HANZHONG, China, August 7, 2015 /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 third quarter of fiscal 2015 ended June 30, 2015 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
"I am very pleased that the Company reported strong earnings this quarter, with net income up 68% compared to the same period of last year. As we are selling out our inventory on completed projects, our sales were negatively impacted due to limited number of units for customer selection," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS. "The overall slower economic environment in China posted challenges for real estate industry. However, our regional real estate market remains stable, with average unit price held steady. Our commercial property and parking units with higher average unit price are particularly in strong demand. Our near term effort is to focus on completion of the projects currently under construction as soon as possible. We expect our contract sales and revenue will improve as we have more GFA available for sale," 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, as well as the Company's Quarterly Reports on Form 10-Q that have been filed since the date of such annual report, 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) |
||||||||
June 30 |
September 30 |
|||||||
2015 |
2014 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash |
$ |
3,784,384 |
$ |
1,125,545 |
||||
Restricted cash |
1,783,501 |
1,589,887 |
||||||
Advances to vendors |
223,745 |
- |
||||||
Cost and earnings in excess of billings |
11,479,614 |
12,332,396 |
||||||
Real estate property development completed |
4,452,559 |
6,050,263 |
||||||
Real estate property under development |
122,564,553 |
140,313,127 |
||||||
Other current assets |
237,488 |
1,409,367 |
||||||
Total current assets |
144,525,844 |
162,820,585 |
||||||
Property, plant and equipment, net |
832,824 |
889,497 |
||||||
Real estate property development completed, net of current portion |
2,312,716 |
2,572,215 |
||||||
Security deposits for land use right |
3,273,965 |
3,249,549 |
||||||
Real estate property under development, net of current portion |
141,714,322 |
128,516,074 |
||||||
Due from local government for real estate property development completed |
2,370,939 |
3,165,644 |
||||||
Total Assets |
$ |
295,030,610 |
$ |
301,213,564 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
Current liabilities: |
||||||||
Bank loan - current portion |
$ |
11,458,879 |
$ |
12,998,197 |
||||
Short-term loans - other |
13,090,951 |
15,290,753 |
||||||
Accounts payable |
31,984,471 |
57,317,877 |
||||||
Other payables |
14,770,664 |
13,777,853 |
||||||
Construction deposits |
382,838 |
367,133 |
||||||
Billings in excess of cost and earnings |
7,785,747 |
2,960,452 |
||||||
Customer deposits |
20,876,258 |
31,100,334 |
||||||
Shareholder loan |
3,903,701 |
5,465,743 |
||||||
Accrued expenses |
4,958,910 |
3,801,567 |
||||||
Taxes payable |
15,153,949 |
12,579,071 |
||||||
Total current liabilities |
124,366,368 |
155,658,980 |
||||||
Long-term bank loan, less current portion |
1,636,983 |
6,499,098 |
||||||
Deferred tax liabilities |
4,389,695 |
2,992,459 |
||||||
Customer deposits, net of current portion |
6,704,214 |
3,829,870 |
||||||
Construction deposits, net of current portion |
1,011,910 |
1,004,364 |
||||||
Total liabilities |
138,109,170 |
169,984,771 |
||||||
Commitments and Contingencies |
||||||||
Stockholders' equity |
||||||||
Common stock, $0.001 par value, 100,000,000 shares authorized, 45,050,000 |
45,050 |
45,050 |
||||||
Additional paid-in capital |
17,759,349 |
17,759,349 |
||||||
Statutory surplus |
12,845,197 |
12,845,197 |
||||||
Retained earnings |
116,440,388 |
91,834,708 |
||||||
Accumulated other comprehensive income |
9,831,456 |
8,744,489 |
||||||
Total stockholders' equity |
156,921,440 |
131,228,793 |
||||||
Total Liabilities and Stockholders' Equity |
$ |
295,030,610 |
$ |
301,213,564 |
||||
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 INCOME (Unaudited) |
||||||||||||||||
Three months ended June 30, |
Nine months ended June 30, |
|||||||||||||||
2015 |
2014 |
2015 |
2014 |
|||||||||||||
Real estate sales |
