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China HGS Reports Full Year Financial Results for the Fiscal Year 2017

2018-01-03 20:00

HANZHONG, China, Jan. 3, 2018 /PRNewswire/ -- China HGS Real Estate Inc. (NASDAQ: HGSH) ("China HGS" or the "Company"), a leading regional real estate developer headquartered in Hanzhong City, Shaanxi Province, China, today filed its Annual Report on Form 10-K for the fiscal year 2017 ended September 30, 2017 with the U.S. Securities and Exchange Commission. An electronic copy of the Annual Report on Form 10-K can be accessed on the SEC's website at www.sec.gov.

Highlights for the Fiscal 2017

  • Total revenues for the fiscal 2017 were approximately $58.7 million, an increase of approximately 45% from approximately $40.6 million in fiscal 2016.
  • For the Company's long-term real estate development projects, the related revenue recognized from percentage of completion method was approximately $13.4 million, which accounted for 23% of total revenue in fiscal 2017 and decreased 47% from the revenue recognized from percentage completion method in fiscal 2016.
  • Net income for the fiscal 2017 totaled approximately $6.3 million, an increase of approximately 26% from the net income of approximately $5.0 million in fiscal 2016.
  • Basic and diluted net earnings per share ("EPS") attributable to shareholders for the fiscal 2017 were $0.14, compared to $0.11 for the fiscal 2016.

Safe Harbor Statement

This press release contains forward-looking statements, which are subject to change. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All "forward-looking statements" relating to the business of China HGS Real Estate Inc., which can be identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties which could cause actual results to differ. These factors include but are not limited to: the uncertain market for the Company's business, macroeconomic, technological, regulatory, or other factors affecting the profitability of real estate business; and other risks related to the Company's business and risks related to operating in China. Please refer to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2016, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. The Company's actual results could differ materially from those contained in the forward-looking statements. The Company undertakes no obligation to revise or update its forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

About China HGS Real Estate, Inc.

China HGS Real Estate, Inc. (NASDAQ: HGSH), founded in 1995 and headquartered in Hanzhong City, Shaanxi Province, is a leading real estate developer in the region and holds the national grade I real estate qualification. The Company focuses on the development of high-rise, sub-high-rise residential buildings and multi-building apartment complexes in China's Tier 3 and Tier 4 cities and counties with rapidly growing populations driven by increased urbanization. The Company provides affordable housing with popular and modern designs to meet the needs of multiple buyer groups. The Company's development activity spans a range of services, including land acquisition, project planning, design management, construction management, sales and marketing, and property management. For further information about China HGS, please go to www.chinahgs.com

Company contact:

Randy Xiong, President of Capital Market
China Phone: (86) 091-62622612
Email: randy.xiong@chinahgs.com

 

 

CHINA HGS REAL ESTATE INC.

CONSOLIDATED BALANCE SHEETS



September 30


September 30


2017


2016

ASSETS






Current assets:






Cash

$

3,431,997


$

6,401,237

Restricted cash


1,284,607



1,493,537

Cost and earnings in excess of billings


12,673,349



11,891,230

Real estate property development completed


79,233,948



113,185,929

Real estate property under development


87,126,402



-

Other current assets


1,529,698



2,722,036

Total current assets


185,280,001



135,693,969

Property, plant and equipment, net


825,833



792,650

Real estate property development completed, net of current portion


1,386,552



1,657,055

Security deposits


8,564,517



7,940,137

Real estate property under development, net of current portion


180,667,276



207,384,015

Due from local government for real estate property development completed


2,928,410



2,920,990

Total Assets

$

379,652,589


$

356,388,816

LIABILITIES AND STOCKHOLDERS' EQUITY






Current liabilities:






Other loans

$

28,545,233


$

6,125,753

Accounts payable


24,047,980



30,574,497

Other payables


3,897,093



5,200,807

Construction deposits


1,966,115



1,911,158

Billings in excess of cost and earnings


4,247,477



2,110,808

Customer deposits


24,613,864



16,790,208

Shareholders loans


2,304,632



2,709,523

Accrued expenses


3,158,432



3,205,099

Taxes payable


17,259,202



15,843,815

Total current liabilities


110,040,028



84,471,668

Deferred tax liabilities


170,950



5,107,887

Tax payable - long term


5,120,862



-

Customer deposits, net of current portion


2,314,641



10,687,272

Other loans, less current portion


98,797,447



99,843,228

Construction deposits, net of current portion


1,319,295



1,329,820

Total liabilities


217,763,223



201,439,875

 

Commitments and Contingencies






 

Stockholders' equity






Common stock, $0.001 par value, 100,000,000 shares authorized, 45,050,000
shares issued and outstanding September 30, 2017 and 2016


45,050



45,050

Additional paid-in capital


129,853,172



129,793,572

Statutory surplus


9,142,899



8,495,631

Retained earnings


26,343,030



20,661,184

Accumulated other comprehensive loss


(3,494,785)



(4,046,496)







Total stockholders' equity


161,889,366



154,948,941







Total Liabilities and Stockholders' Equity

$

379,652,589


$

356,388,816

 

 

CHINA HGS REAL ESTATE INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED SEPTEMBER 30,



