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 Market
China Phone: (86) 091-62622612
Email: randy.xiong@chinahgs.com
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.