results. Since 2024, many tightening measures in the above-mentioned cities have been abolished or relaxed to a
certain extent. For example, in April 2024, Tianjin issued a policy providing that residents of Beijing and Hebei, and those employed in Beijing and
Hebei, should be entitled to enjoy the same housing purchase policies as local residents in Tianjin. In January 2024, several cities in Hainan Province
also started to relax certain aspects of the previous restrictions in those cities. For instance, in Haikou, families with multiple children are permitted to
purchase an additional residential property compared to the number permitted under the previous policies. In April 2024, Chengdu completely
abolished its existing restrictions on residential property purchases. In October 2024, Shanghai reduced social insurance/tax payment requirements for
non-local singles to one year to qualify for purchasing one home in non-core districts. In December 2024, Shenzhen removed price ceilings on luxury
homes and shortened the holding period for resale tax exemptions from 5 to 2 years. Hangzhou narrowed new-home restrictions to 4 central districts
in October 2023, and lifted all resale property purchase limits in March 2024.
Despite the above, the PRC government can still issue and impose policies and regulatory measures on the PRC real estate sector that could
limit our access to required financing and other capital resources, adversely affect the property purchasers’ involved ability to obtain mortgage
financing or significantly increase the cost of mortgage financing, reduce market demand for our properties and increase our operating costs. We
cannot be certain that the PRC government will not issue additional (or will not restore previously abolished or relaxed) stringent regulations or
measures, or that agencies and banks will not adopt restrictive measures or practices in response to PRC governmental policies and regulations, which
could substantially reduce the number of our pre-sold properties and our cash flow from operations and substantially increase our financing needs,
which would in turn materially and adversely affect our business, financial condition, results of operations and prospects.
The PRC government has adopted various measures to regulate foreign investment in the property development industry and may adopt further
restrictive measures in the future.
The PRC government has implemented a number of regulations and measures governing foreign investment in the property development
industry.
In July 2006, the Ministry of Construction, MOFCOM, the NDRC, the PBOC, the State Administration for Industry and Commerce, or the
“SAIC,” and the SAFE, issued the Opinions on Regulating the Entry and Administration of Foreign Investment in the Real Estate Market, amended
on August 19, 2015, which impose significant requirements on foreign investment in the PRC real estate sector. For instance, these opinions set forth
requirements for the procedures to set up a foreign-invested real estate enterprise, or the “FIREE,” and the thresholds for a FIREE to borrow domestic
or overseas loans. In addition, since June 2007, a FIREE approved by local authorities is required to file such approvals with the MOFCOM or its
provincial branches. We cannot assure that any FIREE that we establish, or whose registered capital we increase, will be able to complete the filing
procedures with MOFCOM in time or otherwise fully comply with those specific requirements set for FIREEs.
The regulatory restrictions imposed on foreign investment in real estate projects has been and continues to be evolving. Currently, on March
15, 2019, the National People’s Congress adopted the Foreign Investment Law of the PRC, or the “FIL,” which became effective on January 1, 2020.
The FIL grants national treatment to foreign invested entities, except for those foreign invested entities that operate in industries deemed to be either
“restricted” or “prohibited” in a “negative list.” On December 28, 2021, the MOFCOM and the NDRC promulgated the Special Administrative
Measures on the Access of Foreign Investment (Negative List) (2021 Edition), or the “2021 Negative List,” which took effect on January 1, 2022,
which provide there are no specific restrictions for foreign investment in the real estate industry.

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The PRC government’s restrictive regulations and measures could increase our operating costs in adapting to these regulations and measures,
limit our access to capital resources or even restrict our business operations. We cannot be certain that the PRC government will not issue additional
and more stringent regulations or measures, which could further adversely affect our business and prospects.
We face intense competition from other real estate developers.
The property industry in the PRC is highly competitive. In the high-growth tier I and tier II cities we focus on, local and regional property
developers are our major competitors, and an increasing number of large state-owned and private national property developers have started entering
these markets. Many of our competitors, especially the state-owned and private national property developers, are well capitalized and have greater
financial, marketing and other resources than we have. Some also have larger land banks, greater economies of scale, broader name recognition, a
longer track record and more established relationships in certain markets. In addition, the PRC government’s recent measures designed to reduce land
supply has further increased competition for land among property developers.
Competition among property developers may result in increased costs for the acquisition of land for development, increased costs for raw
materials, shortages of skilled contractors, oversupply of properties, decrease in property prices in certain parts of the PRC, a slowdown in the rate at
which new property developments will be approved and/or reviewed by the relevant government authorities and an increase in administrative costs for
hiring or retaining qualified personnel, any of which may adversely affect our business and financial condition. Furthermore, property developers that
are better capitalized than we are may be more competitive in acquiring land through the auction process. If we cannot respond to changes in market
conditions as promptly and effectively as our competitors or effectively compete for land acquisitions through the auction systems, our business and
financial condition will be adversely affected.
In addition, risk of property over-supply is increasing in parts of China, where property investment, trading and speculation have become
overly active. We are exposed to the risk that in the event of actual or perceived over-supply, property prices may fall drastically, and our revenue and
profitability will be adversely affected.
Our sales, revenue and operations will be affected if our customers are not able to secure mortgage financing on attractive terms, if at all.
A majority of the purchasers of our residential properties rely on mortgages to fund their purchases. If the availability or attractiveness of
mortgage financing is reduced or limited, many of our prospective customers may not desire or be able to purchase our properties and, as a result, our
business, liquidity and results of operations could be adversely affected. Among other factors, the availability and cost of mortgage financing may be
affected by changes in PRC regulations or policies or changes in interest rates. The circulars issued by the PRC State Council and related measures
taken by local governments and banks have restricted and may continue to restrict the ability of purchasers to qualify for or obtain mortgage financing.
On March 30, 2015, the PBOC, the MOHURD and the CBRC jointly issued the Circular on Issues concerning Individual Residential
Mortgage Policies in an effort to stimulate the market. The circular specifies the minimum down payment is 20% for purchasers of a first residential
property for their households with their housing fund loans and 40% for the purchasers of a second residential household property with housing fund
loans with outstanding mortgages who apply for another mortgage. On August 27, 2015, the MOHURD, the Ministry of Finance of the PRC, or the
“MOF,” and the PBOC jointly issued the Circular on Adjusting the Minimum Down Payment for the Purchase of Houses by Individuals with the
Housing Fund Loans, which provides that the purchasers of a second residential household property with housing fund loans are only required to pay a
minimum down payment of 20% if all loans are settled on their first residential property, in addition, Beijing, Shanghai, Guangzhou, and Shenzhen
may, on the basis of the unified national policy and in accordance with local conditions, independently determine the minimum down payment ratio
for applying for housing fund loans to purchase a second residential household property. On February 1, 2016, the PBOC issued the Circular on Issues
concerning Adjusting the Individual Housing Loan Policies, which provides that, in the cities without restrictive measures for residential property
purchase, the minimum down payment shall, in principle, be 25% of the house price with housing fund loans for a first residential property for
purchasers’ households, while the minimum down payment shall be at least 30% of the corresponding house price for a second residential household
property. And in the cities with restrictive measures for house purchase, the individual housing loan policies shall be subject to the previous
provisions. Furthermore, on April 12, 2019, the Circular on Matters relating to Adjusting the Policy for Individual Housing Loans via the Housing
Provident Fund to Further Upgrade Services was issued, which provides that the minimum down payment is 30% for purchasers of a first residential
property other than economically affordable house for their households with their housing fund loans, and 60% for the purchasers of a second
residential household property other than economically affordable house with housing fund loans.

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We cannot predict how long these policies will continue or what other action, if any, the banks in cities in which we operate may take. In
addition, since 2013, PRC banks have tightened the conditions on which mortgage loans are extended to homebuyers by comparing the anticipated
monthly repayment of the mortgage loan with the individual borrower’s monthly income and other measures. Therefore, mortgage loans for home
buyers have been subject to longer processing periods or even denied by the banks. We monitor our homebuyers’ outstanding mortgage loans on an
ongoing basis via our management reporting procedures and have taken the position that contracts with underlying mortgage loans with processing
periods exceeding one year cannot be recognized as revenue on an over time basis. As a result, we reversed contracted sales of the amounts related to
apartments for which mortgage loans with processing periods exceeding one year when recognizing revenue on an over time basis.
Risks Related to Doing Business in China
Significant oversight and discretion by the PRC government over our business operations could result in a material change in our operations and the
value of our ADSs.
We conduct our business primarily through our PRC subsidiaries in China. Our operations in China are governed by PRC laws and
regulations. The PRC government has significant oversight and discretion over the conduct of our business, and may influence or intervene our
operations at any time, which could result in a material change in our operation and/or the value of our ADSs. Also, the PRC government has
indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers
like us, and has implemented, and may continue to implement, relevant regulatory requirements.
For example, recently the PRC government initiated a series of regulatory actions and statements to regulate business operations in China,
including cracking down on illegal activities in the securities market, strengthened supervision on overseas listings by China-based companies,
adopting new measures to extend the scope of cybersecurity reviews and data security protection, and expanding the efforts in anti-monopoly
enforcement. Our failure to meet such requirements could significantly limit or completely hinder our ability to offer or continue to offer securities to
investors and cause the value of such securities to significantly decline or be worthless. In addition, implementation of industry-wide regulations
directly targeting our operations could require us to change our operations, and our failure to do so could cause the value of our securities to
significantly decline. We cannot rule out the possibility that regulations or policies that directly or indirectly affect our industry or require us to seek
additional permission to continue our operations may be released in the future, which could result in a material adverse change in our business, results
of operations, financial condition, and/or the value of our ADSs. Therefore, investors and our business face potential uncertainties from actions taken
by the PRC government affecting our business.
Uncertainties with respect to the PRC legal system, including uncertainties with respect to the interpretation, application, and enforcement of PRC
laws and regulations, and sudden or unexpected changes of PRC laws and regulations with little advance notice, could have a material adverse effect
on our business, results of operations, financial condition and the value of our ADSs.
We conduct our business primarily through our PRC subsidiaries and our operations in China are governed by PRC laws and regulations. The
legal system in China is a civil law system based on written statutes. Unlike common law systems, it is a system in which decided legal cases may be
cited for reference but have less precedential value. The legal system in China evolves rapidly, and the interpretations of laws, regulations, and rules
may change from time to time. The enforcement of laws in the PRC legal system and rules and regulations in China can change quickly with little
advance notice.
In addition, their interpretation and enforcement involve uncertainties. These uncertainties could limit the legal protections available to us. In
addition, we cannot predict the effect of future developments in the PRC legal system, particularly with regard to internet-related industries, including
the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the preemption of local regulations by national
laws. Such unpredictability towards our contractual, property (including intellectual property) and procedural rights could adversely affect our
business and impede our ability to continue our operations. Furthermore, the PRC legal system is based in part on government policies and internal
rules, the interpretation, application, and enforcement of which may involve uncertainties. As a result, we may not be aware of our potential violation
of these policies and rules. In addition, we may have to resort to administrative and court proceedings to enforce the legal protection that we enjoy
either by law or contract. However, administrative and court proceedings may be protracted and result in substantial costs and diversion of resources
and management attention, and we cannot predict the outcome of administrative and court proceedings.

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In addition, new laws and regulations may be enacted from time to time and uncertainties exist regarding the interpretation and
implementation of current and any future PRC laws and regulations applicable to our businesses. For example, recently the PRC government initiated
a series of regulatory actions and statements to regulate business operations in China, including cracking down on illegal activities in the securities
market, strengthened supervision on overseas listings by China-based companies, adopting new measures to extend the scope of cybersecurity reviews
and data security protection, and expanding the efforts in anti-monopoly enforcement. Compliance with these laws, regulations, rules, guidelines, and
implementations may be costly, and any incompliance or associated inquiries, investigations, and other governmental actions may divert significant
management time and attention and our financial resources, bring negative publicity, subject us to liabilities or administrative penalties, or materially
and adversely affect our business, financial condition, and results of operations.
Changes in social conditions, political and economic policies of the PRC government may affect our business, financial condition and results of
operations and may result in our inability to sustain our growth and expansion strategies.
Our results of operations, financial condition and prospects are influenced by social, economic, political and legal developments in China.
China’s economy differs from the economies of most developed countries in many respects, including with respect to the framework and style of
government supervision, level of development, growth rate, control of foreign exchange and allocation of resources. Although the PRC government
has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets,
and the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in China is still owned by
the government. The PRC government also exercises significant control over China’s economic growth through strategically allocating resources,
controlling the payment of foreign currency denominated obligations, setting monetary policy and providing preferential treatment to particular
industries or companies. While the Chinese economy has experienced significant growth over the past decades, growth has been uneven, both
geographically and among various sectors of the economy. The Chinese government has implemented various measures to encourage economic
growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy but may have a negative effect on us.
The growth rate of the Chinese economy has gradually slowed since 2010, and the impact of COVID-19 on the Chinese economy in 2020, 2021 and
2022 was severe. Any prolonged slowdown in the Chinese economy may reduce the demand for our property and materially and adversely affect our
business and results of operations.
The new, stricter regulations or interpretations of existing regulations imposed by the central or local governments may require additional
expenditures and efforts on our part to ensure our compliance with such regulations or interpretations, and if relevant regulations are issued and
become effective in a short notice, we may not be able to take the required actions in a timely manner without allocating significant resource.
Therefore, we cannot predict whether changes in the PRC economic, political and social conditions, laws, regulations and policies will have any
adverse effect on our current or future business, financial condition or results of operations.
PRC regulations of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our
offshore financing to make loans or additional capital contributions to the operating entities, which could materially and adversely affect our liquidity
and business.
We may transfer funds to the operating entities or finance the operating entities by means of shareholders’ loans or capital contributions. Any
loans to the operating entities, which are foreign-invested enterprises, cannot exceed a statutory limit, and shall be filed with SAFE, or its local
counterparts. Furthermore, any capital contributions we make to the operating entities shall be registered with the PRC State Administration for
Market Regulation or its local counterparts and filed with MOFCOM or its local counterparts.

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On March 30, 2015, SAFE promulgated the Circular on Reforming the Administration Measures on Conversion of Foreign Exchange
Registered Capital of Foreign-invested Enterprises, or SAFE Circular 19. SAFE Circular 19, however, allows foreign invested enterprises in China to
use their registered capital settled in RMB converted from foreign currencies to make equity investments, but the registered capital of a foreign
invested company settled in RMB converted from foreign currencies remains not allowed to be used, among other things, for investment in the
security markets, or offering entrustment loans, unless otherwise regulated by other laws and regulations. On June 9, 2016, SAFE further issued the
Circular of the State Administration of Foreign Exchange on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of
Capital Accounts, or SAFE Circular 16, which, among other things, amended certain provisions of Circular 19. According to SAFE Circular 19 and
SAFE Circular 16, the flow and use of the RMB capital converted from foreign currency-denominated registered capital of a foreign invested
company is regulated such that Renminbi capital may not be used for purposes beyond its business scope or to provide loans to non-affiliates unless
otherwise permitted under its business scope or the relevant regulations. On October 23, 2019, SAFE promulgated the Circular of the State
Administration of Foreign  Exchange on Further Promoting the Facilitation of Cross-Border Trade and Investment, or SAFE Circular 28, which
removes the restrictions on domestic equity investments by non-investment foreign-invested enterprises with their capital funds, provided that certain
conditions are met. The applicable foreign exchange circulars and rules may limit our ability to transfer funds, which may adversely affect the
operating entities’ business, our financial condition and results of operations.
We are subject to PRC restrictions on currency exchange.
We currently receive most of our revenue from operations in the PRC and such revenue is denominated in Renminbi. The Renminbi is
currently convertible under the “current account,” which includes dividends, trade and service-related foreign exchange transactions, but not under the
“capital account,” which includes foreign direct investment and loans, including loans we may secure from our PRC subsidiaries. Currently, our PRC
subsidiaries may purchase foreign currency for settlement of “current account transactions,” including payment of dividends to us, without the
approval of the SAFE by complying with certain procedural requirements. However, the relevant PRC governmental authorities may limit or eliminate
our ability to purchase foreign currencies in the future for current account transactions. Foreign exchange transactions under the capital account
remain subject to limitations and require approvals from, or registration with, the SAFE and other relevant PRC governmental authorities. Since a
significant amount of our future revenue and cash flow will be denominated in Renminbi, any existing and future restrictions on currency exchange
may limit our ability to utilize cash generated in Renminbi to fund our business activities outside of the PRC or pay dividends in foreign currencies to
our shareholders, including holders of the ADSs, and may limit our ability service our foreign currency-denominated indebtedness and to obtain
foreign currency through debt or equity financing for our PRC subsidiaries.
PRC regulations relating to investments in offshore companies by PRC residents may subject our PRC-resident beneficial owners or our PRC
subsidiaries to liability or penalties or otherwise limit our PRC subsidiaries’ ability to increase their registered capital or distribute profits to us or
otherwise adversely affect us.
On July 4, 2014, the SAFE issued the Circular of the State Administration of Foreign Exchange on Issues Concerning the Foreign Exchange
Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or the
“SAFE Circular 37,” which replaced the former circular commonly known as “Circular 75” implemented on October 21, 2005. The SAFE Circular 37
requires PRC residents to register with the competent local SAFE branch in connection with their direct establishment or indirect overseas investment
activities. Under SAFE Circular 37, PRC residents who make, or have prior to the implementation of SAFE Circular 37 made, direct or indirect
investments in SPVs, are required to register such investments with SAFE or its local branches. In addition, any PRC resident who is a direct or
indirect shareholder of an SPV, is required to update its registration with the local branch of SAFE with respect to that SPV, to reflect any material
change. Moreover, any subsidiary of such SPV in China is required to urge the PRC resident shareholders to update their registration with the local
branch of SAFE to reflect any material change. If any PRC resident shareholder of such SPV fails to make the required registration or to update the
registration, the subsidiary of such SPV in China may be prohibited from distributing its profits or the proceeds from any capital reduction, share
transfer or liquidation to the SPV, and the SPV may also be prohibited from making additional capital contributions into its subsidiaries in China. In
February 2015, SAFE promulgated a Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on Direct Investment, or
“SAFE Notice 13.” Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign direct investments and outbound direct
investments, including those required under SAFE Circular 37, must be filed with qualified banks instead of SAFE. Qualified banks should examine
the applications and accept registrations under the supervision of SAFE.

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We believe that all of our shareholders who were PRC citizens or residents at the time of our initial public offering completed their required
registrations with the SAFE in accordance with Circular 75 before the promulgation of SAFE Circular 37 prior to, and immediately after, the
completion of our initial public offering. However, as there is uncertainty concerning the reconciliation of these notices with other approval or
registration requirements and their interpretation and implementation has been constantly evolving, it remains unclear how these regulations, and any
future legislation concerning offshore or cross-border investments and transactions, will be interpreted, amended and implemented by the relevant
government authorities. For example, we may be subject to a more stringent review and approval process with respect to our foreign exchange
activities, such as remittance of dividends and foreign-currency-denominated borrowings, which may adversely affect our financial condition and
results of operations. In addition, as a publicly traded company in the United States, we may not at all times know of the identities of all of our
beneficial owners, who are PRC citizens or residents, and we may have little control over either our present or prospective direct or indirect PRC
resident beneficial owners or the outcome of such registration procedures. We cannot assure shareholders that we have complied or will be able to
comply with all applicable foreign exchange and outbound investment related regulations. The failure or inability of these PRC resident beneficial
owners to comply with applicable SAFE registration requirements may subject us to the sanctions described above, including sanctions which may
impede our ability to contribute the additional capital from our proceeds of any future offerings to our PRC subsidiaries, and our PRC subsidiaries’
ability to pay dividends or distribute profits to us. Furthermore, if we decide to acquire a PRC domestic company, we cannot assure shareholders that
we or the owners of such company, as the case may be, will be able to obtain the necessary approvals or complete the necessary filings and
registrations required by the foreign exchange regulations. This may restrict our ability to implement our acquisition strategy and could adversely
affect our business and prospects.
We may be subject to fines or penalties if we fail to comply with any applicable laws, regulations or rules.
Historically, we experienced certain non-compliance incidents, some of our project companies commenced construction before obtaining
construction work permits or construction work planning permits. We believe these non-compliances did not have a material operational and financial
impact on us. There is no assurance that our internal control measures will be effective and there will not be any non-compliance incidents in the
future.
In addition, PRC laws, regulations or rules governing our industry have been evolving rapidly. We cannot assure shareholders that we will
not be subject to fines or penalties arising from non-compliance incidents if we fail to adapt to the new regulatory regime in a timely manner, or at all,
which may have a material adverse effect on our business, financial condition and results of operation.
Certain portions of our property development projects and investment properties are designated as civil air defense properties and transfer of the
right to use such area is subject to restrictions and uncertainties.
Certain portions of our property development projects and investment properties are designated as civil air defense properties. According to
the PRC laws and regulations, new buildings constructed in cities should contain basement areas that can be used for civil air defense purposes in
times of war. Under the Civil Air Defense Law of the PRC promulgated by the SCNPC on October 29, 1996, as amended on August 27, 2009
and Management Measures for Peacetime Development and Usage of Civil Air Defense Properties promulgated by the House Civil Air Defense
Office in November 2001, after obtaining the approval from the civil air defense supervising authority, a developer can manage and use such areas
designated as civil air defense properties at other time and generate profits from such use. We have entered into contracts to transfer the right to use
civil air defense properties in some of our property development projects to our customers as car parks and we intend to continue such transfer.
However, in times of war, such areas may be used by the government at no cost. In the event of war and if the civil air defense area of our projects is
used by the public, we may not be able to use such area as car parks, and such area will no longer be a source of our revenue. In addition, while our
business operations have complied with the laws and regulations on civil air defense property in all material aspects, we cannot assure shareholders
that such laws and regulations will not be amended in the future which may make it more burdensome for us to comply with and increase our
compliance cost. The civil air defense areas of our projects are primarily used or to be used for car parks, representing an insignificant portion of our
property portfolio.

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We may be subject to fines due to the lack of registration of our leases.
Pursuant to relevant PRC regulations, parties to a lease agreement are required to file the lease agreements for registration and obtain
property leasing filing certificates for their leases. We have leased certain properties from independent third-party landlords mainly for our office
premises. However, we failed to register some lease agreements under which we are the tenant. The failure to register the lease agreements does not
affect the validity of the lease agreements under the relevant PRC laws and regulations, or our rights or entitlements to lease out the investment
properties to tenants. However, we may be required by relevant government authorities to file the lease agreements to complete the registration
formalities and may be subject to a fine for non-registration within the prescribed time limit, which may range from RMB1,000 to RMB10,000 per
lease agreement. The imposition of the above fines could require us to make additional efforts and/or incur additional expenses, any of which could
materially and adversely impact our business, financial condition and results of operations. The registration of these lease agreements to which we are
a party requires additional steps to be taken by the respective other parties to the lease agreement which are beyond our control. We cannot assure
shareholders that the other parties to our lease agreements will be cooperative and that we can complete the registration of these lease agreements and
any other lease agreements that we may enter into in the future.
There are uncertainties regarding the interpretation and enforcement of PRC laws, rules and regulations.
Our core business is conducted within China and is governed by PRC laws and regulations. Our PRC subsidiaries are subject to laws, rules
and regulations applicable to foreign investment in China. Some of our activities outside the PRC are also subject to the extra-territorial jurisdiction
under the relevant PRC laws and regulations. The PRC legal system is a civil law system based on written statutes. Unlike the common law system,
prior court decisions may be cited for reference but have limited precedential value.
In 1979, the PRC government began to promulgate a comprehensive system of laws, rules and regulations governing economic matters in
general. The overall effect of legislation over the past three decades has significantly enhanced the protections afforded to various forms of foreign
investment in China. However, China has not developed a fully integrated legal system, and recently enacted laws, rules and regulations may not
sufficiently cover all aspects of economic activities in China or may be subject to significant degrees of interpretation by PRC regulatory agencies. In
particular, because these laws, rules and regulations are relatively new, and because of the limited number of published decisions and the nonbinding
nature of such decisions, and because the laws, rules and regulations often give the relevant regulator significant discretion in how to enforce them, the
interpretation and enforcement of these laws, rules and regulations involve uncertainties and can be inconsistent and unpredictable. In addition, the
PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all, and which
may have a retroactive effect. As a result, we may not be aware of our violation of these policies and rules until after the occurrence of the violation.
Any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and
management attention. Since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and
contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy
than in more developed legal systems. These uncertainties may impede our ability to enforce the contracts we have entered into and could materially
and adversely affect our business, financial condition and results of operations.
In addition, the PRC government has significant oversight and discretion over the conduct of our operations and may intervene or influence
our operations as the government deems appropriate to further regulatory, political and social goals. The PRC government has recently published new
policies that significantly affected certain industries such as the internet industries and private education industries, and we cannot rule out the
possibility that it will in the future release regulations or policies or take regulatory actions regarding our industry that could adversely affect our
business, financial condition and results of operations.
We could be adversely affected by political tensions between the United States and China.
Political tensions between the United States and China have escalated in recent years due to, among other things:
●
the trade war between the two countries since 2018, including expanded tariffs and export controls on Chinese products;
●
the COVID-19 pandemic;

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●
the PRC National People’s Congress’ passage of Hong Kong national security legislation;
●
the imposition of U.S. sanctions on certain Chinese officials from China’s central government and the Hong Kong Special
Administrative Region by the U.S. government, and the imposition of sanctions on certain individuals from the U.S. by the Chinese
government;
●
various executive orders issued by the U.S. government, which include, among others,
o
the executive order issued in August 2020, as supplemented and amended from time to time, that prohibits certain
transactions with ByteDance Ltd., Tencent Holdings Ltd. and the respective subsidiaries of such companies named in such
executive order;
o
the executive order issued in January 2021, as supplemented and amended from time to time, that prohibits such
transactions as are identified by the U.S. Secretary of Commerce with certain “Chinese connected software applications,”
including Alipay and WeChat Pay;
o
the executive order issued in February 2025, as supplemented and amended from time to time, that imposes an additional
10% tariff on Chinese imports, which led to China imposing counter-tariffs on a variety of U.S. products;
o
the executive order issued in March 2025, as supplemented and amended from time to time, that increases tariffs on
Chinese imports to 20%, which led to China imposing additional counter-tariffs on U.S. products; and
●
the Rules on Counteracting Unjustified Extra-Territorial Application of Foreign Legislation and Other Measures promulgated by
the MOFCOM, on January 9, 2021, which applies to Chinese individuals or entities that are purportedly barred by a foreign
country’s law from dealing with nationals or entities of a third country.
Rising political tensions between China and the U.S. could reduce levels of trade, investment, technological exchanges and other economic
activities between the two major economies, which would have a material adverse effect on global economic conditions and the stability of global
financial markets. The measures taken by the U.S. and Chinese governments may have the effect of restricting our ability to transact or otherwise do
business with entities within or outside of China and may cause investors to lose confidence in Chinese companies and counterparties, including us. If
we were unable to conduct our business as it is currently conducted as a result of such regulatory changes, our business, results of operations and
financial condition would be materially and adversely affected.
The U.S. government has recently implemented measures targeting China, including the imposition of tariffs and export controls, which may
lead to shifts in trade policies. These actions, along with potential legislation restricting U.S. investments in certain China-based companies, create
significant uncertainty regarding U.S.-China relations and broader trade dynamics. The impact of new tariffs, regulations or changes to trade
agreements on our industry and business remains uncertain and such measures could negatively affect our financial condition and operations.
Furthermore, the U.S. government has imposed measures limiting or restricting China-based companies from accessing U.S. capital markets
and delisting certain China-based companies from U.S. national securities exchanges. In January 2021, after reversing its own delisting decision, the
NYSE ultimately resolved to delist China Mobile, China Unicom and China Telecom in compliance with the executive order issued in November
2020, after receiving additional guidance from the U.S. Department of Treasury and its Office of Foreign Assets Control. In addition, the NYSE
announced in February 2021 that it has determined to commence proceedings to delist CNOOC Limited in light of the same executive order. These
delistings have introduced greater confusion and uncertainty about the status and prospects of Chinese companies listed on the U.S. stock exchanges.
If any further measures were to be implemented, the resulting legislation may have a material and adverse impact on the stock performance of China-
based issuers listed in the United States such as us, and we cannot assure shareholders that we will always be able to maintain the listing of our ADSs
on a national stock exchange in the U.S., such as the NYSE or the NASDAQ, or that shareholders will always be allowed to trade our ADSs.

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Potential impact of changes to CFIUS regulations.
On February 21, 2025, the Trump Administration released the America First Investment Policy National Security Presidential Memorandum
(“NSPM”) introducing potential changes to the Committee on Foreign Investment in the United States (“CFIUS”) regulations, which could
significantly impact foreign investment activities. The NSPM aims to further restrict Chinese investments in sensitive U.S. technologies, including
artificial intelligence. Additionally, the NSPM seeks to strengthen CFIUS’s authority over foreign investments, including “greenfield” investments,
which are currently exempt from certain CFIUS restrictions. The NSPM’s proposals include additional scrutiny of U.S. investments in China’s
military-industrial sector and potential new restrictions on outbound U.S. investments in China, particularly in sectors related to national security.
These changes could affect the abilities of U.S. businesses to engage in cross-border investments or transactions involving China. Further, such
changes could result in delays, increased compliance requirements or restrictions on transactions involving China, which may have an adverse effect
on our operations, investment opportunities and business strategy.
Our business was materially adversely affected by the COVID-19 pandemic globally and in China during the year ended December 31, 2022.
Beginning in December 2019, a novel strain of coronavirus, or “COVID-19,” resulted in prolonged mandatory quarantines, lockdown,
closures of businesses and facilities and travel restrictions imposed by the Chinese government and many other countries around the world. The
COVID-19 pandemic, as well as the restrictions imposed and actions taken by the governments and society as a whole in response to the COVID-19
pandemic, could present significant challenges and uncertainties.
The Chinese economy has been recovering steadily from the impact of COVID-19 since the second half of 2020; however, during 2022, there
were a considerable amount of new COVID-19 cases, including primarily the COVID-19 Omicron variant cases, in various cities in China. The
Chinese local authorities had reinstated certain measures to keep COVID-19 in check, including travel restrictions and stay-at-home orders. However,
China began to modify its COVID-19 control policy at the end of 2022, and most of the travel restrictions and quarantine requirements were lifted in
December 2022. During the year ended December 31, 2022, the recurrence of COVID-19 in the China and continuance of the outbreak in other parts
of the world adversely impacted our Company’s business operations and the business operations of our Company’s customers and partners, which in
turn had an adverse impact on our business, results of operations and financial condition. We took measures to reduce the impact of the COVID-19,
including monitoring our employees’ health on a daily basis and optimizing our technology system to support remote work arrangements. However,
we still experienced lower work efficiency and productivity, which adversely affected our service quality. Furthermore, we and our customers
experienced business disturbances due to the quarantine measures to contain the spread of COVID-19. We experienced a slowdown in revenue growth
and delayed collection of accounts receivables from our customers. During the year ended December 31, 2024, the COVID-19 pandemic did not have
a material impact on our business operations and financial results.
Our business, results of operations and financial condition were materially and adversely affected by the COVID-19 pandemic during the
year ended December 31, 2022, and further uncertainty remains as a result of the COVID-19, such as the changes in the outlook of China’s property
market, slowdown in China’s economic growth or negative business sentiment. In particular, potential impact includes, among others, the following:
●
the impacts of COVID-19 resulted in a general slowdown in China’s real estate industry, adversely affecting the demand for our
services;
●
our customers may not have sufficient budget or cash flow to pay for our services, or may fail to make the payment in a timely manner,
or at all; and
●
some of our customers may not be well capitalized and may be vulnerable to the COVID-19 pandemic and the slowdown of the
macroeconomic conditions, and if they cannot resume their business during a prolonged virus outbreak, the demand for our services
may be negatively affected.

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We face risks related to natural disasters, health epidemics and other outbreaks, which could significantly disrupt our operations and adversely affect
our business, financial condition or results of operation.
Our business could be adversely affected by the effects of natural disasters and/or health epidemics, including the Ebola virus disease, H1N1
flu, H7N9 flu, avian flu, Severe Acute Respiratory Syndrome, or “SARS,” or other epidemics. Our business operations could be disrupted if any of
our employees is suspected of having the Ebola virus disease, H1N1 flu, H7N9 flu, avian flu, SARS, or other epidemics, since it could require our
employees to be quarantined and/or our offices to be disinfected. In addition, our results of operations could be adversely affected to the extent that
any of these epidemics harm the Chinese and global economy in general.
We are also vulnerable to natural disasters and other calamities, such as fire, floods, typhoons, earthquakes, power loss, telecommunications
failures, break-ins, war, riots, terrorist attacks or similar events, which could cause construction delays and business interruptions.
We may face PRC regulatory risks relating to our equity compensation plans.
Under the applicable regulations and SAFE rules, PRC residents who participate in an employee stock ownership plan or a stock option plan
in an overseas publicly listed company are required to register with SAFE and complete certain other procedures. On February 15, 2012, the SAFE
implemented the Notice on the Administration of Foreign Exchange Matters for Domestic Individuals Participating in the Stock Incentive Plans of
Overseas Listed Companies, or the “Stock Option Notice.” Under the Stock Option Notice, if a PRC resident participates in any employee stock
incentive plan of an overseas listed company, a qualified domestic PRC agent or the PRC subsidiary of such overseas listed company must, among
other things, file, on behalf of such individual, an application with the SAFE or its local counterpart to obtain approval for an annual allowance with
respect to the foreign exchange in connection with the stock holding, unit holding, share option exercises, or the holding of other types of equities
permitted by PRC law. Concurrently, the qualified domestic PRC agent or the PRC subsidiary must also obtain approval from the SAFE or its local
counterpart to open a special foreign exchange account at a PRC domestic bank to hold the funds required in connection with the stock acquisition or
option exercise, any returned principal or profits upon the sale of shares, any dividends issued on the stock and any other income or expenditures
approved by the SAFE or its local counterpart. In addition, the PRC agent or the PRC subsidiary is required to amend the SAFE registration with
respect to the stock options or other awards granted if there is any material change to the stock options or other awards, the PRC agent or the PRC
subsidiary, the overseas listed company, or any other material changes. If we, or any of these persons mentioned above, fail to comply with the
relevant rules or requirements, we may be subject to penalties, and may become subject to more stringent review and approval processes with respect
to our foreign exchange activities, such as our PRC subsidiaries’ dividend payment to us or borrowing foreign currency loans, all of which may
adversely affect our business and financial condition.
The enactment of the Holding Foreign Companies Accountable Act and the adoption of any rules, legislations or other efforts to increase U.S.
regulatory access to audit information could cause uncertainty and our securities listed on the NYSE could be delisted or prohibited from being traded
“over-the-counter” if we are unable to meet the PCAOB requirement in time.
The increased regulatory scrutiny of U.S.-listed companies with operations in China could add uncertainties to our business operations, share
price and reputation. U.S. public companies that have or had a substantial portion of their operations in China have been the subject of heightened
scrutiny, criticism and negative publicity by investors, financial commentators and regulatory agencies, such as the SEC. Much of the scrutiny,
criticism and negative publicity has centered on financial and accounting irregularities and mistakes, a lack of effective internal controls over financial
accounting, inadequate corporate government policies or a lack of adherence thereto and, in many cases, allegations of fraud.
As part of increased regulatory focus in the United States on access to audit information, the United States enacted the HFCA Act  on
December 18, 2020. The HFCA Act includes requirements for the SEC to identify issuers whose audit reports are prepared by auditors that the
PCAOB is unable to inspect or investigate completely because of a restriction imposed by a non-U.S. authority in the auditor’s local jurisdiction. The
HFCA Act also requires public companies on this SEC list to certify that they are not owned or controlled by a foreign government and make certain
additional disclosures in their SEC filings. In addition, under the HFCA Act, if the auditor of a U.S. listed company’s financial statements is not
subject to PCAOB inspections for three consecutive “non-inspection” years, the SEC is required to prohibit the securities of such issuer from being
traded on a U.S. national securities exchange, such as the NYSE and Nasdaq, or in the U.S. over-the-counter markets.

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On December 2, 2021, the SEC adopted final amendments implementing the disclosure and submission requirements under the HFCA Act,
pursuant to which the SEC would identify a “Commission-Identified Issuer” if an issuer has filed an annual report containing an audit report issued by
a registered public accounting firm that the PCAOB has determined it is unable to inspect or investigate completely because of a position taken by an
authority in the foreign jurisdiction, and will then impose a trading prohibition on an issuer after it is identified as a “Commission-Identified Issuer”
for three consecutive years.
On December 16, 2021, the PCAOB issued its determination that the PCAOB is unable to inspect or investigate completely PCAOB-
registered public accounting firms headquartered in mainland China and in Hong Kong, because of positions taken by PRC authorities in those
jurisdictions, and the PCAOB included in the report of its determination a list of the accounting firms that are headquartered in mainland China or
Hong Kong. This list includes Union Power HK CPA Limited (“Union Power”), the firm which audited our financial statements for the fiscal year
ended December 31, 2021. Subsequently on July 29, 2022, we were added to the conclusive list of “Commission-Identified Issuer” identified under
the HFCA Act on the website of the SEC.
On December 29, 2022, the Consolidated Appropriations Act, 2023 was signed into law, which, among other things, amended the HFCA Act
to reduce from three years to two years the number of consecutive years an issuer can be identified as an identified issuer before the SEC can prohibit
an issuer’s securities from trading on any U.S. national securities exchange and on the over-the-counter market. Accordingly, our securities may be
prohibited from trading on NYSE or other U.S. stock exchange if our auditor is not inspected by the PCAOB for two consecutive years, and this
ultimately could result in our ADSs being delisted.
On August 26, 2022, the PCAOB signed a Statement of Protocol Agreement (the “SOP”) with the CSRC and China’s Ministry of Finance.
The SOP, together with two protocol agreements governing inspections and investigations (together, the “SOP Agreements”), establish a specific,
accountable framework to make possible complete inspections and investigations by the PCAOB of audit firms based in mainland China and Hong
Kong, as required under U.S. law.
On December 15, 2022, PCAOB Chair Erica Y. Williams released a statement stating that, for the first time in history, the PCAOB has
secured complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong, and the
PCAOB voted to vacate the previous December 16, 2021 determinations to the contrary. For this reason, we do not expect to be identified as a
Commission-Identified Issuer following the filing of this annual report.
However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms
headquartered in mainland China and Hong Kong is subject to uncertainties and depends on a number of factors out of our and our auditor’s control.
The PCAOB continues to demand complete access in mainland China and Hong Kong moving forward. The PCAOB has also indicated that it will act
immediately to consider the need to issue new determinations with the HFCA Act if needed.
On December 28, 2022, we appointed Assentsure PAC, or Assentsure, as our independent registered public accounting firm for the fiscal
year ending December 31, 2022 and Assentsure remains our independent registered public accounting firm for the fiscal year ending December 31,
2024. Assentsure is headquartered in Singapore and subject to the inspections by the PCAOB on a regular basis. As an auditor of companies that are
traded publicly in the United States and a firm registered with the PCAOB, Assentsure is subject to laws in the United States pursuant to which the
PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. It is not subject to the determinations issued
by the PCAOB on December 16, 2021. Therefore we believe the appointment of Assentsure would substantially reduce the risk of us being continued
to be identified as “Commission-Identified Issuer” under the HFCA Act, and the risk of our securities being prohibited from being traded on a national
securities exchange or in the over the counter trading market in the United States due to rules under the HFCA Act.
If we continue to be identified as a “Commission-Identified Issuer”, the ramification of such identification includes volatility in the trading
price of our securities. We are also subject to the additional compliance requirements under the HFCA Act and potentially other requirements under
related proposed rules. If our shares are prohibited from trading in the United States, there is no certainty that we will be able to list on a non-U.S.
exchange or that a market for our shares will develop outside of the United States. Such a prohibition would substantially impair a shareholder’s
ability to sell or purchase our shares when a shareholder wishes to do so, and the risk and uncertainty associated with delisting would have a negative
impact on the price of our shares. Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all,
which would have a material adverse impact on our business, financial condition, and prospects.

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If for whatever reason the PCAOB is unable to conduct full inspections of our auditor, such uncertainty could cause the market price of our
securities to be materially and adversely affected, and our securities could be delisted or prohibited from being traded “over-the-counter”. If our
securities were unable to be listed on another securities exchange by then, such a delisting would substantially impair a shareholder’s ability to sell or
purchase our securities when a shareholder wishes to do so, and the risk and uncertainty associated with a potential delisting would have a negative
impact on the price of our securities.
It may be difficult for overseas regulators to conduct investigation or collect evidence within China.
Shareholder claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law or
practicality in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatory
investigations or litigations initiated outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the
securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the
securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism. Furthermore,
according to Article 177 of the PRC Securities Law, or “Article 177,” which became effective in March 2020, no overseas securities regulator is
allowed to directly conduct investigation or evidence collection activities within the territory of the PRC. While detailed interpretation of or
implementation rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation
or evidence collection activities within China may further increase difficulties faced by shareholders in protecting their interests.
We may be adversely affected by the settlement order between the SEC and certain PRC-based accounting firms, including our independent registered
public accounting firm.
In December 2012, the SEC instituted proceedings under Rule 102(e)(1)(iii) of the SEC’s Rules of Practice and also under the Sarbanes-
Oxley Act against five PRC-based accounting firms, alleging that these firms had violated U.S. securities laws and the SEC’s rules and regulations
thereunder by failing to provide to the SEC the firms’ work papers related to their audits of certain PRC-based companies that are publicly traded in
the United States. Rule 102(e)(1)(iii) grants the SEC the authority to deny to any person, temporarily or permanently, the ability to practice before the
SEC who is found by the SEC, after notice and opportunity for a hearing, to have willfully violated any such laws or rules and regulations. On January
22, 2014, an initial administrative law decision was issued, censuring these accounting firms and suspending four of the five firms from practicing
before the SEC for a period of six months. Four of these PRC-based accounting firms appealed to the SEC against this decision and, on February 6,
2015, each of the four PRC-based accounting firms agreed to a censure and to pay a fine to the SEC to settle the dispute and avoid suspension of their
ability to practice before the SEC. The firms’ ability to continue to serve all their respective clients is not affected by the settlement. The settlement
requires the firms to follow detailed procedures to seek to provide the SEC with access to Chinese firms’ audit documents via the CRSC. If the firms
do not follow these procedures, the SEC could impose penalties such as suspensions, or it could restart the administrative proceedings. Under the
terms of the settlement, the underlying proceeding against the four PRC-based accounting firms was deemed dismissed with prejudice for four years
after entry of the settlement. The four-year mark occurred on February 6, 2019. We cannot predict if the SEC will further challenge the four PRC-
based accounting firms’ compliance with the U.S. law in connection with the U.S. regulatory requests for audit work papers or if the results of such
challenge would result in the SEC imposing penalties, such as suspensions.
In the event that the PRC-based accounting firms become subject to additional legal challenges by the SEC or PCAOB, depending upon the
final outcome, listed companies in the U.S. with major PRC operations may find it difficult or impossible to retain auditors in respect of their
operations in the PRC, which could result in financial statements being determined to not be in compliance with the requirements of the Securities
Exchange Act of 1934, as amended, or the “Exchange Act,” including possible delisting. Moreover, any negative news about any such future
proceedings against these audit firms may cause investor uncertainty regarding China-based, U.S.-listed companies and the market price of our ADSs
may be adversely affected.
If the auditor of our audit report in our annual report filed with the SEC were denied, even temporarily, the ability to practice before the SEC
and we were unable to timely find another registered public accounting firm to audit and issue an opinion on our consolidated financial statements, our
consolidated financial statements could be determined not to be in compliance with the requirements of the Exchange Act. Such a determination could
ultimately lead to delisting of the ADSs from the NYSE or deregistration from the SEC, or both, which would substantially reduce or effectively
terminate the trading of the ADSs in the U.S.

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In addition, on May 26, 2015, the MOF issued Notice on the Interim Provisions on the Audits Conducted by Accounting Firms concerning
the Overseas Listing of Chinese Domestic Companies, or “Circular 9,” which became effective on July 1, 2015. In accordance with Circular 9,
auditors based outside of China, including our independent registered public accounting firm, are required to cooperate with mainland Chinese
auditors with requisite qualifications and enter into written arrangements with mainland Chinese auditors in order to conduct audit work for overseas
listed mainland Chinese companies, and auditors based outside of China shall undertake the auditing responsibilities which may be incurred. Hence,
our independent registered public accounting firm may need to establish appropriate arrangements with mainland Chinese auditors in order to
continue to audit our financial statements, which may be difficult in light of the SEC’s administrative proceedings and the settlement described above.
If our auditor were unable to have alternate support or cooperation arrangements or otherwise were unable to address issues related to the production
of documents in accordance with the settlement order in the SEC proceedings and we were unable to timely find another independent registered public
accounting firm to audit and issue an opinion on our financial statements, our financial statements could be determined to not be in compliance with
the requirements of the Exchange Act. Such a determination could ultimately lead to delisting of our ADSs from the NYSE or deregistration from the
SEC, or both.
Risks Related to our ADSs
The trading price of our ADSs has been, and is likely to continue to be, volatile, which could result in substantial losses to holders of our ADSs as well
as the potential suspension of listing or delisting of our ADRs.
The trading price of our ADSs has been, and is likely to continue to be, volatile and could fluctuate widely in response to a variety of
factors, many of which are beyond our control. For example, the high and low closing prices of our ADSs in fiscal year 2024 were US$6.23 and
US$2.17, respectively. In addition, the performance and fluctuation of the market prices of other companies with business operations located mainly in
China that have listed their securities in Hong Kong and/or the U.S. may affect the volatility in the prices of and trading volumes for our ADSs. Some
of these companies have experienced significant volatility, including significant price declines after their initial public offerings. The trading
performances of these companies’ securities at the time of or after their offerings may affect the overall investor sentiment towards other companies
with business operations located mainly in China and listed in Hong Kong and/or the U.S. and consequently, may impact the trading performance of
our ADSs. In addition to market and industry factors, the prices and trading volumes for our ADSs may be highly volatile for specific business
reasons, including:
●
variations in our results of operations or earnings that are not in line with market or research analyst expectations or changes in
financial estimates by securities research analysts;
●
publication of operating or industry metrics by third parties, including government statistical agencies, that differ from expectations
of industry or financial analysts;
●
announcements made by us or our competitors of new product and service offerings, acquisitions, strategic relationships, joint
ventures or capital commitments;
●
press and other reports, whether or not true, about our business, including negative reports published by short sellers, regardless of
their veracity or materiality to us;
●
litigation and regulatory allegations or proceedings that involve us;
●
changes in pricing we or our competitors adopt;
●
additions to or departures of our management;
●
actual or perceived general industry, regulatory, economic and business conditions and trends in China and globally, due to various
reasons, including changes in geopolitical landscape, as some investors or analysts may invest in or value our ADSs based on the
economic performance of the Chinese economy, which may not be correlated to our financial performance;

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●
political or market instability or disruptions, and actual or perceived social unrest in the U.S., Hong Kong or other jurisdictions;
●
fluctuations of exchange rates among the Renminbi, the Hong Kong dollar and the U.S. dollar; and
●
sales or perceived potential sales or other dispositions of existing or additional ADSs or other equity or equity-linked securities.
Any of these factors may result in large and sudden changes in the volume and trading price of our ADSs. In addition, the stock market has
from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies and
industries.
When the trading price of our ADRs falls below US$1.00, we are considered below compliance standards pursuant to the listing requirements
of the NYSE and could result in the delisting of our ADRs by the NYSE. As the average trading price of our ADRs remained below US$1.00 for 30
consecutive trading days or more, the NYSE sent us a deficiency notice on December 14, 2021 and required the stock price to be brought back above
US$1.00 within six months prior to May 13, 2022. On May 2, 2022, the NSYE notified us that a calculation of the Company’s average stock price
from the 30-trading days ended April 29, 2022 had been above the US$1.00 based on a 30-trading day average. As a result, the Company regained
compliance. However, our average trading price over the 30 consecutive trading days ended June 23, 2022 fell below US$1.00 again, for which, the
NYSE sent us a deficiency notice on June 24, 2022 and required the stock price to be brought back above US$1.00 within six months prior to
December 23, 2022. On December 27, 2022, the NYSE confirmed that a calculation of the Company’s average stock price for the 30-trading days
ended December 27, 2022 had been above the NYSE’s minimum requirement of $1.00 based on a 30-trading day average. As a result, the Company
regained compliance.
Our ADRs could also be delisted if (i) our average market capitalization over a consecutive 30 trading-day period is less than $15 million, or
(ii) our ADRs trades at an “abnormally low” price, in the determination of the NYSE. In either case, our ADRs would be suspended from trading on
the NYSE immediately, without an opportunity to cure, and the NYSE would begin the process to delist our ADRs. If any of these were to occur, there
is no assurance that we would be able to appeal, or that any appeal we undertake in these or other circumstances would be successful, nor is there any
assurance that we will remain in compliance with the other NYSE continued listing standards.
If the NYSE delists our ADRs due to our failure to regain compliance with the NYSE minimum price requirement or because we fail to
comply with another continued listing standard, and we are unable to obtain listing on another national securities exchange, we could face significant
material adverse consequences, including:
●
a limited availability of market quotations for our securities;
●
reduced liquidity for our securities;
●
a determination that our ADRs are a “penny stock” which will require brokers trading in our ADRs to adhere to more stringent rules
and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
●
a limited amount of news and analyst coverage;
●
such delisting may constitute a breach of certain of our contractual obligations or agreements we have entered into; and
●
a decreased ability to issue additional securities or obtain additional financing in the future.

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We may raise additional capital through the sale of additional equity or debt securities, which could result in additional dilution to our shareholders,
or impose upon us additional financial obligations.
We may require additional cash resources to finance our continued growth or other future developments, including any investments or
acquisitions we may decide to pursue. The amount and timing of such additional financing needs will vary depending on the timing of our property
developments, investments and/or acquisitions, and the amount of cash flow from our operations. If our resources are insufficient to satisfy our cash
requirements, we may seek to sell additional equity or debt securities. Sales of additional equity or convertible securities could result in additional
dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and
financing covenants that would restrict our operations, including our ability to pay dividends or redeem stock. We cannot guarantee that financing will
be available in amounts or on terms acceptable to us, if at all.
Substantial future sales or the perception of sales of our ADSs in the public market could cause the price of our ADSs to decline.
The sales of our ADSs or common shares in the public market, or the perception that such sales could occur, could cause the market price of
our ADSs to decline. As of December 31, 2024, we had 112,812,481 common shares outstanding, including 74,405,372 common shares represented
by 3,720,269 ADSs. All ADSs are freely transferable without restriction or additional registration under the Securities Act of 1933, as amended, or the
“Securities Act,” other than those held by affiliates which are subject to volume and other restrictions as applicable under Rule 144 under the
Securities Act. The remaining common shares outstanding are available for sale, subject to any volume and other restrictions as applicable under Rule
144. The sale or perceived sale of a substantial amount of our ADSs by any principal shareholder could adversely affect the prevailing market price
for our ADSs. Such sales or perceived sales might also make it more difficult for us to sell equity or equity-related securities in the future at a time and
price that we deem appropriate. To the extent that common shares (in the form of ADSs) are sold into the market, the market price of our ADSs could
decline.
The interests of our major shareholders may not be aligned with the interests of our other shareholders.
As of April 7, 2025, Mr. Yong Zhang, Chairman of our board of directors, and Ms. Yuyan Yang, also a board member, beneficially owned
24.38% and 22.86%, respectively of our share capital. Accordingly, they each have substantial influence over our business, including decisions
regarding mergers, consolidations and the sale of all or substantially all of our assets, election of directors and other significant corporate actions. This
concentration of ownership by our major shareholders may result in actions being taken even if opposed by our other shareholders. In addition, it may
discourage, delay or prevent a change in control of our company, which could deprive our shareholders of an opportunity to receive a premium for
their shares as part of a sale of our company and might reduce the price of our ADSs.
If we fail to maintain an effective system of internal controls over financial reporting, we may not be able to accurately report our financial results or
prevent fraud.
We are subject to reporting obligations under the U.S. securities laws, including the SEC’s disclosure rules relating to an effective system of
internal controls over financial reporting and of disclosure controls. If we fail to maintain effective internal control over financial reporting in the
future, our management and our independent registered public accounting firm may not be able to conclude that we have effective internal control
over financial reporting at a reasonable assurance level.
Moreover, effective internal control over financial reporting is necessary for us to produce reliable financial reports and is important to help
prevent fraud. As a result, our failure to maintain effective internal control over financial reporting could result in the loss of investor confidence in the
reliability of our financial statements, which in turn could harm our business and negatively impact the trading price of our ADSs. Furthermore, we
have incurred, and expect to continue to incur, considerable costs and devote significant management time and efforts and other resources to comply
with Section 404 of the Sarbanes-Oxley Act.

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We are a foreign private issuer with the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to
U.S. domestic public companies.
Because we qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and
regulations in the United States that are applicable to United States domestic issuers, including:
●
the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current report on Form 8-
K;
●
the section of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered
under the Exchange Act;
●
the section of the Exchange Act requiring directors, officers and 10% holders to file public reporting of their stock ownership and
trading activities and imposing liability on insiders who profit from trades made in a short period of time;
●
the selective disclosure rules under Regulation FD restricting issuers from selectively disclosing material nonpublic information.
Accordingly, the information we are required to file with or furnish to the SEC is less extensive and less frequent compared to that required to
be filed with the SEC by U.S. domestic issuers.
As a company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices for corporate governance matters that
differ significantly from the NYSE corporate governance listing standards; these practices may afford less protection to shareholders than they would
enjoy if we complied fully with the corporate governance listing standards.
Our ADSs are listed on the NYSE. The NYSE corporate governance listing standards permit a foreign private issuer, like us, to follow the
corporate governance practices of its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may
differ significantly from the NYSE corporate governance listing standards. For example, Cayman Islands does not require us to comply with the
following corporate governance listing standards of the NYSE:
●
having the majority of our board of directors composed of independent directors;
●
having a minimum of three members in our audit committee;
●
holding annual shareholders’ meetings;
●
having a compensation committee composed entirely of independent directors;
●
having a nominating and corporate governance committee composed entirely of independent directors; and
●
requiring members of the audit committee to satisfy certain independence criteria in addition to those of Rule 10A-3 of the
Exchange Act;
●
requiring shareholders to approve the adoption or material revision of any equity compensation plan; and
●
requiring shareholders to approve certain issuances of our equity securities.

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We are currently following home country practice on the requirements described above. Accordingly, the majority of our board of directors is
composed of management or former management directors. Each of our compensation committee and governance and nominating committee include
non-independent directors. In addition, we are not required to put forward for a shareholder vote new equity plans or change to existing equity plans or
other significant share issuance. For a more detailed discussion of the ways in which our corporate governance differs from that of a U.S. domestic
company listed on the NYSE, see “Item 16G. Corporate Governance.” As a result of our use of the “home country practice” exception from the NYSE
corporate governance rules, our shareholders do not have the same shareholder protections as they would if we were a U.S. domestic public company
or if we complied fully with the corporate governance listing standards.
We are not required to follow customary practices applicable to U.S. domestic companies with respect to determining and disclosing executive
compensation.
As a foreign private issuer, we are not subject to many of the corporate governance and disclosure requirements relating to executive
compensation matters under the U.S. securities laws. Under our compensation committee charter, only 50% of the members of the committee at any
time (less than a majority) must be independent of management, while a U.S. domestic issuer is required to form a compensation committee
composing entirely of independent directors. We are also not required to and do not report compensation of senior management or directors on an
individual basis. As a result, investors are not able to assess for themselves appropriateness or reasonableness of the amount or form of compensation
for individual executives. The SEC has adopted a rule requiring disclosure of a chief executive officer pay relative to that of the median total
compensation for employees, which does not apply to foreign private issuers.
We have entered into agreements that provide for the payment of annual bonuses based on a percentage of net income to certain of our
executive officers. In other cases, we have made arrangements or established bonus plans that provide for the payment of performance bonuses to
employees, including executive officers, based on assessment of their contributions to our business development, improvement of operation
management, and fund financing activities. These accrual and payments could result in a decrease of our net profit attributable to public shareholders.
Holders of our ADSs may not have the same voting rights as the holders of our common shares and may not receive voting materials in time to be able
to exercise such holders’ right to vote.
Holders of our ADSs will not be able to exercise voting rights attaching to the underlying common shares represented by our ADSs on an
individual basis. Holders of our ADSs appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the
common shares represented by the ADSs. Holders of ADSs may not receive voting materials in time to instruct the depositary to vote, and it is
possible that holders who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote. As
soon as practicable after the depositary receives from us a notice of a shareholders’ meeting, the depositary will distribute to registered holders of
ADSs a notice stating (a) such information as is contained in such notice and any solicitation materials, (b) that each registered holder on the record
date set for such purpose will, subject to any applicable provisions of Cayman Islands law, be entitled to instruct the depositary as to the exercise of
the voting rights, and (c) the manner in which such instructions may be given, including instructions to give a discretionary proxy to a person
designated by us. The depositary will not itself exercise any voting discretion in respect of any common shares nor will it provide any instructions
with respect to the common shares represented by any ADSs for which voting instructions were not timely and properly received. There can be no
guarantee that registered holders of ADSs will receive the notice described above with sufficient time to enable them to return any voting instructions
to the depositary in a timely manner. To the extent a holder of ADSs hold its ADSs through a bank, broker or other nominee, shareholders will be
relying upon such institutions with respect to voting matters.

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Shareholders may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in China based
on United States or other foreign law against us or our management named in the annual report.
We are incorporated in the Cayman Islands and conduct substantially all of our operations in China through our wholly-owned subsidiaries in
China. Most of our assets are located in China. In addition, many of our directors and senior executive officers reside within China and some or all of
the assets of those persons are located outside of the United States. As a result, it may not be possible to effect service of process within the United
States, or elsewhere outside China, upon our directors and senior executive officers, including with respect to matters arising under the U.S. federal
securities law or applicable state securities law. Even if a shareholder is successful in bringing an action of this kind, the respective law of the Cayman
Islands and China may render them unable to enforce a judgment against our assets or the assets of our directors and officers. Although there is no
statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not
a party to any treaties for the reciprocal enforcement or recognition of such judgments), the courts of the Cayman Islands will, at common law,
recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without any  re-examination  of the merits of the
underlying dispute based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the
liquidated sum for which such judgment has been given, provided such judgment (i) is final and conclusive, (ii) is not in respect of taxes, a fine or a
penalty; and (iii) has not been obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of
the Cayman Islands. However, the Cayman Islands courts are unlikely to enforce a judgment obtained from the U.S. courts under civil liability
provisions of the U.S. federal securities law if such judgment is determined by the courts of the Cayman Islands to give rise to obligations to make
payments that are penal or punitive in nature. A Cayman Islands court may stay enforcement proceedings if concurrent proceedings are being brought
elsewhere. Moreover, the PRC does not have treaties with the United States or many other countries providing for the reciprocal recognition and
enforcement of judgment of courts.
Holders of our ADSs may not be able to participate in rights offerings and may experience dilution of holdings as a result.
We may, from time to time, distribute rights to our shareholders, including rights to acquire our securities. Under the deposit agreement for
the ADSs, the depositary will not offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADS
holders are either registered under the Securities Act or are exempt from registration under the Securities Act with respect to all holders of ADSs. We
are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such a
registration statement to be declared effective. In addition, we may not be able to take advantage of any exemptions from registration under the
Securities Act. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as
a result.
Holders of our ADSs may be subject to limitations on transfer of ADSs.
Our outstanding ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time, or
from time to time, when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer
or register transfers of ADSs generally when our books, or the books of the depositary, are closed, or at any time if we, or the depositary, deem it
advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or
for any other reason.
We are a Cayman Islands exempted company and, because judicial precedent regarding the rights of shareholders is more limited under Cayman
Islands law than under the U.S. law, holders of our ADSs may have less protection of its shareholder rights than they would under the U.S. law.
Our corporate affairs are governed by our memorandum and articles of association and by the Companies Act of the Cayman Islands, as
amended from time to time, and the common law of the Cayman Islands. The rights of shareholders to take legal action against our directors and us,
actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by
the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in
the Cayman Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands. The
rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be
under statutes or judicial precedents in the United States. In particular, the Cayman Islands have a less developed body of securities laws as compared
to the United States and provide significantly less protection to investors. In addition, Cayman Islands companies may not have standing to initiate a
shareholder derivative action before the federal courts of the United States.

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In mergers and consolidations where the merged company or consolidated company will continue to be a Cayman Islands entity, dissenting
shareholders have the right to be paid the fair value of their shares (which, if not agreed between the parties, will be determined by the Cayman Islands
courts) if they follow required procedures, subject to certain exceptions. However, they may not be comparable to the appraisal rights that would
ordinarily be available to dissenting shareholders of a U.S. company.
As a result of all of the above, our public shareholders may have more difficulty in protecting their interests through actions against our
management, directors or major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.
Our articles of association may contain anti-takeover provisions that could have a material adverse effect on the rights of holders of our common
shares and ADSs.
Our second amended and restated articles of association contain provisions limiting the ability of others to acquire control of our company or
cause us to engage in change-of-control transactions. These provisions could have the effect of depriving our shareholders of an opportunity to sell
their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer
or similar transaction. For example, our board of directors has the authority, without further action by our shareholders, to issue preferred shares in one
or more series and to fix their designations, powers, preferences, privileges and relative participating, optional or special rights and their
qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences,
any or all of which may be greater than the rights associated with our common shares, in the form of ADSs or otherwise. Preferred shares could be
issued quickly with terms calculated to delay or prevent a change in control of our company or make removal of management more difficult. If our
board of directors decides to issue preferred shares, the price of our ADSs may fall and the voting and other rights of the holders of our common
shares and ADSs may be materially and adversely affected.
We may be classified as a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. holders of
our ADSs or common shares.
The rules governing passive foreign investment companies, or “PFICs,” can have adverse effects for U.S. federal income tax purposes. The
tests for determining PFIC status for a taxable year depend upon the relative values of certain categories of assets and the relative amounts of certain
kinds of income. The determination of whether we are a PFIC depends on the particular facts and circumstances (such as the valuation of our assets,
including goodwill and other intangible assets) and may also be affected by the application of the PFIC rules, which are subject to differing
interpretations. Based on our estimated gross income, the average value of our assets, including goodwill and the nature of our business, although not
free from doubt, we do not believe that we were classified as a PFIC for U.S. federal income tax purposes for the taxable year ended December 31,
2024.
If we are a PFIC, U.S. holders of our common shares or ADSs would be subject to adverse U.S. federal income tax consequences, such as
ineligibility for any preferred tax rates on capital gains or on actual or deemed dividends, interest charges on certain taxes treated as deferred, and
additional reporting requirements under U.S. federal income tax laws and regulations. A U.S. holder of our common shares or ADSs may be able to
mitigate some of the adverse U.S. federal income tax consequences described above with respect to owning the common shares or ADSs if we are
classified as a PFIC, provided that such U.S. Holder is eligible to make, and validly makes, a “mark-to-market” election. However, because we are a
holding company and a mark-to-market election would not apply to any lower-tier PFICs we own, it is unclear that making the election would have
any benefit to a U.S. holder. In certain circumstances, a U.S. holder can make a “qualified electing fund” election to mitigate some of the adverse tax
consequences described with respect to an ownership interest in a PFIC by including in income its share of the PFIC’s income on a current basis.
However, we do not currently intend to prepare or provide the information that would enable a U.S. holder to make a qualified electing fund election.
See “Item 10. Additional Information — E. Taxation — U.S. Federal Income Taxation — Passive Foreign Investment Company.”

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55
ITEM 4  INFORMATION ON THE COMPANY
A.
History and Development of the Company
We are a Cayman Islands holding company and conduct business primarily through our operating subsidiaries in China and, as to certain
operations, non-PRC based subsidiaries.
Our company was incorporated in the Cayman Islands on March 26, 2007 as an exempted company. Our company operates under the
Cayman Islands Companies Act (As Revised). Our registered address is located at the offices of Maples Corporate Services Limited, PO Box 309,
Ugland House, Grand Cayman, KY1-1104 Cayman Islands. Our principal executive offices are located at 27/F, China Central Place, Tower II, 79
Jianguo Road, Chaoyang District, Beijing 100025, People’s Republic of China. Our telephone number at this address is (86) 10 8588-9200.
For a discussion of our capital expenditures for the last three fiscal years, see “Item 5. Operating and Financial Review and Prospects — B.
Liquidity and Capital Resources — Capital Expenditures.”
The SEC maintains a web site at www.sec.gov that contains reports, proxy and information statements, and other information regarding
registrants, including us, that make electronic filings with the SEC using its EDGAR system. Our website is www.xyre.com. The information
contained on our website does not form part of this annual report.
B.
Business Overview
We are a real estate developer that strategically focuses on selected high-growth cities in China and the United States. Our standardized and
scalable model emphasizes on rapid asset turnover, efficient capital management and strict cost control.
We focus on developing large scale quality residential projects, which typically consist of multiple residential buildings that include multi-
layer apartment buildings, sub-high-rise apartment buildings or high-rise apartment buildings. Several of our projects include auxiliary services and
amenities such as retail outlets, leisure and health facilities, kindergartens and schools. We also develop small-scale residential properties. Our China
developments aim at providing middle-class consumers with a comfortable and convenient community life. In addition, we provide property
management services for our developments and other real estate-related services to our customers. We acquire development sites in China primarily
through public auctions of government land and acquisitions of entities.
We had 17 projects with a total GFA of 3,250,436 square meters under construction as of December 31, 2023, and 16 projects with a total
GFA of 3,127,253 square meters under construction as of December 31, 2024. In addition, we had initiated 7 projects with a total GFA of 1,092,063
square meters under planning as of December 31, 2024. As of December 31, 2024, we completed 84 projects with a total GFA of approximately
11,787,224 square meters and comprising a total of 133,323 units since the inception of our company, more than 98% of which have been sold. In
2022, 2023 and 2024, our revenue was US$950.0 million, US$805.0 million and US$514.7 million, respectively. We had a net loss of US$258.7
million and US$46.0 million in 2022 and 2024, respectively, and net income of US$30.5 million in 2023.

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While our primary focus has been in China, we see potential opportunities for residential real estate development in other jurisdictions that
might be attractive to both Chinese and U.S. buyers. In 2012, we acquired an 8,094 square meters parcel of land in the Williamsburg neighborhood of
Brooklyn, New York, for US$54.2 million, on which we built 216 condominium units with a net saleable floor area of approximately 30,855 square
meters, the New York Oosten Project. Construction on our New York Oosten Project started in November 2013 and the project was delivered in
December 2016. As of December 31, 2024, the project recognized a total revenue of US$329.0 million from the sales of 208 units out of 216 total
units. In January 2016, we also acquired a parcel of land in midtown Manhattan, New York, for US$57.5 million. In 2021, we completed
superstructure construction, precast concrete facade, and windows installation at the Hudson Garden Project, Bloom on Forty Fifth, which began
delivering units in 2022. The building has 92 condominium units from floors two through seven with a unit mix consisting of 17 studios, 45 one-
bedroom units, 24 two-bedroom units, two three-bedroom duplex units, two three-bedroom penthouse units, and two four-bedroom duplex units. As of
December 31, 2024, the project recognized a total revenue of US$56.7 million from the sales of 40 out of 92 total units. In October 2024, we used the
remaining 52 units to settle part of mortgage debt. Of the total saleable 34,903 square feet of retail/commercial space, a total of 28,090 square feet
have been leased to a leading U.S. department store chain, Target, for a 20-year term and another 1,910 square feet have been leased to a
dermatologist’s office for a 15-year lease term. In August 2016, we acquired a parcel of land in the Flushing neighborhood of Queens, New York for
US$66.0 million. The land allows for a mixed-use development comprising approximately 30,112 square meters under approved plans. At this project
in Flushing, New York City, the demolition of the existing building with the exception of the landmark portion was completed as of December 31,
2021. All historic artifacts have been removed from the site and are being restored offsite. We are in the final stage of obtaining approval on our
development scheme from the City. We expect to get formal approval in May 2025. Due to the macroeconomic condition changes, we are also
evaluating our devilment plan to adapt to the new market environment.
We also plan to retain and develop commercial portions of some of our properties, such as shopping malls, supermarkets or hotels, and to
lease and manage those properties ourselves. As of December 31, 2024, we completed seven similar projects, including (i) Xi’an Xinyuan
Metropolitan Shopping Center with a total GFA of approximately 116,000 square meters, located in Xi’an city, Shaanxi Province, (ii) Xingyang Xindo
Park Shopping Center with a total GFA of approximately 15,000 square meters, located in Xingyang city, Henan Province, (iii) Changsha Xindo Park
Shopping Center with a total GFA of approximately 12,000 square meters, located in Changsha city, Hunan Province, (iv) Chengdu Xindo Park
Shopping Center with a total GFA of approximately 19,000 square meters, located in Chengdu city, Sichuan Province, (v) Zhengzhou Xindo Park
Shopping Center with a total GFA of approximately 24,000 square meters, located in Zhengzhou city, Henan Province, (vi) Kunshan Xindo Park
Shopping Center with a total GFA of approximately 4,000 square meters, located in Kunshan city, Jiangsu Province, and (vii) Target Shopping Center
with a total GFA of approximately 28,090 square feet, located in New York. As of December 31, 2024, we had four projects under construction in
which we will retain approximately 203,000 square meters of GFA for development as commercial properties held for lease.
In November 2019, the Group acquired Xitou, a related party, for a total consideration of US$16,486,299, representing extinguishment of
pre-existing receivable. Xitou is primarily engaged in the provision of online platform services for real estate project financing purposes. In November
2019, the Group acquired Xichuang, a related party, for a total consideration of US$11,212,797, thereby extinguishing the pre-existing receivables.
Xichuang is primarily engaged in the provision of online platform services for sourcing, sale and purchase of real estate properties. In November
2019, the Group acquired I-Journey, a related party, for a total consideration of US$21,062,847, representing extinguishment of pre-existing
receivables. I-Journey is primarily engaged in the sale of household robots and provision of community cloud services. The acquisitions of Xitou,
Xichuang and I-Journey were in line with the Group’s strategy to extend its business to provide real estate and property management related
technology services.
In addition to real estate development and sales, we offer a wide range of property management services covering the pre-delivery and post-
delivery phases to property developers, property owners and property occupants for their enjoyment of community life. We also lease and manage
certain properties such as shopping malls, supermarkets and hotels. Moreover, we are engaged in various other business activities related to our
property development operations, including the development and management of industrial parks, the operation of a real estate private financing
platform, the development of cloud-based enterprise resource planning software applications, the development of smart home technology products and
the development of an online property sales platform.
Our Markets
We currently operate in 20 geographic markets in China—Beijing, Shanghai, Tianjin, Chengdu in Sichuan Province, Hefei in Anhui
Province, Jinan and Qingdao in Shandong Province, Suzhou, Kunshan and Xuzhou in Jiangsu Province, Zhengzhou in Henan Province, Changsha in
Hunan Province, Sanya in Hainan Province, Xi’an in Shaanxi Province, Zhuhai and Foshan in Guangdong Province, Dalian in Liaoning Province,
Wuhan in Hubei Province and Huzhou and Taizhou in Zhejiang Province. We also operate in the city of New York in the United States. In addition,
we made certain investments in Malaysia and in London in the U.K.

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The following table sets forth the numbers of our projects and the total GFA in China and the United States indicated as of December 31,
2024:
    
Properties
    
Properties
    
    
    
Total
    
under
under
Properties
Completed
number
Construction
planning
held for
projects
of
Total
    
(m2)
    
(m2)
    sale (m2)     
 (m2)
     projects     
GFA (m2)
China
 
Beijing
 
 87,988
—
—
 133,096
 2
 221,084
Chengdu
 
 741,602
—
—
 651,415
 4
 1,393,017
Zhengzhou
 
 1,712,464
 640,222
—
 4,934,249
 54
 7,286,935
Jinan
 
—
—
—
 1,771,924
 7
 1,771,924
Hefei
 
—
—
—
 145,455
 1
 145,455
Suzhou
 
—
—
—
 1,107,741
 10
 1,107,741
Kunshan
 
—
—
—
 975,034
 4
 975,034
Xuzhou
 
—
—
—
 232,607
 2
 232,607
Sanya
 
—
—
—
 119,237
 1
 119,237
Shanghai
 
—
—
—
 57,770
 1
 57,770
Changsha
 
—
—
—
 415,396
 3
 415,396
Xi’an
 
—
—
—
 490,251
 2
 490,251
Zhuhai
 
—
 70,000
—
—
 1
 70,000
Tianjin
 
—
—
—
 283,894
 2
 283,894
Qingdao
 
 380,890
—
—
 156,403
 2
 537,293
Dalian
 
 9,193
—
—
 98,733
 3
 107,926
Wuhan
 
—
 185,000
—
—
 1
 185,000
Huzhou
 
—
—
—
 47,919
 1
 47,919
Foshan
 
 195,116
 166,729
—
—
 2
 361,845
Taizhou
 
—
—
—
 128,397
 1
 128,397
Sub Total
 
 3,127,253
 1,061,951
—
 11,749,521
 104
 15,938,725
United States
 
Irvine (1)
 
—
—
 2,865
—
 1
 2,865
Nevada (2)
 
—
—
N/A
—
 1
N/A
New York
 
—
 30,112
—
 37,703
 3
 67,815
Total
 
 3,127,253
 1,092,063
 2,865
 11,787,224
 109
 16,009,405
(1) This is not a project constructed by us. The finished condominium project is located in Irvine, California, United States. We acquired 15 units
with a total GFA of 2,865 square meters of the total 72 units from a major United States developer in August 2012. All units were sold as of
December 31, 2015.
(2) The Northern Nevada Land Portfolio is a land portfolio comprised of 325 finished lots and 185 acres of undeveloped land at eight different sites
in the northern Nevada region near the Reno-Spark metropolitan area. All lots and acres were sold as of December 31, 2015.
For a discussion of revenue from each geographical segment in each of 2023 and 2024, see “Item 5. Operating and Financial Review and
Prospects—A. Operating Results—Discussion of Segment Operations.”
In recent years, we expanded our operations into Malaysia and the U.K. and made investments in the two countries.
In 2014, we acquired 100% share of a Malaysian company, which is engaged in land reclamation development for a total of 170 acres
(approximately 687,966 square meters). In February 2023, we obtained 90 acres land title and 41.67 acres of sea area use rights. A renowned local
developer in Malaysia, invested 83.82 million ringgit, approximately US$18.82 million, for the land acquisition. The contract was signed in December
2023 and a 10% deposit has been collected. The sale was completed in the second quarter of 2024, in line with previous expectations.

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In March 2018, we acquired from ED Group a 50% non-controlling equity stake in MDL, the developer of the Amory Tower Project
(previously named as the Madison project), via our wholly-owned subsidiary Xinyuan International (HK) Property Investment Co., Limited for a total
consideration of US$19.1 million. The Amory Tower Project consists of 319 private apartments and 104 affordable apartments, with approximately
425 square meters of community facilities. The project achieved practical completion as of December 31, 2021, which marked the completion of
construction. As of December 31, 2021, all the apartments had been sold. As of the date of this report, all of the 15 parking lots sold off and only one
shop remains available for sale.
We will continue to seek international investment opportunities that have high growth potential and are in line with our investment return
metrics and long-term business plan.
Our Property Projects
Overview
We offer the following four main types of real estate property products:
●
multi-layer apartment buildings, which, in China, are typically six stories or less and normally require nine to 12 months to
construct after we obtain the related construction permit;
●
sub-high-rise apartment buildings, which, in China, are typically seven to 11 stories and normally require 12 to 18 months to
construct after we obtain the related construction permit;
●
high-rise apartment buildings, which, in China, are typically 12 to 33 stories and normally require 18 to 24 months to construct after
we obtain the related construction permit; and
●
offices, mixed-use and commercial properties, which we have offered since 2012.
Our projects are in one of the following five stages:
●
properties under construction, comprising properties for which the construction permits have been obtained;
●
properties under planning, comprising properties for which we have entered into land grant contracts and are in the process of
obtaining the required permits to begin construction;
●
completed projects, comprising projects for which construction has been completed;
●
properties held for lease, comprising projects for which construction has been completed and which we plan to hold and manage;
and
●
properties held for sale, comprising land and properties which we purchase and hold for sale.

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The following table sets forth each of our properties currently under construction or planning as of December 31, 2024:
Total
Number
Type
Construction
Pre-sale
Number
Of
of
Commencement
Commencement
Total
Total
Of
Units
GFA
Project Name
    
Location
     Products (1)     
Date
    
Date (2)
     Site Area (m2)     
GFA (m2)
    
Units (4)
    
Sold
    
Sold (m2)
Chengdu Xinyuan City
 
Chengdu  
MU  
06/2018
09/2018  
200,906
741,602
5,985
5,759
 
585,547
Xingyang Splendid IV
 
Zhengzhou  
H  
05/2018
09/2018  
9,976
152,920
1,598
1,486
 
142,494
Xinyuan Golden Water View City
 
Zhengzhou  
H/C  
10/2017
11/2018  
45,067
332,305
3,010
1,109
176,092
Zhengzhou International New City III C
 
Zhengzhou  
H  
06/2018
10/2018  
27,231
82,965
1,808
1,805
81,640
Zhengzhou International New City IV
 
Zhengzhou  
H  
09/2018
12/2018  
50,966
199,750
1,715
1,715
197,804
Xingyang Splendid V
 
Zhengzhou  
H  
04/2019
07/2019  
34,308
80,486
700
700
78,089
Zhengzhou International New City IV B10
 
Zhengzhou  
H  
07/2018
12/2018  
35,181
92,331
2,418
2,183
82,387
Zhengzhou International New City A04
 
Zhengzhou  
H  
04/2018
11/2019  
19,200
104,924
2,691
2,647
102,262
Foshan Xinchuang AI International Science And Technology Innovation
Valley I
 
Foshan  
H  
05/2019
10/2019  
66,665
195,116
1,712
1,304
143,823
Lingshan Bay Dragon Seal
Qingdao
M/H
05/2019
07/2020
340,400
380,890
2,382
2,063
237,273
Tongzhou Xinyuan Royal Palace
Beijing
H
07/2020
12/2020
42,444
87,988
920
794
80,898
Dalian International Health Technology Town II
 
Dalian  
M  
08/2020
09/2020  
12,548
9,193
71
71
9,193
Xinyuan Yuanyang Zhen Garden
 
Zhengzhou  
H  
05/2021
05/2021  
8,123
142,968
1,384
963
96,000
Xinyuan Zijin Royal Palace
 
Zhengzhou  
H  
08/2021
09/2021  
39,371
200,666
1,670
184
16,958
Xinyuan Yue Royal Palace
Zhengzhou
MU
01/2021
06/2021
79,090
275,742
1,365
529
56,849
Zhengzhou Hangmei International Wisdom City III
Zhengzhou
C
04/2023
08/2023
29,151
47,407
64
55
43,978
Subtotal
 
 
 
 
1,040,627
3,127,253
29,493
23,367
2,131,287
Wuhan Canglong Royal Palace
 
Wuhan  
MU  
TBD
TBD  
53,787
185,000
 
Zhengzhou International New City (pending staging)
 
Zhengzhou  
TBD  
TBD
TBD  
129,080
617,022
 
Zhuhai Xin World
Zhuhai
MU
TBD
TBD
14,107
70,000
Zhengzhou Hangmei Project (pending staging)
Zhengzhou
TBD
TBD
TBD
11,183
23,200
Dalian International Health Technology Town II
Dalian
M/H
TBD
TBD  
86,260
TBD
 
 
Foshan Xinchuang AI International Science And Technology Innovation
Valley II
Foshan
MU
TBD
TBD
60,072
166,729
Flushing
 
New York  
MU  
TBD
TBD  
3,895
30,112
 
 
Subtotal
 
   
   
358,384
1,092,063
 
 
Total
 
1,399,011
4,219,316
29,493
23,367
2,131,287
(1) “M” refers to multi-layer buildings, “H” refers to high-rise buildings, “S” refers to sub-high-rise buildings, “C” refers to commercial properties
and “MU” refers to office, mixed-use and commercial properties.
(2) Pre-sale commencement dates refer to dates on which we began or expect to begin pre-sale activities after receiving the relevant pre-sale permits.
(3) “TBD” refers to “to be determined” as of December 31, 2024.
(4) The Company owns 51% equity interest in a joint venture, Zhengzhou Xinwo Real Estate Co., Ltd., which develops Xinyuan Yuanyang Zhen
Garden. The Company accounts for its investment under the equity method.
(5) Henan Xinyuan Guangsheng Real Estate Co., Ltd., a wholly owned subsidiary of the Company, is developing Xinyuan Zijin Royal Palace.
However, based on the cooperation agreement signed with Sino-Ocean Group on March 11, 2021, the Company owns 51% equity interest of
Xinyuan Zijin Royal Palace, and cannot exercise control of Xinyuan Zijin Royal Palace, but has the ability to exercise significant influence over
Xinyuan Zijin Royal Palace’s operating and financial decisions and accounts for it as an equity method investment.
Properties under Construction
Zhengzhou, Henan Province
Xingyang Splendid IV. The land is located southwest of Guangwu Road and Wangcun Road, Xingyang. This project covers a site area of
9,976 square meters and is expected to have a total GFA of 152,166 square meters, of which 137,061 square meters are for high-rise buildings and
15,105 square meters are for retail stores. We acquired the site in September 2014 and commenced construction in May 2018, and began to deliver
units in 2021. This project, when completed, will consist of 1,597 units. We started pre-sale in September 2018. As of December 31, 2024, we sold
1,486 units with a total GFA of 142,494 square meters.

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60
Xinyuan Golden Water View City. The land is located on Heizhuzhuang Road, Jinshui District, Zhengzhou. This project covers a site area of
45,067 square meters and is expected to have a total GFA of 332,305 square meters, of which 299,204 square meters are for high-rise buildings and
apartments, 24,322 square meters are for public rental housing, 3,269 square meters are for retail stores, and 5,510 square meters are for basements.
We acquired the site in June 2017 and commenced construction in October 2017, and began to deliver units in 2021. This project, when completed,
will consist of 3,010 units. We started pre-sale in November 2018. As of December 31, 2024, we sold 1,109 units with a total GFA of 176,092 square
meters.
Zhengzhou International New City III C. The land is located on south 3rd Ring Road, Zhengzhou. This project covers a site area of 27,231
square meters and is expected to have a total GFA of 82,965 square meters, of which 75,003 square meters are for high-rise buildings and apartments,
and 7,962 square meters are for retail stores. We acquired the site in February 2017 and commenced construction in June 2018, and began to deliver
units in 2021.This project, when completed, will consist of 1,808 units. We started pre-sale in October 2018, and as of December 31, 2024, we sold
1,805 units with a total GFA of 81,640 square meters.
Zhengzhou International New City IV. The land is located on south 3rd Ring Road, Zhengzhou. This project covers a site area of 50,966
square meters and is expected to have a total GFA of 199,750 square meters, of which 191,583 square meters are for high-rise buildings, and 8,167
square meters are for retail stores. We acquired the site in May 2018 and commenced construction in September 2018, and began to deliver units in
2021. This project, when completed, will consist of 1,723 units. We started pre-sale in December 2018, and as of December 31, 2024, we sold 1,715
units with a total GFA of 197,804 square meters.
Xingyang Splendid V. The land is located southwest of Guangwu Road and Wangcun Road, Xingyang. This project covers a site area of
34,308 square meters and is expected to have a total GFA of 80,486 square meters, of which 78,220 square meters are for high-rise buildings, and
2,266 square meters are for retail stores. We acquired the site in September 2014 and commenced construction in April 2019, and began to deliver
units in 2021. This project, when completed, will consist of 708 units. We started pre-sale in July 2019. As of December 31, 2024, we sold 700 units
with a total GFA of 78,089 square meters.
Zhengzhou International New City IV B10. The land is located on south 3rd Ring Road, Zhengzhou. This project covers a site area of 35,181
square meters and is expected to have a total GFA of 92,331 square meters, of which 91,425 square meters are for high-rise buildings and apartments,
and 906 square meters are for retail stores. We acquired the site in July 2018 and commenced construction in September 2018, and began to deliver
units in 2021.This project, when completed, will consist of 2,416 units. We started pre-sale in December 2018, and as of December 31, 2024, we sold
2,183 units with a total GFA of 82,387 square meters.
Zhengzhou International New City A04. The land is located on south 3rd Ring Road, Zhengzhou. This project covers a site area of 19,200
square meters and is expected to have a total GFA of 104,924 square meters, of which 102,894 square meters are for high-rise buildings and
apartments, and 2,030 square meters are for retail stores. We acquired the site in May 2018 and commenced construction in September 2018, and
began to deliver units in 2021. This project, when completed, will consist of 2,591 units. We started pre-sale in November 2019, as of December 31,
2024, we sold 2,647 units with a total GFA of 102,262 square meters.
Xinyuan Yuanyang Zhen Garden. The land is located east of Sanguan Middle Road and south of Baishe Road Zhengzhou. This project covers
a site area of 8,123 square meters and is expected to have a total GFA of 142,968 square meters, of which 139,383 square meters are for high-rise
buildings, and 2,617 square meters are for retail stores. We acquired the site in December 2020 and commenced construction in May 2021, and expect
to deliver units in 2025. This project, when completed, will consist of 1,384 units. We started pre-sale in May 2021, and as of December 31, 2024, we
sold 963 units with a total GFA of 96,000 square meters.
Xinyuan Zijin Royal Palace. The land is located on south 3rd Ring Road Zhengzhou. This project covers a site area of 39,371 square meters
and is expected to have a total GFA of 200,666 square meters. We acquired the site in December 2020 and commenced construction in August 2021
and expect to deliver units in 2025. This project, when completed, will consist of 1,670 units. We started pre-sale in September 2021, and as of
December 31, 2024, we sold 184 units with a total GFA of 16,958 square meters.
Xinyuan Yue Royal Palace. The land is located in Zhongmou County, Zhengzhou. This project covers a site area of 79,090 square meters and
is expected to have a total GFA of 275,742 square meters. We acquired the site in January 2021 and commenced construction in January 2021. This
project, when completed, will consist of 2,238 units. We started pre-sale in June 2021, and as of December 31, 2024, we sold 529 units with a total
GFA of 56,849 square meters.

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Zhengzhou Hangmei International Wisdom City III. The land is located in Xinzheng District, Zhengzhou. This project covers a site area of
29,151 square meters and is expected to have a total GFA of 47,407 square meters, all of which are for commercial properties. We acquired the site in
December 2017 and commenced construction in April 2023, and expect to deliver units in 2026. This project, when completed, will consist of 64
units. We started presale in August 2023, and as of December 31, 2024, we sold 55 units with a total GFA of 43,978 square meters.
Qingdao, Shandong Province
Lingshan Bay Dragon Seal. The land is located in Huangdao District, Qingdao. This project covers a site area of 340,400 square meters and
is expected to have a total GFA of 380,890 square meters. We acquired the site in July 2017, commenced construction in May 2019, and began to
deliver units in 2024. This project, when completed, will consist of 4,745 units. We started pre-sale in July 2020, and as of December 31, 2024, we
sold 2,063 units with a total GFA of 237,273 square meters.
Beijing
Tongzhou Xinyuan Royal Palace. The land is located in Liyuan Town, Tongzhou District, Beijing. This project covers a site area of 42,444
square meters and is expected to have a total GFA of 89,678 square meters. We acquired the site in May 2016, commenced construction in July 2020,
and began to deliver units in 2024. This project, when completed, will consist of 802 units. We started pre-sale in December 2020, and as of December
31, 2024, we sold 794 units with a total GFA of 80,898 square meters.
Chengdu, Sichuan Province
Chengdu Xinyuan City. The land is located in Pidu District, Chengdu. This project covers a site area of 200,906 square meters and is
expected to have a total GFA of 741,602 square meters, of which 716,822 square meters are for high-rise buildings and apartments, and 24,780 square
meters are for retail stores. We acquired the site in December 2017, commenced construction in June 2018, and began to deliver units in 2021. This
project, when completed, will consist of 5,985 units. We started pre-sale in September 2018, and as of December 31, 2024, we sold 5,759 units with a
total GFA of 585,547 square meters.
Dalian, Liaoning Province
Dalian International Health Technology Town II. The land is located in Lvshunkou District, Dalian. This project covers a site area of 12,548
square meters and is expected to have a total GFA of 9,193 square meters. We acquired the site in August 2018, commenced construction in August
2020, and expect to deliver units in 2025. This project, when completed, will consist of 71 units. We started pre-sale in September 2020, and as of
December 31, 2024, we sold 71 units with a total GFA of 9,193 square meters.
Foshan, Guangdong Province
Foshan Xinchuang AI International Science and Technology Innovation Valley I. The land is located in Gaoming District, Foshan. This
project covers a site area of 66,665 square meters and is expected to have a total GFA of 195,116 square meters, of which 191,188 square meters are
for high-rise buildings, 3,928 square meters are for retail stores. We acquired the site in May 2019, commenced construction in May 2019, and began
to deliver units in 2021. This project, when completed, will consist of 1,712 units. We started pre-sale in October 2019, and as of December 31, 2024,
we sold 1,304 units with a total GFA of 143,823 square meters.
Properties under Planning
Zhengzhou International New City (pending staging). The land is located on south 3rd Ring Road, Zhengzhou, Henan Province, and is
currently under planning. It will cover a site area of 129,080 square meters and is expected to have a total GFA of 617,022 square meters. We acquired
the site in 2017.
Zhengzhou Hangmei Project (pending staging). The land is located in Xinzheng District, Zhengzhou, Henan Province. It will cover a site
area of 11,183 square meters and is expected to have a total GFA of 23,200 square meters. We acquired the site in December 2017.

