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China HGS Reports First Quarter of Fiscal Year 2017 Results

China HGS Real Estate Inc.
2017-02-13 20:00 3009

HANZHONG, China, Feb. 13, 2017 /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 reported its financial results for the first quarter of fiscal 2017 ended December 31, 2016 with the U.S. Securities and Exchange Commission. An electronic copy of the quarterly report on Form 10-Q can be accessed on the SEC's website at www.sec.gov.

Highlights for the quarter

  • Total revenues for the first quarter of fiscal 2017 were approximately $8.9 million, an increase of 51.9% from approximately $5.9 million in the same quarter of fiscal 2016.
  • Net income for the first quarter of fiscal 2017 totaled approximately $0.8 million, a decrease of approximately 46.6% from the net income of approximately $1.4 million in the same period of last year. The decreased profit margin in this quarter compared to the same quarter of last year was primarily due to lower margin residential properties, instead of higher margin commercial properties, sold during the first quarter of fiscal 2017.
  • Basic and diluted net earnings per share ("EPS") attributable to shareholders for the first quarter of fiscal 2017 were $0.02, compared to $0.03 for the same quarter last year.

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.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

December 31,

September 30,

2016

2016

ASSETS




Current assets:




Cash

$

10,249,072

$

6,401,237

Restricted cash

1,116,025

1,493,537

Cost and earnings in excess of billings

13,437,593

11,891,230

Real estate property development completed

101,761,829

113,185,929

Real estate property under development

84,609,389

-

Other current assets

2,643,599

2,722,036

Total current assets

213,817,507

135,693,969

Property, plant and equipment, net

745,600

792,650

Real estate property development completed, net of current portion

1,591,534

1,657,055

Security deposits


8,111,436

7,940,137

Real estate property under development, net of current portion

136,206,176

207,384,015

Due from local government for real estate property development
completed

2,805,493

2,920,990

Total Assets

$

363,277,746

$

356,388,816

LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




Other loans

$

11,767,078

$

6,125,753

Accounts payable

28,098,980

30,574,497

Other payables

4,987,591

5,200,807

Construction deposits


1,417,092

1,911,158

Billings in excess of cost and earnings

2,007,849

2,110,808

Customer deposits

16,747,747

16,790,208

Shareholder loan

2,673,956

2,709,523

Accrued expenses

2,982,946

3,205,099

Taxes payable

15,365,447

15,843,815

Total current liabilities

86,048,686

84,471,668

Deferred tax liabilities

4,905,919

5,107,887

Customer deposits, net of current portion

10,387,894

10,687,272

Other long term loan payable, less current portion

111,158,026

99,843,228

Construction deposits, net of current portion

1,277,239

1,329,820

Total liabilities

213,777,764

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 December 31, 2016 and
September 30, 2016

45,050

45,050

Additional paid-in capital

129,808,472

129,793,572

Statutory surplus

8,495,631

8,495,631

Retained earnings

21,423,316

20,661,184

Accumulated other comprehensive loss

(10,272,487)

(4,046,496)

Total stockholders' equity

149,499,982

154,948,941






Total Liabilities and Stockholders' Equity

$

363,277,746

$

356,388,816

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CHINA HGS REAL ESTATE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE LOSS

(Unaudited)

Three months ended December 31,

2016

2015

Real estate sales

$

8,897,854

$

5,856,607

Less: Sales tax

(112,602)

(411,988)

Cost of real estate sales

(7,061,035)

(3,208,889)

Gross profit

1,724,217

2,235,730

Operating expenses




Selling and distribution expenses

146,234

90,153

General and administrative expenses

472,730

478,511

Total operating expenses

618,964

568,664

Operating income

1,105,253

1,667,066

Interest expense

(121,123)

(104,046)

Income before income taxes

984,130

1,563,020

Provision for income taxes

221,998

135,796

Net income

762,132

1,427,224

Comprehensive loss




Foreign currency translation adjustment

(6,225,991)

(3,339,117)

Comprehensive loss

$

(5,463,859)

$

(1,911,893)

Basic and diluted income per common share




Basic and diluted

$

0.02

$

0.03

Weighted average common shares outstanding




Basic and diluted


45,050,000

45,050,000

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

CHINA HGS REAL ESTATE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three months ended December 31,

2016

2015

Cash flows from operating activities




Net income

$

762,132

$

1,427,224

Adjustments to reconcile net income to net cash used in operating activities:




Deferred tax provision

-

66,304

Depreciation

15,962

20,187

Stock based compensation

14,900

14,900

Changes in assets and liabilities:




Advances to vendors

-

(84,577)

Cost and earnings in excess of billings

(2,049,151)

392,728

Real estate property development completed

7,061,036

2,258,837

Real estate property under development

(21,981,341)

(7,098,791)

Other current assets

(522,767)

(1,309,716)

Accounts payables

(1,287,068)

(8,509,618)

Other payables

(7,695)

3,635,725

Billings in excess of cost and earnings

(19,812)

122,823

Customer deposits

756,670

2,934,270

Construction deposits

(425,264)

(452,203)

Accrued expenses

(112,531)

(24,843)

Taxes payable

150,497

29,080

Net cash used in operating activities

(17,644,432)

(6,577,670)






Cash flow from financing activities




Restricted cash

323,605

(61,120)

Net proceeds from shareholder loan

-

852,802

Proceeds from other loans

21,488,076

10,824,408

Repayment of other loans

-

(5,163,753)

Net cash provided by financing activities

21,811,681

6,452,337






Effect of changes of foreign exchange rate on cash

(319,414)

(25,769)

Net increase (decrease) in cash

3,847,835

(151,102)

Cash, beginning of period

6,401,237

1,333,919

Cash, end of period

$

10,249,072

$

1,182,817

Supplemental disclosures of cash flow information:




Interest paid

$

1,374,159

$

486,077

Income taxes paid

$

170,567

$

69,492

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/china-hgs-reports-first-quarter-of-fiscal-year-2017-results-300405969.html

Source: China HGS Real Estate Inc.
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