China HGS Signs Another Residential-Apartment Bulk-Purchase Agreement Worth US $9.2 Million

China HGS Real Estate Inc.

today announced that the Company signed a residential-apartment bulk-purchase agreement (the "Agreement") for a total price of RMB 60 million (approximately $9.2 million) with the Hanzhong Municipal Bureau of Justice (the "Purchaser") on June 8, 2011. The Agreement covers the entire Tower B3 of the Company's "Mingzhu Beiyuan" project, which is comprised of a total of 112 residential-apartment units and is located in downtown Hanzhong. The contracted project is expected to be completed and delivered to the Purchaser within two and a half years after the date of the Agreement, according to the timeline set forth in the Agreement. The total price of the Agreement is RMB 60 million (approximately $9.2 million), with an average sales price of RMB 309 per square foot (approximately $47.50 per sq. ft.). According to the Agreement, the Hanzhong Municipal Bureau of Justice has agreed to make an initial payment of RMB 100,000 (approximately $15,385) for each apartment unit within 10 days of the date of the Agreement and make an additional payment to China HGS by the end of August 2011, raising its total payment to 50% of the total price (RMB 30 million, or approximately $4.6 million). Upon due payment of the contract price as agreed in the Agreement, China HGS is required to complete the project design, obtain the necessary approvals, and perform the related preparation work within three months of the date of the Agreement.