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62
Wuhan Canglong Royal Palace. The land is located in Jiangxia District, Wuhan, Hubei Province. It will cover a site area of 53,787 square
meters and is expected to have a total GFA of 185,000 square meters. We acquired the site in May 2018.
Dalian International Health Technology Town II. The land is located in Lvshunkou District, Dalian, Liaoning Province. It will cover a site
area of 37,078 square meters and is expected to have a total GFA of 44,500 square meters. We acquired the site in August 2018.
Zhuhai Xin World. The land is located in Xiangzhou District, Zhuhai, Guangdong Province. It will cover a site area of 14,107 square meters
and is expected to have a total GFA of 70,000 square meters. We acquired the site in January 2019.
Foshan Xinchuang AI International Science and Technology Innovation Valley II. The land is located in Gaoming District, Foshan,
Guangdong Province. It will cover a site area of 60,072 square meters and is expected to have a total GFA of 166,729 square meters. We acquired the
site in June 2019.
U.S. Flushing Project. The land is located at 135-35 Northern Blvd in Flushing, Queens, New York. We acquired the site in August 2016. As
of December 31, 2021, the property demolition was completed, with the only remaining structure being protected landmarks. The landmark artifacts
have been removed and stored offsite in anticipation for preservation and restoration. Design and entitlement of the new development continues to
progress in anticipation for the next phase. It is expected to have a total GFA of 30,112 square meters.

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63
Completed Projects
The following table sets forth our completed projects as of December 31, 2024.
    
    
    
    
Total
    
    
Total
    
    
Type of
Completion
Site Area
Total
Number of
Number of
GFA
Project Name
    
Location
    
Products
    
Date
    
(m2)
    
GFA (m3)
    
Units
    
Units Sold
    
Sold (m2)
Zhengzhou Longhai Star Garden
 
Zhengzhou
M/H/S
12/2000
 11,719
 39,975
 239
 239
 39,975
Zhengzhou Xinyuan Splendid
Zhengzhou Xinyuan Splendid 1A
 
Zhengzhou
M/S
07/2002
 35,444
 62,623
 484
 484
 62,623
Zhengzhou Xinyuan Splendid 1B
 
Zhengzhou
M
04/2004
 21,800
 43,673
 333
 333
 43,673
Zhengzhou Xinyuan Splendid 2A
 
Zhengzhou
M
04/2003
 23,460
 39,996
 271
 271
 39,996
Zhengzhou Xinyuan Splendid 2B
 
Zhengzhou
M
06/2004
 19,295
 27,041
 86
 86
 27,041
Zhengzhou Xinyuan Splendid 2C
 
Zhengzhou
S
04/2004
 9,968
 21,748
 132
 132
 21,748
Zhengzhou Xinyuan Splendid 3A3B3C
 
Zhengzhou
M/S
08/2005
 51,014
 114,774
 792
 792
 114,774
Zhengzhou Xinyuan Splendid Haojinge
 
Zhengzhou
H
11/2004
 8,298
 31,089
 166
 166
 31,089
Zhengzhou Xinyuan Splendid City Homestead
 
Zhengzhou
M
08/2005
 23,606
 45,378
 369
 369
 45,378
Zhengzhou Xinyuan Splendid Subtotal
 192,885
 386,322
 2,633
 2,633
 386,322
Zhengzhou City Manor
 
Zhengzhou
M
03/2006
 63,089
 118,716
 1,633
 1,633
 118,716
Zhengzhou City Family
 
Zhengzhou
M
12/2006
 21,380
 39,226
 720
 720
 39,226
Zhengzhou Central Garden-East
 
Zhengzhou
M/H/S
09/2007
 60,849
 165,206
 1,624
 1,624
 165,206
Zhengzhou Central Garden-West
 
Zhengzhou
M/H/S
09/2007
 79,464
 190,384
 1,796
 1,796
 190,384
Jinan City Family
 
Jinan
M
11/2007
 47,411
 61,065
 785
 785
 61,065
Suzhou Lake Splendid
 
Suzhou
M/H/S
01/2009
 130,945
 198,113
 2,326
 2,326
 198,113
Hefei Wangjiang Garden
 
Hefei
M/H
04/2009
 51,939
 145,455
 1,649
 1,649
 145,455
Suzhou Colorful Garden
 
Suzhou
M/H
04/2009
 41,365
 81,506
 970
 970
 81,506
Jinan Elegant Scenery
 
Jinan
H/S
06/2009
 61,502
 100,386
 1,127
 1,127
 100,386
Zhengzhou Finance Square
 
Zhengzhou
H
06/2009
 8,410
 67,225
 917
 917
 67,225
Zhengzhou Yipin Xiangshan Phase I
 
Zhengzhou
M/S
12/2009
 57,289
 94,249
 979
 979
 94,249
Jinan International City Garden
 
Jinan
H/S
01/2010
 93,928
 263,793
 4,672
 4,672
 263,793
Zhengzhou Xinyuan Colorful Garden
 
Zhengzhou
M/H
01/2010
 74,462
 191,781
 2,233
 2,233
 191,781
Xuzhou Colorful Garden
 
Xuzhou
M/H
01/2012
 46,777
 101,762
 858
 858
 101,762
Suzhou International City Garden
 
Suzhou
H
12/2011
 119,089
 204,147
 2,436
 2,436
 204,147
Chengdu Xinyuan Splendid I
 
Chengdu
H
06/2011
 34,007
 231,032
 4,081
 4,081
 231,032
Chengdu Xinyuan Splendid II
 
Chengdu
H
10/2012
 30,497
 217,010
 2,782
 2,782
 217,010
Zhengzhou Modern City
 
Zhengzhou
H/S
12/2012
 60,556
 232,054
 2,934
 2,934
 232,054
Kunshan International City Garden
 
Kunshan
M/H
12/2012
 200,008
 497,972
 5,133
 5,133
 497,972
Zhengzhou Yipin Xiangshan Phase II
 
Zhengzhou
M/S
01/2013
 81,345
 200,164
 2,209
 2,209
 200,164
Zhengzhou Century East A
 
Zhengzhou
M/H
12/2013
 22,418
 76,764
 765
 765
 76,764
Zhengzhou Century East B
 
Zhengzhou
H
08/2013
 51,372
 166,481
 1,709
 1,709
 166,481
Zhengzhou Royal Palace
 
Zhengzhou
M/H
06/2014
 45,716
 135,920
 2,061
 2,061
 135,920
Suzhou Xin City
 
Suzhou
H
09/2015
 51,246
 127,291
 1,334
 1,334
 127,291
Jinan Xinyuan Splendid
 
Jinan
M/H
10/2015
 200,180
 573,273
 7,387
 7,387
 572,951
Beijing Xindo Park
 
Beijing
MU
11/2015
 57,862
 133,096
 1,292
 1,234
 131,638
Zhengzhou Xin City
 
Zhengzhou
H
03/2016
 61,078
 210,530
 2,639
 2,639
 209,361
Xingyang Splendid I
 
Zhengzhou
H
03/2016
 40,782
 114,997
 1,427
 1,427
 114,886
Zhengzhou Thriving Family
 
Zhengzhou
H
04/2016
 44,169
 133,779
 1,678
 1,660
 133,061
Suzhou Lake Royal Palace
 
Suzhou
M/H
06/2016
 114,624
 169,781
 1,569
 1,569
 169,781
Shanghai Royal Palace
 
Shanghai
H
07/2016
 28,600
 57,770
 583
 535
 46,406
Chengdu Thriving Family
 
Chengdu
H
08/2017
 75,008
 203,373
 2,515
 2,515
 202,655
Sanya Yazhou Bay No.1
 
Sanya
MU
10/2017
 78,765
 119,237
 1,605
 1,605
 119,237
Kunshan Royal Palace
 
Kunshan
M/S/H
11/2017
 145,776
 280,091
 2,603
 2,603
 280,091
Changsha Xinyuan Splendid
 
Changsha
H/C
12/2017
 89,460
 252,361
 2,952
 2,939
 247,777
Xi’an Metropolitan
 
Xi’an
MU
11/2017
 85,118
 288,625
 2,720
 2,685
 284,605
Jinan Xin Central
 
Jinan
MU
11/2017
 51,352
 196,169
 2,715
 2,715
 195,797
Zhengzhou Xindo Park
 
Zhengzhou
C
12/2018
 40,218
 134,362
 2,170
 2,142
 134,334
Henan Xin Central I
 
Zhengzhou
H
09/2018
 86,781
 261,606
 2,710
 2,703
 255,667
Zhengzhou Fancy City I
 
Zhengzhou
H
12/2018
 50,656
 166,685
 1,641
 1,621
 162,424
Zhengzhou Fancy City II (South)
 
Zhengzhou
H
12/2018
 27,486
 84,274
 884
 883
 82,830
Kunshan Xindo Park
 
Kunshan
H/C
10/2018
 47,523
 89,001
 1,077
 1,076
 88,931
New York Oosten
 
New York
S
12/2016
 8,094
 30,855
 216
 208
 28,562
Xingyang Splendid II
 
Zhengzhou
MU
12/2019
 60,556
 118,530
 1,516
 1,478
 103,273
Xuzhou Colorful City
 
Xuzhou
M/H
06/2019
 45,046
 130,845
 1,453
 1,453
 130,845
Tianjin Spring Royal Palace I
 
Tianjin
M/H
12/2019
 131,021
 140,097
 1,083
 1,083
 139,869
Zhengzhou International New City I
 
Zhengzhou
H
12/2019
 89,088
 356,493
 3,822
 3,816
 355,873
Henan Xin Central II
 
Zhengzhou
H
12/2019
 37,126
 109,328
 1,186
 1,176
 109,328
Xingyang Splendid III
 
Zhengzhou
H
09/2019
 47,709
 120,872
 1,207
 1,200
 120,376
Changsha Mulian Royal Palace
 
Changsha
H
12/2019
 32,158
 90,993
 694
 694
 90,993
Zhengzhou International New City II
 
Zhengzhou
H
12/2019
 41,821
 175,935
 1,910
 1,750
 173,903
Zhengzhou Fancy City II (North)
Zhengzhou
C
06/2020
 30,175
 109,085
 4,793
 3,251
 103,888
Zhengzhou International New City III A
Zhengzhou
H
09/2020
22,225
 97,099
 864
 864
 96,880
Changsha Furong Thriving Family
Changsha
MU
12/2019
 23,418
 72,042
 705
 705
 72,042
Suzhou Gusu Shade I (Suzhou New Project)
Suzhou
M
11/2020
 10,063
 11,944
 78
 78
 11,944
Suzhou Gusu Shade II
Suzhou
M
11/2020
 10,219
 15,112
 96
 96
 15,112
Suzhou Suhe Bay
Suzhou
H
12/2020
 16,627
 62,561
 479
 479
 62,561
Suzhou Galaxy Bay
Suzhou
H/C
12/2020
 21,183
 73,451
 718
 718
 72,676
Qingdao Royal Dragon Bay
Qingdao
MU
08/2021
 64,442
 156,403
 1,249
 1,130
 139,189
Zhengzhou International New City III B
Zhengzhou
H
01/2021
 26,102
 118,678
 1,336
 1,336
 118,590
Zhengzhou International New City III D
Zhengzhou
H/C
02/2021
 15,119
 46,094
 448
 448
 46,094
Tianjin Spring Royal Palace II
Tianjin
M/H
08/2021
 133,499
 143,797
 1,077
 1,077
 143,222
Kunshan Xinyu Jiayuan
Kunshan
MU
07/2022
 18,068
 107,970
 909
 887
 104,666
Jinan Royal Palace
Jinan
H
09/2020
 140,155
 449,450
 6,512
 6,512
 447,413
Jinan Royal Spring Bay
Jinan
M/H
09/2021
 69,587
 127,788
 1,230
 1,059
 122,768
Taizhou Yihe Yayuan
Taizhou
H
03/2021
 61,107
 128,397
 1,081
 1,081
 128,397
Hudson
New York
S
12/2020
 2,323
 6,848
 92
 92
 6,848
Zhengzhou Hangmei International Wisdom City I
Zhengzhou
H
06/2021
 73,300
 133,962
 1,441
 1,441
 133,491
Zhengzhou Fancy City III
Zhengzhou
H
06/2023
 27,599
 80,628
 949
 929
 79,876
Dalian International Health Technology Town I
Dalian
M/H
09/2023
58,740
98,733
948
948
98,623
Huzhou Silk Town
Huzhou
MU
01/2023
84,166
47,919
433
289
39,495
Suzhou Linhu Lake Project
Suzhou
H
06/2023
118,667
163,835
1,668
1,649
163,835
Xi’an Xinyuan Royal Palace
Xi’an
MU
12/2023
80,673
201,626
1,159
1,159
199,081
Zhengzhou Hangmei International Wisdom City II
Zhengzhou
C
06/2023
46,357
134,599
163
161
133,212
Derun project I
Zhengzhou
H
06/12/2024
49,718
122,246
1036
1036
122,246
Total
4,761,257
11,787,224
133,323
130,826
11,681,602
(1)
The Company owns 78.46% equity interest in a joint venture, Huzhou Xinhong Town Construction and Development Co., Ltd. (“Huzhou Xinhong”), which develops Huzhou Silk Town. The Company accounts for its
investment under the equity method. In 2023, the Company sold the project to another shareholder of Huzhou Xinhong.

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64
(2)
The Company owns 24% equity interest in Suzhou Kairongchen Real Estate Co., Ltd., which develops Suzhou He’an Garden. The Company accounts for its investment under the equity method.
As of December 31, 2024, we completed 86 projects comprising 130,826 units with a total GFA of 11,787,224 square meters. More than 98%
of the units were sold. The status of completed projects in the last three years is discussed below:
Zhengzhou Xin City. The land is located south of Yongping Road and east of Kangping Road, New-East-Zheng District, Zhengzhou, Henan
Province. This project covers a site area of 61,078 square meters and has a total GFA of 210,530 square meters, of which 195,537 square meters are
for high-rise buildings, 10,467 square meters are for retail stores, 4,526 square meters are for basements. We acquired the site in December 2011,
commenced construction of this project in March 2013, and began to deliver units in 2015. This project consists of 2,639 units. We started pre-sale in
September 2013, and as of December 31, 2022, we sold all the units.
Zhengzhou Thriving Family. The land is located south of Bairong Road and east of Nangang Road, Zhengzhou, Henan Province. This project
covers a site area of 44,169 square meters and has a total GFA of 133,779 square meters, of which 113,488 square meters are for high-rise buildings,
1,136 square meters are for retail stores, 4,966 square meters are for basements and 13,463 square meters are for public rental housing. We acquired
the site in September 2013, commenced construction of this project in April 2014, and delivered it in 2016. This project consists of 1,678 units. We
started pre-sale in June 2014, and as of December 31, 2024, we sold 1,660 units with a total GFA of 133,061 square meters.
Xingyang Splendid I. The land is located south of Zhengshang Road Xingyang, Henan Province. This project covers a site area of 40,782
square meters and has a total GFA of 114,997 square meters, of which 114,997 square meters are for high-rise buildings. We acquired the site in
November 2013, commenced construction of this project in April 2014, and began to deliver units in 2016. This project consists of 1,427 units. We
started pre-sale in May 2014, and as of December 31, 2021, we sold all the units.
Suzhou Lake Royal Palace. The land is located east of Yinshanhu Road and north of Xingguo Road, in the Wuzhong economic development
zone in Suzhou, Jiangsu Province. This project covers a site area of 114,624 square meters and has a total GFA of 169,781 square meters, of which
119,034 square meters are for high-rise buildings, 50,747 square meters are for multi-layer buildings and 1,410 square meters are for retail stores. We
acquired the site in September 2013, commenced construction of this project in April 2014, and began to deliver units in 2016. This project consists of
1,569 units. We started pre-sale in July 2014, and as of December 31, 2021, we sold all the units.
Shanghai Royal Palace. The land is located in Zhaoxiang Town, Qingpu District, Shanghai. This project covers a site area of 28,600 square
meters and has a total GFA of 57,770 square meters, of which 45,652 square meters are for high-rise buildings and 12,118 square meters are for retail
stores. We acquired the site in April 2014, commenced construction of this project in August 2014, and began to deliver units in 2016. This project
consists of 622 units. We started pre-sale in January 2015, and as of December 31, 2024, we sold 535 units with a total GFA of 46,406 square meters.
Chengdu Thriving Family. The land is located in the Huayangyixin Community, Chengdu, Sichuan Province. This project covers a site area
of 75,008 square meters and has a total GFA of 203,374 square meters, of which 176,471 square meters are for high-rise buildings and 26,902 square
meters are for retail stores. We acquired the site in January 2014, commenced construction of this project in June 2014, and began to deliver units in
2016. This project consists of 2,515 units. We started pre-sale in September 2014, and as of December 31, 2022, we sold all the units.
Sanya Yazhou Bay No.1. The land is located in the Creative Industry Park in Yacheng Town, Sanya, Hainan Province. This project covers a
site area of 78,765 square meters and has a total GFA of 119,237 square meters, of which 105,569 square meters are for high-rise buildings, 9,808
square meters are for multi-layer buildings and 2,208 square meters are for retail stores. We acquired the site in January 2014, commenced
construction of this project in November 2014, and began to deliver units in 2016. This project consists of 1,605 units. We started pre-sale in
November 2014, and as of December 31 2021, we sold all the units.
Kunshan Royal Palace. The land is located east of Xihuan Road and south of Guiyi Road, Huaqiao Town, Kunshan, Jiangsu Province. This
project covers a site area of 145,776 square meters and has a total GFA of 280,091 square meters, of which 65,178 square meters are for multi-layer
buildings, 205,445 square meters are for high-rise buildings, 138 square meters are for basements and 9,328 square meters are for retail stores. We
acquired the site in October 2013, commenced construction of this project in October 2013, and began to deliver units from 2015. This project consists
of 2,603 units. We started pre-sale in November 2013, and as of December 31, 2022, we sold all the units.

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Changsha Xinyuan Splendid. The land is located on Dongfanghong South Road, Yuelu District, Changsha, Hunan Province. This project
covers a site area of 89,460 square meters and has a total GFA of 252,361 square meters, of which 229,366 square meters are for high-rise buildings
and 22,286 square meters are for retail stores. We acquired the site in March 2014, commenced construction of this project in August 2014, and began
to deliver units in 2016. This project consists of 2,952 units. We started pre-sale in November 2014, and as of December 31, 2024, we sold 2,939 units
with a total GFA of 247,777 square meters.
Xi’an Metropolitan. The land is located north of Fenghe Road, Xi’an, Shaanxi Province. This project covers a site area of 85,118 square
meters and has a total GFA of 288,625 square meters, of which 207,080 square meters are for high-rise buildings, 16,119 square meters are for retail
stores, 1,461 square meters are for basements and 63,692 square meters are for office buildings. We acquired the site in July 2014, commenced
construction of this project in December 2014, and began to deliver units in 2016. This project consists of 2,720 units. We started pre-sale started in
December 2014, and as of December 31, 2024, we sold 2,685 units with a total GFA of 284,605 square meters.
Jinan Xin Central. The land is located south of Huayuan Road and west of Huaxin Road, Jinan, Shandong Province. This project covers a
site area of 51,352 square meters and has a total GFA of 196,041 square meters, of which 99,284 square meters are for high-rise buildings, 32,371
square meters are for retail stores, 51,022 square meters are for office buildings, 6,231 square meters are for public rental housing and 5,502 square
meters are for basements. We acquired the site in March 2015, commenced construction of this project in May 2015, and began to deliver units in
2016. This project consists of 2,715 units. We started pre-sale in May 2015, and as of December 31, 2022, we sold all the units.
Zhengzhou Xindo Park (commercial). The land is located south of Bairong Road and west of Daxue Road, Zhengzhou, Henan Province. This
project covers a site area of 40,218 square meters and has a total GFA of 134,362 square meters, of which 110,079 square meters are for office
buildings and 24,283 square meters are for retail stores. We acquired the site in September 2013, commenced construction of this project in January
2015, and began to deliver units in 2017. This project consists of 2,170 units. We started pre-sale in April 2015, and as of December 31, 2024, we sold
2,142 units with a total GFA of 134,334 square meters.
Henan Xin Central I. The land is located south of Bairong Road and east of Xingyuan Road, Zhengzhou, Henan Province. This project
covers a site area of 86,781 square meters and has a total GFA of 261,607 square meters, of which 211,053 square meters are for high-rise buildings,
16,028 square meters are for retail stores, 26,040 square meters are for public rental housing and 8,485 square meters are for basements. We acquired
the site in December 2014 and commenced construction in July 2015, and began to deliver units in 2017. This project consists of 2,710 units. We
started pre-sale in July 2015, and as of December 31, 2024, we sold 2,703 units with a total GFA of 255,667 square meters.
Zhengzhou Fancy City I. The land is located south of Dingsheng Road and west of Siji Road, Zhengzhou, Henan Province. This project
covers a site area of 50,656 square meters and has a total GFA of 166,524 square meters, of which 134,039 square meters are for high-rise buildings,
10,167 square meters are for retail stores, 16,741 square meters are for public rental housing and 5,762 square meters are for basements. We acquired
the site in December 2014 and commenced construction in September 2015, and began to deliver units in 2017. This project consists of 1,642 units.
We started pre-sale in October 2015, and as of December 31, 2024, we sold 1,621 units with a total GFA of 162,424 square meters.
Zhengzhou Fancy City II (South). The land is located west of Songshan Road on the 4th Ring Road, Zhengzhou, Henan Province. This
project covers a site area of 27,486 square meters and has a total GFA of 84,274 square meters, of which 78,445 square meters are for high-rise
buildings, 3,628 square meters are for retail stores and 2,201 square meters are for basements. We acquired the site in April 2016 and commenced
construction in June 2016, and began to deliver units in 2018. This project consists of 884 units. We started pre-sale in June 2016, and as of December
31, 2024, we sold 883 units with a total GFA of 82,830 square meters.
Kunshan Xindo Park. The land is located in the Huaqiao area within the Shanghai Outer Ring Expressway, Kunshan, Jiangsu Province. This
project covers a site area of 47,523 square meters and has a total GFA of 89,001 square meters, of which 72,750 square meters are for high-rise
buildings and 16,252 square meters are for retail stores. We acquired the site in April 2016, commenced construction of this project in July 2016, and
began to deliver units in 2018. This project consists of 1,077 units. We started pre-sale in July 2016, and as of December 31, 2024, we sold 1,076 units
with a total GFA of 88,931 square meters.

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Xingyang Splendid II. The land is located south of Zhengshang Road, Xingyang, Henan Province. This project covers a site area of 60,556
square meters and has a total GFA of 118,530 square meters, of which 118,530 square meters are for high-rise buildings. We acquired the site of 7,577
square meters in November 2013 and 52,979 square meters in August 2014, commenced construction of this project in December 2014, and began to
deliver units in 2017. This project consists of 1,516 units. We started pre-sale in December 2014, and as of December 31, 2024, we sold 1478 units
with a total GFA of 103,273 square meters.
Xuzhou Colorful City. The land is located south of Kuangshan Road, Quanshan District, Xuzhou, Jiangsu Province. This project covers a site
area of 45,046 square meters and has a total GFA of 130,845 square meters, of which 17,600 square meters are for multi-layer buildings, 93,889
square meters are for high-rise buildings 6,972 square meters are for retail stores and 12,379 square meters are for basements. We acquired the site in
December 2011, commenced construction of this project in June 2013, and began to deliver units in 2016. This project consists of 1,453 units. We
started pre-sale in November 2013, and as of December 31, 2022, we sold all the units.
Tianjin Spring Royal Palace I. The land is located in Wuqing District, Sicundian Town, Tianjin. This project covers a site area of 131,021
square meters and has a total GFA of 140,097 square meters, of which 73,383 square meters are for high-rise buildings, 5,735 square meters are for
retail stores, and 60,979 square meters are for multi-layer buildings. We acquired the site in November 2014, commenced construction in October
2015, and began to deliver units in 2017. This project consists of 1,084 units. We started pre-sale in October 2015, and as of December 31, 2024, we
sold 1083 units with a total GFA of 139,869 square meters.
Zhengzhou International New City I. The land is located on south 3rd Ring Road, Zhengzhou, Henan Province. This project covers a site area
of 89,088 square meters and has a total GFA of 356,492 square meters, of which 292,330 square meters are for high-rise buildings, 21,896 square
meters are for retail stores, 36,789 for public rental housing and 5,573 square meters are for basements. We acquired the site in February 2016 and
commenced construction in August 2016, and began to deliver units in 2018. This project consists of 3,822 units. We started pre-sale in September
2016, and as of December 31, 2024, we sold 3,816 units with a total GFA of 355,873 square meters.
Henan Xin Central II. The land is located south of Bairong Road and Xingyuan Road, Zhengzhou, Henan Province. This project covers a site
area of 37,126 square meters and has a total GFA of 109,740 square meters, of which 92,502 square meters are for high-rise buildings, 3,934 square
meters are for retail stores, 1,654 square meters are for basements and 11,235 square meters are for public rental housing. We acquired the site in
December 2014 and commenced construction in September 2016, and began to deliver units in 2018. This project consists of 1,187 units. We started
pre-sale in October 2016, and as of December 31, 2024, we sold 1,176 units with a total GFA of 109,328 square meters.
Xingyang Splendid III. The land is located south of Zhengshang Road, Xingyang, Henan Province. This project covers a site area of 47,709
square meters and has a total GFA of 120,872 square meters, of which 117,505 square meters are for high-rise buildings and 3,608 square meters are
for retail stores. We acquired the site in September 2013 and commenced construction in June 2017, and began to deliver units in 2019. This project
consists of 1,207 units. We started pre-sale in June 2017, and as of December 31, 2024, we sold 1,200 units with a total GFA of 120,376 square
meters.
Changsha Mulian Royal Palace. The land is located in Yuhua District, Changsha, Hunan Province. This project covers a site area of 32,158
square meters and has a total GFA of 90,940 square meters, of which 57,033 square meters are for high-rise buildings, 32,351 square meters are for
multi-layer building and 1,608 square meters are for retail stores. We acquired the site in October 2016 and commenced construction in May 2017,
and began to deliver units in 2019. This project consisted of 694 units. We started pre-sale in August 2017, and as of December 31, 2021, we sold all
the units.
Zhengzhou International New City II. The land is located on south 3rd Ring Road, Zhengzhou, Henan Province. This project covers a site
area of 41,821 square meters and has a total GFA of 175,935 square meters, of which 159,563 square meters are for high-rise buildings, 12,605 square
meters are for retail stores and 2,915 square meters are for basements. We acquired the site in July 2016 and commenced construction in July 2017,
and began to deliver units in 2019. This project consists of 1,910 units. We started pre-sale in August 2017, and as of December 31, 2024, we sold
1,750 units with a total GFA of 173,903 square meters.

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New York Oosten. The Oosten is located at 421 Kent Street in the South Williamsburg neighborhood of Brooklyn, NY. Constructed in 2017,
the Property is an eight-story, 481,000 square foot, Class A, mixed-use condominium building consisting of 216 residential units, community facility
space, and 72 parking spots. There is roughly 9,500 square feet of community facility space and 319,000 square feet of net residential space. As of
December 31, 2024, there were 8 units left to sell in addition to 63 parking licenses. The community facility space was sold in the first quarter of
2022.
Zhengzhou Fancy City II (North). The land is located west of Songshan Road on the 4th Ring Road, Zhengzhou, Henan Province. This
project covers a site area of 30,175 square meters and has a total GFA of 109,085 square meters, of which 100,380 square meters are for multi-layer
buildings and 8,344 square meters are for retail stores. We acquired the site in April 2016 and commenced construction in May 2017, and delivered
units in 2019. This project consists of 3,278 units. We started pre-sale in October 2017, and as of December 31, 2024, we sold 883 units with a total
GFA of 82,830 square meters.
Zhengzhou International New City III A. The land is located on south 3rd Ring Road, Zhengzhou, Henan Province. This project covers a site
area of 22,225 square meters and has a total GFA of 97,099 square meters, of which 95,504 square meters are for high-rise buildings, 1,002 square
meters are for basements and 657 square meters are for retail stores. We acquired the site in May 2017 and commenced construction in November
2017, and delivered units in 2020. This project consists of 864 units. We started pre-sale in December 2017, and as of December 31, 2021, we sold all
the units.
Suzhou Galaxy Bay. The land is located in Taicang District, Suzhou, Jiangsu Province. It covers a site area of 21,183 square meters and has a
total GFA of 73,451 square meters, of which 73,451 square meters are for high-rise buildings. We acquired the site in December 2017, commenced
construction of this project in July 2018 and delivered the units in 2020. This project consists of 718 units. We started pre-sale in December 2018, and
as of December 31, 2021, we sold all the units.
Suzhou Gusu Shade I. The land is located in Gusu District, Suzhou, Jiangsu Province. It covers a site area of 10,063 square meters and has a
total GFA of 11,944 square meters, of which 11,944 square meters are for multi-layer buildings. We acquired the site in March 2018 and commenced
construction of this project in September 2018, and delivered units in 2020. This project consists of 78 units. We started pre-sale in November 2018,
and as of December 31, 2022, we sold all the units.
Suzhou Gusu Shade II. The land is located in Gusu District, Suzhou, Jiangsu Province. This project covers a site area of 10,219 square meters
and has a total GFA of 15,112 square meters, of which 15,112 square meters are for multi-layer buildings. We acquired the site in June 2018 and
commenced construction of this project in October 2018, and delivered units in 2020. This project consists of 96 units. We started pre-sale in May
2019, and as of December 31, 2022, we sold all the units.
Suzhou Suhe Bay. The land is located in Wujiang District, Suzhou, Jiangsu Province. This project covers a site area of 16,627 square meters
and has a total GFA of 62,561 square meters, of which 62,561 square meters are for multi-layer buildings. We acquired the site in April 2018 and
commenced construction of this project in autumn 2018, and delivered units in 2020. This project consists of 479 units. We started pre-sale in
November 2018, and as of December 31, 2021, we sold all the units.
Changsha Furong Thriving Family. The land is located on Shanmu Road, East Coast Town, Changsha, Hunan Province. This project covers
a site area of 23,418 square meters and has a total GFA of 72,042 square meters of which 69,729 square meters are for high-rise buildings, and 2,528
square meters are for retail stores. We acquired the site in January 2017 and commenced construction of the project in July 2017, and delivered units
in 2020. This project consists of 705 units. We started pre-sale in July 2018, and as of December 31, 2021, we sold all the units.
Zhengzhou International New City III B. The land is located south of 3rd Ring Road, Zhengzhou, Henan Province. This project covers a site
area of 26,102 square meters and has a total GFA of 118,678 square meters, of which 118,678 square meters are for high-rise buildings. We acquired
the site in May 2017 and commenced construction in November 2017, and began to deliver units in 2021.This project consists of 1,336 units. We
started pre-sale in April 2018, and as of December 31, 2022, we sold all the units.
Zhengzhou International New City III D. The land is located south of 3rd Ring Road, Zhengzhou, Henan Province. This project covers a site
area of 15,119 square meters and has a total GFA of 46,094 square meters, of which 44,293 square meters are for high-rise buildings, 885 square
meters are for retail stores, and 916 square meters are for basements. We acquired the site in August 2016 and commenced construction in August
2017, and began to deliver units in 2022. This project consists of 448 units. We started pre-sale in June 2018, and as of December 31, 2021, we sold
all the units.

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Qingdao Royal Dragon Bay. The land is located in Huangdao District, Qingdao, Shandong Province. This project covers a site area of 64,442
square meters and has a total GFA of 156,403 square meters, of which 118,914 square meters are for high-rise buildings and apartments, 2,816 square
meters are for retail stores, and 34,673 square meters are for multi-layer buildings. We acquired the site in July 2018, commenced construction in
August 2018, and began to deliver units in 2021. This project consists of 1,249 units. We started pre-sale in November 2018, and as of December 31,
2024, we sold 1,130 units with a total GFA of 139,189 square meters.
Zhengzhou Hangmei International Wisdom City I. The land is located in Xinzheng District, Zhengzhou. This project covers a site area of
73,300 square meters and has a total GFA of 133,962 square meters, of which 133,962 square meters are for high-rise buildings. We acquired the site
in December 2017 and commenced construction in March 2018, and began to deliver units in 2022. This project consists of 1,441 units. We started
pre-sale in May 2018, and as of December 31, 2024, we sold 1,441 units with a total GFA of 133,491 square meters.
Zhengzhou Hangmei International Wisdom City II. The land is located in Xinzheng District, Zhengzhou. This project covers a site area of
46,357 square meters and is expected to have a total GFA of 134,599 square meters, all of which are for commercial properties. We acquired the site in
December 2017 and commenced construction in July 2018, and began to deliver units in 2021. This project consists of 165 units. We started pre-sale
in January 2019, and as of December 31, 2024, we sold 161 units with a total GFA of 133,212 square meters.
Jinan Royal Palace. The land is located south of Qingyuan Road and east of Lashanhe Road, Huaiyin District, Jinan. This project covers a
site area of 140,155 square meters and has a total GFA of 449,450 square meters, of which 399,907 square meters are for high-rise buildings, 26,094
square meters are for retail stores and 21,240 square meters are for basements. We acquired the site in November 2013, commenced construction of
this project in February 2014, and began to deliver units in 2016. This project consists of 6,512 units. We started pre-sale in June 2014, and as of
December 31, 2022, we sold all the units.
Jinan Royal Spring Bay. The land is located in Zhangqiu District, Zhangqiu. This project covers a site area of 69,587 square meters and has a
total GFA of 127,788 square meters, of which 83,982 square meters are for high-rise buildings, 27,921 square meters are for multi-layer buildings,
4,265 square meters are for retail stores and 11,620 square meters are for basements. We acquired the site in June 2018, commenced construction of
this project in September 2018, and began to deliver units in 2021. This project consists of 1,230 units. We started pre-sale in December 2018, and as
of December 31, 2024, we sold 1,059 units with a total GFA of 122,768 square meters.
Kunshan Xinyu Jiayuan. The land is located in Huaqiao District, South of Kunshan. This project covers a site area of 18,068 square meters
and has a total GFA of 107,970 square meters, of which 103,081 square meters are for high-rise buildings, and 4,889 square meters are for office
buildings. We acquired the site in July 2017 and commenced construction of this project in December 2017, and began to deliver units in 2021. This
project consists of 909 units. We started pre-sale in September 2018, and as of December 31, 2024, we sold 887 units with a total GFA of 104,666
square meters.
Tianjin Spring Royal Palace II. The land is located in Sicundian Town, Wuqing District, Tianjin. This project covers a site area of 133,499
square meters and has a total GFA of 143,797 square meters, of which 71,602 square meters are for high-rise buildings, 507 square meters are for
retail stores, and 71,688 square meters are for multi-layer buildings. We acquired the site in November 2014, commenced construction in October
2015, and began to deliver units in 2020. This project consists of 1,077 units. We started pre-sale in January 2018, and as of December 31, 2024, we
sold 1,077 units with a total GFA of 143,222 square meters.
Taizhou Yihe Yayuan. The land is located in Luqiao District, Taizhou. This site covers a site area of 61,107 square meters and has a total GFA
of 128,397 square meters, of which 109,869 square meters are for high-rise buildings, 18,528 square meters are for retail stores. We acquired the site
in May 2019, and began to deliver units in 2021. This project consists of 1,081 units. We started pre-sale in October 2019, and as of December 31,
2021, we sold all units.
Hudson Garden Project - the Bloom on Forty Fifth. The land is located at 500 W 45th St., New York, NY. The project consists of a seven-
story mixed use scheme, providing 92 residential apartments comprising studios, as well as one-b, two-b, three- and four-bedroom apartments,
including 35,000 square feet of retail space. The development achieved final completion in 2021. As of December 31, 2024, there were 0 units left to
sell.

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Zhengzhou Fancy City III. The land is located west of Songshan Road and on 4th Ring Road, Zhengzhou. This project covers a site area of
27,599 square meters and is expected to have a total GFA of 80,628 square meters, of which 78,075 square meters are for high-rise buildings, 1,048
square meters are for retail stores, and 1,480 square meters are for basements. We acquired the site in December 2017 and commenced construction in
March 2018, and began to deliver units in 2021. This project consists of 922 units. We started pre-sale in October 2018. As of December 31, 2024, we
sold 929 units with a total GFA of 79,876 square meters.
Dalian International Health Technology Town I. The land is located in Lvshunkou District, Dalian. This project covers a site area of 58,740
square meters and is expected to have a total GFA of 98,733 square meters, of which 71,677 square meters are for high-rise buildings, 5,112 square
meters are for retail stores, 27,056 square meters are for multi-layer buildings. We acquired the site in August 2018, commenced construction in
October 2018, and began to deliver units in 2020. This project consists of 948 units. We started pre-sale in December 2018, and as of December 31,
2024, we sold 948 units with a total GFA of 98,623 square meters.
Suzhou He’an Garden. The land is located in New District, Suzhou. This project covers a site area of 118,667 square meters and is expected
to have a total GFA of 117,999 square meters. We acquired the site in May 2019, commenced construction in December 2019, and began to deliver
units in 2022. This project consists of 1,668 units. We started pre-sale in May 2020, and as of December 31, 2024, we sold 948 units with a total GFA
of 98,623 square meters.
Xi’an Xinyuan Royal Palace. The land is located in the southwest corner of Shenzhou 3rd Road and Aerospace Middle Road in the Xi’an
Aerospace Base, Xi’an. This site covers a site area of 80,673 square meters and is expected to have a total GFA of 201,626 square meters. We
acquired the site in May 2017 and began to deliver units in 2023. This project consists of 1,159 units. We started pre-sale in February 2021, and as of
December 31, 2024, we sold 1,159 units with a total GFA of 199,081 square meters.
Derun Project I. The land is located west of Jingguan South Road and south of Lijiang Road Zhengzhou. This project covers a site area of
49,718 square meters and is expected to have a total GFA of 122,246 square meters, of which 122,246 square meters are for high-rise buildings. We
acquired the site in July 2020 and commenced construction in July 2020, and expect to deliver units in 2024. This project, when completed, will
consist of 1,036 units. We started pre-sale in July 2020, and as of December 31, 2024, we sold 1,036 units with a total GFA of 122,246 square meters.
Properties Held for Lease
Xi’an Xinyuan Metropolitan Shopping Center. In 2016, we completed the Xi’an Xinyuan Metropolitan Shopping Center, located in Xi’an,
Shaanxi Province. As part of the Xi’an Metropolitan project, the shopping center has a construction GFA of 116,288 square meters. The Xi’an
Metropolitan Shopping Center formally opened in December 2016 and provides retail services including fashion, food and beverage, family activities,
jewelry and clothing, a movie theater, and education, among other services, appealing to customers within a radius of three to five kilometers. The
shopping center is managed by Xi’an Xinyuan Metropolitan Business Management Co. Ltd., one of our subsidiaries that specializes in retail property
management.
Xingyang Xindo Park Shopping Center. In 2017, we completed the Xingyang Xindo Park Shopping Center, located in Xingyang, Henan
Province. As part of the Xingyang Splendid II project, the shopping center has a construction GFA of 15,419 square meters. The Xingyang Xindo
Park Shopping Center formally opened in October 2017 and provides retail services including a supermarket, food and beverage, jewelry and clothing,
leisure and entertainment, family activities, a movie theater and other ancillary services, appealing to customers within a radius of three to five
kilometers. The shopping center is managed by Henan Xinyuan Priority Commercial Management Co., Ltd., one of our subsidiaries that specializes in
retail property management.
Changsha Xindo Park Shopping Center. In 2017, we completed the Changsha Xindo Park Shopping Center, located in Changsha, Hunan
Province. As part of the Changsha Xinyuan Splendid project, the shopping center has a construction GFA of 12,187 square meters. The Changsha
Xindo Park Shopping Center formally opened in August 2017 and will provide retail services including children’s education, a supermarket, food and
beverage, a beauty and fitness center and other ancillary services, appealing to customers within a radius of three to five kilometers. The shopping
center is managed by Hunan Huaiwei Business Management Co., Ltd., one of our subsidiaries that specializes in retail property management.

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Chengdu Xindo Park Shopping Center. In 2017, we completed the Chengdu Xindo Park Shopping Center, located in Chengdu, Sichuan
Province. As part of the Chengdu Thriving Family project, the shopping center has a construction GFA of 18,936 square meters. The Chengdu Xindo
Park Shopping Center formally opened in October 2018 and provides retail services including a supermarket, clothing, food and beverage, leisure and
entertainment, children’s education, a movie theater and other ancillary services, appealing to customers within a radius of three to five kilometers.
The shopping center is managed by Chengdu Xinyuan Commercial Management Co., Ltd., one of our subsidiaries that specializes in retail property
management.
Zhengzhou Xindo Park Shopping Center. In 2018, we completed the Zhengzhou Xindo Park Shopping Center, located in Zhengzhou, Henan
Province. As part of the Zhengzhou Xindo Park project, the shopping center has a construction GFA of 24,423 square meters. The Zhengzhou Xindo
Park Shopping Center formally opened in October 2018 and provides retail services including a supermarket, food and beverage, leisure and
entertainment, children’s education, a movie theater and other ancillary services, appealing to customers within a radius of three to five kilometers.
The shopping center is managed by Henan Xinyuan Priority Commercial Management Co., Ltd., one of our subsidiaries that specializes in retail
property management.
Kunshan Xindo Park Shopping Center. In 2018, we completed the Kunshan Xindo Park Shopping Center, located in Kunshan, Jiangsu
Province. As part of the Kunshan Xindo Park project, the shopping center has a construction GFA of 3,904 square meters. The Kunshan Xindo Park
Shopping Center formally opened in March 2019 and provides retail services including a supermarket, food and beverage, children’s education, a
movie theater and other ancillary services, appealing to customers within a radius of three to five kilometers.
Target Shopping Center. In 2021, we completed the Target Shopping Center, located in Hudson Garden, New York. Target occupies
approximately 28,090 square feet, or 81%, of the retail square footage and operates a full-service Target store featuring both their retail department
store as well as their grocery store. Target is fully operational and open for business.
Our Property Development Operations in China
We have a systematic and standardized process to project development in China, which we implement through several well-defined phases. A
significant portion of our process is dedicated to land acquisition, which is segmented into three stages: (i) opportunity identification, (ii) initial
planning and budgeting and (iii) land acquisition. The following diagram sets forth the key stages of our property development process.
LAND ACQUISITION PROCESS
 
Project

Planning 

and Design
Project

Construction 

and

Management
Pre-sale, Sale 

and Marketing
After-sale and

Delivery
 
   
   
   
   
Opportunity 

Identification
Initial Planning
Land 

Acquisition
   
   
   
   
- Strategic
planning
- Geographic and
market analysis
- Auction
opportunity
research
 
- Feasibility
study
- Preliminary
design
- Costing and
financial
evaluation
 
- Financial
projection
- Internal
approval
- Bidding
process
 
- Outsource
architectural
and engineering
design
- Design
management
- Arrange
financing
 
- Outsource construction
- Construction
supervision
- Quality control
- Completion inspection
- Landscaping and
fixture installation
 
- Pre-sale
- Marketing
- Advertising
- Customer
financing
 
- Delivery
- Registration
assistance
- Feedback
collection
- Property
management

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71
Opportunity Identification
The first stage of our development process involves the identification of new opportunities for upcoming land auctions or acquisition of
entities in our selected high-growth cities around China. Our Land Development Department prepares a strategic plan that specifies our future project
development plans and land acquisition requirements. They also conduct in-depth demographic and market research regarding our selected cities. We
have formulated a set of criteria in selecting suitable high-growth cities to expand our operations based on certain indicators, including, among others:
●
middle to upper rankings in economic strength;
●
populations greater than five million;
●
clear city development and planning;
●
sustainable land supply at reasonable prices for future developments;
●
acceptable competition levels in the real estate market; and
●
lower level of property speculation.
Initial Planning and Budgeting
Once an upcoming land auction or acquisition has been identified, our Land Development Department will conduct a feasibility study based
on our collected data as well as preliminary design and pre-planning of the proposed development project on the land site. We will also budget costs
and financial requirements for the proposed project to identify whether the land site is suitable for our requirements.
The key factors we consider in land site selection are:
●
site area and suitability;
●
location within the city;
●
neighboring environment and amenities;
●
existing or planned infrastructure;
●
announced government planning for the vicinity; and
●
projected cost, investment and financial return ratios.
We evaluate projects through a rigorous planning and approval process. We consider detailed input from each of our Land Development
Department, Planning-Design Department, Operations Department, Financial Department and local team. The proposed project, once vetted and
approved by various departments, will be submitted to the investment committee of our board for approval.
Land Acquisition
Once we receive approval for a proposed project, we will proceed to bid for the land site. We acquire land for development primarily through
the governmental auction process, or acquisition of entities. When deciding to whom the land use rights should be granted, the relevant authorities and
entities may consider not only the bidding price, but also the bidder’s real estate development experience, development track record, credit history,
qualification and development proposal in connection with their local zoning, urbanization and development plans.

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If opportunities arise, we will also consider obtaining land use rights from third parties through negotiation, co-development or other joint
venture arrangements. We decide on whether to develop by ourselves or to partner with third business partners through joint ventures or associations,
by taking into account various factors, such as estimated land acquisition costs, the development scales of the potential projects, the specialty and
resources possessed by the potential business partner, as well as the expected commercial terms available to us upon negotiation. With portions of
initial capital contributed by the third-party business partners, we can invest in property projects with relatively lower capital outlay.
Project Planning and Design
Our project planning and design process includes concept and architectural design, budgeting, quality control, output examination as well as
customer experience after delivery review. We believe careful planning is essential to control costs, build quality and improve efficiency of our
development schedule.
We outsource substantially all of our design work to reputable third-party design firms. Our design team works closely with our external
designers and architects to ensure that our designs comply with PRC laws and regulations, and meet our design, smart house and other project
objectives. Our senior management is also actively involved in the process, especially in the master planning and architectural design of our projects.
Project Construction and Management
We outsource all of our construction work to independent construction companies which are selected mainly through our invitation to tender
bids for the project. We generally hire more than one contractor for each of our projects, with each contractor responsible for a designated portion of
the project on a “turnkey” basis. We have established a selection procedure in order to ensure compliance with our quality and workmanship
standards. We closely supervise and manage the entire project construction process, utilizing our enterprise resource planning systems to monitor and
analyze information regarding the process on a real-time basis. We collect information throughout the development cycle on the entire project,
including information from our third-party contractors, to avoid unanticipated delays and cost overruns.
Pre-Sales, Sales and Marketing
Like other developers, we pre-sell properties prior to the completion of their construction in mainland China. Under PRC pre-sale
regulations, property developers must satisfy specific conditions before they can pre-sell their properties under construction. The major mandatory
conditions include:
●
the land premium must have been paid in full;
●
the land use rights certificate, the construction site planning permit, the construction work planning permit and the construction
permit must have been obtained;
●
at least 25% of the total project development cost must have been incurred;
●
the progress and the expected completion and delivery date of the construction must be fixed;
●
the pre-sale permit must have been obtained; and
●
certain milestones in the construction processes specified by the local government authorities must have been completed.
These major mandatory conditions are designed to require a certain level of capital expenditure and substantial progress in project
construction before the commencement of pre-sale. Generally, the local governments also require developers and property purchasers to use standard
pre-sale contracts prepared under the auspices of the government. Developers are required to file all pre-sale contracts with local land bureaus and real
estate administrations after entering into such contracts.

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We maintain an internal marketing and sales force for our development projects and also use outside sales agencies for all of our projects
while some of our projects also utilize our internal sales. Our marketing and sales teams work closely with each other and with our external sales
agents to survey the demographics for a particular project area to determine the appropriate advertising, promotion, and selling plans for that project.
We develop customer awareness through our marketing and promotion efforts and through referrals from satisfied customers. A sales team at each
project is responsible for following through on the entire sales process including setting monthly sales targets, controlling prices, implementing special
promotions, monitoring external sales agency performance, and processing customer feedback.
Most of our customers purchase our properties using mortgage financing. The maximum loan-to-value ratio of the mortgage loan is also
subject to change according to the economic policies of the central and local governments and banks in China. A typical sales transaction in which a
portion of the purchase price is financed by a mortgage loan consists of three steps. First, the customer pays a deposit to us. Within seven days after
paying the deposit, the customer will sign a purchase contract with us and make down payment to us in cash. After making the down payment, the
customer arranges for a mortgage loan for the balance of the purchase price. Once the loan is approved, the mortgage loan proceeds are paid to us
directly by the bank. Finally, we deliver the property to the customer. Legal title, as evidenced by a property ownership certificate issued by local land
and construction bureaus, may not pass for a period of six to 12 months following delivery and acceptance.
After-Sale Services and Delivery
We assist customers in arranging for and providing information relating to financing. We also assist our customers in various title registration
procedures relating to their properties, and we have set up an ownership certificate team to assist purchasers to obtain their property ownership
certificates. We offer various communication channels to customers to provide their feedback about our products or services. We also cooperate with
property management companies that manage our properties and ancillary facilities, such as schools and clubhouses, to handle customer feedback.
We endeavor to deliver the units to our customers on a timely basis. We closely monitor the progress and quality of construction of our
property projects and conduct pre-delivery property inspections to ensure timely and qualified delivery. The time frame for delivery is set out in the
sale and purchase agreements entered into with our customers, and according to the terms of the purchase agreements, we may be subject to penalty
payments to the purchasers for delay in delivery caused by us. Once development on the property has been completed, has passed the requisite
government inspections and is ready for delivery, we notify our customers and deliver the keys and possession of the property.
To ensure quality property management, we provide property management services to purchasers until they have become statutorily entitled
to elect their own property management companies. As of December 31, 2024, owners of all of our developments, who had become statutorily entitled
to elect their property management companies, continued to choose us to manage their properties, except for the Kunshan International City Garden
project.
Our property management services include security, landscaping, building management and management of public facilities and equipment,
and additional services, such as cultural activities, housekeeping and repair. We are currently managing approximately 40.1 million square meters,
comprising more than 205,800 residential units.
Our U.S. Property Development Operations
We expanded into the United States market in 2012. Investment decisions with respect to the United States market are carried out through the
investment committee of our board of directors. We currently seek investment opportunities mainly through off-market transactions, including resales
and distressed sales. We currently consider the following factors when selecting a project:
●
Geographic location: We intend to focus in areas that are economically active and diversified, and attractive to immigrants on the
east and the west coasts;
●
Risk adjusted financial returns; and
●
Funding opportunities.

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We set up a specialized United States project team in 2012, comprised of U.S. local consultants and employees with substantial experience
and understanding in various areas of the U.S. real estate market. As of December 31, 2024, we had a team of approximately six professionals in the
United States. Their major responsibilities include project research, land valuation, property development management, contracts, and contract terms
verification. We also work with outside consultants and agents familiar with the United States markets.
To date, our acquisitions in the United States have been opportunistic and have not followed a specific development model. Our first property
development project in the United States, the New York Oosten Project, is in the Williamsburg neighborhood of Brooklyn, New York. We commenced
construction of the development project in November 2013. We started marketing the pre-sale of our property upon receiving approval from the state
attorney general in March 2014. As of December 31, 2024, we delivered 208 of 216 units with a total GFA of 28,551 square meters for a total revenue
of US$329.0 million. Of the unsold units, we offered several units for rent and given the unique product and limited availabity of comparable
apartments, we were able to achieve above market rents for these units. These units have consistently outperformed other location adjacent buildings.
We sold the community facility space within the building in the first quarter of 2022. We continue to hold 64 parking licenses and 8 motorcycle
parking licenses in the building, which we rent to unit owners and renters in the building. The parking is in high demand, and we continue to hold a
waiting list of interested renters. We will look to sell the remaining parking licenses in the future, but have no specific timeline for disposition.
In January 2016, we also acquired a parcel of land in midtown Manhattan, New York, for US$57.5 million. The land allows for
approximately 10,235 sellable & rentable square meters. The construction of the midtown Manhattan property, known as the Hudson Garden Project,
is completed. The optimized structure design allows for the maximum amount of prime ground floor retail along the street front. The efficient
residential unit design maximized the total number of units to 92. As of December 31, 2024, we sold 40 of 92 units with a total 3,169 square meters
for a total revenue of US$56,745,268. In October 2024, we used the remaining 52 units to settle part of the mortgage debt. As of December 31, 2024,
98% of the retail spaces have been rented and all tenants are open and operating. Retail anchor is Target Department Store, a nationally recognized
credit tenant.
In August 2016, we acquired a parcel of land in the Flushing neighborhood of Queens, New York for US$66.0 million. The land allows for
approximately 30,112 sellable & rentable square meters. As of December 31, 2021, the demolition of the existing building with the exception of the
landmark portion was completed. All historic artifacts have been removed from the site and are being restored offsite. We are in the final stage of
obtaining approval on our development scheme from the City. We expect to get formal approval in May 2025. Due to the macroeconomic condition
changes, we are also evaluating our devilment plan to adapt to the new market environment.
Our Leased Properties and Real Estate Related Services
Ancillary to our property development operations, we also lease certain properties, including an elementary school, two basements, seven
clubhouses, thirteen parking facilities, fifteen kindergartens, seven shopping malls and a department. The rental income of our lease operations
represented approximately 2.2%, 4.6% and 3.9% of our revenue in 2022, 2023 and 2024, respectively.
We provide property management services through Xinyuan Science and Technology Service Co., Ltd. In 2022, 2023 and 2024, revenue
from our real estate related services represented 11.1%, 11.6% and 18.8% of our total revenue for those periods, respectively.
Quality Control
We emphasize quality control to ensure that our buildings and residential units meet our standards and provide high-quality service. We select
only experienced design and construction companies. We provide customers with warranties covering the building structure and certain fittings and
facilities of our property developments in accordance with the relevant regulations. To ensure construction quality, our construction contracts contain
quality warranties and penalty provisions for poor work quality. In the event of delay or poor work quality, the contractor may be required to pay pre-
agreed penalties, damages, as well as compensation we paid to customers for late delivery, under our construction contracts. Our construction
contracts do not allow our contractors, without prior consent from us, to subcontract or transfer their contractual arrangements with us to third parties.
We typically withhold 5% of the agreed construction amount for two to five years after completion of the construction as a deposit to guarantee
quality, which provides us assurance for our contractors’ work quality.

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Our contractors are also subject to our quality control procedures, including examination of materials and supplies, on-site inspection and
production of progress reports. We require our contractors to comply with relevant laws and regulations of the jurisdictions in which we operate, as
well as our own standards and specifications. We also employ independent surveyors to supervise the construction progress. In addition, the
construction of real estate projects is regularly inspected and supervised by PRC governmental authorities and the relevant authorities of the
jurisdictions in which we operate.
Competition
The real estate industry in China is highly competitive. We compete primarily with local and regional property developers, but an increasing
number of large national property developers have also started to enter these markets. Competitive factors include the geographical location of the
projects, the types of products offered, brand recognition, price, design and quality. See “Item 3. Key Information — D. Risk Factors — Risks
Relating to the Residential Property Industry in China — We face intense competition from other real estate developers.” In the cities in which we
operate, our major competitors include China Overseas Property Ltd., China Vanke Co., Ltd., Sunshine 100, China Resources Land Limited, Sunac
China Holding Limited, Henan Zhengshang Real Estate Co., Ltd., Evergrande Group, Longfor Real Estate Co., Ltd, Greenland Group, China
Overseas Property, Country Garden and KWG Property Holding Ltd.
In the United States, we anticipate that direct competition may come from developers of adjacent projects or other property developers in
target markets. In addition, we may also face competition from other Chinese real estate developers expanding or establishing their business in the
United States.
Intellectual Property Rights
We rely on a combination of trademarks, service marks, domain name registrations, copyright protection and contractual restrictions to
establish and protect our brand name and logos, marketing designs and internet domain names.
We have registered the trademark of “鑫苑” and the associated logo for the real estate related service in the PRC. We have also applied the
same trademark to other goods and services directly or indirectly related to our business operations, to strengthen the protection of our trademark and
brand. All these trademark applications are registered or pending examination and approval. We have also registered the Internet domain name
“www.xyre.com” and other related domain names.
We own trademarks for “鑫苑” in the form of Chinese characters and our company logo in the United States, the U.K., EU, New Zealand,
Australia, Singapore, Korea, Hong Kong and Cayman Islands. We also hold the international registration of our company logo issued by the
International Trademark System.
In the PRC, the registration and protection of a company’s corporate name is regional and limited to its related industry. Although we have
registered our corporate name “Xinyuan” in the provinces where we operate, we cannot prevent others from registering the same corporate name in
other provinces or in other industries. If a company first registers “Xinyuan” as its corporate name in a province other than Henan Province, Shandong
Province, Jiangsu Province, Anhui Province and Sichuan Province or in another industry, we will have to adopt another corporate name if we plan to
enter that market or industry.
Insurance
We obtain insurance against losses or damage to our PRC properties during the construction phase of our projects. We do not maintain
insurance policies for properties that we have delivered to our customers. Although we require our contractors to maintain insurance coverage on our
properties under construction, typically they do not do so, which we believe is customary practice in China. We believe that third-party contractors
should bear liabilities from tortious acts or other personal injuries on our project sites, and we do not maintain insurance coverage against such
liabilities. There are certain types of losses, such as losses from natural disasters, terrorist attacks, construction delays and business interruptions, for
which insurance is either not available or not available at a reasonable cost. We believe our practice is consistent with the customary industry practice
in China.
With respect to our U.S. operations, we follow local requirements and maintain insurance coverage for projects through the end of the
construction.

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Environmental Matters
As a developer of property in the PRC, we are subject to various environmental laws and regulations set by the PRC national, provincial and
municipal governments. These include regulations on air pollution, noise emissions, as well as water and waste discharge. We have never been
required to pay any penalties associated with the breach of any such laws and regulations in the past. Compliance with existing environmental laws
and regulations has not had a material adverse effect on our financial condition and results of operations, and we do not believe it will have such an
impact in the future.
Our projects are normally required to undergo an environmental impact assessment by government-appointed third parties, and a report of
such assessment needs to be submitted to the relevant environmental authorities in order to obtain their approval before commencing construction.
Upon completion of each project, the relevant environmental authorities inspect the site to ensure that the applicable environmental standards have
been complied with, and the resulting report is presented together with other specified documents to the relevant construction administration
authorities for their approval and record. Approval from the environmental authorities of such report is required before we can deliver our completed
work to our customers. In the past, we have not experienced any difficulties in obtaining those approvals for commencement of construction and
delivery of completed projects. However, we cannot assure shareholders that we will not experience any difficulties in the future. See “Item 4.
Information on the Company — B. Business Overview — Regulation — China — Regulations on Environmental Protection in Construction Projects.”
In connection with our current and any future properties in the United States, our relevant property subsidiaries are or will be subject to a
variety of local, state and federal statutes, ordinances, rules and regulations concerning the protection of health and the environment. The particular
environmental laws which apply to any given community, will vary according to the site, its location, the site’s environmental conditions and the
present and former use of the site. Likewise, the particular procedures and approval or other requirements will vary from project to project.
Regulation
China
The PRC government regulates the real estate industry. This section summarizes the principal PRC regulations relating to our business.
We operate our business in China under a legal regime consisting of the National People’s Congress, or the “NPC,” the PRC State Council,
which is the highest authority of the executive branch of the PRC central government, and several ministries and agencies under its authority,
including the MOHURD, the Ministry of Natural Resources (formerly, the Ministry of Land and Resources), or the “MLR,” the MOFCOM, the
NDRC, the SAIC, the SAFE, and their respective authorized local counterparts.
Regulations on Land
The Law of the PRC on Land Administration, implemented on June 25, 1986 and most recently amended on August 26, 2019 by the SCNPC,
distinguishes between the ownership of land and the right to use land. All land in the PRC is either state-owned or collectively-owned, depending on
location. Generally, land in urban areas within a city or town is state-owned, and all land in the rural areas of a city or town and all rural land, unless
otherwise specified by law, are collectively-owned.
Although all land in the PRC is owned by the governments or by the collectives, private individuals and businesses are permitted to hold,
lease and develop land for a specified term without ever owning the land, the duration of which depends on the use purpose of the land. These rights
to use land are termed land use rights.
Under the Interim Regulations of the PRC on Grant and Transfer of the Right to Use State-owned Land in Urban Areas, implemented on and
effective as of May 19, 1990, as amended on November 29, 2020, by the PRC State Council, enterprises, companies and other organizations who
intend to hold, lease and develop the land, each as a “Land User,” must pay a premium to the government as consideration for the grant of the land use
rights on terms of use prescribed by the government, and a Land User may transfer, lease and mortgage, or otherwise commercially exploit the land
use rights, within such terms of use. The land administration authority enters into a contract with the Land User for grant of the land use rights. The
Land User pays the grant premium as stipulated in the grant contract. After paying the grant premium in full, the Land User registers with the land
administration authority and obtains a land use rights certificate. The certificate evidences the acquisition of the land use rights.

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The Regulations on the Grant of State-Owned Construction Land Use Rights through Competitive Bidding, Auction and Listing-for-Sale
(formerly known as the Regulation on the Grant of State-Owned Land Use Rights through Competitive Bidding, Auction and Listing-for-Sale),
implemented by the MLR on May 9, 2002 and amended on September 28, 2007, provides that the land for industrial use (except for mining),
commercial use, tourism, entertainment and commodity housing development is granted by way of competitive bidding, public auction or listing-for-
sale. The land use rights are granted to the bidder with the highest bid/tender in accordance with the terms and conditions of the bid/tender, or to the
bidder who can best fulfill the comprehensive evaluation standards of the bid. The successful bidder/tender will then enter into a grant contract with
the local land administration authority. Only after the successful bidder/tender has paid the land premium in full under the land grant contract, can the
successful bidder/tender apply for the land registration and obtain the land use right certificate.
The Civil Code of the PRC, or the “Civil Code,” published on May 28, 2020 and effective as of January 1, 2021, which replaces Property
Law of the PRC, further clarified land use rights in the PRC with the following rules:
●
the land use rights for residences will be automatically renewed upon expiry;
●
the car parks and garages within the building area planned for vehicle parks must be used to meet the needs of the owners who live
in the building first;
●
the construction of buildings must abide by relevant laws and regulations with regard to the construction planning and may not
affect the ventilation of or lighting to the neighboring buildings; and
●
where the land use rights for construction use are transferred, exchanged, used as a capital contribution, donated to others or
mortgaged, an application for modification or mortgage registration must be filed with the registration department.
In accordance with the Notice on Further Strengthening the Administration of the Costs and Revenue Associated with Land Grant, jointly
issued by the MOF, the MLR, the PBOC, the Ministry of Supervision and the National Audit Office on November 18, 2009, all payments for land use
rights paid for through installments must be made in full within one year in principle. In certain circumstances, the payment term may be extended to
two years upon the approval of the competent authorities. In addition, the initial installment payment may not be less than 50% of the overall amount
owed for the land use rights. The notice also provides that the local-level governments should strictly enforce relevant regulations to impose penalties
on real estate developers that have delayed the payment of land premiums or construction for reasons other than force majeure or restrict such
developers from acquiring new land during the period such payments are delayed.
The Circular of the MLR and the MOHURD on Further Strengthening Administration over Land-use and Constructions of Real Estate,
implemented on September 21, 2010, specifies that when any bidder participates in a competitive bidding, public auction or listing-for-sale, in
addition to the provision of a valid identification certificate and payment of bidding deposit, the bidder shall be also required to submit (i) a letter of
commitment specifying that the bidding deposit is not from a bank loan, shareholder loan, etc., and (ii) a credit certificate issued by a commercial
financial institution. If the land is left idle for more than one year by a real estate developer, the developer and its controlling shareholder shall be
prohibited from taking part in any competitive bidding, public auction or listing-for-sale for the grant of land use rights. Furthermore, real estate
developers must commence the construction of a housing project within one year from the date of delivery of the land as stipulated in the land grant
contract, and complete the construction within three years from the date of commencement of construction.
The Emergency Notice on Further Tightening the Administration on Real Estate Land Use and Reinforcing the Control Results of Real Estate
Market, implemented on July 19, 2012, further emphasized the strict enforcement of current regulations on land grants:
●
the plot area ratio for residential land shall not be less than 1.0;
●
for all types of housing construction projects, construction work shall be commenced within one year of the date when the land is
delivered as set forth in the land grant contract and shall be completed within three years after its commencement date;
●
the bidding deposit for a land grant shall not be less than 20% of the base price; and

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●
the land grant contract shall be signed within 10 working days after a land grant deal is concluded, a down payment of 50% of the
land premium shall be made within one month after signing the contract, and the remaining payment shall be made in a timely
manner in accordance with the contract; in no event should it be more than one year.
On May 22, 2014, the MLR issued the Provisions on the Economical and Intensive Use of Land, which took effect on September 1, 2014 and
were amended on July 24, 2019. They provide that commercial land shall be granted via tender, auction and listing process to determine the user and
the price. Compensation for all types of land supply shall not be lower than the minimum standard stipulated by the government. It is prohibited to
reduce or relieve the land grant price in a disguised form by way of exchanging projects with land, returning fees after collecting them or granting
subsidies or awards.
On November 24, 2014, the PRC State Council issued Interim Regulations on Real Estate Registration, which took effect on March 1, 2015
and were amended on March 24, 2019 and March 10, 2024. They stipulate the registration authorities and the procedures for registration of rights of
real estate rights, including land use rights, which applies to first registration, change of registration, transfer of registration, cancellation of
registration, correction of registration, dissidence registration, advance notice registration, close-down registration and other affairs concerning
registration of real estate. Further, on January 1, 2016, MLR issued Implementing Rules of the Interim Regulations on Real Estate Registration, as
amended on July 24, 2019, and further amended on May 9, 2024, which detail the rules of the registration procedures for registration of different kind
of rights of real estate.
The Administrative Measures for the Preliminary Review of Land Use for Construction Projects, implemented by the MLR on July 25, 2001,
revised on October 29, 2004, amended on November 12, 2008 and November 29, 2016 and took effect on January 1, 2017, simplify the content of
preliminary review of land for construction, reduce the documents necessary for examination and approval, and improve the efficiency of examination
and approval.
On September 5, 2023, the MLR issued the Circular on Launching the Pilot Program for Redevelopment of Underused Land, which took
effect on the same day. This circular aims to foster innovation and balance various stakeholder needs to optimize land use, increase the efficiency of
existing land ownership, and promote green, high-quality development. It encourages each pilot city to promulgate its own policies and regulations to
achieve the goals of this circular.
Regulations on Establishment of a Real Estate Development Enterprise
In accordance with the Law of the PRC on Administration of Urban Real Estate, or “Urban Real Estate Law,” implemented by the SCNPC on
July 5, 1994 and amended on August 30, 2007, August 27, 2009, and August 26, 2019, a developer is defined as “an enterprise which engages in the
development and sale of real estate for the purposes of making profits.”
Under the Regulations on Administration of Development and Operation of Urban Real Estate, or “Development Regulations,” implemented
by the PRC State Council on and effective as of July 20, 1998 and amended on January 8, 2011, March 19, 2018, March 24, 2019, March 27, 2020
and November 29, 2020, a real estate development enterprise must satisfy the following requirements:
●
has a registered capital of not less than RMB1 million; and
●
has four or more full-time professional real estate/construction technicians and two or more full-time accounting officers, each of
whom must hold the relevant qualifications.
The Development Regulations also allow people’s governments of the provinces, autonomous regions and/or municipalities directly under
the central government to impose more stringent requirements regarding the registered capital and qualifications of professional personnel of a real
estate development enterprise according to the local circumstances.
To establish a real estate development enterprise, the developer is required to apply for registration with the department of administration of
industry and commerce (i.e., Administration for Market Regulation at or above the county level). The developer must also report its establishment to
the real estate administration authority in the location of the registration authority within 30 days upon receipt of its business license.

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Regulations on Foreign-Invested Real Estate Enterprise
Industrial Restriction
Pursuant to the Special Administrative Measures on the Access of Foreign Investment (Negative List) (2021 Edition), or the “2021 Negative
List,” jointly issued by the NDRC and the MOFCOM on December 27, 2021 and enforced on January 1, 2022, the foreign investment related to real
estate development does not fall within the category of industries in which foreign investment is restricted or prohibited. The 2021 Negative List
enumerates the restricted industries and the prohibited industries in relation to foreign investment, and the industries, such as real estate development
industry, which do not fall within the 2021 Negative List, shall be administered under the principle of equal treatment to domestic and foreign
investment. On March 15, 2019, the Foreign Investment Law of the People’s Republic of China, or the “FIL,” was issued by SCNPC and took effect
on January 1, 2020, which also provides that the industries in which foreign investment is not restricted and prohibited shall be administered under the
principle of equal treatment to domestic investment. However, where verification and record-filing of a foreign investment are required, relevant
provisions of the State shall still be followed. Since 2021, the NDRC and MOFCOM have updated the Negative List annually, with the latest 2024
edition maintaining the same stance on foreign investment in real estate development—it remains unrestricted and non-prohibited.
Considering the increases to foreign investment in the real estate industry, the MOHURD, the MOFCOM, the NDRC, the PBOC, the SAIC,
and the SAFE jointly implemented the Opinions on Regulating the Entry and Administration of Foreign Investment in the Real Estate Market, or
Circular No. 171, on July 11, 2006 and amended on August 19, 2015, which may impact foreign investment in the real estate industry in the following
areas:
●
FIREEs must have a registered capital in amounts pursuant to and consistent with existing regulations.
●
Upon payment of the land use rights grant premium, the FIREE can apply to the land administration authority for a land use rights
certificate. Upon obtaining the land use rights certificate, an FIREE may then obtain a recertification of the Business License, with
the same validity period as that of such land use rights certificate, following which, the FIREE may apply to the tax administration
for tax registration purposes.
●
When a FIREE’s equity or project is transferred, or a foreign investor merges with a domestic real estate enterprise, the investor is
required to submit a guarantee which ensures the compliance with the provisions of the land use rights grant contract, construction
site planning permit, construction work planning permit, the land use rights certificate, the modification certification issued by the
construction authorities and the tax payments certification issued by the relevant tax authorities.
●
Foreign investors which merge with domestic real estate development enterprises by share transfers or other methods, or which
acquire the equity of a PRC party in joint venture enterprises, must allocate their employees appropriately, deal with bank debts and
settle the lump sum payment of the transfer price through self-owned funds. However, a foreign investor with an unfavorable record
may not be allowed to conduct any of the aforesaid activities.
●
FIREEs which have failed to obtain a land use rights certificate, or which have under 35% of the total capital required for the
project, will not be allowed to obtain a loan in or outside China, and foreign exchange administration departments will not approve
any settlement of foreign loans by such enterprises.
●
Any Chinese or foreign investors in an FIREE may not guarantee fixed profit returns or provide other arrangements to the same
effect for any party in any form.
Circular No. 50
On May 23, 2007, the MOFCOM and the SAFE issued the Notice on Further Strengthening and Standardizing the Approval and
Administration of Foreign Direct Investments in Real Estate Enterprise, or “Circular No. 50,” which was amended on October 28, 2015. Some of the
key developments in this area are as follows:
●
the local governments/authorities that approve FIREE establishments are now required to file such approvals with the MOFCOM;

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●
prior to establishing an FIREE, foreign investors are required to obtain land use rights or the ownership of a real estate project
property, or the investor should have entered into an indicative land grant contract or indicative project property purchase agreement
with the land administrative department, developer of the land or owner of the property;
●
the practice of allowing foreign investors taking over local project companies by way of roundtrip investment is strictly controlled;
and
●
foreign-invested enterprise that intends to engage in real estate development, or an existing FIREE which intends to undertake a
new real estate development project, must first apply to the relevant authorities for such business scope and scale expansion in
accordance with laws and regulations on foreign investments.
Circular 122
On August 19, 2015, six PRC regulatory agencies, including the MOHURD and the SAFE, implemented the Notice on Adjusting Policies on
Entry and Administration of Foreign Investment in the Real Estate Market, or “Circular 122,” according to which, among other things, the
requirement of full payment of its capital contributions of FIREE no longer exists when the FIREE applies to domestic loans, overseas loans and
settlement of foreign exchange loans, and the FIREE may directly apply to the bank for the registration of foreign exchange regarding foreign direct
investment in accordance with the relevant rules on foreign exchange administration. However, Circular 122 does not de-regulate the Chinese real
estate market. The previous material requirements for granting approval under Circular No. 171 and Circular No. 50 still apply.
Regulations on Qualifications of Developer
Under the Rules on the Administration of Qualifications of Real Estate Developers, effective on December 1, 1993 by the MOHURD
(formerly known as the Ministry of Construction) (amended on March 29, 2000, May 4, 2015, December 22, 2018 and March 2, 2022), a developer
must apply for registration of its qualifications. An enterprise may not engage in the development and sale of real estate without a qualification
classification certificate for real estate development.
In accordance with the above rules, developers are classified into two classes: class I and class II. A developer that passes the qualification
examination will be issued a qualification certificate of the relevant class by the relevant construction authority.
A developer of any qualification classification may only engage in the development and sale of real estate within its approved scope of
business and may not engage in business of another classification. A class I developer is not restricted as to the scale of the real estate projects to be
developed and may undertake real estate development projects anywhere in the country. A developer of class II or lower may only undertake projects
with a gross area of less than 250,000 square meters.
Under the Development Regulations, real estate administration authorities examine all applications for the registration of the qualifications of
a developer when it reports its establishment, by considering its assets, professional personnel and business results. A developer may only undertake
real estate development projects in compliance with the approved qualification registration.
Regulations on Development of a Real Estate Project
Commencement of a Real Estate Project and the Idle Land
According to the Circular on the Implementation of the Catalog for Restricted Land Use Projects (2012 Edition) and the Catalogue for
Prohibited Land Use Projects (2012 Edition), implemented by the MLR and the NDRC on May 23, 2012, the area of a plot of land to be granted for
residential use may not exceed (i) seven hectares for small cities and towns, (ii) 14 hectares for medium-sized cities, or (iii) 20 hectares for large cities.
The plot area ratio for residential land should not be lower than 1.0. No land may be granted for “villa” real estate projects. On December 31, 2020,
Ministry of Natural Resources issued a notice to solicit public opinion on the Catalogue of Restrictions and Prohibitions on the Exploitation and Use
of Natural Resources (2021), which intends to replace the Catalog for Restricted Land Use Projects (2012 Edition) and the Catalogue for Prohibited
Land Use Projects (2012 Edition).
Under the Urban Real Estate Law, those who have obtained the land use rights through grant must develop the land in accordance with the
terms of use and within the period of commencement prescribed in the contract for the land use rights grant.

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According to the Measures on Disposing Idle Land, implemented by the MLR and effective as of April 28, 1999, as amended on May 22,
2012 and effective as of July 1, 2012, with regards to the land for a real estate project which is obtained by grant and is within the scope of city
planning, if the construction work has not been commenced within one year upon the commencement date as set forth in the land use rights grant
contract, or the construction and development has been started but the area of land that is under construction and development is less than one third of
the total area of land that should have been under construction and development, or the invested amount is less than 25% of the total investment, and
the construction and development of which has been suspended for more than one year, a surcharge on idle land equivalent to 20% of the grant
premium may be levied; if the construction work has not been commenced within two years, the land can be confiscated without any compensation,
unless the delay is caused by force majeure, or the acts of government or acts of other relevant departments under the government, or by indispensable
preliminary work.
The Emergency Notice on Further Tightening the Administration on Real Estate Land Use and Reinforcing the Control Results of Real Estate
Market implemented on July 19, 2012, requires that the Measures on Disposing Idle Land be strictly implemented, and the land authority dispose of,
case by case, idle land and publish related information on the website designated by the MLR. With regard to land users who have committed acts
such as failing to make payments for land grants, leaving land idle, hoarding land, land speculation, developing land in excess of its actual
development capacity, or failing to fulfill the land use contract, they may be prohibited by the land authority from participating in land auctions for a
certain period of time.
On February 7, 2024, the Supreme People’s Court and the Ministry of Natural Resources of China (MNR) jointly issued the Opinions by the
Supreme People’s Court and the Ministry of Natural Resources of Strengthening Connection Between Judicial Seizure and Disposal of Idle Land
([2024] No. 33), which took effect on the same day. The opinion defines land left undeveloped for over a year past the contracted construction start
date as idle land. Notably, any periods where land is subject to judicial seizure results in such one-year period being paused and only resuming once
the seizure is lifted. When property rights are transferred as a result of judicial processes, the calculation period for idle land restarts. The opinion also
urges courts to permit landowners to develop seized land under specific circumstances to minimize land idleness.
Planning of a Real Estate Project
The Law of the PRC on Urban and Rural Planning, implemented by the NPC on October 28, 2007, effective as of January 1, 2008 and
amended on April 24, 2015 and April 23, 2019, replacing the previous City Planning Law of the PRC, provides that a developer who has obtained
land use rights by grant must, after obtaining approval for a construction project and signing a land use rights grant contract, apply to the city planning
authority for the Permit for Construction Site Planning. It further provides that a developer who has a proposed construction project within the
planning area of a city or town must, after obtaining a Permit for Construction Site Planning, prepare the necessary planning and design work, and
submit the detailed planning and design report, together with the land use rights certificate, to the city planning authority or the town government
designated by the provincial government, and apply for the Permit for Construction Work Planning.
Construction of a Real Estate Project
On June 25, 2014, the MOHURD implemented the Measures for the Administration of Construction Permits for Construction Projects,
which was amended on September 28, 2018 and March 30, 2021. Under the measures, after having obtained a Permit for Construction Work Planning,
a developer needs to file an application for a Construction Permit with the local construction authority above the county level.
Completion of a Real Estate Project
Construction projects shall be delivered for use only after passing the inspection and acceptance examinations under the Construction Law of
the PRC, which was implemented on November 1, 1997 and amended on April 22, 2011 and April 23, 2019.

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According to the Development Regulations, the Regulations on the Acceptance Examination Upon the Completion of Construction Work and
Municipal Infrastructure implemented on December 2, 2013 by the MOHURD, the Regulations on the Administration of Quality of Construction
Works implemented by the PRC State Council on January 30, 2000 and amended on October 7, 2017 and April 23, 2019, and the Measures on the
Administration of Reporting Details regarding Acceptance Examination Upon Completion of Construction Work and Municipal Infrastructure
implemented on April 4, 2000 by the MOHURD and amended on October 19, 2009, a real estate project must comply with the relevant laws and
regulations, requirements on construction quality, safety standards and technical guidance on survey, design and construction work, as well as
provisions of the relevant construction contract. After the completion of works for a project, the developer must apply for an acceptance examination
to the construction authority and must also report details of the acceptance examination to the construction authority. A real estate development project
may only be delivered after passing the inspection and acceptance examinations. For a housing estate or building complex, an acceptance examination
shall be conducted upon completion of the entire project. In the case of a cluster of real estate development projects, such as a residential area
developed in phases, separate acceptance examinations may be carried out for each completed phase.
Regulations on Sale of Commodity Properties
Under the Measures for Administration of Sale of Commodity Properties implemented by the MOHURD on April 4, 2001 and effective June
1, 2001, the sale of commodity properties can include both pre-completion and post-completion sales.
Pre-completion Sales
In accordance with the Measures for the Administration of Pre-Sale of Urban Commodity Properties, or “Urban Pre-Sale Measure,”
promulgated on November 15, 1994 by the MOHURD, which took effect on January 1, 1995 and was amended on August 15, 2001 and July 20,
2004, a developer intending to sell a commodity building before its construction work’s completion must complete pre-sale registration with the real
estate administration authority of the relevant city or county to obtain a Permit for Pre-Sale of Commodity Properties.
Commodity properties may only be sold before completion if:
●
the grant land premium has been paid in full for the grant of the land use rights involved and a land use rights certificate has been
obtained;
●
a permit for construction work planning and a construction permit have been obtained;
●
the funds invested in the development of the commodity properties put up for pre-sale represent 25% or more of the total
investment in the project and the progress of works and the completion and delivery dates have been ascertained; and
●
the pre-sale has been registered and a permit for pre-sale of commodity properties has been obtained.
The Circular on Issues Relevant to Further Strengthening the Regulation of the Real Property Market and Improving the System for Pre-sale
of Residential Premises, implemented by the MOHURD on April 13, 2010, provides that:
●
for residential projects for which a pre-sale permit has not yet been obtained, real estate developers may not pre-sell such premises,
collect or collect in a disguised manner, deposits, reservation fees or other such fees from purchasers in the form of subscriptions,
reservations, lot drawings or the issuance of VIP cards, or participate in any exhibition;
●
where a real estate developer has obtained a pre-sale permit for its residential project, it must publicize all premises available for
sale and the prices of each unit at one time within 10 days, and must sell the premises to the public with clearly marked prices as
filed. Real estate developers may not sell the premises reserved for self-use to the public before the initial registration of the
housing ownership, pre-sell premises through a refund of the sales amount to the purchaser or the guarantee of a lease of the
property after sales, or conduct sham transactions;
●
pre-sale permits can only be issued for an entire building but not for individual floors or units; and

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●
all proceeds from the pre-sale of commodity residential premises must be deposited into accounts monitored by the regulatory
authorities to ensure that such proceeds are used for construction of the commodity residential premises.
Management of Proceeds from Pre-sale of Properties
The Pre-sale Measures also provide that the proceeds obtained by a real estate developer from the advance sale of commodity properties must
be used for the construction of the relevant projects. The specific measures for the supervision of proceeds from the pre-sale of commodity properties
are formulated by the real estate administration authorities.
Under the Implementing Regulations on Supervision of Proceeds from Pre-sales of Commodity Properties of Jinan City, implemented by
Jinan Committee of Construction on September 26, 2005 and effective as of October 26, 2005, the proceeds from pre-sale of properties must be used
in the construction of pre-sale projects, including the purchase of construction materials and equipment, remittance of construction fees and taxes
payable, and should not be used for other purposes. Under the Regulations on the Supervision of Proceeds from the Pre-sale of Commodity Properties
in Jinan City, published by the Jinan City MOHURD on April 4, 2023 and which took effect on April 6, 2023, the proceeds from the pre-sale of
properties must be deposited into accounts monitored by regulatory authorities and a real estate developer must apply for use in accordance with the
progress of construction.
In accordance with the Implementing Opinions on Strengthening the Management for sale of Urban Commodity Properties, implemented by
the People’s Government of Sichuan Province on March 23, 2000, the proceeds from pre-sale of properties must be deposited in a special bank
account opened by the developers, may only be used for the relevant construction work and may not be used for other purposes. The relevant banks
monitor the use of the proceeds of pre-sale and ensure that the proceeds are used in the designated way.
In accordance with the Regulations on Supervision of Proceeds from the Pre-sales of Commodity Properties in Zhengzhou, implemented by
the Zhengzhou People’s Government on November 19, 2009 and effective as of December 20, 2009, the proceeds from the pre-sale of properties must
be used for the construction of the same, which includes the purchase of construction materials and equipment, remittance of fees for construction and
taxes payable. Under the Regulations on the Supervision of Proceeds from the Pre-sale of Commodity Properties in Zhengzhou City (Draft for
Comment), issued by the Zhengzhou City MOHURD on July 4, 2022, the proceeds from the pre-sale of properties must be deposited into accounts
monitored by regulatory authorities and a real estate developer must apply for use in accordance with the progress of construction.
The Notice on Enhancing the Management on Use of Fund of Pre-sales of Commodity Properties of Beijing City, implemented and effective
as of December 16, 2015, provides that the real estate development enterprise may withdraw funds for construction purpose from accounts monitored
by the regulatory authorities if the sale scale confirmed by pre-sale contracts signed online is less than half of the authorized scale of pre-sale. The
Beijing MOHURD promulgated the Regulations on the Supervision of Proceeds from the Pre-sale of Commodity Properties in Beijing (Draft for
Comment, 2023) on December 22, 2023, providing that the proceeds from the pre-sale of properties must be deposited into accounts monitored by
regulatory authorities and must be properly used by developers for their corresponding construction projects.
On November 14, 2022, the CBIRC, the MOHURD and the PBOC issued the Circular on the Relevant Work of Commercial Banks Issuing
letters of Guarantee to Replace the Pre-sale Supervision Funds, pursuant to which high-quality real estate enterprises can apply to banks for a letter of
guarantee to replace their pre-sale supervision funds.
Post-completion Sales
In accordance with the Measures for Administration of Sale of Commodity Properties implemented by the MOHURD on April 4, 2001,
which took effect on June 1, 2001, commodity properties may be put up for post-completion sale only when the following preconditions for such sale
have been satisfied:
●
the developer offering to sell the post-completion properties has a valid business license and a qualification classification certificate;
●
the developer has obtained a land use rights certificate or other approval documents of land use;

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the developer has the relevant permit for construction project planning and the permit for construction;
●
the commodity properties have been completed, inspected and accepted as qualified;
●
the relocation of the original residents has been settled;
●
the supplementary and essential facilities for supplying water, electricity, heating, gas, communication, etc. have been made ready
for use, and other supplementary facilities and public facilities have been made ready for use, or the schedule of construction and
delivery date of such facilities have been specified; and
●
the property management plan has been completed.
Prior to a post-completion sale of a commodity property, a real estate developer is required to submit the Real Estate Development Project
Manual and other documents showing that the preconditions for a post-completion sale have been fulfilled to the real estate development authority.
Regulations on Property Ownership Certificates
Under the Measures for Administration of Sale of Commodity Properties, the developers must submit the documents relating to the
application for property ownership certificates to the local real estate administration authorities within 60 days after the delivery of the property to
customers. The developers are required to assist customers in applying for amendments in the procedures for land use rights and registration
procedures for property ownership.
In accordance with the Pre-Sale Measures, the purchasers must apply for property ownership certificates to the local real estate
administration authorities within 90 days after the delivery of pre-sale property to purchasers. The developers are required to assist and provide the
purchasers with necessary verifying documents. Where the purchasers fail to obtain the property ownership certificates within 90 days thereafter due
to the developer’s fault, unless otherwise provided between the developers and the purchasers, the developers will be liable for the breach of contract.
On December 21, 2023, the MLR, the National Financial Regulatory Administration or the “NFRA,” formerly CBIRC, and several other
agencies issued the Circular on Further Raising the Convenience of Real Estate Registration to Promote the Optimization of Business Environment,
which aims to simplify the process of real estate registration for purchasers and, among other things, facilitate the digitalization of important
documents and registrations.
On November 27, 2024, the Ministry of Natural Resources (MNR) released the Compilation of Exemplary Cases on Optimizing the Business
Environment for Real Estate Registration and Enhancing Convenience. This document consolidates various innovative practices from local
governments nationwide, such as: integrated registration and tax filing, paperless transactions and blockchain-based record-keeping.
Regulations on Transfer, Mortgage and Lease
Transfer
According to the Urban Real Estate Law and the Provisions on Administration of Transfer of Urban Real Estate implemented on September
1, 1995 by the MOHURD and amended on August 15, 2001, a real estate owner may sell, bequeath or otherwise legally transfer real estate to another
person or legal entity. When transferring a building, the ownership of the building and the land use rights to the site on which the building is situated
are transferred as well.
The parties to a transfer must enter into a real estate transfer contract in writing and register the transfer with the real estate administration
authority having jurisdiction over the location of the real estate within 90 days of the execution of the transfer contract.

