Form 8-K CHINA HGS REAL ESTATE For: Aug 09

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

______________

 

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): August 9, 2016

 

China HGS Real Estate, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Florida		001-34864		33-0961490
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

6 Xinghan Road, 19th Floor Hanzhong City Shaanxi Province, PRC 723000

(Address of Principal Executive Offices and Zip Code)

 

Registrant’s telephone number, including area code: (86) 091-62622612

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On August 9, 2016, China HGS Real Estate, Inc. issued a press release regarding its financial results for the three and nine months ended June 30, 2016. A copy of the press release is filed herewith as Exhibit 99.1 to this Current Report and is incorporated herein by reference.

 

As provided in General Instruction B.2 of SEC Form 8-K, such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and it shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or under the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to this Current Report on Form 8-K.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.	Description
99.1	Press Release dated August 9, 2016

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: August 9, 2016	China HGS Real Estate, Inc.
	By:	/s/Xiaojun Zhu
		Name: Xiaojun Zhu
		Title: Chief Executive Officer and Chairman

 

 

 

Exhibit 99.1

 

China HGS Reports Third Quarter of Fiscal Year 2016 Results

 

HANZHONG, CHINA – August 9, 2016 – 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 2016 ended June 30, 2016 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

l

Total revenues for the third quarter of fiscal 2016 were approximately $12.5 million, a decrease of 52.0% from approximately $26.0 million in the same quarter of fiscal 2015. Total revenues recognized from percentage of completion method were approximately $9.2 million, which accounted for 73.4% of total revenues in the third quarter of fiscal 2016.

 

l

Net income for the third quarter of fiscal 2016 totaled approximately $2.4 million, a decrease of approximately 82.2% from the net income of approximately $13.7 million in the same period of last year. The decreased profit in this quarter compared to the same quarter of last year was primarily due to a slowdown of contracted sales achieved in the current quarter.

 

l

Basic and diluted net earnings per share (“EPS”) attributable to shareholders for the third quarter of fiscal 2016 were $0.05, compared to $0.30 for the same quarter last year.

 

“We are experiencing a slowdown in our contracted sales this year compared to last year due to limited selections available to buyers as we are selling out our inventories and new constructions are yet available for sales,” said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS. “Going forward, we remain focused on running our business well, as we are pushing to complete existing constructions, planning and moving into new development projects, and positioning the Company for future growth.”

 

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, 2015, 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)  

 

		June				September 30
		2016				2015
ASSETS
Current assets:
Cash		$	2,085,365			$	1,333,919
Restricted cash			1,498,730				1,715,268
Cost and earnings in excess of billings			10,647,842				11,825,036
Real estate property development completed			65,629,882				75,391,512
Real estate property under development			48,766,106				55,154,153
Other current assets			5,509,313				228,223
Total current assets			134,137,238				145,648,111
Property, plant and equipment, net			695,857				780,038
Real estate property development completed, net of current portion			1,896,673				2,140,271
Security deposits for land use right			2,932,377				3,146,237
Real estate property under development, net of current portion			182,557,600				143,660,781
Due from local government for real estate property development completed			3,010,099				3,065,000
Total Assets		$	325,229,844			$	298,440,438
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank loan		$	-			$	6,292,474
Other loans			6,149,632				5,674,239
Accounts payable			24,877,120				41,501,682
Other payables			9,810,636				12,676,362
Construction deposits			896,572				1,959,706
Billings in excess of cost and earnings			1,680,886				3,315,302
Customer deposits			19,508,249				17,387,969
Shareholder loan			1,810,000				1,810,000
Accrued expenses			3,440,961				4,855,891
Taxes  payable			15,448,779				15,830,886
Total current liabilities			83,622,835				111,304,511
Deferred tax liabilities			4,882,100				4,711,161
Customer deposits, net of current portion			10,149,810				8,246,004
Other loans, less current portion			70,212,895				15,731,186
Construction deposits, net of current portion			700,921				972,432
Total liabilities			169,568,561				140,965,294
Commitments and Contingencies
Stockholders' equity
Common stock, $01 par value, 100,000,000 shares
authorized, 45,050,000 shares issued and outstanding
June 30, 2016 and September 30, 2015			45,050				45,050
Additional paid-in capital			17,809,016				17,764,316
Statutory surplus			16,439,333				16,439,333
Retained earnings			124,839,624				119,668,198
Accumulated other comprehensive income			(3,471,740	)			3,558,247
Total stockholders' equity			155,661,283				157,475,144
Total Liabilities and Stockholders' Equity		$	325,229,844			$	298,440,438

