China HGS Provides Updates on Hanzhong Real Estate Projects

HANZHONG, China, March 18 /PRNewswire-Asia-FirstCall/ -- China HGS Real Estate Inc. (OTC Bulletin Board: CAHS) ("China HGS" or "the Company"), a leading residential property developer in Hanzhong, China, today announced updates on the Company's Ming Zhu Xin Ju ("Xin Ju") Project and Ming Zhu Nan Yuan Phase II ("Nan Yuan II Project") Project located in Hanzhong downtown, Shaanxi Province.

The Xin Ju Project comprises two high-rise apartment buildings with a total Gross Floor Area ("GFA") of 42,476 square meters. At the end of February 2010, approximately 98% of the apartment units of Tower B of the Xin Ju Project were already sold. The Company also completed construction of the roof and is currently working on the interiors. In addition, the Company has completed building the foundation for Tower A. China HGS expects construction of Tower B and Tower A to be completed and delivered to customers in September 2010 and June 2011, respectively.

The Nan Yuan II Project comprises four multi-layer resident buildings and five high-rise apartment buildings. The construction of the four multi-layer buildings are expected to be completed and delivered to customers by the end of March 2010 and June 2010, respectively. The Construction of five high-rise apartment buildings is expected to be completed by March 2011. At the end of February 2010, about 57% of the entire project was sold or reserved. The Nan Yuan Project has a total of three phases, of which Phase I with a total GFA of 221,851 square meters was delivered to customers in 2009, Phase II with a total GFA of 91,514 square meters is estimated to be completed and delivered in March 2011, Phase III with a total GFA of 63,671 square meters, will complete construction in March 2011.

"Our Nan Yuan II and Xin Ju Projects based in Hanzhong downtown are ahead of our estimated schedule," commented Mr. Xiaojun Zhu, Chairman and CEO of China HGS. "Market demand for high quality and well-equipped residential properties continues to grow, resulting in increased market recognition and strong sales for China HGS, which is well-known for its superior quality residential properties. We estimate the Xin Ju Project and the Nan Yuan II Project to generate over RMB 170 million ($24.9 million) in revenue for fiscal year 2010."

About China HGS Real Estate Inc.

China HGS Real Estate Inc., through its wholly-owned subsidiary, Shaanxi Guangsha Investment and Development Group Co., Ltd., specializes in real estate development in China's second-tier and third-tier cities. The Company's real estate properties include multi-layer, sub-high-rise, and high-rise apartment buildings. The Company possesses the national grade II real estate qualification and was ranked as the No. 1 property developer in Hanzhong, Shaanxi Province in terms of market share in 2007 and 2008 successively.

Forward-looking Statements:

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements include, without limitation, statements regarding the company's financial estimates and construction timeline of the Ming Zhu Xin Ju Project and Ming Zhu Nan Yuan Phase II Project; and predictions and guidance relating to the Company's future financial performance. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs but they involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which may include, but are not limited to, such factors as unanticipated changes in demand especially in the residential property market of tier II and tier III cities, the Company's ability to secure financing for land use rights acquisition and property development, meet the planned property development schedule, reliance on third-party contractors, changes in government regulations, risk of default by customers on the Company guaranteed mortgage loans, increase in the cost of raw materials, downturns in the Chinese economy, and other information detailed from time to time in the Company's filings and future filings with the United States Securities and Exchange Commission. You are urged to consider these factors care in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements made herein speak only as of the date of this press release and the Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations.

    For more information, please contact:

    Company Contact:
     Mr. Ran Xiong, Deputy GM
     Email: [email protected]
     Tel:   +86-916-2622612

    Investor Relations Contact:
     Mr. Crocker Coulson, President
     Email: [email protected]
     Tel:   +1-646-213-1915 (NY office)

     Elaine Ketchmere, Partner
     Email: [email protected]
     Tel:   +1-310-954-1345 (LA office)

SOURCE China HGS Real Estate Inc.