China Housing & Land Development Inc. Announces Second Quarter 2013 Financial Results
-- Company Beats 2Q13 Forecast --
XI'AN, China, Aug. 14, 2013 /PRNewswire/ -- China Housing & Land Development, Inc. ("China Housing" or the "Company"; Nasdaq: CHLN) today announced its financial results for the quarter ended June 30, 2013.
Highlights for Q2 2013:
- Total revenue in the second quarter of 2013 was $59.7 million, a 9.9% increase from $54.4 million in the first quarter of 2013 and a 70.6% increase from $35.0 million in the second quarter of 2012. Second quarter recognized revenue significantly exceeded the Company's second quarter revenue outlook of $34 to $36 million.
- Total gross floor area ("GFA") sales were 48,439 sq. meters during the second quarter of 2013, compared with 89,691 sq. meters in the first quarter of 2013 and 25,908 sq. meters in the second quarter of 2012.
- Average residential selling price ("ASP") in the second quarter of 2013 was RMB 7,499, compared with RMB 5,695 in the first quarter of 2013, and RMB 5,705 in the second quarter of 2012.
- Gross profit increased $18.3 million in the second quarter of 2013, a 101.9% increase from $9.0 million in the first quarter of 2013 and a 125.3% increase from $8.1 million in the second quarter of 2012. Second quarter 2013 gross margin was 30.6%, compared with 16.6% in the first quarter of 2013 and 23.2% in the second quarter of 2012.
- SG&A expenses as a percentage of total revenue increased to 8.2%, from 5.8% in the first quarter of 2013 and decreased from 11.3% in the second quarter of 2012.
- Operating income was $9.2 million in the second quarter of 2013, a 113.9% increase from $4.3 million in the first quarter of 2013, and a 199.4% increase from $3.1 million in the second quarter of 2012.
- Net income attributable to the Company in the second quarter of 2013 was $6.4 million, or $0.18 per diluted share, a 107.0% increase from $3.1 million, or $0.09 per diluted share, in the first quarter of 2013.
Mr. Pingji Lu, China Housing's Chairman, commented, "We are pleased to report another strong quarter as our second quarter top line results once again exceeded our guidance forecast. Our strong project development efforts combined with continued strength in the Xi'an residential housing market led to higher average selling prices compared to the last quarter and prior year periods. Four projects contributed the majority of our revenue during the second quarter of 2013, which include our Puhua Phase Two and Three, Park Plaza and Ankang projects."
"We experienced a notable increase in gross profit and a higher gross margin than both the previous quarter and the same period last year, as a result of a considerable increase in revenue and average selling prices while costs remained relatively flat. Furthermore, our Ankang project, which began pre-sales in the fourth quarter of 2012, began to contribute to our revenue during the second quarter."
"As we enter the second half of the year, our current four projects provide us with solid sales and profit opportunities. Additionally, we will initiate marketing for Golden Bay in the third quarter and adjust our sales strategy based on market feedback on the project. We anticipate that official pre-sales will start in the fourth quarter. We remain optimistic about our opportunities in the Xi'an real estate market and continue to focus on the execution of our development project plan. We believe our financial performance in the second half of the year will be strong and that our commitment to providing the highest quality residential properties will continue to drive our growth forward."
Total revenue in the second quarter of 2013 increased 9.9% to $59.7 million from $54.4 million in the first quarter of 2013 and increased 70.6% from $35.0 million in the second quarter of 2012. Other revenue in the second quarter of 2013 decreased to $7.0 million from $11.1 million in the first quarter of 2013 and increased from $4.9 million in the second quarter of 2012. The year-over-year increase was caused by the recognition of interest income on deposits based on the Company's borrowing activity from several overseas banks.
In the second quarter of 2013, the majority of the Company's real estate revenue came from its Puhua Phase Two and Three projects, Park Plaza and Ankang projects. Second quarter 2013 contract sales totaled $59.0 million compared with $82.4 million in the first quarter of 2013 and $24.8 million in the second quarter of 2012. Total gross floor area ("GFA") sales were 48,439 sq. meters during the second quarter of 2013, compared with 89,691 sq. meters in the first quarter of 2013 and 25,908 sq. meters in the second quarter of 2012. The Company's ASP in the second quarter of 2013 was RMB 7,499, compared with RMB 5,695 in the first quarter of 2013, and RMB 5,705 in the second quarter of 2012.
