China HGS Reports Second Quarter of Fiscal Year 2014 Results - Revenues Up by Approximately 157.5%

News provided by

China HGS Real Estate Inc.

May 09, 2014, 07:00 ET

HANZHONG, China, May 9, 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 reported its financial results for the second quarter of fiscal 2014 ended March 31, 2014 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 second quarter of fiscal 2014 were approximately $49.9 million, an increase of 157.5% from approximately $19.4 million in the same quarter of fiscal 2013. Total revenues recognized from percentage of completion method were approximately $33.5 million, which accounted for 67.2% of total revenues in the second quarter of fiscal 2014.
  • Net income for the second quarter of fiscal 2014 totaled approximately $13.4 million, an increase of approximately $7.7 million from the net income of approximately $5.8 million in the same period of last year. The increased net income in this quarter compared to the same quarter of last year was primarily due to the significantly increased revenue.    
  • Basic and diluted net earnings per share ("EPS") attributable to shareholders for the second quarter of fiscal 2014 were $0.30, increased by 130.8% from $0.13 for the same quarter last year.  

"I am very pleased that the Company has delivered strong performance in this quarter," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS. "During the second quarter, we sold a significant portion of commercial units located in Yang County Pearl Garden Project and successfully delivered two municipal roads constructed for the local government. We also experienced significant sales progress in our newly constructed Mingzhu Beiyuan and Oriental Garden real estate projects. These strong results demonstrate that our growth strategy is working well and our execution is effective."

"As the government is cautiously implementing new policies and strategies to manage a stable economic growth in China, new catalysts will drive the growth. We have confidence that our strategy focusing on the real estate market in Tier 3 and Tier 4 cities and counties in China remains sound and effective going forward." Mr. Zhu continued. "For example, the new airport for the greater Hanzhong area is near its completion and is expected to be in operation in the second half of this year. The new airport will offer several direct flights daily from Tier 1 cities such as Beijing, Shanghai and Shenzhen, and many other regional flights, which we believe will add new catalysts to the economic growth in the greater Hanzhong area. We expect that the regional economy in the area which is our major market will get a boost with the new catalysts." 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, 2013, 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: [email protected]

CHINA HGS REAL ESTATE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS 

(Unaudited)


March 31

September 30


2014

2013

ASSETS

Current assets:





Cash 

$

2,843,953

$

5,878,101

Restricted cash

1,483,280

1,332,807

Advances to vendors

-

109,134

Cost and earnings in excess of billings

5,744,960

2,178,270

Real estate property development completed

9,472,719

11,607,164

Real estate property under development

-

1,580,670

Other current assets

583,328

368,377







Total current assets

20,128,240

23,054,523







Property, plant and equipment, net

930,331

977,739

Real estate property development completed, net of current portion

2,183,887

7,619,811

Security deposits for land use right

3,245,752

3,259,240

Real estate property under development, net of current portion

199,704,185

142,916,601

Accounts receivable

3,161,946

-







Total Assets

$

229,354,341

$

177,827,914

 

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:





Bank loan – current portion

$

11,360,132

$

4,888,860

Accounts payable

25,424,259

22,527,686

Other payables

5,644,077

1,863,922

Construction deposits

370,131

357,447

Billings in excess of cost and earnings

8,745,055

5,109,758

Customer deposits

6,005,135

6,130,466

Shareholder loan

9,356,374

1,810,000

Accrued expenses

2,731,959

2,896,539

Taxes  payable

9,177,823

6,612,707







Total current liabilities

78,814,945

52,197,385

Long-term bank loan, less current portion

12,983,008

11,407,340

Deferred tax liabilities 

1,742,989

650,067

Customer deposits, net of current portion

19,681,160

13,410,081

Construction deposits, net of current portion

1,009,683

1,013,877







Total liabilities

114,231,785

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 





March 31, 2014 and September 30, 2013

45,050

45,050

Additional paid-in capital

17,759,349

17,759,349

Statutory surplus

8,977,230

8,977,230

Retained earnings

79,763,614

63,257,918

Accumulated other comprehensive income

8,577,313

9,109,617

Total stockholders' equity

115,122,556

99,149,164







Total Liabilities and Stockholders' Equity

$

229,354,341

$

177,827,914

CHINA HGS REAL ESTATE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME  AND COMPREHENSIVE INCOME 

(Unaudited)

