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Where the land use rights were originally obtained by grant, the real property may only be transferred if:
●
the grant premium has been paid in full for the grant of the land use rights as provided by the grant contract and a land use rights
certificate has been obtained; and
●
the development has been carried out according to the grant contract: in the case of a project for which buildings are developed,
development representing more than 25% of the total investment has been completed; in the case of a whole land lot development
project, construction works have been carried out as planned, water supply, sewerage, electricity supply, heat supply, access roads,
telecommunications and other infrastructure or utilities have been made available, and the site has been leveled and made ready for
industrial or other construction purposes.
Mortgages of Real Estate
Under the Urban Real Estate Law, the Civil Code, and the Measures on the Administration of Mortgage of Buildings in Urban Areas
implemented by the MOHURD on May 9, 1997 and amended on August 15, 2001 and March 30, 2021, when a mortgage is created on the ownership
of a building on state-owned land legally obtained, a mortgage will be simultaneously created on the land use rights of the land on which the building
is erected. Land use rights occupied by the properties will also be mortgaged at the same time. The mortgager and the mortgagee sign a mortgage
contract in writing. Within 30 days after a real estate mortgage contract has been signed, the parties to the mortgage must register the mortgage with
the real estate administration authority in the city where the real estate is situated. A real estate mortgage contract will become effective on the date of
registration of the mortgage. If a mortgage is created on the property placed on pre-sale or which is still undergoing construction, the registration
authority will, when registering the mortgage, record such details on the mortgage contract. If the construction of the property is completed during the
term of a mortgage, the parties involved will have to re-register the mortgage after the issuance of the relevant certificates evidencing the rights and
ownership to the real estate.
Lease
Under the Urban Real Estate Law and the Measures for Administration of Leases of Commodity Properties implemented by the MOHURD
on December 1, 2010 and effective as of February 1, 2011, the parties to a lease of a building are required to enter into a lease contract in writing.
When a lease contract is signed, amended or terminated, the parties must register the details with the real estate administration authority in which the
building is situated.
On May 17, 2016, the PRC State Council implemented the Opinions on Accelerating to Cultivate and Develop the Housing Leasing Market,
according to which real estate developers are encouraged to engage in housing leasing business. Among others, the government intends to (i) support
real estate developers to expand their business scopes, develop housing leasing business by taking advantage of their completed real properties; (ii)
encourage real estate developers to rent the commercial housing in stock and (iii) guide real estate developers to cooperate with the housing leasing
enterprises for developing housing leasing business.
Regulations on Real Estate Financing
The Opinions of the MOHURD and Other Departments on Adjusting the Housing Supply Structure and Stabilizing the Property Prices,
issued on May 24, 2006 by the General Office of the PRC State Council, provides that, to tighten the control of advancing loan facilities, commercial
banks are not allowed to advance their loan facilities to developers who do not have the required 35% or more of the total capital for the construction
projects. The commercial banks should be prudent in granting loan facilities and/or revolving credit facilities in any form to the developers who have a
large number of idle land parcels and unsold commodity properties. Banks may not accept mortgages of commodity properties remaining unsold for
more than three years. In terms of minimum down payment, this Opinion provides that:
●
the minimum down payment for any purchase of first self-use residential property with a unit GFA of less than 90 square meters is
20% of the purchase price of the property; and
●
the minimum down payment for any purchase of first self-use residential property with a unit GFA of 90 square meters or more is
30% of the purchase price of the property.

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The Circular on Strengthening the Management of Commercial Real Estate Credit Facilities, issued on September 27, 2007 by the PBOC
and the CBRC, as supplemented on December 5, 2007 reinstates the minimum down payment requirements contained in the Opinion of the MOHURD
and Other Departments on Adjusting the Housing Supply Structure and Stabilizing the Property Prices issued on May 24, 2006, and further provides
that if a family member (including the purchaser and his/her spouse and their children under 18) has financed the purchase of a residential property
with loans from banks, any member of the family that purchases another residential property will be regarded as a second-time property purchaser.
The Circular of the State Council on Firmly Curbing Precipitous Rise of Some Urban Housing Prices implemented on April 17, 2010 by the
PRC State Council, provides for the implementation of a stricter differentiated housing loan policy, including:
●
purchasers of a first residential property for a household with a GFA of greater than 90 square meters must make down payments of
no less than 30% of the purchase price;
●
purchasers of a second residential property for a household must make down payments of no less than 50% of the purchase price
and the interest rate of any mortgage for such property must equal at least the benchmark interest rate plus 10%; and
●
the minimum down payment amount and applied interest rate must be increased significantly for purchasers of a third residential
property.
On May 26, 2010, the MOHURD, the PBOC and the CBRC jointly issued a notice clarifying the criteria for determining a “second
residential household property.” Among other matters, the requirements on down payments and interest rates for mortgages on a second residential
property will also apply to non-local resident purchasers (i.e., purchasers who cannot provide proof that they have been making individual income tax
payments or social security payments in the relevant local area for more than one year) applying for housing-related mortgage financing, regardless of
whether there is any residential property under the name of a member of their households at the time of application.
On March 30, 2015, the MOF and the SAT jointly issued the Notice on Adjustment of Business Tax Policies on Individual Transfer of House,
or Circular 39, which became effective on March 31, 2015. According to Circular No.  39, individual property owners are exempt from paying
business tax on the sale of an ordinary housing if he has owned and held it for at least two years.
The Circular on Issues Relevant to Improving the Regulation and Control of the Real Property Market implemented by the General Office of
the PRC State Council on January 26, 2011, provides that all local governments and the ministries and commissions under the PRC State Council
must comply with the following requirements:
●
if an individual transfers a house within five years after purchasing it, all his or her income from such sale will be subject to
business tax;
●
for a household purchasing a second residential household property by mortgage financing, the down payment must not be less than
60% of the purchase price, and the interest rate for a mortgage on such property must not be less than 1.1 times of the benchmark
interest rate;
●
local governments are required to strengthen the administration of housing land supply and the land supply for housing for low-
income people and shantytown renovation. Small and medium-sized common commodity property must not be less than 70% of the
total housing land supply;
●
a local resident household having one residential household property, or a non-local resident household that is able to provide the
individual income tax payment certificate or social insurance contribution certificate for a certain number of years, may only be
allowed to purchase one more residential property;

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●
a local resident household having two or more residential properties, or a non-local resident household having one or more
residential properties or is unable to provide the individual income tax payment certificate or social insurance contribution
certificate for a certain number of years, may not be allowed to purchase any residential property in the local area.
In accordance with the Circular of the MOHURD and the SAFE on Further Regulating the Administration of Houses Purchase by Overseas
Entities and Individuals, implemented on November 4, 2010, except as otherwise provided in the law, an overseas individual may only purchase one
house unit for personal residence, and an overseas entity establishing domestic branches or representative offices may only purchase non-residential
houses in the city of registration for business purposes.
On February 20, 2013, the PRC State Council, in an executive meeting, stated that it is still a national policy to take action to curb investment
and speculation in the housing market. The PRC State Council required the local governments continue to stabilize the housing price and restrict the
speculation in the housing market. The meeting also determined that the trial regions for real property tax will be enlarged.
On February 26, 2013, the General Office of the PRC State Council announced the Circular on Continuing to Improve the Regulation and
Control of the Real Estate Market, which among others, provides the following requirements:
●
all municipalities directly under the central government, municipalities with independent planning status, and provincial capital
cities (excluding Lhasa) must promulgate their own plans and targets for price controls on newly constructed commodity properties
(excluding low-cost housing projects) in 2013 based on the principle of stabilizing the current market price. Such plans and targets
were required to be published within the first quarter of 2013;
●
limitations on the purchase of commodity properties must be strictly implemented, and the scope of such limitations must cover all
newly constructed commodity properties and second-hand properties located within the entire administrative area of the city in
question;
●
non-local resident families that already hold a property and non-local resident families that cannot prove their local payment of tax
and/or social insurance for a required period of time shall be suspended from purchasing any property within the local
administrative area;
●
for those cities with excessive growth in housing prices, the local counterparts of the PBOC may further increase down payment
ratios and interest rates for loans to purchase second properties in accordance with the price control policies and targets of the
corresponding local governments; and
●
the gains generated from the sale of a self-owned property shall be subject to individual income tax at a rate of 20%, if the original
value of such property can be verified through historical information such as tax filings and property registration.
On September 29, 2014, PBOC and CBRC issued the Circular of PBOC and CBRC on Further Improving Financial Services for Housing,
among other incentive policies, which specifies that the minimum down payment is 30% of the purchase price for purchasers of a first residential
property for their households, and the minimum loan interest rate is 70% of the benchmark rate, to be decided by banking financial institutions in light
of risk conditions. For purchasers of a second residential property for their households who have paid off the loan that financed their first house and
reapply for a loan to finance an ordinary commodity house for the purpose of improving their living conditions, the loan policies for a first house will
apply.
On October 9, 2014, the MOHURD, the MOF, and the PBOC jointly issued the Circular of MOHURD, MOF and PBOC on Developing the
Business of Individual Housing Loan through Housing Fund, which specifies that employees who make their payment of housing fund for consecutive
six months may apply for individual housing loans through the housing fund and local authorities may raise the amount that a person can apply for
under certain conditions.

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In light of the weakening of the property market in China, on March 30, 2015, the PBOC, the MOHURD and the CBRC jointly issued the
Circular on Issues concerning Individual Residential Mortgage Policies in an effort to stimulate the market. The circular reduces the minimum down
payment ratios from 30% to 20% for first home buyers who use the housing provident fund for their purchase and from 60% to 40% for second home
buyers with outstanding mortgages who apply for another mortgage. In addition, the circular provides that home buyers who use the housing
provident fund for their home purchase are only required to pay a minimum down payment of 30% for their purchase of a second house if all loans are
settled on their first home.
On August 27, 2015, the MOHURD, the MOF and the PBOC jointly issued the Circular on Adjusting the Minimum Down Payment for the
Purchase of Houses by Individuals on the Housing Provident Fund Loans, which became effective on September 1, 2015. The circular provides that
home buyers who use the housing provident fund for their home purchase are only required to pay a minimum down payment of 20% for their
purchase of a second house if all loans are settled on their first home.
On September 24, 2015, the PBOC and the CBRC jointly issued the Circular on Issues Concerning Further Improving Differentiated
Housing Loan Policies, which provided that in the cities without restrictive measures for house purchase, the minimum down payment ratio shall be
25% or higher for the first home buyers who use the commercial individual housing loans.
On September 29, 2015, the MOHURD, the MOF and the PBOC jointly issued the Notice on further improving the Usage Efficiency of
Housing Provident Fund, which became effective on October 8, 2015. According to this notice, in the case of any cities with sub-districts avail the
housing provident fund with an efficiency index less than 85%, the cities shall increase the housing provident fund loans based on the housing price,
loan needs and repayment capacities. The term of the indebtedness can be extended to five years after one’s retirement but is limited to 30 years.
On February 1, 2016, the PBOC and the CBRC jointly issued Circular of the People’s Bank of China and the China Banking Regulatory
Commission on Issues Concerning Adjusting the Individual Housing Loan Policies. It provides that in the cities without restrictive measures for house
purchase, the minimum down payment ratio, in principal, shall be 25% for the first home buyers who use the commercial individual housing loans
common, and the said percentage may be lowered by 5% in different regions; with respect to second home buyers with unsettled house purchase loans
who purchase for improving living conditions and use commercial individual housing loans, the minimum down payment ratio shall be at least 30%.
On February 17, 2016, the MOF, the SAT and the MOHURD jointly issued Circular on Adjusting Deed Tax and Business Tax Policies for
Real Estate Transactions, which became effective on February 22, 2016, which were subsequently superseded by the Announcement on Tax Policies
for Promoting the Stable and Healthy Development of the Real Estate Market issued on November 12, 2024, as mentioned below. Regarding deed tax,
the circular provided that for first home buyers purchasing the only residence for their families (family members include the buyer, the buyer’s spouse
and under-age children, as applicable hereinafter) with an area of 90 square meters or less, the deed tax was reduced to 1%; for a residence with an
area of more than 90 square meters, the deed tax was reduced to 1.5%. For second home buyers purchasing a second residence with an area of 90
square meters or less, the deed tax was reduced to 1%; for residences with an area of more than 90 square meters, the deed tax was reduced to 2%.
Regarding business tax, the circular provides that for any individual who sells his/her ordinary housing that is purchased and owned less than two
years, full business tax is levied; for an individual who sells his/her ordinary housing purchased and owned not less than two years ago, the business
tax was exempted. However, the circular specified that the policies regarding deed tax and business tax shall not apply to Beijing, Shanghai,
Guangzhou and Shenzhen, where the business tax on transfer of residences by individuals as stipulated in the Circular of the Ministry of Finance, and
the State Administration of Taxation on Adjusting Business Tax Policies for Transfer of Residences by Individuals still applied.

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On November 12, 2024, the MOF, SAT, and MOHURD jointly issued the Announcement on Tax Policies for Promoting the Stable and
Healthy Development of the Real Estate Market (Announcement No. 16 [2024]), which took effect on December 1, 2024, introducing comprehensive
tax measures to promote stability in the real estate sector. As mentioned above, this announcement effectively superseded the previous Circular on
Adjusting Deed Tax and Business Tax Policies for Real Estate Transactions. The updated policy implements reduced deed tax rates for residential
purchases, applying a 1% rate for first homes under 140 square meters (1.5% for larger units) and similarly discounted rates for second-home
purchases, subject to family housing status verification through either interagency data sharing or a newly established commitment system. The
Announcement further standardizes VAT and land value-added tax policies nationwide, eliminating previous distinctions between ordinary and non-
ordinary housing classifications in designated cities while maintaining existing exemptions for qualifying residential developments. Notably, the
policy extends VAT exemptions to all qualifying secondary market transactions of properties held for two or more years, including in major
metropolitan areas. These measures, which supersede the 2016 tax framework, apply retroactively to eligible pending transactions and reflect the
government’s dual focus on reducing transaction costs for end-users while maintaining regulatory oversight through technology-enabled compliance
mechanisms. The policy forms part of China’s broader strategy to support genuine housing demand and restore equilibrium in property markets
through targeted fiscal instruments.
Furthermore, the MOF and the SAT jointly implemented the Circular on Issues concerning the Taxation Basis for Deed Tax, House Property
Tax, Land Value-added Tax and Individual Income Tax after the Pilot Collection of Value-Added Tax in Lieu of Business Tax on May 1, 2016 which
deducts VAT from the taxation basis of Deed Tax, House Property Tax, Land Value-added Tax and Individual Income Tax.
On August 20, 2020, PBOC and MOHURD proposed a pilot plan at a conference which sets three goals for real estate development
companies: the debt asset ratio will not exceed 70% after deducting advance proceeds from projects sold; net debt to equity ratio will not exceed
100%; and the ratio of balance of cash and cash equivalent to short-term borrowings will be at least 1. Based on the number of goals completed, the
upper limit of annual growth rate of interest-bearing liabilities of a real estate development company varies from 5% to 15%. The pilot plan was
supposed to become a formal policy in 2021; nevertheless, the governmental authority has not issued any relevant regulations or policies.
On December 31, 2020, PBOC and CBIRC issued the 2021 Notice which took effect on January 1, 2021. The 2021 Notice divides all
Chinese-funded banks into five levels and sets different limitation on banks in different levels to provide real estate loans. For example, the amount of
outstanding real estate loans of a bank in Level 1 must not account for more than 40% of its total outstanding RMB loans, while the amount of
outstanding real estate loans of a bank in Level 5 must not account for more than 12.5% of its total outstanding loans denominated in RMB.
On January 30, 2021, PBOC and CBIRC issued the Circular on Excluding the Loans for Public Rental Housing from the Concentralized
Administration on Real Estate Loans, which provides that loans related to public rental housing will not be counted as a part of the restricted real
estate loan quota provided in the 2021 Notice.
On August 18, 2023, the MOHURD, PBOC, and the NFRA issued the Circular on Optimizing the Criterion on Identifying the House
Quantity in Individual Housing Loans, which allows the mortgages on a property owner’s second houses to receive the same treatment as their first
houses, as long as relevant family members do not already own a house under the same name at the local regional level.
On August 31, 2023, PBOC and the NFRA issued the Circular on Matters Related to Lowering the Interest Rates of Existing Housing Loans
for First-Home Purchases, which aims to lower the interest rates applicable to certain real estate loans and to mitigate the inclination for real estate
purchasers to make early repayments.
On September 29, 2024, the PBC issued the Announcement No. 11 [2024] of the People’s Bank of China—Relevant Matters on Regarding
Improving the Pricing Mechanism for Commercial Personal Housing Loans, which took effect on the same day. The announcement aims to improve
the pricing mechanism for commercial personal housing loans. Starting from November 1, 2024, borrowers with floating rate loans can negotiate
repricing periods with financial institutions, and those with significant rate differentials compared to newly issued loans can replace existing loans
with new floating rate loans.

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Regulations on Housing Prices and Real Estate Tax
On January 7, 2010, the general office of the PRC State Council issued the Circular of the General Office of the State Council on
Accelerating the Stable and Smooth Development of Real Estate Market to all ministries and provincial-level local governments to control the rapid
increase in housing prices and cool down the real estate market in China. The circular reiterated that the purchasers of a second residential property for
their households must make down payments of not less than 40% of the purchase price and the real estate developers must commence the sale within
the mandated period as set forth in the pre-sale approvals and at the publicly announced prices. Further, in order to implement the requirements set out
in the PRC State Council’s circular, the MLR, issued a notice on March  8, 2010 in relation to increasing the supply of, and strengthening the
supervision over, land for real estate development purposes. The MLR’s notice stipulated that the floor price of a parcel of land must not be lower than
70% of the benchmark land price set for the area in which the parcel is located, and that real estate developers participating in land auctions must pay
a deposit equivalent to 20% of the land parcel’s floor price.
On March 16, 2011, the NDRC, issued the Provisions on Selling Real Estate at Expressly Marked Prices, which was implemented on May 1,
2011 to regulate price manipulation and arbitrary price increases by, among other things, requiring developers to re-register with the appropriate
government department before increasing real estate prices. PRC government agencies have also implemented several other regulations in a
continuous bid to promote the construction of public housing, especially rental housing projects. The urban public rental housing policy is targeted at
low to middle income families, new employees without housing and migrants with stable employment in urban areas. Several policies, such as
increasing financial aid from central finance agencies and local governments, improving project planning and establishing a sound regulatory
mechanism, have been implemented to ensure the successful promotion of affordable housing projects.
In addition to the notice above, local government authorities of several municipalities and cities such as Beijing, Zhengzhou, Jinan, Chengdu
and Hefei have successively implemented more detailed regulations to restrict residents who have not resided in the local area for a certain period of
time (ranging from one year to five years, evidenced by their individual income tax payment track records) from purchasing residential property in
that area.
On February 15, 2012, the MLR issued the Circular on Issues Relevant to the Regulation and Control of the Real Property Market in 2012,
which provides that governments must strictly maintain the current range of restrictions on the real estate market.
On April 17, 2014, the General office of the PRC State Council issued a notice that, among other things, specifically emphasizes on the
importance of adopting real estate tax. On November 24, 2014, the Provisional Regulations on Registration of Real Estate was implemented by PRC
State Council, which became effective on March 1, 2015 and was amended on March 24, 2019. It provides that PRC has established a nationwide
property registration system to provide a uniform platform through which ownership information of every registered property can be shared in real-
time among different regions in China. On October 23, 2021, the Decision on Authorizing the State Council to Carry Out a Pilot Scheme of Real
Estate Tax Reform in Certain Regions was promulgated by the SCNPC. This decision provides that the State Council is authorized to implement real
estate tax reforms and impose real estate taxes on owners of land use rights and houses for residential and non-residential purposes in certain pilot
regions. If the PRC government promulgates regulations of real estate tax in the future, it may adversely affect the real estate market in China.
On March 7, 2016, during the National People’s Congress and the Chinese Political Consultative Conference, the All-China Federation of
Industry and Commerce made a proposal concerning propelling relief of real estate inventory. The proposal includes suggestions such as introducing
real estate trusts, using individual income tax to charge against interest of housing loans.
Regulations on Housing Supply and Improving the Healthy Development of the Real Estate Market
The Opinion of the MOHURD and Other Departments on Adjusting the Housing Supply Structure and Stabilizing Property Prices,
implemented on May 24, 2006, provides the following:
●
commercial banks may not grant loans to any developer whose total investment capital contributed is less than 35% and may not
accept any premises that have been left vacant for more than three years as security;

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●
land that has been left idle for two years or more will be repossessed by the government without any compensation payment to the
developer. Also, land will be treated as being left idle if construction has been halted for more than one year and the total area
developed is less than one-third of the whole project area or the capital invested is less than a quarter of the total investment;
●
there will be no supply of land for villas and other equivalent real estate development projects, while land allocation for low-
density, large housing developments will remain tight; and
●
no planning permit, construction permit or premises pre-sale permit is to be issued for projects that do not comply with the above-
mentioned requirements, in particular composite structure projects that exceed planning requirements.
The Circular on Increasing the Supply of, and Strengthening the Supervision over, Land for Real Estate Development Purposes, issued on
March 8, 2010 by the MLR, provides that:
●
the floor price of a parcel of land must not be lower than 70% of the benchmark land price set for the area in which the parcel is
located;
●
real estate developers participating in land auctions must pay a deposit equivalent to 20% of the land parcel’s floor price; and
●
real estate developers must report to the competent land authorities when they commence and complete the construction of each
project, and the land authorities will conduct inspections according to the corresponding land grant contract.
This Circular also reiterated the policy that the initial installment payment made by real estate developers for a parcel of land must not be less
than 50% of the overall amount owed for the land use rights.
On September 24, 2024, the PBC and NFRA issued the Notice on Optimizing the Policy on Minimum Down Payment Ratios for Personal
Housing Loans, which took effect on the same day. The notice establishes that for households purchasing homes with loans, commercial personal
housing loans no longer distinguish between first and second homes, with the minimum down payment ratio uniformly set at no less than 15%.
Building upon this nationally unified minimum down payment requirement, provincial branches of the PBC and local offices of the NFRA can
independently determine whether to establish differentiated minimum down payment ratio policies for cities within their jurisdictions according to
city-specific regulatory principles, based on regulatory requirements of municipal governments in their jurisdictions, and set the lower limit of
minimum down payment ratios for each city.
Regulations on Environmental Protection in Construction Projects
Under the Regulations on the Administration of Environmental Protection in Construction Project, or Environmental Regulations,
implemented by the PRC State Council on November 29, 1998 and amended on July 16, 2017 and effective as of October 1, 2017, each construction
project is subject to an environmental impact assessment by the relevant authorities.
According to the Environmental Regulations, a developer is required to submit an environmental impact report, an environmental impact
report form, or an environmental impact registration form (as the case may be) to the relevant environmental protection administration for approval
during the project’s feasibility analysis stage. In the meantime, if any ancillary environmental protection facilities are necessary in the construction
project, such facilities are required to be designed, constructed and used in conjunction with the main project. After completion of the project, the
developers are required to apply to the relevant environmental protection administrations for final acceptance examination in respect of any ancillary
environmental protection facilities. Construction projects are approved for use after passing the said acceptance examination.

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The Environmental Impact Assessment Law, implemented by the NPC on October 28, 2002 and effective as of September 1, 2003 and
amended on July 2, 2016 and December 29, 2018, provides that if the environmental impact assessment documents of a construction project have not
been examined by the relevant environmental protection administrations or are not approved after examination, the authority in charge of examination
and approval of the project may not approve construction on the project, and the construction work unit may not commence work.
According to the Fire Prevention Law of the People’s Republic of China, promulgated by the SCNPC on April 29, 1998 and implemented on
September 1, 1998, amended on October 28, 2008, April 23, 2019 and April 29, 2021, fire prevention facilities design and works for construction
projects shall conform to state’s fire prevention technical standards for engineering construction.
Regulations on Civil Air Defense Property
Pursuant to the National Defense Law of the PRC, promulgated by the NPC on March 14, 1997 and amended by SCNPC on August 27,2009
and December 26, 2020, national defense assets are owned by the State. Pursuant to the Civil Air Defense Law of the PRC promulgated by the SCNPC
on October 29, 1996 and amended on August 27, 2009, the State supports and encourages the enterprises to invest in the construction of civil air
defense property. The civil air defense property is used and managed at ordinary time by its investor who derives profits therefrom. The design,
construction and quality of the civil air defense property must conform to the protection and quality standards established by the State. The use of civil
air defense property at ordinary time shall not impair its function of air defense. Pursuant to the Interim Measures for Quality Supervision and
Management of Civil Air Defense Property, promulgated by the National Civil Air Defense Office on February 13, 2001, the construction of the civil
air defense property shall be subject to the supervision of the relevant quality supervision department of civil air defense.
Regulations on Property Management
The Property Management Rules, implemented on September 1, 2003 and amended by the PRC State Council on October 1, 2007, February
6, 2016 and March 19, 2018, regulates the property management activities. The Property Management Rules specifies the rights and obligations of
property owners, Property Owners’ Committee, or the “POC,” and property service enterprises. For example, the property owners have the right to
appoint and dismiss property service enterprises (formerly known as property management enterprises). Prior to the selection of the POC, the property
developer would select a property management enterprise to provide property management services and property management fees would be
determined by mutual consent between the POC and the property management enterprise, and set forth in writing in the property management service
contract. The Civil Code further provides more regulations regarding the property management services, such as the right to terminate property
management service contracts without any reason enjoyed by the property owners. Xinyuan Science and Technology Service Co., Ltd. is a property
management company.
Regulations on Urban Landscaping Services
The Regulations Regarding Urban Landscape implemented on August 1, 1992, amended on January 8, 2011 and March 1, 2017 by the PRC
State Council, the Measures on the Administration of Landscape Construction Project implemented on December 20, 2017 and the Measures on the
Administration of Qualifications of Urban Landscaping Enterprises, or Urban Landscaping Measures, implemented on July 4, 1995, as amended on
October 9, 2009, provide the following:
●
housing and urban-rural construction (landscaping) authorities at all levels shall not limit the bidders to those who have urban
landscaping qualifications issued under Measures on the Administration of Qualifications of Urban Landscaping Enterprises and
Urban Landscaping Enterprise Qualification Standards (which were both abolished on February 18, 2016); and
●
the project manager should have competent site management experience and professional and technical skills.

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Regulatory Developments on Overseas Offerings
On February 17, 2023, the CSRC promulgated the Overseas Listing Trial Measures and five relevant guidelines on the application of the
Regulatory Rules, which took effect on March 31, 2023, requiring the overseas securities offerings or listings of Chinese domestic companies to be
filed with the CSRC. The Overseas Listing Trial Measures clarify the scope of overseas offerings or listings by Chinese domestic companies which
are subject to the filing and reporting requirements thereunder, and provide, among other things, that Chinese domestic companies that have already
directly or indirectly offered and listed securities in overseas markets prior to the effectiveness of the Overseas Listing Trial Measures must fulfill their
filing obligations and report relevant information to the CSRC within three working days after conducting a follow-on securities offering on the same
overseas market, and follow the relevant reporting requirements within three working days upon the occurrence and public disclosure of any specified
circumstances provided thereunder, including any (i) change of control; (ii) investigations or sanctions imposed by overseas securities regulatory
agencies or other relevant competent authorities; (iii) change of listing status or transfer of listing segment; or (iv) voluntary or mandatory delisting. In
addition, where the main business of an issuer undergoes a material change after an overseas offering and listing, and is therefore beyond the scope of
the business stated in the original filing documents, such issuer shall follow the relevant reporting requirements within three working days after
occurrence of such changes.
Regulatory Developments on Company Governance
On December 29, 2023, the Standing Committee of the National People’s Congress enacted amendments to the PRC Company Law, which
became effective on July 1, 2024. These amendments introduce significant changes to corporate governance and shareholder rights for PRC
companies. The amended law requires shareholders of PRC limited liability companies to fully pay their subscribed registered capital within five
years of company establishment, unless otherwise specified by laws and regulations. For companies established before July 1, 2024, capital
contribution periods exceeding this new limit must be adjusted. The State Administration for Market Regulation issued implementing provisions
establishing a three-year interim period (July 1, 2024 to June 30, 2027) for existing companies to comply with the new requirements.
If a shareholder fails to make timely capital contributions as required, the company must send a written notice requesting payment within a
grace period of at least sixty days. Should the shareholder still fail to fulfill their obligation after this period, the company may, upon board resolution,
issue a written forfeiture notice. Upon issuance of this notice, the shareholder forfeits the unpaid equity interests, which must then be transferred or
cancelled according to applicable law.
The amended law removes the upper limit on the number of directors for limited liability companies. Companies with more than 300
employees but without a board of supervisors must include an employee representative as a director, to be democratically elected by employees.
Additionally, certain companies, including limited liability companies, joint stock limited companies of small scale or with few shareholders, and
wholly state-owned companies, may now establish an audit committee in lieu of a board of supervisors.
Under the amended law, shareholders of limited liability companies may transfer their equity interests without obtaining consent from other
shareholders, provided they notify other shareholders in writing. Other shareholders are deemed to have waived their right of first refusal if they fail to
respond within 30 days of receiving written notice. Upon transfer, the shareholder must notify the company in writing to update the register of
shareholders and register the change with the appropriate enterprise registration authority. If the company refuses or fails to respond, the transferee
and transferor may seek judicial remedy.

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Regulatory Developments on Data Privacy
In November 2016, the SCNPC promulgated the Cyber Security Law of the PRC, or the “Cyber Security Law,” which took effect on June 1,
2017. In accordance with the Cyber Security Law, network operators must comply with applicable laws and regulations and fulfill their obligations to
safeguard network security in conducting business and providing services. Network service providers must take technical and other necessary
measures as required by laws, regulations and mandatory requirements to safeguard the operation of networks, respond to network security effectively,
prevent illegal and criminal activities, and maintain the integrity, confidentiality and usability of network data. On September 12, 2022, the CAC
released the Draft Amendment to the Cyber Security Law, which increases the legal liability for violations under the current Cyber Security Law,
integrates and unifies the penalties for violations of network operation security protection obligations, violations of critical information infrastructure
security protection obligations and violations of personal information protection obligations. Since the Amendment was only released in draft form for
purposes of soliciting public comments at this stage, uncertainties exist with respect to the enactment timetable, final content, interpretation and
implementation of this proposed Amendment.
For the further purposes of regulating data processing activities, safeguarding data security, promoting data development and utilization,
protecting the lawful rights and interests of individuals and organizations, and maintaining national sovereignty, security, and development interests,
on June 10, 2021, the SCNPC published the Data Security Law of the People’s Republic of China, or the PRC Data Securities Law, which took effect
on September 1, 2021. The PRC Data Security Law is applicable to both data processing activities carried out within the territory of mainland China
and data processing activities carried out outside mainland China that may harm the national security, public interests or the legitimate rights and
interests of citizens or organizations of mainland China. The PRC Data Security Law requires all data processing (which includes the collection,
storage, use, processing, transmission, provision, publication of data) to be conducted in a legitimate and proper manner. The PRC Data Security Law
imposes certain data security and privacy obligations on entities and individuals carrying out data processing activities, including, but not limited to,
establishing whole-process data security management systems, organizing data security trainings, implementing necessary measures to ensure data
security, strengthening risk monitoring, notifying users and authorities of security incidents, and the conduction of regular risk assessments. The PRC
Data Security Law also provides that the government shall establish data security review mechanism for data processing activities that affect or may
affect national security. Violation of the PRC Data Security Law may cause such administrative penalties such as warnings, fines, confiscation of
illegal gains, suspension of business and revocation of licenses and civil and criminal liabilities.
The PRC Data Security Law and the Regulations on Security Protection of Critical Information Infrastructure promulgated by the State
Council on July 30, 2021, among others, provide for a security review procedure for the data activities conducted by critical information infrastructure
operators that may affect national security. As of the date of this annual report, no detailed rules or implementation measures specific to the real estate
industry have been issued by any authority and we have not been informed as a critical information infrastructure operator by any government
authorities. Furthermore, the exact scope of “critical information infrastructure operators” under the current regulatory regime remains unclear, and the
PRC government authorities may have wide discretion in the interpretation and enforcement of these laws. Therefore, it is uncertain whether we
would be deemed as a critical information infrastructure operator under PRC law. If we are deemed as a critical information infrastructure operator
under the PRC cybersecurity laws and regulations, we must fulfill certain obligations as required under these laws and regulations, including, among
others, storing personal information and important data collected and produced within the PRC territory during our operations in the Chinese
mainland, which we have fulfilled in our business, and we may be subject to review when purchasing internet products and services.
On December 28, 2021, the Cyberspace Administration of China amended the Measures for Cybersecurity Review, or the “Cybersecurity
Review Measures,” which became effective on February 15, 2022. The scope of review under the Cybersecurity Review Measures extends to critical
information infrastructure operators that intend to purchase internet products and services and data processing operators engaging in data processing
activities which affect or may affect national security. According to Article 7 of the Cybersecurity Review Measures, operators who possess the
personal information of over a million users must apply to the Cybersecurity Review Office to conduct cybersecurity review procedures before listing
in a foreign country. Additionally, the Cybersecurity Review Measures also provide that if the relevant authorities consider certain network products
and services, data processing activities or listings in foreign countries to affect or potentially affect national security, then the authorities may initiate a
cybersecurity review even if the operators do not have an obligation to independently perform a cybersecurity review under such circumstances.

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On July 7, 2022, the CAC promulgated the Measures for the Security Assessment of Cross-border Data Transmission, which came into effect
on September 1, 2022 and regulate security assessment procedures with respect to cross-border data transfer by data processor of important data and
personal information that is collected and generated during operations within the PRC. According to these measures, personal data processors will be
subject to security assessment procedures conducted by the CAC prior to any cross-border transfers of data if the transfer involves: (i) important data;
(ii) personal information transferred overseas by operators of critical information infrastructure or data processors that have processed personal data of
more than one million persons; (iii) personal information transferred overseas by data processors who have provided personal data of 100,000 persons
or sensitive personal data of 10,000 persons overseas since January 1 of the previous year; or (iv) other circumstances as requested by the CAC.
Furthermore, any cross-border data transfer activities conducted in violation of the Measures for the Security Assessment of Cross-border Data
Transmission before the effectiveness of these measures are required to be brought into compliance with the measures by March 2023.
On March 22, 2024, the CAC issued the long-awaited Provisions on Facilitating and Regulating Cross-Border Data Transfers, effective as of
the same date. The CAC simultaneously updated the  Guidelines to Applications for Security Assessment of Outbound Data Transfers  and
the Guidelines for Filing the Standard Contract for Outbound Cross-Border Transfer of Personal Information to harmonize the current rules applicable
to cross-border data transfers. These regulations benefit many multinational companies that are involved in the activity of transferring personal
information and other data out of China. The essence of these regulations consists of exceptions to existing data compliance requirements (such as the
need to conduct “security assessments” and to complete “standard contracts”) set out under pre-existing laws and regulations concerning outbound
cross-border data transfers.
As of the date of this annual report, we have not been involved in any formal investigations on cybersecurity review made by the CAC on
such basis, and are not required to go through cybersecurity review by the CAC. However, if we are not able to comply with the cybersecurity and
network data security requirements in a timely manner, or at all, we may be subject to government enforcement actions and investigations, fines,
penalties, suspension of our non-compliant operations, among other sanctions, which could materially and adversely affect our business and results of
operations, significantly limit or completely hinder our ability to continue to offer securities to investors, or cause the value of such securities to
significantly decline. In particular, if it is determined in the future that the approval of the CAC or any other regulatory authority is required for our
offering, any failure to complete such procedures for our offshore offerings, would subject us to sanctions by the CAC or other PRC regulatory
authorities. Based on the foregoing, our PRC legal counsel does not expect that, as of the date of this annual report, the current applicable PRC laws
on cybersecurity review would have a material adverse impact on our business.
On August 20, 2021, the SCNPC of China promulgated the Personal Information Protection Law, which became effective on November 1,
2021, and which integrates various scattered rules with respect to personal information rights and privacy protection. The Personal Information
Protection Law stipulates that, among other requirements, (i) all processing of personal information should have a clear and reasonable purpose which
should be directly related to the processing purpose and should be conducted in a method that has the minimum impact on personal rights and
interests, and (ii) the collection of personal information should be limited to the minimum scope that is necessary to achieve the processing purpose
and should avoid any excessive collection of personal information. Personal information processors are required to adopt necessary measures to
safeguard the security of the personal information they handle. Any offending entities could be ordered to undertake corrective measures, or to
suspend or terminate their provision of services, and to potentially face confiscation of unlawful income, fines or other penalties.
Our websites only collect basic user personal information that is necessary to provide the corresponding services. We do not collect any
sensitive personal information or other excessive personal information that is not related to the corresponding services. We update our privacy policies
from time to time to meet the latest regulatory requirements of the CAC and other authorities and adopt technical measures to protect data and ensure
cybersecurity in a systematic way. Nonetheless, the Personal Information Protection Law raises the protection requirements for processing personal
information, and many specific requirements of the Personal Information Protection Law remain to be clarified by the CAC, other regulatory
authorities, and courts in practice. We may be required to make further adjustments to our business practices to comply with the personal information
protection laws and regulations.

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Many data-related laws and regulations in China are relatively new and certain concepts thereunder remain subject to discretionary and
potentially competing interpretations by relevant regulators. If any data that Xinyuan possesses belongs to data categories that are subject to
heightened scrutiny under such laws and regulations, then Xinyuan could be required to adopt stricter measures for the protection and management of
such data. In general, compliance with currently existing PRC laws and regulations, as well as additional laws and regulations that PRC regulatory
bodies may enact in the future, related to data security and personal information protection can be costly and would likely result in additional expenses
to Xinyuan. Any failure to comply with such laws and regulations could also subject Xinyuan to negative publicity, which could harm our reputation
and business operations. There are also uncertainties with respect to how such laws and regulations will be implemented and interpreted in practice, or
whether more restrictive laws or regulations may be promulgated in the future. We are also in the process of evaluating the potential impact of the
newly promulgated Regulations on Administration of Cyber Data Security, which relates to cybersecurity, privacy, data protection and information
security. This regulation was stipulated on September 24, 2024 and took effect on January 1, 2025, and we are monitoring its effect on our current
business practices. All these laws and regulations may result in additional expenses and obligations to us and subject us to negative publicity, which
could harm our reputation and negatively affect the trading price of the ADSs. We expect that these areas will receive greater public scrutiny and
attention from regulators and more frequent and rigid investigation or review by regulators, which will increase our compliance costs and subject us to
heightened risks and challenges. If we are unable to manage these risks, we could become subject to penalties, fines, suspension of business and
revocation of required licenses, and our reputation and results of operations could be materially and adversely affected. We believe, to the best of our
knowledge, that our business operations are compliant with the currently effective PRC laws relating to cybersecurity, data security, and personal data
and privacy laws in all material respects. We have taken and will continue to take reasonable measures to comply with such laws and regulations.
United States
Our operations in the United States are subject to extensive regulations imposed and enforced by various federal, state, and local governing
authorities. These regulations are complex and include building codes, land zoning and other entitlement restrictions, health and safety regulations,
labor practices, marketing and sales practices, environmental regulations, and various other laws, rules, and regulations. Collectively, these regulations
have a significant impact on the site selection and development of our properties, our design and construction techniques, our relationships with
customers, employees, suppliers, subcontractors and many other aspects of our business.
C.
Organizational Structure
Xinyuan is a holding company established in the Cayman Islands that operates its business and operations through its subsidiaries. For its
operations in each of the PRC and the United States, the Group has a local holding company which owns the operating entities. The Group also has
two subsidiaries in Malaysia and owns a 50% non-controlling interest in MLD in the U.K. The Group establishes a separate entity for each
development project. In addition, the Group has various subsidiaries which have been created for use in various future ventures, and subsidiaries
which provide real estate and property management related technology services. Please refer to Exhibit 8.1 to this annual report on Form 20-F for a
listing of the Company’s subsidiaries, including country of incorporation. Please refer to Note 1 of our audited consolidated financial statements for
the ownership percentages of the Group’s principal subsidiaries.
On October 11, 2019, Xinyuan’s property management service entity, Xinyuan Property Management Service (Cayman) Ltd., or Xinyuan
Service, was listed on the Hong Kong Stock Exchange under code “01895,” with 25% of the outstanding shares issued to new investors, following an
internal reorganization pursuant to which Xinyuan Service became a subsidiary of Xinyuan Real Estate, Ltd. The initial public offering price for each
share was HK$2.08, representing an initial market valuation of HK$1.04 billion. Xinyuan Real Estate, Ltd. remains the largest shareholder of Xinyuan
Service, holding 43.07% of its total shares, and Xinyuan Service is consolidated in Xinyuan’s financial statements.
D.
Property, plant and equipment
Our headquarters and some of our subsidiaries are located in Beijing, China, where we lease approximately 2,917 square meters of office
space. We also lease approximately 282 square meters of office space in New York.

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ITEM 4A. UNRESOLVED STAFF COMMENTS
None.
ITEM 5 OPERATING AND FINANCIAL REVIEW AND PROSPECTS
Shareholders should read the following discussion and analysis of our financial condition and results of operations in conjunction with our
consolidated financial statements and the related notes included elsewhere in this annual report on Form 20-F. This discussion may contain forward-
looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated
in these forward-looking statements as a result of various factors, including those set forth under “Item 3. Key Information — D. Risk Factors” or in
other parts of this annual report on Form 20-F.
In accordance with Instruction 6 to Item 5, information with respect to the fiscal year 2022 has been omitted from this Item 5. Such
information has previously been reported and is available in Item 5 of the Company’s annual report on Form 20-F for the fiscal year ended December
31, 2023.
A.
Operating Results
Overview
Since our inception in 1997, we have completed 84 projects with total GFA of 11,787,224 square meters. As of December 31, 2024, we had
23 projects covering 8 cities in China, the United States and the United Kingdom with estimated total GFA of 4,219,316 square meters under
construction and planning, of which 16 projects with estimated total GFA of 3,127,253 square meters were under construction. As of December 31,
2023, we had 24 projects covering 9 cities in China and the United States with estimated total GFA of 4,588,172 square meters under construction and
planning, of which 17 projects with estimated total GFA of 3,250,435 square meters were under construction. As of December 31, 2024 and 2023, we
had no projects in Malaysia or the U.K. under construction or planning.
Our total revenue, derived primarily from sales of residential real estate, was US$805.0 million in 2023 and US$514.7 million in 2024. Our
net income was US$30.5 million in 2023 and net loss was US$46.0 million in 2024. We acquire land in China primarily through auctions of
government land and acquisitions of landowning entities. These acquisition methods allow us to obtain unoccupied land with unencumbered land use
rights, which in turn enables us to save the time and expenses associated with protracted legal processes to obtain title, demolition and re-settlement
and to commence construction quickly.
The most significant factors that directly or indirectly affect our financial performance and results of operations are:
●
Economic growth and demand for residential property in China and, since 2012, in the United States;
●
PRC government policies and regulations, including tax guidelines and lending policies for the real estate sector;
●
Location, number and type of our property developments;
●
Availability and cost of financing;
●
Acquisition of quality land use rights or title to quality properties in our target markets;
●
Changes in the price of raw materials and labor costs; and
●
Our execution capability to support business expansion.

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Principal Factors Affecting Our Results of Operations
Economic growth and demand for residential property in China and since 2012, in the United States
Our business and results of operations are significantly affected by trends and developments in the PRC economy, including disposable
income levels, urbanization rate, population growth, and availability of project and consumer financing, which affect demand for residential properties
in China. During the past decade, China has experienced significant economic growth, which has created a favorable operating environment for us in
the cities where we operate. As of December 31, 2024, 98% of the units in our completed projects were sold. We have periodically experienced some
volatilities in demand due to the strict mortgage policy and other measures taken by the PRC government to slow down the rapid increase in housing
prices, such as the Circular on Continuing to Improve the Regulation and Control of the Real Estate Market announced by the General Office of the
PRC State Council in February 2013 which, among others, requires an individual income tax at a rate of 20% on gains generated from the sale of a
self-owned property. See “Item 4. Information on the Company—B. Business Overview—Regulation—China—Regulations on Real Estate
Financing.” However, we expect continuing economic growth in China, rising disposable income levels and population growth in our target cities to
support demand for residential properties over the next several years. If we continue to expand our business operations in the United States, trends and
development in the U.S. economy, including developments in the United States housing markets, will become increasingly important to our business
and results of operations.
PRC government policies and regulations
Our business and results of operations are significantly affected by PRC government policies and regulations, particularly those that relate to
land sales and development, project and consumer financing, property sales and transfers, property taxation and residential property prices.
We believe that it is in the PRC government’s interest to stabilize the market and to encourage the urbanization process and that increases in
disposable income will continue to support the long-term growth of China’s real estate market. Accordingly, we expect that the government will
maintain policies that will foster long-term healthy growth and curb potential bubbles in the market. However, we cannot assure that the PRC
government will not adopt further measures in the future that may adversely affect our business and financial performance or that a real estate bubble
will not develop despite government efforts to discourage such development.
Moreover, a substantial portion of our customers depend on mortgage financing to purchase our properties. Although government policies
have generally fostered the growth of private home ownership, regulations have been adopted in recent years to tighten and then loosen mortgage
lending rules. Such policies relate to, among other matters, down payment ratio requirements, minimum loan interest rates and amount or percentage
of mortgage financing. The down payment ratio, the loan interest rate and the size of mortgage financing are important factors that affect our results of
operations, and we cannot guarantee that our operations will not be adversely affected by future government policies.
The PRC government will also from time to time introduce sales tax incentives or disincentives to either stimulate or dampen the demand.
For example, the required holding period for the avoidance of business tax on capital gains on the sale of real estate was reduced from five years to
two years with the promulgation of Circular 39 on March 30, 2015, in an effort to stimulate the weakening property market in China.
Location, number and type of our property developments
The amount of revenue we record in any given period is affected by a number of factors, including the number, type and location of
properties we have under construction and their stage of completion, whether the completed units have been sold and the realized selling prices for
such units. The average selling prices of our projects vary depending on the types and sizes of the units sold and on the location of the projects. As the
overall development moves closer to completion, the sales prices tend to increase because a more established residential community is offered to
purchasers. The type of property development affects the estimated construction period of the project, which largely determines the revenue
recognition method we apply. Revenue recognized in any period at a point in time depends on the number, aggregate GFA and average selling prices
of units completed and sold during the period. Revenue recognized in any period on an over time basis depends on contracted sales of units in the
relevant project and the completion progress of a project (measured by the ratio of cost incurred to total estimated cost). As the completion and sales
of our projects are not spread evenly over time, our results of operations may differ significantly from period to period.

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Availability and cost of financing
Like other property developers, we require substantial capital investment for the acquisition of land use rights and the construction of our
projects. Our ability to secure financing for such purposes affects the number of projects we are able to develop at any time. Over the past ten years,
the PBOC has alternatively tightened or loosened the credit supply by increasing or decreasing the reserve requirement ratios of commercial banks
and financial institutions. Any future increases in the reserve requirement ratio will reduce the amount of commercial bank credit available to
businesses in China and may affect our ability to obtain sufficient funding from banks to finance our business expansion. The cost of our financing
also affects our operating results. We typically obtain bank borrowings for up to 65% of the cost of our land use rights to fund PRC project
developments after we receive the required permits. Interest rates on our commercial bank borrowings vary and are linked to benchmark lending rates
published by the PBOC, which fluctuate from time to time.
In addition to bank debts, we obtain financing through the issuance of debt securities and through onshore corporate bonds issued by our
subsidiary, Xinyuan China. As of December 31, 2024, we had an outstanding US$627.7 million aggregate principal amount of senior secured notes
with interest rates ranging from 3.0% to 14.5%. Also, as of December 31, 2024, Xinyuan China had outstanding US$38.1 million in corporate bonds.
For more detailed discussions of the bank borrowing and debt securities, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity
and Capital Resources.”
Acquisition of land use rights or title to properties in target markets
Our business model depends to a large extent on our ability to acquire land use rights for development sites and proceed quickly with
construction to shorten our development cycle. As a consequence, we are frequently surveying the market for attractive development opportunities in
our target cities. Under current regulations and market practice, land use rights for residential development purposes in China may be acquired from
local governments through a competitive auction or other bidding process, in which the minimum reserve price is determined based on the appraised
value. Land use rights may also be acquired in the secondary markets. We also utilize a negotiated land acquisition model, which involves deposits on
certain lands that we are most interested in acquiring, which we believe will improve our chances of successfully acquiring desired land.
Government land auctions are a transparent and competitive process for bringing development land to market, allowing the developer to
acquire clean titles and the ability to proceed immediately with development. However, as competition for development sites increases, the auction
mechanism tends to lead to higher prices. In 2023 and 2024, land use rights costs, including auction price and taxes, constituted 31.2% and 26.1%,
respectively, of our costs of revenue. During 2024, the cost of land acquisitions in China we incurred, including deposits for potential acquisitions
under the negotiated land acquisition model, was immaterial.
We acquire our development sites or land held for sale in the United States generally through off-market transactions, including resales and
distressed sales. We did not purchase any new property in the United States in 2023 and 2024.
Increases in the price of raw materials and labor costs
We outsource the design and construction of our property developments to third-party service providers. Our third-party contractors are
responsible for providing labor and procuring a majority of the raw materials used in our project developments. Our construction contracts typically
provide for flexible payments, subject to changes in certain cases, such as design changes during construction, changes in government-suggested steel
prices, cement prices, as well as labor costs. Any increase in labor costs or other costs which may result in adjustments in payments under our
construction contracts could result in an increase in our construction costs. In addition, the increase in the price of raw materials, such as cement,
concrete blocks and bricks, in the long run could be passed on to us by our contractors, which could increase our construction costs. Any input cost
increase could reduce our earnings to the extent we are unable to pass these increased costs to our customers.

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Our execution capability to support business expansion
Since 2006, we have been expanding our residential property development operations from Zhengzhou in Henan Province into other high-
growth cities. We plan to expand into additional high-growth cities as suitable opportunities arise. The development of real estate projects across
additional high-growth cities will impose significant demands on our management and other operational resources. Moreover, we will face increased
competition and will need to establish brand recognition and market acceptance for our developments in these new markets. Each of our targeted high-
growth cities has its own market conditions, customer requirements and local regulations related to the real estate industry. In addition, while our
primary focus continues to be residential real estate markets in high-growth cities in China, we have expanded into the U.S. market. Our expansion
into the U.S. market, which is significantly different from China in terms of market conditions, regulatory compliance requirements and customers,
imposes significant demands on our management and other operational resources. In 2014, we acquired 100% of the shares of a Malaysian company,
which owns offshore landfill development rights for a total area of 170 acres (approximately 687,966 square meters). On March 21, 2018, we acquired
a 50% equity stake in MDL from ED Group as mentioned above. We have no development experience in Malaysia and the U.K., nor have we ever
engaged in landfill reclamation projects. Such expansion also imposes significant demands on our capital and management resources to develop and
generate future revenue from projects. The success of our business expansion depends on our ability to develop, market and deliver quality
development projects on time. In addition, the progress and costs of a development project can be adversely affected by many factors, such as delays
in obtaining necessary licenses, permits or approvals from relevant government authorities, failures by local contractors to comply with our designs,
specifications or standards, and disputes with our third-party contractors. As we are not permitted to commence pre-sale in China until we have
reached certain milestones in the construction progress for a project, any significant delay in construction could restrict our ability to pre-sell our
properties, which could extend the recovery periods for our investments. This, in turn, could have an adverse effect on our cash flow, investment
returns, results of operations and financial position.
Operating Results
We derive our revenue mainly from the development and sale of real estate. In addition, we generate a small percentage of revenue from
leasing ancillary facilities and residential units in certain of our residential developments, as well as from the provision of related services, including
property management and real estate-related services that we provide to residents and purchasers of our residential units.
    
2023
    
2024
    
US$
    
%
    
US$
    
%
(in thousands, except for percentages)
Real estate sales
 658,073
 81.8
 385,529
 74.8
Real estate lease income
 37,218
 4.6
 19,987
 3.9
Real estate management services income
 93,677
 11.6
 96,508
 18.8
Other revenue
 16,006
 2.0
 12,651
 2.5
Total revenue
 804,974
 100.0
 514,675
 100.0
The impact of foreign exchange rate variances on reported revenue in U.S. dollars was an adverse 1.11% in 2024, compared to an adverse
4.78% in 2023.
Real estate sales
Real estate sales represent revenue from the sales of residential properties we develop and acquire. Throughout this annual report, real estate
sales are stated net of sales tax levied on the relevant contracted sales value. Sales tax is a one-time tariff applicable to property sales in the PRC
which consists of a business tax at the rate of 5%, an urban construction tax at the rate of 0.35% and an education surcharge at the rate of 0.15%. Total
sales tax amounted to US$1.23 million and US$1.25 million in 2023 and 2024, respectively. Beginning May 1, 2016, a value added tax instead of the
business tax was levied on the relevant contracted sales value at the rate of 5% or 11%. Beginning May 1, 2018, the rates of value added tax was
levied on the relevant contracted sales value at the rate of 5% or 10%. Beginning May 1, 2019, the rates of value added tax was levied on the relevant
contracted sales value at the rate of 5% or 9%.

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On January 1, 2018, the Company adopted ASC 606: “Revenue from Contracts with Customers,” or “ASC 606,” issued by the Financial
Accounting Standards Board. The Company adopted the guidance using the modified retrospective approach. Under the new revenue recognition
standards, revenue from domestic real estate sales under the previous contract terms, which used to be recognized over time under the percentage of
completion method, or “POC,” is no longer recognized until title is transferred and the Company does not have the enforceable right to payment,
therefore, the revenue, cost and retained earnings decreased; on the other hand, the balance of real estate properties under development and customer
deposits increased. In 2023 and 2024, all the revenue related to the projects in the U.S. were recognized after the title was transferred.
Real estate lease income
Real estate lease income represents the income from the rental of ancillary facilities, including retail properties, parking facilities,
kindergartens, elementary schools, and clubhouses in a number of our developments.
Real estate management service
Real estate management services income is recognized ratably as services are provided over the term of the property management
agreements.
Other revenue
Other revenue consists primarily of fees received for our landscaping and computer network engineering and other real estate-related services
that we provide to residents and purchasers of our residential units.
Costs of revenue
The following table sets forth a breakdown of our costs of revenue for the period indicated:
    
2023
2024
    
US$
    
%
    
US$
    
%
(in thousands, except for percentages)
Cost of real estate sales
   
   
   
  
Land use rights costs
 209,952
 31.2
 112,713
 26.1
Construction costs
 347,711
 51.7
 222,082
 51.4
Total cost of real estate sales
 557,663
 82.9
 334,795
 77.5
Cost of real estate lease income
 33,920
 5.0
 10,036
 2.3
Cost of real estate management services
 72,310
 10.8
 79,734
 18.4
Other costs
 8,616
 1.3
 7,680
 1.8
Total Costs of revenue
 672,509
 100.0
 432,245
 100.0
Cost of real estate sales
Cost of real estate sales consists primarily of land use rights costs and construction costs. Impairment charges, if any, are also recorded under
cost of real estate sales. Cost of real estate sales is capitalized and allocated to development projects using the specific identification method. When
the full accrual method of revenue recognition is applied, cost of sales is recognized by determining the ratio of the area of the relevant units
completed and sold to the estimated total project area, and applying that ratio to the estimated total project costs. When the over time basis of revenue
recognition is applied, capitalized costs are released to our statement of comprehensive income based on the completion progress of a project.

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Land use rights costs. Land use rights costs include the amount we pay to acquire land use rights for our property development sites in China,
plus taxes, and the amount we pay to acquire land for our property development in the United States, plus taxes. We acquire our development sites in
the PRC mainly by auctions of government land, direct negotiation and acquisition of land-owning entities. We acquired our development sites or land
held for sale in the United States generally through off-market transactions, including resale and distressed sales. Our land use rights costs for different
projects vary according to the size and location of the site and the minimum reserve price for the site, all of which are influenced by government
policies, as well as prevailing market conditions. Our land use rights costs have increased in the past few years due to several factors including
geographic expansion into certain higher priced markets, generally rising prices in each of our served markets, and increased competition from a
growing number of bidders at government land auctions.
Construction costs. We outsource the construction of all of our projects to third party contractors, whom we select through a competitive
tender process. Our construction contracts provide for flexible payments which cover substantially most of all labor, materials, fittings and equipment
costs, subject to adjustments for certain prescribed contingencies, such as design changes during the construction process or changes in government-
suggested steel prices or cement prices. Our construction costs consist primarily of the payments to our third-party contractors, which are paid over the
construction period based on specified milestones. In addition, we directly purchase and supply a limited range of fittings and equipment, including
elevators, window frames and door frames. Our construction costs also include capitalized interest costs in the amount of US$55.6 million and
US$41.0 million and in 2023 and 2024, respectively.
Future losses and impairment charges. When the profitability of a current project deteriorates due to a slowdown in the sales pace, reduction
of pricing or some other factor, this indicates that there may be a possible future loss on delivery and possible impairment in the recoverability of the
assets. Accordingly, the assets of such project are subsequently reviewed for future losses and impairment by comparing the estimated future
undiscounted cash flows for the project to the carrying value of such project. If the estimated future undiscounted cash flows are less than the asset’s
carrying value, such deficit will be charged as a future loss and the asset will then be written down to its estimated fair value.
We determine estimated fair value primarily by discounting the estimated future cash flows relating to the asset. In estimating the cash flows
for a project, we use various factors including (a) the expected pace at which the planned number of units will be sold, based on competitive market
conditions, historical trends in sales pace and actual average selling prices of similar product offerings and any other long or short-term economic
conditions which may impact the market in which the project is located; (b) the estimated net sales prices expected to be attained based on the current
market conditions and historical price trends, as well as any estimated increases in future sales prices based upon the projected rate of unit sales, the
estimated time gap between presale and expected delivery, the impact of government policies, the local and regional competitive environment, and
certain external factors such as the opening of a subway line, school or factory; and (c) the expected costs to be incurred in the future by us, including,
but not limited to, construction cost, construction overhead, sales and marketing, sales taxes and interest costs.
Our determination of fair value requires discounting the estimated cash flows at a rate commensurate with the inherent risk associated with
the assets and related estimated cash flows. The discount rate used in determining each project’s fair value depends on the stage of development,
location and other specific factors that increase or decrease the risk associated with the estimated cash flows. In accordance with our accounting
policies, we consider on a quarterly basis whether indicators of impairment of long-lived assets are present. See also “Item 5. Operating and Financial
Review and Prospects — A. Operating Results — Critical Accounting Policies — Real estate properties development completed and under
development” for our policy on impairment of long-lived assets.
In 2024, we recognized a reversal of impairment loss of US$5,122,885 (2023: recognized an impairment loss of US$7,221,978) for our
active projects, consisting of projects under construction or planning or completed or held for lease.
Cost of real estate lease income
Our cost of real estate lease income consists primarily of depreciation expenses and maintenance expenses associated with the leased
properties. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of our
properties held for lease are 20-60 years.

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Cost of real estate management services
Our cost of real estate management services consists of employee salaries, maintenance, water and electricity charges.
Other costs
Other costs represent costs incurred in connection with the property management and real estate services that we provide to residents and
purchasers of our residential units.
Selling and Distribution Expenses
Our selling and distribution expenses include:
●
advertising and promotion expenses, such as print advertisement costs, billboard and other display advertising costs, and costs
associated with our showrooms and illustrative units;
●
sales and marketing staff costs, which consist primarily of, salaries, welfares and sales commissions;
●
agency commissions of approximately 1% of contracted sales on outsourced project sales; and
●
other related expenses.
As of December 31, 2024, we employed 100 full-time sales and marketing personnel. We expect our selling and marketing expenses to
increase in the near future as we increase our sales efforts, launch more projects and target new markets to expand our operations.
General and Administrative Expenses
General and administrative expenses principally include:
●
staff salaries and benefits, quarterly and annual bonuses, and stock-based compensation;
●
traveling and office expenses;
●
professional fees, such as audit and legal fees; and
●
other expenses.
Interest Income
Interest income represents interest earned mainly on our bank balances.
Interest Expenses
Interest expenses include (i) interest on RMB514.5 million (US$75 million) principal amount of our 12.0% notes due 2022, or the “June
2022 Senior Secured Notes,” US$300 million principal amount of our 14.50% notes due 2023, or the “September 2023 Senior Secured Notes,”
US$270 million principal amount of our 14.00% notes due 2024, or the “January 2024 Senior Secured Notes,” US$628 million principal amount of
our public onshore bonds (which was partially redeemed early in 2019), US$331.3 million principal amount of our 3.00% notes due 2027, or the
“September 2027 Senior Secured Notes,” US$377 million principal amount of our non-public onshore bonds (which was partially redeemed early in
2019) and other borrowings, and (ii) amortization of debt issuance cost.

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All of our borrowings are granted by PRC commercial banks or financing institutions and denominated in RMB except for U.S. dollar and
Hong Kong dollar-denominated borrowings from the following: US$76.7 million from Ares Management, US$14.1 million from KM429 Kent
Avenue Financing LLC, US$37.7 million from RKO Flushing Development LLC and US$32.5 million from Bluebird Credit EM LLC. Our senior
secured notes (see below) are also denominated in U.S. dollars. Interest rates on our long-term PRC bank borrowings are typically variable and linked
to benchmark rates published by the PBOC. Our weighted average interest rate on short-term bank loans and other debt as of December 31, 2024 was
7.24%. As of December 31, 2024, the PBOC benchmark rate for a one-year loan was 4.35% per annum and those for loans of more than one year
ranged from 4.75% to 4.90% per annum.
The June 2022 Senior Secured Notes in the principal amount of RMB514.5 million (US$75 million) bear interest at a fixed rate of 12.00%
per annum. The September 2023 Senior Secured Notes in the principal amount of US$300 million bear interest at a fixed rate of 14.50% per annum.
The October 2023 Senior Secured Notes in the principal amount of US$208 million bear interest at the fixed rate of 14.20% per annum. The January
2024 Senior Secured Notes in the principal amount of US$270 million bear interest at a fixed rate of 14.00% per annum. The September 2027 Senior
Secured Notes in the principal amount of US$331.3 million bear interest at a fixed rate of 3.00% per annum.
In 2023, out of total interest costs incurred, US$176.9 million did not qualify for interest capitalization treatment under U.S. GAAP and was
charged to the 2023 Statement of Comprehensive Income. Total gross interest costs incurred amounted to US$244.0 million in 2023, including
US$237.3 million of interest on loans and notes and US$6.7 million of amortization of debt issuance costs.
In 2024, out of total interest costs incurred, US$117.4 million did not qualify for interest capitalization treatment under U.S. GAAP and was
charged to the 2024 Statement of Comprehensive Income. Total gross interest costs incurred amounted to US$200.2 million in 2024, including
US$199.1 million of interest on loans and notes and US$1.1 million of amortization of debt issuance costs.
Share of Income/(Loss) of Equity Investee
As of December 31, 2023 and 2024, the Group had a 1.85% investment in Zhengzhou Lianhe Real Estate Co., Ltd. The Group does not
exercise significant influence over Zhengzhou Lianhe Real Estate Co., Ltd. and therefore, the Group accounts for the investment as a nonmarketable
equity security. Investment income is recognized by the Group when the investee declares a dividend and the Group believes it is collectible. The
Company adopted ASU 2016-01 and elected to record equity investments without readily determinable fair values at cost minus impairment, if any,
plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the Company. There
were no material adjustments for observable price change or impairment related to these investments in 2024.
On January 11, 2016, the Group together with two other entities established a joint venture called Shenzhen Zhong An Financial Lease Co.,
Ltd., or “Shenzhen Zhong An,” in which the Group holds a 25% equity interest. The purpose of the joint venture is to undertake financial lease
businesses. In 2022, Shenzhen Zhong An was approved by the general meeting of shareholders for liquidation and distributed to shareholders. The
Group collected the cost of investment with no material share of income.
On January 9, 2017, the Company set up a limited partnership, Shenzhen Qianhai Jingjie City Renewal Investment Partnership, or “Shenzhen
Qianhai,” with third parties and made a capital injection of US$8,118,800. Shenzhen Qianhai will focus on investment in real estate renewal projects
in Shenzhen city. The Company has significant influence over Shenzhen Qianhai’s operating and financial decisions and accounted for it as an equity
method investment.
On January 18, 2017, the Group acquired 51% equity interest in Zhengzhou Hangmei. Zhengzhou Hangmei, a consolidated subsidiary, holds
a 3.75% equity interest of Zhengzhou Taike Real Estate Co., Ltd. amounting to US$738,073. The Group does not exercise significant influence over
Zhengzhou Taike Real Estate Co., Ltd. and therefore, the Group accounted for the investment as a nonmarketable equity security. Investment income
is recognized by the Group when the investee declares a dividend and the Group believes it is collectible. The Company adopted ASU 2016-01 and
elected to record equity investments without readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from
observable price changes in orderly transactions for the identical or a similar investment of the Company. In 2022, we disposed this investment with
no material share of income.

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On April 19, 2017, the Company signed an agreement to acquire up to 70% equity interest of Qingdao Huiju Zhihui City Industrial
Development Co., Ltd., or Qingdao Huiju, which was developing a real estate project in Qingdao city from Beijing Huiju Technology Industry
Development Co., Ltd., a non-affiliated company for a consideration of US$505.2 million. As of December 31, 2019, US$505.2 million was paid in
exchange for 49% equity interest that has been transferred to the Company. Based on the articles of association of Qingdao Huiju, the Company
cannot exercise control of Qingdao Huiju until it acquires the entire 70% equity interest, but has the ability to exercise significant influence over
Qingdao Huiju’s operating and financial decisions and accounted for it as an equity method investment.
The Group initiated various legal actions against Beijing Huiju regarding, inter alia (i) the transfer of the remaining 21% equity interest in
Qingdao Huiju to the Group and appointment of directors onto the board of Qingdao Huiju, (ii) the refunding of an unauthorized transfer of cash in the
amount of US$98.7 million from Qingdao Huiju to Beijing Huiju, and (iii) the return of the business license and official seals of Qingdao Huiju being
held under escrow by a third party to Qingdao Huiju. In March 2019, the PRC local court held that Beijing Huiju shall refund the unauthorized cash
transferred to Beijing Huiju to Qingdao Huiju, and has frozen US$98.7 million of the cash in Beijing Huiju’s bank account. In June 2021, the PRC
Supreme People’s Court supported the PRC local court’s judgement and also ruled that Beijing Huiju shall refund the amount of US$98.7 million to
Qingdao Huiju, which comprised the final trial under PRC litigation proceedings. In January 2020, the local PRC court held that the third party
holding the business license and official seals of Qingdao Huiju in escrow shall return such documents to Qingdao Huiju in a preliminary civil trial. In
June 2020, the Qingdao Intermediate People’s Court confirmed the ruling of the preliminary civil trial after Beijing Huiju appealed to the Court
against the return of business and official seals to Qingdao Huiju. In January 2022, the China International Economic and Trade Arbitration
Commission, or CIETAC, ruled that Beijing Huiju shall transfer the remaining 21% equity interest in Qingdao Huiju to the Group, that Beijing Huiju
shall coordinate in completing the equity transfer registration formalities and confirmed that the Group has the right to appoint three directors onto the
board of Qingdao Huiju. Based on independent legal advice and after due and careful inquiry, the directors of the Company are of the view that the
above events shall have not any material adverse effect on the Group’s investment in and receivables from Qingdao Huiju.
In 2022, the enforcement status of the above award/judgements was that (i) the change of equity registration formalities to had been
completed by Beijing Huiju within the prescribed period provided by the CIETAC; (ii) Qingdao Huiju had received the refund of US$98.7 million
transferred by Beijing Huiju; and (iii) Qingdao Huiju had collected the returned business license and official seals of Qingdao Huiju. Therefore,
Qingdao Huiju has been consolidated in the Group’s financial statements since the year of 2022.
On September 4, 2017, the Company with two non-affiliated companies, established a limited partnership, Wuhu Penghong Investment
Center (Limited Partnership), or Wuhu Penghong, in which the Company and the other two partners invested US$30.6 million, US$91.8 million and
US$3.1 million in cash, respectively. The other two partners hold substantive participating rights whereas the Company only exercises significant
influence, and therefore, accounted for its investment in Wuhu Penghong under the equity method. On September 8, 2017, Wuhu Penghong acquired
90.57% equity interest of Guangzhou Huanglong Information Technology Co., Ltd., or Guangzhou Huanglong, for a total cash consideration of
US$19.7 million. In 2021, the Company further invested US$31.4 million in Wuhu Penghong.
On March 20, 2018, the Company acquired 16.66% equity interest in Suzhou Hengwan Real Estate Co., Ltd., or “Suzhou Hengwan,” which
is developing a real estate project in Suzhou city from Suzhou Hengwan Enterprise Management Consulting Co., Ltd., a non-affiliated company for a
consideration of US$18.6 million. Based on Suzhou Hengwan’s articles of association, the Company cannot exercise control of Suzhou Hengwan, but
has the ability to exercise significant influence over Suzhou Hengwan’s operating and financial decisions and accounted for it as an equity method
investment.
On March 21, 2018, the Company acquired 50% equity interest in MDL, which is developing a real estate project in London, the U.K. from
ED Jersey Limited, a non-affiliated company for a consideration of US$19.1 million. Based on MDL’s articles of association, the Company cannot
exercise control of MDL, but has the ability to exercise significant influence over MDL’s operating and financial decisions and accounts for it as an
equity method investment.
On April 26, 2018, the Company acquired 51% equity interest in Henan Qingning Apartment Management Co., Ltd., or “Henan Qingning,”
which is operating rental apartments in Henan Province, from one natural person and Henan Yangjian Industry Co., Ltd., a non-affiliated company, for
a consideration of US$3.8 million. Based on Henan Qingning’s articles of association, the Company cannot exercise control of Henan Qingning, but
has the ability to exercise significant influence over Henan Qingning’s operating and financial decisions and accounted for it as an equity method
investment.

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On May 31, 2018, the Company acquired 19.99% equity interest in Suzhou Litai Real Estate Co., Ltd., or “Suzhou Litai,” which is
developing a real estate project in Suzhou city from Yongwei Real Estate (Suzhou) Co., Ltd., a non-affiliated company, for a consideration of US$9.3
million. Based on Suzhou Litai’s articles of association, the Company cannot exercise control of Suzhou Litai, but has the ability to exercise
significant influence over Suzhou Litai’s operating and financial decisions and accounted for it as an equity method investment.
On June 22, 2018, the Company together with a non-affiliated company, Huzhou Xinhong Real Estate Development Co., Ltd, established a
joint venture, Huzhou Xinhong Town Construction and Development Co., Ltd., or “Huzhou Xinhong,” in which the Company holds a 78.46% equity
interest. Based on Huzhou Xinhong’s articles of association, the Company cannot exercise control of Huzhou Xinhong, but has the ability to exercise
significant influence over Huzhou Xinhong’s operating and financial decisions and accounted for it as an equity method investment.
On May 27, 2015, the Company together with a non-affiliated company, Nanjing Starry Sky Studios Management Co., Ltd. established a
joint venture, Beijing Starry Sky Cinema Co., Ltd., or “Starry Sky,” in which the Company holds a 51% equity interest. The purpose of the joint
venture is to operate movie theatres. On October 18, 2018, for the best interests of the Company, the Company and its non-affiliated joint venture
partner agreed that advances amounting to US$2.4 million for operational needs due from Nanjing Starry Sky should be converted to an additional
19.77% equity interest. Therefore, as of October 18, 2018, the Company’s accumulated equity interest in Starry Sky is 70.77%. Based on Starry Sky’s
latest articles of association, the Company still cannot exercise control of Starry Sky, but has the ability to exercise significant influence over Starry
Sky’s operating and financial decisions and accounted for it as an equity method investment.
On September 25, 2019, the Company acquired 40% equity interest in Taizhou Yiju Real Estate Co., Ltd., or “Taizhou Yiju,” which is
developing a real estate project in Taizhou city from Zhejiang Zhongjian Real Estate Co., Ltd., a non-affiliated company, for a consideration of
US$8.5 million. Based Taizhou Yiju’s the articles of association, the Company cannot exercise control of Taizhou Yiju, but has the ability to exercise
significant influence over Taizhou Yiju’s operating and financial decisions and accounted for it as an equity method investment.
In July 2019, the Company acquired 24% equity interest in Suzhou Rongjingchen Real Estate Co., Ltd., or “Suzhou Rongjingchen,” which is
developing a real estate project in Suzhou city from Suzhou Kaijingsheng Real Estate Co., Ltd., a non-affiliated company, for a consideration of
US$42.0 million. Based on Suzhou Rongjingchen’s articles of association, the Company cannot exercise control of Suzhou Rongjingchen, but has the
ability to exercise significant influence over Suzhou Rongjingchen’s operating and financial decisions and accounted for it as an equity method
investment.
In December 2020, the Company together with a non-affiliated company, Hainan Jiazhaoye Industry Group Co., Ltd. agreed to make a
capital injection to a joint venture, Jiazhaoye Health Industry (Sanya) Investment Co., Ltd., or “Jiazhaoye Health,” in which the Company holds a 49%
equity interest. Based on Jiazhaoye Health’s the articles of association, the Company cannot exercise control of Jiazhaoye Health, but has the ability to
exercise significant influence over Jiazhaoye Health’s operating and financial decisions and accounted for it as an equity method investment. In
November 2021, the Company and Kaisa Group entered into an equity interest swap agreement. According to the agreement, the Company’s 49%
equity interest in Jiazhaoye Health was exchanged for 49% equity interest in Henan Yanchuang Management and Consulting Co., Ltd, or “Henan
Yanchuang,” with no extra consideration. Henan Yanchuang became our subsidiary after the equity interest swap. The changes of business registration
of Jiazhaoye Health and Henan Yanchuang were completed as of January 25, 2022.
As of December 31, 2024, the Group’s investment in the investees in the aggregate exceeded its proportionate share of the net assets of the
equity method investees by US$nil (December 31, 2023: US$nil). This difference, if any, represents equity method goodwill and therefore, is not
amortized. In 2024, the Group recognized share of loss amounting to US$9.2 million (2023: US$17.9 million), mainly consisting of MDL amounting
to US$4.4 million and Wuhu Penghong amounting to US$3.8 million. As of December 31, 2023 and 2024, there was no material impairment related
to these investments.

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107
Net Gain/(Loss) on Debt Extinguishment
From January 1, 2022 to December 31, 2022, the Company redeemed the September 2023 Senior Secured Notes for a total principal amount
of US$3.5 million, the January 2024 Senior Secured Notes for a total principal amount of US$4.8 million and the October 2023 Senior Secured Notes
for a total principal amount of US$2.5 million. The Company recognized gain on extinguishment of debt amounting to US$9,620,914.
From January 1, 2023 to December 31, 2023, the Company redeemed the September 2023 Senior Secured Notes for a total principal amount
of US$3.7 million, the January 2024 Senior Secured Notes for a total principal amount of US$26.68 million, the October 2023 Senior Secured Notes
for a total principal amount of US$5.7 million and the September 2027 Senior Secured Notes for a total principal amount of US$34.5 million. The
Company recognized gain on extinguishment of debt amounting to US$58,411,907.
From January 1, 2024 to December 31, 2024, the Company redeemed the September 2027 Senior Secured Notes for a total principal amount
of US$16.8 million. The Company recognized gain on extinguishment of debt amounting to US$13,018,597.
On August 18, 2023, eligible holders of the September 2023 Senior Secured Notes, the October 2023 Senior Secured Notes and the January
2024 Senior Secured Notes in the aggregate principal amount of US$307.36 million exchanged their notes for, and the Company delivered, the
September 2027 Senior Secured Notes in the aggregate principal amount of US$331.30 million due on September 30, 2027 and US$1.54 million in
cash consideration in full satisfaction of the exchange consideration to those eligible holders. The Company recognized gain on extinguishment of
debt amounting to US$111,520,980.
Gains on modification of debt
From January 1, 2023 to December 31, 2023, the terms of some debt were modified, mainly including extensions and reduced interest rates.
The Company recognized gains on modification of debt amounting to US$26,372,965.
From January 1, 2024 to December 31, 2024, the terms of some debt were modified, mainly including extensions and reduced interest rates.
The Company recognized gains on modification of debt amounting to US$21,253,128.
Income Taxes
The following table sets forth the components of income taxes for the periods indicated:
    
2023
    
2024
    
US$
    
%
    
US$
    
%
(in thousands, except for percentages)
Corporate income tax
 75,387
 136.4
 (20,818)
 (37.9)
Land appreciation tax
 70,422
 127.4
 31,720
 57.8
Deferred tax benefits
 (90,534)
 (163.8)
 43,997
 80.1
Income taxes
 55,275
 100.0
 54,899
 100.0
For an explanation of deferred tax benefits, see Notes 2(w) and 15 of the consolidated financial statements included elsewhere in this annual
report on Form 20-F. For a discussion of corporate income tax and land appreciation tax, see below.
Corporate Income Tax and Unrecognized Tax Benefit
Cayman Islands
We are incorporated in the Cayman Islands. The Cayman Islands currently levies no taxes on individuals or corporations based upon profits,
income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us
levied by the government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or after execution,
brought within the jurisdiction of the Cayman Islands. In addition, the Cayman Islands does not impose withholding tax on dividend payments.

Table of Contents
108
People’s Republic of China
In general, enterprises in the PRC are subject to income tax at a statutory rate of 25%. For our subsidiaries located in various cities, income
tax is levied at the statutory rate of 25% on income as reported in the statutory financial statements after appropriate tax adjustments. Further, under
the same tax laws and regulations, dividends paid by PRC enterprises out of profits earned post-2007 to non-PRC tax resident investors are subject to
PRC dividend withholding tax of 10%. A lower withholding tax rate may be applied based on applicable tax treaties with certain jurisdictions.
We have made provision for the corporate income tax, or CIT, payable by our PRC subsidiaries based on the statutory income tax rate of
25%, after appropriate adjustments to our taxable income used in the calculation. The difference between tax payable on our actual taxable income
and tax levied on the deemed taxable income basis has been treated as an unrecognized tax benefit under ASC 740-10 “Income Tax,” or ASC 740-10,
which had a balance of US$104.3 million as of December 31, 2024. The movement in the unrecognized tax benefits is mainly attributable to deemed
interest income from our subsidiaries during the year amounting to US$16.8 million, related late payment interests amounting to US$1.3 million and
reductions for tax positions of prior years amounting to US$16.8 million.
Hong Kong
Our Hong Kong subsidiaries are subject to income tax at the statutory rate of 16.5% in accordance with the Hong Kong profits tax laws and
regulations. We did not make any provisions for Hong Kong Profits Tax as there were no assessable profits arising in or derived from Hong Kong for
any of the periods presented. Under the Hong Kong tax law, our Hong Kong subsidiaries are exempted from income tax on their foreign-derived
income and there are no withholding taxes in Hong Kong on remittance of dividends.
The United States
Our US subsidiaries are subject to income tax at the effective rate of approximately 21% in accordance with US corporate income tax laws
and regulations, dividends and interests paid by US enterprises to non-US tax resident enterprises are subject to US withholding tax of 30%.
Land Appreciation Tax
Under PRC laws and regulations, our PRC subsidiaries engaging in property development are subject to LAT, which is levied by the local tax
authorities upon the “appreciation value” as defined in the relevant tax laws. All taxable gains from the sale or transfer of land use rights, buildings
and related facilities in China are subject to LAT at progressive rates that range from 30% to 60%. Certain exemptions are allowed for sales of
ordinary residential properties if the appreciation value does not exceed a threshold specified in the relevant tax laws. Gains from sales of commercial
properties are not eligible for this exemption. Whether a property qualifies for the ordinary residential property exemption is determined by the local
government taking into consideration the property’s plot ratio, aggregate GFA and sales price.
In 2024, we have made provision for LAT with respect to properties sold up to December 31, 2024 in accordance with the requirements set
forth in the relevant PRC tax laws and regulations.
Share-based Compensation Expense
We have seven share-based compensation plans: (1) our 2007 long-term incentive plan (which expired in 2017 and has remaining options),
(2) our 2014 Restricted Stock Unit Plan, or “the 2014 RSU Plan,” (3) our 2015 long-term incentive plan, (4) a restricted share scheme operated by our
subsidiary, Xinyuan Property Management Service (Cayman) Ltd., adopted on January 31, 2019, (5) an employee stock option plan for Xinchuang
Technology Co. Ltd., or Xinchuang Technology, adopted on September 28, 2019, (6) our 2020 restricted stock unit plan, adopted on June 30, 2020,
and (7) a share award scheme operated by our subsidiary, Xinyuan Property Management Service (Cayman) Ltd., adopted on July 8 2024.

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109
Under our 2007 long-term incentive plan, as of December 31, 2024, there were nil options granted prior to the expiration of the 2007 long-
term incentive plan that remained exercisable. Under our 2014 RSU Plan, we have granted 12,453,194 restricted common shares to employees and
directors that vest ratably over a three-year service vesting period. Under our 2015 long-term incentive plan, we may grant options, restricted shares,
restricted stock units, stock appreciation rights and other stock-based awards for the purchase of up to 20,000,000 common shares. As of December
31, 2024, 2,687,934 options remained outstanding and exercisable, and 14,865,808 shares remained eligible for future grants under the 2015 long-term
incentive plan.
We incurred compensation cost of US$nil and US$1.1 million in 2023 and 2024, respectively, in the general and administrative expenses. For
a description of the grants under each of the plans, see Note 16 of the consolidated financial statements included elsewhere in this annual report.
Results of Operations
The following table presents a summary of our consolidated statements of comprehensive income by amount and as a percentage of our total
revenue during the periods indicated. Our historical results presented below are not necessarily indicative of the results that may be expected for any
other future period.
2023
2024
    
US$
    
%
    
US$
    
%
(in thousands, except for percentages)
Revenue
 
 804,974
 100.0
 514,675
 100.0
Costs of revenue
 
 (672,509)
 (83.5)
 (432,245)
 (84.0)
Gross profit
 
 132,465
 16.5
 82,430
 16.0
Selling and distribution expenses
 
 (9,928)
 (1.2)
 (5,410)
 (1.1)
General and administrative expenses
 
 (74,244)
 (9.2)
 (38,121)
 (7.4)
Gain on disposal of property held for lease
—
—
 72
 0.0
Operating income
 
 48,293
 6.0
 38,971
 7.6
Interest income
 
 4,779
 0.6
 3,121
 0.6
Interest expenses
 
 (176,940)
 (22.0)
 (117,409)
 (22.8)
Exchange gains
 
 13,482
 1.7
 8,265
 1.6
Other income
 
 25,427
 3.2
 15,963
 3.1
Share of loss of equity investees
 
 (17,914)
 (2.2)
 (9,231)
 (1.8)
Net gain on debt extinguishment
 
 169,933
 21.1
 48,644
 9.5
Gain on modification of debt
 
 26,373
 3.3
 21,253
 4.1
Loss on short-term investments
 
 (7,626)
 (0.9)
 (701)
 (0.1)
Income from operations before income taxes
 
 85,807
 10.7
 8,876
 1.7
Income tax expenses
 
 (55,275)
 (6.9)
 (54,899)
 (10.7)
Net income/(loss)
 
 30,532
 3.8
 (46,023)
 (8.9)
Net income/(loss) attributable to non-controlling interest
 
 9,750
 1.2
 (4,995)
 (1.0)
Net income/(loss) attributable to Xinyuan Real Estate Co., Ltd. shareholders
 40,282
 5.0
 (51,019)
 (9.9)
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
Revenue
Revenue decreased by US$290.3 million, or 36.1%, to US$514.7 million in 2024 from US$805.0 million in 2023.
Real estate sales
Revenue from real estate sales decreased by US$272.5 million, or 41.4%, to US$385.5 million in 2024 from US$658.1 million in 2023,
principally due to decrease in contract sales due to economic downturn and the general condition of housing market in China.