$ |
26,014,516 |
$ |
28,854,104 |
$ |
60,138,945 |
$ |
92,902,437 |
||||||||
Less: Sales tax |
1,655,046 |
1,746,835 |
3,892,435 |
5,700,706 |
||||||||||||
Cost of real estate sales |
9,347,052 |
17,538,690 |
27,702,998 |
58,077,310 |
||||||||||||
Gross profit |
15,012,418 |
9,568,579 |
28,543,512 |
29,124,421 |
||||||||||||
Operating expenses |
||||||||||||||||
Selling and distribution expenses |
211,558 |
154,007 |
804,700 |
522,273 |
||||||||||||
General and administrative expenses |
427,363 |
557,779 |
1,636,889 |
1,684,253 |
||||||||||||
Total operating expenses |
638,921 |
711,786 |
2,441,589 |
2,206,526 |
||||||||||||
Operating income |
14,373,497 |
8,856,793 |
26,101,923 |
26,917,895 |
||||||||||||
Interest income |
- |
3,401 |
- |
12,406 |
||||||||||||
Interest expense |
(22,540) |
(17,793) |
(54,300) |
(53,973) |
||||||||||||
Income before income taxes |
14,350,957 |
8,842,401 |
26,047,623 |
26,876,328 |
||||||||||||
Provision for income taxes |
641,368 |
681,130 |
1,441,943 |
2,099,030 |
||||||||||||
Net income |
13,709,589 |
8,161,271 |
24,605,680 |
24,777,298 |
||||||||||||
Other comprehensive income (loss) |
||||||||||||||||
Foreign currency translation adjustment |
306,940 |
124,287 |
1,086,967 |
(408,017) |
||||||||||||
Comprehensive income |
$ |
14,016,529 |
$ |
8,285,558 |
$ |
25,692,647 |
$ |
24,369,281 |
||||||||
Basic and diluted income per common share |
||||||||||||||||
Basic |
$ |
0.30 |
$ |
0.18 |
$ |
0.55 |
$ |
0.55 |
||||||||
Diluted |
$ |
0.30 |
$ |
0.18 |
$ |
0.55 |
$ |
0.55 |
||||||||
Weighted average common shares |
||||||||||||||||
Basic |
45,050,000 |
45,050,000 |
45,050,000 |
45,050,000 |
||||||||||||
Diluted |
45,075,821 |
45,125,144 |
45,089,819 |
45,125,144 |
||||||||||||
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) |
||||||||
Nine months ended June 30, |
||||||||
2015 |
2014 |
|||||||
Cash flows from operating activities |
||||||||
Net income |
$ |
24,605,680 |
$ |
24,777,298 |
||||
Adjustments to reconcile net income to net cash provided by (used in) |
||||||||
Deferred tax provision |
1,369,997 |
1,681,415 |
||||||
Depreciation |
63,137 |
54,933 |
||||||
Changes in assets and liabilities: |
||||||||
Restricted cash |
(181,039) |
(375,470) |
||||||
Due from local government for real estate property development |
815,661 |
(3,174,981) |
||||||
Advances to vendors |
(222,972) |
109,130 |
||||||
Cost and earnings in excess of billings |
942,175 |
(4,732,899) |
||||||
Real estate property development completed |
1,915,343 |
9,297,037 |
||||||
Real estate property under development |
6,547,520 |
(87,987,018) |
||||||
Other current assets |
1,178,377 |
(290,275) |
||||||
Accounts payables |
(25,674,976) |
2,728,118 |
||||||
Other payables |
886,212 |
8,432,511 |
||||||
Billings in excess of cost and earnings |
4,786,440 |
3,575,124 |
||||||
Customer deposits |
(7,585,864) |
10,913,504 |
||||||
Construction deposits |
12,902 |
4,793 |
||||||
Accrued expenses |
1,126,826 |
179,365 |
||||||
Taxes payable |
2,471,784 |
4,085,999 |
||||||
Net cash provided by (used in) operating activities |
13,057,203 |
(30,721,416) |
||||||
Cash flow from financing activities |
||||||||
Proceeds from shareholder loan |
10,500,816 |
7,577,486 |
||||||
Repayment of shareholder loan |
(12,084,829) |
(1,906,593) |
||||||
Proceeds from bank loan |
- |
8,147,834 |
||||||
Repayment of bank loan |
(6,525,285) |
(1,629,567) |
||||||
Proceeds from short-term loans-other |
9,787,928 |
15,335,854 |
||||||
Repayment of short-term loans-other |
(12,094,617) |
- |
||||||
Net cash (used in) provided by financing activities |
(10,415,987) |
27,525,014 |
||||||
Effect of changes of foreign exchange rate on cash |
17,623 |
(8,816) |
||||||
Net decrease in cash |
2,658,839 |
(3,205,218) |
||||||
Cash, beginning of period |
1,125,545 |
5,878,101 |
||||||
Cash, end of period |
$ |
3,784,384 |
$ |
2,672,883 |
||||
Supplemental disclosures of cash flow information: |
||||||||
Interest paid |
$ |
1,355,741 |
$ |
1,143,784 |
||||
Income taxes paid |
$ |
102,337 |
$ |
291,776 |
||||
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-third-quarter-of-fiscal-year-2015-results-300124701.html
