omniture

China HGS Reports Full Year Financial Results for the Fiscal Year 2014 - Revenue and Net Profit Up by Approximately 83% and 56%, Respectively

2014-12-12 20:00 1763

HANZHONG, China, December 12, 2014 /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 2014 ended September 30, 2014 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 2014

  • Total revenues for the fiscal 2014 were approximately $124.3 million, an increase of approximately 83% from approximately $67.8 million in fiscal 2013.
  • For the Company's long-term real estate development projects, the related revenue recognized from percentage of completion method was approximately $99.6 million, which accounted for 80% of total revenue in fiscal 2014 and increased 262% from the revenue recognized from percentage completion method in fiscal 2013.
  • Net income for the fiscal 2014 totaled approximately $32.4 million, an increase of approximately 56% from the net income of approximately $20.8 million in fiscal 2013.
  • Basic and diluted net earnings per share ("EPS") attributable to shareholders for the fiscal 2014 were $0.72, compared to $0.46 for the fiscal 2013.

"I am pleased to report to shareholders that the Company achieved continuous growth in revenue and net profit in our fiscal 2014, while the whole property sector in China is still under slow recovery," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS.

"Looking ahead in 2015, the Company will remain focused on completing the construction of our on-going apartment complex projects. Meantime, the Company will emphasis on Shanty area reforming projects, which is encouraged by the central government to improve the quality of urbanization and facilitate sustained and healthy economic development. The State Council indicated in its public circular that the government will optimize investment agendas to allocate more funds for shantytown reforms and encourage financial institutions to strengthen loan support for such projects. With such fundamentals undiminished, combined with the favorable development whereby the central government has begun to allow city governments to adapt certain restrict measurement to local conditions and more ready financing for first-time home buyers, we will step up our sales efforts, diversify product development, and expect our sales revenue to steadily increase in a long run," concluded Mr. Xiaojun Zhu.

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, 2014, 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,


2014



2013

ASSETS

Current assets:






Cash


$

1,125,545



$

5,878,101

Restricted cash



1,589,887




1,332,807

Advances to vendors



-




109,134

Cost and earnings in excess of billings



12,332,396




2,178,270

Real estate property development completed



6,050,263




11,607,164

Real estate property under development



140,313,127




1,580,670

Other current assets



1,409,367




368,377

Total current assets



162,820,585




23,054,523

Property, plant and equipment, net



889,497




977,739

Real estate property development completed, net of current portion



2,572,215




7,619,811

Security deposits for land use right



3,249,549




3,259,240

Real estate property under development, net of current portion



128,516,074




142,916,601

Accounts receivable-Local government



3,165,644




-

Total Assets


$

301,213,564



$

177,827,914


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:






Bank loan - current portion


$

12,998,197



$

4,888,860

Short-term loans - other



15,290,753




-

Accounts payable



57,317,877




22,527,686

Other payables



13,777,853




1,863,922

Construction deposits



367,133




357,447

Billings in excess of cost and earnings



2,960,452




5,109,758

Customer deposits



31,100,334




6,130,466

Shareholder loan



5,465,743




1,810,000

Accrued expenses



3,801,567




2,896,539

Taxes payable



12,579,071




6,612,707

Total current liabilities



155,658,980




52,197,385

Deferred tax liabilities



2,992,459




650,067

Customer deposits, net of current portion



3,829,870




13,410,081

Long-term bank loan, less current portion



6,499,098




11,407,340

Construction deposits, net of current portion



1,004,364




1,013,877

Total liabilities



169,984,771




78,678,750

Commitments and Contingencies








Stockholders' equity








Common stock, $0.001 par value, 100,000,000 shares








authorized, 45,050,000 shares issued and outstanding as of








September 30, 2014 and 2013


$

45,050



$

45,050

Additional paid-in capital



17,759,349




17,759,349

Statutory surplus



12,845,197




8,977,230

Retained earnings



91,834,708




63,257,918

Accumulated other comprehensive income



8,744,489




9,109,617

Total stockholders' equity



131,228,793




99,149,164

Total Liabilities and Stockholders' Equity


$

301,213,564



$

177,827,914


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

CHINA HGS REAL ESTATE INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE YEARS ENDED SEPTEMBER 30,





2014


2013



2012

Real estate sales


$

124,295,928


$

67,809,073



$

18,856,978

Less: Sales tax



7,547,052



4,244,644




1,180,437

Cost of real estate sales



77,938,256



37,284,088




9,590,009

Gross profit



38,810,620



26,280,341




8,086,532

Operating expenses











Selling and distribution expenses



923,879



915,217




517,025

General and administrative expenses



2,573,573



3,087,434




2,049,388

Total operating expenses



3,497,452



4,002,651




2,566,413

Operating income



35,313,168



22,277,690




5,520,119

Interest income (expense) - net



(57,452)



(98,305)




(73,608)