2017


2016

Real estate sales

$

58,671,424


$

40,576,717

Less: Sales tax


1,215,960



2,102,616

Net real estate sales


57,455,464



38,474,101

Cost of real estate sales


45,590,345



28,670,778

Gross profit


11,865,119



9,803,323

Operating expenses






Selling and distribution expenses


568,081



1,118,282

General and administrative expenses


3,177,649



2,466,717

Total operating expenses


3,745,730



3,584,999

Operating income


8,119,389



6,218,324

Interest expense - net


(497,798)



(225,155)

Other income - net


2,222



459

Income before income taxes


7,623,813



5,993,628

Provision for income taxes


1,294,699



974,688

Net income


6,329,114



5,018,940

Other comprehensive income (loss)






Foreign currency translation adjustment


551,711



(7,604,743)

Comprehensive income (loss)

$

6,880,825


$

(2,585,803)

Basic and diluted income per common share






Basic

$

0.14


$

0.11

Diluted

$

0.14


$

0.11

Weighted average common shares outstanding






Basic


45,050,000



45,050,000

Diluted


45,050,000



45,050,000

 

 

CHINA HGS REAL ESTATE INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED SEPTEMBER 30, 2017 AND 2016



Common Stock


Additional


Statutory


Retained


Accumulated
Other

Comprehensive




Shares


Amount


Paid-in Capital


Surplus


Earnings


Income (Loss)


Total

Balance at September 30, 2015


45,050,000


$

45,050


$

17,764,316


$

16,439,333


$

119,668,198


$

3,558,247


$

157,475,144

Stock-based Compensation


-



-



59,600



-



-



-



59,600

Appropriation of statutory reserve


-



-



-



516,314



(516,314)



-



-

Net income for the year


-



-



-



-



5,018,940



-



5,018,940

Recapitalization of VIE ("Guangsha")
equity*


-



-



111,969,656



(8,460,016)



(103,509,640)



-



-

Foreign currency translation adjustments


-



-



-



-



-



(7,604,743)



(7,604,743)

Balance at September 30, 2016


45,050,000


$

45,050


$

129,793,572


$

8,495,631


$

20,661,184


$

(4,046,496)


$

154,948,941

Stock-based Compensation


-



-



59,600



-



-



-



59,600

Appropriation of statutory reserve


-



-



-



647,268



(647,268)



-



-

Net income for the year


-



-



-



-



6,329,114



-



6,329,114

Foreign currency translation adjustments


-



-



-



-



-



551,711



551,711

Balance at September 30, 2017


45,050,000


$

45,050


$

129,853,172


$

9,142,899


$

26,343,030


$

(3,494,785)


$

161,889,366

 

 

CHINA HGS REAL ESTATE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED SEPTEMBER 30,



2017


2016

Cash flows from operating activities






Net income

$

6,329,114


$

5,018,940

Adjustments to reconcile net income to net cash used in

operating activities:






Deferred tax provision


167,007



631,099

Depreciation


67,074



74,723

Stock based compensation


59,600



59,600

Changes in assets and liabilities:






Restricted cash


207,817



144,112

Advances to vendors


-



(60,480)

Security deposits


(590,274)



(5,045,816)

Cost and earnings in excess of billings


(734,569)



(634,893)

Real estate property development completed


33,718,033



(41,816,677)

Real estate property under development


(58,501,531)



(18,287,677)

Other current assets


1,171,589



(2,496,811)

Accounts payable


(6,451,836)



(9,166,316)

Other payables


(1,286,545)



(7,024,872)

Billings in excess of cost and earnings


2,082,143



(1,070,814)

Customer deposits


(604,497)



3,112,121

Construction deposits


35,365



456,014

Accrued expenses


(50,932)



(1,468,888)

Taxes payable


1,343,421



772,684

Net cash used in operating activities


(23,039,021)



(76,803,951)







Cash flow from investing activities






Purchases of fixed assets


(97,524)



(125,023)

Net cash used in investing activities


(97,524)



(125,023)







Cash flow from financing activities






Proceeds from other loans


26,657,111



93,658,620

Repayment of other loans


(6,039,415)



(6,286,930)

Repayment of bank loan


-



(6,123,137)

Proceeds from shareholder loan


8,444,575



3,236,078

Repayment of shareholder loan


(8,842,359)



(2,317,607)

Net cash provided by financing activities


20,219,912



82,167,024

Effect of changes of foreign exchange rate on cash


(52,607)



(170,732)

Net (decrease) increase in cash


(2,969,240)



5,067,318

Cash, beginning of year


6,401,237



1,333,919

Cash, end of year

$

3,431,997


$

6,401,237

Supplemental disclosures of cash flow information:






Interest paid

$

5,756,560


$

5,102,735

Income taxes paid

$

721,177


$

424,970

Non-cash financing activities:






Recapitalization of VIE ("Guangsha")

$

-


$

111,969,656

Reclassification of deferred tax liability to income tax
payable

$

5,120,862



-

 

Cision View original content:http://www.prnewswire.com/news-releases/china-hgs-reports-full-year-financial-results-for-the-fiscal-year-2017-300576803.html

Source: China HGS Real Estate Inc.

Related stocks: NASDAQ-SMALL:HGSH

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