Gross profit for the three months ended June 30, 2013 was $18.3 million, representing an increase of 101.9% from $9.0 million in the first quarter of 2013 and a 125.3% increase from $8.1 million in the second quarter of 2012. Gross profit margin for the three months ended June 30, 2013 was 30.6%, which is above the 16.6% in the first quarter of 2013 and the 23.2% in the second quarter of 2012. The increase in gross profit margin was mainly due to a combination of increased sales volume, increased average selling prices, and sales of Puhua Phase Two commercial units, which had higher gross margin. The Company continues to expect full year gross margin to be in the 25% to 30% range in 2013.
SG&A expense was $4.9 million in the second quarter of 2013, compared with $3.2 million in the first quarter of 2013 and $4.0 million in the second quarter of 2012. SG&A expense as a percentage of total revenue was 8.2%, compared with 5.8% in the first quarter of 2013 and 11.3% in the second quarter of 2012. The year-over-year increase in SG&A expense was due to increased selling expenses during the second quarter of 2013 associated with new projects commencing pre-sales activity.
Operating income in the second quarter of 2013 was $9.2 million, or 15.3% of total revenue, compared with $4.3 million, or 7.9% of total revenue, in the first quarter of 2013, and $3.1 million, or 8.7% of total revenue in the second quarter of 2012. The year-over-year increase in operating income was mainly due to increased sales revenue and improved gross profit margin.
Net income attributable to China Housing in the second quarter of 2013 was $6.4 million, or $0.18 per diluted share. This performance compares with net income of $3.1 million, or $0.09 per diluted share, in the first quarter of 2013 and net income of $1.9 million, or $0.06 per diluted share, in the second quarter of 2012.
Sequential Quarterly Revenue Breakout Comparison
| Project |
Q2 2013 |
Q1 2013 |
||||||||
| Recognized Revenue |
Contract Sales |
GFA Sold |
ASP |
Unsold GFA |
POC |
Recognized Revenue |
Contract Sales |
GFA Sold |
ASP |
|
| ($) |
($) |
(m2) |
(RMB) |
(m2) |
($) |
($) |
(m2) |
(RMB) |
||
| Projects Under Construction |
||||||||||
| Park Plaza |
21,709,086 |
25,098,516 |
17,348 |
8,903 |
110,323 |
70.9% |
19,794,628 |
30,152,026 |
22,151 |
8,439 |
| Puhua Phase Three |
9,168,480 |
10,163,137 |
8,665 |
7,218 |
71,733 |
50.9% |
17,348,070 |
36,469,024 |
48,902 |
4,624 |
| Puhua Phase Two |
14,621,508 |
14,039,803 |
9,181 |
9,411 |
127,204 |
79.9% |
5,372,159 |
7,122,505 |
5,076 |
8,700 |
| Ankang |
5,526,291 |
8,024,028 |
12,655 |
3,902 |
191,151 |
21.5% |
- |
7,876,083 |
12,909 |
4,631 |
| Projects Completed |
||||||||||
| Puhua Phase One |
1,673,638 |
1,673,638 |
591 |
17,427 |
7,311 |
100% |
649,744 |
649,744 |
569 |
7,080 |
| JunJing III |
24,132 |
24,132 |
- |
- |
873 |
100% |
109,970 |
109,970 |
84 |
8,118 |
| JunJing II Phase One |
- |
- |
- |
- |
817 |
100% |
- |
- |
- |
- |
| JunJing I |
- |
- |
- |
- |
4,699 |
100% |
- |
- |
- |
- |
| Other Projects |
19,500 |
- |
- |
- |
- |
- |
- |
- |
- |
|
| Other Income |
6,996,473 |
- |
- |
11,099,124 |
- |
- |
||||
| Total |
59,739,107 |
59,023,253 |
48,439 |
7,499 |
514,110 |
- |
54,373,695 |
82,379,352 |
89,691 |
5,695 |
| Q-o-Q Change |
9.9% |
-28.4% |
-46.0% |
31.7% |
||||||
Total debt outstanding as of June 30, 2013 was $301.9 million compared with $202.6 million on December 31, 2012. Net debt outstanding (total debt less cash and restricted cash) as of June 30, 2013 was $88.7 million compared with $85.9 million on December 31, 2012. The Company's net debt as a percentage of total capital (net debt plus shareholders' equity) was 35.3 percent on June 30, 2013 and 36.6 percent on December 31, 2012.
| Q2 2013 |
||
| Projects in Planning |
Unsold GFA |
First Pre-sales Scheduled |
| (m2) |
||
| Golden Bay |
252,540 |
Q4 2013 |
| Puhua Phase Four |
263,833 |
Q3 2014 |
| Textile City |
630,000 |
Q3 2014 |
| Total projects in planning |
1,146,373 |
|
2013 Third Quarter Outlook
Total recognized revenue for the 2013 third quarter is expected to reach $34 million to $36 million, compared with $59.7 million in the 2013 second quarter and $28.9 million in the third quarter of 2012. The Company is reporting revenues, which are subject to percentage of completion alterations.