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

CHINA HGS REAL ESTATE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME  AND COMPREHENSIVE INCOME (LOSS) 

(Unaudited)

   

		Three months ended June 30,								Nine months ended   31,
		2016				2015				2016				2015
Real estate sales		$	12,497,413			$	26,014,516			$	25,205,879			$	60,138,945
Less: Sales tax			(847,938	)			(1,655,046	)			(1,741,251	)			(3,892,435	)
Cost of real estate sales			(8,183,462	)			(9,347,052	)			(15,520,371	)			(27,702,998	)
Gross profit			3,466,013				15,012,418				7,944,257				28,543,512
Operating expenses
Selling and distribution expenses			71,959				211,558				288,138				804,700
General and administrative expenses			609,428				427,363				1,668,790				1,636,889
Total operating expenses			681,387				638,921				1,956,928				2,441,589
Operating income			2,784,626				14,373,497				5,987,329				26,101,923
Interest expense			(29,917	)			(22,540	)			(203,057	)			(54,300	)
Income before income taxes			2,754,709				14,350,957				5,784,272				26,047,623
Provision for income taxes			310,548				641,368				612,846				1,441,943
Net income			2,444,161				13,709,589				5,171,426				24,605,680
Other comprehensive income (loss)
Foreign currency translation adjustment			(4,745,409	)			306,940				(7,029,987	)			1,086,967
Comprehensive income (loss)		$	(2,301,248	)		$	14,016,529			$	(1,858,561	)		$	25,692,647
Basic and diluted income per common share
Basic and diluted		$	0.05			$	0.30			$	0.11			$	0.55
Weighted average common shares outstanding
Basic			45,050,000				45,050,000				45,050,000				45,050,000
Diluted			45,050,000				45,075,821				45,050,000				45,089,819

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

CHINA HGS REAL ESTATE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

		Nine months ended June 30,
		2016				2015
Cash flows from operating activities
Net income		$	5,171,426			$	24,605,680
Adjustments to reconcile net income to net cash providing by (used in) operating activities:
Deferred tax provision			383,850				1,369,997
Stock based compensation			44,700				-
Depreciation			59,658				63,137
Changes in assets and liabilities:
Due from local government for real estate property development completed			-				815,661
Cost and earnings in excess of billings			681,609				942,175
Real estate property development completed			6,811,151				1,915,343
Real estate property under development			(42,105,175	)			6,547,520
Other current assets			(5,418,847	)			955,405
Accounts payables			(15,187,183	)			(25,674,976	)
Other payables			(2,373,223	)			886,212
Billings in excess of cost and earnings			(1,526,997	)			4,786,440
Customer deposits			5,257,341				(7,585,864	)
Construction deposits			(1,236,962	)			12,902
Accrued expenses			(1,248,883	)			1,126,826
Taxes payable			310,218				2,471,784
Net cash (used in) providing by operating activities			(50,377,317	)			13,238,242
Cash flows from investing activities
Purchase of fixed assets			(8,010	)			-
Net cash used in investing activities			(8,010	)			-
Cash flow from financing activities
Restricted cash			145,758				(181,039	)
Proceeds from shareholder loan			840,077				10,500,816
Repayment of shareholder loan			(840,077	)			(12,084,829	)
Repayment of bank loans			(6,165,703	)			(6,525,285	)
Proceeds from other loans			62,793,918				9,787,928
Repayment of other loans			(5,559,922	)			(12,094,617	)
Net cash provided by (used in) financing activities			51,214,051				(10,597,026	)
Effect of changes of foreign exchange rate on cash			(77,278	)			17,623
Net increase in cash			751,446				2,658,839
Cash, beginning of period			1,333,919				1,125,545
Cash, end of period		$	2,085,365			$	3,784,384
Supplemental disclosures of cash flow information:
Interest paid		$	2,843,145			$	1,355,741
Income taxes paid		$	369,885			$	102,337

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

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