10202017Headline:

China HGS Reports Second Quarter of Fiscal Year 2017 Results

May 12, 2017 - (Newswire)

- 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 2017 ended March 31, 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 second quarter of fiscal 2017 were approximately $11.1 million, an increase of 62.2% from approximately $6.9 million in the same quarter of fiscal 2016.
  • Net income for the second quarter of fiscal 2017 totaled approximately $0.8 million, a decrease of approximately 36.7% from the net income of approximately $1.3 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 second quarter of fiscal 2017
  • Basic and diluted net earnings per share ("EPS") attributable to shareholders for the second quarter of fiscal 2017 were $0.02, compared to $0.03 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 Market
China Phone: (86) 091-62622612
Email: randy.xiong@chinahgs.com

CHINA HGS REAL ESTATE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)









March 31,



September 30,



2017



2016

ASSETS








Current assets:








Cash


$

2,290,389



$

6,401,237

Restricted cash



1,100,447




1,493,537

Cost and earnings in excess of billings



12,340,490




11,891,230

Real estate property development completed



94,437,309




113,185,929

Real estate property under development



94,376,792




-

Other current assets



2,008,185




2,722,036

Total current assets



206,553,612




135,693,969

Property, plant and equipment, net



737,396




792,650

Real estate property development completed, net of current portion



1,605,777




1,657,055

Security deposits for land use right



7,694,430




7,940,137

Real estate property under development, net of current portion



153,223,559




207,384,015

Due from local government for real estate property development
completed



2,830,600




2,920,990

Total Assets


$

372,645,374



$

356,388,816

LIABILITIES AND STOCKHOLDERS' EQUITY








Current liabilities:








Other loans



11,872,385




6,125,753

Accounts payable



24,604,226




30,574,497

Other payables



5,057,405




5,200,807

Construction deposits



1,437,652




1,911,158

Billings in excess of cost and earnings



2,078,686




2,110,808

Customer deposits



16,662,127




16,790,208

Shareholder loan



3,175,644




2,709,523

Accrued expenses



2,873,536




3,205,099

Taxes payable



15,912,799




15,843,815

Total current liabilities



83,674,460




84,471,668

Deferred tax liabilities



4,949,824




5,107,887

Customer deposits, net of current portion



13,856,184




10,687,272

Other loans, less current portion



117,192,568




99,843,228

Construction deposits, net of current portion



1,276,989




1,329,820

Total liabilities



220,950,025




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 March 31,
2017 and September 30, 2016



45,050




45,050

Additional paid-in capital



129,823,372




129,793,572

Statutory surplus



8,495,631




8,495,631

Retained earnings



22,246,398




20,661,184

Accumulated other comprehensive income



(8,915,102)




(4,046,496)

Total stockholders' equity



151,695,349




154,948,941









Total Liabilities and Stockholders' Equity


$

372,645,374



$

356,388,816

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 March 31,



Six months ended March 31,



2017



2016



2017



2016













Real estate sales


$

11,113,794



$

6,851,859



$

20,011,648



$

12,708,466

Less: Sales tax



(353,436)




(481,325)




(466,038)




(893,313)

Cost of real estate sales



(8,254,621)




(4,128,020)




(15,315,656)




(7,336,909)

Gross profit



2,505,737




2,242,514




4,229,954




4,478,244

















Operating expenses
















Selling and distribution expenses



131,851




126,026




278,085




216,179

General and administrative expenses



1,150,833




580,851




1,623,563




1,059,362

Total operating expenses



1,282,684




706,877




1,901,648




1,275,541

















Operating income



1,223,053




1,535,637




2,328,306




3,202,703

















Interest expense



(123,447)




(69,094)




(244,570)




(173,140)

Income before income taxes



1,099,606




1,466,543




2,083,736




3,029,563

















Provision for income taxes



276,524




166,502




498,522




302,298

Net income



823,082




1,300,041




1,585,214




2,727,265

















Other comprehensive income (loss)
















Foreign currency translation adjustment



1,357,385




1,054,539




(4,868,606)




(2,284,578)

















Comprehensive income (loss)


$

2,180,467



$

2,354,580



$

(3,283,392)



$

442,687

















Basic and diluted income per common share
















Basic and diluted


$

0.02




$ 0.03



$

0.04



$

0.06

















Weighted average common shares outstanding
















Basic and diluted



45,050,000




45,050,000




45,050,000




45,050,000

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)






Six months ended March 31,



2017



2016

Cash flows from operating activities








Net income


$

1,585,214



$

2,727,265

Adjustments to reconcile net income to net cash used in operating activities:








Deferred tax provision



-




154,618

Stock based compensation



29,800




29,800

Depreciation



30,837




39,909

Changes in assets and liabilities:
















Advances to vendors



-




(22,979)

Cost and earnings in excess of billings



(820,187)




876,158

Real estate property development completed



15,301,222




4,416,727

Real estate property under development



(46,802,444)




(21,468,295)

Other current assets



631,894




(2,336,254)

Accounts payables



(5,042,313)




(13,409,544)

Other payables



17,601




714,978

Billings in excess of cost and earnings



33,317




(972,219)

Customer deposits



3,905,190




6,092,375

Construction deposits



(427,586)




(465,792)

Accrued expenses



(245,158)




(437,604)

Taxes payable



561,290




442,578

Net cash used in operating activities



(31,241,323)




(23,618,279)









Cash flow from financing activities








Restricted cash



348,127




(64,102)

Proceeds from shareholder loan



495,742




842,975

Repayment of shareholder loan



-




(357,298)

Repayment of bank loans



-




(4,640,228)

Proceeds from other loans



26,470,545




33,746,140

Repayment of other loans



-




(5,579,101)

Net cash provided by financing activities



27,314,414




23,948,386









Effect of changes of foreign exchange rate on cash



(183,939)




(18,343)

Net increase (decrease) in cash



(4,110,848)




311,764

Cash, beginning of period



6,401,237




1,333,919

Cash, end of period


$

2,290,389



$

1,645,683

Supplemental disclosures of cash flow information:








Interest paid


$

2,781,494



$

961,149

Income taxes paid


$

355,975



$

162,762

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

SOURCE China HGS Real Estate Inc.

Related Links

www.chinahgs.com

Original Source: https://www.newswire.com/news/china-hgs-reports-second-quarter-of-fiscal-year-2017-results

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