HANZHONG, China, Aug. 11, 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 third quarter of fiscal 2017 ended June 30, 2017 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
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, 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 |
|||||||
| 2017 |
2016 |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash |
$ |
3,294,128 |
$ |
6,401,237 |
||||
| Restricted cash |
1,206,637 |
1,493,537 |
||||||
| Cost and earnings in excess of billings |
12,663,464 |
11,891,230 |
||||||
| Real estate property development completed |
89,509,976 |
113,185,929 |
||||||
| Real estate property under development |
87,796,734 |
- |
||||||
| Other current assets |
2,070,244 |
2,722,036 |
||||||
| Total current assets |
196,541,183 |
135,693,969 |
||||||
| Property, plant and equipment, net |
831,638 |
792,650 |
||||||
| Real estate property development completed, net of current |
1,630,388 |
1,657,055 |
||||||
| Security deposits for land use right |
7,812,355 |
7,940,137 |
||||||
| Real estate property under development, net of current portion |
158,848,636 |
207,384,015 |
||||||
| Due from local government for real estate property development |
2,873,982 |
2,920,990 |
||||||
| Total Assets |
$ |
368,538,182 |
$ |
356,388,816 |
||||
| LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
| Current liabilities: |
||||||||
| Other loans |
$ |
25,064,535 |
$ |
6,125,753 |
||||
| Accounts payable |
24,295,058 |
30,574,497 |
||||||
| Other payables |
3,912,671 |
5,200,807 |
||||||
| Construction deposits |
1,459,073 |
1,911,158 |
||||||
| Billings in excess of cost and earnings |
3,305,671 |
2,110,808 |
||||||
| Customer deposits |
26,038,232 |
16,790,208 |
||||||
| Shareholder loan |
1,810,000 |
2,709,523 |
||||||
| Accrued expenses |
2,097,351 |
3,205,099 |
||||||
| Taxes payable |
16,182,003 |
15,843,815 |
||||||
| Total current liabilities |
104,164,594 |
84,471,668 |
||||||
| Deferred tax liabilities |
5,113,166 |
5,107,887 |
||||||
| Customer deposits, net of current portion |
2,389,627 |
10,687,272 |
||||||
| Other loans, less current portion |
99,911,356 |
99,843,228 |
||||||
| Construction deposits, net of current portion |
1,296,561 |
1,329,820 |
||||||
| Total liabilities |
212,875,304 |
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 |
||||||||
| June 30, 2017 and September 30, 2016 |
45,050 |
45,050 |
||||||
| Additional paid-in capital |
129,838,272 |
129,793,572 |
||||||
| Statutory surplus |
8,495,631 |
8,495,631 |
||||||
| Retained earnings |
23,821,202 |
20,661,184 |
||||||
| Accumulated other comprehensive income |
(6,537,277) |
(4,046,496) |
||||||
| Total stockholders' equity |
155,662,878 |
154,948,941 |
||||||
| Total Liabilities and Stockholders' Equity |
$ |
368,538,182 |
$ |
356,388,816 |
||||
| CHINA HGS REAL ESTATE, INC. |
||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME |
||||||||||||||||
| (LOSS) |
||||||||||||||||
| (Unaudited) |
||||||||||||||||
| Three months ended June 30, |
Nine months ended June 30, |
|||||||||||||||
| 2017 |
2016 |
2017 |
2016 |
|||||||||||||
| Real estate sales |
$ |
15,715,091 |
$ |
12,497,413 |
$ |
35,726,739 |
$ |
25,205,879 |
||||||||
| Less: Sales tax |
(213,183) |
(847,938) |
(679,221) |
(1,741,251) |
||||||||||||
| Cost of real estate sales |
(12,696,093) |
(8,183,462) |
(28,011,749) |
(15,520,371) |
||||||||||||
| Gross profit |
2,805,815 |
3,466,013 |
7,035,769 |
7,944,257 |
||||||||||||
| Operating expenses |
||||||||||||||||
| Selling and distribution expenses |
147,082 |
71,959 |
425,167 |
288,138 |
||||||||||||
| General and administrative expenses |