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110
The following sets forth the percentage of completion, the percentage sold and related revenue for our pre-sold projects in 2023 and 2024.
The revenue for our new pre-sold projects since January 1, 2018 are recognized on an over-time basis upon the adoption of ASC 606 and recognized
at a point in time in the United States. For information regarding revenue recognition on an over time basis and at a point in time, see “Critical
Accounting Policies,” below.
Percentage Sold-
Percentage of Completion
Accumulated as of
Project
    
Total GFA
    
as of Dec 31,
    
Dec 31,
    
Revenues recognized for Year Ended Dec 31,
2023
    
2024
2023
    
2024
2023
    
2024
    
m2
    
%
    
%
    
%
    
%
    
US$
    
%
    
US$
    
%
Chengdu Region
 
   
   
   
   
   
   
   
   
  
Chengdu Xinyuan Splendid I
 
 231,032
 100.0
 100.0
 100.0
 100.0
 —
—
—
—
Chengdu Xinyuan Splendid II
 
 217,010
 100.0
 100.0
 100.0
 100.0
 —
—
—
—
Chengdu Thriving Family
 
 203,373
 99.8
 99.9
 99.6
 99.6
 (1,637,204)
 (0.2)
—
—
Chengdu Xinyuan City
 
 741,602
 82.8
 87.1
 61.7
 61.4
 149,181,277
 22.7
 30,122,072
 7.8
Jiangsu Region
 
Shanghai Royal Palace
 
 57,770
 99.9
 99.9
 67.3
 67.3
 10,321
—
 53,270
—
Suzhou International City Garden
 
 204,147
 100.0
 100.0
 100.0
 100.0
 (9,199)
—
 (6,400)
—
Suzhou Lake Splendid
 198,113
 100.0
 100.0
 100.0
 100.0
—
—
—
—
Suzhou Xin City
 
 127,291
 100.0
 100.0
 100.0
 100.0
—
—
—
—
Suzhou Lake Royal Palace
 
 169,781
 100.0
 100.0
 100.0
 100.0
 —
—
—
—
Kunshan International City Garden
 
 497,972
 100.0
 100.0
 100.0
 100.0
 170,813
—
—
—
Kunshan Royal Palace
 
 280,091
 100.0
 100.0
 100.0
 100.0
 —
—
—
—
Kunshan Xindo Park
 
 89,001
 100.0
 100.0
 99.9
 99.9
 —
—
 (4,693)
—
Xuzhou Colorful City
 
 130,845
 99.6
 99.6
 100.0
 100.0
 (1)
—
—
—
Kunshan Xinyu Jiayuan
 
 107,970
 97.3
 98.8
 96.9
 97.4
 5,859,859
 0.9
 6,406,859
 1.7
Suzhou Galaxy Bay
 
 73,451
 94.7
 94.7
 96.1
 96.4
 2,340,681
 0.4
 313,215
 0.1
Suzhou Gusu Shade I
 
 11,944
 100.0
 100.0
 98.9
 97.7
 3,297,240
 0.5
 (586,536)
 (0.2)
Shandong Region
 
Jinan International City Garden
 
 263,793
 100.0
 100.0
 100.0
 100.0
 —
—
—
—
Jinan Xinyuan Splendid
 
 573,273
 100.0
 100.0
 100.0
 100.0
 (8,004)
—
 533,015
 0.1
Jinan Royal Palace
 
 449,450
 98.5
 98.7
 100.0
 100.0
 286,235
—
 (65,344)
—
Jinan Xin Central
 
 196,169
 100.0
 100.1
 99.9
 99.9
 145,362
—
—
—
Qingdao Royal Dragon Bay
 
 156,403
 91.1
 96.6
 88.7
 88.6
 1,052,020
 0.2
 19,715,142
 5.1
Jinan Royal Spring Bay
 
 127,788
 96.6
 96.7
 87.3
 95.4
 3,751,126
 0.6
 11,013,920
 2.9
Lingshan Bay Dragon Seal
 380,890
 75.3
 82.2
 37.0
 41.4
 83,897,546
 12.7
 72,553,712
 18.8
Henan Region
 
Zhengzhou Xinyuan Colorful Garden
 
 191,781
 100.0
 100.0
 100.0
 100.0
 —
—
—
—
Zhengzhou Finance Square
 
 67,225
 100.0
 100.0
 100.0
 100.0
 (16,919)
—
 (47,227)
—
Zhengzhou Modern City
 
 232,054
 100.0
 100.0
 100.0
 100.0
—
—
—
—
Zhengzhou Century East A
 
 76,764
 100.0
 100.0
 100.0
 100.0
 599,257
 0.1
—
—
Zhengzhou Century East B
 
 166,481
 100.0
 100.0
 100.0
 100.0
 879,019
 0.1
—
—
Zhengzhou Xin City
 
 210,530
 100.0
 100.0
 99.0
 99.0
 378,614
 0.1
—
—
Zhengzhou Thriving Family
 
 133,779
 99.5
 99.5
 92.6
 92.7
 2,141,287
 0.3
 (265)
—
Henan Xin Central I
 
 261,606
 99.5
 99.5
 96.5
 96.5
 1,874,242
 0.3
—
—
Xingyang Splendid I
 
 114,997
 97.5
 97.7
 99.5
 99.5
 —
—
—
—
Xingyang Splendid II
 
 118,530
 87.5
 87.6
 79.1
 79.1
 14,625,697
 2.2
 451,086
 0.1
Xingyang Splendid III
 
 120,872
 99.6
 99.4
 99.4
 99.4
 128,241
—
—
—
Xingyang Splendid IV
 
 152,920
 69.4
 74.9
 85.4
 86.8
 13,514,679
 2.1
 8,964,842
 2.3
Zhengzhou Xindo Park
 
 134,362
 98.9
 98.9
 88.8
 88.8
 (19,285)
—
 (27,887)
—
Zhengzhou Fancy City I
 
 166,685
 99.8
 100.0
 93.9
 93.9
 298,033
—
—
—
Zhengzhou Fancy City III
 
 80,628
 96.8
 99.3
 96.0
 96.7
 5,909,805
 0.9
 4,197,519
 1.1
Zhengzhou International New City I
 
 356,493
 98.6
 98.7
 99.4
 99.4
 441
—
 (39,063)
—
Zhengzhou International New City II
 
 175,935
 86.5
 87.3
 99.7
 99.7
 6,663,704
 1.0
 136,748
—
Zhengzhou International New City III A
 
 97,099
 90.3
 87.6
 99.8
 99.8
 (297,560)
—
—
—
Zhengzhou Fancy City II (South)
 
 84,274
 98.4
 98.6
 98.9
 98.9
 169,513
—
 (464)
—
Zhengzhou Fancy City II (North)
 
 109,085
 96.9
 95.9
 89.9
 89.9
 890,096
 0.1
—
—
Henan Xin Central II
 
 109,328
 99.7
 99.7
 98.5
 98.5
 476,131
 0.1
—
—
Zhengzhou International New City III B
 
 118,678
 83.6
 86.3
 99.9
 99.9
 (3,641,325)
 (0.6)
 5,608,735
 1.5
Zhengzhou International New City III C
 
 82,965
 99.3
 86.4
 93.1
 93.1
 4,224,539
 0.6
 (15,839,755)
 (4.1)
Zhengzhou International New City III D
 
 46,094
 93.5
 94.1
 96.1
 96.1
 391,490
 0.1
 515,713
 0.1
Zhengzhou International New City IV
 
 199,750
 88.6
 91.6
 95.3
 95.3
 44,837,883
 6.8
 10,883,968
 2.8
Zhengzhou Hangmei International Wisdom City I
 
 133,962
 95.4
 97.8
 86.8
 94.5
 (515,435)
 (0.1)
 11,460,911
 3.0
Zhengzhou Hangmei International Wisdom City II
 134,599
 92.8
 90.6
 99.0
 91.7
 (129,723)
—
 (6,504,619)
 (1.7)
Zhengzhou Hangmei International Wisdom City III
 
 47,407
 19.3
 78.5
 30.3
 86.2
 1,291,379
 0.2
 13,932,261
 3.6
Xinyuan Golden Water View City
 
 332,305
 82.1
 85.4
 50.6
 50.6
 6,762,747
 1.0
 12,965,228
 3.4
Xingyang Splendid V
 
 80,486
 78.58
 83.1
 94.34
 94.7
 17,342,168
 2.6
 3,529,641
 0.9
Zhengzhou International New City IV B10
 
 92,331
 67.19
 70.0
 86.88
 87.7
 5,730,554
 0.9
 3,518,946
 0.9
Zhengzhou International New City A04
 104,924
 68.58
 73.2
 83.36
 83.5
 4,334,552
 0.7
 5,560,301
 1.4
Derun project I
 122,246
 76.6
 88.4
 92.98
 96.5
 22,416,486
 3.4
 32,002,455
 8.3
Xinyuan Yue Royal Palace
 
 275,742
 55.73
 59.5
 13.74
 15.7
 1,291,709
 0.2
 5,907,754
 1.5
Anhui Region
 
Hefei Wangjiang Garden
 
 145,455
 100.0
 100.0
 100.0
 100.0
 40,008
—
 434,705
 0.1
Beijing Region
 
Beijing Xindo Park
 133,096
 99.9
 99.9
 99.5
 99.5
 708,239
 0.1
 (8,163)
—
Tongzhou Xinyuan Royal Palace
 
 87,988
 92.3
 97.6
 82.3
 93.7
 94,966,954
 14.4
 85,327,519
 22.1
Tianjin Spring Royal Palace I
 
 140,097
 99.1
 99.6
 92.1
 99.8
 3,843,882
 0.6
 2,045,111
 0.5
Tianjin Spring Royal Palace II
 
 143,797
 96.6
 96.9
 98.3
 98.3
 7,536,360
 1.1
 643,025
 0.2
Changsha Region
 
Changsha Xinyuan Splendid
 
 252,361
 100.0
 100.0
 96.1
 96.2
 (630,314)
 (0.1)
 414,728
 0.1
Changsha Mulian Royal Palace
 
 90,993
 99.5
 99.5
 100.0
 100.0
 61,042
—
 (3,261,077)
 (0.8)
Changsha Furong Thriving Family
 
 72,042
 99.5
 99.5
 100.0
 99.9
 1,196,944
 0.2
 (137,002)
—
Sanya Region
 
Sanya Yazhou Bay No.1
 
 119,237
 98.8
 98.8
 100.0
 100.0
 (30,892)
—
 (17,459)
—
Xi’an Region
 
Xi’an Metropolitan
 288,625
 98.8
 98.8
 97.8
 97.8
 (681,639)
 (0.1)
 (118)
—
Xi’an Xinyuan Royal Palace
 
 201,626
 93.4
 99.3
 96.2
 97.1
 109,940,244
 16.7
 31,239,266
 8.1
Dalian Region
 
Dalian International Health Technology Town I
 98,733
 95.9
 98.5
 91.8
 91.7
 14,446,732
 2.2
 2,627,526
 0.7
Dalian International Health Technology Town II
 
9,193
93.4
99.3
96.2
97.1
365,001
 0.1
(160,131)
 —
Guangdong Region
 
Foshan Xinchuang AI International Science And Technology Innovation Valley I
 
 195,116
 91.0
 92.2
 58.44
 58.6
 (2,069,377)
 (0.3)
 2,346,444
 0.6
Malaysia Region
 
Malaysia Project
 
N/A
N/A
N/A
N/A
N/A
—
—
 18,567,205
 4.8
US Region
Hudson
 
 6,848
N/A
N/A
N/A
N/A
 5,514,187
 0.8
 (385,328)
 (0.1)
New York Oosten
 
 30,855
N/A
N/A
N/A
N/A
 21,975,711
 3.4
 8,627,373
 2.3
Total
 12,438,138
6,614
6,744
6,481
6,579
 658,073,173
 100.0
 385,528,684
 100.0
(1)
Percentage of completion is calculated by dividing total costs incurred by total estimated costs for the relevant project, estimated as of the time of preparation of
our financial statements as of and for the year indicated.

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111
(2)
Percentage sold is calculated by dividing contracted sales value from property sales by total estimated sales value of the relevant project, estimated as of the time
of preparation of our financial statements as of and for the year indicated.
(3)
Percentage of all real estate sales revenue for the financial period, including revenue recognized on an “over time” basis and until title was transferred.
(4)
The revenue for these projects is recognized on an over time basis.
The following sets forth the square meters sold and average selling price per square meter for each pre-sold project, each reportable segment and on a
consolidated basis in 2023 and 2024:
Project
    
Year Ended December 31,
    
2023
    
2024
    
Square
    
Average
    
Square
    
Average
Contract Sales
Meters Sold
Selling Price
Contract Sales
Meters Sold
Selling Price
    
US$
    
m2
    
US$/m2
    
US$
    
m2
    
US$/m2
Chengdu region
 
   
   
   
   
   
  
Chengdu Xinyuan Splendid II
 
 —
 —
 —
 —
 —
 —
Chengdu Thriving Family
 
 (1,116,734)
 (718)
 1,555
 —
 —
 —
Chengdu Xinyuan City
 
 49,310,609
 35,802
 1,377
 620,537
 629
 987
Total
 
 48,193,875
 35,084
 1,374
 620,537
 629
 987
Shanghai region
 
Shanghai Royal Palace
 
 133,480
 —
 —
 162,554
 —
 —
Suzhou Galaxy Bay
 
 1,832,954
 613
 2,990
 —
 —
 —
Huzhou Silk Town ***
 
 —
 —
 —
 —
 —
 —
Suzhou Linhu Lake Project
 
 21,992,466
 8,845
 2,486
 3,798,481
 1,128
 3,368
Kunshan Xindo Park
 
 —
 —
 —
 —
 —
 —
Kunshan Xinyu Jiayuan
 
 4,066,311
 2,245
 1,811
 1,909,416
 578
 3,303
Total
 
 28,025,211
 11,703
 2,395
 5,870,451
 1,706
 3,442
Shandong region
 
Jinan International City Garden
 —
 —
 —
 —
 —
 —
Jinan Xinyuan Splendid
 
 5,277
 34
 155
 —
 —
 —
Shandong Royal Palace
 
 16,756
 172
 97
 —
 —
 —
Jinan Xin Central
 
 (300,724)
 (205)
 1,467
 —
 —
 —
Qingdao Royal Dragon Bay
 
 4,075,843
 1,539
 2,648
 —
 —
 —
Jinan Royal Spring Bay
 
 4,445,688
 1,331
 3,340
 3,095,015
 2,903
 1,066
Qingdao Longxi
 
 155,756,042
 51,642
 3,016
 79,088,957
 31,790
 2,488
Total
 
 163,998,882
 54,513
 3,008
 82,183,972
 34,693
 2,369
Henan Region
 
Zhengzhou Century East A
 
 708,416
 294
 2,410
 —
 —
 —
Zhengzhou Xin City
 
 (3,289,157)
 (897)
 3,667
 —
 —
 —
Zhengzhou Thriving Family
 
 814,004
 1,873
 435
 57,036
 9
 6,337
Henan Xin Central I
 
 642,965
 59
 10,898
 5,054
 —
 —
Zhengzhou Xindo Park
 
 438,892
 272
 1,614
 3,424
 —
 —
Xingyang Splendid I
 (478,387)
 (111)
 4,310
 —
 —
 —
Xingyang Splendid II
 
 2,687,187
 2,643
 1,017
 —
 —
 —
Zhengzhou Fancy City I
 
 (150,223)
 8
 (18,778)
 3,859
 —
 —
Zhengzhou Fancy City II (South)
 
 252,363
 1
 252,363
 6,488
 —
 —
Zhengzhou International New City I
 
 10,224
 —
 —
 5,517
 11
 502
Henan Xin Central II
 
 524,206
 94
 5,577
 57,454
 5
 11,491
Zhengzhou Fancy City II (North)
 
 827,202
 430
 1,924
 —
 —
 —
Zhengzhou International New City II
 
 295,501
 513
 576
 144,179
 223
 647
Zhengzhou International New City III A
 
 (791,633)
 (283)
 2,797
 —
 —
 —
Zhengzhou International New City III B
 
 (102,729)
 (88)
 1,167
 —
 —
 —
Zhengzhou International New City III D
 
 293,932
 —
 —
 25,040
 —
 —
Zhengzhou Hangmei International Wisdom City I
 
 1,545,041
 1,751
 882
 —
 —
 —
Zhengzhou Hangmei International Wisdom City II
 
 760,508
 731
 1,040
 140,745
 398
 354
Zhengzhou Hangmei International Wisdom City III
 
 7,540,594
 13,242
 569
 16,309,657
 30,736
 531
Xingyang Splendid IV
 
 1,642,045
 869
 1,890
 1,532,881
 846
 1,812
Xinyuan Golden Water View City
 
 (78,668)
 —
 —
 57,648
 —
 —
Zhengzhou Fancy City III
 
 105,531
 717
 147
 1,134,011
 60
 18,900
Zhengzhou International New City III C
 
 113,593
 79
 1,438
 —
 —
 —
Zhengzhou International New City IV
 (513,760)
 1,036
 (496)
 92,575
 89
 1,040
Zhengzhou International New City IV B10
 1,942,030
 1,791
 1,084
 1,096,675
 973
 1,127
Zhengzhou International New City A04
 
 179,209
 170
 1,054
 216,655
 32
 6,770
Derun project I
 
 4,084,362
 —
 —
 —
 —
 —
Xinyuan Yue Royal Palace
 
 1,740,467
 919
 1,894
 —
 —
 —
Total
 
 24,887,414
 30,257
 823
 20,888,898
 33,382
 626
Beijing region
 
Tianjin Spring Royal Palace I
 
 670,783
 346
 1,939
 7,790,329
 3,323
 2,344
Tianjin Spring Royal Palace II
 
 2,442,806
 1,245
 1,962
 144,028
 86
 1,675
Tongzhou Xinyuan Royal Palace
 
 31,511,348
 3,737
 8,432
 69,496,675
 16,652
 4,173
Total
 
 34,624,937
 5,328
 6,499
 77,431,032
 20,061
 3,860
Hunan region
 
Changsha Xinyuan Splendid
 
 (242,392)
 (300)
 808
 131,462
 173
 760
Changsha Mulian Royal Palace
 
 —
 —
 —
 276,774
 53
 5,222
Changsha Furong Thriving Family
 
 —
 —
 —
 —
 —
 —
Total
 
 (242,392)
 (300)
 808
 408,236
 226
 1,806
Xi’an region
 
Xi’an Metropolitan
 446,576
 1,461
 306
 —
 —
 —
Xi’an Xinyuan Royal Palace
 1,619,406
 2,778
 583
 9,577,302
 (2)
 (4,164,044)
Total
 
 2,065,982
 4,239
 487
 9,577,302
 (2)
 (4,164,044)
Liaoning region
 
 —
 —
 —
Dalian International Health Technology Town I
 
 7,527
 (13)
 (579)
 —
 —
 —
Dalian International Health Technology Town II
 
 269,358
 141
 1,910
 —
 —
 —
Foshan Xinchuang AI International Science And Technology Innovation Valley I
 
 (2,459,575)
 (1,352)
 1,819
 —
 —
 —
Total
 (2,182,690)
 (1,224)
 1,783
 —
 —
 —
U.S.
New York Oosten
 
 21,975,711
 2,644
 8,311
 10,685,000
 889
 12,022
New York Bloom
 
 5,514,187
 339
 16,266
 91,289,800
 4,284
 21,309
Total
 
 326,861,117
 142,583
 2,292
 298,955,228
 95,867
 3,118
*The Company owns a 19.99% equity interest in Suzhou Litai Real Estate Co., Ltd., which develops Suzhou Gusu Shade II. The Company
accounts for its investment under the equity method.
** The Company owns a 78.46% equity interest in a joint venture, Huzhou Xinhong Town Construction and Development Co., Ltd. which
develops Huzhou Silk Town. The Company accounts for its investment under the equity method. In 2023, the Company sold the project to another
shareholder of Huzhou Xinhong.

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112
Total square meters sold decreased to 95,867 square meters in 2024 from 142,583 square meters in 2023. The decrease was mainly due to the
economic downturn and the general condition of the housing market in China in 2024.
The overall aggregate average selling price per square meter in 2024 increased to US$3,118 from US$2,292 in 2023, primarily because a
higher percentage of units were sold in locations with a comparatively higher average selling price, such as Qingdao, Beijing and Chengdu.
Chengdu region. Total square meters in this region sold in 2024 decreased to 629 square meters from 35,084 square meters in 2023,
primarily due to decreased sales of Chengdu Xinyuan City. The average selling price per square meter in 2024 decreased to US$987 from US$1,374
in 2023.
Shanghai region. Total square meters sold in 2024 decreased to 1,706 square meters from 11,703 square meters in 2023, mainly due to the
decreased sales of Suzhou Linhu Lake Project, Suzhou Gusu Shade I and Kunshan Xindo Park. The average selling price per square meter in 2024
decreased to US$1,706 from US$2,395 in 2023.
Shandong region. Total square meters sold in 2024 decreased to 34,693 square meters from 54,513 square meters in 2023, mainly due to the
decrease of saleable units of Qingdao Longxi and Jinan Royal Spring Bay. The average selling price per square meter in 2024 decreased to US$2,369
from US$3,008 in 2023.
Henan region. Total square meters sold in 2024 increased to 33,382 square meters from 30,257 square meters in 2023, mainly due to the
increased sales of Zhengzhou Hangmei International Wisdom City III, The average selling price per square meter in 2023 decreased to US$626 from
US$823 in 2023.
Beijing region. Total square meters sold in 2024 increased to 20,061 square meters from 5,328 square meters in 2023, mainly due to the
increased sales of Tongzhou Xinyuan Royal Palace and Tianjin Spring Royal Palace I. The average selling price per square meter in 2024 decreased to
US$3,860 from US$6,499 in 2023.
Hunan region. Total square meters sold in 2024 increased to 226 square meters from 300 square meters in 2023, mainly due to the increased
sales of Changsha Xinyuan Splendid. The average selling price per square meter in 2023 increased to US$1,806 from US$808 in 2023.
United States region. Total square meters sold in 2024 increased to 5,173 square meters from 2,983 square meters in 2023, derived from the
sale of New York Hudson Garden Project and New York Oosten Project. The average selling price per square meter in 2024 decreased to US$19,713
from US$9,215 in 2023, due to the increase in high margin units available for sale.
Real estate lease income
Real estate lease income decreased by US$17.2 million, or 46.3% to US$20.0 million in 2024 from US$37.2 million in 2023.
Real estate management services income
Real estate management services income increased by US$2.8 million, or 3.0%, to US$96.5 million in 2024 from US$93.7 million in 2023.
The increase primarily resulted from the increase of square meters under our management.
Other revenue
Other revenue decreased by US$3.3 million, or 21.0%, to US$12.7 million in 2024 from US$16.0 million in 2023.
Costs of Revenue
Costs of revenue decreased by US$240.3 million, or 35.7%, to US$432.2 million in 2024 from US$672.5 million in 2023, primarily resulted
from the decrease of revenue.

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113
Cost of real estate sales
Cost of real estate sales decreased by US$222.9 million, or 40.0%, to US$334.8 million in 2024 from US$557.7 million in 2023. The total
land use rights cost decreased by US$97.2 million, or 46.3%, from US$209.9 million (31.2% of costs of revenue) in 2023 to US$112.7 million (26.1%
of costs of revenue) in 2024. The decrease was consistent with the decrease of real estate sales revenue. Construction cost, including capitalized
interest, decreased by US$125.6 million, or 36.1%, to US$222.1 million in 2024 from US$347.7 million in 2023, primarily due to decreased project
construction activities and decrease of real estate sales revenue.
Cost of real estate lease income
Cost of real estate lease income decreased by US$23.9 million, or 70.4%, to US$10.0 million in 2024 from US$33.9 million in 2023. The
decrease was consistent with the decrease of real estate lease income.
Cost of real estate management services
Cost of real estate management services increased by US$7.4 million, or 10.3%, to US$79.7 million in 2024 from US$72.3 million in 2023.
The increase was consistent with the increase of real estate management services income.
Other costs
Other costs decreased by US$0.9 million, or 10.9%, to US$7.7 million in 2024 from US$8.6 million in 2023. The decrease was primarily
attributable to cost control measures in software consulting service.
Gross Profit
Gross profit decreased by US$50.0 million, or 37.8%, to US$82.4 million in 2024 from US$132.5 million in 2023. Gross profit margin was
16.0% in 2024, compared to 16.5% in 2023. The decrease was primarily attributable to the decrease of percentage in pre-sale of our high margin units
over all units available in 2024.
Selling and Distribution Expenses
Selling and distribution expenses decreased by US$4.5 million, or 45.5%, to US$5.4 million in 2024 from US$9.9 million in 2023. As a
percentage of revenue, selling and distribution expenses, it was 1.1% in 2024, compared to 1.2% in 2023. The decrease was primarily due to decrease
in promotion activities. As revenue grows in the future, we expect selling and distribution expenses as a percentage of revenue to remain stable.
General and Administrative Expenses
General and administrative expenses decreased by US$36.1 million, or 48.7% to US$38.1 million in 2024 from US$74.2 million in 2023.
The decrease was primarily due to the decrease of headcount and our expense control measures. As a percentage of revenue, general and
administrative expenses, it was 7.4% in 2024 compared to 9.2% in 2023.
Interest Income
Interest income was US$3.1 million in 2024, compared to US$4.8 million in 2023. The decrease was primarily due to the maturity of time
deposits secured for some loans and the decrease of cash and cash equivalents and restricted cash.
Interest Expenses
In 2024, out of total interest costs incurred, US$117.4 million did not qualify for interest capitalization treatment under U.S. GAAP and was
charged to the 2024 Statement of Comprehensive Income. Total gross interest costs incurred amounted to US$200.2 million in 2024, including
US$199.1 million of interest on loans and notes and US$1.1 million of amortization of debt issuance costs.

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114
In 2023, out of total interest costs incurred, US$176.9 million did not qualify for interest capitalization treatment under U.S. GAAP and was
charged to the 2023 Statement of Comprehensive Income. Total gross interest costs incurred amounted to US$244.0 million in 2023, including
US$237.3 million of interest on loans and notes and US$6.7 million of amortization of debt issuance costs.
Income Taxes
Income taxes expense decreased by US$0.4 million, or 0.7% to income tax expense of US$54.9 million in 2024 from income tax expense of
US$55.3 million in 2023, the change is immaterial.
Our effective tax rate increased to 618.5% in 2024, from 64.4% in 2023.
Net (Loss)/Income Attributable to our Shareholders
Net loss increased by US$91.3 million, or 226.7% to US$51.0 million in 2024, from net income of US$40.3 million in 2023.
Discussion of Segment Operations
We consider each of our individual property developments as a discrete operating segment. As a presentation of segment information for
every property development would not be meaningful, we have aggregated our segments on a provincial basis as property development projects
undertaken within a province have similar expected economic characteristics, type of properties offered, customers and market and regulatory
environment. Our reporting segments are: (i) property developments in Zhengzhou, Henan Province, (ii) property developments in Jinan and Qingdao,
Shandong Province, (iii) property developments in Suzhou, Xuzhou and Kunshan, Jiangsu Province and Shanghai, (iv) property developments in
Chengdu, Sichuan Province (v) property developments in Beijing and Tianjin, (vi) property developments in Sanya, Hainan Province, (vii) property
developments in Changsha, Hunan Province, (viii) property developments in Xi’an, Shaanxi Province, (ix) property developments in Zhuhai and
Foshan Guangdong Province, (x)  property developments in Wuhan, Hubei Province, (xi) property developments in Dalian, Liaoning Province,
(xii)  property developments in the United States, (xiii) property management and (xiv) other. Each geographic operating segment is principally
engaged in the construction and development of residential real estate units. The “property management” category relates to property management
services. The “other” category relates to investment holdings, installation of intercom systems, landscaping, engineering and management, real estate
sale, purchase and lease activities. The accounting policies of the various segments are the same as those described in Note 2, “Summary of
Significant Accounting Policies” of the Notes to Consolidated Financial Statements included in this report.

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115
    
2023
    
2024
 
(US$in thousands, except for percentages)
 
Zhengzhou, Henan
 
  
Total revenue
 
 191,314
 129,907
Total cost of revenue
 
 (191,326)
 (99,369)
Gross profit /(loss)
 
 (12)
 30,538
Gross margin
 
 0.0 %  
 23.5 %
Operating income /(loss)
 
 (12,879)
 28,382
Jinan and Qingdao, Shandong
 
Total revenue
 
 90,079
 105,820
Total cost of revenue
 
 (82,460)
 (77,394)
Gross profit
 
 7,619
 28,426
Gross margin
 
 8.5 %  
 26.9 %
Operating income /(loss)
 
 2,316
 24,972
Suzhou, Kunshan and Xuzhou, Jiangsu, and Shanghai
 
Total revenue
 
 12,895
 8,723
Total cost of revenue
 
 (9,700)
 362
Gross profit
 
 3,195
 9,084
Gross margin
 
 24.8 %  
 104.1 %
Operating income /(loss)
 
 587
 5,757
Chengdu, Sichuan
 
Total revenue
 
 148,374
 30,595
Total cost of revenue
 
 (134,133)
 (23,612)
Gross profit/(loss)
 
 14,241
 6,983
Gross margin
 
 9.6 %  
 22.8 %
Operating income /(loss)
 
 11,679
 8,519
Beijing and Tianjin
 
Total revenue
 
 106,631
 86,103
Total cost of revenue
 
 (68,230)
 (71,471)
Gross profit
 
 38,401
 14,632
Gross margin
 
 36.0 %  
 17.0 %
Operating loss
 
 17,382
 5,536
Sanya, Hainan
 
Total revenue
 
—
—
Total cost of revenue
 
—
—
Gross loss
 
—
—
Gross margin
 
— %  
— %
Operating income /(loss)
 
 (58)
 (22)
Changsha, Hunan
 
Total revenue
 
 (2,234)
 (2,075)
Total cost of revenue
 
 5,774
 487
Gross profit /(loss)
 
 3,540
 (1,588)
Gross margin
 
 (158.5)%  
 76.5 %
Operating income /(loss)
 
 3,204
 (1,810)
Xi’an, Shaanxi
 
Total revenue
 
 112,109
 33,247
Total cost of revenue
 
 (77,844)
 (19,901)
Gross (loss) /profit
 
 34,265
 13,346
Gross margin
 
 30.6 %  
 40.1 %
Operating loss
 
 31,836
 11,392
Zhuhai and Foshan, Guangdong
 
Total revenue
 
 (34)
 2,385
Total cost of revenue
 
 779
 (2,376)
Gross profit
 
 745
 9
Gross margin
 
 (2,213.9)%  
 0.4 %
Operating income
 (628)
 (744)
Wuhan, Hubei
Total revenue
 (12)
 (9)
Total cost of revenue
 63
 (23)
Gross (loss) / profit
 51
 (32)
Gross margin
 (438.7)%  
 344.9 %
Operating loss
 293
 (173)
Dalian, Liaoning
 
Total revenue
 
 14,825
 2,484
Total cost of revenue
 
 (11,599)
 (2,011)
Gross profit
 
 3,226
 473
Gross margin
 
 21.8 %  
 19.0 %
Operating income /(loss)
 
 2,318
 (157)
US
 
Total revenue
 
 31,573
 12,482
Total cost of revenue
 
 (31,243)
 (54,559)
Gross loss
 
 330
 (42,077)
Gross margin
 
 1.0 %  
 (337.1)%
Operating loss
 
 (8,499)
 (45,026)
Property Management
 
Total revenue
 
 99,401
 104,566
Total cost of revenue
 
 (72,535)
 (82,276)
Gross profit
 
 26,866
 22,290
Gross margin
 
 27.0 %  
 21.3 %
Operating income
 
 7,078
 3,470
Others
 
Total revenue
 
 53
 447
Total cost of revenue
 
 (54)
 (101)
Gross profit
 
 (1)
 346
Gross margin
 
 (3.0)%  
 77.5 %
Operating loss
 (6,336)
 (1,125)

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116
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
Zhengzhou, Henan. Total revenue decreased by US$61.4 million, or 32.1%, from US$191.3 million in 2023 to US$129.9 million in 2024. Gross profit for
this region was US$30.5 million, or 23.5% of revenue, in 2024, as compared to gross loss of US$0.0 million, or 0.0% of revenue, in 2023. The operating income was
US$28.4 million in 2024, representing an increase of US$41.3 million, or 320.4%, from operating loss of US$12.9 million in 2023.
Jinan and Qingdao, Shandong. Total revenue increased by US$15.7 million, or 17.5%, from US$90.1 million in 2023 to US$105.8 million in 2024. The
gross profit increased to US$28.4 million, or 26.9% of revenue, in 2024 from gross profit of US$7.6 million, or 8.5% of revenue, in 2023. The operating income was
US$25.0 million in 2024, representing an increase of US$22.7 million, or 978.5%, from operating income of US$2.3 million in 2023.
Suzhou, Kunshan and Xuzhou, Jiangsu and Shanghai. Total revenue decreased by US$4.2 million, or 32.4%, from US$12.9 million in 2023 to US$8.7
million in 2024. Gross profit for the Jiangsu and Shanghai segment increased to US$9.1 million, or 104.1% of revenue, in 2024, from gross profit of US$3.2 million,
or 24.8% of revenue, in 2023. The operating income was US$5.8 million in 2024, representing an increase of US$5.2 million, or 880.8%, from the operating income of
US$0.6 million in 2023.
Chengdu, Sichuan. Total revenue decreased by US$117.8 million, or 79.4% from US$148.4 million in 2023 to US$30.6 million in 2024. Gross profit for
the Sichuan segment was US$7.0 million, or 22.8% of revenue, in 2024, as compared to gross profit of US$14.2 million, or 9.6% of revenue, in 2023. The operating
income was US$8.5 million in 2024, representing a decrease of US$3.2 million, or 27.1%, from the operating income of US$11.7 million in 2023.
Beijing and Tianjin. Total revenue decreased by US$20.5 million, or 19.3%, from US$106.6 million in 2023 to US$86.1 million in 2024. Gross profit for
the Beijing and Tianjin segment was US$14.6 million, or 17.0% of revenue, in 2024, decreasing by US$23.8 million from gross profit of US$38.4 million, or 36.0% of
revenue, in 2023. The operating income was US$5.5 million in 2024, representing a decrease of US$11.8 million, or 68.2%, from the operating income of US$17.4
million in 2023.
Sanya, Hainan. Total revenue decreased by US$nil million, or 0%, from US$nil in 2023 to US$nil million in 2024. Gross profit for the Hainan segment was
US$nil million in 2024, decreasing by US$nil million from US$nil, or 0% of revenue, in 2023. The operating loss was US$0.0 million in 2024, representing a decrease
of US$0.0 million, or 62.7%, from operating loss of US$0.0 million in 2023.
Changsha, Hunan. Total revenue increased by US$0.2 million, or 7.1%, from US$-2.2 million in 2023 to US$-2.1 million in 2024. Gross loss for the Hunan
segment was US$1.6 million, or 76.5% of revenue, in 2024, decreasing by US5.1 million from gross profit of US$3.5 million, or -158.5% of revenue, in 2023.
Operating loss was US$1.8 million in 2024, representing a decrease of US$5.0 million, or 156.5%, from operating income of US$3.2 million in 2023.
Xi’an, Shaanxi. Total revenue decreased by US$78.9 million, or 70.3%, from US$112.1 million in 2023 to US$33.2 million in 2024. Gross profit for the
Shaanxi segment was US$13.3 million, or 40.1% of revenue, in 2024, decreasing by US$20.9 million from gross profit of US$34.3 million, or 30.6% of revenue, in
2023. The operating income was US$11.4 million in 2024, representing a decrease of US$20.4 million, or 64.2%, from operating income of US$31.8 million in 2023.
Zhuhai and Foshan, Guangdong. Total revenue increased by US$2.4 million, or 7189.2%, from US$0.0 million in 2023 to US$2.4 million in 2024. Gross
profit for the Guangdong segment was US$0.0 million, or 0.4% of revenue, in 2024, decreasing by US$0.7 million from US$0.7 million, or -2,213.9% of revenue, in
2023. The operating loss was US$0.7 million in 2024, representing an increase of US$0.1 million, or 18.5%, from operating loss of US$0.6 million in 2023.
Wuhan, Hubei. Total revenue decreased by US$0.0 million, or 20.9%, from US$0.0 million in 2023 to US$0.0 million in 2024. Gross loss for the Hubei
segment was US$0.0 million, or 344.9% of revenue, in 2024, decreasing by US$0.1 million from gross profit of US$0.0 million, or -438.7% of revenue, in 2023. The
operating loss was US$0.2 million in 2024, representing a decrease of US$0.5 million, or 159.0%, from operating income of US$0.3 million in 2023.
Dalian, Liaoning. Total revenue decreased by US$12.3 million, or 83.2%, from US$14.8 million in 2023 to US$2.5 million in 2024. Gross profit for the
Liaoning segment was US$0.5 million, or 19.0% of revenue, in 2024, decreasing by US$2.8 million from US$3.2 million, or 21.8% of revenue, in 2023. The operating
loss was US$0.2 million in 2024, representing a decrease of US$2.5 million, or 106.8%, from operating income of US$2.3 million in 2023.

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The United States. Total revenue decreased by US$19.1 million, or 60.5%, to US$12.5 million in 2024 from US$31.6 million in 2023. This region had a
gross loss of US$42.1 million, or -337.1% of revenue, in 2024, decreasing by US$42.4 million from gross profit of US$0.3 million, or 1.0% of revenue, in 2023. This
region has an operating loss of US$45.0 million in 2024, increasing by US$36.5 million, or 429.8%, from operating loss of US$8.5 million in 2023.
Property Management. Total revenue increased by US$5.2 million, or 5.2%, to US$104.6 million in 2024 from US$99.4 million in 2023. Gross profit was
US$22.3 million, or 21.3% of revenue, in 2024, decreasing by US$4.6 million from US$26.9 million, or 27.0% of revenue, in 2023. The operating income was US$3.5
million in 2024, representing a decrease of US$3.6 million, or 51.0%, from operating income of US$7.1 million in 2023.
Others. Total revenue increased by US$0.4 million, or 749.5%, to US$0.4 million in 2024 from US$0.1 million in 2023. It consisted of real estate-related
services, including, among others, property management services, broadband network installation, landscaping services and consulting services.
Critical Accounting Policies
We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires us to make judgments, estimates and
assumptions that affect (i) the reported amounts of our assets and liabilities, (ii) the disclosure of our contingent assets and liabilities at the end of each
reporting period and (iii) the reported amounts of revenue and expenses during each reporting period. We continually evaluate these estimates based
on our own experience, knowledge and assessment of current business and other conditions, and our expectations regarding the future based on
available information and reasonable assumptions, which together form our basis for making judgments about matters that are inherently uncertain.
Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our
accounting policies require a higher degree of judgment than others in their application.
When reading our financial statements, shareholders should consider (i) our selection of critical accounting policies, (ii) the judgment and
other uncertainties affecting the application of such policies and (iii) the sensitivity of reported results to changes in conditions and assumptions. We
believe the following accounting policies involve the most significant judgments and estimates used in the preparation of our financial statements.
Revenue recognition
Revenue is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to
which we expect to be entitled in exchange for those goods or services. We also elected to exclude sales taxes and other similar taxes from the
measurement of the transaction price. Therefore, revenue is recognized net of business tax, value added taxes, or VAT.
A significant portion of our revenue is derived from real estate sales of development properties in the PRC, with revenue recognized using
the percentage-of-completion, or “POC,” method in previous years. Under ASC 606, to recognize revenue over time similar to the POC method,
contractual provisions need to provide us with an enforceable right to payment. Historically, our contracts did not include a specific term on
enforceable right to payment. For all contracts executed starting from January 1, 2018, we modified certain terms to establish an enforceable right to
payment for performance completed to date, including a reasonable profit. Under ASC 606, we recognize revenue on an “over time” basis
prospectively for these new contracts by using cost inputs to measure progress towards the completion of the performance obligation. The progress
towards complete satisfaction of the performance obligation is measured based on our efforts or inputs to the satisfaction of the performance
obligation, by reference to the contract costs incurred up to the end of reporting period as a percentage of total estimated costs for each contract. For
those contracts that do not include enforceable right to payment terms, revenue is recognized at a point in time when title to the property is transferred
to the customer. For the periods presented, all the revenue related to projects in the U.S. are recognized when title is transferred.
Generally, we receive short-term advances from our customers for real estate sales. Using the practical expedient, we do not adjust the
promised amount of consideration for the effects of a significant financing component if we expect, at contract inception, that the period between the
transfer of the promised good or service to the customer and when the customer pays for that good or service will be one year or less. We also receive
long-term advances from customers for real estate sales. The transaction price for such contracts is adjusted for the effects of a financing component if
long-term advances from customers is assessed as significant at the individual contract level.

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Contract assets
We pay sales commission to our real estate sales agencies for each real estate sales contract. We have elected to apply the optional practical
expedient for costs to obtain a contract which allows us to immediately expense sales commissions (included under selling and distribution expenses)
when the amortization period of the asset that we otherwise would have used is one year or less. For incremental costs of obtaining real estate sales
contracts that extend beyond a one-year period, these incremental costs of obtaining real estate sales contracts are recognized as assets if the real estate
sales are collectible and amortized as we transfer the control of the assets to customers.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which we have received consideration (or an amount of
consideration is due) from the customer. If a customer pays consideration before we transfer goods or services to the customer, a contract liability is
recognized when the payment is made or the payment is due (whichever is earlier). Our contract liabilities are comprised of customer deposits, which
are recognized as revenue when we perform under the contract.
Income taxes
We account for income tax using the balance sheet method. Deferred taxes are provided for the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as
unutilized net operating losses. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire
before we are able to realize our benefits, or that future utilization is uncertain. We assess the need for valuation allowances by tax reporting unit by
jurisdiction. Generally, each of our reportable operating segments is organized in a separate tax reporting unit in a single tax jurisdiction.
Late payment interests and penalties arising from underpayment of income taxes are recognized according to the relevant tax law. The
amount of interest expense to be recognized is computed by applying the applicable statutory rate of interest to the difference between the tax position
recognized and the amount previously taken or expected to be taken in a tax return. Interest recognized in accordance with ASC 740-10, “Income
Tax,” or ASC 740-10, is classified in the consolidated financial statements as interest expense, while penalties recognized in accordance with this
interpretation are classified in the consolidated financial statements as other expenses.
In accordance with the provisions of ASC 740-10, we recognize in our consolidated financial statements the impact of a tax position if a tax
return’s position or future tax position is “more likely than not” to prevail (defined as a likelihood of more than fifty percent of being sustained upon
audit, based on the technical merits of the tax position). Tax positions that meet the “more likely than not” threshold are measured (using a probability
weighted approach) at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. Our estimated
liability for unrecognized tax benefits is periodically assessed for adequacy and may be affected by changing interpretations of laws, rulings by tax
authorities, certain changes and/or developments with respect to audits, and expiration of the statute of limitations. The outcome for a particular audit
cannot be determined with certainty prior to the conclusion of the audit and, in some cases, appeal or litigation process. The actual benefits ultimately
realized may differ from our estimates. As each audit is concluded, adjustments, if any, are appropriately recorded in our consolidated financial
statements. Additionally, in future periods, changes in facts, circumstances, and new information may require us to adjust the recognition and
measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recognized in the period in
which the changes occur.
Please see the more detailed discussion in Note 15 to our consolidated financial statements included elsewhere in this annual report.

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Land Appreciation Tax
In accordance with the relevant taxation laws for real estate companies of the provinces in which the subsidiaries operate in the PRC, the
local tax authorities levy the land appreciation tax, or LAT, based on progressive rates ranging from 30% to 60%, on the appreciation of land value,
being the proceeds of sales of properties less deductible expenditures, including borrowing costs and all property development expenditures. LAT is
generally prepaid based on a fixed percentage (varying by local tax jurisdiction) of customer deposits and is expensed when the related revenue is
recognized. Please see the more detailed discussion in Note 15 to our consolidated financial statements included elsewhere in this annual report.
Share-based compensation
Under ASC 718, “Compensation - Stock Compensation,” we are required to recognize share-based compensation as compensation expense
based on the fair value of stock options and other equity awards on the date of the grant. We have elected to recognize compensation expense using the
straight-line method for all restricted shares and stock options granted with service conditions that have a graded vesting schedule. We have a policy
of using authorized shares in the existing pool to satisfy any future exercise of share options and shares repurchased held by a third-party trustee to
satisfy the restricted shares granted under our 2014 RSU Plan.
For options granted with performance conditions, share-based compensation expense is recognized based on the probable outcome of the
performance condition using the accelerated method over the requisite service period. A performance condition is not taken into consideration in
determining fair value of the non-vested shares granted.
Real estate properties development completed and under development
Real estate properties completed and under development consist of residential unit sites and commercial offices. We lease the land for the
residential unit sites under land use right leases with various terms from the PRC. Real estate properties development completed and under
development are stated at the lower of carrying amounts or fair value less selling costs.
Expenditures for land development, including costs of land use rights, deed tax, pre-development costs and engineering costs, are capitalized
and allocated to development projects by the specific identification method. Costs are allocated to specific units within a project based on the ratio of
the sales value of units to the estimated total sales value times the total project costs.
Costs of amenities transferred to buyers are allocated as common costs of the project that are allocated to specific units as a component of
total construction costs. For amenities retained by us, costs in excess of the related fair value of the amenities are also treated as common costs.
Results of operations of amenities retained by us are included in current operating results.
In accordance with ASC 360, “Property, Plant and Equipment,” or ASC 360, real estate property development completed and under
development are subject to valuation adjustments when the carrying amount exceeds fair value. An impairment loss is recognized only if the carrying
amount of the assets is not recoverable and exceeds fair value. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash
flows expected to be generated by the assets.
When the profitability of a current project deteriorates due to a slowdown in the sales pace, reduction of pricing or some other factor, this
indicates that there may be a possible future loss on delivery and possible impairment in the recoverability of the assets. Accordingly, the assets of
such project are subsequently reviewed for future losses and impairment by comparing the estimated future undiscounted cash flows for the project to
the carrying value of such project. If the estimated future undiscounted cash flows are less than the asset’s carrying value, such deficit will be charged
as a future loss and the asset will then be written down to its estimated fair value.

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We determine estimated fair value primarily by discounting the estimated future cash flows relating to the asset. In estimating the cash flows
for a project, we use various factors including (a) the expected pace at which the planned number of units will be sold, based on competitive market
conditions, historical trends in sales pace and actual average selling prices of similar product offerings and any other long or short-term economic
conditions which may impact the market in which the project is located; (b) the estimated net sales prices expected to be attained based on the current
market conditions and historical price trends, as well as any estimated increases in future sales prices based upon the projected rate of unit sales, the
estimated time gap between presale and expected delivery, the impact of government policies, the local and regional competitive environment, and
certain external factors such as the opening of a subway line, school or factory; and (c) the expected costs to be incurred in the future by us, including,
but not limited to, construction cost, construction overhead, sales and marketing, sales taxes and interest costs.
Our determination of fair value requires discounting the estimated cash flows at a rate commensurate with the inherent risk associated with
the assets and related estimated cash flows. The discount rate used in determining each project’s fair value depends on the stage of development,
location and other specific factors that increase or decrease the risk associated with the estimated cash flows.
In 2023 and 2024, we recognized impairment losses of US$7.2 million and reversal of impairment losses of US$5.1 million for real estate
properties completed and under development, respectively.
Real estate properties held for lease, net
Real estate properties held for lease are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets. Estimated useful lives of the real estate properties held for lease are 20-60 years.
Maintenance, repairs and minor renewals are charged directly to expenses as incurred. Major additions and improvements to the real estate
properties held for lease are capitalized.
In accordance with ASC 360, “Property, Plant and Equipment,” real estate properties held for lease are subject to valuation adjustments when
the carrying amount exceeds fair value. An impairment loss is recognized only if the carrying amount of the assets is not recoverable and exceeds fair
value. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash flows expected to be generated by the assets.
In 2023 and 2024, we did not recognize any impairment for real estate properties held for lease.
Leases
We adopted Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), or ASU 2016-02, from January 1, 2019, by using the
modified retrospective method and did not restate the comparable periods. We have elected the package of practical expedients, which allows us to
carry forward our original assessment of whether contracts contained a lease, lease classification, and the initial direct cost. Lastly, we elected the
short-term lease exemption for all contracts with lease terms of 12 months or less.
We determine if an arrangement is or contains a lease at inception or modification of a contract. A contract is or contains a lease if the
contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified
asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the
use of the asset.
Lessee
We categorize leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally those
leases that transfer ownership to us or allow us to purchase assets at a nominal amount by the end of the lease term. Assets acquired under finance
leases are recorded in property and equipment, net and real estate properties held for lease, net. All other leases are recorded as operating lease right-
of-use, or ROU, assets.

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Lease liability is recorded based on the present value of the lease payments over the lease term using a discount rate at commencement date.
As the implicit rate in our leases is not typically readily available, we use an incremental borrowing rate based on the information available at the lease
commencement date in determining the present value of lease payments. This incremental borrowing rate reflects the fixed rate at which we could
borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. Leased
assets are recognized based on the initial present value of the lease payments, reduced by lease incentives.
Operating lease expense for lease payments is recognized on a straight-line basis over the lease term. The expected lease terms are based on
the non-cancelable term of the lease and may contain options to extend or terminate the lease when it is reasonably certain that we will exercise that
option. Finance lease assets are amortized in a manner consistent with our normal depreciation policy for owned assets. Variable lease payments not
dependent on an index or rate are excluded from the ROU assets and lease liability calculations and are recognized in expense in the period which the
obligation for those payments is incurred.
Lessor
As a lessor, our leases are classified as operating leases under ASC 842, and thus, the pattern of recognition of real estate lease income
remains unchanged from previous lease accounting guidance. Leases, in which we are the lessor, are substantially all accounted for as operating leases
and the lease components and non-lease components are accounted for separately.
Effect of change in estimate
Revisions in estimated gross profit margins related to estimated costs and revenues are made in the period in which circumstances requiring
the revisions become known. During the year ended December 31, 2024, real estate development projects (Tianjin Spring Royal Palace I, Tianjin
Spring Royal Palace II, Zhengzhou Hangmei International Wisdom City I, Beijing Tongzhou Liyuan, Xi’an Xinyuan Royal Palace), which recognized
gross profit in 2023, had changes in their estimated gross profit margins. As these projects moved closer to completion during 2024, the Company
adjusted its prior estimates related to selling prices and development costs. As a result of the changes in estimate above, gross profit, net income and
basic and diluted earnings per share increased by US$32.4 million (2022: decreased by US$55.3 million, 2023: increased by US$104.8 million),
US$24.3 million (2022: decreased by US$41.5 million, 2023: increased by US$78.6 million), US$0.22 per share (2022: decreased by US$0.38 per
share, 2023: increased by US$0.74 per share), and US$0.22 per share (2022: decreased by US$0.38 per share, 2023: increased by US$0.74 per share),
respectively, for the year ended December 31, 2024.
Recently Issued Accounting Pronouncements
Please see the more detailed discussion in Note 2 to our consolidated financial statements included elsewhere in this annual report.
B.
Liquidity and Capital Resources
The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. As of December
31, 2024, the Group’s short-term bank loans and other debt, and current portion of long-term bank loans and other debt amounted to US$1,145.0
million. As announced in the Form 6-K dated July 19, 2022, the Company did not make payments in full for its senior notes of RMB545.3 million
(“defaulted senior notes”) issued on July 3 and August 6, 2020 with a maturity date on June 29, 2022. The default also triggered cross-default of other
senior notes issued by the Group. On August 18, 2023, eligible holders of the defaulted senior notes in the aggregate principal amount of US$307.36
million exchanged their notes and the Company delivered the September 2027 Senior Secured Notes in the aggregate principal amount of US$331.3
million due on September 30, 2027 and US$1.54 million in cash consideration in full satisfaction of the exchange consideration to those eligible
holders. The carrying amount of senior notes still in default was US$391.9 million as of December 31, 2024.

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We also breached certain covenants relating to borrowings of US$409.9 million as of December 31, 2024. As of the date hereof, we continue
to be in breach of certain covenants and other lenders have not demanded immediate repayment of other borrowings. Additionally, certain subsidiaries
are currently involved in bankruptcy proceedings which could significantly affect the Group’s access to capital and its ability to meet short-term
obligations. These proceedings may also result in additional claims or restructuring obligations that further impact our liquidity position. For further
discussion, see “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal Proceedings.”
In addition, we are involved in other various litigation and arbitration cases for various reasons and the contingent compensation is subject to
the court verdict. The Company anticipates that the market conditions in the real estate sector remain under pressure in 2025, and therefore, in the
absence of a sharp recovery in the market and the availability of various financing options, the Company remains cautious about its liquidity in the
near term. The above events or conditions indicate the existence of material uncertainty which cast substantial doubt on the Group’s ability to continue
as a going concern.
In view of such circumstances, the directors consider that the Group has taken various measures and will have adequate funds available to
enable it to operate as a going concern, taking into account the past operating performance of the Group and the following:
(a)
The Group has been in negotiation with the noteholder to reach agreement on a further debt restructuring plan.
(b)
Up to the date of approval of the consolidated financial statements, the Group reached an agreement with corporate bondholders of
RMB corporate bonds with carrying amount of RMB273.8 million as of December 31, 2024. Pursuant to the agreement, the
repayment date of the corporate bond was extended to November 13, 2027 and January 7, 2028;
(c)
The Group is actively in discussions with the other existing lenders to renew the Group’s certain borrowings and/or not to demand
immediate repayment until the Group has successfully completed the property construction projects and generated sufficient cash
flows therefrom. These discussions have been constructive and focused on possible actions in light of current circumstances but do
require time to formulate or implement due to ongoing changes in market conditions;
(d)
The Group will continue to implement measures to accelerate the pre-sales and sales of its properties under development and
completed properties, and to speed up the collection of outstanding sales proceeds and other receivables. Recent relaxation of
policies with regards to the property market in the PRC have been encouraging to increase buyer interests and stimulate demand.
Subject to the improvement of the market sentiment, the Group will actively adjust sales and pre-sale activities to better respond to
changing markets to achieve the latest budgeted sales and pre-sales volumes and amounts;
(e)
The Group will continue to control administrative costs and contain unnecessary capital expenditures to preserve liquidity. The
Group will also continue to actively assess additional measures to further reduce discretionary spending; and
(f)
The Group has been proactive in seeking ways to settle the outstanding litigations of the Group. The Group will seek to reach an
amicable solution on the charges and payment terms to the claims and litigations which have not yet reached a definite outcome.
In the event forecast cash flow is not achieved or the renewal of borrowings and public senior notes does not undergo as planned, the
directors of the Company have also evaluated other plans that could be undertaken to improve their liquidity position as follow:
1)
The Group could adjust their original sale plan for some residential properties and commercial buildings to an earlier stage in order
to generate additional funds; and
2)
The Group will continue to seek to obtain additional new sources of financing from potential equity investment partners or to seek
suitable opportunities to dispose of its equity interest in certain project development companies to generate additional cash inflows. The Group’s
properties are predominantly located in higher tier cities that make them relatively more attractive to potential buyers and retain a higher value in
current market conditions.

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Notwithstanding the above, uncertainty exists as to whether the renewal of borrowings and public senior notes can be renewed and as to all
other alternative operating and financing plans as the Group is still negotiating with its external financiers on the financing to the Group and the sales
of properties depend on market conditions. Should the Group be unable to operate as a going concern, adjustments would have to be made to reduce
the carrying values of the Group’s assets to their recoverable amounts, to provide for financial liabilities which might arise, and to reclassify non-
current assets and non-current liabilities as current assets and current liabilities respectively, if applicable. The effects of these adjustments have not
been reflected in the consolidated financial statements.
See Report of Independent Registered Public Accounting Firm in the accompanying consolidated financial statements.
As previously discussed, a principal factor affecting our results of operations and our growth is the acquisition of land and land use rights in
target markets. Under current regulations and market practice, land use rights for residential development purposes in the PRC may be acquired from
local governments through a competitive auction or other bidding process. These competitive auctions and bidding processes are typically announced
20 days before they are about to take place. To participate in these auctions, we are required to make a minimum deposit of 20-50% of the opening
auction price in cash. If we are successful on our bids, we are also generally required to remit the remaining purchase price within one to six months
of the auction. Further, under current regulations we are not permitted to borrow money from local banks to fund land purchases. As a result, we have
to fund land purchases either from cash flows from project sales or from financing transactions in foreign markets which have been and continue to be
relatively expensive and not easily accessible. See “Item 3. Key Information—D. Risk Factors—Risks Related to Our Business—Our business
requires access to substantial financing. Our failure to obtain adequate financing in a timely manner could severely adversely (1) restrict our ability to
complete existing projects, expand our business, or repay our debts, and (2) affect our financial performance and condition.” As a result of entering
into other markets, we will also require adequate U.S. dollar and other currency financing for our offshore operations, one of the sources of which is
back-to-back loan arrangements with our subsidiaries, which is subject to foreign exchange rate fluctuation and regulatory risk. See “Item 3. Key
Information—D. Risk Factors—Risks Related to Our Business—We face risks related to our back-to-back loans.”
In addition to our land acquisitions, we expect to incur material project development costs on the acquired land. Our cash needs can only be
partially satisfied by construction loans and future cash flows from real estate projects under development in the upcoming fiscal year. To ensure that
we have sufficient funds to secure attractive land parcels and cover material project development costs, which are vital to our growth strategy, we have
chosen to maintain a certain level of cash reserves on hand. In addition, we are required to maintain restricted cash deposits by banks that provide
loans to us and our customers. The amount of the restricted cash deposits will vary based on the amount of the related loans. As of December 31,
2024, approximately US$57.9 million or 38.0% of our total cash balance reserve, was restricted cash.
We have and will continue to closely monitor our cash flow position to support our operations. We believe we manage land acquisition
activities in a rational manner to control land expenditure and achieve reasonable profit of each project investment. We also closely monitor the
collection of accounts receivable, and obtain funds through a variety of both domestic and overseas financing activities to provide a solid cash flow
position for sustainable development.
We are a holding company established in the Cayman Islands and operate most of our business through our subsidiaries in China. Our cash
requirements rely significantly upon dividends that we receive from our subsidiaries in China. To the extent our U.S., Malaysia and U.K. operations
continue to grow, we may in the future also depend on dividends from our U.S., Malaysia and U.K. subsidiaries. If our subsidiaries incur indebtedness
or losses, their ability to pay dividends or other distributions to us may be negatively affected. Regulations in China currently permit payment of
dividends only out of accumulated after-tax profits upon satisfaction of relevant statutory conditions and procedures, if any, determined in accordance
with Chinese accounting standards and regulations. In addition, restrictive covenants in bank credit facilities, bonds, other long-term debt agreements,
joint venture agreements or other agreements that we or our subsidiaries currently have or may enter into in the future may also restrict the ability of
our subsidiaries to pay dividends or make other distributions to us and our ability to receive distributions. See “Item 3. Key Information—D. Risk
Factors—Risks Related to Our Business—We are a holding company that depends on dividend payments from our subsidiaries for funding.”

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Cash Flows
    
2023
    
2024
(US$ in thousands)
Net cash (used in)/provided by operating activities
 
 (270,774)
 18,198
Net cash (used in)/provided by investing activities
 
 (1,107)
 9,963
Net cash used in financing activities
 
 (47,293)
 (99,270)
Net decrease in cash, cash equivalents and restricted cash
 
 (319,174)
 (71,109)
Effect of exchange rate changes on cash and cash equivalents
 
 (10,733)
 (7,327)
Cash, cash equivalents and restricted cash, at beginning of year
 
 560,728
 230,821
Cash, cash equivalents and restricted cash, at end of year
 
 230,821
 152,385
Operating Activities
Net cash provided by operating activities was US$18.2 million in 2024, primarily attributable to a decrease in real estate properties
completed and under development of US$61.6 million and a decrease in customer deposits of US$205.2 million, partially offset by a decrease in other
deposits and prepayments of US$20.9 million and an increase in accounts payable and other payables and accrued liabilities of US$140.4 million.
Net cash used in operating activities was US$270.8 million in 2023, primarily attributable to an increase in real estate properties completed
and under development of US$53.1 million and a decrease in customer deposits of US$522.2 million, partially offset by a decrease in other deposits
and prepayments of US$57.7 million and an increase in accounts payable and other payables and accrued liabilities of US$347.9 million.
Proceeds from pre-sale of our properties under development are an important source of cash flow for our operations. PRC law allows us to
pre-sell properties before their completion upon satisfaction of certain requirements and requires us to use the pre-sale proceeds to develop the
particular project pre-sold. The amount and timing of cash flows from pre-sale are affected by a number of factors, including restrictions on pre-sale
imposed by PRC law, market demand for our properties subject to pre-sale, prices at which we can pre-sell and the number of properties we have
available for pre-sale. Any pre-sale payments we receive before we recognize revenue are recorded as current liabilities under customer deposits. As
of December 31, 2023 and 2024, we recorded current liabilities consisting of customer deposits of US$740.0 million and US$525.9 million,
respectively. We actively market pre-sales of our properties in accordance with regulations to accelerate cash in flow to the extent possible.
Investing Activities
Net cash provided by investing activities was US$10.0 million in 2024, and was mainly attributable to proceeds from disposal of properties
held for lease or property and equipment of US$9.2 million.
Net cash used in investing activities was US$1.1 million in 2023, and was mainly attributable to the purchase of investment product of
US$1.4 million.
Financing Activities
Net cash used in financing activities was US$99.3 million in 2024, and was primarily attributable to repayments of short-term and long-term
bank loans and other debt in the aggregate of US$165.1 million, partially offset by proceeds from short-term and long-term bank loans and other debt
in the aggregate of US$67.1 million.
Net cash used in financing activities was US$47.3 million in 2023, and was primarily attributable to repayments of short-term and long-term
bank loans and other debt in the aggregate of US$110.5 million, partially offset by proceeds from short-term and long-term bank loans and other debt
in the aggregate of US$56.8 million.

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Bank Borrowings and Other Debt
Bank borrowings and other debt are an important source of funding for our property developments. Our borrowings as of December 31, 2023
and 2024, respectively, were as follows:
    
2023
    
2024
US$
US$
Short-term bank loans and other debt
 63,295,071
 62,364,365
Long-term bank loans
 152,088,997
 180,976,059
Other long-term debt
 476,033,481
 478,767,048
Current portion of long-term bank loans and other debt
 1,265,784,530
 1,082,607,536
Total
 1,957,202,079
 1,804,715,008
As of December 31, 2023 and 2024, the weighted average interest rate on our short-term bank loans and other debt was 5.80% and 7.24% per
annum respectively. As of December 31, 2023, US$63.3 million of the short-term bank loans was denominated in RMB and is secured by real estate
properties completed, land use rights, real estate properties held for lease, and property and equipment. As of December 31, 2024, US$62.4 million of
the short-term bank loans was denominated in RMB and is secured by real estate properties completed, land use right, real estate properties held for
lease, and property and equipment.
As of December 31, 2023 and 2024, the weighted average interest rate on our long-term bank loans, including their current portion, was
6.06% and 6.33% per annum respectively. As of December 31, 2023, US$563.1 million of the long-term bank loans was denominated in RMB and
secured by associated land use rights, real estate under development and real estate properties held for lease, and property and equipment. As of
December 31, 2024, US$503.4 million of the long-term bank loans was denominated in RMB and secured by associated land use rights, real estate
under development and real estate properties held for lease, and property and equipment.
Since June 2003, commercial banks have been prohibited under the PBOC guidelines from advancing loans to fund the payment of land use
rights. In addition, the PRC government also encourages property developers to use internal funds to develop their property projects. Under guidelines
jointly issued by the MOHURD and other PRC government authorities in August 2004, commercial banks in China are not permitted to lend funds to
property developers with an internal capital ratio, calculated by dividing the internal funds available by the total capital required for the project, of less
than 35%.
On August 20, 2020, the PBOC and MOHURD proposed a pilot plan at a conference which sets three goals for PRC real estate development
companies: their debt asset ratios should not exceed 70% after deducting advance proceeds from projects sold; their net debt to equity ratios should
not exceed 100%; and their ratios of cash balances and cash equivalent to short-term borrowings should be at least 1. Based on the number of these
targets that PRC real estate development companies manage to satisfy, the upper limit of annual growth rate of interest-bearing liabilities that a
particular real estate development company is permitted to hold varies from 5% to 15%. The pilot plan was supposed to become a formal policy in
2021. However, to date, PRC governmental authorities have not issued any relevant regulations or policies.
On December 31, 2020, the PBOC and CBIRC issued the 2021 Notice, which took effect on January 1, 2021. The 2021 Notice divides all
Chinese-funded banks into five levels and sets different limitations on banks in different levels to provide real estate loans. For example, the amount
of outstanding real estate loans of a bank in Level 1 must not account for more than 40% of its total outstanding RMB loans, while the amount of
outstanding real estate loans of a bank in Level 5 must not account for more than 12.5% of its total outstanding loans denominated in RMB.
These internal capital ratio requirements, together with the above policies, have limited the amount of bank financing that property
developers, including us, are able to obtain.

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126
Debt Securities
In addition to bank loans, the Group from time to time raises funds through the issuance of debt securities. On June 29, 2020, the Company
issued a collective aggregate principal amount of RMB514.5 million (US$75 million) of June 2022 Senior Secured Notes. The June 2022 Notes bear
interest at 12.0% per annum, payable semi-annually. Interest will be payable on December 29 and June 29 of each year, commencing December 29,
2020. The June 2022 Notes have a two-year term maturing on June 29, 2022. On September 17, 2020, the Company issued a collective aggregate
principal amount of US$300 million of September 2023 Senior Secured Notes. The September 2023 Notes bear interest at 14.5% per annum, payable
semi-annually. Interest will be payable on March 17 and September 17 of each year, commencing March 17, 2021. The September 2023 Notes have a
three-year term maturing on September 17, 2023. On January 25, 2021, the Company issued a collective aggregate principal amount of US$270
million of January 2024 Senior Secured Notes. The January 2024 Notes bear interest at 14.0% per annum, payable semi-annually. Interest will be
payable on July 25 and January 25 of each year, commencing July 25, 2021. The January 2024 Notes have a three-year term maturing on January 25,
2024.
On October 15, 2021, eligible holders of the October 2021 Notes in the aggregate principal amount of US$207,680,000 exchanged their notes
and the Company delivered new notes in the aggregate principal amount of US$205,401,000 and US$19,101,080 in cash consideration in full
satisfaction of the exchange consideration to those eligible holders. The October 2023 Senior Secured Notes bear interest at 14.2% per annum, payable
semi-annually. Interest will be payable on April 15 and October 15 of each year, commencing April 15, 2022. The new notes have a two-year term
maturing on October 15, 2023.
The June 2022 Senior Secured Notes, the September 2023 Senior Secure Notes, the January 2024 Senior Secured Notes and the October
2023 Senior Secured Notes were issued without registration under the Securities Act in offerings conducted outside the United States pursuant to
Regulation S under the Securities Act.
Senior Secured Notes
Our obligations under the June 2022 Senior Secured Notes, the September 2023 Senior Secure Notes, the January 2024 Senior Secured Notes
and the October 2023 Senior Secured Notes, the indenture governing the June 2022 Senior Secured Notes (the “June 2022 Indenture”), the indenture
governing the September 2023 Senior Secured Notes (the “September 2023 Indenture”), the indenture governing the January 2024 Senior Secured
Notes (the “January 2024 Indenture”) and the indenture governing the October 20230 Senior Secured Notes (the “October 2023 Indenture”) have been
guaranteed initially by certain of our wholly-owned subsidiaries, Xinyuan Real Estate, Ltd., Xinyuan International Property Investment Co., Ltd.,
Victory Good Development Limited, South Glory International Limited, Elite Quest Holdings Limited and Xinyuan International (HK) Property
Investment Co., Limited (the “Subsidiary Guarantors”) and will be guaranteed by such other of our future subsidiaries in accordance with the terms of
the applicable Indenture. Our obligations under the June 2022 Senior Secured Notes, the September 2023 Senior Secure Notes, the January 2024
Senior Secured Notes and the October 2023 Senior Secured Notes, the June 2022 Indenture, the September 2023, the January 2024 and the October
2023 Indenture are secured by a pledge of the capital stock of our wholly-owned subsidiaries, Xinyuan Real Estate, Ltd., Xinyuan International
Property Investment Co., Ltd., Victory Good Development Ltd., South Glory International Ltd. and Elite Quest Holdings Ltd.
The June 2022 Indenture, the September 2023 Indenture, the January 2024 Indenture and the October 2023 Indenture contain certain
covenants that, among others, restrict our ability and the ability of our restricted subsidiaries (as defined in the applicable Indenture) to incur
additional debt or to issue preferred stock, to make certain payments or investments, to pay dividends or purchase or redeem capital stock, to sell
assets (including limitations on the use of proceeds of asset sales), to grant liens on the collateral securing the June 2022 Indenture, the September
2023, the January 2024 or the October 2023 Indenture, as applicable, or other assets, to make certain other payments and to engage in transactions
with affiliates and holders of more than 10% of our common shares, subject to certain qualifications and exceptions and the satisfaction, in certain
circumstances of specified conditions, such as a Fixed Charge Coverage Ratio (as defined in the applicable Indenture) of 2.0 to 1.0, 2.0 to 1.0, 2.0 to
1.0, and 2.0 to 1.0, respectively. Certain of these limitations, including restrictions on the incurrence of certain indebtedness or issuances of preferred
stock, the making of certain payments or investments, payments of dividends, and sales of assets will be suspended if the June 2022 Senior Secured
Notes, the September 2023 Senior Secure Notes, the January 2024 Senior Secured Notes and the October 2023 Senior Secured Notes as applicable,
obtain and retain an investment grade rating.

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At any time prior to the maturity date of a series of senior secured notes, we may, at our option, redeem the outstanding notes of the series in
whole, but not in part, at a redemption price equal to 100.0% of the principal amount of that series of senior secured notes plus the Applicable
Premium as of, and accrued and unpaid interest, if any, to (but not including) the redemption date. “Applicable Premium” means with respect to a
series secured note of any series at any redemption date, the greater of (i) 1.00% of the principal amount of such the Senior Secured Note, and (ii) the
excess of (A) the present value at such redemption date of the principal amount of such senior secured note plus all required remaining scheduled
interest payments due on such senior secured note through its maturity date (but excluding accrued and unpaid interest to the redemption date),
computed using a discount rate equal to the Adjusted Treasury Rate (as defined in the applicable Indenture) plus 100 basis points, over (B) the
principal amount of such senior secured note on such redemption date.
At any time prior to maturity date of a series of senior secured notes, we may redeem up to 35% of the aggregate principal amount of that
series of senior secured notes with the net cash proceeds of one or more sales of our common shares in certain equity offerings, within a specified
period after the equity offering, at a redemption price of (a) in the case of the June 2022 Senior Secured Notes, 112% of the principal amount, (b) in
the case of the September 2023 Senior Secured Notes, 114.5% of the principal amount, (c) in the case of the January 2024 Senior Secured Notes,
114% of the principal amount, (d) in the case of the October 2023 Senior Secured Notes, 114.5% of the principal amount plus, in each case, accrued
and unpaid interest, if any, to (but not including) the redemption date. At least 65% of the aggregate principal amount of a series being so redeemed
must remain outstanding after such redemption.
Following any Change of Control Triggering Event applicable to a series of senior secured notes, we must make an offer to purchase all
outstanding senior secured notes of that series at a purchase price equal to 101.0% of the principal amount thereof plus accrued and unpaid interest, if
any, to (but not including) the purchase payment date. A “Change of Control Triggering Event” means the occurrence of both a Change of Control (as
defined in the applicable Indenture) and a specified decline in the ratings of the senior secured notes within six months after the date of public notice
of the occurrence of a Change of Control or the intention by us or any other person to effect a Change of Control.
June 2022 Senior Secured Notes
On June 29, 2020, the Company issued a collective aggregate principal amount of RMB514,500,000 (US$75 million) of the June 2022
Senior Secured Notes. The June 2022 Senior Secured Notes bear interest at 12.0% per annum, payable semi-annually. Interest will be payable on June
29 and December 29 of each year, commencing December 29, 2020. The June 2022 Notes have a two-year term maturing on June 29, 2022. As of
December 31, 2023, we had a total principal amount of US$72.6 million of June 2022 Senior Secured Notes outstanding. We did not make payments
in full for the June 2022 Senior Secured Notes at maturity on June 29, 2022. The total amount due and payable, including principal and interests, was
RMB545.3 million. We have been in negotiation with the sole beneficial holder, who is a third party, with a view to resolving the matter soon.
September 2023 Senior Secured Notes
On September 17, 2020, the Company issued a collective aggregate principal amount of US$300,000,000 of the September 2023 Senior
Secured Notes. The September 2023 Senior Secured Notes bear interest at 14.5% per annum, payable semi-annually. Interest will be payable on
March 17 and September 17 of each year, commencing March 17, 2020. The September 2023 Senior Secured Notes have a three-year term maturing
on September 17, 2023. As of December 31, 2023, we had a total principal amount of US$150.0 million of September 2023 Senior Secured Notes
outstanding. We had not made interest payments for the September 2023 Senior Secured Notes since September 17, 2022. We have been negotiating
with the major holder of the September 2023 Senior Secured Notes to resolve the matter. On August 18, 2023, eligible holders of the September 2023
Senior Secured Notes in the aggregate principal amount of US$104.1 million exchanged their notes for the September 2027 Senior Secured Notes as
described below.

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128
January 2024 Senior Secured Notes
On January 25, 2021, the Company issued a collective aggregate principal amount of US$270,000,000 of the January 2024 Senior Secured
Notes. The January 2024 Senior Secured Notes bear interest at 14.0% per annum, payable semi-annually. Interest will be payable on July 25 and
January 25 of each year, commencing July 25, 2021. The January 2024 Senior Secured Notes have a three-year term maturing on January 25, 2024.
As of December 31, 2023, we had a total principal amount of US$153.2 million of January 2024 Senior Secured Notes outstanding. We had not made
interest payments for the January 2024 Senior Secured Notes since July 25, 2022. We have been negotiating with the major holder of the January 2024
Senior Secured Notes to resolve the matter. On August 18, 2023, eligible holders of the January 2024 Senior Secured Notes in the aggregate principal
amount of US$86.7 million exchanged their notes for the September 2027 Senior Secured Notes as described below.
October 2023 Senior Secured Notes
On October 15, 2021, eligible holders of the October 2021 Senior Secured Notes in the aggregate principal amount of US$207,680,000
exchanged their notes and we delivered the October 2023 Senior Secured Notes in the aggregate principal amount of US$205,401,000 and
US$19,101,080 in cash consideration in full satisfaction of the exchange consideration to those eligible holders. The October 2023 Senior Secured
Notes bear interest at 14.2% per annum, payable semi-annually. Interest will be payable on April 15 and October 15 of each year, commencing April
15, 2021. The October 2023 Senior Secured Notes have a two-year term maturing on October 15, 2023. As of December 31, 2023, we had a total
principal amount of US$17.1 million of October 2023 Senior Secured Notes outstanding. We had not made interest payments for the October 2023
Senior Secured Notes since October 15, 2022. We have been negotiating with the major holder of the October 2023 Senior Secured Notes to resolve
the matter. On August 18, 2023, eligible holders of the October 2023 Senior Secured Notes in the aggregate principal amount of US$116.5 million
exchanged their notes for the September 2027 Senior Secured Notes as described below.
September 2027 Senior Secured Notes
On August 18, 2023, eligible holders of the September 2023 Senior Secured Notes, the October 2023 Senior Secured Notes and the January
2024 Senior Secured Notes in the aggregate principal amount of US$307,363,500 exchanged their notes and we delivered the September 2027 Senior
Secured Notes in the aggregate principal amount of US$331,303,941 due on September 30, 2027 and US$1,536,863 in cash consideration in full
satisfaction of the exchange consideration to those eligible holders. The September 2027 Senior Secured Notes bear interest at 3% per annum payable
semi-annually in the form of cash and/or payment-in-kind subject to our election. Interest will be payable on March 30 and September 30 of each year,
commencing September 30, 2023. The September 2027 Senior Secured Notes have a five-year term maturing on September 30, 2027. As of
December 31, 2023, we had a total principal amount of US$337.93 million of the September 2027 Senior Secured Notes outstanding. On April 29,
2024, the Company received valid consents in respect of 88.55% of the aggregate principal amount of the September 2027 Senior Secured Note,
which constitutes the requisite consents to (i) amend certain provisions of the Indenture to remove the minimum cash interest requirement for the
interest payment period from and including September 30, 2023 up to and excluding April 1, 2024 (the “Proposed Amendments”), and (ii) irrevocably
and unconditionally waive all defaults under the Indenture which may arise from the failure of the Company to make payment of cash interest on the
Notes on March 31, 2024. The Company, certain subsidiary guarantors, and Citicorp International Limited, as trustee, entered into a Supplemental
Indenture to the Indenture, to implement the Proposed Amendment. Accordingly, the Company has accrued the payment-in-kind interest on the
principal amount of the outstanding Notes and is no longer obligated to pay interest in cash for the aforementioned period.
On October 29, 2024, the Company announced that it had received the requisite consents in connection with its previously commenced
consent solicitation (the “Consent Solicitation”) relating to that certain indenture dated August 18, 2023 and as amended by the supplemental
indenture dated as of April 29, 2024 (the “Indenture”) relating to the Company’s 3.0% senior notes due 2027 (the “Notes”). The Consent Solicitation
was made pursuant to a consent solicitation statement dated October 21, 2024 (the “Consent Solicitation Statement”), which is available at:
https://www.dfkingltd.com/xinyuan/.

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The Company received valid consents in respect of 88.96% of the aggregate principal amount of the outstanding Notes, which constitutes the
requisite consents to (i) amend certain provisions of the Indenture to (a) remove the minimum cash interest requirement for the interest payment
period from and including March 30, 2024 up to and excluding September 30, 2024, (b) lower the minimum cash interest requirement from 2.0% to
0.2% per annum for the period from and including September 30, 2024 up to and excluding September 30, 2025 and from 3% to 0.2% per annum
thereafter, and (c) delete certain mandatory redemption provisions that require the Company to redeem certain aggregate outstanding principal amount
of the Notes on September 30, 2025 and on September 30, 2026, respectively (the “Proposed Amendments”), and (ii) irrevocably and unconditionally
waive all defaults under the Indenture which have arisen from the failure of the Company to make payment of cash interest on the Notes on September
30, 2024 (the “Waiver of Existing Defaults”).
On October 29, 2024, the Company, certain subsidiary guarantors, and Citicorp International Limited, as trustee, entered into the Second
Supplemental Indenture to the Indenture, to implement the Proposed Amendment.
Onshore Corporate Bonds
On April 1, 2019, Xinyuan (China) Real Estate, Ltd. issued a new tranche of the onshore corporate bonds with an aggregate principal amount
of RMB980 million (US$146 million) due on April 1, 2024 (the “2019 First Tranche Bonds”) at a coupon rate of 8.4% per annum payable annually.
Interest is payable on April 1 of each year, commencing April 1, 2020. As of December 31, 2024, the total principal amount of the 2019 First Tranche
Bonds was US$nil.
On November 12, 2020, Xinyuan (China) Real Estate, Ltd. issued a new tranche of the onshore corporate bonds with an aggregate principal
amount of RMB900 million (US$130 million) due on November 13, 2025 (the “2020 Tranche Bonds”) at a coupon rate of 8.35% per annum payable
annually. Interest is payable on November 13 of each year, commencing November 13, 2020. As of December 31, 2024, the total principal amount of
the 2020 Tranche Bonds was US$24.5 million.
On January 7, 2021, Xinyuan (China) Real Estate, Ltd. issued a new tranche of the onshore corporate bonds with an aggregate principal
amount of RMB500 million (US$78 million) due on January 7, 2026 (the “2021 Tranche Bonds”) at a coupon rate of 8.35% per annum payable
annually. Interest is payable on January 7 of each year, commencing January 7, 2021. As of December 31, 2024, the total principal amount of the 2021
Tranche Bonds was US$13.6 million.
Capital Expenditures
Our capital expenditures were US$0.4 million and US$0.6 million in 2023 and 2024, respectively. Our capital expenditures in 2023 and 2024
were mainly used for building improvements, and purchase of vehicles, fixtures and furniture and computer network equipment. The source of our
capital expenditures is primarily the cash flow generated from operating activities.
As of December 31, 2024, we had outstanding commitments with respect to non-cancellable construction contracts for real estate
development and land use rights purchases in the amount of US$1,107.8 million.
Material Cash Requirements
Our material cash requirements, as of December 31, 2024 and any subsequent period, primarily included contractual construction costs, and
repayment of principle and interests for bank loans and debts. We intend to fund our existing and future material cash requirements with cash flow
generated from operating activities, issuance of debt securities and obtaining of bank borrowings. We will continue to make cash commitments,
including capital expenditures, to support the growth of our business.
Our capital expenditures primarily consist of building improvements, purchase of construction equipment, vehicles, fixtures and furniture and
computer network equipment. Our capital expenditures were RMB35.2 million (US$5.2 million), RMB2.6 million (US$0.4 million) and RMB4.2
million (US$0.6 million) in the years ended December 31, 2022, 2023 and 2024, respectively. We will continue to make capital expenditures to meet
the expected growth of the business. Our capital expenditures may decrease in the future as we do not expect significant demands in purchasing
incremental equipment. We currently plan to fund these expenditures with the cash flow generated from operating and financing activities.

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As of December 31, 2024, our contractual obligations amounted to US$3,373.1 million, primarily arising from contracted construction costs
or other capital commitments for future property developments and debt obligations. The following table sets forth our contractual obligations for the
periods indicated:
    
Payments due by period
    
    
    
    
    
More
Less than 
than 5
Total
1 year
1-3 years
3-5 years
 years
(US$ in thousands)
Long-term debt obligations
   
   
   
   
  
Long-term bank loans
 180,976
—
 41,734
 41,734
 97,508
Interest on long-term bank loans (1)
 66,112
—
 10,217
 11,725
 44,170
Other long-term debt
 478,767
—
 380,639
 98,128
—
Interest on other long-term debt (2)
 44,138
—
 16,617
 5,916
 21,605
Current portion of long-term bank loan and other debt
 1,082,608
 1,082,608
—
—
—
Interest on current portion of long-term bank loan and other debt (1)
 347,410
 347,410
—
—
—
Short-term debt obligations
Short-term bank loans
 62,364
 62,364
—
—
—
Interest on short-term debt obligations (3)
—
—
—
—
—
Operating lease obligations
 2,915
 2,078
 771
 66
—
Non-cancellable construction contract obligations
 1,107,764
 981,328
 126,288
 148
 —
Total
 3,373,054
 2,475,788
 576,266
 157,717
 163,283
(1) Our long-term bank loans, including current portion, bear variable interest at rates adjustable based on the PBOC benchmark rate. Interest on
long-term loans, including current portion, was calculated based on the current interest rate of each loan, ranging from 4.40% to 9.00% per
annum, using the PBOC benchmark rate of 4.75% as of December 31, 2024.
(2) Interest on other long-term debt is calculated based on the interest rates for relevant loans, ranging from 2.70% to 14.50% per annum.
(3) Interest on short-term loans is calculated based on the interest rates for relevant loans, ranging from 6.50% to 19.20% per annum.
We have projected cash flows for each of our existing projects, considering a number of factors, including the relative stage of each of our
projects under construction and our projects under planning and the demand for and the average selling prices of our projects. For any given project,
we use cash early in the project life and generate cash later in the project life. Costs for land acquisition, site preparation, foundation, and early above-
ground framing are all incurred before we obtain licenses from local governing authorities to enter into pre-sale activity. The construction of many of
our projects is carried-out in phases, the timing of which is primarily determined by us based on the pace of the market demand for units in the project.
Accordingly, after receiving the pre-sale permits relating to a project, we are in a better position to manage some of our construction activities to
coincide with the timing of expected pre-sales.
We believe our cash on hand, projected cash flow from operations, available construction loan borrowing capability, and potential access to
capital markets, should be sufficient to meet our expected cash requirements, including our non-cancellable construction contract obligations and
capital lease obligations that are due on various dates through May 1, 2024, and for Xinyuan China to satisfy its obligations under the 2019 First
Tranche Bonds, 2020 Tranche Bonds and 2021 Tranche Bonds. The repayment of the outstanding principal amount of our June 2022 Senior Secured
Notes due in June 2022 was delayed and is being negotiated with the sole beneficiary holder.
Our ability to secure sufficient financing for land use rights acquisition and property development depends on internal cash flows in addition
to a number of other factors that are not completely under our control, including lenders’ perceptions of our creditworthiness, market conditions in the
capital markets, investors’ perception of our securities, the PRC economy and the PRC government regulations that affect the availability and cost of
financing for real estate companies or property purchasers and the U.S. economy and recovery of the U.S. real estate markets.

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There can be no assurance that our internally generated cash flow and external financing will be sufficient for us to meet our contractual and
financing obligations in a timely manner. We may require additional cash due to changing business conditions or other future developments, including
any decline in cash flow from operations or any investments or acquisitions we may decide to pursue. In the event that proceeds from the sale of units
for a project are insufficient to meet our contractual and financing obligations, we would need to raise the required funds through new borrowings,
refinancing of existing borrowings, public or private sales of equity securities, or a combination of one or more of the above. We cannot assure
shareholders that we will be able to obtain adequate funding in a timely manner and on reasonable terms, or at all.
Moreover, as is customary in the property industry in China, we provide guarantees to commercial banks in respect of the mortgage loans
they extend to our customers prior to the issuance of their property ownership certificates. These guarantees remain outstanding until the completion
of the registration of the mortgage with the relevant mortgage registration authorities. In most cases, guarantees for mortgages on residential properties
are discharged when we submit the individual property ownership certificates and certificates of other interests in the property to the mortgagee bank.
In our experience, the application for and issuance of the individual property ownership certificates typically takes six to twelve months, so the
guarantee periods typically last for up to six to twelve months after we deliver the related property.
As of December 31, 2023 and 2024, we guaranteed mortgage loans in the aggregate outstanding amount of US$1,926.4 million and
US$1,708.9 million, respectively.
We generally pre-sell properties prior to the completion of their construction. Sales contracts are executed during the pre-sale period and
mortgages are generally executed within 30 days after the buyer signs the sales contract.
The pre-sale period begins upon receipt of a government permit which is issued soon after groundbreaking on a given phase of the project.
The period from groundbreaking to delivery consists of building construction, landscaping, municipal government inspections and issuance of a
certificate of occupancy. This “delivery period” will generally range from one to two years. The buyers only request the government to record buyer
ownership in their official records after the delivery period is completed. After the record request is being made, the government will typically provide
certificates of ownership within six to twelve months. Therefore, the total elapsed time between our receipt of mortgage proceeds and the buyer’s
receipt of an ownership certificate can range from one and a half years to three years.
Due to the time lag above, our mortgage guarantees may exceed the real estate balances at any given point in time.
We paid US$2.3 million and US$0.6 million to satisfy guarantee obligations related to customer defaults in 2023 and 2024, respectively. The
fair value of the guarantees is not significant and we consider that in case of default in payments, the net realizable value of the related properties can
cover the repayment of the outstanding mortgage principal together with the accrued interest and penalty and therefore, no provision has been made
for the guarantees in our consolidated financial statements.
Except for the contingent liabilities set forth above, we had not entered into any financial guarantees or other commitments to guarantee the
payment obligations of any third parties or long-term obligations as of December 31, 2024. We have not entered into any transactions with
unconsolidated entities, derivative contracts that are indexed to our shares and classified as shareholders’ equity, or that are not reflected in our
consolidated financial statements. Other than as described above, there are no off-balance sheet arrangements that have or are reasonably likely to
have effect on our financial position.
We have no obligation arising out of a variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk
support to us, or that engages in leasing, hedging, or research and development arrangements with us.
As of December 31, 2024, the Group provided financial guarantees for bank loans of four of its equity method investees. The Group could
incur losses in the event of defaults under or foreclosure of these loans and its maximum exposure to credit losses is approximately US$199 million.
The fair value of the guarantees is not significant and the Group considers that in case of default in payments, the net realizable value of the related
properties can cover the repayment of the outstanding bank loans together with the accrued interest and penalty and therefore, no provision has been
made for the guarantees in the consolidated financial statements.

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C.
Research and Development, Patent and Licenses, etc.
Not applicable.
D.
Trend Information
Other than as disclosed elsewhere in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for
the period from January 1, 2024 to December 31, 2024 that are reasonably likely to have a material adverse effect on our net revenue, income,
profitability, liquidity or capital resources, or that caused the disclosed financial information to be not necessarily indicative of future operating results
or financial conditions.
E.
Critical Accounting Estimates
We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires our management to make estimates that
affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported
amounts of revenue and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual
results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other
assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information.
We evaluate these estimates on an ongoing basis.
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were
highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to
period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition
or results of operations. There are other items within our financial statements that require estimation but are not deemed critical, as defined above.
Changes in estimates used in these and other items could have a material impact on our financial statements. See Note 2 to our consolidated financial
statements included elsewhere in this annual report.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect
the amounts reported in the consolidated financial statements and accompanying notes, and disclosure of contingent liabilities at the date of the
consolidated financial statements. Estimates are used for, but not limited to, the selection of the useful lives of property and equipment and finance
lease, allowance for estimating the allowance for credit losses associated with accounts receivables, other receivables, contract assets, short-term
investments and advances to suppliers, fair values of the purchase price allocation with respect to business combinations, progress towards the
completion of the performance obligation, accounting for the share-based compensation, accounting for deferred income taxes, impairment of
goodwill, impairment of real estate properties under development, real estate properties held for lease and long-term investments, provision necessary
for contingent liabilities and estimating the incremental borrowing rate for operating lease liabilities. Our management analyzed the forecasted cash
flows for the 12 months from April 29, 2025, which indicates that the Group will have sufficient liquidity from cash flows generated by operations
and existing credit facilities and therefore, there will be sufficient financial resources to settle borrowings and payables that will be due through end of
April 2026. Our management believes that the estimates utilized in preparing its consolidated financial statements are reasonable and prudent. Actual
results could differ from these estimates.

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Fair value of financial instruments
Financial instruments include cash and cash equivalents, restricted cash, short-term investments, accounts receivable, other deposits and
prepayments, due from employees, due from related parties, other receivables, long-term investments, accounts payable, customer deposits, other
payables and accrued liabilities, short-term bank borrowings, long-term borrowings and due to related parties. The carrying amounts of the
aforementioned financial instruments, except for short-term investments for which the measurement alternative was elected, long-term investments
and long-term borrowings, approximate their fair value due to the short-term maturities of these instruments. The carrying amounts of the long-term
borrowings approximate their fair values because the stated interest rates approximate rates currently offered by financial institutions for similar debt
instruments of comparable credit risk and maturities. Long-term investments have no quoted market prices, and it is not practicable to estimate their
fair value without incurring excessive costs. We review the investments for impairment whenever events or changes in circumstances indicate that the
carrying amount may no longer be recoverable.
For long-term investments other than those accounted for under the equity method or those that result in consolidation of the investee, we
measure equity investments at fair value and recognizes any changes in fair value in net income. However, for equity investments that do not have
readily determinable fair values and do not qualify for the existing practical expedient in ASC 820, Fair Value Measurement (“ASC 820”), to estimate
fair value using the net asset value per share (or its equivalent) of the investment, we chose to measure those investments at cost, less any impairment,
plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. At
each reporting date, we are required to make a qualitative assessment as to whether equity investments without a readily determinable fair value for
which the measurement alternative is elected is impaired. In the event that a qualitative assessment indicates that the investment is impaired, and the
fair value of the investment is less than the carrying value, the carrying value is written down to its fair value. A variety of factors are considered when
determining if a decline in fair value is below carrying value, including, among others, the financial condition and prospects of the investee.
Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or
permitted to be recorded at fair value, we consider the principal or most advantageous market in which we would transact, and we consider
assumptions that market participants would use when pricing the asset or liability.
Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use
of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest
level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair
value:
Level 1 Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets;
Level 2 Includes other inputs that are directly or indirectly observable in the marketplace; and
Level 3 Unobservable inputs which are supported by little or no market activity.
ASC 820 describes three main approaches for measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and
(3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or
comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The
measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount
that would currently be required to replace an asset.
In accordance with ASC 820, investment in marketable equity securities and investment in real estate investment trusts (“REITs”) are
classified as Level 1 as we measure the fair value using quoted trading prices that are published on a regular basis, and investment in equity securities
in unlisted companies is categorized as Level 3 measured at fair value using alternative method, less any impairment, plus or minus changes resulting
from observable price in orderly transactions.

