China HGS Reports Full Year Financial Results for the Fiscal Year 2013 -- Revenue and Net Profit Up by Approximately 260% and 300%, Respectively

PR Newswire

HANZHONG, China, Dec. 13, 2013 /PRNewswire-FirstCall/ -- China HGS Real Estate Inc. (HGSH) ("China HGS" or the "Company"), a leading regional real estate developer headquartered in Hanzhong City, Shaanxi Province, China, today filed its Annual Report on Form 10-K for the fiscal year 2013 ended September 30, 2013 with the U.S. Securities and Exchange Commission. An electronic copy of the Annual Report on Form 10-K can be accessed on the SEC's website at www.sec.gov.

Highlights for the Fiscal 2013

  • Total revenues for the fiscal 2013 were approximately $67.8 million, an increase of approximately 260% from approximately $18.9 million in fiscal 2012.
  • The Company adopted Percentage of Completion method to recognize real estate sales from long term real estate development projects, total revenue recognized from percentage of completion method was approximately $27.5 million, which accounted for 40.6% of total revenue in fiscal 2013.
  • Net income for the fiscal 2013 totaled approximately $20.8 million, an increase of approximately 300% from the net income of approximately $5.2 million in fiscal 2012.
  • Basic and diluted net earnings per share ("EPS") attributable to shareholders for the fiscal 2013 were $0.46, compared to $0.11 for the fiscal 2012.

"I am very pleased that the Company delivered an outstanding performance driven by solid market demands despite restrictive measurements imposed by the central government on the real estate market in China," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS.

"Looking ahead in fiscal 2014, we remain focused on completing the construction of our on-going apartment complex projects. As the construction of some of our large scale high rise apartment buildings are moving closer to the completion stage, we plan to step up our sales efforts and expect our sales revenue to steadily increase. Longer term, the Company will continue to focus on building large-scale and high quality communities in Tier 3 and Tier 4 cities and expand development models into new markets," 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, 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. (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.

CONSOLIDATED BALANCE SHEETS




September 30,




2013



2012

ASSETS


Current assets:







Cash



$

5,878,101



$

1,104,686

Restricted cash




1,332,807




1,080,985

Advances to vendors




109,134




2,566,422

Loans to outside parties, net




-




20,957

Cost and earnings in excess of billings




2,178,270




-

Real estate property development completed




11,607,164




19,534,088

Real estate property under development




1,580,670




8,590,275

Other current assets




368,377




171,863

Total current assets




23,054,523




33,069,276

Property, plant and equipment, net




977,739




1,037,080

Real estate property development completed, net of current portion




7,619,811




6,691,813

Security deposits for land use right




3,259,240




22,894,698

Real estate property under development, net of current portion




142,916,601




56,021,787

Total Assets



$

177,827,914



$

119,714,654


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Bank loan – current portion




 

$

4,888,860



$

-

Accounts payable





22,527,686




3,828,880

Other payables






1,863,922




1,213,394

Construction deposits





357,447




301,318

Billings in excess of cost and earnings





5,109,758




-

Customer deposits





6,130,466




11,597,422

Shareholder loan





1,810,000




1,810,000

Accrued expenses





2,896,539





2,305,086

Taxes payable






6,612,707






4,336,458

Total current liabilities





52,197,385





25,392,558

Deferred tax liabilities





650,067





-

Customer deposits, net of current portion





13,410,081





17,743,993

Long-term bank loan, less current portion





11,407,340





-

Construction deposits, net of current portion





1,013,877






864,259

Total liabilities





78,678,750






44,000,810

Commitments and Contingencies









Stockholders' equity









Common stock, $0.001 par value, 100,000,000 shares









authorized, 45,050,000 shares issued and outstanding as of









September 30, 2013 and 2012




 

$

45,050




$

45,050

Additional paid-in capital




17,759,349





17,750,337

Statutory surplus




8,977,230





6,549,354

Retained earnings




63,257,918





44,894,229

Accumulated other comprehensive income






9,109,617





6,474,874

Total stockholders' equity





99,149,164





75,713,844

Total Liabilities and Stockholders' Equity




 

$

177,827,914




 

$

119,714,654
















 

CHINA HGS REAL ESTATE INC.



CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME



FOR THE YEARS ENDED SEPTEMBER 30,













2013



2012


Real estate sales





$

67,809,073



$

18,856,978


Less:   Sales tax






4,244,644




1,180,437


Cost of real estate sales






37,284,088




9,590,009


Gross profit






26,280,341




8,086,532


Operating expenses












Selling and distribution expenses






915,217




517,025


General and administrative expenses






3,087,434




2,049,388


Total operating expenses






4,002,651




2,566,413


Operating income






22,277,690




5,520,119


Interest income (expense) - net






(98,305)




(73,608)


Other income - net






10,398




12,659


Income before income taxes






22,189,783




5,459,170


Provision for income taxes






1,398,218




283,077


Net income






20,791,565




5, 176,093


Other comprehensive income












Foreign currency translation adjustment






2,634,743




862,601


Comprehensive income





$

23,426,308



$

6,038,694


Basic and diluted income per common share












Basic





$

0.46



$

0.11


Diluted





$

0.46



$

0.11


Weighted average common shares outstanding












Basic






45,050,000




45,050,000


Diluted






45,124,474




45,050,000
















 

 CHINA HGS REAL ESTATE INC.


CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY


FOR THE YEARS ENDED SEPTEMBER 30, 2013 AND 2012








 

 

Common Stock

Shares



 

Par value
$0.001
Amount



Additional

Paid-in

Capital



Statutory

Surplus



Retained

Earnings



Accumulated

Other

Comprehensive

Income



Total
























Balance at September 30,

2011



45,050,000



$

45,050



$

17,724,085



$

5,945,384



$

40,322,106



$

5,612,273



$

69,648,898

 

Stock-based Compensation











26,252
















26,252

 

Appropriation of statutory reserve















603,970




(603,970)








-

 

Net income for the year



-
















5,176,093








5,176,093

 

Foreign currency

translation adjustments























862,601




862,601

 

Balance at September 30, 2012



45,050,000



$

45,050



$

17,750,337



$

6,549,354



$

44,894,229



$

6,474,874



$

75,713,844

 

Stock-based

Compensation











9,012
















9,012

 

Appropriation of statutory reserve















2,427,876




(2,427,876)








-

 

Net income for the year



-
















20,791,565








20,791,565

 

Foreign currency translation adjustments























2,634,743




2,634,743

 

Balance at September 30,

2013



45,050,000



$

45,050



$

17,759,349



$

8,977,230



$

63,257,918



$

9,109,617



$

99,149,164






























 

 CHINA HGS REAL ESTATE INC.


CONSOLIDATED STATEMENTS OF CASH FLOWS


FOR THE YEARS ENDED SEPTEMBER 30,










2013


 

2012



Cash flows from operating activities








Net income





$

20,791,565



$

5,176,093


Adjustments to reconcile net income to net cash used in operating

activities:











Depreciation






88,818




89,363


Stock based compensation






9,012




26,252














Changes in assets and liabilities:












Restricted cash






(216,286)




(184,604)


Advances to vendors






2,494,790




3,435,815


Loans to outside parties






21,249




2,581,379


Security deposits for land use rights






20,005,071




(16,562,486)


Cost and earnings in excess of billings






(2,144,855)




-


Real estate property development completed






7,659,989




(7,110, 766)


Real estate property under development






(76,766,598)




(126,162)


Other current assets






(188,464)




(85,398)


Accounts payables






18,299,774




(3,700,969)


Other payables






604,996




885,072


Customer deposits






(10,510,235)




7,089,879


Construction deposits






168,439




106,436


Billings in excess of cost and earnings






5,031,374




-


Accrued expenses






518,602




277,201


Taxes payable






2,114,271




264,205


Net cash used in operating activities





$

(12,018,488)



$

(7,838,690)














Cash flow from financing activities












Proceeds from bank loan






16,046,213




-


Proceeds from shareholder loan






-




3,142,332


Repayment of shareholder loan






-




(3,142,332)


Net cash provided by financing activities





$

16,046,213



$

-














Effect of changes of foreign exchange rate on cash






745,690




105,581


Net increase (decrease) in cash






4,773,415




(7,733,109)


Cash, beginning of year






1,104,686




8,837,795


Cash, end of year





$

5,878,101



$

1,104,686














Supplemental disclosures of cash flow information:












Interest paid





$

55,839



$

-


Income taxes paid





$

780,908



$

129,863





























 

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