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China HGS Announces First Nine Months of Fiscal 2021 Financial Results

PR Newswire

HANZHONG, China, Aug. 16, 2021 /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, announced its interim financial results for the first nine months of fiscal 2021 ended June 30, 2021.


Third Quarter Fiscal 2021 Highlights

  • Total revenues for the third quarter of fiscal 2021 were approximately $31.8 million, representing an increase of 944.6% from approximately $3.0 million in the same quarter of fiscal 2020 due to more gross floor area sold during the current quarter.
  • Net income for the third quarter of fiscal 2021 totaled approximately $3.6 million, significantly increased from net loss of approximately $2.6 million in the same period of last year.
  • Basic and diluted net income per share for the third quarter of fiscal 2021 increased to $0.14, compared to net loss per share of $0.11 for the same quarter of the last year.


First Nine Months of Fiscal 2021 Highlights

  • Total revenues for the first nine months of fiscal 2021 were approximately $52.9 million, representing an increase of 630.0% from approximately $7.2 million in the same period of fiscal 2020.
  • Net income for the first nine months of fiscal 2021 totaled approximately $6.1 million, significantly increased from net loss of approximately $3.5 million in the same period of last year.
  • Basic and diluted net income per share for the first nine months of fiscal 2021 increased to $0.26, compared to net loss per share of $0.15 for the same period of the 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, 2020, 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: [email protected]

 

 

 


CHINA HGS REAL ESTATE, INC.


CONDENSED CONSOLIDATED BALANCE SHEETS


(Unaudited)


June 30,


September 30,


2021


2020


ASSETS

(Unaudited)

Cash

$

324,497

$

457,699

Restricted cash

3,382,086

3,409,837

Contract assets

12,645,871

14,255,328

Real estate property development completed

92,799,351

94,671,258

Other assets

9,250,111

8,132,555

Property, plant and equipment, net

563,086

571,330

Security deposits

1,951,204

1,855,506

Real estate property under development

263,416,787

227,741,017

Due from local governments for real estate property development completed

3,017,624

2,869,623


Total assets

$

387,350,617

$

353,964,153


LIABILITIES AND STOCKHOLDERS’ EQUITY

Construction loans

$

119,391,636

$

109,937,408

Accounts payable

20,128,624

25,415,352

Other payables

4,659,605

4,028,048

Construction deposits

3,338,078

3,202,730

Contract liabilities

2,082,108

1,847,685

Customer deposits

22,814,868

19,405,528

Accrued expenses

1,879,321

1,920,370

Taxes payable

22,982,722

19,881,211


    Total liabilities

197,276,962

185,638,332


Commitments and contingencies

 

Stockholders’ equity

Common stock, $0.001 par value, 50,000,000 shares authorized, 25,617,807 and 22,525,693

shares issued and outstanding June 30, 2021 and September 30, 2020, respectively

25,617

22,525

Additional paid-in capital

136,522,128

129,930,330

Statutory surplus

10,458,395

10,458,395

Retained earnings

41,095,539

34,954,061

Accumulated other comprehensive income (loss)

1,971,976

(7,039,490)


Total stockholders’ equity

190,073,655

168,325,821


Total Liabilities and Stockholders’ Equity

$

387,350,617

$

353,964,153

 

 

 


CHINA HGS REAL ESTATE, INC.


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)


(Unaudited)


Three months ended June 30,


Nine months ended June 30,


2021


2020


2021


2020


Real estate sales

$

31,824,097

$

3,046,430

$

52,857,471

$

7,240,503


Less: Sales tax

(197,537)

(29,222)

(336,241)

(95,503)


Impairment losses on real estate property development completed

–

(2,703,031)

–

(2,703,031)


Cost of real estate sales

(25,296,688)

(1,728,217)

(41,624,594)

(4,900,210)


Gross profit

6,329,872

(1,414,040)

10,896,636

(458,241)


Operating expenses

Selling and distribution expenses

81,002

77,404

177,168

477,962

General and administrative expenses

1,411,151

973,318

2,260,410

2,381,572


Total operating expenses

1,492,153

1,050,722

2,437,578

2,859,534


Operating income (loss)

4,837,719

(2,464,762)

8,459,058

(3,317,775)


Interest income (expense), net

2,857

(16,171)

6,394

(49,010)


Other expense

(1,354)

(58,380)

(273,782)

(155,109)


Income (loss) before income taxes

4,839,223

(2,539,313)

8,191,671

(3,521,894)


Provision (benefit) for income taxes

1,210,569

35,860

2,050,193

(65,319)


Net income (loss)

3,628,654

(2,575,173)

6,141,478

(3,456,575)


Other comprehensive income (loss)

Foreign currency translation adjustment

2,757,738

363,273

9,011,466

1,920,990


Comprehensive income (loss)

$

6,386,392

$

(2,211,900)

$

15,152,944

$

(1,535,585)


Basic and diluted income (loss) per common share

Basic and diluted

$

0.14

$

(0.11)

$

0.26

$

(0.15)


Weighted average common shares outstanding

Basic and diluted

25,102,455

22,525,693

23,378,298

22,525,693

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

 

 

 


CHINA HGS REAL ESTATE INC.


CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY


(Unaudited)


Common Stock


Additional


Statutory


Retained


Accumulated
Other


Comprehensive


Shares


Amount


Paid-in Capital


Surplus


Earnings


Income (loss)


Total


Balance at September 30, 2019


22,525,693


$


22,525


$


129,930,330


$


10,360,251


$


34,070,767


$


(15,683,723)


$


158,700150

Net (loss) for the period

–

–

–

–

(257,381)

–

(257,381)

Foreign currency translation adjustments

–

–

–

–

–

4,380,862

4,380,862


Balance at December 31, 2019


22,525,693


22,525


129,930,330


10,360,251


33,189,365


(11,302,861


162,823,631

Net (loss) for the period

–

–

–

–

(624,021)

–

(624,021)

Foreign currency translation adjustments

–

–

–

–

–

(2,823,145

(2,823,145


Balance at June 30,2020


22,525,693


22,525


129,930,330


10,360,251


33,189,365


(14,126,006)


159,376,465

Net (loss) for the period

–

–

–

–

(2,575,173)

–

(2,575,173)

Foreign currency translation adjustments

–

–

–

–

–

363,273

363,273


Balance at June 30, 2020


22,525,693


$


22,525


$


129,930,330


$


10,360,251


$


30,614,365


$


(13,762,733)


$


157,164,565


Balance at September 30, 2020


22,525,693


$


22,525


$


129,930,330


$


10,458,395


$


34,954,061


$


(7,039,490)


$


168,325,821

Net income for the period

–

–

–

–

291,587

–

291,587

Foreign currency translation adjustments

–

–

–

–

–

6,991,159

6,991,159


Balance at December 31, 2020


22,525,693


22,525


129,930,330


$


10,458,395


35,245,648


(48,331)


175,608,567

Net income for the period

–

–

–

–

2,221,237

–

2,221,237

Foreign currency translation adjustments

–

–

–

–

–

(737,431)

(737,431)


Balance at June 30,2021


22,525,693


22,525


129,930,330


10,458,395


37,466,885


(785,762)


177,092,373

Issuance of stock for settlement of accounts
payable

3,092,114

3,092

6,591,798

–

–

–

6,594,890

Net income for the period

–

–

–

–

3,628,654

–

3,628,654

Foreign currency translation adjustments

–

–

–

–

–

2,757,738

2,757,738


Balance at June 30, 2021


25,617,807


$


22,525


$


136,522,128


$


10,458,395


$


41,095,539


$


1,971,976


$


190,073,655

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,


2021


2020


Cash flows from operating activities

Net income (loss)

$

6,141,478

$

(3,456,575)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Deferred tax provision (benefit)

–

(266,319)

Depreciation

37,342

56,366

Impairment losses on real estate property development completed

–

2,703,031

Changes in operating assets and liabilities:

Contract assets

2,321,807

12,600,352

Real estate property development completed

6,688,702

(7,549,755)

Real estate property under development

(19,949,297)

(4,393,458)

Other current assets

(691,310)

(1,170,228)

Security deposit

4,761,043

Accounts payables

61,717

(657,012)

Other payables

419,675

150,939

Contract liabilities

137,771

(139,990)

Customer deposits

2,385,004

1,785,335

Construction deposits

(29,542)

(426)

Accrued expenses

(631,420)

Taxes payables

2,224,269

(1,979,971)


Net cash (used in) provided by operating activities

(252,384)

1,811,912


Cash flow from financing activities

Repayments of construction loans

–

(2,405,349)


Net cash (used in) financing activities

–

(2,405,349)


Effect of changes of foreign exchange rate on cash and restricted cash

91,431

184,993


Net (decrease) in cash and restricted cash

(160,953)


(408,444)


Cash and restricted cash, beginning of period

3,867,536

4,202,117


Cash and restricted cash, end of period

$

3,706,583

$

3,793,673


Supplemental disclosures of cash flow information:

Interest paid

$

2,014,791

$

5,142,658

Income taxes paid

$

265,149

$

504,064


Reconciliation to amounts on condensed consolidated balance sheets:

Cash

$

324,497

$

516,272

Restricted

3,382,086

3,277,401

Total cash and restricted cash

$

3,706,583

$

3,793,673

Cash, beginning of period

$

457,699

$

263,139

Restricted, beginning of period

3,409,837

3,938,978

Total cash and restricted cash, beginning of period

$

3,867,536

$

4,202,117


Non-cash financing activities:

Reclassification of interest payable to construction loan

$


3,269,932

$

–

Real estate sales for settlements in real estate property under development 

$

(14,503,991)

$

–

Issuance of stock for settlement of accounts payable

$

6,594,890

$

–

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

 

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SOURCE China HGS Real Estate Inc.