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Revenue recognition
Revenue is recognized when control of the goods or services is transferred to the customer at an amount that reflects the consideration to
which we expect to be entitled in exchange for those goods or services. We also elect to exclude sales taxes and other similar taxes from the
measurement of the transaction price. Therefore, revenue is recognized net of business tax and VAT.
Real estate sales
Revenue arising from real estate sales is recognized when or as the control of the asset is transferred to the customer. Depending on the terms
of the contract and the laws that apply to the contract, control of the asset may transfer over time or at a point in time.
For real estate sales contracts for which we have an enforceable right to payment for performance completed to date, revenue is recognized
over time by measuring the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a point in time
when the customer obtains the physical possession, the legal title, or the significant risks and rewards of ownership of the assets and we have a present
right to a payment and the collection of the consideration is probable. The progress towards complete satisfaction of the performance obligation is
measured based on our efforts or inputs to the satisfaction of the performance obligation, by reference to the contract costs incurred up to the end of
reporting period as a percentage of total estimated costs for each contract.
Generally, we receive short-term advances from customers for real estate sales. Using the practical expedient, we do not adjust the promised
amount of consideration for the effects of a significant financing component if we expect, at contract inception, that the period between the transfer of
the promised good or service to the customer and when the customer pays for that good or service will be one year or less. We also receive long-term
advances from customers for real estate sales. The transaction price for such contracts is adjusted for the effects of a financing component, if long-
term advances from customers are assessed as significant at the individual contract level.
Real estate management services income
Real estate management services income is recognized in the accounting period in which the services are rendered. We bill a fixed amount
periodically for services provided and recognizes as revenue the amount to which we have a right to invoice that corresponds directly with the value of
performance completed.
Real estate lease income
Real estate lease income is generally recognized on a straight-line basis over the terms of the tenancy agreements. For real estate leases, these
contracts are treated as leases for accounting purposes, rather than contracts with customers subject to ASC 606, Revenue from Contracts with
Customers.
Other revenue
Other revenue includes services ancillary to our real estate projects, including construction service revenue and software consulting service
income. Construction service revenue and software consulting service income are recognized when services are provided as the customer
simultaneously benefits from the services as they are performed.
Contract assets
We pay sales commission to our real estate sales agencies for each real estate sales contract. We have elected to apply the optional practical
expedient for costs to obtain a contract which allows us to immediately expense sales commissions (included under selling and distribution expenses)
when the amortization period of the asset that we otherwise would have used is one year or less. For incremental costs of obtaining real estate sales
contracts that extend beyond a one-year period, these incremental costs of obtaining real estate sales contracts are recognized as assets if the real estate
sales are collectible and amortized as we transfer the control of the assets to customers. We recognized US$4.1 million and US$3.2 million of such
costs in selling and distribution expenses during 2023 and 2024, respectively. As of December 31, 2023 and 2024, there was no impairment losses on
contract assets.

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Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which we have received consideration (or an amount of
consideration is due) from the customer. If a customer pays consideration before we transfer goods or services to the customer, a contract liability is
recognized when the payment is made, or the payment is due (whichever is earlier). Our contract liabilities are comprised of customer deposits, which
are recognized as revenue when we perform under the contract.
Accounts receivable and allowance for credit losses
We adopted ASU No. 2016-13, Financial Instruments—Credit Losses. Subsequently, the Financial Accounting Standards Board issued ASU
2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief and ASU 2019-11 Codification Improvements to Topic 326,
Financial Instruments- Credit Losses from January 1, 2020 using the modified retrospective approach and did not restate the comparable periods.
Accounts receivable represents our right to an amount of consideration that is unconditional (i.e. only the passage of time is required before
payment of the consideration is due). Our accounts receivable consists of balances due from customers for the sale of residential units in PRC and
United States and real estate management service contracts. These balances are unsecured, bear no interest and are due within a year from the date of
the sale.
The allowance for credit losses reflects our current estimate of credit losses expected to be incurred over the life of the receivables. We
consider various factors in establishing, monitoring, and adjusting its allowance for credit losses including the aging of receivables and aging trends,
customer creditworthiness and specific exposures related to particular customers. We also monitor other risk factors and forward-looking information,
such as country specific risks and economic factors that may affect a customer’s ability to pay in establishing and adjusting its allowance for credit
losses. Accounts receivables are written off after all collection efforts have ceased. As of December 31, 2024, there was US$9.6 million (December
31, 2023: US$6.8 million) allowance for credit loss.
ITEM 6 DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A.
Directors and Senior Management
The following table sets forth information regarding our executive officers and directors as of the date of this report:
Name
    
Age
    
Position 
Yong Zhang
 
61
 
Executive Director, Chairman of the Board, Chief Executive Officer
Bo Zhang
45
Chief Financial Officer
Haifei He
 
59
 
Executive Director and President of Xinyuan (China)
Fei Xie
 
50
 
Director and Vice Chairman of the Board
Yuyan Yang
 
61
 
Director
Yong Cui
 
49
 
Director
Yifan (Frank) Li
56
Director*
Ji Luo
 
78
 
Director*
*
Independent director per SEC and NYSE listing standards.
Unless otherwise indicated, the business address of each director and executive officer is 27/F, China Central Place, Tower II, 79 Jianguo
Road, Chaoyang District, Beijing, 100025, the People’s Republic of China.
A description of the business experience and present position of each director and executive officer is provided below:

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Yong Zhang founded our company in 1997 and has been the Chairman of the board of directors since 2007 and the Chief Executive Officer
since June 2019, previously holding the position from 1997 to 2013. Mr. Zhang has more than 20 years of working experience in the real estate
industry. Prior to founding our company, he worked at several construction and property development companies, including Zhengzhou City
Construction and Development Inc. and China Antai Real Estate Development Inc. Mr. Zhang is also vice chairman of Henan Real Estate Association,
a member of China Democratic National Construction Association and a deputy to the 11th and 12th People’s Congress of Henan Province in China.
He serves as a director of Beijing Ruizhuo Xihe Technology Development Co., Ltd., Beijing Ruizhuo Xitou Technology Development Co., Ltd.,
Beijing Ruizhuo Xichuang Technology Development Co., Ltd, Beijing XinyuanXin Technology Development Co., Ltd., Beijing Ruizhuo Xirong
Technology Development Co., Ltd., Beijing Ruizhuo Xihui Technology Development Co., Ltd., Beijing Ruizhuo Xijia Technology Development Co.,
Ltd., Huayi Xincheng (Beijing) Intelligent City Construction Co., Ltd., Beijing Xinyuan Future Investment Management Co., Ltd., Ningbo Zhongxin
Xitou Investment Management Co., Ltd., Beijing Aijieli Technology Development Co., Ltd., Xinyuan Holding Ltd. and Madison Developments
Limited. Mr. Zhang received a Ph.D. in finance from Renmin University of China in 2014, an executive master’s degree in business administration
from Tsinghua University in 2005 and a bachelor’s degree in architecture from Henan Zhengzhou Institute of Technology in 1985.
Bo Zhang has been an CFO since 2024. Mr. Zhang is in charge of the Comprehensive Operations of the Group’s Finance and Capital
Markets. In December 2023, he was appointed as the CFO of Xinyuan (China). Mr. Zhang brought over two decades of senior leadership experiences
to our company. Prior to joining our company, Mr. Zhang served as the Vice President at Tahoe Group Co.,Ltd. from March 2023 to December 2023.
Prior to this, Mr. Zhang served as vice president, CFO, Member of the Investment Decision Committee and Member of the Financing Decision
Committee at Ganglong China Property Group Limited from January 2021 to January 2022. Mr. Zhang served as CFO, Vice President, Member of the
Investment Decision Committee, and Member of the Financing Decision Committee at Dafa Properties Group Limited from January 2018 to January
2021. Before that, Mr. Zhang served as General Manager of the Group Finance Center, Vice President of the Financial Investment Group
(Preparation), and Member of both the Investment Decision Committee and Financing Decision Committee at Shanghai Zhongliang Real Estate
Group Co., Ltd from June 2015 to January 2018. Mr. Zhang served as Senior Manager of the Financial Capital Department, Deputy Financial Director
(Assistant General Manager), Member of the Bidding Team, and Regional Company Cost Controller at China Overseas Property from July 2002 to
June 2015. He earned a Master’s degree in Executive Business Administration from Yunnan University in December 2020 and received a Bachelor’s
degree in Accounting from Northeast Forestry University in June 2002.
Haifei He has been an executive director of our board of directors since 2020. Mr. He is in charge of the Company’s overall operation and
management. In October 2023, he was appointed as the Chairman of the board of directors of Xinyuan (China). From December 2020 to October
2023, Mr. He served as the president of Xinyuan (China). Mr. He brought over three decades of senior leadership experiences to our company. Prior to
joining our company, Mr. He served as the president and the head of overseas business at Honglicheng Group from March 2018 to November 2020.
Prior to this, Mr. He served as the Assistant General Manager of China State Construction Engineering Corporation, and the Chairman and Party
Secretary of China Construction Fangcheng Investment & Development Group. Mr. He received an executive master’s degree in business
administration from Tsinghua University in 2012 and a bachelor’s degree in mechanical equipment installation from Chongqing Construction
Engineering College (now Chongqing University).
Fei Xie was appointed as a director of our company in January 2024. In April 2024, Mr. Xie was appointed as the Vice Chairman of the board
to primarily oversee the development and maintenance of external relations and public relations Mr. Xie has served as the chairman of the board of
Zhongyuan Real Estate Co., Ltd. since April 2017. Mr. Xie has more than 15 years of experience in the real estate industry.
Yuyan Yang co-founded our company in 1997 with Mr. Yong Zhang and has been a member of our board of directors since 2007. Ms. Yang
also served as a Vice President of our company. Ms. Yang has more than 10 years’ working experience in the real estate industry. Ms. Yang received a
bachelor’s degree in education management from Henan University in 1985. Ms. Yang received her executive master’s degree in business
administration at the National University of Singapore in May 2008.
Yong Cui has been a member of our board of directors since April 2007 and served as our President from September 2013 through January
2018. With a doctorate degree in finance from Renmin University of China, Mr. Cui has extensive experience in corporate finance.

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Yifan (Frank) Li was appointed as a member of our board of directors in February 2017. Mr. Li has been Chief Financial Officer of Human
Horizons Group Inc. since April 2021. He was a Vice President of Geely Holding Group from October 2014. Prior to joining Geely, he was Vice
President and international Chief Financial Officer of Sanpower Group from April 2014 to. Previously, he served as Chief Financial Officer of China
Zenix Auto International (NYSE: ZX) from December 2010 to March 2014. Prior to joining China Zenix Auto International, Mr. Li was the Chief
Financial Officer of Standard Water and Time Share Media, respectively, from December 2007. Mr. Li is also an independent director of Qudian Inc.
(NYSE: QD), 36Kr Holdings Inc. (NASDAQ: KRKR). Mr. Li received his MBA degree from the University of Chicago Booth School of Business in
2000, MSc in Accounting from University of Texas at Dallas in 1994, and Bachelor of Economics in World Economy from Fudan University in 1989.
He is a Certified Public Accountant in the United States and a Chartered Global Management Accountant. His business address is 1339 Wanfang
Road, Shanghai 201112, China.
Ji Luo was appointed as a member of our board of directors in December 2022. Mr. Luo has previously served as an independent director of
Xinyuan Property Management Service (Cayman) Ltd., a company listed on the Stock Exchange of Hong Kong (Stock Code: 1895), from September
2019 to October 2022 and Beijing Aerospace Changfeng Co., Ltd., a company listed on the Shanghai Stock Exchange (stock code: 600855), from
May 2010 to April 2016. Prior to joining the Company in December 2022, Mr. Luo was the executive manager and a partner at Beijing Hanheng Law
Firm from September 2003 and March 2007, respectively. Mr. Luo obtained a bachelor’s degree in law from the China University of Political Science
and Law in November 1999 and became a qualified lawyer of the Ministry of Justice of the PRC in April 2001.
As of the date of this annual report on Form 20-F, there were no familial relationships between any directors and members of senior
management.
As of the date of this annual report on Form 20-F, there are no arrangements or understandings with major shareholders, customers, suppliers
or others pursuant to which any person referred to above was selected as a director or member of senior management.
B.
Compensation
In 2024, the aggregate compensation given to our executive officers, including all directors was US$2.6 million (which included amounts
paid to persons who are no longer serving as executive officers), of which the aggregate compensation given to our non-executive directors was
US$1.0 million (which included amounts paid to persons who are no longer serving as directors). As discussed below under “Item 6. Directors, Senior
Management and Employees—D. Employees,” we made contributions of US$8.8 million to employee benefit plans in 2024.
2007 Long Term Incentive Plan
In November 2007, we adopted our 2007 long term incentive plan, or the “2007 Plan,” which provided for the grant of options, restricted
shares, restricted stock units, stock appreciation rights and other stock-based awards to purchase our common shares. The maximum aggregate number
of common shares which could be issued pursuant to all awards, including options, was 10 million common shares, subject to adjustment to account
for changes in the capitalization of our company. The 2007 Plan by its terms expired in 2017.
As of December 31, 2024, none of the options granted prior to the expiration of the 2007 Plan remain exercisable.

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2014 Restricted Stock Unit Plan
Our board of directors adopted the Xinyuan Real Estate Co., Ltd. 2014 Restricted Stock Unit Plan, or the “2014 RSU Plan,” effective May
23, 2014. The 2014 RSU Plan provides for discretionary grants of restricted stock units, or “RSUs,” to or for the benefit of participating employees.
The purpose of the 2014 RSU Plan is to provide to us and our shareholders the benefits of the additional incentive inherent in the ownership of our
common shares by selected employees, including selected employees of our subsidiaries who are important to the success and growth of our business,
and to help us and our subsidiaries secure the services of those persons. The maximum number of shares that may be delivered to RSU Plan
participants in connection with RSUs granted under the 2014 RSU Plan is 10,000,000, subject to adjustment if our outstanding common shares are
increased, decreased, changed into or exchanged for a different number or kind of shares or securities of our company through a reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction. All of our and our subsidiaries’ employees
and officers who are capable of contributing significantly to our successful performance, in the determination of the Compensation Committee of our
board of directors, are eligible to be participants in the 2014 RSU Plan. Each eligible employee selected to participate may be granted an award of
RSUs at such times and subject to such conditions as determined by the Compensation Committee.
Incentive Pool; Funding. Under the 2014 RSU Plan, we established a long-term incentive pool for participants for each fiscal year, a “Grant
Year,” based on our net income (or other performance goals) for the most recently completed prior fiscal year, a “Base Year.” The long-term incentive
pool is funded for any Grant Year and RSUs are granted only if 70% or more of the target net income for applicable Base Year has been achieved in
the Grant Year or if 70% or more of the total target net income for the three fiscal years ending with the Base Year has been achieved. If neither of
such targets is achieved for a Grant Year, no amount is credited to the long-term incentive pool for that Grant Year and no RSUs will be awarded for
the Grant Year. We have established a trust and we will deposit or cause to be deposited in the trust amounts of cash not exceeding the amount of the
long-term incentive pool for a Grant Year. The trustee will use the funds to acquire in the open market or in private transactions that number of ADSs
representing common shares as we direct over a period of time as we and the trustee determine.
Administration. The 2014 RSU Plan provides that it will be administered by one or more committees of our board of directors, which has
designated the Compensation Committee to administer the 2014 RSU Plan. Subject to the provisions of the 2014 RSU Plan, the Compensation
Committee has the discretionary authority and power to determine and designate those individuals selected to receive awards; determine the terms of
awards, including the time at which each award will be granted and the number of common shares subject to each award; establish the terms and
conditions upon which awards may be exercised, unlocked or paid (including any requirements that we or the participant satisfy performance criteria
or performance objectives); prescribe, amend or rescind any rules and regulations necessary or appropriate for the administration of the 2014 RSU
Plan; correct any defect, supply any deficiency and reconcile any inconsistency in the 2014 RSU Plan or in any related award or agreement; and make
other determinations and take such other action in connection with the administration of the 2014 RSU Plan as it deems necessary or advisable.
Grant, Allocation and Unlocking of RSUs. During the Grant Year, the Compensation Committee will allocate to each participant a percentage
of the long-term incentive pool, if any, for that Grant Year based on such factors as the Compensation Committee may determine from time to time in
its discretion. A participant will be allocated RSUs based on the aggregate of common shares represented by ADSs purchased by the trustee for a
Grant Year multiplied by the percentage of the long-term incentive pool allocated by the Compensation Committee to that participant for the Grant
Year. Each RSU represents a right to receive one common share to be delivered or made available at the time or times specified in the award
agreement, subject to a risk of cancellation and to the other terms and conditions set forth in the 2014 RSU Plan, the award agreement and any
additional terms and conditions set by the Compensation Committee. At our election, RSUs may be settled by delivery of common shares or ADSs
representing the number of common shares subject to the RSU.

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Common shares (either in the form of common shares or ADSs) in respect of RSUs allocated to a participant will not be eligible to be
withdrawn by a participant from the trust established pursuant to the 2014 RSU Plan for the period of time, or the lock-up period, set forth in the 2014
RSU Plan. Common shares or ADSs become “unlocked” and may be withdrawn or transferred from the trust at the election of a participant as follows:
one-third after the first anniversary of the grant date, one-third after the second anniversary of the grant date, and one-third after the third anniversary
of the Grant Date. In the event of (i) death, (ii) disability as the result of a work injury, (iii) retirement on or after age 60, in each case prior to
termination of service, or (iv) subject to exceptions specified in the 2014 RSU Plan, the termination of employment or resignation by a participant, the
locked portion of a participant’s RSUs will continue to become unlocked on each subsequent anniversary of the Grant Date after such event. In the
event of death, a participant’s awards will be paid to his personal representative or estate as provided by applicable law. The locked portion of a
participant’s RSU award may be cancelled for no value for certain events specified in the 2014 RSU Plan. The Compensation Committee, in its sole
discretion, may (but will not be required to) reallocate all or a portion of RSUs forfeited by a participant to a different participant or participants
continuing in employment on such unlocking schedule as the Compensation Committee may determine. If we are party to a “Change of Control,” as
defined in the 2014 RSU Plan, the board of directors may determine to cancel each outstanding award after payment to participants of the fair market
value of the common shares subject to the award at the time of the transaction constituting the Change of Control, provide for assumption of the
awards or substitution of comparable awards by the surviving or acquiring company in the transaction, or accelerate the unlocking, in whole or in part,
of the awards, subject to effectiveness of the transaction.
Amendments. Our board of directors may amend, suspend or terminate the 2014 RSU Plan or the Compensation Committee’s authority to
grant awards under the 2014 RSU Plan without the consent of participants; provided, however, that, without the consent of an affected participant, no
such board action may materially and adversely affect the rights of the participant under any outstanding award. The Compensation Committee may
amend any outstanding award without the consent of the affected participant; provided, however, that, without such consent, no such action may
materially and adversely affect the rights of the participant under any outstanding award. Unless earlier terminated by action of the board of directors,
the 2014 RSU Plan will remain in effect until such time as no common shares remain available for delivery under the 2014 RSU Plan and we have no
further rights or obligations with respect to outstanding awards under the 2014 RSU Plan.
On May 23, 2014, our company established a trust that is governed by a third-party trustee and deposited US$7,042,725 into the trust. The
trustee used the funds to acquire 4,234,884 common shares in the open market through the purchase of ADSs. The awards vested ratably over a three-
year service vesting period.
On April 10, 2015, under the 2014 RSU Plan, our company deposited US$3,259,998 into the trust. The trustee used the funds to acquire
2,076,964 common shares in the open market through the purchase of ADSs. 2015 RSU awards vested ratably over a three-year service vesting
period.
On April 18, 2016, under the 2014 RSU Plan, our company deposited US$4,003,999 into the trust. The trustee used the funds to acquire
1,614,220 common shares in the open market through the purchase of ADSs. 2016 RSU awards vest ratably over a three-year service vesting period.
On July 27, 2017, under the 2014 RSU Plan, our company deposited US$3,485,952 into the trust. The trustee used the funds to acquire
1,356,584 common shares from the open market as of December 31, 2018. The awards vest ratably over a three-year service vesting period.
On July 30, 2018, under the 2014 RSU Plan, our company deposited US$3,976,660 into the trust. The trustee used the funds to acquire
1,732,466 common shares in the open market through the purchase of ADSs as of December 31, 2018. The awards vest ratably over a three-year
service vesting period.
On August 30, 2019, under the 2014 RSU Plan, our company deposited US$2,912,539 into the trust. The trustee used the funds to acquire
1,438,076 common shares from the open market as of December 31, 2019. The awards vest ratably over a three-year service vesting period.

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2015 Stock Option Plan
Our board of directors adopted the Xinyuan Real Estate Co., Ltd. 2015 Stock Option Plan, or the “Option Plan,” effective June 24, 2015. The
Option Plan provides for discretionary grants of stock options, or “Options,” to purchase shares of our company stock to participating employees and
directors. The purpose of the Option Plan is to promote the interests of our company by enabling it to attract, retain and motivate key employees and
directors responsible for the success and growth of our company and its subsidiaries by providing them with appropriate incentives and rewards and
enabling them to participate in the growth of our company. All employees and directors of our company or any subsidiary who are capable of
contributing significantly to the successful performance of our company, in the determination of the board of directors, are eligible to be participants
in the Option Plan. Each eligible employee selected to participate may be granted an award of Options at such times and subject to such conditions as
determined by the board of directors.
Stock Subject to Plan. The aggregate number of shares that may be issued under the Option Plan or covered by awards must not exceed
20,000,000 common shares. Shares offered under the Option Plan may be authorized but unissued shares or treasury shares. The number of shares that
are subject to awards outstanding at any time under the Option Plan should not exceed the number of shares that then remain available for issuance
under the Option Plan. In the event that any outstanding award for any reason expires, is terminated unexercised, or is forfeited or settled or in a
manner that results in fewer shares outstanding than were initially awarded, the shares subject to the award, to the extent of such expiration,
termination, or forfeiture, again will be available for purposes of the Option Plan. If shares issued under the Option Plan are reacquired by our
company, those shares again will be available for purposes of the Option Plan. If the outstanding shares of our company are increased, decreased,
changed into or exchanged for a different number or kind of shares or securities of our company through a reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other similar transaction, the board of directors will make appropriate and
proportionate adjustments as it deems necessary or appropriate in one or more of (i) the number and class of shares subject to the Option Plan, and (ii)
the number of shares or class of shares covered by each outstanding award and (iii) the exercise price or grant price under each outstanding Option.
Administration. The Option Plan provides that it will be administered by the Compensation Committee. Subject to the provisions of the
Option Plan, the board of directors has the discretionary authority and power to determine and designate those individuals selected to receive awards;
determine the terms of awards, including the time at which each award will be granted and the number of shares subject to each award; establish the
terms and conditions upon which awards may be exercised, vested or paid (including any requirements that we or the participant satisfy performance
criteria or performance objectives); prescribe, amend or rescind any rules and regulations necessary or appropriate for the administration of the Option
Plan; grant awards in substitution for options or other equity interests held by individuals who become employees of our company or one of its
subsidiaries as a result of our company’s acquiring or merging with the individual’s employer (if necessary to conform the awards to the interests for
which they are substitutes, the board of directors may grant substitute awards under terms and conditions that vary from those the Option Plan
otherwise requires); correct any defect, supply any deficiency and reconcile any inconsistency in the Option Plan or in any related award or
agreement; and make other determinations and take such other action in connection with the administration of the Option Plan as it deems necessary
or advisable.
Grant, Exercise and Payment of Options. Each grant of an Option will be evidenced by an award agreement between the participant and our
company. Each award agreement will specify (i) the formula for determining the number of shares that are subject to the Option, (ii) the exercise
price, (iii) the term of the Option, and (iv) when all or any installment of the Option becomes exercisable. Options will be exercised by delivering a
signed written notice of exercise to our company which must be received as of a date set by our company prior to the effective date of the proposed
exercise. The exercise price upon exercise of any Option will be payable in the following manner:
●
in cash or cash equivalents when the shares are purchased;
●
subject to prior approval by the board of directors, by surrendering or attesting to the ownership of shares that are already owned by
the participant. These shares will be surrendered to our company in good form for transfer and will be valued at their Fair Market
Value (as defined in the Stock Option Plan) on the date when the Option is exercised;

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●
subject to prior approval by the board of directors, with a full recourse promissory note. These shares will be pledged as a security
for payment of the principal amount of the promissory note and interest on it. The interest rate payable under the terms of the
promissory note will not be less than the minimum rate (if any) required to avoid the imputation of additional interest under the
Code (as defined below). The board of directors will specify the term, interest rate, amortization requirements (if any) and other
provisions of the note;
●
subject to prior approval by the board of directors, if our company’s stock is publicly traded, by the delivery of an irrevocable
direction to a securities broker approved by our company to sell the shares and to deliver all or part of the sales proceeds to our
company in payment of all or part of the exercise price and any withholding taxes;
●
subject to prior approval by the board of directors, if our company’s stock is publicly traded, by the delivery of an irrevocable
direction to pledge the shares to a securities broker or lender approved by our company, as security for a loan, and to deliver all or
part of the loan proceeds to our company in payment of all or part of the exercise price and any withholding taxes; or
●
any combination of the above methods of payment.
Termination of Options. Upon termination of a participant’s service for any reason other than for death or disability, all unvested portions of
any outstanding awards will be immediately forfeited without consideration, and the participant will have a period of three months (twelve months in
the case of termination of service due to death or disability as defined in the Option Plan), commencing with the date the participant’s service has
terminated, to exercise the vested portion of any outstanding Options, subject to the term of the Option. The participant may exercise all or part of his
or her Options at any time before their expiration due to termination of the participant’s service, but only to the extent that the Options had become
exercisable before the date the participant’s service terminated. Those Options that are not exercisable immediately before the date of termination of
Service (as defined in the Option Plan) will expire on the date of termination of Service. Notwithstanding the forgoing, if the participant’s Service is
terminated due to any Cause (as defined in the Option Plan), then such participant’s Options shall be terminated, whether or not such Options are
vested or unvested, and/or whether or not such Options are exercised or unexercised. If we are party to a Change in Control (as defined in the Option
Plan), the board of directors may determine to cancel each outstanding award after payment to participants of the Fair Market Value of the shares
subject to the award at the time of the transaction constituting the Change in Control minus, in the case of an Option, the exercise price and grant price
of the shares subject to the Option; provide for assumption of the awards or substitution of comparable awards by the surviving or acquiring company
in the transaction; accelerate the exercisability or vesting, in whole or in part, of the awards subject to effectiveness of the transaction; or terminate
awards if not exercised by the effective time of the Change in Control, and lapse any reacquisition or repurchase rights held by our company with
respect to such awards subject to effectiveness of the transaction.
Performance Awards. The board of directors will have the authority to establish and administer performance-based grant and/or vesting
conditions and performance objectives with respect to such awards as it considers appropriate, which performance objectives must be satisfied before
the participant receives or retains an award or before the award becomes nonforfeitable.
Performance objectives will be based on one or more of the following performance-based measures determined based on our company and its
subsidiaries on a group-wide basis or on the basis of subsidiary, business platform, or operating unit results: (i) earnings per share (on a fully diluted or
other basis), (ii) pretax or after tax net income, (iii) operating income, (iv) gross revenue, (v) profit margin, (vi) stock price targets or stock price
maintenance, (vii) working capital, (viii) free cash flow, (ix) cash flow, (x) return on equity, (xi) return on capital or return on invested capital, (xii)
earnings before interest, taxes, depreciation, and amortization (EBITDA), (xiii) strategic business criteria, consisting of one or more objectives based
on meeting specified revenue, market penetration, geographic business expansion goals, cost targets, or objective goals relating to acquisitions or
divestitures or (xiv) any combination of these measures.
Amendments. Our board of directors may amend the terms of any award; provided, however, that the rights under any award will not be
impaired without the consent of the participant. The Option Plan will terminate automatically on June 24, 2025. No shares will be issued or sold under
the Option Plan after its termination, except on exercise of an Option granted prior to the termination. No amendment, suspension or termination of
the Option Plan will, without the consent of the participant, alter or impair any rights or obligations under any award previously granted under the
Option Plan.

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On July 1, 2015, under the 2015 Plan, our company granted options with service conditions to purchase up to 6,574,600 common shares to 22
employees, at an exercise price of US$1.71 per share. These options have a weighted average grant date fair value of US$0.48 per option and a total
expected compensation cost, net of expected forfeitures, of US$3,165,867. These options have vesting periods based on length of service of 34 months
and will expire no later than July 1, 2025.
On July 29, 2015, under the 2015 Plan, our company granted options with service conditions to purchase up to 81,600 common shares to one
employee, at an exercise price of US$1.71 per share. These options have a weighted average grant date fair value of US$0.42 per option and a total
expected compensation cost, net of expected forfeitures, of US$34,294. These options have vesting periods based on length of service of 33 months
and will expire no later than July 29, 2025.
Our company did not grant any options under the 2015 Plan from 2018 to 2024.
As of December 31, 2024, 2,687,934 options were issued and outstanding under the 2015 Plan and 14,865,808 shares remained eligible for
future grants under the plan. The following table summarizes the options granted to our current directors, executive officers, and other individuals as a
group under our 2015 Plan outstanding as of March 31, 2025.
    
Common Shares
     Exercise Price of      
    
Underlying Options
Options Granted 
Date of
Name
    
Granted
    
(US$ per share)
    
Grant Date
    
 Expiration
Yong Zhang
 
 2,497,600  
 1.71
July 1, 2015
June 30, 2025
Other employees as a group (1)
 
 54,334  
 1.71
July 1, 2015
June 30, 2025
 
 54,400  
 1.71
July 1, 2015
June 30, 2025
 
 81,600  
 1.71
July 1, 2015
June 30, 2025
 
 
(1) None of these employees is a director or executive officer of our company.
2020 Restricted Stock Unit Plan
Our board of directors adopted the Xinyuan Real Estate Co., Ltd. 2020 Restricted Stock Unit Plan, or the “2020 RSU Plan,” effective June
30, 2020. The purpose of the 2020 RSU Plan is to provide to us and our shareholders the benefits of the additional incentive inherent in the ownership
of our common shares by selected employees, including selected employees of our subsidiaries who are important to the success and growth of our
business, and to help us and our subsidiaries secure the services of those persons. The maximum number of shares that may be delivered to the RSU
Plan participants in connection with RSUs granted under the 2020 RSU Plan is 10,000,000, subject to adjustment if our outstanding common shares
are increased, decreased, changed into or exchanged for a different number or kind of shares or securities of our company through a reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock split or other similar transaction. All of our and our subsidiaries’ employees
and officers who are capable of contributing significantly to our successful performance, in the determination of the board of directors, are eligible to
be participants in the 2020 RSU Plan. Each eligible employee selected to participate may be granted an award of RSUs at such times and subject to
such conditions as determined by the board of directors.
Incentive Pool; Funding. Under the 2020 RSU Plan, we will establish a long-term incentive pool for participants for each fiscal year, a
“Grant Year,” based on our net income attributable to shareholders (or other performance goals) for the most recently completed prior fiscal year, a
“Base Year.” The long-term incentive pool is funded and RSUs are granted only if 70% or more of the target net income attributable to shareholders
for the Base Year has been achieved. If the net income attributable to shareholders achieved for a Base Year is less than 70% of the target, no amount
is credited to the long-term incentive pool for that Grant Year and no RSUs will be awarded for the Grant Year. We have established a trust and we
will deposit or cause to be deposited in the trust amounts of cash not exceeding the amount of the long-term incentive pool for a Grant Year. The
trustee will use the funds to acquire in the open market or in private transactions that number of ADSs representing common shares as we direct over a
period of time as we and the trustee determine.

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Administration. The 2020 RSU Plan provides that it will be administered by one or more committees of our board of directors. Subject to the
provisions of the 2020 RSU Plan, such committee(s) have the discretionary authority and power to determine and designate those individuals selected
to receive awards; determine the terms of awards, including the time at which each award will be granted and the number of common shares subject to
each award; establish the terms and conditions upon which awards may be exercised, unlocked or paid (including any requirements that we or the
participant satisfy performance criteria or performance objectives); prescribe, amend or rescind any rules and regulations necessary or appropriate for
the administration of the 2020 RSU Plan; correct any defect, supply any deficiency and reconcile any inconsistency in the 2020 RSU Plan or in any
related award or agreement; and make other determinations and take such other action in connection with the administration of the 2020 RSU Plan as
it deems necessary or advisable.
Grant, Allocation and Trading Restrictions of RSUs. Following the end of a Base Year, the committee(s) will allocate to each participant a
percentage of the long-term incentive pool based on such factors as the committee(s) may determine from time to time in its or their discretion. A
participant will be allocated RSUs based on the aggregate of common shares represented by ADSs purchased by the trustee for a Grant Year
multiplied by the percentage of the long-term incentive pool allocated to that participant for the Grant Year. Each RSU represents a right to receive
one common share to be delivered or made available at the time or times specified in the award agreement, subject to a risk of cancellation and to the
other terms and conditions set forth in the 2020 RSU Plan, the award agreement and any additional terms and conditions set by the committee(s). At
our election, RSUs may be settled by delivery of common shares or ADSs representing the number of common shares subject to the RSU.
Common shares or ADSs settling vested RSUs may not be sold, transferred or otherwise disposed of by the participant (other than being
returned to the Company) until one year after the participant’s resignation or termination of employment other than as a result of (i) death, (ii)
disability as the result of a work injury or (iii) retirement on or after age 60. After such one year period if an off-office audit performed by our internal
audit department does not identify any risk (i.e., damage) to the Company or its subsidiaries from the participant’s conduct while employed with us or
our subsidiaries, the Trustee will (i) deposit such ADSs or common shares into an account maintained for the participant (or of which the participant is
a joint owner, with the consent of the participant) by a broker-dealer or stock plan administrator, or (ii) deliver common shares or ADSs to the
participant (under our direction). Thereafter, the participant may sell, transfer or otherwise dispose of the common shares or ADSs. If the off-office
audit identifies a risk to us or our subsidiaries, the common shares or ADSs will be forfeited and surrendered to us.
Amendments. Our board of directors may amend, suspend or terminate the 2020 RSU Plan or the authority of the committee(s) to grant
awards under the 2020 RSU Plan without the consent of participants; provided, however, that, without the consent of an affected participant, no such
board action may materially and adversely affect the rights of the participant under any outstanding award. The committee(s) may amend any
outstanding award without the consent of the affected participant; provided, however, that, without such consent, no such action may materially and
adversely affect the rights of the participant under any outstanding award. Unless earlier terminated by action of the board of directors, the 2020 RSU
Plan will remain in effect until such time as no common shares remain available for delivery under the 2020 RSU Plan and we have no further rights
or obligations with respect to outstanding awards under the 2020 RSU Plan.
As of the date of this annual report, we have not deposited any amount into the trust established and governed by a third-party trustee.
Other awards
On September 28, 2019, our board of directors approved the employee stock option plan of Xinchuang Technology, a subsidiary of us. Under
the plan, we reserved 150 million shares, representing 30% of Xinchuang Technology’s issued capital for purpose of providing share option awards to
our senior management and employees. In November 2019, we granted a total 100 million share options to certain employees of us with an exercise
price of US$0.14 (RMB1). The options become vested in five tranches subject to achievement of certain performance conditions as follows: (i) 5% on
the grant date with no performance condition; (ii) 5% for each of the first, second, third anniversary of the grant date, respectively; and (iii) the
remaining 80% shall vest upon the completion of the initial public offering of Xinchuang. The total fair value of the share options granted in October
2019 is US$3.5 million, which shall be recognized as compensation expense using the accelerated method. The fair value is determined by an external
valuer using the discounted cash flow method to determine the underlying equity fair value of Xinchuang Technology. Key assumptions, such as the
discount rate, cash flow projections and the discount for lack of marketability, are determined by the Group with best estimates. As of December 31,
2024, there were no expired shares. The amount of expenses relating to the options that the Group recognized in profit of loss during the period is nil
(2023: US$nil; 2022: US$nil).

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Xinyuan Property Management Service (Cayman) Ltd., a subsidiary of us, operates a restricted share award scheme, or the “Scheme,” for the
purpose of providing incentives and rewards to eligible participants who contribute to the success of its operations. The participants of the scheme
include its directors and senior executives. The Scheme was adopted by our board on January 31, 2019. Pursuant to the scheme, an award of 56,250
restricted shares (subdivided into 56,250,000 restricted shares in August 2019), representing 15% of its share capital, was granted to the participants
with a total exercise price at an aggregate consideration of US$1,204,094 (RMB8,400,000). The considerations were fully settled in cash upon the
issuance of restricted shares. The restricted shares vest in three tranches of 2%, 18% and 80% on January 1, 2020, January 1, 2021 and January 1,
2022, respectively, in accordance with certain vesting conditions, that is, performance condition based on the completion of IPO which requires
recognition on an accelerated basis.
On June 14, 2019, Mr. Zhang Lizhou (one of the participants) resigned as an executive director. Upon the resignation of Mr. Zhang Lizhou,
we repurchased the 18,750 shares granted to him at a consideration of US$401,365 (RMB2,800,000), which was equal to the amount paid by Mr.
Zhang Lizhou to us at the issuance date. The remaining settled aggregate consideration of US$802,729 (RMB5,600,000) according to the Scheme was
recognized as liability because the restricted shares will be repurchased by us at the original amount by participants upon the termination of
employment.
The aggregate fair value of the restricted shares granted at the grant date amounting to US$4,931,051 (RMB34,400,000) are recognized as
compensation expense using the accelerated method. The fair value is determined by an external valuer using the discounted cash flow method to
determine the underlying equity fair value of Xinyuan Property Management Service (Cayman) Ltd. Key assumptions, such as the discount rate, cash
flow projections and the discount for lack of marketability, are determined by us with best estimates.
As of December 31, 2024, there were no shares vested or expired, and we recognized scheme-related expense amounting to US$nil (2023:
US$nil; 2022: US$nil) in profit or loss during the period.
Xinyuan Property Management Service (Cayman) Ltd., a subsidiary of the Company, implemented a new share award scheme during 2024
(the “2024 Share Award Scheme”) which is related to the conditional grants of award shares to its two executive directors (“grantees”) on July 8 2024.
This was a one-off grant and expired upon the vesting of the awarded shares. The purpose of the 2024 Share Award Scheme is to recognize the
grantees’ contribution to the business performance and development of the subsidiary and to provide sufficient incentive to retain and motivate the
grantees to continue to strive for greater contributions to the subsidiary in the future.
As the conditional grants to each of the two executive directors would result in the shares issued and to be issued in respect of all options and
awards granted to them in the 12-month period up to and including the date of the conditional grants representing in aggregate over 1% of the shares
in issue (excluding any options and awards lapsed in accordance with the terms of the scheme), such grants were approved by the qualified
shareholders at the EGM of the subsidiary.
Pursuant to the 2024 Share Award Scheme, the conditional grant of awards of 25,537,500 shares represented 17,025,000 new shares to Mr.
Shen and 8,512,500 new shares to Mr. Wang, each of whom are executive directors of the subsidiary. The 25,537,500 awarded shares allotted and
issued under the conditional grants represent (i) 4.5% of the issued shares on 8 July 2024; and (ii) approximately 4.31% of the issued shares as
enlarged by the allotment and issue of the awarded shares, assuming there will be no other change in the issued share capital of the subsidiary between
the grant date and date of the allotment and issuance of the awarded shares. All awarded shares were credited as fully paid upon issue and were vested
immediately upon issue. The vesting of the awarded shares is not subject to any performance targets or clawback mechanism. Each of the grantees of
the awarded shares shall not dispose of or transfer any of the awarded shares owned by them on or before 31 December 2025, provided that such
restriction shall cease to apply if such grantees cease to be directors of the subsidiary.
The aggregate fair value of grantees’ services received in return for restricted shares awarded of approximately US$1,102,260
(RMB7,848,000) was measured by reference to closing market price at HK$0.335 of the subsidiary’s listed shares on 8 July 2024, the grant date of
shares awarded.
As of December 31, 2024, the Group recognized expenses relating to the 2024 Share Award Scheme of US$1,102,260 in the Consolidated
Statements of Comprehensive Income.

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C.
Board Practices
Our board of directors currently has seven directors.
Committees of the Board of Directors
We have established four committees under the board of directors: the audit committee, the compensation committee, the corporate
governance and nominating committee and the investment committee. We have adopted a charter for each of the four committees. Each committee’s
members and functions are described below.
Audit Committee. Our audit committee consists of Mr. Yifan (Frank) Li and Mr. Ji Luo. Under Section 303A of the NYSE Listed Company
Manual, as a foreign private issuer, we are required to have an audit committee composed solely of independent directors. However, unlike U.S. listed
companies, we are not required to have a minimum number of committee members and our audit committee members may be “independent” only as
required by SEC Rule 10A-3 but need not meet the other independence test of NYSE Rule 303A. Our audit committee charter provides that the
committee will consist of at least three directors, each of whom must meet applicable independence and financial literacy requirements of the NYSE
and Rule 10A-3 under the Exchange Act. Our board of directors has determined that Mr. Li qualifies as an “audit committee financial expert” under
applicable SEC rules. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our
company. The audit committee is responsible for, among other things:
●
selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be
performed by the independent registered public accounting firm;
●
reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response;
●
reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Exchange Act,
regardless of the dollar amount involved in such transactions;
●
discussing the annual audited financial statements with management and the independent registered public accounting firm;
●
reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control
deficiencies; and
●
meeting separately and periodically with management and the independent registered public accounting firm.
Compensation Committee. Our compensation committee consists of Mr. Yong Zhang (Chairman), Mr. Ji Luo and Mr. Yifan (Frank) Li. Our
compensation committee charter provides that the committee will be composed of at least three directors, at least half of whom will be independent as
defined by the NYSE and any other applicable laws and regulations. All decisions are subject to simple majority approval. However, the committee
may delete all or any portion of its duties and responsibilities to a subcommittee consisting of one or more members.
The compensation committee assists the board in reviewing and approving the design of and administering executive compensation
programs. The compensation committee is responsible for, among other things:
●
reviewing our overall compensation philosophy at least annually;
●
reviewing and approving the corporate goals and objectives relative to our Chief Executive Officer’s compensation on an annual
basis and determine the level of the Chief Executive Officer’s compensation;

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●
determining, or recommending for the board’s determination, the annual base and incentive compensation for our Chief Financial
Officer, Chief Operating Officer, Chief Administrative Officer and any other person who performs similar functions for our
company;
●
making recommendations to the board with respect to equity-based compensation plans;
●
determining compensation policies and practices and approving compensation to non-employee directors; and
●
reviewing, approving or making recommendations on executive employments agreements or any severance or similar termination
payments proposed to be made to any current or former executive officer of the company.
No member of senior management may be present when his or her compensation is being discussed.
Corporate Governance and Nominating Committee. Our corporate governance and nominating committee consists of Mr. Yong Zhang
(Chairman), Mr. Yifan (Frank) Li and Mr. Ji Luo.
The corporate governance and nominating committee assists the board of directors in selecting individuals qualified to become our directors
and in determining the composition of the board and its committees. The corporate governance and nominating committee is responsible for, among
other things:
●
identifying and recommending qualified candidates to the board for selection of directors, nominees for board of directors, or for
appointment to fill any vacancy;
●
reviewing annually with the board of directors the current composition of the board of directors with regards to characteristics such
as independence, age, skills, experience and availability of service to us;
●
advising the board of directors periodically with regards to significant developments in the law and practice of corporate
governance as well as our compliance with applicable laws and regulations, and making recommendations to the board of directors
on all matters of corporate governance and on any remedial action to be taken; and
●
monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our
procedures to ensure proper compliance.
Investment Committee. Our investment committee consists of Mr. Yong Zhang (Chairman), Mr. Yong Cui and Mr. Haifei He.
The investment committee assists the board of directors in overseeing our company’s real property acquisitions and developments and
management of other strategic assets. The investment committee is responsible for, among other things:
●
reviewing and approving individual real property acquisitions;
●
approving, without further board action, land acquisitions where the consideration is cash, seller financing and/or conventional bank
debt;
●
land acquisitions involving use of the company’s shares, options or warrants; and
●
approving acquisitions of assets, other than land, including shares in a third party or non-bank financial assets.

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Duties of Directors
Under Cayman Islands law, our directors have a fiduciary duty to act honestly in good faith with a view to our best interests. Our directors
also have a duty to exercise the skill they actually possess with the care and diligence that a reasonably prudent person would exercise in comparable
circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as
amended and restated from time to time. Our company has the right to seek damages if a duty owed by our directors is breached. A shareholder may
in certain circumstances have rights to damages if a duty owed by the directors is breached.
The functions and powers of our board of directors include, among others:
●
convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings;
●
declaring dividends and distributions;
●
appointing officers and determining the term of office of officers;
●
exercising the borrowing powers of our company and mortgaging the property of our company; and
●
approving the transfer of shares of our company, including the registering of such shares in our register of members.
Terms of Directors and Officers
Under our memorandum and articles of association, a director holds office until he resigns or otherwise vacates his office or is removed by
our shareholders or directors. Accordingly, annual elections of directors by our shareholders are not required and we do not put to a shareholder vote
on an annual or periodic basis election of directors to our company. A director may be removed by special resolution passed by our shareholders
before the expiration of such director’s term. Officers are appointed by and serve at the discretion of the board of directors.
D.
Employees
As of December 31, 2022, 2023 and 2024, we had 1,160, 1,069 and 985 full-time employees, respectively. The following table sets forth the
number of our full-time employees categorized by function as of the period indicated:
    
2022
    
2023
    
2024
Management
 
 48
 27
 36
Finance
 
 125
 82
 79
Planning and development
 
 180
 146
 75
Project construction management
 
 172
 240
 173
Sales and marketing
 
 127
 99
 100
Property management
 
 365
 370
 429
Administrative and human resources
 
 130
 95
 80
Legal and audit
 
 13
 10
 13
Total
 
 1,160
 1,069
 985
As of December 31, 2024, our subsidiary, Xinyuan Property Service Co., Ltd, also hired approximately 6,540 contract employees, most of
whom provided security and housekeeping services relating to property management.
As required by PRC regulations, we participate in various employee benefit plans that are organized by municipal and provincial
governments, including housing funds, pension, medical and unemployment benefit plans. We are required under PRC law to make contributions to
the employee benefit plans at specified percentages of the salaries, bonuses and certain allowances of our employees, up to a maximum amount
specified by the respective local government authorities where we operate our businesses from time to time. Members of the retirement plan are
entitled to a pension equal to a fixed proportion of the salary prevailing at the member’s retirement date. The total amount of contributions we made to
employee benefit plans in 2022, 2023 and 2024 was US$14,643,127, US$10,035,173 and US$8,777,571, respectively.

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We have entered into non-competition agreements with our management and key personnel, which prohibit them from engaging in any
activities that compete with our business during, and for one or two years after, the period of their employment with our company. We have also
entered into confidentiality agreements with all of our employees.
We offer training programs for our employees, third-party contractors and outsourced employees. We sponsor senior managers for executive
MBA programs and other senior employees for part-time non-degree MBA courses at top universities in China. We also invite industry experts to give
lectures to our employees and provide training to our third-party contractors.
We have not been subjected to any strikes or other labor disturbances that have interfered with our operations, and we believe that we have a
good relationship with our employees. Our employees are not covered by any collective bargaining agreement.
E.
Share Ownership
The following table sets forth information with respect to the beneficial ownership of our common shares as of April 7, 2025, by:
●
each of our directors and executive officers;
●
each person known to us to own beneficially more than 5% of our common shares; and
●
all of our directors and executive officers as a group.
Shares
Beneficially
Owned (1)
Directors and Executive Officers
    
Number
    
%
Yong Cui
 
 —
 —
Haifei He
 
 —
 —
Yifan (Frank) Li
 
 —
 —
Yuyan Yang*(2)
 
 28,400,000
 22.86 %
Yong Zhang*(3)
 
 30,897,600
 24.38 %
Ji Luo
 —
 —
Fei Xie
 —
 —
All directors and executive officers as a group (4)
 59,297,600
 46.78 %
5% Shareholders:
Spectacular Stage Limited(2)
 28,400,000
 22.86 %
Juicy Seasons Limited(3)
30,897,600
24.38 %
Central Plains Ltd. (5)
11,398,784
9.17 %
Xy Management Ltd. (6)
12,515,080
10.07 %
(1) Beneficial ownership includes voting or investment power with respect to the securities and, except as indicated below, each person named has
sole voting and investment power with respect to the shares shown opposite his or her name. Beneficial ownership is determined in accordance
with Rule 13d-3 of the General Rules and Regulations under the Exchange Act, pursuant to which a person or group of persons is deemed to have
“beneficial ownership” of any shares of ADRs that such person has the right to acquire within 60 days of the date of determination. The
percentage of beneficial ownership is based on 112,273,601 common shares outstanding as of March 31, 2025. In addition, for purposes of
computing the percentage of outstanding shares of ADRs held by each person or group of persons named above, any shares which such person or
persons had the right to acquire on or within 60 days of March 31, 2025 are deemed to be outstanding but are not deemed to be outstanding for
the purpose of computing the percentage ownership of any other person.

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(2) Ms. Yang is the settlor of The Spectacular Stage Trust established pursuant to the Trust Deed dated November 24, 2015 between Ms. Yang, as
Settlor, and HSBC International Trustee Limited, as Trustee, or the “Spectacular Trust.” Pursuant to the Trust Deed, the Trustee is required to
obtain the prior written consent of Ms. Yang, as Protector, before making any direct or indirect dispositions of any common shares that constitute
assets of the Spectacular Trust and to vote common shares held by the Spectacular Trust and cause any entity owned by the Spectacular Trust
directly or indirectly that holds common shares to vote such shares in accordance with instructions from Ms. Yang. Accordingly, pursuant to
Section 13(d) of the Exchange Act, Ms. Yang may be deemed to beneficially own all of the common shares held directly or indirectly by the
Spectacular Trust. Spectacular Stage Limited, a British Virgin Islands company indirectly wholly owned by the Spectacular Trust, owns
28,400,000 common shares.
(3) Mr. Zhang is the settlor of The Juicy Seasons Trust established pursuant to the Trust Deed dated June 21, 2019 between Mr. Zhang, as Settlor, and
HSBC International Trustee Limited, as Trustee, or the Juicy Trust. Pursuant to the Trust Deed, the Trustee is required to obtain the prior written
consent of Mr. Zhang, as Protector, before making any direct or indirect dispositions of any common shares that constitute assets of the Juicy
Trust and to vote common shares held by the Juicy Trust and cause any entity owned by the Juicy Trust directly or indirectly that holds common
shares to vote such shares in accordance with instructions from Mr. Zhang. Accordingly, pursuant to Section 13(d) of the Exchange Act, Mr.
Zhang may be deemed to beneficially own all of the common shares held directly or indirectly by the Juicy Trust. Juicy Seasons Limited, a
British Virgin Islands company indirectly wholly owned by the Juicy Trust, owns 28,400,000 common shares. The amount of common shares
also includes 2,497,600 common shares issuable upon exercise of vested options.
(4) Includes 2,497,600 common shares issuable upon exercise of options exercisable within 60 days.
(5) Represents 11,398,784 common shares held by Central Plains Ltd., a British Virgin Islands company, which is 100% owned by Jinghong Huo, as
reported in a Schedule 13G jointly filed by Central Plains Ltd. and Jinghong Huo on January 29, 2024. The registered address of Central Plains
Ltd. is ILS FIDUCIARY (BVI) LIMITED, Mill Mall, Suite 6, Wickhams Cay 1, P.O. Box 3085, Road Town, Tortola, British Virgin Islands.
(6) Represents 12,515,080 common shares held by Xy Management Ltd., a British Virgin Islands company, which is 100% owned by Jianwei Gao.
The registered address of Xy Management Ltd. is Mill Mall, Suite 6, Wickhams Cay 1, PO BOX 3085, Road Town, Tortola, British Virgin
Islands.
F.
Disclosure of a registrant’s action to recover erroneously awarded compensation.
Not applicable.

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ITEM 7  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
A.
Major Shareholders
Please refer to “Item 6. Directors, Senior Management and Employees—E. Share Ownership” for our major shareholders.
Our major shareholders do not have voting rights that are different from other shareholders.
There were three record holders in the United States, including the depositary for our ADSs, holding, collectively, 35.6% of our outstanding
common shares, as of April 7, 2025.
B.
Related Party Transactions
Please refer to Note 18 of our audited consolidated financial statements for additional information.
Review and Approval of Related Party Transactions
Pursuant to our audit committee charter, all transactions or arrangements with related parties, as such term is defined under Item 404 of
Regulation S-K, including directors, executive officers, beneficial owners of 5% or more of our voting securities and their respective affiliates,
associates and related parties, will require the prior review and approval of our audit committee, regardless of the dollar amount involved in such
transactions or arrangements.
C.
Interests of Experts and Counsel
Not applicable.
ITEM 8 FINANCIAL INFORMATION
A.
Consolidated Statements and Other Financial Information
We have appended consolidated financial statements filed as part of this annual report.
Dividend Policy
Payment of dividends is subject to our board of directors’ discretion and the form, frequency and amount of any dividend will depend upon
our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the
board of directors may deem relevant.
If we pay any dividends, we will pay our ADS holders to the same extent as holders of our common shares, subject to the terms of the deposit
agreement, including the fees and expenses payable thereunder. Cash dividends on our common shares, if any, will be paid in U.S. dollars. In previous
years, the Company has paid quarterly dividends.

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Legal Proceedings
In November 2022, Xinyuan Service, one of the Company’s subsidiaries in which the Company has a controlling stake, identified that certain
time deposits of a wholly-owned subsidiary of Xinyuan Service (the “Xinyuan Service Subsidiary”) amounting to RMB402 million in aggregate had
been pledged (the “Subsidiary Pledges”) to secure loan facilities for another subsidiary of the Company (the “Beneficiary”), as well as for certain
companies which are not part of the Group. On April 17, 2023, Xinyuan Service and the Xinyuan Service Subsidiary filed a Notice of Arbitration to
initiate Hong Kong International Arbitration Centre-administered arbitration proceedings against the Beneficiary seeking recovery of any losses
and/or damages suffered by Xinyuan Service with respect to the Subsidiary Pledges. The final and legally binding arbitral award in the Arbitration,
dated 13 October 2023, has been issued by the HKIAC (the “Arbitral Award”). Specifically, the Arbitral Award provides that: (i) the Respondent is
liable to immediately pay the Claimants the loss suffered by the Claimants due to the Respondent’s conduct, including the total deposit principal of
RMB402 million, interest losses of RMB24 million on the principal of the Time Deposits, and costs and expenses the Claimants incurred in reviewing
and investigating the matter (amongst others) totaling HKD4 million; (ii) the Respondent shall transfer to the Claimants certain non-cash assets, and
immediately pay the Claimants in cash the difference between the abovementioned funds and the value of the non-cash assets provided by the
Respondent as declared by the Tribunal; and (iii) the Respondent shall bear the costs of the Arbitration.
On December 19, 2023, we received subpoenas from the SEC in connection with certain loans and compensations. On June 12, 2024, the
Xinyuan Service Subsidiary’s shares have been reinstated, resulting in the automatic termination of the SEC investigation.
On January 7, 2024, Hudson 888 Owner LLC and Hudson 888 Holdco LLC (the “Hudson 888 Debtors”), two of the Company’s subsidiaries
in the United States voluntary filed petitions for relief (each, a “Chapter 11 Case”) under chapter 11 of title 11 of the United States Code in the United
States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). Through these Chapter 11 Cases, and subject to negotiations
with other parties in interest and approval of the Bankruptcy Court, the Hudson 888 Debtors anticipate pursuing a stand-alone restructuring plan that
may include one or more potential restructuring scenarios. On October 11, 2024, Hudson 888 Owner LLC and Hudson 888 Holdco LLC (the “Hudson
888 Debtors”), two of the Company’s subsidiaries in the United States, submitted their Plan of Reorganization (“Restructure Plan”) to restructure their
debts in connection with a previously filed Chapter 11 petition from January 7, 2024. The bankruptcy court approved the Restructure Plan and issued a
Confirmation Order on October 11th. On December 6, 2024, Hudson 888 Debtors completed a transaction to pay off the remaining secured claims in
the Hudson 888 Debtors’ chapter 11 cases for approximately $48 million. This transaction represents the successful culmination of the Hudson 888
Debtors’ reorganization around the retail portion of The Bloom on Forty Fifth Condominium. With the closing of the December 6th transaction,
Hudson 888 Debtors re-emerged from bankruptcy just under a few months.
On April 14, 2025, an involuntary petition for relief under Chapter 11 of Title 11 of the United States Bankruptcy Code was filed against
Xinyuan Real Estate Co., Ltd. (the “Company”) in the United States Bankruptcy Court for the Southern District of New York. As of April 21, 2025,
the Company reached a settlement agreement with all of the petitioning creditors (the “Parties”) in connection with the involuntary petition filed on
April 14, under which the Parties have agreed to jointly request the court to suspend further proceedings for at least 14 days, and upon meeting the
conditions in the settlement agreement, the petitioning creditors will promptly dismiss the Chapter 11 case against the Company.
B.
Significant Changes
Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited
consolidated financial statements included in this annual report.
ITEM 9  THE OFFER AND LISTING
A.
Offer and Listing Details
See “Item 9. The Offer and Listing — C. Markets” for price history data.
B.
Plan of Distribution
Not applicable

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C.
Markets
Our ADSs, each representing 20 of our common shares, have been listed on the NYSE since December 12, 2007. Our ADSs trade under the
symbol “XIN.” The Company’s ADSs were temporarily suspended from trading on the NYSE from April 15, 2025 to April 21, 2025, due to an
involuntary Chapter 11 petition filed against the Company in the U.S. Bankruptcy Court for the Southern District of New York. Trading resumed on
April 21, 2025 following the resolution of the matter.
D.
Selling Shareholders
Not applicable.
E.
Dilution
Not applicable.
F.
Expenses of the Issue
Not applicable.
ITEM 10 ADDITIONAL INFORMATION
A.
Share Capital
Not applicable.
B.
Memorandum and Articles of Association
The Companies Act (As Revised), or the “Companies Act,” differs from laws applicable to United States corporations and their shareholders.
Set forth below is a summary of the significant differences between the provisions of the Companies Act applicable to us and the laws applicable to
companies incorporated in the United States and their shareholders.
Mergers and similar arrangements. The Companies Act permits mergers and consolidations between Cayman Islands companies and
between Cayman Islands companies and non-Cayman Islands companies. For these purposes, (a) “merger” means the merging of two or more
constituent companies and the vesting of their undertaking, property and liabilities in one of such companies as the surviving company, and (b)
“consolidation” means the combination of two or more constituent companies into a consolidated company and the vesting of the undertaking,
property and liabilities of such companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each
constituent company must approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution of each
constituent company and (b) such other authorization, if any, as may be specified in such constituent company’s articles of association. The written
plan of merger or consolidation must be filed with the Registrar of Companies together with a declaration as to the solvency of the consolidated or
surviving company, a list of the assets and liabilities of each constituent company and an undertaking that a copy of the certificate of merger or
consolidation will be given to the members and creditors of each constituent company and that notification of the merger or consolidation will be
published in the Cayman Islands Gazette. Dissenting shareholders have the right to be paid the fair value of their shares (which, if not agreed between
the parties, will be determined by the Cayman Islands court) if they follow the required procedures, subject to certain exceptions. Court approval is not
required for a merger or consolidation which is effected in compliance with these statutory procedures.
In addition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies by way of scheme of arrangement,
provided that the arrangement is approved by three-fourths in value of each class of shareholders; or a majority in number of each class of creditors
with whom the arrangement is to be made, and who must in addition represent three-fourths in value of each such class of creditors, as the case may
be, that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening of the meetings and
subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder has the right to express
to the court the view that the transaction ought not to be approved, the court can be expected to approve the arrangement if it determines that:

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●
the company is not proposing to act illegally or beyond the scope of its authority and the statutory provisions as to the required
majority vote have been met;
●
the shareholders have been fairly represented at the meeting in question and the majority shareholders are acting in good faith
without coercion of the minority to promote interests adverse to those of the relevant class;
●
the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his
interest; and
●
the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act or that would
amount to a “fraud on the minority.”
If the arrangement and reconstruction by way of scheme of arrangement is thus approved, the dissenting shareholder would have no rights
comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of United States corporations, providing
rights to receive payment in cash for the judicially determined value of the shares.
When a tender offer is made and accepted by holders of 90% of the shares within four months, the offeror may, within a two-month period
commencing on the expiration of such four-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer.
An objection can be made to the Grand Court of the Cayman Islands, but this is unlikely to succeed unless there is evidence of fraud, bad faith or
collusion.
Shareholders’ suits. In principle, we will normally be the proper plaintiff and as a general rule, a derivative action may not be brought by a
minority shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, the
Cayman Islands courts can be expected (and have had occasion) to follow and apply the common law principles (namely the rule in Foss v. Harbottle
and the exceptions thereto) which permit a minority shareholder to commence a class action against, or derivative actions in the name of, our company
to challenge:
●
an act which is ultra vires or illegal and is therefore incapable of ratification by the shareholders;
●
an act which constitutes a fraud against the minority where the wrongdoer are themselves in control of the company; and
●
an act which requires a resolution with a qualified (or special) majority (i.e., more than a simple majority) which has not been
obtained.
Anti-takeover provisions. Some provisions of our second amended and restated memorandum and articles of association may discourage,
delay or prevent a change in control of our company or management that shareholders may consider favorable, including provisions that authorize our
board of directors to redesignate authorized and unissued common shares as other shares or series of shares, to issue preference shares in one or more
series and to designate the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or action by our
shareholders. However, under Cayman Islands law, our directors may only exercise the rights and powers granted to them under our second amended
and restated memorandum and articles of association, as amended and restated from time to time, for what they believe in good faith to be in the best
interests of our company.
Directors’ fiduciary duties and powers. As a matter of Cayman Islands law, a director of a Cayman Islands company is in the position of a
fiduciary with respect to the company, and therefore it is considered that he or she owes the following duties to the company-a duty to act bona fide in
the best interests of the company, a duty not to make a profit out of his or her position as director (unless the company permits him or her to do so) and
a duty not to put himself or herself in a position where the interests of the company conflict with his or her personal interests or his or her duty to a
third party. A director of a Cayman Island company owes to the company a duty to act with skill and care. It was previously considered that a director
need not exhibit in the performance of his or her duties a greater degree of skill than may reasonably be expected from a person of his or her
knowledge and experience. However, there are indications that the courts are moving towards an objective standard with regard to the required skill
and care.

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Under our memorandum and articles of association, directors who are in any way, whether directly or indirectly, interested in a contract or
proposed contract with our company shall declare the nature of their interest at a meeting of the board of directors. Following such declaration, a
director may vote in respect of any contract or proposed contract notwithstanding his interest. Directors are not required to hold shares; however, a
minimum share requirement for directors may be established at a general meeting. Directors may exercise all powers of our company to borrow
money, under our memorandum and articles of association, in a variety of ways, including issuing bonds and other securities either outright or as
security for any debt liability or obligation of our company or of any third party.
Shareholder action by written resolution. Under Cayman Islands law and our second amended and restated articles of association, our
shareholders may approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have
been entitled to vote on such matter at a general meeting without a meeting being held.
Removal of Directors. Under our memorandum and articles of association, directors may be removed by a special resolution. In addition, a
director’s office shall be vacated if the director (i) gives notice in writing to our company that he resigns the office of director; (ii) without special
leave of absence from our board of directors, is absent from three consecutive meetings of the board and the board resolves that his office be vacated;
(iii) if he dies, becomes bankrupt or makes any arrangement or composition with his creditors; (iv) is found to be or becomes of unsound mind or dies;
(v) resigns his office by notice in writing to the company; (vi) if all other directors (being not less than two in number) resolve that he should be
removed as a director or; (vii) is removed from office pursuant to any other provisions of our second amended and restated memorandum and articles
of association.
Dissolution; winding up. Under our memorandum and articles of association, if our company is wound up, the liquidator of our company
may distribute the assets only by the vote of holders of a two-thirds majority of our outstanding shares being entitled to vote in person or by proxy at a
shareholder meeting or by unanimous written resolution.
Amendment of governing documents. Under Cayman Islands law and our memorandum and articles of association, our governing documents
may only be amended with the vote of holders of two-thirds of our shares entitled to vote in person or by proxy at a shareholder meeting or, as
permitted by our articles of association, by unanimous written consent.
Rights of Non-Resident or Foreign Shareholders. There are no limitations imposed by foreign law or by our memorandum and articles of
association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in
our memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.
C.
Material Contracts
During the two fiscal years immediately preceding this annual report, we have entered into the following material contracts, excluding
contracts entered into in the ordinary course of business.
Bond Offerings
For a description of the January 2024 Senior Secured Notes, the October 2023 Senior Secured Notes, and September 2027 Senior Secured
Notes, see “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Debt Securities—Senior Secured Notes,”
included elsewhere in this annual report on Form 20-F.
For a description of the onshore corporate bonds, see “Item 5. Operating and Financial Review and Prospects —B. Liquidity and Capital
Resources — Onshore Corporate Bonds” included elsewhere in this annual report on Form 20-F.

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D.
Exchange Controls
Under current PRC foreign exchange rules, after complying with certain procedural requirements and producing commercial documents
evidencing relevant transactions, RMB is convertible into other currencies without prior approval from the SAFE only for current account items, such
as trade related payments, interest and dividends, and certain capital account items, such as direct equity investments, loans and repatriation of
investment in non-sensitive industries. The conversion of RMB into other currencies and remittance of the converted foreign currency outside the
PRC under sensitive industries direct equity investments, loans and repatriation of investment, requires prior approval from the SAFE or its local
office. Foreign-invested enterprises may retain foreign exchange in accounts with designated foreign exchange banks subject to a cap set by the SAFE
or its local office. Under the SAFE regulations, PRC companies and individuals may repatriate foreign currency revenue received from abroad back to
China or they may retain the foreign currency revenue abroad. The term and conditions for both alternatives are subject to provisions further provided
by the SAFE in accordance with international receipts and payments and the needs of foreign exchange administration. These restrictions could affect
our ability to obtain foreign currency through debt or equity financing, or for capital expenditures.
E.
Taxation
Cayman Islands Taxation
The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no
taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government of the Cayman
Islands except for stamp duties which may be applicable on instruments executed in, or brought within the jurisdiction of the Cayman Islands. The
Cayman Islands is not party to any double tax treaties which are applicable to payments made to and by our company. There are no exchange control
regulations or currency restrictions in the Cayman Islands.
People’s Republic of China Taxation
The PRC Enterprise Income Tax Law, or the “EIT Law,” became effective as of January 1, 2008 and was amended on February 24, 2017 and
December 29, 2018, and the Implementation for the EIT Law became effective as of January 1, 2008 and was amended on April 23, 2019. The EIT
Law provides that enterprises established outside of China whose “de facto management bodies” are located in China are considered “resident
enterprises” and are generally subject to the uniform 25% corporate income tax rate as to their worldwide income (including dividend income received
from subsidiaries). Under the Implementation for the EIT Law, a “de facto management body” is defined as a body that has material and overall
management and control of the manufacturing and business operations, personnel and human resources, finances and treasury, and acquisition and
disposition of properties and other assets of an enterprise. On April 22, 2009, the SAT issued the Circular 82, which was retroactively effective as of
January 1, 2008. Under this notice, an overseas incorporated domestically controlled enterprise will be recognized as a PRC resident enterprise if it
satisfies all of the following conditions: (i) the senior management responsible for daily production/ business operations are primarily located in the
PRC, and the location(s) where such senior management execute their responsibilities are primarily in the PRC; (ii) strategic financial and personnel
decisions are made or approved by organizations or personnel located in the PRC; (iii) major properties, accounting ledgers, company seals and
minutes of board meetings and shareholder meetings, etc., are maintained in the PRC; and (iv) 50% or more of the board members with voting rights
or senior management habitually reside in the PRC. Further, the SAT issued Bulletin 45, which became effective on September 1, 2011 and was
amended on April 17, 2015 and June 28, 2016, to provide further guidance on the implementation of Circular 82. Bulletin 45 clarified certain issues
relating to the determination of PRC tax resident enterprise status, post-determination administration and the authorities responsible for determining
offshore-incorporated PRC tax resident enterprise status. Bulletin 45 specifies that when provided with a copy of a Chinese tax resident determination
certificate issued by the in-charge tax authorities from an offshore-incorporated PRC tax resident enterprise, the payer should not withhold 10%
income tax when paying Chinese-sourced dividends, interest and royalties to the offshore incorporated PRC tax resident enterprise. However, as
Circular 82 and Bulletin 45 only apply to enterprises incorporated under laws of foreign jurisdictions that are controlled by PRC enterprises or groups
of PRC enterprises, it remains unclear how the tax authorities will determine the location of “de facto management bodies” for overseas incorporated
enterprises that are controlled by individual PRC residents or non-PRC enterprises such as our company. It is not clear whether PRC tax authorities
would require (or permit) us to be treated as a PRC resident enterprise.

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Under the EIT Law and the Implementation for the EIT Law, PRC income tax at the rate of 10% is applicable to dividends payable to
investors that are “non-resident enterprises,” which do not have an establishment or place of business in the PRC, or which have such establishment or
place of business, but the relevant income is not effectively connected with the establishment or place of business, to the extent such dividends have
their sources within the PRC. Similarly, any gain realized on the transfer of our ADSs by such investors is also subject to 10% PRC income tax if such
gain is regarded as income derived from sources within the PRC. For non-PRC individual investors, under PRC Individual Income Law, there could
be a PRC income tax at a rate of 20% for such dividends or gains. If we are considered a PRC “resident enterprise,” it is unclear whether dividends we
pay with respect to our ADSs, or the gain a shareholder may realize from the transfer of our ADSs, would be treated as income derived from sources
within the PRC and be subject to PRC tax as stated above. If we are not considered a PRC “resident enterprise,” the holders of our ADSs that are non-
PRC “resident enterprises” could be subject to PRC income tax for gains from transferring or otherwise disposing their ADSs, since such activities
might be recognized as “transferring the equity interests of a PRC resident enterprise indirectly by disposing of the equity interests of an overseas
holding company” under Circular 7 or GATA. However, since Circular 7 specifies that it does not apply if a non-PRC resident enterprise purchases
and sells equity of the same listed foreign enterprise in the open market and obtains the proceeds from indirect transfer of Chinese taxable property,
for most our investors, who either are not enterprises, or are non-resident enterprises but only trade equity in the open market and gain proceeds, they
will not be required to pay tax under Circular 7. It is also unclear whether, if we are considered a PRC “resident enterprise,” holders of our ADSs
might be able to claim the benefit of income tax treaties entered into between China and other countries.
U.S. Federal Income Taxation
The following is a general discussion of certain U.S. federal income tax consequences of the ownership and disposition of the common
shares or ADSs (evidenced by ADRs) by U.S. Holders (as defined below). This discussion applies only to U.S. Holders that hold the common shares
or ADSs as capital assets for U.S. federal income tax purposes.
This discussion is based on the Internal Revenue Code of 1986, as amended, or the “Code,” Treasury regulations implemented thereunder,
and administrative and judicial interpretations thereof, all as in effect on the date hereof and all of which are subject to change, possibly with
retroactive effect, or to different interpretation. There can be no assurance that the IRS or a court will not take a contrary position with respect to any
U.S. federal income tax considerations described below.
This discussion does not address all of the tax considerations that may be relevant to specific U.S. Holders in light of their particular
circumstances or to U.S. Holders subject to special treatment under U.S. federal income tax law (such as banks, other financial institutions, insurance
companies, tax-exempt entities, retirement plans, regulated investment companies, real estate investment trusts, grantor trusts, partnerships (or other
entities treated as flow-through entities for U.S. federal income tax purposes), dealers or traders in securities, brokers, United States expatriates and
certain former long-term U.S. residents, persons subject to the alternative minimum tax, persons who have acquired the shares or ADSs as part of a
straddle, hedge, conversion transaction or other integrated investment, persons who generally mark their securities to market for U.S. federal income
tax purposes, persons that have a “functional currency” other than the U.S. dollar, persons who are residents in the PRC for PRC tax purposes or
persons that own directly, indirectly, or constructively 10% or more of our stock by vote or value). If a partnership holds common shares or ADSs, the
consequences to a partner will generally depend upon the status of the partner and upon the activities of the partnership. A partner of a partnership
holding common shares or ADSs should consult its own tax adviser regarding the United States tax consequences of its investment in the common
shares or ADSs through the partnership. This discussion does not address any U.S. state or local or non-U.S. tax considerations, any U.S. federal
estate, gift or alternative minimum tax considerations, the U.S. federal Medicare tax on net investment income.
As used in this discussion, the term “U.S. Holder” means a beneficial owner of the common shares or ADSs that is, for U.S. federal income
tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation, or other entity taxable as a corporation for U.S.
federal income tax purposes, created or organized in or under the laws of the United States or of any state or political subdivision thereof or therein,
including the District of Columbia, (iii) an estate, the income of which is subject to U.S. federal income tax regardless of the source thereof, or (iv) a
trust with respect to which a court within the United States is able to exercise primary supervision over its administration and one or more United
States persons have the authority to control all of its substantial decisions, or certain electing trusts that were in existence on August 19, 1996 and
were treated as domestic trusts on that date.
In general, for U.S. federal income tax purposes, a U.S. Holder of an ADS will be treated as the owner of the common shares represented by
the ADSs.

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Investors should consult their tax advisors as to the particular tax considerations applicable to them relating to the ownership and disposition
of the common shares or ADSs, including the applicability of U.S. federal, state and local tax laws or non- U.S. tax laws, any changes in applicable
tax laws and any pending or proposed legislation or regulations.
Dividends
Subject to the discussion below under “—Passive Foreign Investment Company,” the gross amount of any distribution (without reduction for
any PRC tax withheld) made by us on the common shares or ADSs generally will be treated as a dividend includible in the gross income of a U.S.
Holder as dividend income to the extent of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles,
when received by the U.S. Holder, in the case of common shares, or when received by the Depositary, in the case of ADSs. To the extent the amount
of such distribution exceeds our current and accumulated earnings and profits as so computed, it will be treated first as a non-taxable return of capital
to the extent of such U.S. Holder’s adjusted tax basis in such common shares or ADSs and, to the extent the amount of such distribution exceeds such
adjusted tax basis, will be treated as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax principles.
Therefore, a U.S. Holder should expect that a distribution will generally be treated as a dividend even if that distribution would otherwise be treated as
a non-taxable return of capital or as capital gain under the rules described above. The dividends will not be eligible for the dividends-received
deduction allowed to corporations in respect of dividends received from other U.S. corporations.
Certain dividends received by non-corporate U.S. Holders generally will be taxed at the preferential rate applicable to qualified dividend
income. These reduced income tax rates are applicable to dividends paid by “qualified foreign corporations” and only with respect to common shares
or ADSs held for a minimum holding period of at least 61 days during a specified 121-day period, and if certain other conditions are met (including,
but not limited to, us not being a PFIC (as discussed below) for either our taxable year in which the dividend is paid or the preceding taxable year).
Shareholders should consult their tax advisors regarding the availability of the preferential rate for dividends paid with respect to common shares or
ADSs.
Dividends paid by us will constitute income from sources outside the United States for U.S. foreign tax credit limitation purposes and will be
categorized as “passive category income” or, in the case of certain U.S. Holders, as “general category income” for U.S. foreign tax credit purposes.
In the event that we are deemed to be a PRC resident enterprise under the EIT Law (see discussion under “Item 10. Additional Information—
E. Taxation—People’s Republic of China Taxation”), shareholders may be subject to PRC withholding taxes on dividends paid to them with respect to
the common shares or ADSs. Subject to generally applicable limitations, PRC withholding taxes on dividends, if any, may be treated as foreign taxes
eligible for credit against shareholders’ U.S. federal income tax liability. However, such foreign tax credit may be disallowed, if the U.S. Holder has
held such shares for less than a specified minimum period during which the U.S. Holder is not protected from risk of loss, or is obligated to make
payments related to the dividends. The rules relating to the U.S. foreign tax credits are complex and U.S. Holders may be subject to various limitations
on the amount of foreign tax credits that are available. U.S. Holders should consult their own tax advisors regarding the effect of these rules in their
particular circumstances. For the year ended December 31, 2024, we did not declare any dividends to our shareholders.
Sale or Other Disposition of Ordinary common shares or ADSs
Subject to the discussion below under “—Passive Foreign Investment Company,” a U.S. Holder generally will recognize gain or loss for U.S.
federal income tax purposes upon a sale or other disposition of the common shares or ADSs in an amount equal to the difference between the amount
realized from such sale or disposition and the U.S. Holder’s adjusted tax basis in such common shares or ADSs. Such gain or loss generally will be a
capital gain or loss and will be long-term capital gain (taxable at preferential rates for non-corporate U.S. Holders) or loss if, on the date of sale or
disposition, such common shares or ADSs were held by such U.S. Holder for more than one year. The deductibility of capital losses is subject to
significant limitations. Any gain or loss on the sale or disposition will generally be treated as U.S. source income or loss for U.S. foreign tax credit
limitation purposes.

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Passive Foreign Investment Company
Special U.S. tax rules apply to companies that are considered to be PFICs. We will be classified as a PFIC in a particular taxable year if either
(i) 75% or more of our gross income for the taxable year is passive income; or (ii) on average at least 50% of the value of our assets produce passive
income or are held for the production of passive income. Passive income for this purpose generally includes, among other things, certain dividends,
interest, royalties, rents and gains from commodities and securities transactions and from the sale or exchange of property that gives rise to passive
income.
In making this determination, we will be treated as earning our proportionate share of any income and owning our proportionate share of any
assets of any corporation in which we hold a 25% or greater interest (by value).
Based on our estimated gross income, the average value of our assets, including goodwill, and the nature of our business, although not free
from doubt, we do not believe that we were classified as a PFIC for U.S. federal income tax purposes for the taxable year ended December 31, 2024.
Our status for any taxable year will depend on our assets and activities in each year, and because this is a factual determination made annually after the
end of each taxable year, there can be no assurance that we will not be considered a PFIC for the current taxable year or any future taxable year. The
market value of our assets may be determined in large part by reference to the market price of the ADSs and our common shares, which is likely to
fluctuate. Furthermore, the composition of our income and assets may also be affected by how, and how quickly, we use our liquid assets. Under
circumstances where our revenue from activities that produce passive income significantly increase relative to our revenue from activities that produce
non-passive income, or where we determine not to deploy significant amounts of cash for active purposes, our risk of being classified as a PFIC may
substantially increase. In addition, because there are uncertainties in the application of the relevant rules, it is possible that the IRS may challenge our
classification of certain income and assets as non-passive or our valuation of our tangible and intangible assets, each of which may result in our
becoming a PFIC for the current or subsequent table years. If we were classified as a PFIC for any year during which a U.S. holder held our ADSs or
common shares, we generally would continue to be treated as a PFIC for all succeeding years during which such U.S. holder holds our ADSs or
common shares.
A U.S. Holder may be able to mitigate some of the adverse U.S. federal income tax consequences described below with respect to owning the
common shares or ADSs if we are classified as a PFIC for any taxable year, provided that such U.S. Holder is eligible to make, and validly makes a
mark-to-market election. However, because we are a holding company and a mark-to-market election would not apply to any lower-tier PFICs we
own, it is unclear that making the election would have any benefit to a U.S. Holder. In certain circumstances, a U.S. Holder can make a qualified
electing fund election, or QEF election, to mitigate some of the adverse tax consequences described with respect to an ownership interest in a PFIC by
including in income its share of the PFIC’s income on a current basis. However, we do not currently intend to prepare or provide the information that
would enable a U.S. Holder to make a QEF election.
In the event we are classified as a PFIC, in any year in which shareholders hold the common shares or ADSs, and any shareholders do not
make the election described in the preceding paragraph, any gain recognized by such shareholders on a sale or other disposition (including a pledge)
of the common shares or ADSs would be allocated ratably over such shareholders’ holding period for the common shares or ADSs. The amounts
allocated to the taxable year of the sale or other disposition and to any year before we became a PFIC would be taxed as ordinary income. The amount
allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable
year, and an interest charge would be imposed. Further, to the extent that any distribution received by shareholders on their common shares or ADSs
were to exceed 125% of the average of the annual distributions on the common shares or ADSs received during the preceding three years or a
shareholder’s holding period, whichever is shorter, that distribution would be subject to taxation in the same manner as gain on the sale or other
disposition of shares, described above. Classification as a PFIC may also have other adverse tax consequences, including, in the case of individuals,
the denial of a step-up in the basis of their common shares or ADSs at death.
The U.S. federal income tax rules relating to PFICs are complex. Shareholders are urged to consult their tax advisors with respect to the
purchase, ownership and disposition of the common shares or ADSs, any elections available with respect to such ADSs and the U.S. Internal Revenue
Service information reporting obligations with respect to the purchase, ownership and disposition of the ADS.

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Backup Withholding Tax and Information Reporting and Disclosure Requirements
Dividend payments made to U.S. Holders and proceeds paid from the sale or other disposition of their common shares or ADSs may be
subject to information reporting to the U.S. Internal Revenue Service and possible U.S. federal backup withholding. Certain exempt recipients are not
subject to these information reporting requirements. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer
identification number and makes any other required certification, or who is otherwise exempt from backup withholding. U.S. Holders who are
required to establish their exempt status generally must provide IRS Form W-9 (Request for Taxpayer Identification Number and Certification).
Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. Holder’s U.S. federal
income tax liability. A U.S. Holder may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate
claim for refund with the Internal Revenue Service in a timely manner and furnishing any required information.
Investors should consult their own tax advisors as to their qualification for an exemption from backup withholding and the procedure for
obtaining this exemption.
Certain U.S. Holders may be required to report information with respect to such holder’s interest in “specified foreign financial assets” (as
defined in Section 6038D of the Code), including stock of a non-U.S. corporation that is not held in an account maintained by a U.S. “financial
institution,” if the aggregate value of all such assets exceeds certain thresholds. Persons who are required to report specified foreign financial assets
and fail to do so may be subject to substantial penalties. U.S. Holders are urged to consult their own tax advisors regarding the foreign financial asset
reporting obligations and their possible application to the holding of the common shares or ADSs.
F.
Dividends and Paying Agents
Not applicable.
G.
Statement by Experts
Not applicable.
H.
Documents on Display
We are subject to the periodic reporting and other informational requirements of the Exchange Act. Under the Exchange Act, we are required
to file reports and other information with the SEC. Specifically, we are required to file annually a Form 20-F no later than four months after the close
of each fiscal year, which is December 31. The SEC maintains a web site at www.sec.gov that contains reports, proxy and information statements, and
other information regarding registrants that make electronic filings with the SEC using its EDGAR system, which can be accessed without charge. As
a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of quarterly reports and proxy
statements, and officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in
Section 16 of the Exchange Act. In accordance with Section 203.01 of the NYSE Listed Company Manual, we will post this annual report on our
website at www.xyre.com.
I.
Subsidiary Information
Not applicable.
J.
Annual Report to Security Holders
If we are required to provide an annual report to security holders in response to the requirements of Form 6-K, we will submit the annual
report to security holders in electronic format in accordance with the EDGAR Filer Manual.

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ITEM 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the risk of loss related to adverse changes in market prices, including interest rate and foreign exchange rates of financial
instruments. We are exposed to various types of market risks in the normal course of business. We have not in the past used derivatives to manage our
exposure to market interest rate risk or foreign exchange risk. The following discussion and analysis, which involves “forward-looking statements”
that involve risk and uncertainties, summarizes our exposure to different market risks.
Foreign Exchange Risk
We and our subsidiaries are principally engaged in real estate development and the provision of property management services in the PRC.
We started U.S. business operations, which is mainly residential real estate development, as well as resale, in 2012. The functional currency of our
PRC subsidiaries is the Renminbi, while that of our subsidiaries in the United States is U.S. dollars. Our reporting currency is the U.S. dollar. We
translate the PRC operating results using the average exchange rate for the year and we translate the PRC financial position at the year-end exchange
rate. The foreign currency translation loss recognized in our other comprehensive income/(loss) amounted to US$5.03 million in 2024.
A significant portion of our revenue is denominated in RMB. However, we have substantial U.S. dollar denominated obligations, including
the obligation to pay interest and principal on our secured debt and capital commitments to support our United States business operations.
Accordingly, any significant fluctuation between the RMB and the U.S. dollar could expose us to foreign exchange risk. We do not currently hedge
our exchange rate exposure. We evaluate such risk from time to time and may consider engaging in hedging activities in the future to the extent we
deem appropriate. Such hedging arrangements may require us to pledge or transfer cash and other collateral to secure our obligations under the
agreements, and the amount of collateral required may increase as a result of mark-to-market adjustments.
The RMB is not a freely convertible currency. The PRC government may take actions that could cause future exchange rates to vary
significantly from current or historical exchange rates. The conversion of RMB into foreign currencies, including U.S. dollars, has been based on rates
set by the PBOC. On July 1, 2005, the PRC government changed its previous policy of pegging the value of the RMB to the U.S. dollar. Under the
current policy, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. There remains
significant international pressure on the PRC government to adopt an even more flexible currency policy, which could result in a further and more
significant appreciation of the RMB against the U.S. dollar. Any appreciation of the RMB against the U.S. dollar or any other foreign currencies
would make any new RMB-denominated investments or expenditures more costly to us, to the extent that we need to convert foreign currencies into
RMB for such purposes. On August 11, 2015, the PBOC allowed the RMB to depreciate by approximately 2% against the U.S. dollar. It is difficult to
predict how long such depreciation of RMB against the U.S. dollar may last. However, any significant depreciation in the exchange rates of the RMB
against the U.S. dollar could adversely affect the value of any dividends paid by us to our shareholders, which would be funded by RMB but paid in
U.S. dollars. There can be no assurance that any future movements in the exchange rate of the RMB against the U.S. dollar or other foreign currencies
will not adversely affect our results of operations and financial condition (including our ability to pay dividends). A significant depreciation in the
RMB against major foreign currencies may have a material adverse impact on our results of operations, financial condition and share price because
our reporting currency is the U.S. dollar and our ADSs are expected to be quoted in U.S. dollars, whereas our revenue, costs and expenses are largely
denominated in RMB.

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Interest Rate Risk
The cost of financing is sensitive to fluctuations in interest rates. Our bank borrowings bear interest at variable rates, and an increase in
interest rates would increase our costs thereunder. Our net income is affected by changes in interest rates as a result of the impact such changes have
on interest income from, and interest expense on, short-term deposits and other interest-bearing financial assets and liabilities. In addition, our sales
are also sensitive to fluctuations in interest rates. An increase in interest rates would adversely affect our prospective purchasers’ ability to obtain
financing and depress the overall housing demand. Higher interest rates, therefore, may adversely affect our revenue, gross profits and net income, and
our ability to raise and service debt and to finance our developments.
In addition, the United Kingdom Financial Conduct Authority, or “FCA,” which regulates London Interbank Offered Rate, or “LIBOR,”
announced on July 27, 2017 that it would no longer persuade or compel banks to submit rates for the calculation of the LIBOR benchmark after 2021
and confirmed on March 5, 2021 that most LIBOR benchmark tenors would cease or cease to be representative benchmarks from December 31, 2021
or (in the case of certain tenors of USD LIBOR only) from June 30, 2023. While various replacement reference rates have been proposed, an
alternative reference rate to LIBOR has not yet been widely adopted. As such, the replacement of LIBOR could have an adverse effect on the market
for, or value of, LIBOR-linked financial instruments.
Our indebtedness consists primarily of short-term and long-term bank borrowings, secured debt and onshore corporate bonds. As of
December 31, 2024, we had (i) US$62.4 million of short-term borrowings, with US$62.4 million denominated in RMB, which bear interest rates
ranging from 6.5% per annum to 19.2% per annum, with a weighted average interest rate at such date of 7.24%; (ii) US$460.6 million of long-term
bank loans, including current portions of long-term bank loans, bear floating interest rates, which are based on 92.6% to 189.5% of PBOC benchmark
rates in the following years; and (iii) US$156.4 million of long-term debt, including current portions of long-term debt, bear floating interest rates,
which are based on LIBOR or SOFR benchmark rates in the following years. The PBOC regulates the interest rates of our Renminbi-denominated
borrowings. The PBOC-published benchmark one-year lending rate in China, which directly affects the property mortgage rates offered by
commercial banks in China, as of December 31, 2022, 2023 and 2024 was 4.35%, 4.35% and 4.35%, respectively. As of December 31, 2024, the
principal amount of our aggregate outstanding variable rate debt, including long-term bank loans, was US$665.7 million. A hypothetical 1.00%
increase in annual interest rates would increase our interest cost by approximately US$6.7 million per year based on our debt level as of December 31,
2024. The senior secured notes and other debt, except the above-mentioned US$665.7 million of floating rate debt, bear fixed interest rates and
therefore, interest rate risk is low.