Other income - net



-



10,398




12,659

Income before income taxes



35,255,716



22,189,783




5,459,170

Provision for income taxes



2,810,959



1,398,218




283,077

Net income



32,444,757



20,791,565




5, 176,093

Other comprehensive income











Foreign currency translation adjustment



(365,128)



2,634,743




862,601

Comprehensive income


$

32,079,629


$

23,426,308



$

6,038,694

Basic and diluted income per common share











Basic


$

0.72


$

0.46



$

0.11

Diluted


$

0.72


$

0.46



$

0.11

Weighted average common shares outstanding











Basic



45,050,000



45,050,000




45,050,000

Diluted



45,124,233



45,124,474




45,050,000


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

CHINA HGS REAL ESTATE INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED SEPTEMBER 30, 2014, 2013 AND 2012



Common Stock

Shares



Par value $0.001

Amount



Additional

Paid-in Capital



Statutory

Surplus



Retained

Earnings



Accumulated Other

Comprehensive Income



Total

Balance at October 1, 2011



45,050,000



$

45,050



$

17,724,085



$

5,945,384



$

40,322,106



$

5,612,273



$

69,648,898

Stock-based Compensation











26,252
















26,252

Appropriation of statutory reserve















603,970




(603,970)








-

Net income for the year



-
















5,176,093








5,176,093

Foreign currency translation adjustments























862,601




862,601

Balance at September 30, 2012



45,050,000



$

45,050



$

17,750,337



$

6,549,354



$

44,894,229



$

6,474,874



$

75,713,844

Stock-based Compensation











9,012
















9,012

Appropriation of statutory reserve















2,427,876




(2,427,876)








-

Net income for the year



-
















20,791,565








20,791,565

Foreign currency translation adjustments























2,634,743




2,634,743

Balance at September 30, 2013



45,050,000



$

45,050



$

17,759,349



$

8,977,230



$

63,257,918



$

9,109,617



$

99,149,164

Stock-based Compensation











-
















-

Appropriation of statutory reserve















3,867,967




(3,867,967)








-

Net income for the year



-
















32,444,757








32,444,757

Foreign currency translation adjustments























(365,128)




(365,128)

Balance at September 30, 2014



45,050,000



$

45,050



$

17,759,349



$

12,845,197



$

91,834,708



$

8,744,489



$

131,228,793


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


CHINA HGS REAL ESTATE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED SEPTEMBER 30,



2014


2013

2012

Cash flows from operating activities






Net income


$

32,444,757


$

20,791,565



$

5,176,093

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










Deferred tax provision



2,348,981



640,095




-

Depreciation



85,504



88,818




89,363

Stock based compensation



-



9,012




26,252












Changes in assets and liabilities:











Accounts receivable



(3,171,932)



-




-

Advances to vendors



109,025



2,494,790




3,435,815

Loans to outside parties



-



21,249




2,581,379

Security deposits for land use rights



-



20,005,071




(16,562,486)

Cost and earnings in excess of billings



(10,180,783)



(2,144,855)




-

Real estate property development completed



10,568,278



7,659,989




(7,110,766)

Real estate property under development



(125,009,367)



(76,766,598)




(126,162)

Other current assets



(1,044,153)



(188,464)




(85,398)

Accounts payables



34,926,405



18,299,774




(3,700,969)

Other payables



11,943,147



604,996




885,072

Billings in excess of cost and earnings



(2,138,352)



5,031,374




-

Customer deposits



15,478,439



(10,510,235)




7,089,879

Construction deposits



4,258



168,439




106,436

Accrued expenses



914,825



518,602




277,201

Taxes payable



5,997,914



2,114,271




264,205

Net cash used in operating activities


$

(26,723,054)


$

(11,162,107)



$

(7,654,086))












Cash flow from financing activities











Restricted cash



(261,561)



(216,286)




(184,604)

Proceeds from short-term loan-other



15,321,123



-




-

Proceeds from bank loan



8,140,008



16,046,213




-

Repayment of bank loan



(4,884,004)



-




-

Proceeds from shareholder loan



7,570,208



-




3,142,332

Repayment of shareholder loan



(3,907,204)



-




(3,142,332)

Net cash provided by (used in) financing activities


$

21,978,570


$

15,829,927



$

(184,604)












Effect of changes of foreign exchange rate on cash



(8,072)



105,595




105,581

Net increase (decrease) in cash



(4,752,556)



4,773,415




(7,733,109)

Cash, beginning of year



5,878,101



1,104,686




8,837,795

Cash, end of year


$

1,125,545


$

5,878,101



$

1,104,686












Supplemental disclosures of cash flow information:











Interest paid


$

1,500,121


$

55,839



$

-

Income taxes paid


$

339,613


$

780,908



$

129,863


The accompanying notes are an integral part of these consolidated financial statement

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/china-hgs-reports-full-year-financial-results-for-the-fiscal-year-2014---revenue-and-net-profit-up-by-approximately-83-and-56-respectively-300008553.html

Source: China HGS Real Estate Inc.
Keywords: Real Estate
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