China HGS Reports Full Year Financial Results for the Fiscal Year 2018

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HANZHONG, China, Jan. 10, 2019 /PRNewswire/ -- 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 2018 ended September 30, 2018 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 2018

  • Total revenues for the fiscal 2018 were approximately $65.5 million, an increase of approximately 12% from approximately $58.7 million in fiscal 2017.
  • For the Company's long-term real estate development projects, the related revenue recognized from percentage of completion method was approximately $36.7 million, which accounted for 56% of total revenue in fiscal 2018 and increased 174% from the revenue recognized from percentage completion method in fiscal 2017.
  • Net income for the fiscal 2018 totaled approximately $5.2 million, a decrease of approximately 17% from the net income of approximately $6.3 million in fiscal 2017.
  • Basic and diluted net earnings per share ("EPS") attributable to shareholders for the fiscal 2018 were $0.12, compared to $0.14 for the fiscal 2017.

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, 2018, 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,





September 30,







2018





2017



ASSETS

















Current assets:

















Cash



$

3,267,020





$

1,970,199



Restricted cash





3,508,557







2,746,405



Cost and earnings in excess of billings





12,582,965







12,673,349



Real estate property development completed





58,999,178







79,233,948



Real estate property under development





60,128,554







87,126,402



Other current assets





1,408,826







1,529,698





















Total current assets





139,895,100







185,280,001





















        Property, plant and equipment, net





718,366







825,833



        Real estate property development completed, net of current portion





1,217,650







1,386,552



        Security deposits





8,296,782







8,564,517



        Real estate property under development, net of current portion





215,431,915







180,667,276



        Due from local government for real estate property development completed





2,836,865







2,928,410





















Total Assets



$

368,396,678





$

379,652,589





















LIABILITIES AND STOCKHOLDERS' EQUITY

















Current liabilities:

















Other loans



$

55,610,803





$

28,545,233



Accounts payables





20,507,128







24,047,980



Other payables





4,894,774







3,897,093



Construction deposits





1,879,570







1,966,115



Billings in excess of cost and earnings





5,844,189







4,247,477



Customer deposits





20,234,072







24,613,864



Shareholder loans





2,142,110







2,304,632



Accrued expenses





3,006,150







3,158,432



Taxes payables





15,492,902







17,259,202





















Total current liabilities





129,611,698







110,040,028



 

        Deferred tax liabilities





2,068,257







170,950



        Tax payable – long term





4,960,779







5,120,862



        Customer deposits, net of current portion





1,914,677







2,314,641



        Other loans, less current portion





66,885,378







98,797,447



        Construction deposits, net of current portion





1,278,053







1,319,295





















Total liabilities





206,718,842







217,763,223





















Commitments and Contingencies

















Stockholders' equity

















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

45,050,000 shares issued and outstanding September 30, 2018 and 2017





45,050







45,050



Additional paid-in capital





129,907,805







129,853,172



Statutory surplus





9,925,794







9,142,899



Retained earnings





30,803,052







26,343,030



Accumulated other comprehensive deficit





(9,003,865)







(3,494,785)





















Total stockholders' equity





161,677,836







161,889,366





















Total Liabilities and Stockholders' Equity



$

368,396,678





$

379,652,589



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



 

CHINA HGS REAL ESTATE INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED SEPTEMBER 30, 2018 and 2017







2018





2017



Real estate sales



$

65,487,296





$

58,671,424



Less: Sales tax





1,248,230







1,215,960



Net real estate sales





64,239,066







57,455,464



Cost of real estate sales





48,642,392







45,590,345



Gross profit





15,596,674







11,865,119



Operating expenses

















Selling and distribution expenses





843,813







568,081



General and administrative expenses





2,530,269







3,177,649



Total operating expenses





3,374,082







3,745,730



Operating income





12,222,592







8,119,389



Interest expense, net





(499,855)







(497,798)



Other income (expense), net





(1,407,109)







2,222



Income before income taxes





10,315,628







7,623,813



Provision for income taxes





5,072,711







1,294,699



Net income





5,242,917







6,329,114



Other comprehensive income (loss)

