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Credit Risk
We provide guarantees to mortgage lending banks in respect of the mortgage loans provided to the purchasers of our properties in the PRC up
until completion of the registration of the mortgage with the relevant authorities, which generally occurs within six to 12 months after the purchaser
takes possession of the relevant properties. If a purchaser defaults under the loan while our guarantee is in effect and we repay all debt owed by the
purchaser to the mortgagee bank under the loan, the mortgagee bank must assign its rights under the loan and the mortgage to us and, after the
registration of the mortgage, we will have full recourse to the property. In line with what we believe is industry practice, we do not conduct
independent credit checks on our customers but rely on the credit checks conducted by the mortgagee banks.
As of December 31, 2024, we had outstanding guarantees of mortgages in the principal amount of US$1,708.9 million. If a purchaser
defaults on the payment of its mortgage during the term of the guarantee, the mortgage lending bank may require us to repay the outstanding amount
under the loan plus any accrued interest. In this event, although we are able to retain the customer’s deposit and sell the property to recover any
amounts paid by us to the bank, there can be no assurance that we would be able to sell the property at a price equal to or greater than the amount we
paid on the defaulting purchaser’s outstanding loan amount and any accrued interest thereon. We paid US$0.6 million to satisfy guarantee obligations
related to customer defaults in 2024.
During parts of 2011 and 2012, we offered certain homebuyers seller-financing arrangements. All the homebuyers entered into such
arrangement were subject to credit verification procedures. In addition, accounts receivable balances are unsecured, but monitored on an ongoing basis
via our management reporting procedures. We provided longer payment terms, ranging between six months to two years to particular home buyers
after applying strict credit requirements based on our credit policy. In the second half of 2012, execution of seller-financed contracts dropped
significantly. From the fourth quarter of 2012, we stopped offering seller-financed contracts to second home buyers. Commencing in the second
quarter of 2014, the Group again offer seller-financed contracts. As of December 31, 2023 and 2024, there was no concentration of credit risk with
respect to receivables and we do not have a significant exposure to any individual debtor. Since 2013, PRC banks have tightened the distributions of
mortgage loans to homebuyers. Therefore, mortgage loans for homebuyers have been subject to longer processing periods or even denied by the
banks. We took the position that the processing periods of the contracts with underlying mortgage loans exceeding one year cannot be recognized as
revenue on an over time basis.
As of December 31, 2024, our cash and cash equivalents totaled US$94.4 million and restricted cash totaled US$57.9 million, predominately
deposited in accounts maintained with state-owned bank within the PRC. We have not experienced any losses in such accounts and management
believes it is not exposed to any risks on its cash in bank accounts.
Inflation
Inflation has not had a significant effect on our business during the past three years. According to the National Bureau of Statistics of China,
China’s overall national inflation rate, as represented by the general consumer price index, was approximately 2.0%, 0.2% and 0.2% in 2022, 2023
and 2024, respectively. Deflation could negatively affect our business as it would be a disincentive for prospective property buyers to make a
purchase. As of the date of this annual report, we have not been materially affected by any inflation or deflation.
ITEM 12 DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Our common shares, in the form of ADSs, each representing 20 common shares, are listed on the NYSE. JPMorgan Chase Bank, N.A. serves
as the depositary for the ADSs. JPMorgan Chase Bank, N.A.’s principal executive office is located at 383 Madison Avenue, Floor 11, New York, New
York 10179.
The depositary may charge each person to whom ADSs are issued, including, without limitation, issuances against deposits of shares,
issuances in respect of share distributions, rights and other distributions, issuances pursuant to a stock dividend or stock split declared by us or
issuances pursuant to a merger, exchange of securities or any other transaction or event affecting the ADSs or deposited securities, and each person
surrendering ADSs for withdrawal of deposited securities in any manner permitted by the deposit agreement, US$5.00 for each 100 ADSs (or any
portion thereof) issued, delivered, reduced, cancelled or surrendered, as the case may be. ADSs are represented and evidenced by American depositary
receipts, or ADRs.

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The depositary may charge the following additional amounts to ADR holders:
●
a fee of US$0.02 or less per ADS (or portion thereof) for any cash distribution made pursuant to the deposit agreement;
●
a fee of US$1.50 per ADR or ADRs for transfers pursuant to the deposit agreement;
●
an aggregate fee of up to US$0.05 per ADS (or portion thereof) per calendar year for services performed by the depositary in
administering our ADR program;
●
any other charge payable by any of the depositary, any of the depositary’s agents, including, without limitation, the custodian, or the
agents of the depositary’s agents in connection with the servicing of our shares or other deposited securities;
●
a fee for the distribution of securities (or the sale of securities in connection with a distribution), such fee being in an amount equal
to the fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of such securities
(treating all such securities as if they were shares) but which securities or the net cash proceeds from the sale thereof are instead
distributed by the depositary to those holders entitled thereto;
●
stock transfer or other taxes and other governmental charges;
●
SWIFT, cable, telex and facsimile transmission and delivery charges incurred upon request of an ADR holder;
●
transfer or registration fees for the registration of transfer of deposited securities on any applicable register in connection with the
deposit or withdrawal of deposited securities;
●
expenses of the depositary in connection with the conversion of foreign currency into U.S. dollars; and
●
such fees and expenses as are incurred by the depositary (including without limitation expenses incurred in connection with
compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in delivery of
deposited securities or otherwise in connection with the depositary’s or its custodian’s compliance with applicable laws, rules or
regulations.
The fees described above may be amended from time to time.
The depositary collects its fees for issuance and cancellation of ADSs directly from investors depositing shares or surrendering ADSs for the
purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those
fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for
depositary services by deduction from cash distributions, or by directly billing investors, or by charging the book-entry system accounts of participants
acting for them. The depositary may generally refuse to provide services to any holder until the fees and expenses owing by such holder for those
services or otherwise are paid.
ADR holders must pay any tax or other governmental charge payable by the custodian or the depositary on any ADS or ADR, deposited
security or distribution. If an ADR holder owes any tax or other governmental charge, the depositary may (i) deduct the amount thereof from any cash
distributions, or (ii) sell deposited securities and deduct the amount owing from the net proceeds of such sale. In either case the ADR holder remains
liable for any shortfall. Additionally, if any tax or governmental charge is unpaid, the depositary may also refuse to effect any registration, registration
of transfer, split-up or combination of deposited securities or withdrawal of deposited securities (except under limited circumstances mandated by
securities regulations). If any tax or governmental charge is required to be withheld on any non-cash distribution, the depositary may sell the
distributed property or securities to pay such taxes and distribute any remaining net proceeds to the ADR holders entitled thereto.
The depositary may remit to us all or a portion of the depositary fees charged for the reimbursement of certain of the expenses we incur in
respect of the ADS program established pursuant to the deposit agreement upon such terms and conditions as we may agree from time to time. In
2024, no such reimbursement was made.

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PART II
ITEM 13 DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
See our Form 6-K dated July 19, 2022 (File No. 001-33863), Form 6-K dated October 7, 2022 (File No. 001-33863), Form 6-K dated June
12, 2023 (File No. 001-33863), Form 6-K dated August 21, 2023 (File No. 001-33863), Form 6-K dated August 28, 2023 (File No. 001-33863) and
Form 6-K dated January 16, 2024 (File No. 001-33863).
ITEM 14 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
None.
ITEM 15 CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, performed an evaluation of the
effectiveness of our disclosure controls and procedures within the meaning of Rule 13a-15(e) of the Exchange Act as of the end of the period covered
by this report. Based on such evaluation, our management concluded that, as of the end of the period covered by this annual report, our disclosure
controls and procedures were effective to ensure that information required to be disclosed by our company in the reports that we file or submit under
the Exchange Act is (i) recorded, processed, summarized and reported within the time period specified in the SEC rules and forms, and (ii)
accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure.
Report of Management on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Rule
13(a)-15(f) and 15(d)-15(f) of the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles. Our internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that our receipts
and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the
consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate. Management, under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based on
the framework in Internal Control-Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Based on our evaluation under the framework in Internal Control-Integrated Framework (2013 Framework), our management concluded
that, as of December 31, 2024, our internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.
Nonetheless, the board and the audit committee are acutely aware of the importance of internal controls and take their fiduciary duties
seriously. Therefore, despite believing that the Company’s existing internal controls are sufficient, following the internal review of certain potential
related party transactions described in our annual report on Form 20-F for the year ended December 31, 2020, or the “Internal Review,” the board and
audit committee directed management to review internal controls and remediate any material weaknesses that are identified. This has involved several
workstreams.

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First, the Internal Review did identify some weaknesses in the Company’s internal controls, which the Company is working to correct. As
part of that process, the Company is implementing enhanced review protocols, including:
●
appointing a new chairman for Xinyuan China, who has a strong professional background in the real estate industry;
●
strengthening and improving its internal accounting procedures and bookkeeping standards to ensure accurate recording of
transactions and regular reviews of transaction records;
●
strengthening and enhancing its internal procedures and standards regarding contract management and transaction approval, with
stricter and more detailed requirements and guidance, including imposing requirements for supporting documentation with respect
to any related party transaction;
●
providing additional guidance and training to employees regarding the relevant rules and disclosure requirements for related party
transactions;
●
improving the process of identifying, processing, and disclosing related party transactions to ensure compliance with the relevant
rules and regulations; and
●
completing comprehensive data migration to clearly separate systems between the Company and the related party, including email
domains, online approval (OA) and HR systems, and seal usage management.
Second, Xinyuan Property Management Services (HK) Limited, or the “HK Subsidiary,” has retained Deloitte Enterprise Consulting
(Shanghai) Co., Ltd. Beijing Branch as independent internal control reviewer to review and validate the HK Subsidiary’s systems and controls. The
Company is considering the findings from that review. To the extent they are relevant to the Company, the Company will also implement any
recommended improvements.
Third, the Company has arranged regular training sessions to raise employee awareness of internal control and compliance matters.
Finally, the effectiveness of our internal control over financial reporting, as of December 31, 2024, was also audited by Assentsure PAC, an
independent registered public accounting firm, as stated in their attestation report thereon which appears herein.
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Xinyuan Real Estate Co., Ltd.
Opinion on Internal Control over Financial Reporting
We have audited Xinyuan Real Estate Co., Ltd. and subsidiaries’ internal control over financial reporting as of December 31, 2024, based on
criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework) (the COSO criteria). In our opinion, Xinyuan Real Estate Co., Ltd. and subsidiaries (the Company) maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the
consolidated balance sheets as of December 31, 2024 and 2023, the related consolidated statements of comprehensive income, changes in
shareholders’ equity and cash flows for the years ended December 31, 2024, 2023 and 2022, and the related notes and our report dated April 29, 2025
expressed an unqualified opinion thereon.

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Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting included in the accompanying Report of Management on Internal Control over Financial
Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public
accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists,
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as
we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A
company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and
that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets
that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.
/s/ Assentsure PAC
We have served as the Company’s auditor since 2022.
Singapore
April 29, 2025
Changes in Internal Control over Financial Reporting
During 2024, there were no changes in our internal control over financial reporting that occurred during the period covered by the report for
2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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167
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Our board of directors has determined that Mr. Yifan (Frank) Li, the chairman of our audit committee, qualifies as an audit committee
financial expert under applicable SEC and NYSE rules.
ITEM 16B. CODE OF ETHICS
Our board of directors has adopted a code of business conduct and ethics that pertains to our directors, officers and employees with certain
provisions that specifically apply to our Chief Executive Officer, Chief Financial Officer, Vice Presidents and any other persons who perform similar
functions for us. Our code of business conduct and ethics is available at our website at www.xyre.com.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by
Assentsure PAC, KTC Partners CPA Limited, Elite Partners CPA Limited and Moore CPA Limited, our independent registered public accounting firm,
for the periods indicated:
        
2024
    
2023
    
US$
US$
Audit fees (1)
 
- Assentsure PAC
 1,067,368
 1,207,001
- KTC Partners CPA Limited
 168,532
 —
- Moore CPA Limited
 —
 284,426
Audit-related fees (2)
 
- Elite Partners CPA Limited
 59,969
 —
- Moore CPA Limited
 —
 71,994
Tax fees
 
 —  
 —
All other fees
 
 —  
 —
(1) “Audit fees” represent the aggregate fees billed in each of the fiscal year for the audit of financial statements of the Company and the limited
quarterly procedures. In 2024, the audit fees billed included the audit of financial statements of the Company’s subsidiary, Xinyuan Property
Management Service (Cayman) Ltd for its annual reporting purpose.
(2) “Audit-related fees” represents aggregate fees billed in respect of review of interim financial statements of Xinyuan Property Management
Service (Cayman), Ltd., and issue comfort letter for the Company’s financing purposes.
All audit and non-audit services provided by our independent auditor must be pre-approved by our audit committee. Our audit committee has
adopted a project-by-project approach in pre-approving proposed services. All requests or applications for services to be provided by our independent
auditor require a detailed description of the services to be rendered and will be presented to our audit committee for pre-approval.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
None.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
Effective August 28, 2023, our board of directors approved a new additional share repurchase plan, or the “2023 Share Repurchase Plan,”
pursuant to which the Company shall, from time to time, repurchase shares on the open market and/or in privately negotiated transactions, and has
been authorized to repurchase of up to 1,000,000 ADSs. The 2023 Share Repurchase Plan will be funded from available working capital. Repurchases
under the 2023 Share Repurchase Plan will be made from time to time through a combination of open market and privately negotiated transactions.
The per share price cap will be determined from time to time in the discretion of management.

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168
The following table sets forth a summary of our repurchase of our ADSs made from January 1, 2024 to December 31, 2024:
    
    
    
Total Number 
    
of ADSs
Total Number
Purchased as
of ADSs
Part of
that May Yet
Publicly
Be Purchased
Total Number
Average Price
Announced 
Under the
of ADSs
Paid Per ADS
Plans or
Plans or
Period(1)
    
Purchased
    
(US$)
    
Programs
    
Programs
January 1 - January 31
 
 39,569  
 2.48  
 39,569  
 672,621
February 1 - February 28
 
 11,341  
 2.69  
 11,341  
 661,280
March 1 - March 31
 
 19,002  
 2.70  
 19,002  
 642,278
April 1 - April 30
 
 13,275  
 2.70  
 13,275  
 629,003
May 1 - May 31
 
 9,132  
 2.64  
 9,132  
 619,871
June 1 through June 30
 
 31,500  
 2.65  
 31,500  
 588,371
July 1 through July 31
 
 4,749  
 2.74  
 4,749  
 583,622
August 1 through August 31
 
 5,911
 2.79
 5,911
 577,711
September 1 through September 30
 
 7,000
 2.70
 7,000
 570,711
October 1 through October 31
 
 —
 —
 —
 570,711
November 1 through November 30
 
 —
 —
 —
 570,711
December 1 through December 31
 
 26,700
 2.58
 26,700
 544,011
Total
 
 168,179
 2.62
 168,179
 544,011
(1) Our ADS to common share ratio is one ADS for 20 common shares.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
None.
ITEM 16G. CORPORATE GOVERNANCE
Our ADSs are listed on the NYSE and we are therefore subject to corporate governance requirements of the NYSE. We are incorporated in
the Cayman Islands and thus our corporate governance practices are also governed by applicable Cayman Islands law. Under Section 303A of the
NYSE Listed Company Manual, NYSE-listed non-U.S. companies may, in general, follow their home country corporate governance practices in lieu
of some of the NYSE corporate governance requirements.
The NYSE Listed Company Manual requires that the board of directors of a listed company consist of a majority of independent directors, as
defined by the NYSE from time to time. The corporate governance practice in our home country, the Cayman Islands, does not require a majority of
directors of a corporation to be independent. As of the date of this annual report, the majority of our directors are not independent directors as defined
by the NYSE. Our board is currently composed of seven directors, two of whom are current officers of the Company or one of its subsidiaries. Under
NYSE rules, all non-management directors are required to meet periodically in executive session, without any members of management present. The
corporate governance practice in our home country does not require such meetings and, accordingly, our non-management directors do not meet in
executive session.
The NYSE Listed Company Manual requires each issuer to have a nominating and corporate governance committee and a compensation
committee composed entirely of independent directors. In addition, each of those committees must have a written charter setting out, at a minimum,
certain prescribed duties. The corporate governance practice in our home country, the Cayman Islands, does not require the implementation of a
compensation committee, nor a nominating and corporate governance committee, nor does it require any such committees to be comprised solely of
independent directors. We have established a separate compensation committee and a nominating and corporate governance committee. However,
neither of the committees consists solely of independent directors. Each committee has a written charter which is available on our corporate website.
However, the committees have not adopted and implemented all of the duties prescribed for such committees by the NYSE.

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The NYSE Listed Company Manual requires listed companies to have an audit committee that satisfies the requirements of Section 10A of
the Exchange Act. As a foreign private issuer, we are not required to comply with certain other NYSE rules related to audit committees, including the
requirements to have a minimum of three members and that the members satisfy the additional “independence” standards of Section 303A.02 of the
New York Stock Exchange Listed Company Manual. Our audit committee has, as of the date of this annual report, two members, each of whom
satisfies the “independence” requirements of Rule 10A-3 under the Exchange Act, and one such member qualifies as an “audit committee financial
expert” under applicable SEC rules.
In addition to the board governance rules described above, the NYSE Listed Company Manual requires shareholder action in connection with
certain share issuances by a listed company. Specifically, shareholder approval is required in connection with an issuance of an amount of equity
securities equal to or greater than 20% of the outstanding voting power or equity interest of the company, subject to limited exceptions. Shareholder
approval is also required for the adoption of or material revision to an equity compensation plan, which is defined as a plan or other arrangement that
provide for the delivery of equity securities of the company to any employee, director or other service provider as compensation for services. Our
home country corporate governance does not require shareholder action in either situation and, accordingly, such actions may be and are taken on
behalf of our company with just board or board committee action.
ITEM 16H. MINE SAFETY
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
On August 29, 2022, we were conclusively identified by the SEC as a Commission-Identified Issuer pursuant to the HFCAA because we
filed an annual report on Form 20-F for the year ended December 31, 2021 with the SEC on July 29, 2022 with an audit report issued by Union Power,
a registered public accounting firm retained by the Company at that time, for the preparation of the audit report on our financial statements included
therein. Union Power HK CPA Limited is a registered public accounting firm headquartered in Hong Kong Special Administrative Region of the
People’s Republic of China, a jurisdiction where the PCAOB determined that it had been unable to inspect or investigate completely registered public
accounting firms headquartered there until December 2022 when the PCAOB vacated its previous determination.
The Company is controlled by Mr. Yong Zhang, who holds 24.38% of its outstanding shares as of April 7, 2025. In response to Item 16I(a) of
Form 20-F, based on the above and the following information, the Company believes it is not owned or controlled by a governmental entity in
mainland China or Hong Kong.
Based on an examination of the Company’s register of members, to the Company’s knowledge, no shareholder other than Juicy Seasons
Limited, Spectacular Stage Limited and Central Plains Ltd. owns more than 5% of the Company’s outstanding shares. Juicy Seasons Limited is a
private company incorporated in the British Virgin Islands wholly owned and controlled by Mr. Yong Zhang. Juicy Seasons Limited beneficially owns
24.38% of the Company’s total outstanding shares as of April 7, 2025. Spectacular Stage Limited is a private company incorporated in the British
Virgin Islands wholly owned and controlled by Ms. Yuyan Yang. Spectacular Stage Limited beneficially owns 22.86% of the Company’s total
outstanding shares as of April 7, 2025. Please refer to “Item 6.E. Directors, Senior Management and Employees-Share Ownership” of in this annual
report on Form 20-F for more details.
In addition, the Company is not aware of any governmental entity in mainland China or Hong Kong that is in possession of the power, direct
or indirect, to direct or cause the direction of the management and policies of the Company, whether through the ownership of voting securities, by
contract, or otherwise.
The Company’s auditor for the fiscal years ended December 31, 2022, December 31, 2023 and December 31, 2024, Assentsure PAC, is
PCAOB registered and based in Singapore. Under the HFCAA, the PCAOB is permitted to inspect our independent public accounting firm. There is
no guarantee that future audit reports will be prepared by auditors that are completely inspected by the PCAOB, and, as such, future investors may be
deprived of such inspections, which could result in limitations or restrictions to our access of the U.S. capital markets. While the audit reports of
Assentsure PAC incorporated by reference into this annual report on Form 20-F are prepared by auditors based in Singapore who are subject to
inspection and investigation by the PCAOB, there can be no assurance that our auditor or we will be able to comply with these and other requirements
imposed by U.S. regulators in the future.

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170
As of the date of this annual report on Form 20-F, (i) to our knowledge, no governmental entities in the Cayman Islands, China, Hong Kong,
British Virgin Islands, Malaysia, or United States own shares of the Company or its operating entities, including the VIEs, (ii) to our knowledge,
neither the governmental entities in the aforementioned jurisdictions do not have a controlling financial interest in the Company or its operating
entities, including the VIEs, (iii) to our knowledge, none of the members of the board of directors of the Company or its operating entities, including
the VIEs, is an official of the Chinese Communist Party, and (iv) none of the currently effective memorandum and articles of association (or
equivalent organizing document) of the Company or its operating entities, including the VIEs contains any charter of the Chinese Communist Party.
Item 16J. INSIDER TRADING POLICIES
As of the date of this annual report, the Company has not adopted a formal written insider trading policy. The Board of Directors is currently
evaluating the implementation of such a policy to align with applicable SEC rules and exchange requirements. The Company relies on general
compliance training and ad-hoc communications to ensure that directors, officers and employees adhere to insider trading laws and regulations,
including the listing standards of Nasdaq.
Item 16K. CYBERSECURITY
Risk Management and Strategy
As of the date of this annual report, the Company has not identified any material cybersecurity incidents or threats that have materially
affected, or are reasonably likely to materially affect, its business operations, financial condition, or strategic objectives. While the Company has not
yet established a formal enterprise-wide cybersecurity risk assessment framework, it maintains ad-hoc monitoring mechanisms to address potential
threats, including regular system vulnerability scans and employee awareness training. The Company is in the process of developing a structured
cybersecurity risk management policy.
Governance
Our board of directors is responsible for overseeing risks related to cybersecurity. Our board of directors shall (i) maintain oversight of the
disclosure related to cybersecurity matters in current reports or periodic reports of our company, (ii) review updates to the status of any material
cybersecurity incidents or material risks from cybersecurity threats to our company, and the disclosure issues, if any, presented by our management on
a semi-annually basis, and (iii) review disclosure concerning cybersecurity matters in our annual report on Form 20-F presented by our management.

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171
PART III
ITEM 17 FINANCIAL STATEMENTS
We have elected to provide financial statements pursuant to Item 18.
ITEM 18 FINANCIAL STATEMENTS
The consolidated financial statements of Xinyuan Real Estate Co., Ltd. are included at the end of this annual report.
ITEM 19 EXHIBITS
Exhibit Number
    
Description of Document
1.1
Second Amended and Restated Memorandum and Articles of Association of Xinyuan Real Estate Co., Ltd. (incorporated by
reference to Exhibit 1.1 to the registrant’s annual report on Form 20-F (File No. 001-33863), as amended, initially filed with the
SEC on May 15, 2024)
2.1
Deposit Agreement, dated as of December 11, 2007, among Xinyuan Real Estate Co., Ltd., JPMorgan Chase Bank, N.A., as
depositary, and holders of American Depositary Shares (incorporated by reference to Exhibit 2.5 to Amendment No. 1. to the
registrant’s annual report (File No. 001-33863), as amended, initially filed with the SEC on September 29, 2009)
2.2
Amendment to Deposit Agreement, including the form of ADR, dated November 9, 2017 (incorporated by reference to Exhibit
99.(a)(2) to the registrant’s F-6EF (File No. 333-221449) filed with the SEC on November 9, 2017)
2.3
Form of Amendment No. 2 to Deposit Agreement, including the form of ADR, dated November 15, 2022 (incorporated by
reference to Exhibit 99.(a)(3) to the registrant’s F-6 POS (File No. 333-221449) filed with the SEC on November 15, 2022)
2.4
Indenture, dated as of December 6, 2013, between Xinyuan Real Estate Co., Ltd., the entities listed on Schedule 1 thereto as
Subsidiary Guarantors, and Citicorp International Limited, as Trustee and Shared Security Agreement (incorporated by reference
to Exhibit 99.1 to the registrant’s Form 6-K (File No. 001-33863) filed with the SEC on December 9, 2013)
2.5
Indenture Supplement No. 1 dated as of February 13, 2015, among Citicorp International Limited as Trustee, Citicorp
International Limited as Shared Security Agent, Xinyuan Real Estate Co., Ltd. and the entities listed in Schedules I thereto as the
Subsidiary Guarantors to the Indenture, dated as of May 3, 2013 with respect to the registrant’s 13% June 2019 Senior Secured
Notes (incorporated by reference to Exhibit 99.2 to the registrant’s Form 6-K (File No. 001-33863) filed with the SEC on
February 13, 2015)
2.6
Indenture Supplement No. 2, dated as of February 3, 2016, among Citicorp International Limited as Trustee, Citicorp
International Limited as Shared Security Agent, Xinyuan Real Estate Co., Ltd. and the entities listed in Schedule I as the
Subsidiary Guarantors, to the Indenture, dated as of December 6, 2013, with respect to the registrant’s 13% June 2019 Senior
Secured Notes (incorporated by reference to Exhibit 99.3 to the registrant’s Form 6-K (File No. 001-33863) filed with the SEC
on February 3, 2016)
2.7
Global note representing the 13% June 2019 Senior Secured Notes (US$200,000,000 aggregate principal amount) (incorporated
by reference to Exhibit 99.2 to the registrant’s Form 6-K (File No. 00133863) filed with the SEC on December 9, 2013)
2.8
Indenture, dated as of August 30, 2016, between Xinyuan Real Estate Co., Ltd., the entities listed on Schedule I thereto as
Subsidiary Guarantors, and Citicorp International Limited, as Trustee and Shared Security Agent (incorporated by reference to
Exhibit 99.1 to the registrant’s Form 6-K (File No. 00133863) filed with the SEC on August 30, 2016)

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172
Exhibit Number
    
Description of Document
2.9
Global note representing the 8.125% August 2019 Senior Secured Notes (US$300,000,000 aggregate principal amount)
(incorporated by reference to Exhibit 99.2 to the registrant’s Form 6-K (File No. 00133863) filed with the SEC on August 30,
2016)
2.10
Indenture, dated as of February 28, 2017, between Xinyuan Real Estate Co., Ltd., the entities listed on Schedule I thereto as
Subsidiary Guarantors, and Citicorp International Limited, as Trustee and Shared Security Agent (incorporated by reference to
Exhibit 99.1 to the registrant’s Form 6-K (File No. 00133863) filed with the SEC on February 28, 2017)
2.11
Global note representing the 7.75% February 2021 Senior Secured Notes (US$300,000,000 aggregate principal amount)
(incorporated by reference to Exhibit 99.2 to the registrant’s Form 6-K (File No. 00133863) filed with the SEC on February 28,
2017)
2.12
Indenture, dated as of November 22, 2017, between Xinyuan Real Estate Co., Ltd., the entities listed on Schedule I thereto as
Subsidiary Guarantors, and Citicorp International Limited, as Trustee and Shared Security Agent (incorporated by reference to
Exhibit 99.1 to the registrant’s Form 6-K (File No. 001-33863) filed with the SEC on November 22, 2017)
2.13
Global note representing 8.875% Senior Notes due 2020 (US$200,000,000 aggregate principal amount) (incorporated by
reference to Exhibit 99.2 to the registrant’s Form 6-K (File No. 001-33863) filed with the SEC on November 22, 2017)
2.14
Global note representing 8.875% Senior Notes due 2020 (US$100,000,000 aggregate principal amount) (incorporated by
reference to Exhibit 99.2 to the registrant’s Form 6-K (File No. 001-33863) filed with the SEC on December 4, 2017)
2.15
Indenture, dated as of March 19, 2018, between Xinyuan Real Estate Co., Ltd., the entities listed on Schedule I thereto as
Subsidiary Guarantors, and Citicorp International Limited, as Trustee and Shared Security Agent (incorporated by reference to
Exhibit 99.1 to the registrant’s Form 6-K (File No. 001-33863) filed with the SEC on March 19, 2018)
2.16
Global note representing 9.875% Senior Notes due 2020 (US$200,000,000 aggregate principal amount) (incorporated by
reference to Exhibit 99.2 to the registrant’s Form 6-K (File No. 001-33863) filed with the SEC on March 19, 2018)
2.17
Indenture, dated as of April 15, 2019, between Xinyuan Real Estate Co., Ltd., the entities listed on Schedule I thereto as
Subsidiary Guarantors, and Citicorp International Limited, as Trustee and Shared Security Agent (incorporated by reference to
Exhibit 99.1 to the registrant’s Form 6-K (File No. 001-33863) filed with the SEC on April 18, 2019)
2.18
Global note representing 14.2% Senior Notes due 2021 (US $200,000,000 aggregate principal amount) (incorporated by
reference to Exhibit 2.17 to the registrant’s Form 20-F(File No. 001-33863) filed with the SEC on April 29, 2019)
2.19
Global note representing 14.2% Senior Notes due 2021 (US $100,000,000 aggregate principal amount) (incorporated by
reference to Exhibit 2.18 to the registrant’s Form 20-F(File No. 001-33863) filed with the SEC on April 29, 2019)
2.20
Global note representing 12% Senior Notes due 2022 (RMB160,000,000 aggregate principal amount) (incorporated by reference
to Exhibit 99.1 to the registrant’s Form 6-K (File No. 001-33863) filed with the SEC on June 30, 2020)
2.21
Global note representing 12% Senior Notes due 2022 (RMB354,500,000 aggregate principal amount) (incorporated by reference
to Exhibit 99.1 to the registrant’s Form 6-K (File No. 001-33863) filed with the SEC on August 12, 2020)

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173
Exhibit Number
    
Description of Document
2.22
Global note representing 14.5% Senior Notes due 2023 (US $300,000,000 aggregate principal amount) (incorporated by
reference to Exhibit 99.1 to the registrant’s Form 6-K (File No. 001-33863) filed with the SEC on September 18, 2020)
2.23
Global note representing 14% Senior Notes due 2024 (US $170,000,000 aggregate principal amount) (incorporated by reference
to Exhibit 99.1 to the registrant’s Form 6-K (File No. 001-33863) filed with the SEC on January 26, 2021)
2.24
Global note representing 3% Senior Notes due 2027 (US$331,303,941 aggregate principal amount) (incorporated by reference to
Exhibit 99.1 to the registrant’s Form 6-K (File No. 001-33863) filed with the SEC on August 22, 2023)
2.25
Supplemental Indenture, dated as of April 29, 2024, between Xinyuan Real Estate Co., Ltd., the entities listed on Schedule I
thereto as Subsidiary Guarantors, and Citicorp International Limited, as Trustee, related to 3.0% Senior Notes Due
2027(incorporated by reference to Exhibit 2.25 to the registrant’s annual report on Form 20-F (File No. 001-33863), as amended,
initially filed with the SEC on May 15, 2024)
2.26
Description of Securities (incorporated by reference to Exhibit 2.19 to the registrant’s annual report on Form 20-F (File No. 001-
33863), filed with the SEC on April 29, 2020)
2.27
Subscription Agreement, dated as of December 18, 2023, by and between Xinyuan Real Estate Co., Ltd. and Central Plains Ltd.
(incorporated by reference to Exhibit 10.1 to the registrant’s Form 6-K (File No. 001-33863) filed with the SEC on December 22,
2023)
4.1
2007 Long Term Incentive Plan (incorporated by reference to Exhibit 10.2 to the registrant’s F-1 registration statement (File No.
333-147477), as amended, initially filed with the SEC on November 16, 2007)
4.2
2014 Restricted Stock Unit Plan (incorporated by reference to Exhibit 4.3 to the registrant’s annual report on Form 20-F (File
No. 001-33863), filed with the SEC on April 27, 2015)
4.3
2015 Stock Option Plan (incorporated by reference to Exhibit 10.1 to the registrant’s Form S-8 (File No. 333-205371) filed with
the SEC on June 30, 2015)
4.4
English Summary of the Capital Lease Agreement dated as of October 23, 2012, by and among MinshengHongtai (Tianjin)
Aviation Leasing Co., Ltd., and Henan Xinyuan Real Estate Co., Ltd. (Original Language: Chinese) (incorporated by reference to
Exhibit 4.7 to the registrant’s annual report on Form 20-F (File No. 001-33863), filed with the SEC on April 15, 2013)
4.5
English Summary of the Guarantee Agreement dated as of October 23, 2012, by and among MinshengHongtai (Tianjin) Aviation
Leasing Co., Ltd., Xinyuan (China) Real Estate, Ltd. and Henan Xinyuan Real Estate Co., Ltd. (Original Language: Chinese)
(incorporated by reference to Exhibit 4.8 to the registrant’s annual report on Form 20-F for the year ended December 31, 2012
(File No. 00133863), filed with the SEC on April 15, 2013)
4.6
2020 Restricted Stock Unit Plan (incorporated by reference to Exhibit 10.1 to the registrant’s Form S-8 (File No. 333-239620)
filed with the SEC on July 1, 2020)
8.1*
Subsidiaries of Xinyuan Real Estate Co., Ltd.
11.1
Code of Business Conduct and Ethics of the Registrant (incorporated by reference to Exhibit 99.1 to the registrant’s F-1
registration statement (File No. 333-147477), as amended, initially filed with the SEC on November 16, 2007)
12.1*
CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2*
CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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174
Exhibit Number
    
Description of Document
13.1**
CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2**
CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1
Consent of Union Power HK CPA Limited(incorporated by reference to Exhibit 15.1 to the registrant’s [Amend] annual report on
Form 20-F (File No. 001-33863), as amended, initially filed with the SEC on October 29, 2024)
15.2*
Consent of Assentsure PAC
15.3
Letter of Union Power HK CPA Limited to the SEC, dated May 30, 2023 (incorporated by reference to Exhibit 15.3 to the
registrant’s annual report on Form 20-F (File No. 001-33863), as amended, initially filed with the SEC on May 30, 2023)
97.1
Compensation Recovery Policy of the Registrant (incorporated by reference to Exhibit 97.1 to the registrant’s annual report on
Form 20-F (File No. 001-33863), as amended, initially filed with the SEC on May 15, 2024)
101.INS*
Inline XBRL Instance Document
101.SCH*
Inline XBRL Taxonomy Extension Schema Document
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
Taxonomy Extension Presentation Linkbase Document
104*
Cover Page Interactive Data File (embedded within the Inline XBRL document)
*
Filed with this annual report on Form 20-F
**
Furnished with this annual report on Form 20-F

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175
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the
undersigned to sign this annual report on its behalf.
 
Xinyuan Real Estate Co., Ltd.
 
 
 
By:
/s/ Yong Zhang
 
Name:
Yong Zhang
 
Title:
Chief Executive Officer
Date: April 29, 2025

Table of Contents
F-1
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
    
Pages
Report of Independent Registered Public Accounting Firm- Assentsure PAC (PCAOB ID: 6783)
F-2
Consolidated Balance Sheets as of December 31, 2023 and 2024
F-6
Consolidated Statements of Income/(Loss) and Other Comprehensive Income/(Loss) for the years ended December 31, 2022, 2023 and
2024
F-8
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2022, 2023 and 2024
F-9
Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2023 and 2024
F-10
Notes to Consolidated Financial Statements
F-12

Table of Contents
F-2
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of Xinyuan Real Estate Co., Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Xinyuan Real Estate Co., Ltd. and subsidiaries (the “Company”) as of
December 31, 2024 and 2023, the related consolidated statements of comprehensive income, changes in shareholders’ equity and cash flows for the
years ended December 31, 2024, 2023 and 2022, and the related notes (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of
December 31, 2024 and 2023, and the results of its operations and its cash flows for the years ended December 31, 2024, 2023 and 2022, in
conformity with accounting principles generally accepted in the United States of America.
Opinion on Internal Control over Financial Reporting
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the
Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated April 29, 2025 expressed an
unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Material Uncertainty relating to Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As
discussed in Note 2 (b) to the consolidated financial statements, the Company’s ability to generate funds to meet short term operating cash
requirements and loan repayments is reliant on the Company’s ability to sell the real estate properties it holds, or to obtain alternative financing. The
timing of these sales is uncertain and as a result the Company is currently reliant on long term investor loans being renewed when they come up for
repayment. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans relating to these matters are
also described in Note 2(b). The consolidated financial statements do not include any adjustments that might result from the outcome of this
uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to
be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our
audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, examining, on a test basis,
evidence supporting the amounts and disclosures, assessing the accounting principles used and significant estimates made by management, and
evaluating the overall presentation of the consolidated financial statements. Our audits also included performing procedures to test the effectiveness of
the Company’s internal control over financial reporting.  We believe that our audits provide a reasonable basis for our opinion.

Table of Contents
F-3
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that
were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the
consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit
matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical
audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Revenue Recognition and Contracts with Customers – Long-Term Fixed Price Contracts
Critical Audit Matter Description
All real estate sales contracts are long-term fixed price contracts whereby revenue is recognized over the contract term (“over time”) as the work
progresses and control of the goods and services is transferred to the customer. Revenue for these contracts is recognized based on the extent of
progress toward completion, generally measured by using a cost-to-cost basis input method.
Accounting for real estate sales contracts requires management’s judgment in estimating total contract costs. Contract costs, which can be incurred
over several years, are largely determined based on negotiated or estimated construction contract terms and consider factors such as historical
performance, technical and schedule risk, internal and subcontractor performance trends, and anticipated labor costs.
Given the significant judgments necessary to estimate costs associated with these long-term contracts, auditing real estate sales contracts requires a
high degree of auditor judgment.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to real estate sales contracts included the following, among others:
●
We tested the effectiveness of internal controls over the recognition of revenue and the determination of estimated contract costs including
controls over the review of management’s assumptions and key inputs used to recognize revenue and costs on real estate sales contracts
using the cost-to-cost input method.
●
We evaluated the appropriateness and consistency of management’s methods and assumptions used to recognize revenue and costs on real
estate sales contracts using the cost-to-cost input method to recognize revenue over time.
●
We selected a sample of real estate sales contracts and tested the estimates of total cost for each of the real estate sales contracts by:
o
Testing the estimated costs to complete projects that were not completed during the year ended December 31, 2024 by comparing
the estimated cost to complete at December 31, 2024 to actual cost incurred subsequent to December 31, 2024.
o
Evaluating management’s ability to achieve the estimates of total cost by corroborating inquiries with Company personnel,
including project managers, and comparing the estimates to documentation such as management’s work plans, contract terms and
requirements, and purchase orders with suppliers. Our evaluation of management’s assumptions included consideration of historical
and current project performance such as consistency of gross margin, identified risks related to project timing including technical
and schedule matters, and the status of construction progress.

Table of Contents
F-4
Impairments – Real Estate Properties Development Completed and Under Development
Critical Audit Matter Description
At December 31, 2024, the Company’s real estate properties development completed and under development was US$3,206,897,355. As described in
Note 2 to the consolidated financial statements, the Company’s evaluation of impairment of real estate involves an assessment of the carrying value of
real estate properties development completed and under development when events or changes in circumstances indicate that the carrying value may
not be recoverable.
Auditing the Company’s process to evaluate real estate properties development completed and under development for impairment was complex due to
the subjectivity in determining whether impairment indicators were present. Additionally, for real estate assets where indicators of impairment were
determined to be present, the determination of the future undiscounted cash flows involved significant judgment. In particular, the undiscounted cash
flows and fair value estimates were sensitive to significant assumptions, including future revenue, construction costs and selling expenses, which are
affected by expectations about future market or economic conditions.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to real estate properties development completed and under development impairment included the following, among
others:
●
We tested the effectiveness of controls over impairment of real estate properties development completed and under development, including
those over impairment indicators and the determination of future undiscounted cash flows and forecasted sales price for real estate properties
development completed and under development.
●
We evaluated the future cash flows analysis, including the reasonableness of estimated target sales and target costs. For each real estate asset
identified as having indicators of impairment, we performed the following procedures:
1.
Making inquiries of accounting and operations management and board of directors.
2.
Comparing the source data and management’s assumptions to the Company’s historical results and external market sources.
3.
Testing the mathematical accuracy of the future cash flows analysis.
Going concern
Critical Audit Matter Description
As discussed in Note 2 (b) to the consolidated financial statements, the Company’s ability to generate funds to meet short term operating cash
requirements and loan repayments is reliant on the Company’s ability to sell the real estate properties it holds, or to obtain alternative financing. The
timing of these sales is uncertain and as a result the Company is currently reliant on long term investor loans being renewed when they come up for
repayment.
We determined that Company’s ability to continue as a going concern is a critical matter due to the estimation and uncertainty regarding the
Company’s available funding and the risk of bias in management’s judgement and assumptions in their determination.

Table of Contents
F-5
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures relating to the Company’s assertion on its ability to continue as a going concern included the following, among others:
●
We inquired of Company management and reviewed Company records and documents to assess whether there are additional factors that
contribute to the uncertainties disclosed.
●
We assessed whether the Company’s identification of conditions and events that indicate there could be substantial doubt about its ability to
continue as a going concern for a reasonable period of time was appropriate and adequately disclosed.
●
We reviewed a cash flow projection prepared by management incorporating management’s plan and performed sensitivity analysis of
significant assumptions to evaluate the changes in the cash flow projection that would result from changes in the assumptions.
●
We inquired of Company management the settlement agreement with all of the petitioning creditors discussed in Note 24 to the consolidated
financial statements together with the conditions in the settlement agreement signed between petitioning creditors and the Company.  We
have also reviewed the settlement agreement to assess that the transaction is appropriately disclosed and whether the Company has the
ability to fulfill the stated conditions.
/s/ Assentsure PAC
We have served as the Company’s auditor since 2022.
Singapore
April 29, 2025
PCAOB ID No: 6783

Table of Contents
F-6
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(ALL amounts stated in US$, except for number of shares data)
    
    
December 31, 
    
December 31, 
    
Notes
    
2023
    
2024
US$
US$
ASSETS
 
   
  
Current assets
 
   
  
Cash and cash equivalents
 
129,243,923  
94,444,126
Restricted cash
 
101,577,317  
57,941,758
Short-term investments
 
3
 
5,422,264  
3,106,107
Accounts receivable, net
 
44,252,051  
42,101,736
Other receivables
4
 
378,656,298  
339,695,310
Deposits for land use rights
 
31,973,682  
30,270,992
Other deposits and prepayments
 
259,752,148  
235,424,409
Advances to suppliers
 
39,803,727  
37,155,618
Real estate properties development completed and under development
 
5
 
3,307,964,969  
3,206,897,355
Amounts due from related parties
 
17
 
192,626,511  
191,715,053
Amounts due from employees
 
17
 
1,038,494  
805,503
Other current assets
 
900,641  
966,930
Total current assets
 
4,493,212,025  
4,240,524,897
Non-current assets
Real estate properties held for lease, net
 
6
 
322,552,001  
306,314,884
Deposits for land use rights and properties
 
32,473,512  
31,996,013
Property and equipment, net
 
7
 
25,543,359  
13,331,980
Long-term investments
 
8
 
73,787,743  
67,898,666
Deferred tax assets
 
14
 
283,687,539  
282,311,518
Amounts due from related parties
 
17
 
14,805,229  
14,641,366
Contract assets
 
 
34,255,318  
25,373,383
Operating lease right-of-use assets
12
1,615,626
372,277
Other assets
 
51,460,879  
39,712,747
Total non-current assets
840,181,206
781,952,834
TOTAL ASSETS
 
5,333,393,231  
5,022,477,731

Table of Contents
F-7
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(ALL amounts stated in US$, except for number of shares data)
December 31, 
    
December 31, 
    
Notes
    
2023
    
2024
US$
US$
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
   
  
Current liabilities
 
   
  
Accounts payable and notes payable (including accounts payable and notes payable of the VIEs without recourse to
the primary beneficiary of US$13,215 and US$13,021 as of December 31, 2023 and 2024, respectively)
 
1,023,913,738
 
992,213,130
Short-term bank loans and other debt
 
9
 
63,295,071
 
62,364,365
Customer deposits
 
13
 
740,013,355
 
525,882,552
Income tax payable
 
294,923,155
 
264,605,419
Other payables and accrued liabilities (including other payables and accrued liabilities of the VIEs without recourse to
the primary beneficiary of US$3,831,970 and US$2,134,884 as of December 31, 2023 and 2024, respectively)
 
16
 
659,501,859
 
779,236,665
Payroll and welfare payable (including payroll and welfare payable of the VIEs without recourse to the primary
beneficiary of US$319,565 and US$164,573 as of December 31, 2023 and 2024, respectively)
 
14,191,467
 
13,989,715
Current portion of long-term bank loans and other debt
 
10,11
 
1,265,784,530
 
1,082,607,536
Operating lease liabilities, current portion
 
12
 
2,228,329
 
747,044
Mandatorily redeemable non-controlling interests
 
 
9,741,467
 
10,725,626
Amounts due to related parties
 
17
 
72,910,425
 
69,493,602
Total current liabilities
 
4,146,503,396
 
3,801,865,654
Non-current liabilities
Long-term bank loans
 
10
 
152,088,997
180,976,059
Deferred tax liabilities
 
14
 
347,969,036
399,069,727
Unrecognized tax benefits
 
14
 
103,047,687
104,307,339
Other long-term debt
 
11
 
476,033,481
478,767,048
Operating lease liabilities
 
12
 
338,252
77,442
Total non-current liabilities
1,079,477,453
1,163,197,615
Total liabilities
 
5,225,980,849
4,965,063,269
Commitments and contingencies
 
21
 
 
Shareholders’ deficit
 
 
Common shares, US$0.0001 par value:
 
 
Authorized‑500,000,000 shares; shares issued and outstanding- 112,812,481 shares as of December 31, 2024 (2023:
113,671,841 shares)
 
19
 
17,554
 
17,554
Additional paid-in capital
 
546,549,246
 
534,233,824
Statutory reserves
 
179,843,852
 
180,160,066
Accumulated deficits
 
(616,742,846)
 
(671,470,599)
Accumulated other comprehensive loss
 
 
(26,603,172)
 
(30,521,402)
Treasury shares
18
(116,793,448)
(116,593,657)
Total Xinyuan Real Estate Co., Ltd. shareholders’ deficit
 
(33,728,814)
 
(104,174,214)
Non-controlling interest
 
23
 
141,141,196
 
161,588,676
Total equity
 
107,412,382
 
57,414,462
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
 
5,333,393,231
 
5,022,477,731
The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents
F-8
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the years ended December 31, 2022, 2023, and 2024
(ALL amounts stated in US$, except for number of shares data)
Year ended December 31,
    
Notes
    
2022
    
2023
    
2024
US$
US$
US$
Revenue:
 
   
   
  
Real estate sales
 
809,412,923  
658,073,173
385,528,684
Real estate management services income
 
105,460,071  
93,676,874
96,508,350
Real estate lease income
 
20,782,612  
37,218,451
19,987,093
Other revenue
 
14,356,567  
16,005,977
12,650,868
Total revenue
 
950,012,173  
804,974,475
514,674,995
Costs of revenue:
 
 
Cost of real estate sales
 
(768,356,253) 
(557,662,795)
(334,795,000)
Cost of real estate management services income
 
(79,609,736) 
(72,310,054)
(79,733,796)
Cost of real estate lease income
 
(20,287,953) 
(33,920,221)
(10,035,727)
Other costs
 
(9,802,123) 
(8,616,049)
(7,680,447)
Total costs of revenue
 
(878,056,065) 
(672,509,119)
(432,244,970)
Gross profit
 
71,956,108  
132,465,356
82,430,025
Selling and distribution expenses
 
(29,458,486) 
(9,927,659)
(5,410,108)
General and administrative expenses
 
(96,106,518) 
(74,244,144)
(38,120,563)
Gain on disposal of property held for lease
5,687,312
—
72,070
Impairment loss on goodwill
(1,481,006)
—
—
Operating (loss)/income
 
(49,402,590) 
48,293,553
38,971,424
Interest income
 
8,207,327  
4,779,314
3,121,364
Interest expense
 
(158,008,411) 
(176,940,318)
(117,409,422)
Net gain on debt extinguishment
 
11
 
9,620,914  
169,932,886
48,643,696
Loss on short-term investments
 
3
 
(71,675,454) 
(7,626,097)
(700,539)
Share of loss of equity investees
 
8
 
(26,166,538) 
(17,914,070) 
(9,230,998)
Exchange gains
 
39,952,338  
13,482,057  
8,264,806
Gain on modification of debt
11
—
26,372,965
21,253,128
Other (loss)/income
 
(1,968,849) 
25,426,872  
15,962,738
(Loss)/income from operations before income taxes
 
(249,441,263) 
85,807,162  
8,876,197
Income taxes expenses
 
14
 
(9,241,462) 
(55,275,451) 
(54,899,488)
Net (loss)/income
 
(258,682,725) 
30,531,711  
(46,023,291)
Net (loss)/income attributable to non-controlling interest
 
(4,670,836) 
9,750,314  
(4,995,448)
Net (loss)/income attributable to Xinyuan Real Estate Co., Ltd. shareholders
 
(263,353,561) 
40,282,025  
(51,018,739)
(Loss)/income per share:
 
 
 
Basic
 
19
 
(2.44) 
0.38  
(0.45)
Diluted
 
19
 
(2.44) 
0.38  
(0.45)
Shares used in computation:
 
 
 
Basic
 
19
 
107,849,225  
106,686,376  
112,234,853
Diluted
 
19
 
107,849,225  
106,686,376  
112,234,853
Foreign currency translation adjustments
 
(67,014,536) 
(6,770,114) 
(5,025,283)
Comprehensive (loss)/income
 
(325,697,261) 
23,761,597  
(51,048,574)
Comprehensive income/(loss) attributable to non-controlling interest
 
5,804,943  
11,532,734  
(3,888,395)
Comprehensive (loss)/income attributable to Xinyuan Real Estate Co., Ltd. shareholders
 
(319,892,318) 
35,294,331  
(54,936,969)
The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents
F-9
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
For the years ended December 31, 2022, 2023, and 2024
(ALL amounts stated in US$, except for number of shares data)
Total Xinyuan Real
Retained
Accumulated
Estate Co., 
Non-
Additional
Earnings
Other
Ltd.
controlling
Number of
Common
Treasury
Paid-in
Statutory
/(Accumulated
Comprehensive
shareholders’
Interest
    
Shares
     Shares     
Shares
    
Capital
    
Reserves
    
Deficits)
     Income / (Loss)     
equity
    
(Note 24)
    
Total
US$
US$
US$
US$
US$
US$
US$
US$
US$
BALANCE AT DECEMBER 31, 2021
 
107,757,721
16,415
(116,061,577)
544,386,509
178,497,890
(387,664,005)
34,923,279
254,098,511
159,130,726
413,229,237
Foreign currency translation
 
—
—
—
—
—
—
(56,538,757)
(56,538,757)
(10,475,779)
(67,014,536)
Stock-based compensation expenses
 
271,536
—
—
568,047
—
—
—
568,047
—
568,047
Net loss
 
—
—
—
—
—
(263,353,561)
—
(263,353,561)
4,670,836
(258,682,725)
Appropriation to statutory reserves
 
—
—
—
—
959,207
(959,207)
—
—
—
—
Dividends to shareholders
 
—
—
—
—
—
(4,661,341)
—
(4,661,341)
—
(4,661,341)
Acquisition of non-controlling interests
—
—
—
—
—
—
—
—
(651,853)
(651,853)
BALANCE AT DECEMBER 31, 2022
 
108,029,257
16,415
(116,061,577)
544,954,556
179,457,097
(656,638,114)
(21,615,478)
(69,887,101)
152,673,930
82,786,829
Issuance of ordinary shares
11,398,784
1,139
—
1,594,690
—
—
—
1,595,829
—
1,595,829
Repurchase of ordinary shares
(5,756,200)
—
(731,871)
—
—
—
—
(731,871)
—
(731,871)
Foreign currency translation
—
—
—
—
—
—
(4,987,694)
(4,987,694)
(1,782,420)
(6,770,114)
Stock-based compensation expenses
—
—
—
—
—
—
—
—
—
—
Net income (loss)
—
—
—
—
—
40,282,025
—
40,282,025
(9,750,314)
30,531,711
Appropriation to statutory reserves
—
—
—
—
386,755
(386,755)
—
—
—
—
BALANCE AT DECEMBER 31, 2023
113,671,841
17,554
(116,793,448)
546,549,246
179,843,852
(616,742,846)
(26,603,172)
(33,728,814)
141,141,196
107,412,382
Partial disposal of subsidiary
—
—
—
(13,417,682)
—
—
—
(13,417,682)
16,559,085
3,141,404
Repurchase of ordinary shares
(3,363,580)
—
(440,576)
—
—
—
—
(440,576)
—
(440,576)
Foreign currency translation
—
—
—
—
—
—
(3,918,230)
(3,918,230)
(1,107,053)
(5,025,283)
Stock-based compensation expenses
—
—
—
1,102,260
—
—
—
1,102,260
—
1,102,260
Net income (loss)
—
—
—
—
—
(51,018,739)
—
(51,018,739)
4,995,448
(46,023,291)
Appropriation to statutory reserves
—
—
—
—
316,214
(316,214)
—
—
—
—
Dividends to shareholders
—
—
—
—
—
(3,392,800)
—
(3,392,800)
—
(3,392,800)
Disposal of ordinary shares
2,504,220
—
640,367
—
—
—
—
—
—
640,367
BALANCE AT DECEMBER 31, 2024
112,812,481
17,554
(116,593,657)
534,233,824
180,160,066
(671,470,599)
(30,521,402)
(104,174,214)
161,588,676
57,414,462
The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents
F-10
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2022, 2023, and 2024
(ALL amounts stated in US$, except for number of shares data)
Year ended December 31,
    
2022
    
2023
    
2024
US$
US$
US$
CASH FLOWS FROM OPERATING ACTIVITIES:
 
   
   
  
Net (loss)/income
 
(258,682,725) 
30,531,711
(46,023,291)
Adjustments to reconcile net (loss)/income to net cash provided by/(used in) operating
activities:
 
 
Depreciation and amortization
 
13,168,207  
22,506,645
(809,102)
Stock-based compensation expenses (Note 15)
 
568,047  
—
1,102,260
Deferred tax expenses/(benefit)
 
92,635,419  
(98,128,752)
43,064,499
Amortization of deferred charges
 
5,728,866  
7,739,849
345,921
Share of loss of equity investees
 
26,166,538  
17,914,070
9,230,998
Exchange gain
 
(39,952,338) 
(13,482,057)
(8,264,806)
Changes in unrecognized tax benefit
 
6,298,039  
11,044,674
17,636,751
Gain on extinguishment of debt (Note 11)
 
(9,620,914) 
(169,932,886)
(48,643,696)
Loss on short-term investments
 
71,675,454  
7,626,097
700,539
Gain on disposal of property held for lease
 
(5,687,312) 
—
(72,070)
Proceeds from disposal of short-term investments
 
359,025  
—
—
Gain on modification of debt
—
(26,372,965)
(21,253,128)
Allowance for doubtful accounts
 
2,119,346  
2,082,081
2,430,695
Impairment loss on goodwill
1,481,006
—
—
Others
 
(64,687) 
3,404,181
5,524,096
Changes in operating assets and liabilities:
 
 
Accounts receivable
 
22,272,540  
(14,027,916)
(934,499)
Real estate properties development completed and under development
 
(506,304,362) 
(53,100,033)
61,571,275
Contract assets
 
(18,682,950) 
18,055,825
8,704,038
Real estate properties held for lease
 
(51,502,401) 
13,493,374
19,822,059
Advances to suppliers
 
61,413,770  
13,595,505
2,099,119
Other receivables
 
(103,913,042) 
(2,456,245)
32,859,111
Deposits for land use rights
 
(1,182,046) 
1,326,894
1,244,327
Other deposits and prepayments
 
15,076,597  
57,657,023
20,903,928
Other current assets
 
(6,456,006) 
6,975,279
352,598
Amounts due from related parties
 
47,297,291  
7,825,323
(1,996,056)
Amounts due from employees
 
(47,565) 
405,575
214,327
Other assets
 
14,383,358
769,425
9,438,651
Accounts payable
 
(94,511,442)
89,556,104
(16,920,975)
Customer deposits
 
210,848,409
(522,223,988)
(205,242,047)
Income tax payable
 
13,392,278
58,023,234
(26,233,265)
Other payables and accrued liabilities
 
(29,962,164)
258,398,911
157,349,835
Payroll and welfare payable
 
2,392,037
(1,980,925)
(3,845)
Amounts due to related parties
(10,979,186)
2,000,000
—
Net cash (used in)/provided by operating activities
 
(530,272,913) 
(270,773,987) 
18,198,247
The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents
F-11
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2022, 2023, and 2024
(ALL amounts stated in US$, except for number of shares data)
Year ended December 31,
    
2022
    
2023
    
2024
US$
US$
US$
CASH FLOWS FROM INVESTING ACTIVITIES:
 
   
   
  
Disposal of properties held for lease and property and equipment
 
3,264,138  
82,512  
9,202,167
Purchase of property and equipment
 
(28,681) 
(372,937) 
(590,389)
Acquisition of subsidiaries, net of cash acquired
 
510,108,525  
—  
(268,836)
Acquisition of long-term investments
 
—  
414,661  
192,012
Purchase of Investment product
—
(1,411,891)
1,428,264
Proceeds of sales of equity interest of subsidiaries
—
180,702
—
Loan to employees
554,309
—
—
Net cash provided by/(used in) investing activities
 
513,898,291  
(1,106,953) 
9,963,218
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
Proceeds from issuance of common shares
—
1,595,830
—
Purchase of treasury shares (Note 18)
 
—  
(731,871) 
(440,576)
Disposal of ordinary shares
—
—
640,367
Dividends to shareholders
 
(4,661,341) 
—  
(3,392,800)
Amounts due to related parties
 
(4,068,750) 
5,432,379  
(2,396,841)
Repayments of short-term bank loans and current portion of long-term bank loans
 
(205,502,651) 
(110,453,807) 
(81,115,077)
Proceeds from short-term bank loans and current portion of long-term bank loans
 
5,825,838  
—  
2,106,648
Repayment of long-term bank loans
 
(38,472,000) 
—  
—
Proceeds from long-term bank loans
 
83,335,835  
20,314,059  
27,746,217
Repayment of other short-term debt
 
(4,059,023) 
—  
(83,972,898)
Proceeds from other short-term debt
 
85,768,101  
—  
32,500,000
Repayment of other long-term debt
 
(98,522,299) 
—  
—
Proceeds from other long-term debt
 
124,661,778  
36,508,218  
4,775,069
Payment of principal from finance lease
 
(5,207,694) 
—  
—
Proceeds from mandatorily redeemable non-controlling interests
 
475,728  
42,171  
1,138,179
Contributions from non-controlling interests, net
 
—  
—  
3,141,404
Net cash used in financing activities
 
(60,426,478) 
(47,293,021) 
(99,270,308)
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
 
(76,801,100) 
(319,173,961) 
(71,108,843)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
 
(82,342,346) 
(10,733,108) 
(7,326,513)
Cash, cash equivalents and restricted cash, at beginning of year
 
719,871,755  
560,728,309  
230,821,240
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, AT END OF YEAR
 
560,728,309  
230,821,240  
152,385,884
SUPPLEMENTARY INFORMATION ON CASH FLOWS
 
 
 
Cash and cash equivalents
 
283,131,542  
129,243,923  
94,444,126
Restricted cash
 
277,596,767  
101,577,317  
57,941,758
Incomes taxes paid
 
99,120,026  
44,064,294  
24,272,715
Interest paid
 
112,037,414  
34,991,943  
37,822,272
The accompanying notes are an integral part of these consolidated financial statements.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-12
1.         Background information of business and organization
Organization and Description of Business
Xinyuan Real Estate Co., Ltd. (the “Company”) and its subsidiaries (collectively the “Group”) are principally engaged in residential real
estate development and the provision of property management services. The Group’s operations are conducted mainly in the People’s Republic of
China (the “PRC”). In 2012, the Group expanded its business into the U.S. residential real estate market.
As of December 31, 2024, principal subsidiaries of the Company and its consolidated variable interest entities included the following entities:
Percentage of
Registered Place
Equity
and Date of
Registered
Attributable
Principal
Company Name
    
Incorporation
    
Capital
    
to the Group
    
Activities
Subsidiary companies:
    
      
      
      
      
  
Xinyuan International Property Investment Co., Ltd.
Cayman Islands October 6, 2011
 
US$
 
500,000  
100 %   Investment holding company
Xinyuan International (HK) Property Investment Co., Ltd.
Hong Kong October 26, 2011
 
HK$
 
3,000,000  
100 %   Investment holding company
XIN Development Group International Inc.
United States November 10, 2011
 
US$
 
—  
100 %   Investment holding company
Xinyuan Real Estate, Ltd.
Cayman Islands January 27, 2006
 
US$
 
50,000,000  
100 %   Investment holding company
XIN Development Management East, LLC
United States August 28, 2012
 
US$
 
1,000  
100 %   Property management services
XIN NY Holding, LLC
United States August 29, 2012
 
US$
 
1,000  
100 %   Investment holding company
421 Kent Development, LLC
United States August 29, 2012
 
US$
 
1,000  
100 %   Real estate development
Xinyuan Sailing Co., Ltd.
Hong Kong June 21, 2013
 
HK$
 
3,000,000  
100 %   Investment holding company
AWAN Plasma Sdn Bhd
Malaysia April 16, 2007
 
MYR
 
33,577,000  
100 %   Real estate development
XIN Eco Marine Group Properties Sdn Bhd
Malaysia July 9, 2014
 
MYR
 
33,217,000  
100 %   Investment holding company
Zhengzhou Jiasheng Real Estate Co., Ltd.
PRC December 2, 2013
 
US$
 
60,000,000  
100 %   Real estate development
Xinyuan (China) Real Estate, Ltd. (“Xinyuan China”)
PRC April 10, 2006
US$
307,000,000
100 %   Investment holding company
Henan Xinyuan Real Estate Co., Ltd. (“Henan Xinyuan”)
PRC May 19, 1997
RMB
200,000,000
100 %   Real estate development
Qingdao Xinyuan Xiangrui Real Estate Co., Ltd.
PRC February 9, 2006
RMB
10,000,000
100 %   Real estate development
Shandong Xinyuan Real Estate Co., Ltd.
PRC June 2, 2006
RMB
300,000,000
100 %   Real estate development
Xinyuan Property Management Service (Cayman) Ltd.
Cayman Islands December 13, 2018
HKD
50,000
43.07 %   Investment holding company
Xinyuan Property Management Service (BVI) Ltd.
British Virgin Islands January 2, 2019
USD
—
43.07 %   Investment holding company
Xinyuan Property Management Service (HK) Limited
HK January 8, 2019
HKD
1
43.07 %   Investment holding company
Xinyuan Science and Technology Service Group Co., Ltd.
PRC December 28, 1998
RMB
50,000,000
43.07 %   Property management services
Mingyuan Landscape Engineering Co., Ltd.
PRC February 17, 2004
RMB
50,000,000
100 %   Landscaping engineering and management
Henan Xinyuan Wanzhuo Real Estate Co., Ltd.
PRC December 29, 2011
RMB
20,000,000
100 %   Real estate development
Suzhou Xinyuan Real Estate Development Co., Ltd.
PRC November 24, 2006
RMB
200,000,000
100 %   Real estate development
Anhui Xinyuan Real Estate Co., Ltd.
PRC December 7, 2006
RMB
50,000,000
100 %   Real estate development
Kunshan Xinyuan Real Estate Co., Ltd.
 
PRC January 31, 2008
 
RMB
 
200,000,000  
100 %   Real estate development
Xinyuan Real Estate (Chengdu) Co., Ltd.
 
PRC June 12, 2007
 
RMB
 
220,000,000  
100 %   Real estate development
Xuzhou Xinyuan Real Estate Co., Ltd.
 
PRC November 9, 2009
 
RMB
 
200,000,000  
100 %   Real estate development
Henan Xinyuan Jiye Real Estate Co., Ltd.
 
PRC November 15, 2009
 
RMB
 
50,000,000  
100 %   Real estate development
Beijing Xinyuan Wanzhong Real Estate Co., Ltd. (“Beijing Wanzhong”)
 
PRC March 4, 2008
 
RMB
 
900,000,000  
100 %   Real estate development

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-13
Percentage of
Registered Place
Equity
and Date of
Registered
Attributable
Principal
Company Name
    
Incorporation
    
Capital
    
to the Group     
Activities
Xinyuan Renju (Beijing) Asset Management Co., Ltd.
 
PRC January 16, 2009
 
RMB
 
30,000,000  
100 %   Management consulting service
Beijing Xinyuan Priority Real Estate Consulting Co., Ltd.
 
PRC March 8, 2012
 
RMB
 
30,000,000  
100 %   Real estate consulting services
Henan Xinyuan Priority Commercial Management Co., Ltd.
 
PRC August 10, 2012
 
RMB
 
2,000,000  
100 %   Leasing management services
Suzhou Xinyuan Wanzhuo Real Estate Co., Ltd. (“Suzhou Wanzhuo”)
(Note 18(a))
 
PRC September 20, 2012
 
RMB
 
200,000,000  
20 %   Real estate development
Jiangsu Jiajing Real Estate Co., Ltd.
 
PRC March 28, 2005
 
RMB
 
150,000,000  
100 %   Real estate development
Xingyang Xinyuan Real Estate Co., Ltd.
 
PRC July 25, 2013
 
RMB
 
200,000,000  
100 %   Real estate development
Jinan Xinyuan Wanzhuo Real Estate Co., Ltd.
 
PRC December 4, 2013
 
RMB
 
300,000,000  
100 %   Real estate development
Sanya Beida Science and Technology Park Industrial Development Co.,
Ltd.
 
PRC January 10, 2014
 
RMB
 
200,000,000  
100 %   Real estate development
Chengdu Xinyuan Wanzhuo Real Estate Co., Ltd.
 
PRC February 21, 2014
 
RMB
 
50,000,000  
100 %   Real estate development
Tianjin Xinyuan Real Estate Co., Ltd.
 
PRC September 17, 2014
 
RMB
 
100,000,000  
100 %   Real estate development
Xi’an Yinghuai Square Commerce Management Co., Ltd.
 
PRC November 25, 2014
 
RMB
 
3,000,000  
100 %   Retail store
Subsidiary companies:
 
  
 
  
 
   
   
  
Changsha Xinyuan Wanzhuo Real Estate Co., Ltd.
 
PRC April 3, 2014
 
RMB
 
100,000,000  
100 %   Real estate development
Shanghai Junxin Real Estate Co., Ltd.
 
PRC January 16, 2014
 
RMB
 
5,000,000  
100 %   Real estate development
Beijing Yinghuai Commerce and Trade Co., Ltd.
 
PRC January 5, 2015
 
RMB
 
30,000,000  
100 %   Retail store
Beijing Xinhe Investment Development Co., Ltd.
 
PRC May 5, 2015
 
RMB
 
5,000,000  
100 %   Investment holding company
Henan Xinyuan Guangsheng Real Estate Co., Ltd.
 
PRC July 27, 2015
 
RMB
 
200,000,000  
100 %   Real estate development
Shandong Xinyuan Renju Real Estate Co., Ltd.
 
PRC November 19, 2011
 
RMB
 
50,000,000  
100 %   Real estate development
Shaanxi Zhongmao Economy Development Co., Ltd.
 
PRC June 22, 1998
 
RMB
 
22,500,000  
65.98 %   Real estate development
421 Kent Holding Co, Ltd.
 
United States May 2, 2014
 
US$
 
1,000  
100 %   Investment holding company
Hudson 888 Owner LLC
 
United States October 22, 2015
 
US$
 
1,000  
100 %   Real estate development
XIN Manhattan Holding LLC
 
United States December 9, 2015  
US$
 
1,000  
100 %   Investment holding company
Hudson 888 Holding LLC
 
United States December 9, 2015  
US$
 
1,000  
100 %   Investment holding company
Shenzhen Xinchuang Investment Consulting Co., Ltd.
 
PRC January 20, 2016
 
RMB
 
10,000,000  
100 %   Investment

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-14
Percentage of
Registered Place
Equity
and Date of
Registered
Attributable
Principal
Company Name
    
Incorporation
    
Capital
    
to the Group     
Activities
Subsidiary companies:
    
      
      
      
      
  
Henan Xinyuan Quansheng Real Estate Co., Ltd.
 
PRC January 14, 2015
 
RMB
 
40,000,000  
100 %   Real estate development
Zhengzhou Shengdao Real Estate Co., Ltd.
 
PRC October 14, 2013
 
RMB
 
20,000,000  
100 %   Real estate development
Henan Xinyuan Shunsheng Real Estate Co., Ltd.
 
PRC January 13, 2016
 
RMB
 
30,000,000  
100 %   Real estate development
Hunan Erli Real Estate Co., Ltd.
 
PRC January 4, 2008
 
RMB
 
50,000,000  
100 %   Real estate development
XIN Queens Holding LLC
 
United States July 6, 2016
 
US$
 
1,000  
100 %   Investment holding company
Queens Theatre Holdco LLC
 
United States July 6, 2016
 
US$
 
1,000  
100 %   Investment holding company
Queens Theatre Owner LLC
 
United States July 6, 2016
 
US$
 
1,000  
100 %   Real estate development
Zhengzhou Xinnan Real Estate Co., Ltd.
 
PRC January 21, 2016
 
RMB
 
50,000,000  
100 %   Real estate development
Xinyan Investment Management Co., Limited.
 
PRC April 8, 2016
 
RMB
 
100,000,000  
90 %   Investment
Hunan Xintian Real Estate Co., Ltd.
 
PRC September 28, 2009
 
RMB
 
20,000,000  
100 %   Real estate development
Zhengzhou Hangmei Technology Development Co., Ltd.
 
PRC November 25, 2014
 
RMB
 
50,000,000  
100 %   Real estate development
Zhengzhou Hangmei Zhengxing Technology Co., Ltd.
 
PRC March 28, 2016
 
RMB
 
50,000,000  
100 %   Real estate consulting services
Xi’an Dingrun Real Estate Co., Ltd.
 
PRC June 1, 2011
 
RMB
 
20,000,000  
100 %   Real estate development
Zhengzhou Kangshengboda Real Estate Co., Ltd.
 
PRC July 29, 2016
 
RMB
 
50,000,000  
100 %   Real estate development
Zhuhai Prince Real Estate Co., Ltd.
 
PRC September 13, 1990
 
RMB
 
307,000,000  
100 %   Real estate development
Henan Renxin Real Estate Co., Ltd. (“Henan Renxin”)
 
PRC July 11, 2008
 
RMB
 
200,000,000  
51 %   Real estate development
Xinchuang Technology Co., Ltd. (“Xinchuang Technology”)
 
PRC May 2, 2017
 
RMB
 
100,000,000  
100 %   Management consulting services
Hangzhou Huiyuan Investment Management Partnership Enterprise.
(Limited partnership)
 
PRC May 23, 2017
 
RMB
 
5,000,000  
100 %   Investment holding company
Guangdong Xinyuan Real Estate Co., Ltd.
 
PRC October 18, 2017
 
RMB
 
100,000,000  
100 %   Real estate development
Taicang Pengchi Real Estate Co., Limited. (“Taicang Pengchi”) (Note
17(a))
 
PRC June 16, 2017
 
RMB
 
200,000,000  
17 %   Real estate development
Khorgos XinYan Enterprise Management Consulting Co., Ltd.
 
PRC December 4, 2017
 
RMB
 
5,000,000  
100 %   Management consulting services
Jinan Xinyuan Quansheng Real Estate Co., Ltd.
 
PRC May 25, 2018
 
RMB
 
50,000,000  
100 %   Real estate development

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-15
Percentage of
Registered Place
Equity
and Date of
Registered
Attributable
Principal
Company Name
    
Incorporation
    
Capital
    
to the Group
    
Activities
Subsidiary companies:
    
      
      
      
      
  
Suzhou Yuxi Real Estate Co., Limited.
 
PRC March 5, 2018
 
RMB
 
100,000,000  
20 %   Real estate development
Xinchuang Sailing (Dalian) Healthy Technology Industrial Investment Co., Ltd.
 
PRC June 5, 2018
 
RMB
 
600,000,000  
100 %   Real estate development
Dalian Xinyi Renju Real Estate Co., Ltd.
 
PRC June 26, 2018
 
RMB
 
100,000,000  
100 %   Real estate development
Beijing Xinyuan Huicheng Technology Development Co., Ltd.
 
PRC January 26, 2018
 
RMB
 
100,000,000  
100 %   Technical services
Suzhou Yefang Real Estate Co., Limited. (“Suzhou Yefang”) (Note 17(b))
 
PRC April 14, 2017
 
RMB
 
100,000,000  
20 %   Real estate development
Chengdu Xinyuan Renju Enterprise Management Co., Ltd. (“Chengdu Renju”)
 
PRC October 26, 2017
 
RMB
 
50,000,000  
100 %   Real estate development
Chengdu Guohongteng Real Estate Co., Ltd.
 
PRC July 16, 2010
 
RMB
 
1,673,179,200  
100 %   Real estate development
Qingdao Keda Real Estate Co., Ltd. (“Qingdao Keda”)
 
PRC September 20, 2010
 
RMB
 
50,000,000  
100 %   Real estate development
Wuhan Yinghexin Real Estate Co., Ltd. (“Wuhan Yinghexin”)
 
PRC January 15, 2014
 
RMB
 
100,000,000  
100 %   Real estate development
Henan Xinyuan Property Management Co., Ltd.
 
PRC December 1, 2016
 
RMB
 
10,000,000  
100 %   Property management services
Subsidiary companies:
Zhuhai Xinyuan Real Estate Co., Ltd.
 
PRC December 31, 2018
 
RMB
 
100,000,000  
100 %   Real estate development
Jinan Renju Building Material Co., Ltd.
PRC January 2, 2019
RMB
50,000,000
100 %
Sales of construction material
  
  
Dalian Xinyi Yaju Real Estate Co., Ltd.
PRC January 16, 2019
RMB
100,000,000
100 %
Real estate development
  
  
Guangdong Xinchuang Kechuang Zhigu Development Co., Ltd.
PRC February 27,2019
RMB
100,000,000
100 %
Real estate development
Jiangxi Xinyuan Heju Enterprise Management Consulting Service Co., Ltd.
PRC April 2,2019
RMB
10,000,000
100 %
Management consulting services
  
  
Beijing I-Journey Science and Technology Development Co., Ltd.(“I-Journey”)
PRC October 20,2015
RMB
40,000,000
93 %
Development and sales of robots
Beijing Ruizhuo Xichuang Technology Development Co., Ltd.(“Xichuang”)
PRC July 16,2015
RMB
30,000,000
93 %
Real estate brokerage
Beijing Ruizhuo Xitou Development Co., Ltd. (“ Xitou”)
PRC July 16,2015
RMB
30,000,000
85 %
Internet platform for real estate property financing
Beijing Future Xinzhihui Technology Development Center (Limited Partnership)
PRC December 16,2016
RMB
30,000,000
90.67 %
Investment holding company
Beijing Future Xinhujin Technology Development Center (Limited Partnership)
PRC December 30,2016
RMB
20,000,000
89.5 %
Investment holding company
Beijing Future Xinruifeng Technology Development Center (Limited Partnership)
PRC February 23,2017
RMB
20,000,000
77.5 %
Investment holding company
Beijing Ruihao Rongtong Real Estate Co., Ltd. (“Ruihao Rongtong”)
PRC June 15, 2006
RMB
250,000,000
100 %
Real estate development
Zhengzhou Xinhe Real Estate Co., Ltd
PRC January 8,2020
RMB
50,000,000
80 %
Real estate development
Zhengzhou Xinying Real Estate Co., Ltd.
PRC May 19,2020
RMB
30,000,000
100 %
Real estate development
Zhengzhou Xinyuan Xinsheng Business Management Co. Ltd.
PRC November 2,2020
RMB
1,000,000
100 %
Real estate development
Dalian Xinsheng Industrial Co., Ltd.
PRC December 16,2020
RMB
20,000,000
100 %
Leasing management services
Guoxin Chuangxiang (Tianjin) Enterprise Management Consulting Partnership (Limited Partnership)
PRC January 2,2020
RMB
15,000,000
95.22 %
Management consulting service
Guoxin Chuangzhi (Tianjin) Enterprise Management Consulting Partnership (Limited Partnership)
PRC June 23,2020
RMB
135,000,000
94.41 %
Management consulting service
Chongqing Heavy Duty Vehicle Group Hong Property LLC Wulong Branch
PRC September 26, 2021
RMB
—
100 %
Property management services
Henan Rongyao Catering Service Co., Ltd.
PRC September 23, 2021
RMB
1,000,000
51 %
Catering services
Henan Xinzhixiang Electronic Technology Co., Ltd.
PRC May 20, 2020
RMB
5,000,000
100 %
Electronic commerce
Henan Xinyuan Property Service Co., Ltd.. Xincai Branch
PRC November 19, 2021
RMB
—
—
Property management services
Zhengzhou Shengxin Landscape Engineering Co., Ltd.
PRC November 10, 2021
RMB
10,000,000
51 %
Property management services
Henan Xinyuan Property Service Co., Ltd.. Runan Branch
PRC March 18, 2021
RMB
—
—
Property management services
Guangzhou Yuesheng Commercial Service Co., Ltd.. Zhengzhou Branch
PRC March 30, 2021
RMB
—
—
Management consulting services
Henan Kai Dao real Estate Brokerage Co., Ltd.
PRC September 30, 2021
RMB
10,000,000
100 %
Property management services
Shanghai Xinqiao Trading Co., Ltd. (1)
PRC March 17, 2021
RMB
30,000,000
100 %
Property management services
Hainan Xinyuan Heju Enterprise Management Consulting Service Co., Ltd. (2)
PRC September 27, 2020
RMB
10,000,000
100 %
Management consulting services
Guangzhou Xinyuan Commercial Management Co., Ltd.
PRC March 30, 2021
RMB
1,000,000
100 %
Retail store
Henan Xinyuan Hongsheng Commercial Management Co., Ltd.
PRC May 6, 2021
RMB
1,000,000
100 %
Retail store
Qingdao Huiju Zhihui City Industrial Development Co., Ltd.
PRC June 7, 2016
RMB
2,000,000,000
100 %
Real estate development
Huai’an Xinyuan Yaju Enterprise Management Co., Ltd. (Jiangsu Xinyuan Yaju Enterprise Management
Co., Ltd.)
PRC August 23, 2023
RMB
10,000,000
100 %
Management consulting services
VIE:
 
  
 
  
 
   
   
  
Beijing Yuzhouyun Technology Development Center (Limited partnership)) and its subsidiary
(“Yuzhouyun”) (Note 2(a))
 
PRC March 2, 2018
 
RMB
 
18,388,300  
51 %   Technical services
Beijing Ruizhuo Xihui Technology Development Centre Co., Ltd (Note 2(a))
 
PRC January 22,2017
 
RMB
 
10,000,000  
1 %   Technical services
(1)
Liquidated on October 9, 2023.
(2)
Liquidated on June 20, 2023.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-16
2.           Summary of significant accounting policies
(a)         The Company and basis of presentation and consolidation
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles
(“U.S. GAAP”). The consolidated financial statements include the financial statements of the Company, its subsidiaries, VIEs, and the subsidiaries of
VIEs. All inter-company transactions and balances between the Company and its subsidiaries have been eliminated upon consolidation.
Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which
control is transferred out of the Group. Where there is a loss of control of a subsidiary, the consolidated financial statements include the results for the
part of the reporting year during which the Group has control.
Ruihao Rongtong
Ruihao Rongtong, with a registered capital of US$37.6 million (RMB250.0 million), was invested in by the Company on May 6, 2015, for
the purpose of undertaking a residential property development project in Beijing. On March 1, 2016, June 28, 2016 and September 18, 2016, an
unrelated trustee company, Ping An trust Co.,  Ltd. (“Ping An trust”) purchased 20%, 5% and 10% of the Company’s equity interest in Ruihao
Rongtong, respectively, and loaned US$124.3 million (RMB862.5 million) in aggregate to the Group. On February  28, 2017, the Company
repurchased the 35% equity interest of Ruihao Rongtong from Ping An trust. On May 23, 2017, Ping An trust subsequently repurchased back 35% of
the Company’s equity interest in Ruihao Rongtong, and loaned US$246.8 million (RMB1.61 billion) in aggregate to the Group. As of December 31,
2018, Ruihao Rongtong had one project under construction. Pursuant to the share purchase agreement, the 35% of non-controlling equity interest of
Ruihao Rongtong was to be repurchased by the Company in cash at the earlier of the second anniversary date, or the date the Company elected to
repurchase the 35% equity interest of Ruihao Rongtong. Therefore, the non-controlling interest is mandatorily redeemable and is accounted for as
liability in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”). On June 21, 2019, the Company repurchased the 35%
equity interest of Ruihao Rongtao from Ping An trust and Ruihao Rongtong ceased to be variable interest entity(“VIE”).
In accordance with ASC 810, Consolidation (“ASC 810”), before June 21, 2019, Ruihao Rongtong was a variable interest entity as it was not
established with sufficient equity at risk to finance its activities without additional subordinated financial support. The Company is considered as the
primary beneficiary of Ruihao Rongtong, as it has the power to direct the activities of Ruihao Rongtong that most significantly impact their economic
performance and has the obligation to absorb the losses and the right to receive benefits from Ruihao Rongtong through its voting interest underlying
its 65% equity interest in accordance with PRC Law and the articles of association of Ruihao Rongtong. Based on the above, Ruihao Rongtong was
consolidated by the Company.
Yuzhouyun
On March 2, 2018, the Group signed a partnership agreement with certain senior management members to form Yuzhouyun. According to
the partnership agreement, the design and purpose of Yuzhouyun’s activities are to provide technical services to the Group. The Group acts as a
limited partner and the senior management members are general partners. Substantially all significant activities require the approval from the senior
management members. The Group and senior management members agreed to share profits at the proportion of 51% and 49%, respectively. The
Group, as the limited partner, is the only party with the equity at risk to absorb losses of Yuzhouyun. Yuzhouyun’s principal activities are also to
provide technical service to the Group, which indicates that Yuzhouyun’s activities are conducted on behalf of the Group. Therefore, under ASC 810,
Yuzhouyun is a variable interest entity. In addition, as the senior management members are the Group’s employees, which represent a principal-
agency relationship, therefore, the Group is concluded to be “most closely associated” with Yuzhouyun. Based on the above, the Group is the primary
beneficiary because it has the power to direct the activities of Yuzhouyun that most significantly impact their economic performance and has the
obligation to absorb the losses and the right to receive benefits from Yuzhouyun.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-17
The carrying amounts and classifications of the assets and liabilities of Yuzhouyun were as follows:
    
December 31, 
    
December 31, 
2023
2024
US$
US$
Current assets
 
(10,484)
275,024
Non-current assets
 
2,922,037
2,652,385
Total assets
 
2,911,553
2,927,409
Current liabilities
 
21,353,225
21,726,028
Non-current liabilities
 
6,847,671
6,746,981
Total liabilities
 
28,200,896
28,473,009
The financial performance and cash flows of Yuzhouyun were as follows:
    
Year ended
    
Year ended
December 31, 
December 31, 
2023
2024
US$
US$
Revenue
 
10,731
—
Cost of revenue
 
(947,551)
—
Net loss
 
(721,263)
(634,123)
Net cash provided by operating activities
 
3,140,065
222,878
Net cash used in investing activities
 
—
—
Net cash used in financing activities
 
(3,124,002)
(210,665)
As of December 31, 2023 and 2024, the current liabilities of Yuzhouyun included amounts due to subsidiaries of the Group amounting to
US$18,643,004 and US$18,522,954, which were eliminated upon consolidation by the Company.
During the years ended December 31, 2023 and 2024, the revenue of Yuzhouyun included amounts that came from the Group amounting to
US$nil and US$nil, which were eliminated upon consolidation by the Company.
Yuzhouyun contributed US$10,731 and US$nil of the Company’s consolidated revenue for the years ended December 31, 2023 and 2024,
respectively.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-18
Ruizhuo Xihui
In 2020, Ruizhuo Xichuang, a subsidiary of the Group, together with Ruizhuo Xihui and its registered shareholders, entered a new set of
Contractual Arrangements, including the powers of attorney, the exclusive business cooperation agreement, the exclusive share purchase agreement,
the equity pledge agreement, the confirmations from such Registered Shareholders and the spouse undertakings (collectively known as the “Ruizhuo
Xihui VIE Agreements”). The terms of the Ruizhuo Xihui VIE Agreements indicate that the Group is the only party at risk to absorb losses of
Ruizhuo Xihui. Ruizhuo Xihui’s principal activities are also to provide technical service to the Group, which indicates that Ruizhuo Xihui’s activities
are conducted on behalf of the Group. In accordance with ASC 810, Ruizhuo Xihui is a variable interest entity. Based on the above, the Group is the
primary beneficiary because it has the power to direct the activities of Ruizhuo Xihui that most significantly impact its economic performance and has
the obligation to absorb the losses and the right to receive benefits from Ruizhuo Xihui.
The carrying amounts and classifications of the assets and liabilities of Ruizhuo Xihui were as follows:
    
December 31, 
    
December 31, 
2023
2024
 
US$
US$
Current assets
 
2,566,273
2,526,033
Non-current assets
 
(10,626)
(10,470)
Total assets
 
2,555,647
2,515,563
Current liabilities
 
2,533,801
2,496,543
Total liabilities
 
2,533,801
2,496,543
The financial performance and cash flows of Ruizhuo Xihui were as follows:
    
Year ended
    
Year ended
December 31, 
December 31, 
2023
2024
 
US$
US$
Revenue
 
—
—
Cost of revenue
 
—
—
Net income
 
30,919
(2,528)
Net cash used in operating activities
 
(24)
—
Net cash used in investing activities
 
—
—
Net cash used in financing activities
 
—
—
As of December 31, 2023 and 2024, the current liabilities of Ruizhuo Xihui included amounts due to subsidiaries of the Group amounting to
US$nil and US$nil, respectively, the current assets of Ruizhuo Xihui included amounts due from subsidiaries of the Group of US$2,476,119 and
US$2,437,205, which were eliminated upon consolidation by the Company.
Ruizhuo Xihui contributed US$nil and US$nil of the Company’s consolidated revenue for the years ended December 31, 2023 and 2024,
respectively.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-19
(b)          Going concern
As of December 31, 2024, the Group’s short-term bank loans and other debt, and current portion of long-term bank loans and other debt
amounted to US$1,145.0 million.
As announced in the Form 6-K dated July 19, 2022, the Company did not make payments in full for its senior notes of RMB545.3 million
(“defaulted senior notes”) issued on July 3 and August 6, 2020 with a maturity date on June 29, 2022. The default also triggered cross-default of other
senior notes issued by the Group. On August 18, 2023, eligible holders of the defaulted senior notes in the aggregate principal amount of US$307.36
million exchanged their notes and the Company delivered the September 2027 Senior Secured Notes in the aggregate principal amount of US$331.3
million due on September 30, 2027 and US$1.54 million in cash consideration in full satisfaction of the exchange consideration to those eligible
holders. The carrying amount of senior notes still in default was US$391.9 million as of December 31, 2024.
The Group also breached certain covenants relating to borrowings of US$409.9 million as of December 31, 2024. Additionally, as of the date
hereof, the Group continues to be in breach of certain covenants and other lenders have not demanded immediate repayment of other borrowings.
In addition, the Group is involved in other various litigation and arbitration cases for various reasons and the contingent compensation is
subject to the court verdict. The Company anticipates that the market conditions in the real estate sector remain under pressure in 2025, and therefore,
in the absence of a sharp recovery in the market and the availability of various financing options, the Company remains cautious about its liquidity in
the near term. The above events or conditions indicate the existence of material uncertainty which cast substantial doubt on the Group’s ability to
continue as a going concern.
In view of such circumstances, the directors consider that the Group has taken various measures and will have adequate funds available to
enable it to operate as a going concern, taking into account the past operating performance of the Group and the following:
(a) The Group has been in negotiation with the noteholder to reach agreement on a further debt restructuring plan.
(b) Up to the date of approval of the consolidated financial statements, the Group reached an agreement with corporate bondholders of RMB
corporate bonds with carrying amount of RMB273.8 million as of December 31, 2024. Pursuant to the agreement, the repayment date of the
corporate bond was extended to November 13, 2027 and January 7, 2028;
(c) The Group is actively in discussions with the other existing lenders to renew the Group’s certain borrowings and/or not to demand immediate
repayment until the Group has successfully completed the property construction projects and generated sufficient cash flows therefrom.
These discussions have been constructive and focused on possible actions in light of current circumstances but do require time to formulate
or implement due to ongoing changes in market conditions;
(d) The Group will continue to implement measures to accelerate the pre-sales and sales of its properties under development and completed
properties, and to speed up the collection of outstanding sales proceeds and other receivables. Recent relaxation of policies with regards to
the property market in the PRC have been encouraging to increase buyer interests and stimulate demand. Subject to the improvement of the
market sentiment, the Group will actively adjust sales and pre-sale activities to better respond to changing markets to achieve the latest
budgeted sales and pre-sales volumes and amounts;
(e) The Group will continue to control administrative costs and contain unnecessary capital expenditures to preserve liquidity. The Group will
also continue to actively assess additional measures to further reduce discretionary spending; and
(f)
The Group has been proactive in seeking ways to settle the outstanding litigations of the Group. The Group will seek to reach an amicable
solution on the charges and payment terms to the claims and litigations which have not yet reached a definite outcome.
In the event forecast cash flow is not achieved or the renewal of borrowings and public senior notes does not undergo as planned, the
directors of the Company have also evaluated other plans that could be undertaken to improve their liquidity position as follow:
1)
The Group could adjust their original sale plan for some residential properties and commercial buildings to an earlier stage in order to
generate additional funds; and

