China HGS Reports Third Quarter of Fiscal Year 2017 Results

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August 11, 2017 7:00 AM EDT

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 MarketChina Phone: (86) 091-62622612Email: [email protected]

 

 

 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

 

View original content:http://www.prnewswire.com/news-releases/china-hgs-reports-third-quarter-of-fiscal-year-2017-results-300503180.html

SOURCE China HGS Real Estate Inc.


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