HANZHONG, China, May 17, 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, today reported its financial results for the second quarter of fiscal 2021 ended March 31, 2021 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 second quarter of fiscal 2021 were approximately $18.3 million, representing an increase of 867.2% from approximately $1.9 million in the same quarter of fiscal 2020 due to less gross floor area sold during the current quarter.
  • Net income for the second quarter of fiscal 2021 totaled approximately $2.2 million, significantly increased from net loss of approximately $0.6 million in the same period of last year.
  • Basic and diluted net loss per share ("EPS") attributable to shareholders for the second quarter of fiscal 2021 were $0.10, compared to net loss per share of $0.03 for the same quarter 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.  

 

CHINA HGS REAL ESTATE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)




March 31,



September 30,


2021



2020

ASSETS


(Unaudited)





Cash

$

555,576



$

457,699

Restricted cash


3,297,734




3,409,837

Contract assets


15,195,730




14,255,328

Real estate property development completed


93,359,420




94,671,258

Other assets


9,709,848




8,132,555

Property, plant and equipment, net


567,292




571,330

Security deposits


1,922,853




1,855,506

Real estate property under development


251,151,767




227,741,017

Due from local governments for real estate property development completed


2,973,777




2,869,623








Total Assets

$

378,733,997



$

353,964,153








LIABILITIES AND STOCKHOLDERS' EQUITY







Construction loans

$

116,060,624



$

109,937,408

Accounts payable


31,854,281




25,415,352

Other payables


4,569,384




4,028,048

Construction deposits


3,318,974




3,202,730

Contract liabilities


1,885,982




1,847,685

Customer deposits


21,498,027




19,405,528

Accrued expenses


1,861,745




1,920,370

Taxes payable


20,592,607




19,881,211

Total liabilities


201,641,624




185,638,332








Commitments and Contingencies






Stockholders' equity







Common stock, $0.001 par value, 50,000,000 shares authorized, 22,525,000 shares issued and
outstanding March 31, 2021 and September 30, 2020


22,525




22,525

Additional paid-in capital


129,930,330




129,930,330

Statutory surplus


10,458,395




10,458,395

Retained earnings


37,466,885




34,954,061

Accumulated other comprehensive loss


(785,762)




(7,039,490)

Total stockholders' equity


177,092,373




168,325,821








Total Liabilities and Stockholders' Equity

$

378,733,997



$

353,964,153

 

CHINA HGS REAL ESTATE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)

(Unaudited)




Three months ended March 31,



Six months ended March 31,



2021



2020



2021



2020

Real estate sales


$

18,278,112



$

1,889,829



$

21,033,374



$

4,194,073

Less: Sales tax



(115,166)




(27,048)




(138,704)




(66,281)

Cost of real estate sales



(14,474,264)




(1,466,381)




(16,327,906)




(3,171,993)

Gross profit



3,688,682




396,400




4,566,764




955,799

Operating expenses
















Selling and distribution expenses



16,821




200,390




96,166




400,558

General and administrative expenses



543,334




819,415




849,259




1,408,254

Total operating expenses



560,155




1,019,805




945,425




1,808,812

Operating income (loss)



3,128,527




(623,405)




3,621,339




(853,013)

Interest income (expense), net



712




(15,586)




3,537




(32,839)

Other expense



(166,571)




(96,729)




(272,428)




(96,729)

Income (loss) before income taxes



2,962,668




(735,720)




3,352,448




(982,581)

Provision (benefit) for income taxes



741,431




(111,699)




839,624




(101,179)

Net income (loss)



2,221,237




(624,021)




2,512,824




(881,402)

Other Comprehensive income (loss)
















Foreign currency translation adjustment



(737,431)




(2,823,145)




6,253,728




1,557,717

Comprehensive income (loss)


$

1,483,806



$

(3,447,166)



$

8,766,552



$

676,315

Basic and diluted income (loss) per common share
















Basic and diluted


$

0.10



$

(0.01)



$

0.11



$

(0.02)

Weighted average common shares outstanding
















Basic and diluted



22,525,000




22,525,000




22,525,000




22,525,000


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

22,525,000


$

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

22,525,000



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 March 31, 2020

22,525,000


$

22,525


$

129,930,330


$

10,360,251


$

33,189,365


$

(14,126,006)


$

159,376,465









































Balance at September 30, 2020

22,525,000


$

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

22,525,000



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 March 31, 2021

22,525,000


$

22,525


$

129,930,330


$

10,458,395


$

37,466,885


$

(785,762)


$

177,092,373


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)




Six months ended March 31,




2021



2020


Cash flows from operating activities









Net income (loss)


$

2,512,824



$

(881,402)


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









Deferred tax provision (benefit)



-




(235,179)


Depreciation



24,772




37,710


Changes in operating assets and liabilities:









Contract assets



(422,948)




651,289


Real estate property development completed



4,747,385




2,937,724


Real estate property under development



(13,010,220)




(2,835,288)


Other current assets



(1,281,964)




(935,053)


Security deposit







3,195,887


Accounts payable



5,515,797




89,325


Other payables



395,088




111,347


Contract liabilities



(28,762)




(71,507)


Customer deposits



1,387,999




2,349,028


Construction deposits







(428)


Accrued expenses







(675,478)


Taxes payables



109,454




(1,379,060)


Net cash (used in) provided by operating activities



(50,575)




2,358,915











Cash flow from financing activities









Repayments of construction loans



-




(2,128,585)


Net cash used in financing activities



-




(2,128,585)











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



36,349




103,801


Net (decrease) increase in cash and restricted cash



(14,226)




334,131


Cash and restricted cash, beginning of period



3,867,536




4,202,117


Cash and restricted cash, end of period


$

3,853,310



$

4,536,248


Supplemental disclosures of cash flow information:









Interest paid


$

1,847,904



$

3,416,592


Income taxes paid


$

135,462



$

375,601











Reconciliation to amounts on condensed consolidated balance sheets:









Cash


$

555,576



$

658,313


Restricted


$

3,297,734



$

3,877,935


Total cash and restricted cash


$

3,853,310



$

4,536,248











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


$

1,626,210



$

-


Real estate sales for settlements in real estate property under development


$

(14,432,275)



$

-



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

 

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SOURCE China HGS Real Estate Inc.

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