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-20
2)
The Group will continue to seek to obtain additional new sources of financing from potential equity investment partners or to seek suitable
opportunities to dispose of its equity interest in certain project development companies to generate additional cash inflows. The Group’s
properties are predominantly located in higher tier cities that make them relatively more attractive to potential buyers and retain a higher
value in current market conditions.
Notwithstanding the above, uncertainty exists as to whether the renewal of borrowings and public senior notes can be renewed and as to all
other alternative operating and financing plans as the Group is still negotiating with its external financiers on the financing to the Group and the sales
of properties depend on market conditions. Should the Group be unable to operate as a going concern, adjustments would have to be made to reduce
the carrying values of the Group’s assets to their recoverable amounts, to provide for financial liabilities which might arise, and to reclassify non-
current assets and non-current liabilities as current assets and current liabilities respectively, if applicable. The effects of these adjustments have not
been reflected in the consolidated financial statements.
(c)          Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect
the amounts reported in the consolidated financial statements and accompanying notes, and disclosure of contingent liabilities at the date of the
consolidated financial statements. Estimates are used for, but not limited to, the selection of the useful lives of property and equipment and finance
lease, allowance for estimating the allowance for credit losses associated with accounts receivables, other receivables, contract assets, short-term
investments and advances to suppliers, fair values of the purchase price allocation with respect to business combinations, progress towards the
completion of the performance obligation, accounting for the share-based compensation, accounting for deferred income taxes, impairment of
goodwill, impairment of real estate properties under development, real estate properties held for lease and long-term investments, provision necessary
for contingent liabilities and estimating the incremental borrowing rate for operating lease liabilities. Management analyzed the forecasted cash flows
for the 12 months from April 29, 2025, which indicates that the Group will have sufficient liquidity from cash flows generated by operations and
existing credit facilities and therefore, there will be sufficient financial resources to settle borrowings and payables that will be due through end of
April 2026. Management believes that the estimates utilized in preparing its consolidated financial statements are reasonable and prudent. Actual
results could differ from these estimates.
(d)          Fair value of financial instruments
Financial instruments include cash and cash equivalents, restricted cash, short-term investments, accounts receivable, other deposits and
prepayments, due from employees, due from related parties, other receivables, long-term investments, accounts payable, customer deposits, other
payables and accrued liabilities, short-term bank borrowings, long-term borrowings and due to related parties. The carrying amounts of the
aforementioned financial instruments, except for short-term investments for which the measurement alternative was elected, long-term investments
and long-term borrowings, approximate their fair value due to the short-term maturities of these instruments. The carrying amounts of the long-term
borrowings approximate their fair values because the stated interest rates approximate rates currently offered by financial institutions for similar debt
instruments of comparable credit risk and maturities. Long-term investments have no quoted market prices and it is not practicable to estimate their
fair value without incurring excessive costs. The Group reviews the investments for impairment whenever events or changes in circumstances indicate
that the carrying amount may no longer be recoverable.
For long-term investments other than those accounted for under the equity method or those that result in consolidation of the investee, the
Company measures equity investments at fair value and recognizes any changes in fair value in net income. However, for equity investments that do
not have readily determinable fair values and do not qualify for the existing practical expedient in ASC 820, Fair Value Measurement (“ASC 820”), to
estimate fair value using the net asset value per share (or its equivalent) of the investment, the Company chose to measure those investments at cost,
less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of
the same issuer. At each reporting date, the Company is required to make a qualitative assessment as to whether equity investments without a readily
determinable fair value for which the measurement alternative is elected is impaired. In the event that a qualitative assessment indicates that the
investment is impaired and the fair value of the investment is less than the carrying value, the carrying value is written down to its fair value. A variety
of factors are considered when determining if a decline in fair value is below carrying value, including, among others, the financial condition and
prospects of the investee.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-21
Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or
permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers
assumptions that market participants would use when pricing the asset or liability.
Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use
of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest
level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair
value:
Level 1-Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets
Level 2-Includes other inputs that are directly or indirectly observable in the market place
Level 3-Unobservable inputs which are supported by little or no market activity
ASC 820 describes three main approaches for measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and
(3)  cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or
comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The
measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount
that would currently be required to replace an asset.
In accordance with ASC 820, investment in marketable equity securities and investment in real estate investment trusts (“REITs”) are
classified as Level 1 as the Company measures the fair value using quoted trading prices that are published on a regular basis, and investment in
equity securities in unlisted companies is categorized as Level 3 measured at fair value using alternative method, less any impairment, plus or minus
changes resulting from observable price in orderly transactions.
(e)          Foreign currency translation
The Group’s financial information is presented in U.S. dollars. The functional currency of the Company is U.S. dollars. The functional
currency of the Company’s subsidiaries in the PRC is Renminbi (“RMB”), the currency of the PRC. The functional currency of the Company’s
subsidiaries in Malaysia is Malaysian Ringgit (“MYR”), the currency of Malaysia. The functional currency of the Company’s subsidiaries other than
those in the PRC and Malaysia is U.S. dollars. Transactions by the Company’s subsidiaries in the PRC which are denominated in currencies other than
RMB are remeasured into RMB at the exchange rate quoted by the People’s Bank of China (“PBOC”) prevailing at the dates of the transactions.
Exchange gains and losses resulting from transactions denominated in a currency other than RMB are included in the consolidated statements of
comprehensive income as exchange gains (losses). The consolidated financial statements of the Company’s subsidiaries have been translated into U.S.
dollars in accordance with ASC 830, Foreign Currency Matters (“ASC 830”). PRC subsidiaries’ financial information is first prepared in RMB and
then is translated into U.S. dollars at period-end exchange rates as to assets and liabilities and average exchange rates as to revenue and expenses.
Capital accounts are translated at their historical exchange rates when the capital transactions occurred.
The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized
institutions. No representation is made that the RMB amounts could have been, or could be, converted into U.S. dollars at the rates used in translation.
(f)          Cash and cash equivalents
The Group considers all highly liquid investments with original maturities of three  months or less to be cash equivalents. The Group
maintains bank accounts mainly in the PRC, Hong Kong and the United States. The vast majority of PRC bank balances are denominated in RMB.
Hong Kong and United States bank balances are denominated in U.S. dollars.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-22
Cash includes cash on hand and demand deposits in accounts maintained with various state-owned and private banks within the PRC, Hong
Kong and the United States. Total cash in banks (excluding restricted cash) at December 31, 2024 amounted to US$94,444,126 (December 31, 2023:
US$129,243,923), of which the vast majority of deposits were not covered by insurance.
(g)          Restricted cash
The Group is required to maintain certain deposits with banks that provide mortgage loans to the Group’s customers in order to purchase
residential units from the Group. These balances are subject to withdrawal restrictions and totaled US$4,706,575 as of December 31, 2024
(December  31, 2023: US$5,221,094). As of December 31, 2024, the Group held US$53,235,183 (December 31, 2023: US$96,356,223) in its
restricted cash accounts, representing funds received from sales proceeds that are subject to withdrawal restrictions. The Group is also required to
maintain certain deposits with banks and financial institutions that provide loans to the Group. As of December 31, 2024, the Group also held US$nil
in its restricted cash accounts (December 31, 2023: US$nil) as security for its short-term loans (Note 9).
As of December 31, 2024, the Group held US$nil (December 31, 2023: US$nil) in its bank accounts with withdrawal restriction for its long-
term loans (Note 10).
(h)         Real estate properties development completed and under development
Real estate properties completed and under development consist of residential unit sites and commercial offices. The Group leases the land
for the residential unit sites under land use right leases with various terms from PRC government. Real estate properties development completed and
under development are stated at the lower of carrying amounts or fair value less selling costs.
Expenditures for land development, including cost of land use rights, deed tax, pre-development costs and engineering costs, are capitalized
and allocated to development projects by the specific identification method. Costs are allocated to specific units within a project based on the ratio of
the sales value of units to the estimated total sales value times the total project costs.
Costs of amenities transferred to buyers are allocated as common costs of the project that are allocated to specific units as a component of
total construction costs. For amenities retained by the Group, costs in excess of the related fair value of the amenities are also treated as common
costs. Results of operations of amenities retained by the Group are included in the current operating results.
In accordance with ASC 360, Property, Plant and Equipment (“ASC 360”), real estate property development completed and under
development are subject to valuation adjustments when the carrying amount exceeds fair value. An impairment loss is recognized only if the carrying
amount of the assets is not recoverable and exceeds fair value. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash
flows expected to be generated by the assets.
When the profitability of a current project deteriorates due to a slowdown in the sales pace, reduction of pricing or some other factor, this
indicates that there may be a possible future loss on delivery and possible impairment in the recoverability of the assets. Accordingly, the assets of
such project are subsequently reviewed for future losses and impairment by comparing the estimated future undiscounted cash flows for the project to
the carrying value of such project. If the estimated future undiscounted cash flows are less than the asset’s carrying value, such deficit will be charged
as a future loss and the asset will then be written down to its estimated fair value.
The Group determines estimated fair value primarily by discounting the estimated future cash flows relating to the asset. In estimating the
cash flows for a project, the Group uses various factors including (a) the expected pace at which the planned number of units will be sold, based on
competitive market conditions, historical trends in sales pace and actual average selling prices of similar product offerings and any other long or short-
term economic conditions which may impact the market in which the project is located; (b) the estimated net sales prices expected to be attained based
on the current market conditions and historical price trends, as well as any estimated increases in future sales prices based upon the projected rate of
unit sales, the estimated time gap between presale and expected delivery, the impact of government policies, the local and regional competitive
environment, and certain external factors such as the opening of a subway line, school or factory; and (c) the expected costs to be incurred in the
future by the Group, including, but not limited to, construction cost, construction overhead, sales and marketing, sales taxes and interest costs.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-23
The Group’s determination of fair value requires discounting the estimated cash flows at a rate commensurate with the inherent risk
associated with the assets and related estimated cash flows. The discount rate used in determining each project’s fair value depends on the stage of
development, location and other specific factors that increase or decrease the risk associated with the estimated cash flows.
For the year ended December 31, 2024, the Group recognized reversal of impairment loss of US$5,122,885 for real estate properties
completed and under development (2022: impairment loss of US$2,932,743; 2023: impairment loss of US$21,544,902).
(i)          Revenue recognition
Revenue is recognized when control of the goods or services is transferred to the customer at an amount that reflects the consideration to
which the Group expects to be entitled in exchange for those goods or services. The Group also elected to exclude sales taxes and other similar taxes
from the measurement of the transaction price. Therefore, revenue is recognized net of business tax and value added taxes (“VAT”).
Real estate sales
Revenue arising from real estate sales is recognized when or as the control of the asset is transferred to the customer. Depending on the terms
of the contract and the laws that apply to the contract, control of the asset may transfer over time or at a point in time.
For real estate sales contracts for which the Group has an enforceable right to payment for performance completed to date, revenue is
recognized over time by measuring the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized at a
point in time when the customer obtains the physical possession, the legal title, or the significant risks and rewards of ownership of the assets and the
Group has a present right to a payment and the collection of the consideration is probable. The progress towards complete satisfaction of the
performance obligation is measured based on the Group’s efforts or inputs to the satisfaction of the performance obligation, by reference to the
contract costs incurred up to the end of reporting period as a percentage of total estimated costs for each contract.
Generally, the Group receives short-term advances from its customers for real estate sales. Using the practical expedient, the Group does not
adjust the promised amount of consideration for the effects of a significant financing component if it expects, at contract inception, that the period
between the transfer of the promised good or service to the customer and when the customer pays for that good or service will be one year or less. The
Group also receives long-term advances from customers for real estate sales. The transaction price for such contracts is adjusted for the effects of a
financing component, if long-term advances from customers are assessed as significant at the individual contract level.
Real estate management services income
Real estate management services income is recognized in the accounting period in which the services are rendered. The Group bills a fixed
amount periodically for services provided and recognizes as revenue the amount to which the Group has a right to invoice that corresponds directly
with the value of performance completed.
Real estate lease income
Real estate lease income is generally recognized on a straight-line basis over the terms of the tenancy agreements. For real estate leases, these
contracts are treated as leases for accounting purposes, rather than contracts with customers subject to ASC 606, Revenue from Contracts with
Customers.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-24
Other revenue
Other revenue includes services ancillary to the Group’s real estate projects, including construction service revenue and software consulting
service income. Construction service revenue and software consulting service income are recognized when services are provided as the customer
simultaneously benefits from the services as they are performed.
Contract assets
The Group pays sales commission to its real estate sales agencies for each real estate sales contract. The Group has elected to apply the
optional practical expedient for costs to obtain a contract which allows the Group to immediately expense sales commissions (included under selling
and distribution expenses) when the amortization period of the asset that the Group otherwise would have used is one year or less. For incremental
costs of obtaining real estate sales contracts that extend beyond a one-year period, the Group has no current contract assets as not expected to realize
within one year, these incremental costs of obtaining real estate sales contracts are recognized as assets if the real estate sales are collectible and
amortized as the Group transfers the control of the assets to customers. The Group recognized US$4.1 million and US$3.2 million of such costs in
selling and distribution expense during the years ended December 31, 2023 and 2024, respectively. As of December 31, 2023 and 2024, there was no
impairment losses on contract assets.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount
of consideration is due) from the customer. If a customer pays consideration before the Group transfers goods or services to the customer, a contract
liability is recognized when the payment is made or the payment is due (whichever is earlier). The Group’s contract liabilities are comprised of
customer deposits, which are recognized as revenue when the Group performs under the contract.
The following table presents the Group’s contract balances as of December 31, 2023 and 2024:
    
December 31, 
    
December 31, 
2023
2024
Contract assets
 
34,255,318
25,373,383
Customer deposits (Note 13)
 
740,013,355
525,882,552
The Group has not disclosed the movement of contract assets as it is not material.
(j)           Accounts receivable and allowance for credit losses
Accounts receivable represents the Group’s right to an amount of consideration that is unconditional (i.e. only the passage of time is required
before payment of the consideration is due). The Group’s accounts receivable consists of balances due from customers for the sale of residential units
in the PRC and United States and real estate management service contracts. These balances are unsecured, bear no interest and are due within a year
from the date of the sale.
The allowance for credit losses reflects the Company’s current estimate of credit losses expected to be incurred over the life of the
receivables. The Company considers various factors in establishing, monitoring, and adjusting its allowance for credit losses including the aging of
receivables and aging trends, customer creditworthiness and specific exposures related to particular customers. The Company also monitors other risk
factors and forward-looking information, such as country specific risks and economic factors that may affect a customer’s ability to pay in establishing
and adjusting its allowance for credit losses. Accounts receivable are written off after all collection efforts have ceased. As of December 31, 2024,
there was US$9,613,908 (December 31, 2023: US$6,803,575) allowance for credit loss. The Group has not disclosed the movement of allowance for
credit loss as it is not material.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-25
(k)          Other receivables
Other receivables consist of various cash advances to unrelated companies and individuals with which the Group has business relationships.
The allowance for credit losses reflects the Company’s current estimate of credit losses expected to be incurred over the life of the
receivables. The Company considers various factors in establishing, monitoring, and adjusting its allowance for credit losses including the aging of
receivables and aging trends, customer creditworthiness and specific exposures related to particular customers. The Company also monitors other risk
factors and forward-looking information, such as country specific risks and economic factors that may affect a customer’s ability to pay in establishing
and adjusting its allowance for credit losses. As of December 31, 2024, there was US$14,006,158 (December 31, 2023: US$14,245,346) allowance for
credit loss.
(l)          Deposits for land use rights
Deposits for land use rights consist of upfront cash payments made to local land bureaus to secure land use rights under executed short-term
or long-term land framework cooperation agreements or land use rights agreements.
Deposits for land use rights are reviewed periodically as to whether their carrying value has become impaired. The Group considers the assets
to be impaired if the collectability of the balances become doubtful. There were no impairment losses for any periods presented.
(m)         Other deposits and prepayments
Other deposits and prepayments mainly consist of upfront cash payments made to third parties related to the direct negotiation model in
acquiring land parcels and prepaid tax.
The allowance for credit losses reflects the Company’s current estimate of credit losses expected to be incurred over the life of other deposits.
The Company considers various factors in establishing, monitoring, and adjusting its allowance for credit losses including the aging of other deposits
and aging trends, customer creditworthiness and specific exposures related to particular customers. The Company also monitors other risk factors and
forward-looking information, such as country specific risks and economic factors that may affect a customer’s ability to pay in establishing and
adjusting its allowance for credit losses. As of December 31, 2024, there was US$1,908,929 (December 31, 2023: US$1,112,484) allowance for credit
loss.
(n)         Advances to suppliers
Advances to suppliers consist of balances paid to contractors and vendors for services and materials that have not been provided or received
and generally relate to the development and construction of residential units in the PRC. Advances to suppliers are reviewed periodically to determine
whether their carrying value has become impaired. The Group considers the assets to be impaired if it is doubtful that the services and materials can be
provided. As of December 31, 2023 and 2024, there was no allowance provided.
(o)          Customer deposits
Customer deposits consist of sales proceeds received from customers from the sale of residential units in the PRC. In the PRC, customers will
generally obtain financing for the purchase of their residential unit prior to the completion of the project. The lending institution will provide the
funding to the Group upon the completion of the financing rather than the completion of the project. The Group receives these funds and recognizes
them as a customer deposit current liability until the revenue can be recognized.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-26
(p)         Notes payable and other payables
Notes payable represents short-term bank and commercial acceptance notes issued by financial institutions that entitle the holder to receive
the stated amount from the financial institutions at the maturity date of the notes. The Group has utilized notes payable to settle amounts owed to
suppliers and contractors. The notes payable is non-interest bearing and is normally settled within six months. Notes payable was US$70,193,272 and
US$66,127,643 as of December 31, 2023 and 2024, respectively.
Other payables consist of balances for non-construction costs with unrelated companies and individuals with which the Group has business
relationships.
(q)         Real estate properties held for lease, net
Real estate properties held for lease are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets. Estimated useful lives of the real estate properties held for lease are 20-60 years.
Maintenance, repairs and minor renewals are charged directly to expenses as incurred. Major additions and improvements to the real estate
properties held for lease are capitalized.
In accordance with ASC 360, real estate properties held for lease is subject to valuation adjustments when the carrying amount exceeds fair
value. An impairment loss is recognized only if the carrying amount of the assets is not recoverable and exceeds fair value. The carrying amount is not
recoverable if it exceeds the sum of the undiscounted cash flows expected to be generated by the assets.
For the periods presented, the Group did not recognize any impairment for real estate properties held for lease.
(r)         Property and equipment, net
Property and equipment are recorded at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the
estimated useful lives of the assets. Estimated useful lives of the assets are as follows:
Corporate aircraft
     15 years
Vehicles
 
5 years
Furniture and fixtures
 
5 years
Office buildings
 
20‑60 years
Maintenance, repairs and minor renewals are charged directly to expense as incurred unless such expenditures extend the useful life or
represent a betterment, in which case they are capitalized.
(s)          Long-term Investments
The Group’s long-term investments consist of equity method investments and equity investments without readily determinable fair value.
Equity method Investments
Where the Group has significant influence over the investee, the Group applies the equity method of accounting in accordance with ASC
323, Investments-Equity Method and Joint Ventures (“ASC 323”). The reporting dates and accounting policies of the equity investee are the same as
the Group. The investment in the equity investee is stated at cost, including the Group’s share of the equity investee’s net gain or loss, less any
impairment in value. The Group recognizes in its consolidated statement of comprehensive income its share of the net income (loss) of the equity
investees. The Company periodically evaluates whether declines in fair values of our investments indicate impairment and whether declines in fair
value of our investments below their book value are other-than-temporary.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-27
Nonmarketable equity securities
Nonmarketable equity securities are investments in privately held companies without readily determinable market values.
On January 1, 2018, the Group adopted ASU 2016-01, pursuant to which, for equity investments without readily determinable fair value, the
Group elected to use the measurement alternative to measure those investments at cost, less any impairment, plus or minus changes resulting from
observable price changes in orderly transactions for identical or similar investments of the same issuer, if any. All gains and losses on nonmarketable
equity securities, realized and unrealized, are recognized in earnings. The Group performs a qualitative assessment of whether the investment is
impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the Group has to estimate the investment’s fair
value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment
loss in net income equal to the difference between the carrying value and fair value.
(t)         Capitalized interest
The Group capitalizes interest as a component of building construction costs in accordance with ASC 835, Interest (“ASC 835”).
As a result of the total interest costs capitalized during the period, the interest expense for the years ended December 31, 2022, 2023 and
2024 was as follows:
    
2022
    
2023
    
2024
US$
US$
US$
Amortization of issuance cost related to long-term debt
 
9,311,710
6,722,387
1,137,960
Interest expense of finance leases
 
69,672
—
—
Interest on borrowings
 
237,293,974
237,307,045
199,088,548
Total interest costs
 
246,675,356
244,029,432
200,226,508
Total interest costs capitalized
 
(88,666,945)
(67,089,115)
(82,817,086)
Interest expense, net
 
158,008,411
176,940,317
117,409,422
(u)         Retirement benefits
Regulations in the PRC require the Group to contribute to a defined contribution retirement plan for all permanent employees. Pursuant to the
mandatory requirement from the local authority in the PRC, the retirement pension insurance, unemployment insurance, health insurance and housing
fund were established for the employees during the term they are employed. For the years ended December 31, 2022, 2023 and 2024, the Group is
obligated to contribute for each employee an amount equal to 32%, 32% and 32%, respectively, of last year’s average salary determined by the Social
Welfare Bureau. For the year ended December 31, 2024, the Group recorded expenses in the amount of US$8,777,571 (2022: US$14,643,127; 2023:
US$10,035,173).
(v)         Distribution of earnings and reserve fund
The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions from its subsidiaries. The earnings
reflected in the consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial
statements of the Company’s subsidiaries. In accordance with PRC Company Law, PRC subsidiaries are required to transfer 10% of their profit after
tax, as determined in accordance with PRC accounting standards and regulations, to the statutory surplus reserve (the “SSR”) until such reserve
reaches 50% of the registered capital of the subsidiaries. Subject to certain restrictions set out in PRC Company Law, the SSR may be distributed to
stockholders in the form of share bonus issued to increase share capital, provided that the remaining balance after the capitalization is not less than
25% of the registered capital before capital increase.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-28
(w)         Income taxes
The Group accounts for income tax using the balance sheet method. Deferred taxes are provided for the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as
well as unutilized net operating losses. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either
expire before the Group is able to realize their benefits, or that future utilization is uncertain. The Group assesses its need for valuation allowances by
tax reporting unit by jurisdiction.
Late payment interests and penalties arising from underpayment of income taxes are recognized according to the relevant tax law. The
amount of interest expense to be recognized is computed by applying the applicable statutory rate of interest to the difference between the tax position
recognized and the amount previously taken or expected to be taken in a tax return. Interest recognized in accordance with ASC 740, Income Tax
(“ASC 740”) is classified in the consolidated financial statements as interest expense, while penalties recognized in accordance with this interpretation
are classified in the consolidated financial statements as other expenses.
In accordance with the provisions of ASC 740, the Group recognizes in its consolidated financial statements the impact of a tax position if a
tax return’s position or future tax position is “more likely than not” to prevail (defined as a likelihood of more than fifty percent of being sustained
upon audit, based on the technical merits of the tax position). Tax positions that meet the “more likely than not” threshold are measured (using a
probability weighted approach) at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement.
The Group’s estimated liability for unrecognized tax benefits is periodically assessed for adequacy and may be affected by changing interpretations of
laws, rulings by tax authorities, certain changes and/or developments with respect to audits, and expiration of the statute of limitations. The outcome
for a particular audit cannot be determined with certainty prior to the conclusion of the audit and, in some cases, appeal or litigation process. The
actual benefits ultimately realized may differ from the Group’s estimates. As each audit is concluded, adjustments, if any, are appropriately recorded in
the Group’s consolidated financial statements. Additionally, in future periods, changes in facts, circumstances, and new information may require the
Group to adjust the recognition and measurement estimates with regards to individual tax positions. Changes in recognition and measurement
estimates are recognized in the period in which the changes occur.
(x)         Land Appreciation Tax (“LAT”)
In accordance with the relevant taxation laws for real estate companies of the provinces in which the subsidiaries operate in the PRC, the
local tax authorities levy LAT based on progressive rates ranging from 30% to 60% on the appreciation of land value, being the proceeds of sales of
properties less deductible expenditures, generally including borrowing costs and relevant property development expenditures. LAT is generally
prepaid based on a fixed percentage (varying by local tax jurisdiction) of customer deposits and is expensed when the related revenue is recognized.
(y)         Comprehensive income
Comprehensive income is defined as the changes in equity of the Group during a period from transactions and other events and
circumstances excluding transactions resulting from investments by owners and distributions to owners. Among other disclosures, ASC 220,
Comprehensive Income (“ASC 220”), requires that all items that are required to be recognized under current accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. For each of the
periods presented, the Group’s comprehensive income includes net income/(loss) and foreign currency translation adjustments and is presented in the
consolidated statements of comprehensive income.
(z)          Advertising and promotion expenses
Advertising and promotion costs are expensed as incurred, or the first time the activity takes place, in accordance with ASC 720-35,
Advertising Costs. For the  year ended December 31, 2024, the Group recorded advertising and promotion expenses of US$4,806,666 (2022:
US$19,164,227; 2023: US$6,664,465).

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-29
(aa)        Leases
The Company adopted ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) from January 1, 2019 by using the modified retrospective
method and did not restate the comparable periods. The Company has elected the package of practical expedients, which allows the Company to carry
forward our original assessment of whether contracts contained a lease, lease classification, and the initial direct cost. Lastly, the Company elected the
short-term lease exemption for all contracts with lease terms of 12 months or less.
The Group determines if an arrangement is or contains a lease at inception or modification of a contract. A contract is or contains a lease if
the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. Control over the use of the identified
asset means the lessee has both (a) the right to obtain substantially all of the economic benefits from the use of the asset and (b) the right to direct the
use of the asset.
Lessee
The Group categorizes leases with contractual terms longer than 12 months as either operating or finance. Finance leases are generally those
leases that transfer ownership to the Group or allow the Group to purchase assets at a nominal amount by the end of the lease term. Assets acquired
under finance leases are recorded in property and equipment, net and real estate properties held for lease, net. All other leases are recorded as
operating lease right-of-use (“ROU”) assets.
Lease liability is recorded based the present value of the lease payments over the lease term using a discount rate at commencement date. As
the implicit rate in the Group’s leases is not typically readily available, the Group uses an incremental borrowing rate based on the information
available at the lease commencement date in determining the present value of lease payments. This incremental borrowing rate reflects the fixed rate
at which the Group could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar
economic environment. Leased assets are recognized based on the initial present value of the lease payments, reduced by lease incentives. Operating
lease expense for lease payments is recognized on a straight-line basis over the lease term. The expected lease terms are based on the non-cancelable
term of the lease and may contain options to extend or terminate the lease when it is reasonably certain that the Group will exercise that option.
Finance lease assets are amortized in a manner consistent with the Group’s normal depreciation policy for owned assets. Variable lease payments not
dependent on an index or rate are excluded from the ROU assets and lease liability calculations and are recognized in expense in the period which the
obligation for those payments is incurred.
As of December 31, 2024, the Company recognized operating lease ROU assets of US$0.4 million (2023: US$1.6 million) and total lease
liability of US$0.8 million (2023: US$2.6 million), including current portion of US$0.7 million (2023: US$2.2 million) for operating lease and US$nil
(2023: US$nil) for finance lease.
Lessor
As a lessor, the Company’s leases are classified as operating leases under ASC 842, Leases, and thus the pattern of recognition of real estate
lease income remains unchanged from previous lease accounting guidance. The lease components and non-lease components are accounted for
separately.
(ab)        Property warranty
The Company and its subsidiaries provide customers with assurance-type warranties which cover major defects of building structure and
certain fittings and facilities of properties sold as stipulated in the relevant sales contracts. The warranty period varies from two months to three years,
depending on different property components the warranty covers.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-30
The Group regularly estimates potential costs for materials and labor with regards to warranty-type claims expected to be incurred
subsequent to the delivery of a property. The Group regularly monitors the warranty reserve and makes adjustments to its pre-existing warranties, if
any, in order to reflect changes in trends and historical data as information becomes available. The Group may seek recourse against its contractors or
any related third parties if it can be demonstrated they are at fault. In addition, the Group withholds up to 5% of the contract cost from sub-contractors
for periods of two to five years. These amounts are included in current liabilities, and are only paid to the extent that there has been no warranty claim
against the Group relating to the work performed or materials supplied by the subcontractors. For the periods presented, the Group had not recognized
any warranty liability nor incurred any warranty costs in excess of the amount retained from subcontractors.
(ac)        Earnings per share
Earnings per share are calculated in accordance with ASC 260, Earnings per Share (“ASC 260”). Basic earnings per share is computed by
dividing net income attributable to holders of common shares by the weighted average number of common shares outstanding during the period.
Diluted earnings per common share reflects the potential dilution that could occur if securities or other contracts to issue common shares were
exercised or converted into common shares. Common share equivalents consist of common shares issuable upon the exercise of the share options and
vesting of restricted shares units using treasury stock method. Common equivalent shares are excluded from the computation of diluted earnings per
share if their effects would be anti-dilutive. The non-vested options granted with performance conditions are excluded in the computation of diluted
EPS unless the options are dilutive and unless their conditions (a) have been satisfied at the reporting date or (b) would have been satisfied if the
reporting date was the end of the contingency period.
(ad)        Treasury Shares
The Company accounted for shares repurchased as treasury shares at cost in accordance with ASC Subtopic 505-30, Treasury Shares. When
the Company decides to retire the treasury shares, the difference between the original issuance price and the repurchase price may be allocated
between additional paid-in capital and retained earnings.
On May 20, 2019, the Board of Directors unanimously authorized management to repurchase up to US$50 million of the Company’s shares
from the approval date to the end of 2021. On August 28, 2023, the Board of Directors unanimously authorized management to repurchase up to
1,000,000 ADSs. As of December 31, 2024, the Company had a balance of 61,593,146 (2023: 60,733,786) treasury shares amounting to
US$116,593,657 (2023: US$116,793,448).
(ae)        Senior Secured Notes
On June 29, 2020, the Company issued notes with an aggregate principal amount of RMB514.5 million (US$75 million) due on June 29,
2022 (the “June 2022 Senior Secured Notes”) at a coupon rate of 12.00% per annum payable semi-annually. Interest is payable on December 29 and
June 29 of each year, commencing December 29, 2020. Given that the June 2022 Senior Secured Notes are debts in their legal form and are not a
derivative in its entirety, they have been classified as other long-term debts. The Company has evaluated and determined that there was no embedded
derivative requiring bifurcation from the June 2022 Senior Secured Notes under the requirements of ASC 815. The embedded redemption options and
repurchase features did not qualify for derivative accounting because the embedded derivatives were considered clearly and closely related to the
characteristics of the June 2022 Senior Secured Notes. The June 2022 Senior Secured Notes were issued at par.
On September 17, 2020, the Company issued notes with an aggregate principal amount of US$300,000,000 due on September 17, 2023 (the
“September 2023 Senior Secured Notes”) at a coupon rate of 14.50% per annum payable semi-annually. Interest is payable on March 17 and
September 17 of each year, commencing March 17, 2021. Given that the September 2023 Senior Secured Notes are debts in their legal form and are
not a derivative in its entirety, they have been classified as other long-term debts. The Company has evaluated and determined that there was no
embedded derivative requiring bifurcation from the September 2023 Senior Secured Notes under the requirements of ASC 815. The embedded
redemption options and repurchase features did not qualify for derivative accounting because the embedded derivatives were considered clearly and
closely related to the characteristics of the September 2023 Senior Secured Notes. The September 2023 Senior Secured Notes were issued at par.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-31
On January 25, 2021, the Company issued a collective aggregate principal amount of US$270 million due on January 15, 2024 (the “January
2024 Senior Secured Notes”) at a coupon rate of 14.0% per annum payable semi-annually. Interest will be payable on July 25 and January 25 of each
year, commencing July 25, 2021. Given that the January 2024 Senior Secured Notes are debt in their legal form and are not a derivative in its entirety,
they have been classified as other long-term debts. The Company has evaluated and determined that there was no embedded derivative requiring
bifurcation from the January 2024 Senior Secured Notes under the requirements of ASC 815. The embedded redemption options and repurchase
features did not qualify for derivative accounting because the embedded derivatives were considered clearly and closely related to the characteristics
of the January 2024 Senior Secured Notes. The January 2024 Senior Secured Notes were issued at par.
On October 15, 2021, eligible holders of the certain notes issued by the Company in 2019 in the aggregate principal amount of US$207.68
million exchanged their notes and the Company delivered the October 2023 Senior Secured Notes in the aggregate principal amount of US$205.4
million due on October 15, 2023 and US$19.1 million in cash consideration in full satisfaction of the exchange consideration to those eligible holders.
The October 2023 Senior Secured Notes bear interest at 14.2% per annum payable semi-annually. Interest will be payable on April 15 and October 15
of each year, commencing April 15, 2022. Given that the October 2023 Senior Secured Notes are debt in their legal form and are not a derivative in its
entirety, they have been classified as other long-term debts. The Company has evaluated and determined that there was no embedded derivative
requiring bifurcation from the October 2023 Senior Secured Notes under the requirements of ASC 815. The embedded redemption options and
repurchase features did not qualify for derivative accounting because the embedded derivatives were considered clearly and closely related to the
characteristics of the October 2023 Senior Secured Notes. The October 2023 Senior Secured Notes were issued at par.
On August 18, 2023, eligible holders of the September 2023 Senior Secured Notes, the October 2023 Senior Secured Notes and the January
2024 Senior Secured Notes in the aggregate principal amount of US$307,363,500 exchanged their notes for, and we delivered, the September 2027
Senior Secured Notes, in the aggregate principal amount of US$331,303,941 due on September 30, 2027 and US$1,536,863 in cash consideration in
full satisfaction of the exchange consideration to those eligible holders. The September 2027 Senior Secured Notes bear interest at 3% per annum
payable semi-annually in the form of cash and/or payment-in-kind subject to our election. Interest will be payable on March 30 and September 30 of
each year, commencing September 30, 2023. The September 2027 Senior Secured Notes have a five-year term maturing on September 30, 2027. As of
December 31, 2023, we had a total principal amount of US$337.93 million of the September 2027 Senior Secured Notes outstanding. Given that the
September 2027 Senior Secured Notes are debt in their legal form and are not a derivative in its entirety, they have been classified as other long-term
debts. The Company has evaluated and determined that there was no embedded derivative requiring bifurcation from the September 2027 Senior
Secured Notes under the requirements of ASC 815. The embedded redemption options and repurchase features did not qualify for derivative
accounting because the embedded derivatives were considered clearly and closely related to the characteristics of the September 2027 Senior Secured
Notes. The September 2027 Senior Secured Notes were issued at par.
(af)        Onshore corporate bonds
During the periods presented, Xinyuan China issued a series of onshore corporate bonds. Given that each onshore corporate bond
individually is a debt in its legal form and is not a derivative in its entirety, it has been classified as other long-term debt. The Company has evaluated
and determined that there was no embedded derivative requiring bifurcation from these onshore corporate bonds under the requirements of ASC 815.
The onshore corporate bonds were issued at par.
(ag)        Short-term investments
All highly liquid investments with original maturities of greater than three months, but less than 12 months, are classified as short-term
investments. Investments that are expected to be realized in cash during the next 12 months are also included in short-term investments.
Equity investments that have readily determinable fair values are measured at fair value with changes recognized in gain(loss) on short-term
investments in the consolidated statements of comprehensive income. Equity investments without readily determinable fair values and for which the
Company does not have the ability to exercise significant influence are accounted for at cost with adjustments for observable changes in prices or
impairments.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-32
(ah)        Assets acquisition and business combinations
Pursuant to ASC 805, Business Combinations (“ASC 805”), the Company determines whether a transaction or other event is a business
combination by applying the definition below, which requires that the assets acquired and liabilities assumed constitute a business. The guidance
requires an entity to first evaluate whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or
a group of similar identifiable assets. If that threshold is met, the set of assets and activities is not a business. If it is not met, the entity evaluates
whether the set meets the definition of a business. ASC 805 defines a business as consisting of inputs and processes applied to those inputs that have
the ability to contribute to the creation of outputs. Inputs are defined as economic resources, while processes are defined as protocols, systems or
standards. Inputs and processes create, or have the ability to contribute to the creation of, outputs. Outputs are often present in businesses but are not
required to meet the definition of a business. To be considered a business under ASC 805, the acquisition of net assets must include, at a minimum, an
input and a substantive process that together significantly contribute to the ability to create outputs. If the assets acquired are not a business, the
reporting entity shall account for the transaction or other event as an assets acquisition.
The Company accounted for its acquisitions of Suzhou Yefang, Wuhan Yinghexin and Qingdao Keda as asset acquisitions either because the
fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets or the acquired entities had
no processes in place to apply to inputs to have the ability to create outputs.
The excess of the fair value of purchase consideration over the fair values of identifiable assets acquired and liabilities assumed is recorded as
goodwill. The Group reviews goodwill for impairment at least annually or more frequently if events or changes in circumstances would more likely
than not reduce the fair value of its single reporting unit below its carrying value. Impairment losses on goodwill of US$nil (2023: US$nil) and
impairment loss on intangible assets of US$nil (2023: US$nil) were recognized for the year ended December 31, 2024.
(ai)         Non-controlling interests
A non-controlling interest is recognized to reflect the portion of their equity which is not attributable, directly or indirectly, to the Group.
Consolidated net income on the consolidated statements of comprehensive income includes the net loss/(income) attributable to non-controlling
interests. The cumulative results of operations attributable to non-controlling interests are recorded as non-controlling interests in the Group’s
consolidated balance sheets. Losses attributable to the Group and the non-controlling interest in a subsidiary may exceed their interests in the
subsidiary’s equity. The excess, and any further losses attributable to the Group and the non-controlling interest, shall continue to be attributed to those
interests.
(aj)         Effect of change in estimate
Revisions in estimated gross profit margins related to estimated costs and revenues are made in the period in which circumstances requiring
the revisions become known. During the year ended December 31, 2024, real estate development projects (Zhengzhou International New City III B,
Beijing Tongzhou Liyuan, Xi’an Xinyuan Royal Palace, Lingshan Bay Dragon Seal), which recognized gross profit in 2023, had changes in their
estimated gross profit margins. As these projects moved closer to completion during 2024, the Company adjusted its prior estimates related to selling
prices and development costs. As a result of the changes in estimate above, gross profit, net income and basic and diluted earnings per share increased
by US$32.4 million (2022: decreased by US$55.3 million, 2023: increased by US$104.8 million), US$24.3 million (2022: decreased by US$41.5
million, 2023: increased by US$78.6 million), US$0.22 per share (2022: decreased by US$0.38 per share, 2023: increased by US$0.74 per share), and
US$0.22 per share (2022: decreased by US$0.38 per share, 2023: increased by US$0.74 per share), respectively, for the year ended December 31,
2024.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-33
(ak)        Share-based compensation
The Group has adopted ASC 718, Compensation-Stock Compensation (“ASC 718”), which requires that share-based payment transactions
with employees, such as restricted shares or stock options, be measured based on the grant-date fair value of the equity instrument issued, and the
Company has elected to recognize compensation expense using the straight-line method for all restricted shares and stock options granted with service
conditions that have a graded vesting schedule. In addition, the Company recognizes share-based compensation expense net of an estimated forfeiture
rate and therefore, only recognizes compensation cost for those shares expected to vest over the service period of the award. The estimation of the
forfeiture rate is primarily based on historical experience of employee turnover. To the extent the Company revises this estimate in the future, the
share-based payments could be materially impacted in the year of revision, as well as in the following years.
The Company also has a policy of using authorized shares in the existing pool to satisfy any future exercise of share options and shares
repurchased held by a third-party trustee to satisfy the RSUs granted under the Company’s 2014 Restricted Stock Unit Plan.
For options granted with performance conditions, share-based compensation expense is recognized based on the probable outcome of the
performance condition using the accelerated method over the requisite service period. A performance condition is not taken into consideration in
determining fair value of the non-vested shares granted. The fair value of liabilities incurred in share-based payment transactions with employees are
remeasured at the end of each reporting period through settlement. Changes in the fair value of a liability incurred under a share-based payment
arrangement that occur during the requisite service period are recognized as compensation costs over that period.
(al)         Segment Reporting
In accordance with ASC 280, Segment Reporting (“ASC 280”), segment reporting is determined based on how the Group’s chief operating
decision maker reviews operating results to make decisions about allocating resources and assessing performance for the Group. According to the
management approach, the Group operates in geographical segments. Therefore, each of its individual property developments is a discrete operating
segment. The Group has aggregated its segments on a geographical basis as property development projects undertaken within a region have similar
expected economic characteristics, type of properties offering, customers and market and regulatory environment (Note 21).
(am)       Recent Accounting Pronouncements
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new
accounting standards that are issued.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,
which requires public entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim and
annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing
segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. This standard is effective for the Company for the
annual period beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of the adoption of
ASU 2023-07.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”).
ASU 2023-09 is intended to improve transparency of income tax disclosure by requiring income tax disclosures to contain consistent categories and
greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. This standard affects the
disclosure of income taxes not the accounting for income taxes. This standard is effective for the Company for the annual period beginning after
December 15, 2025, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2023-09.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-34
In November 2024, the FASB ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures
(Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). which enhances the disclosures required for expense
disaggregation in the Company’s annual and interim consolidated financial statements. ASU 2024-03 is effective for the Company for annual
reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted.
The Company is currently assessing the impact of the adoption of this standard on its consolidated financial statements disclosures.
3.         Short-term investments
The short-term investments represent investments in REITs, which are publicly traded on the Hong Kong Stock Exchange, marketable equity
securities, and investment in private equity funds, which are expected to be realized in cash during the next 12 months.
The following summarizes the short-term investments measured at fair value at December 31, 2023 and 2024:
December 31, 2023
US$
    
Fair
    
    
Unrealized
value
Cost
loss in profit and loss
Level 1
Equity securities with readily determinable fair value
3,996,130
6,119,697
(2,123,567)
Investment product with readily determinable fair value
1,426,134
1,411,891
14,243
Total
 
5,422,264
7,531,588
(2,109,324)
December 31, 2024
US$
    
Fair
    
    
Unrealized
value
Cost
loss in profit and loss
Level 1
Equity securities with readily determinable fair value
 
3,106,107
3,996,128
(890,021)
Total
3,106,107
3,996,128
(890,021)
During the year ended December 31, 2024, US$189,482 net realized gain (2023: US$5,516,773 net realized loss) and US$890,021 (2023:
US$2,109,324) unrealized loss are included in earnings.
4.         Other receivables
As of December 31, 2023 and 2024, other receivables consisted of the followings:
    
December 31, 
    
December 31, 
2023
2024
US$
US$
Henan Derun Real Estate Co. Ltd (“Henan Derun”)
 
140,261,069
138,911,029
Zhengzhou Yongzhi Jianxin Meiyu Private Equity Fund (“Zhengzhou Yongzhi”)
 
22,590,255
—
Due from contractors
 
23,571,115
24,339,375
Due from Zijin Royal Palace
44,025,880
48,696,346
Others
 
148,207,979
127,748,560
Total
 
378,656,298
339,695,310

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-35
In December 2019, the Group agreed to provide Henan Derun financing using the prepayment and charge interest of 18% per annum
commencing from the date of prepayment made to Henan Derun. In March 2020, the Group entered into an agreement with Henan Derun, pursuant to
which the above receivables shall be settled by Henan Derun’s transfer of certain parcels of land properties to a project company 80% owned by the
Group and the Group will assume the bank loans of Henan Derun aggregating to US$77.1 million, which were pledged by such land properties. The
Group evaluated the potential impairment and concluded that no impairment allowance is required because the estimated future undiscounted cash
flow of the relevant land properties attributed to the Group exceeded the total amount of the above receivables and bank loans assumed by the Group.
As of December 31, 2024, the prepayment was recorded as other receivables aggregating to US$138.9 million (2023: US$140.3 million).
In July 2020, the Company transferred Zhengzhou Modern City Shopping Mall originally held by the Company to a new subsidiary (the
“Project Company”). The shopping mall was accounted for as property held for lease. In September 2020, the Company entered into a share purchase
agreement with Zhengzhou Yongzhi to transfer its 98% equity interest in the Project Company for a consideration of US$122,607,243. As of
December 31, 2021, Zhengzhou Yongzhi had paid US$98,085,794 to the Company and the change of business registration of the Project Company
had been completed. According to the agreement, the remaining consideration of US$22,590,255 should be paid before September 27, 2021. In 2024,
the remaining consideration was collected.
The “Others” category primarily includes: mortgage defaults receivables from customers, amounts due from business partners, and other
miscellaneous items that are individually immaterial in amount.
5.         Real estate properties development completed and under development
The following summarizes the components of real estate properties development completed and under development at December 31, 2023
and 2024:
    
December 31, 
    
December 31, 
2023
2024
US$
US$
Real estate properties development completed
 
854,076,531
675,946,233
Real estate properties under development
 
2,453,888,438
2,530,951,122
Total real estate properties development completed and under development
 
3,307,964,969
3,206,897,355
As of December 31, 2024, land use rights included in the real estate properties under development totaled US$1,473,561,084 (2023:
US$1,589,737,091).
As of December 31, 2024, land use rights with an aggregate net book value of US$379,460,397 (2023: US$398,837,052) was pledged as
collateral for certain bank loans and other debts.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-36
6.         Real estate properties held for lease, net
The Group leases its owned buildings to various third parties, including elementary schools, basement parking, kindergartens, parking
facilities, clubhouses as well as a shopping mall. These leases are non-cancelable operating leases with remaining lease periods that vary from 25 days
to 20 years. The leases may include minimum base rents with escalated contingent rent clauses.
    
December 31, 
    
December 31, 
2023
2024
US$
US$
Elementary schools
 
3,011,399
2,967,119
Basement parking
 
6,458,198
6,363,235
Kindergartens
 
4,104,942
1,925,240
Parking facilities
 
55,336,381
53,653,397
Clubhouses
 
7,570,605
6,451,013
Shopping mall
 
267,753,895
260,529,484
Residential properties
49,585,754
38,147,312
Total costs
 
393,821,174
370,036,800
Accumulated depreciation
 
(71,269,173)
(63,721,916)
Real estate properties held for lease, net
 
322,552,001
306,314,884
The Group has shopping mall equipment with gross amounts of US$ nil acquired under finance lease as of December 31, 2023 and 2024.
Depreciation expense for real estate properties held for lease for the year ended December 31, 2024 amounted to US$10,761,325 (2023:
US$11,227,812).
As of December 31, 2024, US$252,517,455 of real estate properties held for lease was pledged as collateral for certain bank loans and other
debts (2023: US$278,724,872).
As of December 31, 2024, minimum future rental income on non-cancellable leases (none of which contains any contingent rental clauses),
in the aggregate and for each of the five succeeding fiscal years and thereafter, is as follows:
Year
    
Amount
US$
2025
 
19,956,866
2026
 
19,698,520
2027
 
18,580,397
2028
 
16,603,513
2029 and thereafter
 
112,626,705
Total
 
187,466,001

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-37
7.         Property and equipment, net
Property and equipment consisted of the following:
    
December 31, 
    
December 31, 
2023
2024
US$
US$
Corporate aircraft
 
36,332,509
—
Vehicles
 
4,164,765
4,103,525
Furniture and fixtures
 
8,690,083
8,707,803
Office buildings
 
17,412,804
17,156,762
Total
 
66,600,161
29,968,090
Accumulated depreciation
 
(41,056,802)
(16,636,110)
Property and equipment, net
 
25,543,359
13,331,980
On October 23, 2012, the Group acquired a corporate aircraft owned by Minsheng Financial Leasing Co. Ltd. (“Minsheng”) under a finance
lease. The lease has an eight-year term and expires on September 15, 2021 with 32 quarterly lease payments of US$1,426,000. A deposit in the
amount of US$6.7 million may be used as full and final payment to Minsheng to purchase the corporate aircraft. On June 15, 2020, the Group
terminated the previous agreement and signed a new leaseback agreement with Minsheng. The leaseback has a three-year term and expired on July 14,
2023 with 12 quarterly lease payment of US$1,105,274. In 2023, the Group terminated the previous leaseback agreement with Minsheng and signed a
new leaseback agreement with Tianjin Huaxin Funian Leasing Co., Ltd. In2024, the Group completed the disposal of the corporate aircraft,
terminating all related leaseback obligations.
Depreciation expense for property and equipment for the year ended December 31, 2024 amounted to US$2,585,132 (2022: US$3,787,564;
2023: US$2,037,472).
Accumulated depreciation for property and equipment as of December 31, 2024 amounted to US$16,636,110 (2022: US$39,019,330; 2023:
US$41,056,802).
8.         Long-term investments
As of December 31, 2023 and 2024, the long-term investments consisted of the following:
    
    
     December 31, 
Initial Cost
Ownership
2023
US$
US$
Nonmarketable equity securities
 
   
   
  
Zhengzhou Lianhe Real Estate Co., Ltd.
 
241,648
1.85 %  
282,378
Zhengzhou Taike Real Estate Co., Ltd.
 
738,073
3.75 %  
—
Equity method investees
 
   
   
Qingdao Huiju Zhihui City Industrial Development Co., Ltd.
 
523,459,957
49 %  
—
Madison Developments Limited.
19,095,969
50 %  
—
Wuhu Penghong Investment Center (Limited Partnership)
 
61,998,960
n/a
14,095,331
Suzhou Rongjingchen Real Estate Co., Ltd
42,041,464
24 %  21,867,621
Others
68,076,387
n/a
37,542,413
Total
 
 
   
73,787,743

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-38
    
    
    
December 31, 
    
Initial Cost
     Ownership
    
2024
US$
US$
Nonmarketable equity securities
 
   
   
  
Zhengzhou Lianhe Real Estate Co., Ltd.
 
241,648
1.85 %
278,226
Zhengzhou Taike Real Estate Co., Ltd.
 
738,073
3.75 %
—
Equity method investees
 
 
 
Qingdao Huiju Zhihui City Industrial Development Co., Ltd.
 
523,459,957
49 %
—
Madison Developments Limited.
 
19,095,969  
50 %  
—
Wuhu Penghong Investment Center (Limited Partnership)
61,998,960
n/a
10,047,342
Suzhou Rongjingchen Real Estate Co., Ltd
42,041,464
24 %
21,017,557
Others
68,076,387
n/a
36,555,541
Total
 
 
   
67,898,666
Equity method investees
On April  19, 2017, the Company signed an agreement to acquire up to 70% equity interest of Qingdao Huiju Zhihui City Industrial
Development Co.,  Ltd. (“Qingdao Huiju”), which is developing a real estate project in Qingdao city from Beijing Huiju Technology Industry
Development Co., Ltd. (“Beijing Huiju”), a non-affiliated company for a consideration of US$505.2 million. As of December 31, 2020, US$505.2
million had been paid and a 49% equity interest has been transferred to the Company. Based on the articles of association, the Company cannot
exercise control of Qingdao Huiju until it acquires the entire 70% equity interest, but has the ability to exercise significant influence over Qingdao
Huiju’s operating and financial decisions and accounted for it as an equity method investment.
The Group initiated various legal actions against Beijing Huiju for, inter alia, (i) the transfer of the remaining 21% equity interest in Qingdao
Huiju to the Group and appointment of directors into the board of Qingdao Huiju, (ii) refund of unauthorized transfer of cash of US$98.7 million from
Qingdao Huiju to Beijing Huiju, and (iii) return of business license and official seals of Qingdao Huiju to Qingdao Huiju. In March 2019, PRC local
court held that Beijing Huiju shall refund the unauthorized cash transferred to Beijing Huiju to Qingdao Huiju and has frozen the cash of US$98.7
million in Beijing Huiju’s bank account. In January 2020, local PRC court held that Beijing Huiju shall return the business license and official seals of
Qingdao Huiju to Qingdao Huiju. On June 15, 2021, the PRC local court issued a final verdict that Beijing Huiju shall refund the unauthorized cash of
US$98.7 million. In January 2022, the China International Economic and Trade Arbitration Commission, or CIETAC, ruled that Beijing Huiju shall
transfer the remaining 21% equity interest in Qingdao Huiju to the Group, that Beijing Huiju shall coordinate in completing the equity transfer
registration formalities and confirmed that the Group has the right to appoint three directors onto the board of Qingdao Huiju. Based on independent
legal advice and after due and careful enquiry, the directors of the Company are of the view that the above events shall have not any material adverse
effect on the Group’s investment in and receivables from Qingdao Huiju.
In 2022, the enforcement status of the above award/judgements was that, (i) the change of equity registration formalities to had been
completed by Beijing Huiju within the prescribed period provided by the CIETAC; (ii) Qingdao Huiju had received the refund of US$98.7 million
transferred by Beijing Huiju; and (3) Qingdao Huiju had collected the returned business license and official seals of Qingdao Huiju. Therefore,
Qingdao Huiju has been consolidated in the Group’s financial statements since the year of 2022.
On September  4, 2017, the Company, with two non-affiliated companies, established a limited partnership, Wuhu Penghong Investment
Center (Limited Partnership) (“Wuhu Penghong”), in which the Company and the other two partners invested US$30.6 million, US$91.8 million and
US$3.1 million in cash, respectively, to invest in a real estate project. The other two partners hold substantive participating rights whereas the
Company only exercises significant influence, and therefore, accounted for its investment in Wuhu Penghong under the equity method. In 2021, the
Company further invested US$31.4 million to Wuhu Penghong.
On March 21, 2018, the Company acquired a 50% equity interest in Madison Developments Limited (“MDL”), which is developing a real
estate project in London, England from ED Jersey Limited, a non-affiliated company for a consideration of US$19.1 million. Based on the articles of
association, the Company cannot exercise control of MDL, but has the ability to exercise significant influence over MDL’s operating and financial
decisions and accounts for it as an equity method investment.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-39
In July 2019, the Company acquired a 24% equity interest in Suzhou Rongjingchen Real Estate Co., Ltd. (“Suzhou Rongjingchen”), which is
developing a real estate project in Suzhou city from Suzhou Kaijingsheng Real Estate Co., Ltd., a non-affiliated company, for a consideration of
US$42.0 million. Based on the articles of association, the Company cannot exercise control of Suzhou Rongjingchen, but has the ability to exercise
significant influence over Suzhou Rongjingchen’s operating and financial decisions and accounted for it as an equity method investment.
As of December 31, 2024, the Group’s investment in the investees in the aggregate exceeded its proportionate share of the net assets of the
equity method investees by nil (2023: nil). This difference, if any, represents equity method goodwill and therefore, is not amortized. For the year
ended December 31, 2024, the Group recognized its share of loss from its equity method investments of US$9,230,998 (2022: loss of US$26,166,538;
2023: loss of US$17,914,070). As of December 31, 2023 and 2024, there was no material impairment related to these investments.
Summarized combined financial information of the equity method investees is as follows:
    
December 31, 
2024
US$
 
(in thousands)
Current assets
 
279,824
Non-current assets
 
219,282
Current liabilities
 
115,219
Non-current liabilities
 
292,015
Non-controlling interest
—
Gross revenue
 
19,384
Gross profit
 
4,347
Loss from continuing operations
 
(11,301)
Net loss
(14,375)
Net loss attributable to the Company
 
(9,231)
The above summarized financial information represents the operating performance and financial position of the investees since they became
equity method investees of the Group.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-40
9.         Short-term bank loans and other debt
Short-term bank loans and other debt represent amounts due to various banks and financial institutions that are due on the dates indicated
below. Short-term bank loans and other debt at December 31, 2023 and 2024 consisted of the following:
    
December 31, 
    
December 31, 
2023
2024
US$
US$
Loan from Hua Xia Bank Co., Ltd.
Due March 21, 2023 at 7.00% per annum
 
3,953,295
3,895,164
 
Loan from Everbright Bank
 
Due October 19, 2022 at 8.00% per annum
 
4,207,435
4,145,568
Loan from Henan Zhongyuan Microfinance Co., Ltd
 
Due July 13, 2023, at 11.00% per annum
 
4,165,078
4,103,834
 
Loan from Beijing Dingcheng Pawnshop Co., Ltd
Due September 9, 2022 at 19.20% per annum
1,553,080
1,530,243
Loan from Bank of Zhengzhou
Due March 28, 2023, at 6.50% per annum
49,416,183
48,689,556
Total short-term bank loans and other debt
 
63,295,071
62,364,365
As of December 31, 2024, US$62,364,365 of the Group’s short-term bank loans and other debt were denominated in RMB and were mainly
secured by the Group’s real estate properties development completed with net book value of US$72,027,002 (2023: US$73,101,911), land use right of
US$17,094,026 (2023: US$17,349,132), real estate properties held for lease with net book value of US$16,971,788 (2023: US$17,225,070), and
property and equipment with net book value of US$8,344,538 (2023: US$8,469,069). As of December 31, 2024, no short-term bank loans and other
debt was denominated in U.S. dollar. As of December 31, 2023, no short-term bank loans and other debt was denominated in U.S. dollar.
The weighted average interest rate on short-term bank loans and other debt as of December 31, 2024 was 7.24% (2023: 5.80%).
As of December 31, 2024, all the short-term bank loans and other debt are overdue, the Group is in the process of negotiating with the
lenders for the extension of the loans.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-41
10.         Long-term bank loans
Long-term bank loans as of December 31, 2023 and 2024 analyzed by final installment maturity dates consisted of the following:
    
December 31, 
    
December 31, 
2023
2024
US$
US$
Loan from ICBC
 
   
  
Due September 13, 2027, at 4.75% per annum
 
—
19,462,100
—
19,462,100
Loan from Bank of China
 
 
Due March 19, 2023 at 5.2250% per annum
14,118,910
13,819,929
Due October 31, 2022 at 4.75% per annum
 
6,339,390  
—
20,458,300
13,819,929
Loan from Ping An Bank Co., Ltd.
 
 
Due March 18, 2022, at 6.8875% per annum
 
18,213,393  
17,945,579
 
18,213,393  
17,945,579
Loan from Bank of Minsheng
 
 
Due May 30, 2031 at 4.50% per annum
 
46,451,212
45,768,182
Due November 30, 2031 at 5.80% per annum (Due March 30, 2023 at 7.6% per annum before loan extension)
 
178,553,802
162,891,684
Due November 30, 2031 at 4.40% per annum (Due January 14, 2024 at 6.65% per annum before loan extension)
31,140,345
30,604,547
 
256,145,359
239,264,413
Loan from Bank of Huaxia Co., Ltd
 
 
Due May 26, 2025 at 7.00% per annum (Due March 21, 2023 at 7.00% per annum before loan extension)
11,293,716
11,127,651
Due June 29, 2025 at 8.00% per annum (Due March 30, 2023 at 8.00% per annum before loan extension)
5,632,033
5,517,500
16,925,749
16,645,151
Loan from Bank of Zhengzhou Co., Ltd
Due March 25, 2023, at 7.00% per annum
50,686,885
—
Due August 11, 2023 at 6.50% per annum
105,891,821
104,334,762
156,578,706
104,334,762
Loan from Xiamen International Bank Co., Ltd
Due November 16, 2024, at 6.80% per annum (Due January 6, 2023, at 6.80% per annum before loan extension)
6,847,671
6,746,981
6,847,671
6,746,981
Loan from Bank of Guangzhou Co., Ltd
Due September 2, 2025, at 9.00% per annum (Due September 2, 2024, at 9.00% per annum before loan extension)
87,889,366
85,201,532
Total
 
563,058,544
503,420,447
Less: current portion of long-term bank loans
 
(410,969,547)
(322,444,388)
Total long-term bank loans
 
152,088,997
180,976,059

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-42
As of December 31, 2024, the contractual maturities of these loans are as follows:
Year
    
Amount
US$
2025
 
322,444,388
2026
 
20,866,952
2027
 
20,866,952
2028
 
20,866,952
2029 and thereafter
 
118,375,203
Less: current portion of long-term bank loans
 
(322,444,388)
Total: long-term bank loans
 
180,976,059
As of December 31, 2024, US$503,420,448 of the Group’s long-term bank loans were denominated in RMB and were mainly secured by the
Group’s real estate properties under development with net book value of US$233,551,914 (2023: US$235,545,667), land use rights with net book
value of US$238,219,368 (2023: US$249,556,186), the Group’s real estate properties held for lease with net book value of US$111,581,723 (2023:
US$115,419,606), and the property and equipment with net book value of US$8,863,812 (2023: US$8,996,093). As of December 31, 2024, no long-
term bank loans were denominated in U.S. dollar. As of December 31, 2023, no long-term bank loans were denominated in U.S. dollar. The interest
rates of these bank loans are adjustable based on the range of 93% to 189% of the PBOC prime rate. The weighted average interest rate on long-term
bank loans as of December 31, 2024 was 6.33% (2023: 6.06%).

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-43
11.         Other long-term debt
As of December 31, 2023 and 2024, other long-term debt analyzed by final installment maturity dates consisted of the following:
    
December 31, 
    
December 31, 
2023
2024
US$
US$
Senior notes
June 2022 Senior notes due on June 29, 2022 at 12.00% per annum
72,641,789
71,573,646
September 2023 Senior notes due on September 17, 2023 at 14.50% per annum
150,030,000
150,030,000
October 2023 notes due on October 15, 2023 at 14.20% per annum
17,118,420
17,118,420
January 2024 notes due on January 25, 2024 at 14.00% per annum
153,182,000
153,182,000
September 2027 Senior notes due on September 30, 2027 at 3% per annum
232,091,202
235,786,580
Corporate bonds
Due November 13, 2025 at 8.35% per annum
24,836,447
24,471,245
Due January 7, 2026 at 8.35% per annum
13,815,353
13,612,209
Loan from China Huarong Asset Management Co., Ltd
Due April 20, 2026 at 12.50% per annum (Due April 20, 2024 at 12.00% per annum before debt extension)
32,332,303
31,856,881
Due November 27, 2023 at 12.00% per annum
18,775,326
18,499,249
Loan from Chang An International Trust Co., Ltd
Due September 15, 2026 at 4.75% per annum (Due December 24, 2023 at 9.00% per annum before debt extension)
134,850,420
139,861,680
Loan from Tianjin Huaxin Funian Leasing Co., Ltd
Due April 6, 2025 at 8.90% per annum
8,034,949
—
Loan from Daye Trust Co., Ltd
Due August 31, 2022 at 11.50% per annum
84,713,457
83,467,809
Due October 16, 2022 at 14.50% per annum
28,237,819
27,822,603
Loan from Hubei Tian Qian Asset Management Co., Ltd
Due November 15, 2023 at 12.00% per annum
12,707,019
12,520,171
Loan from Qingdao Xifa Commercial Factoring Co., Ltd
Due June 20, 2025 at 9.00% per annum (Due June 20, 2023 at 9.00% per annum before debt extension)
44,011,465
31,024,985
Due September 28, 2025 at 9.00% per annum
—
7,182,405
Loan from Qingdao Haifa Finance Leasing Co., Ltd
Due January 26, 2025 at 13.00% per annum (Due January 24, 2024 at 9.00% per annum before debt extension)
1,073,037
—
Loan from Qingdao West Coast Small Loan Co., Ltd
Due January 26, 2025 at 13.00% per annum (Due January 24, 2024 at 13.00% per annum before debt extension)
4,235,673
2,086,695
Loan from Qingdao Rongfu Huijin Asset Management Co., Ltd
Due October 20, 2025 at 9.00% per annum (Due May 20, 2024 at 9.00% per annum before debt extension)
35,297,274
29,770,185
Loan from Zhengzhou Jinshui Holding Group Co., Ltd
Due February 5, 2026 at 2.80% to 3.00% per annum
15,389,611
15,163,319
Due January 1, 2026 at 9.50% per annum
—
6,816,538
Loan from China Development Bank Henan Branch
Due August 30, 2025 at 2.80% per annum
101,839,225
70,145,581
Due February 7, 2026 at 2.70% per annum
—
2,225,808
Due June 17, 2026 at 2.70% per annum
—
695,565
 
Loan from Dalian Lvshunkou District State-owned Capital Investment and Operation Group Co., Ltd
Due August 31, 2025 at 2.80% to 3.20% per annum
9,939,710
9,793,556
Loan from Ares Management
Due December 30, 2025 at Mortgage: 6.5%+Term SOFR, Mezz: 18.7%+Term SOFR per annum
76,685,804
—
Loan from Kriss Capital LLC
Due November 3, 2025 at 7.25%+Term SOFR per annum (Due April 4, 2023 at 7.25%+Term SOFR per annum before debt extension)
19,085,161
—
Loan from Summitbridge National Investments VIII LLC
Due December 31, 2025 at 7.00% or 12%+Term SOFR per annum
—
14,050,000
Loan from Mezzanine Loan
Due December 30, 2025 at 9.5%+Term SOFR per annum (Due October 4, 2023 at 9.5%+Term SOFR per annum before debt extension)
5,500,000
5,500,000
Loan from Bluebird Credit EM LLC
Due December 6, 2025 at 6.5%+Term SOFR per annum
—
32,500,000
Loan from Mezzanine Loan
Due December 30, 2025 at 9.5%+Term SOFR per annum (Due October 4, 2023 at 9.5%+Term SOFR per annum before debt extension)
34,425,000
32,173,066
Total principal of other long-term debt
1,330,848,464
1,238,930,196
Less: current portion of other long-term debt
(854,814,983)
(760,163,148)
Total other long-term debt
476,033,481
478,767,048

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-44
The June 2023, September 2024, October 2024 and January 2025 Senior Secured Notes are senior secured pari passu obligations of the
Company.
As of December 31, 2024, the contractual maturities of these debts are as follows:
Year
    
Amount
US$
2025
 
760,163,148
2026
 
128,159,131
2027
 
252,480,141
2028
 
16,693,563
2029 and thereafter
 
81,434,213
Less: current portion of other long-term debt
 
(760,163,148)
Total: Other long-term debt
 
478,767,048
The Company did not made payments in full for June 2022 Senior Secured Notes of RMB545.3 million at maturity on June 29, 2022. The
default in repayment triggered the default term of other senior notes. The carrying amount of senior notes still in default was US$391.9 million as of
December 31, 2024.
As of December 31, 2024, US$527,016,483 of the Group’s other long-term debt was denominated in RMB and mainly secured by the
Group’s real estate properties under development with net book value of US$343,042,416 (2023: US$340,187,890), land use rights with net book
value of US$124,147,003 (2023: US$131,931,734), real estate properties held for lease with net book value of US$107,905,636 (2023:
US$107,905,636), real estate properties development completed with net book value of US$61,859,618 (2023: US$63,709,985), and property and
equipment with net book value of US$11,236,069 (2023: US$11,403,753). As of December 31, 2024, US$711,913,712 of the Group’s other long-term
debt, mainly consisted of the Senior Secured Notes, was denominated in U.S. dollar.
June 2022 Senior Secured Notes
On July 3, 2020 and August 6, 2020, the Company issued an aggregate principal amount of RMB514.5 million (US$75 million) of the June
2022 Senior Secured Notes. The June 2022 Senior Secured Notes bear interest at 12.00% per annum payable semi-annually. Interest will be payable
on December 29 and June 29 of each year, commencing December 29, 2020. The June 2022 Senior Secured Notes have a two-year term maturing on
June 29, 2022.
The effective interest rate of June 2022 Senior Secured Notes is 15.69%.
The June 2022 Senior Secured Notes were issued pursuant to an indenture, dated June 29, 2020, between the Company, the “Subsidiary
Guarantors” identified below and Citicorp International Limited, as trustee and collateral agent (the “June 2022 Indenture”). The Company’s
obligations under the June 2022 Indenture and the June 2022 Senior Secured Notes have been guaranteed by certain of the Company’s wholly-owned
subsidiaries, Xinyuan Real Estate, Ltd., Xinyuan International Property Investment Co., Ltd., Victory Good Development Ltd., South Glory
International Ltd., Elite Quest Holdings Ltd. and Xinyuan International (HK) Property Investment Co., Limited (the “Subsidiary Guarantors”) and will
be guaranteed by such other future subsidiaries of the Company as is set forth in and in accordance with the terms of the June 2022 Indenture. The
Company’s obligations under the June 2022 Indenture and the June 2022 Senior Secured Notes are secured by a pledge of the capital stock of the
Company’s wholly-owned subsidiaries, Xinyuan Real Estate, Ltd., Xinyuan International Property Investment Co., Ltd., Victory Good Development
Limited, South Glory International Limited and Elite Quest Holdings Ltd.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-45
At any time prior to June 29, 2022, the Company may at its option redeem the June 2022 Senior Secured Notes, in whole but not in part, at a
redemption price equal to 100.0% of the principal amount of the June 2022 Senior Secured Notes plus the Applicable Premium as of, and accrued and
unpaid interest, if any, to (but not including) the redemption date. “Applicable Premium” means with respect to any June 2022 Senior Secured Note at
any redemption date, the greater of (i) 1.00% of the principal amount of such June 2022 Senior Secured Note and (ii) the excess of (A) the present
value at such redemption date of the principal amount of such June 2022 Senior Secured Note, plus all required remaining scheduled interest
payments due on such June 2022 Senior Secured Note through the maturity date of the June 2022 Senior Secured Notes (but excluding accrued and
unpaid interest to the redemption date), computed using a discount rate equal to the Adjusted Treasury Rate (as defined in the June 2022 Indenture)
plus 100 basis points, over (B) the principal amount of such June 2022 Senior Secured Note on such redemption date.
At any time prior to June 29, 2022, the Company may redeem up to 35% of the aggregate principal amount of the June 2022 Senior Secured
Notes with the net cash proceeds of one or more sales of our common shares in certain equity offerings, within a specified period after the equity
offering, at a redemption price of 112% of the principal amount of the June 2022 Senior Secured Notes, plus accrued and unpaid interest, if any, to
(but not including) the redemption date, provided that at least 65% of the aggregate principal amount of the June 2022 Senior Secured Notes issued on
June 29, 2020 remains outstanding after each such redemption.
The Company has evaluated and determined that there was no embedded derivative requiring bifurcation from the June 2022 Senior Secured
Notes under the requirements of ASC 815. The embedded redemption options and repurchase features did not qualify for derivative accounting
because the embedded derivatives were considered clearly and closely related to the characteristics of the June 2022 Senior Secured Notes.
The June 2022 Indenture, contains certain covenants that, among others, restrict the Company’s ability and the ability of the Company’s
Restricted Subsidiaries (as defined in the June 2022 Indenture) to incur additional debt or to issue preferred stock, to make certain payments or
investments, to pay dividends or purchase or redeem capital stock, to sell assets (including limitations on the use of proceeds of asset sales), to grant
liens on the collateral securing the June 2022 Senior Secured Notes or other assets, to make certain other payments or to engage in transactions with
affiliates and holders of more than 10% of the Company’s Common Shares, subject to certain qualifications and exceptions and satisfaction, in certain
circumstances of specified conditions, such as a Fixed Charge Coverage Ratio (as defined in the June 2022 Indenture) of 2.0 to 1.0.
September 2023 Senior Secured Notes
On September 17, 2020, the Company issued an aggregate principal amount of US$300 million of the September 2023 Senior Secured Notes.
The September 2023 Senior Secured Notes bear interest at 14.50% per annum payable semi-annually. Interest will be payable on March 17 and
September 17 of each year, commencing March 17, 2021. The September 2023 Senior Secured Notes have a three-year term maturing on September
17, 2023.
The effective interest rate of September 2023 Senior Secured Notes is 15.69%.
The September 2023 Senior Secured Notes were issued pursuant to an indenture, dated September 17, 2020, between the Company, the
Subsidiary Guarantors and Citicorp International Limited, as trustee and collateral agent (the “September 2023 Indenture”). The Company’s
obligations under the September 2023 Indenture and the September 2023 Senior Secured Notes have been guaranteed by the Subsidiary Guarantors
and will be guaranteed by such other future subsidiaries of the Company as is set forth in and in accordance with the terms of the September 2023
Indenture. The Company’s obligations under the September 2023 Indenture and the September 2023 Senior Secured Notes are secured by a pledge of
the capital stock of the Company’s wholly-owned subsidiaries, Xinyuan Real Estate, Ltd., Xinyuan International Property Investment Co., Ltd.,
Victory Good Development Limited, South Glory International Limited and Elite Quest Holdings Ltd.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-46
At any time prior to September 17, 2023, the Company may at its option redeem the September 2023 Senior Secured Notes, in whole but not
in part, at a redemption price equal to 100.0% of the principal amount of the September 2023 Senior Secured Notes plus the Applicable Premium as
of, and accrued and unpaid interest, if any, to (but not including) the redemption date. “Applicable Premium” means with respect to any September
2023 Senior Secured Note at any redemption date, the greater of (i) 1.00% of the principal amount of such September 2023 Senior Secured Note and
(ii) the excess of (A) the present value at such redemption date of the principal amount of such September 2023 Senior Secured Note, plus all required
remaining scheduled interest payments due on such September 2023 Senior Secured Note through the maturity date of the September 2023 Senior
Secured Notes (but excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the Adjusted Treasury Rate
(as defined in the September 2023 Indenture) plus 100 basis points, over (B) the principal amount of such September 2023 Senior Secured Note on
such redemption date.
At any time prior to September 17, 2023, the Company may redeem up to 35% of the aggregate principal amount of the September 2023
Senior Secured Notes with the net cash proceeds of one or more sales of our common shares in certain equity offerings, within a specified period after
the equity offering, at a redemption price of 114.5% of the principal amount of the September 2023 Senior Secured Notes, plus accrued and unpaid
interest, if any, to (but not including) the redemption date, provided that at least 65% of the aggregate principal amount of the September 2023 Senior
Secured Notes issued on September 17, 2020 remains outstanding after each such redemption.
The Company has evaluated and determined that there was no embedded derivative requiring bifurcation from the September 2023 Senior
Secured Notes under the requirements of ASC 815. The embedded redemption options and repurchase features did not qualify for derivative
accounting because the embedded derivatives were considered clearly and closely related to the characteristics of the September 2023 Senior Secured
Notes.
The September 2023 Indenture, contains certain covenants that, among others, restrict the Company’s ability and the ability of the
Company’s Restricted Subsidiaries (as defined in the September 2023 Indenture) to incur additional debt or to issue preferred stock, to make certain
payments or investments, to pay dividends or purchase or redeem capital stock, to sell assets (including limitations on the use of proceeds of asset
sales), to grant liens on the collateral securing the September 2023 Senior Secured Notes or other assets, to make certain other payments or to engage
in transactions with affiliates and holders of more than 10% of the Company’s Common Shares, subject to certain qualifications and exceptions and
satisfaction, in certain circumstances of specified conditions, such as a Fixed Charge Coverage Ratio (as defined in the September 2023 Indenture) of
2.0 to 1.0.
From January 1, 2020 to December 31, 2020, the Company redeemed the September 2023 Senior Secured Notes for a total principal amount
of US$1 million. The Company recognized loss on extinguishment of debt amounting to US$7,334, consisting of the loss from the difference between
repurchase price and principal amount of the debt amounting to US$7,334.
From January 1, 2021 to December 31, 2021, the Company redeemed the September 2023 Senior Secured Notes for a total principal amount
of US$41.2 million.
From January 1, 2022 to December 31, 2022, the Company redeemed the September 2023 Senior Secured Notes for a total principal amount
of US$3.5 million.
January 2024 Senior Secured Notes
On January 25, 2021 and February 9, 2021, the Company issued a collective aggregate principal amount of US$270 million of the January
2024 Senior Secured Notes. The January 2024 Senior Secured Notes bear interest at 14.0% per annum payable semi-annually. Interest will be payable
on July 25 and January 25 of each year, commencing July 25, 2021. The January 2024 Senior Secured Notes have a three-year term maturing on
January 25, 2024.
The effective interest rate of January 2024 Senior Secured Notes is 14.49%.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-47
The January 2024 Senior Secured Notes were issued pursuant to an indenture, dated January 25, 2021, between the Company, the Subsidiary
Guarantors and Citicorp International Limited, as trustee and collateral agent (the “January 2024 Indenture”). The Company’s obligations under the
January 2024 Indenture and the January 2024 Senior Secured Notes have been guaranteed by the Subsidiary Guarantors and will be guaranteed by
such other future subsidiaries of the Company as is set forth in and in accordance with the terms of the January 2024 Indenture. The Company’s
obligations under the January 2024 Indenture and the January 2024 Senior Secured Notes are secured by a pledge of the capital stock of the
Company’s wholly-owned subsidiaries, Xinyuan Real Estate, Ltd., Xinyuan International Property Investment Co., Ltd., Victory Good Development
Limited, South Glory International Limited and Elite Quest Holdings Ltd.
At any time prior to January 25, 2024, the Company may at its option redeem the January 2024 Senior Secured Notes, in whole but not in
part, at a redemption price equal to 100.0% of the principal amount of the January 2024 Senior Secured Notes plus the Applicable Premium as of, and
accrued and unpaid interest, if any, to (but not including) the redemption date. “Applicable Premium” means with respect to any January 2024 Senior
Secured Note at any redemption date, the greater of (i) 1.00% of the principal amount of such January 2024 Senior Secured Note and (ii) the excess of
(A) the present value at such redemption date of the principal amount of such January 2024 Senior Secured Note, plus all required remaining
scheduled interest payments due on such January 2024 Senior Secured Note through the maturity date of the January 2024 Senior Secured Notes (but
excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the Adjusted Treasury Rate (as defined in the
January 2024 Indenture) plus 100 basis points, over (B) the principal amount of such January 2024 Senior Secured Note on such redemption date.
At any time prior to January 25, 2024, the Company may redeem up to 35% of the aggregate principal amount of the January 2024 Senior
Secured Notes with the net cash proceeds of one or more sales of our common shares in certain equity offerings, within a specified period after the
equity offering, at a redemption price of 114% of the principal amount of the January 2024 Senior Secured Notes, plus accrued and unpaid interest, if
any, to (but not including) the redemption date, provided that at least 65% of the aggregate principal amount of the January 2024 Senior Secured Notes
issued on January 25, 2021, remains outstanding after each such redemption.
The Company has evaluated and determined that there was no embedded derivative requiring bifurcation from the January 2024 Senior
Secured Notes under the requirements of ASC 815. The embedded redemption options and repurchase features did not qualify for derivative
accounting because the embedded derivatives were considered clearly and closely related to the characteristics of the January 2024 Senior Secured
Notes.
The January 2024 Indenture, contains certain covenants that, among others, restrict the Company’s ability and the ability of the Company’s
Restricted Subsidiaries (as defined in the January 2024 Indenture) to incur additional debt or to issue preferred stock, to make certain payments or
investments, to pay dividends or purchase or redeem capital stock, to sell assets (including limitations on the use of proceeds of asset sales), to grant
liens on the collateral securing the January 2024 Senior Secured Notes or other assets, to make certain other payments or to engage in transactions
with affiliates and holders of more than 10% of the Company’s Common Shares, subject to certain qualifications and exceptions and satisfaction, in
certain circumstances of specified conditions, such as a Fixed Charge Coverage Ratio (as defined in the January 2024 Indenture) of 2.0 to 1.0.
From January 1, 2021 to December 31, 2021, the Company redeemed the January 2024 Senior Secured Notes for a total principal amount of
US$5.5 million.
From January 1, 2022 to December 31, 2022, the Company redeemed the January 2024 Senior Secured Notes for a total principal amount of
US$4.82 million.
In March 2023, the Company redeemed the January 2024 Senior Secured Notes for a total principal amount of US$3.9 million.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-48
October 2023 Senior Secured Notes
On October 15, 2021, eligible holders of certain notes issued by the Company in 2019 in the aggregate principal amount of US$207.68
million exchanged their notes and the Company delivered the October 2023 Senior Secured Notes in the aggregate principal amount of US$205.4
million due on October 15, 2023 and US$19.1 million in cash consideration in full satisfaction of the exchange consideration to those eligible holders.
The October 2023 Senior Secured Notes bear interest at 14.2% per annum payable semi-annually. Interest will be payable on April 15 and October 15
of each year, commencing April 15, 2022. The October 2023 Senior Secured Notes have a two-year term maturing on October 15, 2023.
The effective interest rate of October 2023 Senior Secured Notes is 16.65%.
The October 2023 Senior Secured Notes were issued pursuant to an indenture, dated October 15, 2021, between the Company, the Subsidiary
Guarantors and Citicorp International Limited, as trustee and collateral agent (the “October 2023 Indenture”). The Company’s obligations under the
October 2023 Indenture and the October 2023 Senior Secured Notes have been guaranteed by the Subsidiary Guarantors and will be guaranteed by
such other future subsidiaries of the Company as is set forth in and in accordance with the terms of the October 2023 Indenture. The Company’s
obligations under the October 2023 Indenture and the October 2023 Senior Secured Notes are secured by a pledge of the capital stock of the
Company’s wholly-owned subsidiaries, Xinyuan Real Estate, Ltd., Xinyuan International Property Investment Co., Ltd., Victory Good Development
Limited, South Glory International Limited and Elite Quest Holdings Ltd.
At any time prior to October 15, 2023, the Company may at its option redeem the October 2023 Senior Secured Notes, in whole but not in
part, at a redemption price equal to 100.0% of the principal amount of the October 2023 Senior Secured Notes plus the Applicable Premium as of, and
accrued and unpaid interest, if any, to (but not including) the redemption date. “Applicable Premium” means with respect to any October 2023 Senior
Secured Note at any redemption date, the greater of (i) 1.00% of the principal amount of such October 2023 Senior Secured Note and (ii) the excess of
(A) the present value at such redemption date of the principal amount of such October 2023 Senior Secured Note, plus all required remaining
scheduled interest payments due on such October 2023 Senior Secured Note through the maturity date of the October 2023 Senior Secured Notes (but
excluding accrued and unpaid interest to the redemption date), computed using a discount rate equal to the Adjusted Treasury Rate (as defined in the
October 2023 Indenture) plus 100 basis points, over (B) the principal amount of such October 2023 Senior Secured Note on such redemption date.
At any time prior to October 15, 2023, the Company may redeem up to 35% of the aggregate principal amount of the October 2023 Senior
Secured Notes with the net cash proceeds of one or more sales of our common shares in certain equity offerings, within a specified period after the
equity offering, at a redemption price of 114.5% of the principal amount of the October 2023 Senior Secured Notes, plus accrued and unpaid interest,
if any, to (but not including) the redemption date, provided that at least 65% of the aggregate principal amount of the October 2023 Senior Secured
Notes issued on October 15, 2021, remains outstanding after each such redemption.
The Company has evaluated and determined that there was no embedded derivative requiring bifurcation from the October 2023 Senior
Secured Notes under the requirements of ASC 815. The embedded redemption options and repurchase features did not qualify for derivative
accounting because the embedded derivatives were considered clearly and closely related to the characteristics of the October 2023 Senior Secured
Notes.
The October 2023 Indenture contains certain covenants that, among others, restrict the Company’s ability and the ability of the Company’s
Restricted Subsidiaries (as defined in the October 2023 Indenture) to incur additional debt or to issue preferred stock, to make certain payments or
investments, to pay dividends or purchase or redeem capital stock, to sell assets (including limitations on the use of proceeds of asset sales), to grant
liens on the collateral securing the October 2023 Senior Secured Notes or other assets, to make certain other payments or to engage in transactions
with affiliates and holders of more than 10% of the Company’s Common Shares, subject to certain qualifications and exceptions and satisfaction, in
certain circumstances of specified conditions, such as a Fixed Charge Coverage Ratio (as defined in the October 2023 Indenture) of 2.0 to 1.0.
From January 1, 2021 to December 31, 2021, the Company redeemed the October 2023 Senior Secured Notes for a total principal amount of
US$66.1 million.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-49
From January 1, 2022 to December 31, 2022, the Company redeemed the October 2023 Senior Secured Notes for a total principal amount of
US$2.5 million.
September 2027 Senior Secured Notes
On August 18, 2023, eligible holders of the September 2023 Senior Secured Notes, the October 2023 Senior Secured Notes and the January
2024 Senior Secured Notes in the aggregate principal amount of US$307.36 million exchanged their notes and the Company delivered the September
2027 Senior Secured Notes in the aggregate principal amount of US$331.30 million due on September 30, 2027 and US$1.54 million in cash
consideration in full satisfaction of the exchange consideration to those eligible holders. The September 2027 Senior Secured Notes bear interest at 3%
per annum payable semi-annually in the form of cash and/or payment-in-kind subject to the election of the Company. Interest will be payable on
March 30 and September 30 of each year, commencing September 30, 2023. The September 2027 Senior Secured Notes have a five-year term
maturing on September 30, 2027.
The September 2027 Senior Secured Notes were issued pursuant to an indenture, dated August 18, 2023, between the Company, the
Subsidiary Guarantors and Citicorp International Limited, as trustee and collateral agent (the “Original September 2027 Indenture”). With the consent
of the holders of not less than 66% in aggregate principal amount of the outstanding September 2027 Senior Secured Notes, the parties to the Original
September 2027 Indenture entered into the supplemental indenture dated April 29, 2024 and the second supplemental indenture dated October 29,
2024 (the foregoing, the “Supplemental Indentures”; the Original September 2027 Indenture as amended by the Supplemental Indentures, the “the
September 2027 Indenture”). The Company’s obligations under the September 2027 Indenture and the September 2027 Senior Secured Notes have
been guaranteed by the Subsidiary Guarantors and will be guaranteed by such other future subsidiaries of the Company as is set forth in and in
accordance with the terms of the September 2027 Indenture. The Company’s obligations under the September 2027 Indenture and the September 2027
Senior Secured Notes are secured by a pledge of the capital stock of the Company’s wholly-owned subsidiaries, Xinyuan Real Estate, Ltd., Xinyuan
International Property Investment Co., Ltd., Victory Good Development Limited, South Glory International Limited and Elite Quest Holdings Ltd.
At any time prior to September 30, 2027, the Company may at its option redeem the September 2027 Senior Secured Notes, in whole or in
part, at a redemption price equal to or no less than 100.0% of the principal amount of the September 2027 Senior Secured Notes plus the accrued and
unpaid interest, if any, to (but not including) the redemption date.
Before entry into the Supplemental Indentures in 2024, unless previously redeemed in full prior to each Mandatory Redemption Date (as
defined below), the September 2027 Senior Secured Notes shall be redeemed by the Company in accordance with the redemption schedule described
below, at the redemption price of 100% of the outstanding principal amount of the September 2027 Senior Secured Notes to be redeemed, plus
accrued and unpaid interest on such September 2027 Senior Secured Notes up to but excluding the relevant Mandatory Redemption Date:
Mandatory Redemption Date
Required Redemption Portion
September 30, 2025
5% of the then aggregate outstanding principal amount of the
September 2027 Senior Secured Notes
September 30, 2026
5% of the then aggregate outstanding principal amount of the
September 2027 Senior Secured Notes
The Supplemental Indentures cancel the foregoing mandatory redemption arrangement. Under the Supplemental Indentures, the Company as
issuer will have no obligation to pay minimum cash interest at the rate of 2.0% per annum for the period from and including September 30, 2023 up to
and excluding September 30, 2024 (the “Affected Interest Payment Period”). However, interest at a rate of 3.0% per annum will continue to accrue on
the principal amount of the outstanding September 2023 Senior Secured Notes for the Affected Interest Payment Period. In addition, under the
Supplemental Indentures, the Company will not be required to redeem any of the aggregate outstanding principal amount of the September 2027
Senior Secured Notes on either September 30, 2025 or September 30, 2026.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-50
The Company has evaluated and determined that there was no embedded derivative requiring bifurcation from the September 2027 Senior
Secured Notes under the requirements of ASC 815. The embedded redemption options and repurchase features did not qualify for derivative
accounting because the embedded derivatives were considered clearly and closely related to the characteristics of the September 2027 Senior Secured
Notes.
The September 2027 Indenture, contains certain covenants that, among others, restrict the Company’s ability and the ability of the
Company’s Restricted Subsidiaries (as defined in the September 2027 Indenture) to incur additional debt or to issue preferred stock, to make certain
payments or investments, to pay dividends or purchase or redeem capital stock, to sell assets (including limitations on the use of proceeds of asset
sales), to grant liens on the collateral securing the September 2027 Senior Secured Notes or other assets, to make certain other payments or to engage
in transactions with affiliates and holders of more than 10% of the Company’s Common Shares, subject to certain qualifications and exceptions and
satisfaction, in certain circumstances of specified conditions, such as a Fixed Charge Coverage Ratio (as defined in the September 2027 Indenture) of
2.0 to 1.0.
From January 1, 2023 to December 31, 2023, the Company redeemed the September 2027 Senior Secured Notes for a total principal amount
of US$34.5 million.
From January 1, 2024 to December 31, 2024, the Company redeemed the September 2027 Senior Secured Notes for a total principal amount
of US$16.8million.
Onshore Corporate Bonds
On April 1, 2019, Xinyuan (China) Real Estate, Ltd. issued another new tranche of the onshore corporate bonds with an aggregate principal
amount of RMB980 million (US$146 million) due on April 1, 2024 (the “2019 First Tranche Bonds”) at a coupon rate of 8.4% per annum payable
annually. Interest is payable on April 1 of each year, commencing April 1, 2020.
From April 1, 2019 to June 21, 2019, the Company redeemed the 2019 First Tranche Bonds for a total principal amount of RMB637 million
(US$91 million). The Company recognized loss on extinguishment of debt amounting to US$3,977,493 in 2019, consisting of both the debt
redemption price amounting to US$3,494,668 and unamortized deferred debt issuance costs amounting to US$482,825.
From February 15, 2020 to November 30, 2020, the Company redeemed the remaining amount of the 2019 First Tranche Bonds for a total
principal amount of RMB343 million (US$49 million). The Company recognized loss on extinguishment of debt amounting to US$423,011,
consisting of both the debt redemption price amounting to US$72,640 and unamortized deferred debt issuance costs amounting to US$350,371.
On November 12, 2020, Xinyuan (China) Real Estate, Ltd. issued a new tranche of the onshore corporate bonds with an aggregate principal
amount of RMB900 million (US$130 million) due on November 13, 2025 (the “2020 Tranche”) at a coupon rate of 8.35% per annum payable
annually. Interest is payable on November 13 of each year, commencing November 13, 2020.
On November 30,2020, the Company redeemed the 2020 Tranche for a total principal amount of RMB646 million (US$94 million). The
Company recognized loss on extinguishment of debt amounting to US$261,320, consisting of both the debt redemption price amounting to US$492
and unamortized deferred debt issuance costs amounting to US$260,828.
From January 1, 2021 to December 31, 2021, the Company redeemed the 2020 Tranche for a total principal amount of RMB77.1 million
(US$12 million).
From January 1, 2022 to December 31, 2024, the Company did not made redemption for the 2020 Tranche.
On January 7, 2021, Xinyuan (China) Real Estate, Ltd. issued a new tranche of the onshore corporate bonds with an aggregate principal
amount of RMB500 million (US$78 million) due on January 7, 2026 (the “2021 Tranche”) at a coupon rate of 8.35% per annum payable annually.
Interest is payable on January 7 of each year, commencing January 7, 2021.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-51
From January 1, 2021 to December 31, 2021, the Company redeemed the 2021 Tranche for a total principal amount of RMB402.2 million
(US$62 million).
From January 1, 2022 to December 31, 2023, the Company did not make redemption for the 2021 Tranche.
The net gain on debt extinguishment arose from debts restructuring which resulted in extinguishment accounting amounting to U$9,620,914,
U$169,932,886 and U$48,643,696 for 2022, 2023 and 2024 respectively.
Gain on modification of debt amounting to U$26,372,965 and U$21,253,128 in financial year 2023 and 2024 respectively arose from
modification of debt terms.
12.         Leases
Lessee
The Group has operating leases, which primarily consist of office space and equipment. The Group’s leases include options to extend the
lease term. The Group’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The Group has operating leases for office and dormitories in the United States and China. The leases have remaining lease terms of up to two
years.
Leases recorded on the consolidated balance sheets are summarized as follows:
    
December 31, 
    
December 31, 
 
2023
2024
 
US$
US$
Lease Assets
Operating lease ROU assets
 
1,615,626
372,277
Lease Liabilities
 
Current
 
Current portion of operating lease
 
2,228,329
747,044
Non-current
 
Operating lease, net of current portion
 
338,252
77,442
The components of lease expenses recognized are as follows:
    
Year ended
    
Year ended
 December 31,
 December 31,
    
2023
2024
US$
US$
Operating lease cost:
  
Operating lease cost
2,528,841
2,637,923
Short-term lease cost
508,273
399,191
Total lease cost
3,037,114
3,037,114

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-52
Supplemental cash flow information related to leases was as follows:
Year ended
Year ended
 December 31,
 December 31,
    
2023
    
2024
US$
US$
Operating cash flows for operating leases
 
1,996,744
2,096,515
Maturities of lease liabilities are as follows:
December 31,
2024
    
Operating Leases
US$
Year ending December 31, 2025
 
2,078,388
Year ending December 31, 2026
 
505,193
Year ending December 31, 2027
 
266,078
Year ending December 31, 2028
65,876
Total lease payments
 
2,915,535
Less: imputed interest
 
(31,655)
Present value of lease liabilities
 
2,883,880
Other supplemental information related to lease terms and discount rates are summarized below:
    
December 31, 
    
December 31, 
 
2023
2024
 
Weighted-average remaining lease term (years)
 
  
Operating leases
 
1.79
1.67
Weighted-average discount rate
 
Operating leases
 
6.48 %
5.15 %
13.         Customer deposits
Advances for real estate properties comprise sales proceeds received from customers for the pre-sale of residential units in the PRC.
Advances for real estate properties are typically funded up to 40% - 80% by mortgage loans made by banks to the customers. The Group holds certain
cash balances in restricted cash accounts at the relevant banks (Note 2 (f)). The Group, in return, has a right to withhold transfer of title to the
customer until outstanding amounts are fully settled.
    