Three months ended March 31,

Six months ended March 31,







2014

2013

2014

2013























Real estate sales

$

49,907,770

$

19,382,960

$

64,048,333

$

30,386,375





Less: Sales tax

3,007,183


1,148,725


3,953,871


1,859,442





         Cost of real estate sales

31,392,779


10,678,011


40,538,620


14,508,255





Gross profit

15,507,808


7,556,224


19,555,842


14,018,678



























Operating expenses




















Selling and distribution expenses

253,916


297,914


368,266


459,008





General and administrative expenses

586,245


1,117,545


1,126,474


1,678,516





Total operating expenses

840,161


1,415,459


1,494,740


2,137,524



























Operating income

14,667,647


6,140,765


18,061,102


11,881,154



























Interest income

4,446


-


9,005


-





Interest (expense)

(128,411)


(18,100)


(146,511)


(36,200)





Other income (expenses) - net

-


7


-


7,959





Income before income taxes

14,543,682


6,122,672


17,923,596


11,852,913



























Provision for income taxes

1,095,103


355,952


1,417,900


577,116





Net income

$

13,448,579

$

5,766,720

$

16,505,696

$

11,275,797



























Other comprehensive income




















Foreign currency translation

adjustment

(939,669)


468,723


(532,304)


677,708



























Comprehensive income

$

12,508,910

$

6,235,443

$

15,973,392

$

11,953,505



























Basic and diluted income per common share




















Basic

$

0.30

$

0.13

$

0.37

$

0.25





Diluted

$

0.30

$

0.13

$

0.37

$

0.25



























Weighted average common shares

outstanding




















Basic

45,050,000


45,050,000


45,050,000


45,050,000





Diluted

45,126,214


45,116,695


45,126,214


45,090,074




























CHINA HGS REAL ESTATE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


Six months ended


March 31,


2014

2013

Cash flows from operating activities

Net income


$

16,505,696

$

11,275,797

Adjustments to reconcile net income to net cash used in operating

activities:





Deferred tax provision

1,103,204

-

Depreciation

43,661


44,671

Stock based compensation

-


5,512

Changes in assets and liabilities:






Restricted cash

(157,070)


(127,177)

Accounts receivable

(3,183,853)


(4,030,621)

Advances to vendors

109,435


(1,475,065)

Loans to outside parties

-


15,917

Security deposits for land use rights

-


(398,329)

Cost and earnings in excess of billings

3,681,777


-

Real estate property development completed

7,542,703


7,834,524

Real estate property under development

(56,191,546)


(16,983,329)

Other current and non-current assets

(217,975)


(56,762)

Accounts payables

3,010,516


1,302,987

Other payables

3,814,113


652,305

Billings in excess of cost and earnings

(3,600,479)


-

Customer deposits

6,269,755


401,479

Construction deposits

14,260


95,605

Accrued expenses

(154,580)


184,157

Taxes payable

2,610,444


857,617

Net cash used in operating activities

(18,799,939)


(400,712)
















Cash flow from financing activities






Proceeds from shareholder loan

7,598,660


-

Proceeds from bank loan

8,170,602


-

Net cash provided by financing activities

15,769,262


-








Effect of changes of foreign exchange rate on cash



(3,471)


8,219

Net decrease in cash



(3,034,148)


(392,493)

Cash, beginning of period

5,878,101


1,104,686

Cash, end of period

$

2,843,953

$

712,193

Supplemental disclosures of cash flow information:






Interest paid

$

751,584

$

-

Income taxes paid

$

244,997

$

37,408



















SOURCE China HGS Real Estate Inc.

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

icon3
440k+
Newsrooms &
Influencers
icon1
9k+
Digital Media
Outlets
icon2
270k+
Journalists
Opted In
GET STARTED