651,773 |
609,428 |
2,275,336 |
1,668,790 |
||||||||||||
| Total operating expenses |
798,855 |
681,387 |
2,700,503 |
1,956,928 |
||||||||||||
| Operating income |
2,006,960 |
2,784,626 |
4,335,266 |
5,987,329 |
||||||||||||
| Interest expense |
(125,750) |
(29,917) |
(370,320) |
(203,057) |
||||||||||||
| Income before income taxes |
1,881,210 |
2,754,709 |
3,964,946 |
5,784,272 |
||||||||||||
| Provision for income taxes |
306,406 |
310,548 |
804,928 |
612,846 |
||||||||||||
| Net income |
1,574,804 |
2,444,161 |
3,160,018 |
5,171,426 |
||||||||||||
| Other comprehensive income (loss) |
||||||||||||||||
| Foreign currency translation adjustment |
2,377,825 |
(4,745,409) |
(2,490,781) |
(7,029,987) |
||||||||||||
| Comprehensive income (loss) |
$ |
3,952,629 |
$ |
(2,301,248) |
$ |
669,237 |
$ |
(1,858,561) |
||||||||
| Basic and diluted income per common |
||||||||||||||||
| Basic and diluted |
$ |
0.03 |
$ |
0. 05 |
$ |
0.07 |
$ |
0.11 |
||||||||
| Weighted average common shares |
||||||||||||||||
| Basic and diluted |
45,050,000 |
45,050,000 |
45,050,000 |
45,050,000 |
||||||||||||
| CHINA HGS REAL ESTATE, INC. |
||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
| (Unaudited) |
||||||||
| Nine months ended June 30, |
||||||||
| 2017 |
2016 |
|||||||
| Cash flows from operating activities |
||||||||
| Net income |
$ |
3,160,018 |
$ |
5,171,426 |
||||
| Adjustments to reconcile net income to net cash used in operating activities: |
||||||||
| Deferred tax provision |
86,471 |
383,850 |
||||||
| Stock based compensation |
44,700 |
44,700 |
||||||
| Depreciation |
38,433 |
59,658 |
||||||
| Changes in assets and liabilities: |
||||||||
| Cost and earnings in excess of billings |
(952,473) |
681,609 |
||||||
| Real estate property development completed |
21,602,071 |
6,811,151 |
||||||
| Real estate property under development |
(42,106,890) |
(42,105,175) |
||||||
| Other current assets |
600,966 |
(5,418,847) |
||||||
| Accounts payables |
(5,720,568) |
(15,187,183) |
||||||
| Other payables |
(1,190,529) |
(2,373,223) |
||||||
| Billings in excess of cost and earnings |
1,214,641 |
(1,526,997) |
||||||
| Customer deposits |
1,376,497 |
5,257,341 |
||||||
| Construction deposits |
(428,185) |
(1,236,962) |
||||||
| Accrued expenses |
(1,049,391) |
(1,248,883) |
||||||
| Taxes payable |
172,676 |
310,218 |
||||||
| Net cash used in operating activities |
(22,737,925) |
(50,377,317) |
||||||
| Cash flows from investing activities |
||||||||
| Purchases of fixed assets |
(89,579) |
(8,010) |
||||||
| Net cash used in investing activities |
(89,579) |
(8,010) |
||||||
| Cash flow from financing activities |
||||||||
| Restricted cash |
259,829 |
145,758 |
||||||
| Proceeds from shareholder loan |
4,067,944 |
840,077 |
||||||
| Repayments of shareholder loan |
(4,942,772) |
(840,077) |
||||||
| Repayments of bank loans |
- |
(6,165,703) |
||||||
| Proceeds from other loans |
26,470,159 |
62,793,918 |
||||||
| Repayments of other loans |
(5,997,059) |
(5,559,922) |
||||||
| Net cash provided by financing activities |
19,858,101 |
51,214,051 |
||||||
| Effect of changes of foreign exchange rate on cash |
(137,706) |
(77,278) |
||||||
| Net increase(decrease) in cash |
(3,107,109) |
751,446 |
||||||
| Cash, beginning of period |
6,401,237 |
1,333,919 |
||||||
| Cash, end of period |
$ |
3,294,128 |
$ |
2,085,365 |
||||
| Supplemental disclosures of cash flow information: |
||||||||
| Interest paid |
$ |
4,243,756 |
$ |
2,843,145 |
||||
| Income taxes paid |
$ |
681,772 |
$ |
369,885 |
||||
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