Conference Call Information
Management will host a conference call at 8:30 am ET on August 14, 2013. Listeners may access the call by dialing #1-913-312-0643. To listen to the live webcast of the event, please go to http://www.viavid.net. Listeners may access the call replay, which will be available through August 21, 2013, by dialing #1-858-384-5517; passcode: 7803652.
About China Housing & Land Development, Inc.
Based in Xi'an, the capital city of China's Shaanxi province, China Housing & Land Development, Inc., is a leading developer of residential and commercial properties in northwest China. China Housing has been engaged in land acquisition, development, and management, including the sales of residential and commercial real estate properties through its wholly-owned subsidiary in China, since 1992.
China Housing & Land Development is the first Chinese real estate development company traded on NASDAQ. The Company's news releases, project information, photographs, and more are available on the internet at www.chldinc.com.
Safe Harbor
This news release may contain forward-looking information about China Housing & Land Development, Inc. which is covered under the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward- looking terminology such as believe, expect, may, will, should, project, plan, seek, intend, or anticipate or the negative thereof or comparable terminology, and include discussions of strategy, and statements about industry trends and China Housing & Land Development's future performance, operations, and products.
Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Actual performance results may vary significantly from expectations and projections. Further information regarding this and other risk factors are contained in China Housing's public filings with the U.S. Securities and Exchange Commission.
All information provided in this news release and in any attachments is as of the date of the release, and the companies do not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.
China Housing contacts
Mr. Cangsang Huang
Chief Financial Officer
Tel: +86 29.8258.2648 in Xi'an
Email: [email protected]
Ms. Jing Lu
Chief Operating Officer, Board Secretary, and Investor Relations Officer
+86 29.8258.2639 in Xi'an
[email protected] / English and Chinese
Mr. Shuai Luo, CFA
Investor Relations
+86 29.8258.2632 in Xi'an
[email protected] / English and Chinese
Mr. Bill Zima, ICR
+86 10 6583 7511
[email protected]
China Housing Investor Relations Department
+1 646.308.1285
| CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES |
|||||||||||||
| Unaudited Interim Consolidated Statements of Income |
|||||||||||||
| For Three and Six Months Ended June 30, 2013 and 2012 |
|||||||||||||
| 3 months |
3 months |
6 months |
6 months |
||||||||||
| June 30, 2013 |
June 30, 2012 |
June 30, 2013 |
June 30, 2012 |
||||||||||
| REVENUES |
|||||||||||||
| Real estate sales |
$ |
52,742,634 |
$ |
30,069,549 |
$ |
96,017,205 |
$ |
50,503,892 |
|||||
| Other revenue |
6,996,473 |
4,945,971 |
18,095,597 |
8,013,399 |
|||||||||
| Total revenues |
59,739,107 |
35,015,520 |
114,112,802 |
58,517,291 |
|||||||||
| COST OF REVENUES |
|||||||||||||
| Cost of real estate sales |
37,235,900 |
23,115,905 |
73,024,315 |
37,348,769 |
|||||||||
| Cost of other revenue |
4,232,921 |
3,792,088 |
13,768,820 |
6,031,958 |
|||||||||
| Total cost of revenues |
41,468,821 |
26,907,993 |
86,793,135 |
43,380,727 |
|||||||||
| Gross margin |
18,270,286 |
8,107,527 |
27,319,667 |
15,136,564 |
|||||||||
| OPERATING EXPENSES |
|||||||||||||
| Selling, general and administrative expenses |
4,904,517 |
3,956,069 |
8,066,398 |
6,979,754 |
|||||||||
| Stock-based compensation |
1,006,736 |
690,390 |
1,104,273 |
812,996 |
|||||||||
| Other expenses |
390,567 |
58,455 |
450,549 |
64,888 |
|||||||||
| Financing expense |
2,807,094 |
100,676 |
4,253,880 |
330,948 |
|||||||||
| Accretion expense on convertible debt |
- |
241,665 |
- |
474,151 |
|||||||||
