China HGS Reports Third Quarter of Fiscal Year 2017 Results

China HGS Reports Third Quarter of Fiscal Year 2017 Results

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

  • Total revenues for the third quarter of fiscal 2017 were approximately $15.7 million, an increase of 25.7% from approximately $12.5 million in the same quarter of fiscal 2016. Total revenues recognized from percentage of completion method were approximately $6.9 million, which accounted for 44.0% of total revenues in the third quarter of fiscal 2017.
  • Net income for the third quarter of fiscal 2017 totaled approximately $1.6 million, a decrease of approximately 35.6% from the net income of approximately $2.4 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 third quarter of fiscal 2017.
  • Basic and diluted net earnings per share ("EPS") attributable to shareholders for the third quarter of fiscal 2017 were $0.03, compared to $0.05 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, 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
portion



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
completed



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
share
















Basic and diluted


$

0.03



$

0. 05



$

0.07



$

0.11

















Weighted average common shares
outstanding
















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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