Foreign currency translation adjustment





(5,509,080)







551,711



Comprehensive income (loss)



$

(266,163)





$

6,880,825



Basic and diluted income per common share

















Basic and diluted



$

0.12





$

0.14



Weighted average common shares outstanding

















Basic and diluted





45,050,000







45,050,000



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



 

CHINA HGS REAL ESTATE INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED SEPTEMBER 30, 2018 AND 2017







Common Stock





Additional





Statutory





Retained





Accumulated

Other

Comprehensive













Shares





Amount





Paid-in Capital





Surplus





Earnings





Deficit





Total



Balance at

September 30,

2016





45,050,000





$

45,050





$

129,793,572





$

8,495,631





$

20,661,184





$

(4,046,496)





$

154,948,941



Stock-based Compensation





-







-







59,600







-







-







-







59,600



Appropriation of statutory reserve





-







-







-







647,268







(647,268)







-







-



Net income

for the year





-







-







-







-







6,329,114







-







6,329,114



Foreign currency translation adjustments





-







-







-







-







-







551,711







551,711



Balance at September 30, 2017





45,050,000







45,050







129,853,172







9,142,899







26,343,030







(3,494,785)







161,889,366



Stock-based Compensation





-







-







54,633







-







-







-







54,633



Appropriation of statutory reserve





-







-







-







782,895







(782,895)







-







-



Net income

for the year





-







-







-







-







5,242,917







-







5,242,917



Foreign currency translation adjustments





-







-







-







-







-







(5,509,080)







(5,509,080)



Balance at September 30, 2018





45,050,000





$

45,050





$

129,907,805





$

9,925,794





$

30,803,052





$

(9,003,865)





$

161,677,836



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



 

CHINA HGS REAL ESTATE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED SEPTEMBER 30, 2018 and 2017







2018





2017



Cash flows from operating activities

















Net income



$

5,242,917





$

6,329,114



Adjustments to reconcile net income to net cash provided by (used in)

operating activities:

















Deferred tax provision





1,999,052







167,007



Depreciation





85,788







67,074



Stock based compensation





54,633







59,600



Changes in assets and liabilities:

















Restricted cash





(917,026)







(1,253,981)



Advances to vendors





38,990







-



Security deposits





-







(590,274)



Cost and earnings in excess of billings





(321,291)







(734,569)



Real estate property development completed





18,789,499







33,718,033



Real estate property under development





(16,955,946)







(58,501,531)



Other current assets





37,764







1,171,589



Accounts payables





(2,930,405)







(6,451,836)



Other payables





1,176,231







(1,286,545)



Billings in excess of cost and earnings





1,817,121







2,082,143



Customer deposits





(4,137,470)







(604,497)



Construction deposits





(26,353)







35,365



Accrued expenses





(74,789)







(50,932)



Taxes payables





(1,413,508)







1,343,421



Net cash provided by (used in) operating activities





2,465,207







(24,500,819)





















Cash flow from investing activities

















Purchases of fixed assets





-







(97,524)



Net cash used in investing activities





-







(97,524)





















Cash flow from financing activities

















Proceeds from other loans





5,150,795







26,657,111



Repayment of other loans





(6,060,305)







(6,039,415)



Proceeds from shareholder loan





1,505,324







8,444,575



Repayment of shareholder loan





(1,659,834)







(8,842,359)



Net cash (used in) provided by financing activities





(1,064,020)







20,219,912



Effect of changes of foreign exchange rate on cash





(104,366)







(52,607)



Net increase (decrease) in cash





1,296,821







(4,431,038)



Cash, beginning of year





1,970,199







6,401,237



Cash, end of year



$

3,267,020





$

1,970,199



Supplemental disclosures of cash flow information:

















Interest paid



$

6,643,169





$

5,756,560



Income taxes paid



$

772,337





$

721,177



Reclassification of deferred tax liability to income tax payable



$

-





$

5,120,862



 

Cision View original content:http://www.prnewswire.com/news-releases/china-hgs-reports-full-year-financial-results-for-the-fiscal-year-2018-300776209.html

SOURCE China HGS Real Estate Inc.

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