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China HGS Reports Third Quarter of Fiscal Year 2016 Results

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HANGZHOU, China, Aug. 9, 2016 /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 2016 ended June 30, 2016 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 2016 were approximately $12.5 million, a decrease of 52.0% from approximately $26.0 million in the same quarter of fiscal 2015. Total revenues recognized from percentage of completion method were approximately $9.2 million, which accounted for 73.4% of total revenues in the third quarter of fiscal 2016.
  • Net income for the third quarter of fiscal 2016 totaled approximately $2.4 million, a decrease of approximately 82.2% from the net income of approximately $13.7 million in the same period of last year. The decreased profit in this quarter compared to the same quarter of last year was primarily due to a slowdown of contracted sales achieved in the current quarter.
  • Basic and diluted net earnings per share ("EPS") attributable to shareholders for the third quarter of fiscal 2016 were $0.05, compared to $0.30 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, 2015, 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




2016



2015


ASSETS











Current assets:







Cash


$

2,085,365



$

1,333,919


Restricted cash



1,498,730




1,715,268


Cost and earnings in excess of billings



10,647,842




11,825,036


Real estate property development completed



65,629,882




75,391,512


Real estate property under development



48,766,106




55,154,153


Other current assets



5,509,313




228,223


Total current assets



134,137,238




145,648,111


Property, plant and equipment, net



695,857




780,038


Real estate property development completed, net of current portion



1,896,673




2,140,271


Security deposits for land use right



2,932,377




3,146,237


Real estate property under development, net of current portion



182,557,600




143,660,781


Due from local government for real estate property development completed



3,010,099




3,065,000


Total Assets


$

325,229,844



$

$ 298,440,438


LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities:







Bank loan


$

-



$

6,292,474


Other loans



6,149,632




5,674,239


Accounts payable



24,877,120




41,501,682


Other payables



9,810,636




12,676,362


Construction deposits



896,572




1,959,706


Billings in excess of cost and earnings



1,680,886




3,315,302


Customer deposits



19,508,249




17,387,969


Shareholder loan



1,810,000




1,810,000


Accrued expenses



3,440,961




4,855,891


Taxes  payable



15,448,779




15,830,886


Total current liabilities



83,622,835




111,304,511


Deferred tax liabilities



4,882,100




4,711,161


Customer deposits, net of current portion



10,149,810




8,246,004


Other loans, less current portion



70,212,895




15,731,186


Construction deposits, net of current portion



700,921




972,432


Total liabilities



169,568,561




140,965,294


Commitments and Contingencies









Stockholders' equity









Common stock, $01 par value, 100,000,000 shares









authorized, 45,050,000 shares issued and outstanding









June 30, 2016 and September 30, 2015



45,050




45,050


Additional paid-in capital



17,809,016




17,764,316


Statutory surplus



16,439,333




16,439,333


Retained earnings



124,839,624




119,668,198


Accumulated other comprehensive income



(3,471,740)




3,558,247


Total stockholders' equity



155,661,283




157,475,144











Total Liabilities and Stockholders' Equity


$

325,229,844



$

298,440,438



















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 June 30,



Nine months ended  31,





2016



2015



2016



2015

















Real estate sales


$

12,497,413



$

26,014,516



$

25,205,879



$

60,138,945



Less: Sales tax



(847,938)




(1,655,046)




(1,741,251)




(3,892,435)



Cost of real estate sales



(8,183,462)




(9,347,052)




(15,520,371)




(27,702,998)



Gross profit



3,466,013




15,012,418




7,944,257




28,543,512





















Operating expenses


















Selling and distribution expenses



71,959




211,558




288,138




804,700



General and administrative expenses



609,428




427,363




1,668,790




1,636,889



Total operating expenses



681,387




638,921




1,956,928




2,441,589





















Operating income



2,784,626




14,373,497




5,987,329




26,101,923





















Interest expense



(29,917)




(22,540)




(203,057)




(54,300)



Income before income taxes



2,754,709




14,350,957




5,784,272




26,047,623





















Provision for income taxes



310,548




641,368




612,846




1,441,943



Net income



2,444,161




13,709,589




5,171,426




24,605,680





















Other comprehensive income (loss)


















Foreign currency translation adjustment



(4,745,409)




306,940




(7,029,987)




1,086,967





















Comprehensive income (loss)


$

(2,301,248)



$

14,016,529



$

(1,858,561)



$

25,692,647





















Basic and diluted income per common share


















Basic and diluted


$

0.05



$

0. 30



$

0.11



$

0.55





















Weighted average common shares outstanding


















Basic



45,050,000




45,050,000




45,050,000




45,050,000



Diluted



45,050,000




45,075,821




45,050,000




45,089,819




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)



Nine months ended June 30,




2016



2015


Cash flows from operating activities





Net income


$

5,171,426



$

24,605,680



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

operating activities:









                Deferred tax provision



383,850



1,369,997



Stock based compensation



44,700




-



Depreciation



59,658




63,137



Changes in assets and liabilities:










Due from local government for real estate property development
completed



-




815,661



Cost and earnings in excess of billings



681,609




942,175



Real estate property development completed



6,811,151




1,915,343



Real estate property under development



(42,105,175)




6,547,520



Other current assets



(5,418,847)




955,405



Accounts payables



(15,187,183)




(25,674,976)



Other payables



(2,373,223)




886,212



Billings in excess of cost and earnings



(1,526,997)




4,786,440



Customer deposits



5,257,341




(7,585,864)



Construction deposits



(1,236,962)




12,902



Accrued expenses



(1,248,883)




1,126,826



Taxes payable



310,218




2,471,784



Net cash (used in) providing by operating activities



(50,377,317)




13,238,242













Cash flows from investing activities










                   Purchase of fixed assets



(8,010)




-



Net cash used in investing activities



(8,010)




-













Cash flow from financing activities










Restricted cash



145,758




(181,039)



Proceeds from shareholder loan



840,077




10,500,816



Repayment of shareholder loan



(840,077)




(12,084,829)



Repayment of bank loans



(6,165,703)




(6,525,285)



Proceeds from other loans



62,793,918




9,787,928



Repayment of other loans



(5,559,922)




(12,094,617)



Net cash provided by (used in) financing activities



51,214,050




(10,597,026)













Effect of changes of foreign exchange rate on cash



(77,277)




17,623



Net increase in cash



751,446




2,658,839



Cash, beginning of period



1,333,919




1,125,545



Cash, end of period


$

2,085,365



$

3,784,384



Supplemental disclosures of cash flow information:










Interest paid


$

2,843,145



$

1,355,741



Income taxes paid


$

369,885



$

102,337




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

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/china-hgs-reports-third-quarter-of-fiscal-year-2016-results-300310937.html

SOURCE China HGS Real Estate Inc.

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