December 31, 
    
December 31, 
2023
2024
US$
US$
Advances for real estate properties
 
1,279,142,157  
663,295,070
Add: increase in revenue recognized in excess of amounts received from customers
 
—  
—
Less: recognized as progress billings
 
(539,128,802) 
(137,412,518)
Customer deposits (Note 2(i))
 
740,013,355  
525,882,552
14.         Income taxes
(a)         Corporate income tax (“CIT”)
Under the current law of the Cayman Islands, the Company is not subject to income tax and withholding tax.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-53
The Company’s PRC subsidiaries are subject to income tax at the statutory rate of 25% in accordance with PRC corporate income tax laws
and regulations. Further, under the same tax laws and regulations, dividends paid by PRC enterprises out of profits earned post-2007 to non-PRC tax
resident investors are subject to PRC dividend withholding tax of 10%. A lower withholding tax rate may be applied based on applicable tax treaties
with certain jurisdictions.
The Company’s HK subsidiaries are subject to income tax at the statutory rate of 16.5% in accordance with the HK profits tax laws and
regulations. The Company did not make any provisions for Hong Kong Profits Tax as there were no assessable profits arising in or derived from Hong
Kong for any of the periods presented. Under the Hong Kong tax law, the Company’s HK subsidiaries are exempted from income tax on its foreign-
derived income and there are no withholding taxes in Hong Kong on remittance of dividends.
The Company’s U.S. subsidiaries are subject to income tax at the statutory rate of 21% in accordance with US corporate income tax laws and
regulations. Dividends and interests paid by US enterprises to non-U.S. tax resident enterprises are subject to US withholding tax of 30%.
Income before income tax expense consisted of:
Year ended December 31,
    
2022
    
2023
    
2024
US$
US$
US$
PRC
 
(33,822,942)
43,313,793
91,724,941
Non-PRC
 
(215,618,321)
42,493,369
(82,848,744)
Total
 
(249,441,263)
85,807,162
8,876,197
Income tax expense for the years ended December 31, 2022, 2023 and 2024 is summarized as follows:
Year ended December 31,
    
2022
    
2023
    
2024
US$
US$
US$
Current:
 
   
   
  
CIT tax expense/(benefit)
 
42,948,974
75,387,486
(20,818,449)
LAT expense
 
26,862,350
70,422,049
31,720,514
Deferred tax (benefit)/expense
 
(60,569,862)
(90,534,084)
43,997,423
Income tax expense
 
9,241,462
55,275,451
54,899,488
The Group’s income tax expense differs from the tax expense computed by applying PRC statutory CIT rate of 25% for the years ended
December 31, 2022, 2023 and 2024 as follows:
Year ended December 31,
    
2022
    
2023
    
2024
US$
US$
US$
CIT at rate of 25%
  
(62,360,316)
21,451,790
2,219,050
Tax effect of non-taxable income
(20,815,682)
(7,508,336)
(365,693)
Tax effect of non-deductible expenses
 
8,849,339
(3,025,167)
(2,630,919)
Unrecognized tax benefits
 
—
(12,673,506)
107,820
LAT expense
 
26,862,350
70,422,049
31,720,514
CIT benefit of LAT
 
(6,715,587)
(17,605,512)
(7,930,129)
Changes in valuation allowance
 
31,860,999
24,493,566
17,012,228
International rate differences
 
42,918,080
(18,620,948)
14,865,994
Dividend and interest withholding taxes
 
889,259
(321,096)
(806,104)
Adjustment of estimated income tax accruals
 
(8,220,977)
(1,315,644)
706,727
Others
 
(4,026,003)
(21,745)
—
Income tax expense
 
9,241,462
55,275,451
54,899,488

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-54
(b)          Unrecognized tax benefit
The following table summarizes the activities related to the Group’s unrecognized tax benefits:
    
2022
    
2023
    
2024
US$
US$
US$
Balance at January 1
 
130,560,908
135,562,075
103,047,687
Additions for tax positions of current year
 
6,295,454
23,209,764
18,026,267
Reductions for tax positions of prior years
 
—
(42,880,080)
(16,766,615)
Movement in current year due to foreign exchange rate fluctuation
 
(1,294,287)
(12,844,072)
—
Balance at December 31
 
135,562,075
103,047,687
104,307,339
The movement in the liability for unrecognized tax benefits in 2022 included an amount of US$10,042,468 and write off related late payment
interest of US$4,304,458, which were due to deemed interest income from subsidiaries of the Company during the year, related late payment interests
of US$557,444, which were due to an uncertain tax position in respect of an investment loss deduction claimed in the 2018 tax return filed in 2019.
The movement in the liability for unrecognized tax benefits in 2023 included an amount of US$23,939,130 and related late payment interest
of US$996,540, which were due to deemed interest income from subsidiaries of the Company during the year, write off related late payment interests
of US$1,725,906, which were due to an uncertain tax position in respect of an investment loss deduction claimed in the 2018 tax return filed in 2019.
The movement in the liability for unrecognized tax benefits in 2024 included an amount of US$16,766,615 and related late payment interest
of US$1,259,652, which were due to deemed interest income from subsidiaries of the Company during the year.
As of December 31, 2022, 2023 and 2024, unrecognized tax benefits of US$13,279,620, US$12,673,506 and US$12,534,555, respectively, if
ultimately recognized, will impact the effective tax rate. The Group anticipates new unrecognized tax benefits, related to tax positions similar to those
giving rise to its existing unrecognized tax benefits, to originate after December 31, 2024. It is possible that the amount of uncertain tax positions will
change in the next twelve months, however, an estimate of the range of the possible outcomes cannot be made at this time.
The Group’s income tax returns for fiscal year 2009 through fiscal year 2024 remain open to potential examination. In addition, local tax
authorities may exercise broad discretion in applying the tax law, thus potentially exposing the subsidiaries to audits of tax years outside the general
statute of limitations.
(c)          LAT
LAT is applicable at progressive tax rates ranging from 30% to 60% on the appreciation of land values, with an exemption provided for the
sales of ordinary residential properties if the appreciation values do not exceed certain thresholds specified in the relevant tax laws.
For all periods presented, the Group has made provision for LAT with respect to properties sold up to the respective reporting date in
accordance with the requirements set forth in the relevant PRC tax laws and regulations.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-55
(d)          Deferred tax
The tax effects of temporary differences that give rise to the Group’s deferred tax assets and liabilities as of December 31, 2023 and 2024 are
as follows:
    
December 31, 
    
December 31, 
2023
2024
US$
US$
Deferred tax assets:
Tax loss carried forward
 
65,880,222
91,720,093
Accruals and provisions
 
126,741,964
116,919,417
Capitalized expenses
 
84,831,071
86,867,447
Revenue recognition at a point in time less tax paid under deemed profit method
 
(32,803,744)
(63,437,820)
Revenue recognition of real estate lease income on a straight-line basis
 
(1,572,986)
(3,047,810)
Deemed interest expense
 
96,240,973
96,240,973
Operating lease liability
641,645
206,121
Less: Valuation allowance
 
(18,099,350)
(18,091,522)
Total deferred tax assets, net of valuation allowance
 
321,859,795
307,376,899
Deferred tax liabilities:
 
Revenue recognition over time
 
(85,213,884)
(144,265,482)
Taxable temporary differences arising from asset acquisitions
 
(256,323,009)
(236,382,167)
Dividend and interest withholding taxes
 
(44,200,493)
(43,394,390)
Operating lease right-of-use assets
(403,906)
(93,069)
Total deferred tax liabilities
 
(386,141,292)
(424,135,108)
Certain of the Company’s PRC subsidiaries have PRC tax net operating loss carry forwards of US$348.8 million (2023: US$245.5 million),
which will expire in 1 to 10 years, if unutilized. Losses incurred in the U.S. amounting to US$21.5 million (2023: US$21.5 million) can be carried
forward for 20 years, and US$11.2 million (2023: US$11.2 million) have an indefinite carryforward period.
During 2023 and 2024, the Company has considered its operational funding needs, future development initiatives and its dividend
distribution plan and is permanently reinvesting all but US$470.0 million and US$433.9 million of its PRC subsidiaries earnings as at December 31,
2023 and 2024, respectively. Accordingly, the Company accrued deferred income tax liabilities of US$47.0 million and US$43.4 million for the
withholding tax liability associated with the distribution of retained earnings that are not permanently reinvested as at December 31, 2023 and 2024,
respectively. As of December 31, 2023 and 2024, the total amount of undistributed earnings from the Company’s PRC subsidiaries that are considered
to be permanently reinvested were nil, and the related unrecognized deferred tax liabilities were approximately nil. The Company’s remaining
subsidiaries do not have retained earnings for all the periods presented.
In assessing the ability to realize the deferred tax assets, the Group has considered whether it is more likely than not that some portion or all
of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income
during the periods in which those temporary differences become deductible. Accordingly, the Group recorded valuation allowances amounting
US$18,099,350 and US$18,091,522 as of December 31, 2023 and 2024, respectively.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-56
15.         Share-based compensation
As of December 31, 2024, the Company primarily had four share-based compensation plans under which awards may be granted to both
employees and non-employees, namely, the 2007 Long Term Incentive Plan (the “2007 Plan”), 2015 Long Term Incentive Plan (the “2015 Plan”),
2014 Restricted Stock Unit Plan (the “2014 RSU Plan”) and 2020 Restricted Stock Unit Plan (the “2020 RSU Plan”). On January 31, 2019, Xinyuan
Property Management Service (Cayman) Ltd., a subsidiary of the Company, approved a restricted share award scheme (the “Scheme”). On September
28, 2019, the Company approved the employee stock option plan of Xinchuang Technology Co. Ltd. (“Xinchuang Technology”). On July 8, 2024,
Xinyuan Property Management Service (Cayman) Ltd., a subsidiary of the Company, approved a new share award scheme during 2024 (the “2024
Share Award Scheme”). Compensation cost of US$1,102,260 (2022: US$568,047; 2023: US$nil) was recorded in general and administrative expenses
with a corresponding credit to additional paid-in capital in the year ended December 31, 2024. The compensation cost is primarily regarded as a
permanent difference for income tax purposes as relevant equity awards were mainly granted by the Company and a subsidiary, which are registered
in the Cayman Islands, a tax-free jurisdiction. Hence, no tax benefit was recognized upon the recognition of compensation cost. The Company has a
policy of using authorized shares in the existing pool to satisfy any future exercise of share options and shares repurchased held by a third-party
trustee to satisfy the RSUs granted under the 2014 RSU Plan and 2020 RSU plan.
2007 Plan
In November 2007, the Company adopted the 2007 Plan which provides for the grant of options, restricted shares, restricted stock units,
stock appreciation rights and other stock-based awards to purchase its common shares. The maximum aggregate number of common shares which
may be issued pursuant to all awards, including options, is 10 million common shares, subject to adjustment to account for changes in the
capitalization of the Company.
Under the 2007 Plan, the Company granted share options with service conditions to purchase common shares to employees, at an exercise
price ranging from US$1.085 to US$1.81 per option. These options have a weighted average grant date fair value of US$0.36 to US$0.61 per option
and the total expected compensation cost has considered the expected forfeitures. These options generally have vesting periods based on length of
service of 36 months and will expire no later than 2025.
2015 Plan
In June  2015, the Company approved the 2015 Plan to provide grant of options to purchase shares of Company stock with maximum
aggregate number of 20 million common shares, subject to adjustment to account for changes in the capitalization of the Company.
On July 1, 2015, under the 2015 Plan, the Company granted share options with service conditions to purchase up to 6,574,600 common
shares to 22 employees, at an exercise price of US$1.71 per share. These options have a weighted average grant date fair value of US$0.48 per option
and a total expected compensation cost, net of expected forfeitures, of US$3,165,867. These options have vesting periods based on length of service of
34 months and will expire no later than July 1, 2025.
On July 29, 2015, under the 2015 Plan, the Company granted share options with service conditions to purchase up to 81,600 common shares
to one employee, at an exercise price of US$1.71 per share. These options have a weighted average grant date fair value of US$0.42 per option and a
total expected compensation cost, net of expected forfeitures, of US$34,294. These options have vesting periods based on length of service of
33 months and will expire no later than July 29, 2025.
No options were granted during the years ended December 31, 2023 and 2024, for 2007 Plan and 2015 Plan.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-57
Assumptions
The fair value of each option is estimated on the date of grant using the Dividend Adjusted Black-Scholes option-pricing model that uses the
assumptions noted below.
    
Options
    
Options
 
Granted in
Granted in
 
2015
2015
 
Under the
Under the
 
    
2007 Plan
    
2015 Plan
 
Average risk-free rate of return
1.82‑1.92 %  
1.57‑1.92 %
Expected term
6 Years  
6 Years
Volatility rate
46.3‑55.2 %  
55.0‑55.9 %
Dividend yield
5 %  
5 %
The risk-free rate for periods within the expected life of the option is based on the implied yield rates of U.S treasury yield curve in effect at
the time of grant. The expected life of options represents the period of time the granted options are expected to be outstanding. The Company had
limited historical exercise data. Therefore, the expected life was estimated as the average of the contractual term and the vesting period. The dividend
yield was based on the Company’s dividend distribution plan. The expected volatility was based on the historical daily stock price of the Company,
annualized.
Share Option Activity
As of January 1, 2024, all options granted under 2007 Plan were fully vested. The following table is a summary of the Company’s share
option activity under the 2007 Plan (in US$, except options):
    
    
Weighted
    
Weighted
    
Average
Remaining
Number of
Exercise
Contractual
Aggregate
Options Under the 2007 Plan
 Options
Price
Life (Years)
Intrinsic Value
Outstanding, January 1, 2024
 
   
   
   
  
1.21 (exercise price)
 
39,400  
1.21
 
0.50  
—
Outstanding and Exercisable, December 31, 2024
 
   
  
 
   
  
1.21 (exercise price)
 
—  
—
 
—  
—
The aggregate intrinsic value in the table above represents the total intrinsic value (the aggregate difference between the Company’s closing
stock price of US$0.13 per common share as of December 31, 2024 and the exercise price for in-the-money options) that would have been received by
the option holders if all in-the-money options had been exercised on December 31, 2024. As of December 31, 2024, there was no unrecognized
compensation cost related to non-vested share-based compensation arrangements granted to employees, under the 2007 Plan. Total fair value of
options vested was nil during the year ended December 31, 2022, 2023 and 2024, respectively.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-58
As of January 1, 2024, all options granted under 2015 Plan were fully vested. The following table is a summary of the Company’s share
option activity under the 2015 Plan (in US$, except options):
    
    
Weighted
    
Weighted
    
Average
Remaining
Number of
Exercise
Contractual
Aggregate
Options Under the 2015 Plan
Options
Price
Life (Years)
Intrinsic Value
Outstanding, January 1, 2024
1.71(exercise price)
 
2,715,134
1.71
1.50
—
Forfeited
 
 
 
 
1.71 (exercise price)
 
27,200
1.71  
—  
—
Outstanding and Exercisable, December 31, 2024
 
   
   
   
  
1.71(exercise price)
 
2,687,934
1.71
0.50
—
The aggregate intrinsic value in the table above represents the total intrinsic value (the aggregate difference between the Company’s closing
stock price of US$0.13 per common share as of December 31, 2024 and the exercise price for in-the-money options) that would have been received by
the option holders if all in-the-money options had been exercised on December 31, 2024. As of December 31, 2024, there was no unrecognized
compensation cost related to non-vested share-based compensation arrangements granted to employees, under the 2015 Plan. Total fair value of
options vested was nil during the year ended December 31, 2022, 2023 and 2024, respectively.
2014 RSU Plan
On May 23, 2014, the Board of Directors approved the 2014 RSU Plan, which is administered by the Compensation Committee of the Board
of Directors. The 2014 RSU Plan provides for discretionary grants of restricted stock units, or RSUs, to or for the benefit of participating employees.
The maximum number of common shares that may be delivered to 2014 RSU Plan participants in connection with RSUs granted under the 2014 RSU
Plan is 10,000,000, subject to adjustment if the Company’s outstanding common shares are increased, decreased, changed into or exchanged for a
different number or kind of shares or securities of the Company through a reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction.
On May 23, 2014, the Company established a trust that is governed by a third-party trustee and deposited US$7,042,725 into the trust. The
trustee used the funds to acquire 4,234,884 common shares in the open market. Repurchased shares were granted to certain employees and awards
vest ratably over a three-year service vesting period. The aggregate fair value of the restricted shares granted at the grant date shall be recognized as
compensation expense using the straight-line method.
On April 10, 2015, under the 2014 RSU Plan, the Company deposited US$3,259,998 into the trust. The trustee used the funds to acquire
2,076,964 common shares from the open market. The awards vest ratably over a three-year service vesting period. The aggregate fair value of the
restricted shares granted at the grant date shall be recognized as compensation expense using the straight-line method.
On April 18, 2016, under the 2014 RSU Plan, the Company deposited US$4,003,999 into the trust. The trustee used the funds to acquire
1,614,220 common shares from the open market. The awards vest ratably over a three-year service vesting period. The aggregate fair value of the
restricted shares granted at the grant date shall be recognized as compensation expense using the straight-line method.
On July 27, 2017, under the 2014 RSU Plan, the Company deposited US$3,485,952 into the trust. The trustee had not used the funds to
acquire any common shares from the open market as of December 31, 2017. The awards vest ratably over a three-year service vesting period. The
aggregate fair value of the restricted shares granted at the grant date shall be recognized as compensation expense using the straight-line method. The
trustee had used the funds to acquire 1,356,584 common shares from the open market as of December 31, 2018.

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-59
On July 30, 2018, under the 2014 RSU Plan, the Company deposited US$3,976,660 into the trust. The trustee had used the funds to acquire
1,732,466 common shares from the open market as of December 31, 2018. The awards vest ratably over a three-year service vesting period. The
aggregate fair value of the restricted shares granted at the grant date shall be recognized as compensation expense using the straight-line method.
On August 30, 2019, under the 2014 RSU Plan, the Company deposited US$2,912,539 into the trust. The trustee had used the funds to
acquire 1,438,076 common shares from the open market as of December 31, 2019. The awards vest ratably over a three-year service vesting period.
The aggregate fair value of the restricted shares granted at the grant date shall be recognized as compensation expense using the straight-line method.
No restricted shares were granted during the years ended December 31, 2022, 2023 and 2024 under the 2014 RSU plan.
2020 RSU Plan
On June 30, 2020, the Board of Directors approved the 2020 RSU Plan, which is administered by the Compensation Committee of the Board
of Directors. The 2020 RSU Plan provides for discretionary grants of RSUs to or for the benefit of participating employees. The maximum number of
common shares that may be delivered to 2020 RSU Plan participants in connection with RSUs granted under the 2020 RSU Plan is 10,000,000,
subject to adjustment if the Company’s outstanding common shares are increased, decreased, changed into or exchanged for a different number or
kind of shares or securities of the Company through a reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split
or other similar transaction.
Other awards
On September 28, 2019, the Board of Directors of the Company approved the employee stock option plan of Xinchuang Technology Co.,
Ltd. (“Xinchuang Technology”), a subsidiary of the Company. Under the plan, the Company reserved 150 million shares, representing 30% of
Xinchuang Technology’s issued capital for purpose of providing share option awards to the Company’s senior management and employees. In
November 2019, the Company granted a total of 100 million share options to certain employees of the Group with an exercise price of US$0.14
(RMB1). The options become vested in five tranches subject to achievement of certain performance conditions as follows: (i) 5% on the grant date
with no performance condition; (ii) 5% for each of the first, second, and third anniversary of the grant date, respectively; and (iii) the remaining 80%
shall vest upon the completion of the initial public offering of Xinchuang. The total fair value of the share options granted in October 2019 was
US$3.5 million, which shall be recognized as compensation expense using the accelerated method. The fair value was determined by an external
valuer using the discounted cash flow method to determine the underlying equity fair value of Xinchuang Technology. Key assumptions, such as the
discount rate, cash flow projections and the discount for lack of marketability, are determined by the Group with best estimates.
As of December 31, 2024, there were no shares expired and the expense recognized was immaterial (2022: nil, 2023: nil).
Xinyuan Property Management Service (Cayman) Ltd., a subsidiary of the Company, operates the Scheme for the purpose of providing
incentives and rewards to eligible participants (the “Participants”) who contribute to the success of its operations. The Participants of the Scheme
include its directors and senior executives. The Scheme was adopted by its board on January 31, 2019 (the “Adoption Date”). Pursuant to the Scheme,
an award of 56,250 restricted shares (subdivided into 56,250,000 restricted shares in August 2019), representing 15% of its share capital, was granted
to the Participants with a total exercise price at an aggregate consideration of US$1,204,094 (RMB8,400,000).
The consideration was fully settled in cash upon the issuance of restricted shares. The restricted shares vested in three tranches of 2%, 18%
and 80% on January 1, 2020, January 1, 2021 and January 1, 2022, respectively, in accordance with certain vesting conditions, that is, a performance
condition based on the completion of an IPO. The compensation cost was recognized using accelerated method.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-60
On June 14, 2019, Mr. Zhang Lizhou (one of the participants) resigned as an executive director. Upon the resignation of Mr. Zhang Lizhou,
the Company repurchased the 18,750 shares granted to him at a consideration of US$401,365 (RMB2,800,000), which was equal to the amount paid
by Mr. Zhang Lizhou to the Company at the issuance date. The remaining settled aggregate consideration of US$802,729 (RMB5,600,000) according
to the Scheme was recognized as liability because the restricted shares will be repurchased by the Company at the original amount paid by participants
upon the termination of employment.
The aggregate fair value of the restricted shares granted at the grant date amounting to US$4,931,051 (RMB34,400,000) is recognized as
compensation expense using the accelerated method. The fair value is determined by an external valuer using the discounted cash flow method to
determine the underlying equity fair value of Xinyuan Property Management Service (Cayman) Ltd. Key assumptions, such as the discount rate, cash
flow projections and the discount for lack of marketability, are determined by the Group using its best estimates.
As of December 31, 2024, there were no shares vested or expired and the Group recognized expense relating to the Scheme of US$ nil (2022:
US$nil; 2023: US$nil) in the Consolidated Statements of Comprehensive Income during the period.
Xinyuan Property Management Service (Cayman) Ltd., a subsidiary of the Company, operates a new share award scheme during 2024 (the
“2024 Share Award Scheme”) which is related to the conditional grants of award shares to its two executive directors (“grantees”) on July 8 2024.
This was a one-off grant and expired upon the vesting of the awarded shares. The purpose of 2024 Share Award Scheme is to recognize the grantees’
contribution to the business performance and development of the subsidiary and to provide sufficient incentive to retain and motivate the grantees to
continue to strive for greater contributions to the subsidiary in the future.
As the conditional grants to each of the two executive directors would result in the shares issued and to be issued in respect of all options and
awards granted to them in the 12-month period up to and including the date of the conditional grants representing in aggregate over 1% of the shares
in issue (excluding any options and awards lapsed in accordance with the terms of the scheme), such grants were approved by the qualified
shareholders at the EGM of the subsidiary.
Pursuant to the 2024 Share Award Scheme, the conditional grant of awards of 25,537,500 shares represented 17,025,000 new shares to Mr.
Shen and 8,512,500 new shares to Mr. Wang,each of whom are executive directors of the subsidiary The 25,537,500 awarded shares allotted and
issued under the conditional grants represent (i) 4.5% of the issued shares on 8 July 2024; and (ii) approximately 4.31% of the issued shares as
enlarged by the allotment and issue of the awarded shares, assuming there will be no other change in the issued share capital of the subsidiary between
the grant date and date of the allotment and issuance of the awarded shares. All awarded shares were credited as fully paid upon issue and were vested
immediately upon issue. The vesting of the awarded shares is not subject to any performance targets or clawback mechanism. Each of the grantees of
the awarded shares shall not dispose of or transfer any of the awarded shares owned by them on or before 31 December 2025, provided that such
restriction shall cease to apply if such grantees cease to be directors of the subsidiary.
The aggregate fair value of grantees’ services received in return for restricted shares awarded of approximately US$1,102,260
(RMB7,848,000) was measured by reference to closing market price at HK$0.335 of the subsidiary’s listed shares on 8 July 2024, the grant date of
shares award.
As of December 31, 2024, the Group recognized expense relating to the 2024 Share Award Scheme of US$1,102,260 in the Consolidated
Statements of Comprehensive Income/(Loss).

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XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-61
16.         Other payables and accrued liabilities
The components of other payables and accrued liabilities were as follows:
    
December 31, 
    
December 31, 
2023
2024
US$
US$
Contract deposit
 
221,148,610  
279,471,348
Accrued expenses
 
46,365,405  
21,200,736
Deed tax and maintenance fund withheld for customers
 
15,079,138  
10,525,607
Bidding deposit
 
3,331,250  
3,238,992
Welfare payable
 
1,458,748  
1,437,298
Other tax payable
 
20,392,535  
30,827,250
Accrued aircraft operating expense
 
1,488,258  
871,401
Accrued interest expense
 
287,028,427  
404,937,375
Purchase consideration payable for asset acquisitions and business combinations
 
33,275,049  
20,725,436
Others
 
29,934,439  
6,001,222
Total
 
659,501,859  
779,236,665
17.         Related party and employee transactions
(a)
Amounts due from related parties
    
December 31, 
    
December 31, 
2023
2024
US$
US$
Current:
 
   
  
Henan Hongguang Olympic Real Estate Co., Ltd.
 
85,595,700  
84,337,080
Guangzhou Huanglong Information Technology Co., Ltd.
27,153,613
26,882,866
Madison Development Limited
 
3,689,595  
480,132
Suzhou Wanzhuo’s non-controlling interest holders
 
28,834,616  
28,410,626
Taicang Pengchi’s non-controlling interest holders
 
23,494,569  
27,582,909
Suzhou Rongjingchen Real Estate Co., Ltd.
19,931,382
19,638,306
Others
3,927,036
4,383,134
Total current amounts due from related parties
 
192,626,511  
191,715,053
Non current:
 
 
Xinzheng Meihang Network Technology Co., Ltd.
 
1,047,764  
1,032,357
Suzhou Yefang’s non-controlling interest holders
11,293,716
11,181,487
Others
2,463,750
2,427,522
Total non-current amounts due from related parties
14,805,230
14,641,366
Total
 
207,431,741  
206,356,419
As of December 31, 2024, the balances due from Guangzhou Huanglong Information Technology Co., Ltd., a wholly-owned subsidiary of
the Company’s equity method investee, were related to advances for operational needs without any fixed payment terms. This balance is unsecured,
bears no interest and expected to be repaid in one year.
Henan Hongguang Olympic Real Estate Co., Ltd. (“Henan Hongguang”) is the non-controlling shareholder of Henan Renxin (Note 1), one of
the Company’s subsidiaries. As of December 31, 2024, the balance due from Henan Hongguang was related to advances for operational needs without
any fixed payment terms. This balance is unsecured, bears no interest, and is expected to be repaid in one year.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-62
Xinzheng Meihang Network Technology Co., Ltd. (“Meihang”) is the non-controlling shareholder of Zhengzhou Hangmei Technology
Development Co., Ltd. (“Zhengzhou Hangmei”), one of the Company’s subsidiaries. As of December 31, 2021, the balance due from Meihang was
US$2,854,538, which have a three-year payment term, and bear interest at 11.5%. In 2020, Meihang together with Zhengzhou Hangmei entered into
an agreement with the Company in which all parties had agreed that the interest relating to the payable balance to be ceased from accrual thereafter.
The Company settled the remaining balance in 2022.
As of December 31, 2023, the balance due from Madison Development Limited, an equity method investee, amounting to US$3,689,595 is
related to advances for operational needs. This balance is unsecured, bears interest at 15%, and has no fixed repayment term. Accrued interest
amounted to US$624,125 as of December 31, 2023.
On September 12, 2017, the Company sold 80% of its equity interest in Suzhou Wanzhuo to four non-affiliated passive investors for an
aggregate cash consideration of US$23,687,327. Pursuant to the updated articles of association, the Company still exercises control over the relevant
principal activities of Suzhou Wanzhuo and therefore, continues to consolidate it in its financial statements. As of December 31, 2023, the balances
due from the non-controlling interest holders amounting to US$28,834,616 are related to advances for working capital funds. The balances are in the
form of an unsecured interest bearing loan, which has no fixed payment terms, and bears interest at 4.75%. Accrued interest is immaterial as of
December 31, 2023.
On December 1, 2017, the Company together with seven other non-affiliated companies acquired 100% of Taicang Pengchi for an aggregate
cash consideration of US$28,836,311. The Company accounted for the acquisition of Taicang Pengchi as an asset acquisition because the only asset of
Taicang Pengchi is the land. Pursuant to the articles of association, the Company exercises control over the relevant significant activities of Taicang
Pengchi and therefore, consolidates it in its financial statements. As of December 31, 2023, the balance due from the non-controlling interest holders
amounting to US$23,494,569 are related to advances for working capital funds. The balances are in the form of an unsecured interest bearing loan,
which has no fixed payment terms, and bears no interest.
As of December 31, 2023, the balance due from Suzhou Yefang amounting to US$11,293,716 was related to advances for working capital
funds. This balance is unsecured, bears no interest, and is expected to be repaid over one year.
In evaluating the collectability of the amounts due from related parties balance, the Group considers many factors, including the related
parties’ repayment history and their credit-worthiness. An allowance for doubtful accounts is made when collection of the full amount is no longer
probable. For the periods presented, based on management’s evaluation, no allowance of credit loss was provided.
(b)
Amounts due to related parties
    
December 31,      
December 31, 
2023
2024
US$
US$
Current:
 
   
  
Suzhou Yefang’s non-controlling interest holders
1,512,945
1,452,578
Suzhou Wanzhuo’s non-controlling interest shareholders
 
2,666,033  
—
Henan Qingning Apartment Management Co., Ltd.
9,707,534
9,542,023
Suzhou Kairongchen Real Estate Co., Ltd.
40,504,045
40,222,303
Others
18,519,868
18,276,698
Total current amounts due to related parties
 
72,910,425  
69,493,602
As of December  31, 2023 and 2024, the remaining advance to Suzhou Wanzhuo’s non-controlling interest shareholders amounting to
US$2,666,033 and US$nil, respectively, were for shareholder service.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-63
On June 6, 2018, the Company together with four other non-affiliated companies acquired 100% of Suzhou Yefang for an aggregate cash
consideration of US$15,615,240. The Company accounted for the acquisition of Suzhou Yefang as an asset acquisition because the only asset of
Suzhou Yefang is the land. Pursuant to the articles of association, the Company exercises control over the relevant significant activities of Suzhou
Yefang and therefore, consolidates it in its financial statements. As of December 31, 2024, the Company repaid the entire payable to its non-
controlling shareholders except for accrued interest amounted to US$1,452,578.
(c)
Amounts due from employees
    
December 31, 
    
December 31, 
2023
2024
US$
US$
Advances to employees
 
1,038,494  
805,503
The balance represents cash advances to employees for traveling expenses and other expenses. The balances are unsecured, bear no interest
and have no fixed payment terms.
(d)
Others
In 2018, the Company sold a small percentage of the equity interests (ranging from 0.50% to 5.54%) in eight real estate project companies to
senior management and employees for a total consideration of US$8,720,772. In 2019, the Company sold an additional percentage of the equity
interests in the eight real estate project companies to senior management and employees for a total consideration of US$604,914 and the total sold
equity interests ranges from 0.57% to 5.59% as of December 31, 2019. According to the equity transfer agreement, the Company is obligated to
repurchase the equity interest back from management. Therefore, the non-controlling interest is mandatorily redeemable and is accounted for as a
liability.
In 2019, the Company sold 6.03% of the equity interests in one real estate project company to senior management and employees for a total
consideration of US$1,300,135. According to the equity transfer agreement, the Company is obligated to repurchase the equity interest back from
management. Therefore, the non-controlling interest is mandatorily redeemable and is accounted for as a liability.
For the  year ended December 31, 2023, total directors’ remuneration amounted to US$3,572,912 (2021: US$6,447,214; 2022:
US$4,012,619).
18.         Equity
(i)
As at December 31, 2024, the Company’s authorized share capital was 500 million common shares, par value US$0.0001 per share
(December 31, 2023: 500 million common shares).
(ii)
During the year ended December 31, 2024, 3,363,580 common shares were repurchased at a total cost of US$440,576.
(iii)
During the year ended December 31, 2024, no dividend was distributed.
All other equity transactions have been disclosed in consolidated statement of changes in shareholders’ equity.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-64
19.         (Loss)/income per share
Basic and diluted net (loss)/income per share for each period presented are calculated as follows:
December 31, 
2022
2023
2024
    
US$
    
US$
    
US$
Numerator:
Net (loss)/income attributable to Xinyuan Real Estate Co., Ltd. Shareholders -
basic and diluted
 
(263,353,561) 
40,282,025  
(51,018,739)
Denominator:
 
 
 
Weighted average number of shares outstanding-basic*
 
107,849,225  
106,686,376  
112,234,853
Weighted average number of shares outstanding-diluted
 
107,849,225  
106,686,376  
112,234,853
Basic (loss)/income per share
 
(2.44) 
0.38
 
(0.45)
Diluted (loss)/income per share
 
(2.44) 
0.38
 
(0.45)
*
The restricted shares repurchased by the trustee that are unvested are excluded from the number of shares outstanding for purposes of computing
basic earnings per share in accordance with ASC 260. However, these unvested restricted shares are factored into the computation of diluted
earnings per share using the treasury stock method.
During the year ended December 31, 2024, nil (2022: nil; 2023: nil) stock options, and nil (2022: nil; 2023: nil) RSUs were excluded from
the calculation of earnings per share, respectively, because their effect would be anti-dilutive.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-65
20.         Segment reporting
The Group’s long-lived assets and revenue are mainly located in and derived from PRC. Starting in 2012, a relatively smaller portion of the
Group’s long-lived assets and revenue are located in and derived from the United States. The Group considers that each of its individual property
developments is a discrete operating segment. The Group has aggregated its segments on a geographical basis as property development projects
undertaken within a region having similar expected economic characteristics, type of properties offered, customers and market and regulatory
environment. The Group’s reportable operating segments are comprised of Henan Region, Shandong Region, Shanghai Region (including Shanghai and
Jiangsu Province), Sichuan Region, Beijing Region (including Beijing and Tianjin), Hainan Region, Hunan Region, Shaanxi Region, Guangdong Region,
Hubei Region, and Liaoning Region in the PRC and the United States.
Each geographic operating segment is principally engaged in the construction and development of residential real estate units. The “property
management” category relates to property management services. The “other” category relates to investment holdings, landscaping, engineering and
management, real estate sale, purchase and lease activities. The accounting policies of the various segments are the same as those described in Note 2,
“Summary of Significant Accounting Policies.”
The Group’s chief operating decision maker relies upon net sales, gross profit and net income when making decisions about allocating resources
and assessing performance of the Group. Net sales for geographic segments are generally based on the location of the project development. Net income for
each segment includes net sales to third parties, related cost of sales and operating expenses directly attributable to the segment. Capital expenditures for
each segment includes cost for acquisition of subsidiaries, vehicles, and fixtures and furniture.
No single customer accounted for more than 10% of net sales for the years ended December 31, 2022, 2023 and 2024.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-66
Summary information by operating segment is as follows:
December 31, 2022     
Henan
     Shandong      Shanghai     
Sichuan
    
Beijing
    
Hainan
    
Hunan
    
Shaanxi
    United States     Guangdong     
Hubei
     Liaoning     Property Management    
Others
     Consolidated
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
Net real estate sales  
133,906,983
152,896,390
3,056,829
  93,804,069
142,331,456
—
(1,058,911)
191,013,871
58,007,780
  34,659,102
564,076
231,278
—
—
809,412,923
Real estate lease
income
 
7,268,773
1,530,316
2,080,042
 
416,589
177,246
—
1,162,618
2,349,797
4,041,509
 
1,727,356
—
—
—
28,366
20,782,612
Real estate
management
services income  
4,448,994
—
—
 
—
—
—
—
1,833,511
—
 
—
—
—
99,177,566
—
105,460,071
Other revenue
 
7,894,262
8,316
552,228
 
(35,831)
1,727,882
—
904,831
446
—
 
805,323
—
149,812
2,349,298
—
14,356,567
Total revenue
 
153,519,012
154,435,022
5,689,099
  94,184,827
144,236,584
—
1,008,538
195,197,625
62,049,289
  37,191,781
564,076
381,090
101,526,864
28,366
950,012,173
Cost of real estate
sales
 
(134,259,620)
(171,319,778)
(7,306,487)   (87,599,735)
(110,230,204)
—
943,112
(156,675,331)
(75,759,072)   (25,841,656)
(21,408)
(286,074)
—
—
(768,356,253
Cost of real estate
lease income
 
(9,680,982)
(852,927)
(778,313)  
(219,502)
(365,600)
—
(363,485)
128,004
(2,081,799)   (6,023,790)
—
—
—
(49,559)
(20,287,953
Cost of real estate
management
services
 
(5,631,437)
—
3,188,299
 
—
—
—
—
(3,694,930)
—
 
—
—
—
(73,471,668)
—
(79,609,736
Other costs
 
(1,031,030)
—
617,889
 
(924,057)
(5,578,881)
—
(710,529)
—
—
 
(882,999)
—
(19,164)
(1,273,352)
—
(9,802,123
Total cost of
revenue
 
(150,603,069)
(172,172,705)
(4,278,612)   (88,743,294)
(116,174,685)
—
(130,902)
(160,242,257)
(77,840,871)   (32,748,445)
(21,408)
(305,238)
(74,745,020)
(49,559)
(878,056,065
Gross profit
 
2,915,943
(17,737,683)
1,410,487
 
5,441,533
28,061,899
—
 
877,636
34,955,368
(15,791,582)  
4,443,336
542,668
75,852
26,781,844
(21,193)
71,956,108
Operating expenses  
(11,698,488)
(13,408,341)
(3,366,711)   (3,728,249)
(42,774,682)
(47,094)   (1,242,859)
(5,165,593)
(17,406,597)   (3,297,920)
(1,331,279)
(2,089,948)
(9,376,483)
(12,111,766)
(127,046,010
Gain on disposal of
property held for
lease
 
2,650,215
397,708
2,150,988
 
—
—
—
 
—
—
—
 
—
—
—
—
488,401
5,687,312
Operating
income/(loss)
 
(6,132,330)
(30,748,316)
194,764
 
1,713,284
(14,712,783)
(47,094)  
(365,223)
29,789,775
(33,198,179)  
1,145,416
(788,611)
(2,014,096)
17,405,361
(11,644,558)
(49,402,590
Interest income
 
1,602,637
280,967
656,403
 
250,397
1,093,214
145
 
3,073
667,222
701
 
31,785
78
1,283
1,449,210
2,170,212
8,207,327
Interest expense
 
(13,389,344)
(1,818,414)
(99,438)   (24,130,024)
(962,042)
—
 
—
(4,726,423)
(15,815,618)  
—
—
—
(69,672)
(96,997,436)
(158,008,411
Net realized gain on
short-term
investments
 
—
—
—
 
—
463
—
 
—
—
—
 
—
—
—
—
(71,675,917)
(71,675,454
Share of (loss) /gain
in an equity
investee
 
(3,718,820)
—
3,784,015
 
—
—
—
 
—
—
—
  (15,920,880)
—
—
(810,983)
(9,499,870)
(26,166,538
Gain on
extinguishment
of debt
—
—
—
—
—
—
—
—
—
—
—
—
—
9,620,914
9,620,914
Exchange gains
 
45,800,405
—
—
—
—
—
—
—
—
 
—
—
—
(699,044)
(5,149,023)
39,952,338
Other
income/(expense)
(1,587,295)
17,236
(19,220)
277,819
420,916
325
187,576
49,144
(36,029)
99,781
(8,098)
(1,452,134)
881,696
(800,566)
(1,968,849
 
 
 
 
Income/(loss) before
income taxes
 
22,575,253
(32,268,527)
4,516,524
  (21,888,524)
(14,160,232)
(46,624)  
(174,574)
25,779,718
(49,049,125)   (14,643,898)
(796,631)
(3,464,947)
18,156,568
(183,976,244)
(249,441,263
Income tax
benefit/(expense)
(12,780,775)
22,127,223
(3,927,044)
(2,443,468)
(4,379,784)
463
174,167
(2,378,418)
1,206,732
(2,377,772)
(1,359,448)
(485,277)
(1,482,371)
(1,135,690)
(9,241,462
 
 
 
 
Net income/(loss)
9,794,478
(10,141,304)
589,480
(24,331,992)
(18,540,016)
(46,161)
(407)
23,401,300
(47,842,393)
(17,021,670)
(2,156,079)
(3,950,224)
16,674,197
(185,111,934)
(258,682,725
 
 
 
 
Depreciation and
amortization
 
5,516,725
874,640
647,400
 
1,095,409
1,162,790
—
 
—
1,832,811
612,887
 
—
23,806
13,918
533,861
853,960
13,168,207
Capital expenditure  
5,221,417
803
—
 
—
1,577
—
 
—
—
(63)  
—
4,186
—
8,455
—
5,236,375
Real estate
properties
completed and
under
development
  1,159,231,389
412,162,579
100,867,987
 577,969,652
45,945,861
—
  4,995,367
35,489,672
266,654,891
 395,241,531
191,185,397
53,684,534
—
33,627,793
3,277,056,653
Real estate
properties held
for lease
 
48,958,513
2,434,604
32,354,424
  32,786,449
7,676,329
—
 54,293,887
86,799,863
107,905,636
 
—
—
—
—
258,162
373,467,867
Total long-lived
assets
 
386,224,257
13,434,007
133,703,563
  49,512,464
24,828,219
5,774,972
 68,720,346
96,615,555
118,812,943
  34,008,878
769,742
857,181
7,209,649
20,599,425
961,071,201
Total assets
  2,270,506,759
259,228,051
540,587,961
 709,048,905
240,590,331
11,212,039
 78,448,652
323,750,877
404,653,727
 499,695,879
197,190,024
61,041,098
147,478,659
106,845,365
5,850,278,327

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-67
December 31, 2023     
Henan
     Shandong      Shanghai     
Sichuan
    
Beijing
    
Hainan
    
Hunan
    
Shaanxi
    United States     Guangdong     
Hubei
     Liaoning     Property Management    
Others
     Consolidated
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
Net real estate sales  
152,591,635
89,069,287
11,669,658
147,542,499
107,053,837
—
627,881
109,258,071
27,489,898
(2,069,637)
(11,697)
14,811,733
—
40,008
658,073,173
Real estate lease
income
 
29,274,568
1,009,694
1,511,669
397,685
86,982
—
(3,735,823)
2,640,636
4,082,885
1,926,668
—
10,856
—
12,631
37,218,451
Real estate
management
services income  
1,538,767
—
—
156,324
—
—
—
210,556
—
—
—
—
91,771,226
1
93,676,874
Other revenue
 
7,909,151
—
(286,625)
277,249
(509,601)
—
873,996
—
—
109,324
—
2,777
7,629,706
—
16,005,977
Total revenue
 
191,314,121
90,078,981
12,894,702
148,373,757
106,631,218
—
(2,233,946)
112,109,263
31,572,783
(33,645)
(11,697)
14,825,366
99,400,932
52,640
804,974,475
Cost of real estate
sales
 
(163,057,353)
(82,219,415)
(9,614,743)
(133,082,218)
(64,969,677)
—
7,156,894
(74,748,589)
(27,840,145)
2,229,267
63,011
(11,578,004)
(1,583)
(240)
(557,662,795)
Cost of real estate
lease income
 
(23,817,603)
(240,837)
(780,902)
(697,495)
(183,762)
—
(667,817)
(2,861,696)
(3,403,014)
(1,213,136)
—
—
—
(53,959)
(33,920,221)
Cost of real estate
management
services
 
(2,749,635)
—
—
(340,884)
—
—
—
(233,866)
—
—
—
—
(68,985,669)
—
(72,310,054)
Other costs
 
(1,701,411)
—
695,476
(12,739)
(3,076,605)
—
(714,677)
—
—
(237,609)
—
(20,733)
(3,547,751)
—
(8,616,049)
Total cost of
revenue
 
(191,326,002)
(82,460,252)
(9,700,169)
(134,133,336)
(68,230,044)
—
5,774,400
(77,844,151)
(31,243,159)
778,522
63,011
(11,598,737)
(72,535,003)
(54,199)
(672,509,119)
Gross profit
 
(11,881)
7,618,729
3,194,533
14,240,421
38,401,174
—
3,540,454
34,265,112
329,624
744,877
51,314
3,226,629
26,865,929
(1,559)
132,465,356
Operating expenses  
(12,866,682)
(5,303,199)
(2,607,527)
(2,561,480)
(21,019,160)
(57,945)
(336,874)
(2,428,759)
(8,828,446)
(1,372,742)
242,080
(908,802)
(19,787,513)
(6,334,754)
(84,171,803)
Gain on disposal of
property held for
lease
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Operating
income/(loss)
 
(12,878,563)
2,315,530
587,006
11,678,941
17,382,014
(57,945)
3,203,580
31,836,353
(8,498,822)
(627,865)
293,394
2,317,827
7,078,416
(6,336,313)
48,293,553
Interest income
 
6,059
142,181
200,827
131,341
98,485
2
1,918
1,221,974
2,175
26,594
37
6,992
342,602
2,598,127
4,779,314
Interest expense
 
(12,434,185)
(7,249,071)
—
(18,543,629)
—
—
—
(5,347,808)
(28,825,082)
—
—
—
—
(104,540,543)
(176,940,318)
Net realized gain on
short-term
investments
 
—
—
—
—
—
—
—
—
—
—
—
—
14,325
(7,640,422)
(7,626,097)
Share of (loss) /gain
in an equity
investee
 
(7,847,367)
—
3,370,027
—
—
—
—
—
—
(12,199,505)
—
—
(114,651)
(1,122,574)
(17,914,070)
Gain on
extinguishment
of debt
 
—
—
—
—
—
—
—
—
—
—
—
—
—
169,932,886
169,932,886
Gain on
modification of
debt
—
—
—
26,372,965
—
—
—
—
—
—
—
—
—
—
26,372,965
Exchange gains
 
9,426,923
—
—
—
—
—
—
—
—
—
—
—
170,555
3,884,579
13,482,057
Other
income/(expense) 
3,670,566
2,845,027
4,937,780
(227,508)
30,951
(4,453)
(2,898)
(84,792)
13,595,467
129,168
8,686
(194,969)
261,501
462,346
25,426,872
Income/(loss) before
income taxes
 
(20,056,567)
(1,946,333)
9,095,640
19,412,110
17,511,450
(62,396)
3,202,600
27,625,727
(23,726,262)
(12,671,608)
302,117
2,129,850
7,752,748
57,238,086
85,807,162
Income tax
benefit/(expense)  
14,814,458
792,277
(12,047,878)
(17,481,633)
(22,171,296)
3,275
(4,364,673)
(7,872,323)
(741,067)
(1,508,575)
(1,256,109)
(1,353,719)
677,821
(2,766,009)
(55,275,451)
Net income/(loss)
 
(5,242,109)
(1,154,056)
(2,952,238)
1,930,477
(4,659,846)
(59,121)
(1,162,073)
19,753,404
(24,467,329)
(14,180,183)
(953,992)
776,131
8,430,569
54,472,077
30,531,711
Depreciation and
amortization
 
4,136,037
274,482
603,524
598,078
2,050,750
—
—
1,755,174
11,639,957
—
9,356
5,090
326,968
1,107,229
22,506,645
Capital expenditure
3,353
627
—
—
1,825
—
—
—
(12)
—
—
—
367,144
—
372,937
Real estate
properties
completed and
under
development
  1,207,782,937
394,558,791
102,589,027
503,780,381
65,449,973
—
11,872,490
53,897,457
280,032,599
411,898,623
196,266,519
64,815,058
—
15,021,114
3,307,964,969
Real estate
properties held
for lease
45,427,310
(6,129,675)
29,843,420
31,649,101
4,749,926
—
47,061,528
83,770,504
85,979,680
—
—
—
—
200,207
322,552,001
Total long-lived
assets
 
286,787,108
15,081,225
137,469,838
53,134,953
25,002,494
5,732,976
67,126,463
94,644,226
97,134,292
22,391,243
368,241
849,197
7,516,719
26,942,231
840,181,206
Total assets
  2,089,109,648
201,589,676
513,329,822
600,165,262
223,190,269
11,064,860
81,359,058
240,848,887
391,317,225
488,477,145
201,937,156
72,172,008
148,503,161
70,329,054
5,333,393,231

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-68
December 31, 2024
    
Henan
     Shandong      Shanghai     
Sichuan
    
Beijing
    
Hainan
    
Hunan
    
Shaanxi
    United States     Guangdong     
Hubei
     Liaoning     Property Management    
Others
     Consolidated
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
US$
Net real estate sales
 
115,809,092
103,693,475
6,175,703
30,121,658
88,001,380
—
  (2,983,634)   31,230,815
8,242,045
2,345,305
(9,255)
2,467,395
—
434,705
385,528,684
Real estate lease
income
 
8,017,412
1,646,337
2,239,796
306,633
—
—
 
475,740
 
1,841,759
4,240,136
4,440
—
12,885
1,189,463
12,492
19,987,093
Real estate management
services income
 
1,239,696
—
—
208,437
—
—
 
85,567
 
174,085
—
—
—
—
94,800,565
—
96,508,350
Other revenue
 
4,840,371
480,651
307,401
(41,732)
(1,898,725)
—
 
347,685
 
—
—
35,400
—
3,858
8,575,959
—
12,650,868
Total revenue
 
129,906,571
105,820,463
8,722,900
30,594,996
86,102,655
 
—
  (2,074,642)   33,246,659
12,482,181
2,385,145
(9,255)
2,484,138
104,565,987
447,197
514,674,995
Cost of real estate sales  
(91,453,900)
(75,485,489)
1,041,182
(22,704,900)
(71,116,610)  
—
  1,908,115
  (18,001,818)
(54,553,765)
(2,351,018)
(22,662)
(2,006,965)
—
(47,170)
(334,795,000)
Cost of real estate lease
income
 
(3,771,260)
(1,908,914)
(653,954)
(597,694)
(112,066)  
—
 
(940,427)   (1,708,818)
(5,685)
—
—
—
(283,540)
(53,369)
(10,035,727)
Cost of real estate
management
services
 
(794,514)
—
—
(182,416)
—
 
—
 
(197,737)  
(189,959)
—
—
—
—
(78,369,170)
—
(79,733,796)
Other costs
 
(3,349,277)
—
(25,702)
(127,374)
(242,156)  
—
 
(283,218)  
—
—
(25,300)
—
(4,217)
(3,623,202)
—
(7,680,447)
Total cost of revenue
 
(99,368,951)
(77,394,403)
361,526
(23,612,384)
(71,470,832)  
—
 
486,733
  (19,900,595)
(54,559,450)
(2,376,318)
(22,662)
(2,011,182)
(82,275,912)
(100,539)
(432,244,970)
Gross profit
 
30,537,620
28,426,060
9,084,426
6,982,612
14,631,823
 
—
  (1,587,909)   13,346,064
(42,077,269)
8,827
(31,917)
472,956
22,290,075
346,658
82,430,025
Operating expenses
 
(2,155,267)
(3,526,218)
(3,327,090)
1,501,889
(9,095,825)  
(21,598)  
(222,576)   (1,953,718)
(2,949,155)
(752,699)
(141,039)
(630,247)
(18,820,557)
(1,471,239)
(43,530,671)
Gain on disposal of
property held for
lease
—
72,070
—
—
—
—
—
—
—
—
—
—
—
—
72,070
Operating income/(loss) 
28,382,353
24,971,912
5,757,336
8,484,501
5,535,998
 
(21,598)   (1,810,485)   11,392,346
(45,026,424)
(743,872)
(172,956)
(157,291)
3,469,518
(1,124,581)
38,971,424
Interest income
 
47,672
68,794
278,240
35,383
16,653
 
164
 
599
 
16,517
50,996
8,372
67
382
171,855
2,425,670
3,121,364
Interest expense
 
(11,526,886)
(9,767,392)
—
(13,813,190)
—
 
—
 
—
  (6,607,284)
(12,588,839)
—
—
—
—
(63,105,831)
(117,409,422)
Net realized gain on
short-term
investments
 
—
—
—
—
—
 
—
 
—
 
—
—
—
—
—
—
(700,539)
(700,539)
Share of (loss) /gain in
an equity investee
 
(647,257)
12,821
(360,109)
—
—
 
—
 
—
 
—
—
(3,784,868)
—
—
(4,444)
(4,447,141)
(9,230,998)
Gain on extinguishment
of debt
35,625,099
—
—
—
—
—
—
—
—
—
—
—
—
13,018,597
48,643,696
Gain on modification of
debt
—
—
—
21,253,128
—
—
—
—
—
—
—
—
—
—
21,253,128
Exchange gains
 
4,026,185
—
—
—
—
 
—
 
—
 
—
—
—
—
—
(184,072)
4,422,693
8,264,806
Other income/(expense) 
12,643,007
1,127,817
(314,838)
(500,395)
313,249
 
(3)
(13,611)  
1,269,090
(107,426)
60,888
27,598
(88,973)
(161,096)
1,707,431
15,962,738
Income/(loss) before
income taxes
 
68,550,173
16,413,952
5,360,629
15,459,427
5,865,900
 
(21,437)
(1,823,497)  
6,070,669
(57,671,693)
(4,459,480)
(145,291)
(245,882)
3,291,761
(47,803,701)
8,876,197
Income tax
benefit/(expense)
 
(24,753,435)
(10,536,929)
(2,886,793)
(2,339,230)
(6,110,354)  
189
126,646
  (2,080,908)
—
(2,160,489)
(1,855,886)
(85,479)
(1,360,389)
(856,431)
(54,899,488)
Net income/(loss)
 
43,796,738
5,877,023
2,473,836
13,120,197
(244,454)  
(21,248)
(1,696,851)  
3,989,761
(57,671,693)
(6,619,969)
(2,001,177)
(331,361)
1,931,372
(48,660,132)
(46,023,291)
Depreciation and
amortization
 
3,556,450
269,403
596,888
593,213
1,182,655
 
—
 
—
 
1,734,992
(10,235,608)
—
973
3,210
391,677
1,097,045
(809,102)
Capital expenditure
 
1,911
16,403
—
5,980
—
 
—
 
—
 
—
(10)
—
2,809
—
563,296
—
590,389
Real estate properties
completed and under
development
1,196,959,703
384,675,892
98,856,623
536,110,927
29,791,972
 
—
14,382,770
  47,475,993
196,068,445
431,083,411
202,334,173
68,280,048
—
877,398
3,206,897,355
Real estate properties
held for lease
 
42,794,735
(8,515,175)
28,813,409
30,601,758
4,569,078
 
—
45,266,438
  80,979,964
81,660,276
—
—
—
—
144,401
306,314,884
Total long-lived assets  
260,243,161
16,094,845
132,624,161
51,440,342
18,520,372
  5,692,034
64,681,469
  91,609,091
92,880,123
16,562,017
369,956
946,388
8,146,299
22,142,576
781,952,834
Total assets
  1,985,307,938
215,766,248
487,261,237
586,636,646
96,634,103
 10,930,676
81,325,475
 206,083,509
303,434,355
488,306,783
207,983,431
75,760,233
143,431,173
133,615,924
5,022,477,731

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-69
21.         Commitments and contingencies
Other commitments
As of December 31, 2024, the Group had outstanding commitments with respect to non-cancellable construction contracts for real estate
development and land use rights purchases as follows:
    
Amount
US$
2025
 
981,328,224
2026
 
101,059,734
2027
 
25,228,415
2028
 
147,962
2029 and thereafter
 
—
Total
 
1,107,764,335
Contingencies
As of December 31, 2024, the Group provided guarantees of US$1,708,919,250 (2022: US$2,110,456,012; 2023: US$1,926,419,080), in
favor of its customers in respect of mortgage loans granted by banks to such customers for their purchases of the Group’s properties where the
underlying real estate ownership certificates can only be provided to the banks on a time delay manner due to administrative procedures in the PRC.
Pursuant to the terms of the guarantees, upon default in mortgage payments by these purchasers, the Group is responsible to repay the outstanding
mortgage principal together with the accrued interest and penalty owed by the defaulted purchasers to the bank and the Group is entitled to take over
the legal titles and possession of the related properties. The Group’s guarantee period starts from the date of grant of the relevant mortgage loan and
ends upon issuance of real estate ownership certificate which will generally be available within six to twelve  months after the purchaser takes
possession of the relevant property. The Group paid US$4,068,840, US$2,286,938 and US$603,930 to satisfy guarantee obligations related to
customer defaults for the years ended December 2022, 2023 and 2024, respectively.
The fair value of the guarantees is not significantly different than the net realizable value of the properties and management considers that in
case of default in payments, the net realizable value of the related properties can cover the repayment of the outstanding mortgage principal together
with the accrued interest and penalty and therefore no provision has been made for the guarantees.
At December 31, 2024, the Group provided financial guarantees for bank loans of four of its equity method investees. The Group could incur
losses in the event of defaults under or foreclosure of these loans and its maximum exposure to credit losses is US$199,140,282 (2022:
US$226,755,305; 2023: US$202,187,414). The fair value of the guarantees is not significant and the Group considers that in case of default in
payments, the net realizable value of the related properties can cover the repayment of the outstanding bank loans together with the accrued interest
and penalty and therefore, no provision has been made for the guarantees in the consolidated financial statements.
22.         Concentration of risk
The Group’s financial instruments potentially subject to significant concentrations of credit risk primarily consist of cash and cash
equivalents, restricted cash, other receivables and amounts due from related parties. As of December 31, 2023 and 2024, substantially all of the
Group’s cash and cash equivalents and restricted cash were held in major financial institutions located in China, Hong Kong SAR and the United
States, which management consider being of high credit quality. In the event of bankruptcy of one of these financial institutions, the Group may not be
able to claim its cash and demand deposits back in full. The Group continues to monitor the financial strength of the financial institutions. The Group
does not have requirements for collateral for the balance of other receivables and amounts due from related parties while considers various factors in
establishing, monitoring the financial instruments, including the aging of receivables and aging trends, customer creditworthiness. repayment history
and credit-worthiness.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-70
The Group’s operations are conducted mainly in the PRC. Starting in 2012, a relatively smaller portion of the Group’s operations is
conducted in the United States. Accordingly, the Group’s business, financial condition and results of operations is primarily influenced by the
political, economic and legal environments in the PRC and by the general state of PRC economy.
The Group’s operations in the PRC are subject to special considerations and significant risks. These include risks associated with, among
others, the political, economic and legal environments and foreign currency exchange. The Group’s results may be adversely affected by changes in
the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary
measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.
The Group transacts most of its business in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions
take place either through the PBOC or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the PBOC. Approval
of foreign currency payments by the PBOC or other institutions requires submitting a payment application form together with suppliers’ invoices,
shipping documents and signed contracts.
On July 21, 2005, PRC government changed its decade-old policy of pegging the value of the RMB to the US$. Under the new policy, the
RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy had resulted in
a 13.1% appreciation of the RMB against the US$ from July 21, 2005 to December 31, 2024.
To the extent that the Company needs to convert US$ into RMB for capital expenditures and working capital and other business purposes,
appreciation of RMB against US$ would have an adverse effect on the RMB amount the Company would receive from the conversion. Conversely, if
the Company decides to convert RMB into US$ for the purpose of making payments for dividends on ordinary shares, strategic acquisitions or
investments or other business purposes, appreciation of US$ against RMB would have a negative effect on the US$ amount available to the Company.
In addition, a significant depreciation of the RMB against the US$ may significantly reduce the US$ equivalent of the Company’s earnings or losses.
The Group provides guarantees to mortgage lending banks in respect of the mortgage loans provided to the purchasers of its properties in the
PRC up until completion of the registration of the mortgage with the relevant authorities, which generally occurs within six to 12 months after the
purchaser takes possession of the relevant properties. If a purchaser defaults under the loan while our guarantee is in effect and the Group repays all
debt owed by the purchaser to the mortgagee bank under the loan, the mortgagee bank must assign its rights under the loan and the mortgage to the
Group and, after the registration of the mortgage, the Group will have full recourse to the property. In line with industry practice, the Group does not
conduct independent credit checks on its customers but relies on the credit checks conducted by the mortgagee banks.
As of December 31, 2024, the Group had outstanding guarantees of mortgages in the principal amount of US$1,708.9 million. If a purchaser
defaults on the payment of its mortgage during the term of the guarantee, the mortgage lending bank may require the Group to repay the outstanding
amount under the loan plus any accrued interest. In this event, although the Group is able to retain the customer’s deposit and sell the property to
recover any amounts paid by it to the bank, there can be no assurance that the property could be sold at a price equal to or greater than the amount paid
on the defaulting purchaser’s outstanding loan amount and any accrued interest thereon. The Group paid US$0.6 million to satisfy guarantee
obligations related to customer defaults for the year ended December 31, 2024.
The Group offers certain homebuyers seller-financing arrangements. All the homebuyers that entered into such arrangements were subject to
credit verification procedures. In addition, accounts receivable balances are unsecured, but monitored on an ongoing basis via the Group’s
management reporting procedures. The Group provides longer payment terms to particular home buyers after applying strict credit requirements based
on the Group’s credit policy. As of December 31, 2023 and 2024, there was no concentration of credit risk with respect to receivables and the Group
did not have a significant exposure to any individual debtor.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-71
In 2013, PRC banks tightened the conditions on which mortgage loans are extended to homebuyers. Therefore, mortgage loans for
homebuyers have been subject to longer processing periods or even denied by the banks. The Group monitors its homebuyers’ outstanding mortgage
loans on an ongoing basis via the Group’s management reporting procedures and took the position that contracts with underlying mortgage loans with
processing periods exceeding one year shall not be considered when recognizing revenue on an over time basis (Note 2(i) for further detail). As a
result, sales contracts of 1,546 apartments were excluded when determining revenue to be recognized in 2024.
In addition, no single customer or supplier accounted for more than 10% of revenue or project expenditures for the years ended December 31,
2022, 2023 and 2024.
23.         Non-controlling interests
As of December 31, 2023, the non-controlling interests consisted of the following:
    
    
December 31, 
Ownership
2023
US$
Shaanxi Zhongmao Economy Development Co., Ltd.
 
34.02 %  
—
Xinyuan Property Management Service (Cayman) Ltd.
40.53 %  
(77,892,291)
Taicang Pengchi Real Estate Co., Limited. (Note 18 (a))
 
83.00 %  
(33,373,465)
Suzhou Xinyuan Wanzhuo Real Estate Co., Ltd. (Note 18 (a.b))
 
80.00 %  
(27,244,465)
Henan Renxin Real Estate Co., Ltd.
 
49.00 %  
—
Suzhou Yefang Real Estate Co., Limited. (Note 18(a.b))
 
79.99 %  
(11,290,614)
Zhengzhou Xinhe Real Estate Co., Ltd
20.00 %  
2,792,991
Others
5,866,648
Total
 
   
(141,141,196)
As of December 31, 2024, the non-controlling interests consisted of the following:
    
    
December 31, 
Ownership
2024
US$
Shaanxi Zhongmao Economy Development Co., Ltd.
 
34.02 %  
—
Xinyuan Property Management Service (Cayman) Ltd.
 
56.93 %  
(94,235,138)
Taicang Pengchi Real Estate Co., Limited. (Note 18 (a))
 
83.00 %  
(32,867,478)
Suzhou Xinyuan Wanzhuo Real Estate Co., Ltd. (Note 18 (a.b))
 
80.00 %  
(32,455,789)
Henan Renxin Real Estate Co., Ltd.
 
49.00 %  
—
Suzhou Yefang Real Estate Co., Limited. (Note 18(a.b))
 
79.99 %  
(11,124,595)
Zhengzhou Xinhe Real Estate Co., Ltd
20.00 %  
3,224,474
Others
5,869,850
Total
 
   
(161,588,676)
24.         Subsequent events
On April 14, 2025, an involuntary petition for relief under Chapter 11 of Title 11 of the United States Bankruptcy Code was filed against
Xinyuan Real Estate Co., Ltd. (the “Company”) in the United States Bankruptcy Court for the Southern District of New York. As of April 21, 2025,
the Company has reached settlement agreement with all of the petitioning creditors (the “Parties”) in connection with the involuntary petition filed on
April 14, under which the Parties have agreed to jointly request the court to suspend further proceedings for at least 14 days, and upon meeting the
conditions in the settlement agreement, the petitioning creditors will promptly dismiss the Chapter 11 case against the Company. The Company will
fullfill the conditions in the settlement agreement.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-72
25.         Condensed financial information of the Company
The condensed financial statements of Xinyuan Real Estate Co., Ltd. have been prepared in accordance with U.S. GAAP. Under the PRC
laws and regulations, the Company’s PRC subsidiaries are restricted in their ability to transfer certain of their net assets to the Company in the form of
dividend payments, loans or advances. The amounts restricted include paid-in capital and statutory reserves, as determined pursuant to PRC generally
accepted accounting principles, totaling US$852,921,640 as of December 31, 2024 (2023: US$854,952,913).
Condensed Balance Sheets
December 31
    
2023
    
2024
US$
US$
ASSETS
 
   
  
Current assets
 
   
  
Cash and cash equivalents
 
344,215  
270,631
Short-term investments
286,054
196,865
Other receivables
 
1,051,960  
1,104,752
Due from subsidiaries
 
49,101,879  
49,101,879
Total current assets
 
50,784,108  
50,674,127
Investments in subsidiaries
 
985,740,913  
975,581,038
TOTAL ASSETS
 
1,036,525,021  
1,026,255,165
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
   
  
Current liabilities
 
   
  
PRC income tax payable
 
13,388  
13,388
PRC other tax payable
 
902,190  
902,190
Other payable and accrued liabilities
 
105,408,095  
165,180,664
Current portion of long-term bank loan and other debt
 
392,972,209  
391,904,066
Due to subsidiaries
338,802,242
336,597,872
Payroll and welfare payables
 
64,509  
44,618
Total current liabilities
 
838,162,633  
894,642,798
Other long-term debt
 
232,091,202  
235,786,580
Total liabilities
 
1,070,253,835  
1,130,429,378
Shareholders’ equity
 
 
Common shares, $0.0001 par value:
 
 
Authorized‑500,000,000 shares, issued and outstanding 112,812,481 shares as of December 31, 2024
(2023: 113,671,841 shares)
 
17,554  
17,554
Treasury shares
 
(116,793,448) 
(116,593,657)
Additional paid-in capital
 
546,549,246  
534,233,824
Retained earnings
 
(463,502,166) 
(521,831,934)
Total shareholders’ equity
 
(33,728,814) 
(104,174,213)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
 
1,036,525,021  
1,026,255,165

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-73
Condensed Statements of Comprehensive (Loss)/Income
Year ended December 31,
    
2022
    
2023
    
2024
US$
US$
US$
General and administrative expenses
 
(4,993,180)
(1,962,954)
(1,768,324)
Operating loss
 
(4,993,180)
(1,962,954)
(1,768,324)
Interest expense
 
(107,459,673)
(116,296,860)
(72,854,767)
Interest income
 
1,139
1,102
620
Net gain on debt extinguishment
 
9,620,914
169,932,886
13,018,597
Loss on short-term investments
(68,931,940)
(660,022)
(89,189)
Other expenses
 
1,395,668
6,760,754
1,207,746
Equity in (loss)/profit of subsidiaries, net
 
(92,986,489)
(17,492,881)
9,466,578
(Loss)/income from operations before income taxes
 
(263,353,561)
40,282,025
(51,018,739)
Income taxes
 
—
—
—
Net (loss)/income attributable to common shareholders
 
(263,353,561)
40,282,025
(51,018,739)
Other comprehensive income/(loss), net of tax of nil
 
Foreign currency translation adjustments
 
(56,538,757)
(4,987,693)
(3,918,230)
Comprehensive (loss)/income attributable to shareholders
 
(319,892,318)
35,294,332
(54,936,969)

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-74
Condensed Statements of Cash Flows
Year ended December 31,
    
2022
    
2023
    
2024
US$
US$
US$
Cash flows from operating activities:
 
   
   
  
Net (loss)/income
 
(263,353,561)
40,282,023  
(51,018,739)
Adjustment to reconcile net (loss) income to net cash used in operating activities: 
 
Equity in loss/(profit) of subsidiaries, net
 
92,986,489
17,492,881  
(9,466,578)
Stock based compensation expense
 
568,046
—  
—
Loss on short-term investments
68,931,940
660,022
89,189
Proceeds from disposal of short-term investments
359,025
—
—
Amortization of deferred charges
 
5,472,222
7,739,849  
345,921
Gain on extinguishment of debt
 
(9,620,914)
(169,932,886) 
(13,018,597)
Other receivables
 
634,819
(14,125) 
(52,792)
Other payable and accrued liabilities
 
53,426,168
93,426,988  
76,551,386
Payroll and welfare payables
 
(460,149)
(381)
(19,890)
Net cash used in operating activities
 
(51,055,915)
(10,345,629)
3,409,900
Cash flows from investing activities:
Net cash used in investing activities
—
—
—
Cash flows from financing activities:
 
 
Changes in due from subsidiaries
 
54,889,206
17,823,271  
(2,204,370)
Repayment of current portion of long-term bank loan and other long-term debt
—
(10,791,800)
(1,478,905)
Repayment of other long-term debts
 
(1,199,086)
—  
—
Purchase of treasury shares
 
—
(731,871) 
199,791
Proceeds from issuance of common shares
 
—
1,595,830  
—
Net cash provided by/(used in) financing activities
 
53,690,120
7,895,430  
(3,483,484)
Net increase/(decrease) in cash and cash equivalents
 
2,634,205
(2,450,199)
(73,584)
Cash and cash equivalents, at the beginning of the year
 
160,209
2,794,414
344,215
Cash and cash equivalents, at end of the period
 
2,794,414
344,215  
270,631
(a)         Basis of presentation
In the company-only financial statements, the Company’s investment in subsidiaries is stated at cost plus its equity interest in undistributed
earnings of subsidiaries since inception. The company-only financial statements should be read in conjunction with the Company’s consolidated
financial statements.
The Company records its investment in its subsidiaries under the equity method of accounting as prescribed in ASC 323. Such investment is
presented on the balance sheet as “Investments in subsidiaries” and share of the subsidiaries’ profit or loss as “Equity in profit of subsidiaries, net” on
the condensed statements of comprehensive income.
The subsidiaries did not pay any dividends to the Company for the periods presented.
(b)         Related party transactions
As of December 31, 2024, the Company had US$336,597,872 (2023: US$338,802,242) due to its wholly-owned subsidiaries. These amounts
mainly reflect intercompany loans from the Company to Xinyuan Real Estate, Ltd. While intercompany loans have no fixed payments terms, the
Company has a legal enforceable right to demand payment at any time, and Xinyuan Real Estate, Ltd. has the ability to repay the outstanding balances
on demand.

Table of Contents
XINYUAN REAL ESTATE CO., LTD. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All amounts stated in US$, except for number of shares data)
F-75
In 2013, the Company also entered into a separate loan facility agreement with XIN Development Group International Inc. Pursuant to the
agreement, the Company provided a loan facility to XIN Development for the period from July  1, 2013 to January  18, 2018 amounting to
US$50,000,000 at 17.5% per annum. As of December 31, 2024, the Company had US$116,656,089 (2023: US$116,656,089), including accrued
interest of US$67,554,210 (2023: US$67,554,210), due from XIN Development under this loan facility.
(c)         Commitments
Except for those disclosed in the Company’s condensed financial information, the Company does not have significant commitments or long-
term obligations as of the period end presented.

Exhibit 8.1
Xinyuan Real Estate Co., Ltd.
List of Subsidiaries as of December 31, 2024
Jurisdiction of
Company Name
     Incorporation
Xinyuan International Property Investment Co., Ltd.
Cayman Islands
Xinyuan International (HK) Property Investment Co., Ltd.
Hong Kong
XIN Development Group International Inc.
United States
Xinyuan Real Estate, Ltd.
Cayman Islands
XIN Development Management East, LLC
United States
XIN NY Holding, LLC
United States
421 Kent Development, LLC
United States
Xinyuan Sailing Co., Ltd.
Hong Kong
AWAN Plasma Sdn Bhd
Malaysia
XIN Eco Marine Group Properties Sdn Bhd
Malaysia
Zhengzhou Jiasheng Real Estate Co., Ltd.
China
Xinyuan (China) Real Estate, Ltd.
China
Henan Xinyuan Real Estate Co., Ltd.
China
Qingdao Xinyuan Xiangrui Real Estate Co., Ltd.
China
Shandong Xinyuan Real Estate Co., Ltd.
China
Xinyuan Property Management Service (Cayman) Ltd.
Cayman Islands
Xinyuan Property Management Service (BVI) Ltd.
British Virgin Islands
Xinyuan Property Management Services (HK) Limited
Hong Kong
Xinyuan Science and Technology Service Group Co., Ltd.
China
Mingyuan Landscape Engineering Co., Ltd.
China
Henan Xinyuan Wanzhuo Real Estate Co., Ltd.
China
Suzhou Xinyuan Real Estate Development Co., Ltd.
China
Anhui Xinyuan Real Estate Co., Ltd.
China
Kunshan Xinyuan Real Estate Co., Ltd.
China
Xinyuan Real Estate (Chengdu) Co., Ltd.
China
Xuzhou Xinyuan Real Estate Co., Ltd.
China
Henan Xinyuan Jiye Real Estate Co., Ltd.
China
Beijing Xinyuan Wanzhong Real Estate Co., Ltd.
China
Xinyuan Renju (Beijing) Asset Management Co., Ltd.
China
Beijing Xinyuan Priority Real Estate Consulting Co., Ltd.
China
Henan Xinyuan Priority Commercial Management Co., Ltd.
China
Suzhou Xinyuan Wanzhuo Real Estate Co., Ltd.
China
Jiangsu Jiajing Real Estate Co., Ltd.
China
Xingyang Xinyuan Real Estate Co., Ltd.
China
Jinan Xinyuan Wanzhuo Real Estate Co., Ltd.
China
Sanya Beida Science and Technology Park Industrial Development Co., Ltd.
China
Chengdu Xinyuan Wanzhuo Real Estate Co., Ltd.
China
Tianjin Xinyuan Real Estate Co., Ltd.
China
Xi'an Yinghuai Square Commerce Management Co., Ltd.
China
Changsha Xinyuan Wanzhuo Real Estate Co., Ltd.
China
Shanghai Junxin Real Estate Co., Ltd.
China
Beijing Yinghuai Commerce and Trade Co., Ltd.
China
Beijing Xinhe Investment Development Co., Ltd.
China
Henan Xinyuan Guangsheng Real Estate Co., Ltd.
China

2
Shandong Xinyuan Renju Real Estate Co., Ltd.
     China
Shaanxi Zhongmao Economy Development Co., Ltd.
China
421 Kent Holding Co, Ltd.
United States
Hudson 888 Owner LLC
United States
XIN Manhattan Holding LLC
United States
Hudson 888 Holding LLC
United States
Shenzhen Xinchuang Investment Consulting Co., Ltd.
China
Henan Xinyuan Quansheng Real Estate Co., Ltd.
China
Zhengzhou Shengdao Real Estate Co., Ltd.
China
Henan Xinyuan Shunsheng Real Estate Co., Ltd.
China
Hunan Erli Real Estate Co., Ltd.
China
XIN Queens Holding LLC
United States
Queens Theatre Holdco LLC
United States
Queens Theatre Owner LLC
United States
Zhengzhou Xinnan Real Estate Co., Ltd.
China
Xinyan Investment Management Co., Limited.
China
Hunan Xintian Real Estate Co., Ltd.
China
Zhengzhou Hangmei Technology Development Co., Ltd.
China
Zhengzhou Hangmei Zhengxing Technology Co., Ltd.
China
Xi’an Dingrun Real Estate Co., Ltd.
China
Zhengzhou Kangshengboda Real Estate Co., Ltd.
China
Zhuhai Prince Real Estate Co., Ltd.
China
Henan Renxin Real Estate Co., Ltd.
China
Xinchuang Technology Co., Ltd.
China
Hangzhou Huiyuan Investment Management Partnership Enterprise. (Limited partnership)
China
Guangdong Xinyuan Real Estate Co., Ltd.
China
Taicang Pengchi Real Estate Co., Limited.
China
Khorgos XinYan Enterprise Management Consulting Co., Ltd.
China
Jinan Xinyuan Quansheng Real Estate Co., Ltd.
China
Suzhou Yuxi Real Estate Co., Limited.
China
Xinchuang Sailing (Dalian) Healthy Technology Industrial Investment Co., Ltd.
China
Dalian Xinyi Renju Industrial Co., Ltd.
China
Beijing Xinyuan Huicheng Technology Development Co., Ltd.
China
Suzhou Yefang Real Estate Co., Limited.
China
Chengdu Xinyuan Renju Enterprise Management Co., Ltd.
China
Chengdu Guohongteng Real Estate Co., Ltd.
China
Qingdao Keda Real Estate Co., Ltd.
China
Wuhan Yinghexin Real Estate Co., Ltd.
China
Henan Xinyuan Property Management Co., Ltd.
China
Zhuhai Xinyuan Real Estate Co., Ltd.
China
Jinan Renju Building Material Co., Ltd.
China
Dalian Xinyi Yaju Real Estate Co., Ltd.
China
Guangdong Xinchuang Kechuangzhigu Development Co., Ltd.
China
Jiangxi Xinyuan Heju Enterprise Management Consulting Service Co., Ltd.
China
Beijing I-Journey Science and Technology Development Co., Ltd.
China
Beijing Ruizhuo Xichuang Technology Development Co., Ltd.
China
Beijing Ruizhuo Xitou Development Co., Ltd.
China
Beijing Future Xinzhihui Technology Development Center (Limited Partnership)
China
Beijing Future Xinhujin Technology Development Center (Limited Partnership)
China
Beijing Future Xinruifeng Technology Development Center (Limited Partnership)
China

3
Beijing Ruihao Rongtong Real Estate Co., Ltd.
     China
Beijing Yuzhouyun Technology Development Center (Limited partnership)
China
Zhengzhou Xinhe Real Estate Co., Ltd
China
Zhengzhou Xinying Real Estate Co., Ltd.
China
Zhengzhou Xinyuan Xinsheng Business Management Co. Ltd.
China
Dalian Xinsheng Industrial Co., Ltd.
China
Guoxin Chuangxiang (Tianjin) Enterprise Management Consulting Partnership (Limited Partnership)
China
Guoxin Chuangzhi (Tianjin) Enterprise Management Consulting Partnership (Limited Partnership)
China
Beijing Ruizhuo Xihui Technology Development Centre Co., Ltd.
China
Chongqing Heavy Duty Vehicle Group Hong Property LLC Wulong Branch
China
Henan Rongyao Catering Service Co., Ltd.
China
Henan Xinzhixiang Electronic Technology Co., Ltd.
China
Henan Xinyuan Property Service Co., Ltd.. Xincai Branch
China
Zhengzhou Shengxin Landscape Engineering Co., Ltd.
China
Henan Xinyuan Property Service Co., Ltd.. Runan Branch
China
Guangzhou Yuesheng Commercial Service Co., Ltd.. Zhengzhou Branch
China
Henan Kai Dao real Estate Brokerage Co., Ltd.
China
Guangzhou Xinyuan Commercial Management Co., Ltd.
China
Henan Xinyuan Hongsheng Commercial Management Co., Ltd.
China
Qingdao Huiju Zhihui City Industrial Development Co., Ltd.
China
Huai’an Xinyuan Yaju Enterprise Management Co., Ltd.
China
*The list does not include various new entities created by Xinyuan Real Estate Co., Ltd. that are being held for future ventures.

EXHIBIT 12.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Yong Zhang, certify that:
1.
I have reviewed this Annual Report on Form 20-F of Xinyuan Real Estate Co., Ltd.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the
period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4.
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-
15(f) and 15d-15(f)) for the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period
covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over
financial reporting; and
5.
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s
internal control over financial reporting.
Date: April 29, 2025
    
/s/ Yong Zhang
Yong Zhang
Chairman and Chief Executive Officer
(Principal Executive Officer)

EXHIBIT 12.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Bo Zhang, certify that:
1.
I have reviewed this Annual Report on Form 20-F of Xinyuan Real Estate Co., Ltd.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the
period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4.
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-
15(f) and 15d-15(f)) for the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period
covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over
financial reporting; and
5.
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s
internal control over financial reporting.
Date: April 29, 2025
/s/ Bo Zhang
Bo Zhang
Chief Financial Officer
(Principal Financial Officer)

EXHIBIT 13.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Rule  13a-14(b)  under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and 18 U.S.C. § 1350, the
undersigned officer of Xinyuan Real Estate Co., Ltd. (the “Company”), hereby certifies that the Company’s Annual Report on Form 20-F for the year
ended December 31, 2024 (the “Report”) complies with the requirements of Section 13(a) or 15(d), as applicable, of the Exchange Act and that the
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Yong Zhang
Yong Zhang
Chairman and Chief Executive Officer
(Principal Executive Officer)
April 29, 2025
The foregoing certification is being furnished solely pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C § 1350 and will not be
deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section.

EXHIBIT 13.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Rule  13a-14(b)  under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and 18 U.S.C. § 1350, the
undersigned officer of Xinyuan Real Estate Co., Ltd. (the “Company”), hereby certifies that the Company’s Annual Report on Form 20-F for the year
ended December 31, 2024 (the “Report”) complies with the requirements of Section 13(a) or 15(d), as applicable, of the Exchange Act and that the
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Bo Zhang
    
Bo Zhang
Chief Financial Officer
(Principal Financial Officer)
April 29, 2025
The foregoing certification is being furnished solely pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C § 1350 and will not be
deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section.

Exhinit 15.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in the Registration Statements on Form S-8 (File Nos: 333-152637, 333- 198525, 333-205371, 333-
239620) of our report dated April 29, 2025, with respect to our audit of the consolidated financial statements of Xinyuan Real Estate Co., Ltd. (the
“Company”) and the effectiveness of internal control over financial reporting of the Company, appearing in this Annual Report on Form 20-F for the
years ended December 31, 2024 and 2023. Our report on the Company’s financial statements contains an explanatory paragraph regarding the
Company’s ability to continue as a going concern.
/s/ Assentsure PAC
Singapore
April 29, 2025