Revenues for 2006 Increase 65% to $54.1 million, Net Income Improves 91% to $9.1 million, EPS up 88% to $0.45
XI'AN, China, April 2 /Xinhua-PRNewswire-FirstCall/ -- China Housing and Land Development, Inc., "China Housing" (OTC Bulletin Board: CHLN), a leading developer of residential and commercial properties in the city of Xi'an announced today financial results for the fourth quarter and full year 2006.
Revenue for the fourth quarter 2006 was $3.5 million which represented a 60.8 percent increase as compared $2.2 million in the fourth quarter of last year. The increase primarily resulted from the contribution of the Company's Tsining-24G project. Located in the commercial center of Xi'an, Tsining-24G was a redevelopment of an existing 26 floor building to accommodate both residential and commercial space. This project was completed in June of 2006. Net income for the fourth quarter was $0.1 million as compared to a net profit of $0.2 million in the fourth quarter of 2005.
"Both the fourth quarter of 2005 and 2006 represented transitional quarters for the Company as we were actively developing properties during both respective periods while engaging in presales," commented Mr. Pingji Lu, CEO & Chairman of China Housing. "In the Chinese real estate market developers can begin presales before a development is complete with the financial institution or buyer prepaying for the unit before taking possession. Once the new buyer takes physical possession of the property the transaction is considered final and we can then recognize the sale as revenue."
For 2006 revenues were $54.1 million, an increase of 65.2 percent from the $32.8 million reported for 2005. Sales of properties totaled $53.7 million in 2006 with rental income of $0.5 million compared to $32.8 million and $0.3 million last year. Full year revenues benefited from increased residential and commercial sales at the Company's Tsining 24G and Tsining JunjingYuan (aka Junjing Garden I) projects and a 7.4 percent annualized increase in sale prices. China Housing began developing Tsining JunjingYuan in 2003 and completed the project in September 2006. Tsining JunjingYuan is a 1,230 unit development consisting of one to five bedroom apartments. Management has completely sold out all of the residential space and anticipates selling a greater portion of the available commercial space beginning in 2007, while retaining a small percentage to generate incremental rental income.
Cost of properties sold for 2006 increased 73.1 percent to $36.8 million as compared to $21.2 million last year. The year over year increase is consistent with the overall growth in revenues. Selling, general and administrative expense decreased by 12.0 percent to $3.2 million as the Company actively managed costs and improved operating leverage. Operating income increased 91.8 percent to $13.6 million versus last year with margins improving 3.5 percent year over year to 25.0 percent. For 2006, the Company had an effective tax rate of 33.3 percent which was unchanged versus the prior year. Net income increased 91.0 percent to $9.1 million from $4.7 million last year with earnings per fully diluted share increasing 88.4 percent to $0.45 for 2006 as compared to $0.24 in 2005.
"We are pleased with our performance this year as we continued to profitably develop several of our high profile residential and commercial properties, further commented Mr. Lu. "The real estate market in Xi'an remains robust given its relative affordability in comparison to other major Chinese cities in conjunction with strong economic and population growth in Xi'an. In addition, recent adoption of Property Law during the latest National People's Congress in early March is expected to provide new and more protections for property owners and buyers."
Revenue Contribution by Project:
(all numbers in USD thousands)
2006 2005
Tsining JunjingYuan: $39.7 $10.6
Tsining-24G: $13.0 ---
Tsining Gangwan: --- $16.5
Other Projects $1.4 $5.7
Total $54.1 $32.8
"Our recent acquisition of Xi'an Xindadi Technology Development Company will provide us with the development and sale rights to 487 acres of the highly coveted residential portion of the Baqiao Hi Tec Industrial Zone," continued Mr. Lu. "Baqiao is expected to be a major residential area in Xi'an as a result of increased business investment and local government mandates to move a significant portion of the population out to this new area. With this acquisition we now hold the exclusive rights to develop and sell the residential portion of Baqiao which we believe will generate significant revenue and net income over the next four years."
