XXI Century Increases Sales 61.3% to USD 20.2 mln in 2007

According to XXI Century (XXIC LN: BUY), its sales were up 61.3% yoy in 2007 to USD 20.2 mln last year. The company also reported that its net profit rose more than sevenfold to USD 1.4 bln, this amount was entirely made up of the increase in the fair value of its investment properties. Alexander Romanov: Reported sales for 2007 include rental income of USD 5.6 mln and sales of residential bonds (effectively a presale) of USD 14.6 mln. We projected rental income for the company at USD 5.3 mln in 2007, close to the actual figures, but used a different accounting approach for residential sales recognition (we capitalized presales) and arrived at an estimated 2007 sales figure of USD 9 mln. We view the news as neutral for the stock.