Following management's prepared remarks, we'll open the call to questions. During the Q&A session, Mr. Zhang will speak in Mandarin and I will translate his comments into English. Please note that unless otherwise stated, all figures mentioned during this conference call are in U.S. dollars.I will now turn the call over to Xinyuan's chairman and CEO, Mr. Yong Zhang. Please go ahead, sir. Yong Zhang Hello. [inaudible] Helen and thank you for joining us today. We were pleased with our third quarter performance, which improved compared to the second quarter and was [above the high end of our] schedule. Revenues, contracted sales, GFA sales, and the gross margin are increased compared to the second quarter. [inaudible] GFA sales at three of our major active projects in Suzhao, Chengdu, and Zhengzhou are improved compared to the second quarter. Xuzhou Colorful Garden also began adding to our GFA sales on schedule in August. Our revenues increased sequentially. We kept a tight focus on our costs. Our expenses were down as a percent of revenue compared to the second quarter and the prior year, boosting our profitability. In September, the government issued a new circular on housing policy to [prevent high ASP growth and to decrease speculation]. The government is [inaudible] down payment and suspending mortgage lending for first time buyers and non-local lenders. The new circular will increase some uncertainty in our outlook. We believe we have a good position for future development with [inaudible] three of our major projects, namely Chengdu Splendid II, Zhengzhou Modern City, and Zhengzhou Colorful Garden, which began pre-sales in the past two quarters, make [inaudible] the contribution for our sales in the fourth quarter. In the first quarter next year we will have [inaudible] to our active projects and our [land] bank is fully funded. This gives us a path for further growth into next year, with our focus on affordable development in Q2 and three cities. We are excited about our future growth opportunities.
I will now turn the call over to Tom Gurnee, our chief financial officer.Tom Gurnee Thank you. Let me start this call by taking our listeners back to this time in last quarter, when we were doing our conference call. At that time, the government had introduced new real estate mortgage policies on April 17. Banks, and particularly in Kunshan and Shanghai, virtually stopped making mortgages for a few months as they pondered how to implement the new policy. After an abrupt drop in sales in late April, we did begin to see some life in July sales figures. Some buyers, at least, were coping with the new rules and buying some apartments, albeit at much lower volumes than before the policy announcement. In this uncertain environment, we were about to introduce one new project, Xuzhou Colorful Garden, in Jiangsu Province, and we were about to receive crucial new sales permits for our Zhengzhou Modern City project, which had sold so well in May and April despite the new policies. By the time of last quarter's earnings, we were still trying to determine the impact going forward of the new policy on Xinyuan sales rates and buyer mortgage availability. So in this uncertain environment, we provided the third quarter guidance quite cautiously. Since then, the government has weighed in with more policy pronouncements. On September 29 a new mortgage policy was issued, raising minimum down payments from 20% to 30% for first apartment buyers and prohibiting mortgages for third-time apartment buyers or non-residents. And earlier this month the government announced an interest rate hike of 25 basis points and further rate hikes are expected. In this environment, we were quite pleased with our sales results versus what we had expected at this time last quarter. GFA, or gross floor area, sales totaled over 137,000 square meters, fully 51,000 square meters above Q2, and 57,000 square meters above my guidance. Read the rest of this transcript for free on seekingalpha.com