The Company remains in a solid financial position with $72.8 million in total assets as of December 31, 2006. Included in total assets are $47.0 million in real estate held for sale or development which are stated at cost or net realizable value depending on which is lower. Accounts receivable were $3.1 million and continue to remain low as the Company receives prepayments for sales of properties. Total liabilities are $53.6 million which includes $23.2 million in loans payable that are secured by the Company's assets. The Company maintained a current ratio of 1.4 to 1 and had shareholder's equity of $19.2 million. During 2006 the Company generated $6.4 million in positive net cash flow from operations.
Mr. Lu concluded, "In addition to Baqiao we are actively preparing for our next two developments which are Junjing Garden II and Yijing Garden. We are expecting presales of Junjing Garden II, a 1,500 unit development, to begin in May 2007 with the project anticipated to be complete by 2009. Yijing Garden, set on 15 acres of land is expected to consist of 1,500 units with construction set to begin in October 2008. Both of these properties are expected to generate over $178 million in revenue over the next three years and are expected to complement our Baqiao project. Given our track record, experience and new project pipeline we believe are well positioned to generate substantial long term revenues and profits."
About China Housing and Land Development, Inc.
Based in Xi'an, the capital city of the Shaanxi province in China, China Housing and Land Development, Inc. is the largest Private developer of residential and commercial properties. China Housing has been an independent business since 1992 and became a US publicly listed company in 2006.
Cautionary Statement Regarding Forward Looking Information
This Press Release may contain forward-looking information about China Housing and Land Development, which are covered under the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward- looking statements are statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology, and include discussions of strategy, and statements about industry trends and China Housing and Land Development's future performance, operations and products. Actual performance results may vary significantly from expectations and projections. This and other "Risk Factors" contained in China Housing and Land Development, Inc.'s public filings with the SEC.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2006
ASSETS
Cash $379,633
Cash - restricted $1,108,271
Accounts receivable, not of allowance
for doubtful accounts of $79,118 $3,070,516
Notes receivable, net $2,127,271
Inventories
Finished projects $37,247,436
Construction in progress $9,730,650
Total real estate held
for development or sale $46,978,086
Property and equipment, net $17,701,896
Advance to suppliers $493,570
Receivables, deferred charge and
other assets $986,039
Total assets $72,845,282
LIABILITIES
Accounts payable $5,324,815
Advances from customers $2,902,426
Accrued expenses $1,738,584
Payable to original shareholders $5,462,798
Income and other taxes payable $11,386,169
Other payables $2,572,838
Loans from employees $1,037,842
Loans payables $23,206,852
Total liabilities $53,632,324
SHAREHOLDERS' EQUITY
Common stock: $.001 par value,
authorized 100,000,000 shares
issued and outstanding 20,619,223 $20,619
Additional paid in capital $7,192,600
Statutory reserves $2,150,138
Retained earnings $14,414,181
Capital contribution receivable ($5,462,798)
Accumulated other comprehensive income $898,218
Total shareholders' equity $19,212,958
Total liabilities and
shareholders' equity $72,845,282
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2006 AND 2005
2006 2005
REVENUE
Sale of properties $53,647,174 $32,450,037
Other income 452,312 335,681
Total revenue 54,099,486 32,785,718
COSTS AND EXPENSES
Cost of properties sold 36,749,683 21,236,598
Selling, general and
administrative expenses 3,197,310 3,632,627
Other expense 301,158 103,572
Interest expense 289,083 741,880
Total costs and expense 40,537,234 25,714,677
INCOME BEFORE PROVISION
FOR INCOME TAXES 13,562,252 7,071,041
PROVISION FOR INCOME TAXES 4,511,442 2,333,444
NET INCOME 9,050,810 4,737,597
OTHER COMPREHENSIVE INCOME 655,435 242,783
OTHER COMPREHENSIVE INCOME $9,706,245 $4,980,380
WEIGHTED AVERAGE SHARES OUTSTANDING
BASIC AND DILUTED 20,277,615 20,000,000
EARNINGS PER SHARE
BASIC AND DILUTED $0.45 $0.24
For more information, please contact:
Investors:
Matt Hayden,
Hayden Communications
Tel: +1-858-704-5065
Email: matt@haydenir.com
Company:
Jing Lu
Tel: +86-29-8258-2632
Email: lujing@chinahousinginc.com.cn