| Total operating expenses |
9,108,914 |
5,047,255 |
13,875,100 |
8,662,737 |
|||||||||
| 9,161,372 |
3,060,272 |
||||||||||||
| CHANGE IN FAIR VALUE OF DERIVATIVES |
|||||||||||||
| Change in fair value of embedded derivatives |
- |
(150,181) |
- |
(221,284) |
|||||||||
| Change in fair value of warrants |
- |
(3,554) |
- |
(3,186) |
|||||||||
| Total change in fair value of derivatives |
- |
(153,735) |
- |
(224,470) |
|||||||||
| Income before provision for income taxes |
9,161,372 |
3,214,007 |
13,444,567 |
6,698,297 |
|||||||||
| Provision for income taxes |
2,835,057 |
1,372,027 |
4,102,200 |
2,341,512 |
|||||||||
| (Recovery of) provision for deferred income taxes |
(50,013) |
(64,768) |
(114,648) |
214,624 |
|||||||||
| Provision for income taxes |
2,785,044 |
1,307,259 |
3,987,552 |
2,556,136 |
|||||||||
| NET INCOME |
$ |
6,376,328 |
$ |
1,906,748 |
$ |
9,457,015 |
$ |
4,142,161 |
|||||
| WEIGHTED AVERAGE SHARES OUTSTANDING |
|||||||||||||
| Basic |
35,086,599 |
34,914,731 |
35,086,599 |
34,822,496 |
|||||||||
| Diluted |
35,086,599 |
34,914,731 |
35,086,599 |
34,822,496 |
|||||||||
| NET INCOME PER SHARE |
|||||||||||||
| Basic |
$ |
0.18 |
$ |
0.06 |
$ |
0.27 |
$ |
0.12 |
|||||
| Diluted |
$ |
0.18 |
$ |
0.06 |
$ |
0.27 |
$ |
0.12 |
|||||
| The accompanying notes are an integral part of these interim condensed consolidated financial statements. |
|||||||||||||
| CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES |
||||||||
| Unaudited Interim Condensed Consolidated Balance Sheets |
||||||||
| As of June 30, 2013 and December 31, 2012 |
||||||||
| March 31, |
December 31, |
|||||||
| 2013 |
2012 |
|||||||
| ASSETS |
||||||||
| Cash |
$ |
100,960,800 |
$ |
6,121,448 |
||||
| Cash - restricted |
112,235,956 |
110,576,248 |
||||||
| Accounts receivable, net of allowance for doubtful |
||||||||
| accounts of $586,439 and $577,713, respectively |
50,137,448 |
26,897,958 |
||||||
| Construction in excess of billing |
953,735 |
1,484,626 |
||||||
| Other receivables, prepaid expenses and other assets, net |
7,972,560 |
6,854,325 |
||||||
| Real estate held for development or sale |
225,395,977 |
238,111,545 |
||||||
| Property and equipment, net |
34,354,503 |
33,837,346 |
||||||
| Advances to suppliers |
460,774 |
1,363,817 |
||||||
| Deposits on land use rights |
43,393,688 |
42,748,017 |
||||||
| Intangible asset, net |
55,192,879 |
54,482,252 |
||||||
| Goodwill |
1,943,098 |
1,914,186 |
||||||
| Deferred financing costs |
116,221 |
194,162 |
||||||
| Total assets |
633,117,639 |
524,585,930 |
||||||
| LIABILITIES |
||||||||
| Accounts payable |
$ |
52,640,327 |
$ |
55,142,928 |
||||
| Advances from customers |
43,172,088 |
48,829,289 |
||||||
| Accrued expenses |
17,467,815 |
22,229,514 |
||||||
| Income and other taxes payable |
27,265,975 |
20,929,485 |
||||||
| Other payables |
12,532,968 |
11,228,553 |
||||||
| Loans from employees |
23,002,319 |
27,868,785 |
||||||
| Loans payable |
278,893,997 |
174,749,368 |
||||||
| Deferred tax liability |
14,625,370 |
14,521,613 |
||||||
| Total liabilities |
469,600,859 |
375,499,535 |
||||||
| SHAREHOLDERS' EQUITY |
||||||||
| Common stock: $.001 par value, authorized 100,000,000 shares; |
||||||||
| Issued 35,438,079 and 35,438,079, respectively |
35,438 |
35,438 |
||||||
| Common stock subscribed |
900,364 |
- |
||||||
| Additional paid in capital |
50,176,083 |
49,972,174 |
||||||
| Treasury Stock |
(434,240) |
(434,240) |
||||||
| Statutory reserves |
9,903,457 |
9,903,457 |
||||||
| Retained earnings |
74,514,348 |
65,057,333 |
||||||
| Accumulated other comprehensive income |
28,421,330 |
24,552,233 |
||||||
| Total shareholders' equity |
163,516,780 |
149,086,395 |
||||||
| Total liabilities and shareholders' equity |
$ |
633,117,639 |
$ |
524,585,930 |
||||
| The accompanying notes are an integral part of these interim condensed consolidated financial statements. |
||||||||
SOURCE China Housing & Land Development, Inc.
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