HANZHONG, China, Jan. 3, 2018
/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
filed its Annual Report on Form 10-K for the fiscal year 2017 ended
September 30, 2017 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 2017
- Total revenues for the fiscal 2017 were approximately
$58.7 million, an increase of
approximately 45% from approximately $40.6
million in fiscal 2016.
- For the Company's long-term real estate development projects,
the related revenue recognized from percentage of completion method
was approximately $13.4 million,
which accounted for 23% of total revenue in fiscal 2017 and
decreased 47% from the revenue recognized from percentage
completion method in fiscal 2016.
- Net income for the fiscal 2017 totaled approximately
$6.3 million, an increase of
approximately 26% from the net income of approximately $5.0 million in fiscal 2016.
- Basic and diluted net earnings per share ("EPS") attributable
to shareholders for the fiscal 2017 were $0.14, compared to $0.11 for the fiscal 2016.
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, 2016, 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.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
September
30
|
|
September
30
|
|
2017
|
|
2016
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash
|
$
|
3,431,997
|
|
$
|
6,401,237
|
Restricted
cash
|
|
1,284,607
|
|
|
1,493,537
|
Cost and earnings in
excess of billings
|
|
12,673,349
|
|
|
11,891,230
|
Real estate property
development completed
|
|
79,233,948
|
|
|
113,185,929
|
Real estate property
under development
|
|
87,126,402
|
|
|
-
|
Other current
assets
|
|
1,529,698
|
|
|
2,722,036
|
Total current
assets
|
|
185,280,001
|
|
|
135,693,969
|
Property, plant and
equipment, net
|
|
825,833
|
|
|
792,650
|
Real estate property
development completed, net of current portion
|
|
1,386,552
|
|
|
1,657,055
|
Security
deposits
|
|
8,564,517
|
|
|
7,940,137
|
Real estate property
under development, net of current portion
|
|
180,667,276
|
|
|
207,384,015
|
Due from local
government for real estate property development
completed
|
|
2,928,410
|
|
|
2,920,990
|
Total
Assets
|
$
|
379,652,589
|
|
$
|
356,388,816
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Other
loans
|
$
|
28,545,233
|
|
$
|
6,125,753
|
Accounts
payable
|
|
24,047,980
|
|
|
30,574,497
|
Other
payables
|
|
3,897,093
|
|
|
5,200,807
|
Construction
deposits
|
|
1,966,115
|
|
|
1,911,158
|
Billings in excess of
cost and earnings
|
|
4,247,477
|
|
|
2,110,808
|
Customer
deposits
|
|
24,613,864
|
|
|
16,790,208
|
Shareholders
loans
|
|
2,304,632
|
|
|
2,709,523
|
Accrued
expenses
|
|
3,158,432
|
|
|
3,205,099
|
Taxes
payable
|
|
17,259,202
|
|
|
15,843,815
|
Total current
liabilities
|
|
110,040,028
|
|
|
84,471,668
|
Deferred tax
liabilities
|
|
170,950
|
|
|
5,107,887
|
Tax payable - long
term
|
|
5,120,862
|
|
|
-
|
Customer deposits,
net of current portion
|
|
2,314,641
|
|
|
10,687,272
|
Other loans, less
current portion
|
|
98,797,447
|
|
|
99,843,228
|
Construction
deposits, net of current portion
|
|
1,319,295
|
|
|
1,329,820
|
Total
liabilities
|
|
217,763,223
|
|
|
201,439,875
|
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, 2017 and
2016
|
|
45,050
|
|
|
45,050
|
Additional paid-in
capital
|
|
129,853,172
|
|
|
129,793,572
|
Statutory
surplus
|
|
9,142,899
|
|
|
8,495,631
|
Retained
earnings
|
|
26,343,030
|
|
|
20,661,184
|
Accumulated other
comprehensive loss
|
|
(3,494,785)
|
|
|
(4,046,496)
|
|
|
|
|
|
|
Total
stockholders' equity
|
|
161,889,366
|
|
|
154,948,941
|
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
$
|
379,652,589
|
|
$
|
356,388,816
|
CHINA HGS REAL
ESTATE INC.
|
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)
|
FOR THE YEARS
ENDED SEPTEMBER 30,
|
|
|
2017
|
|
2016
|
Real estate
sales
|
$
|
58,671,424
|
|
$
|
40,576,717
|
Less: Sales
tax
|
|
1,215,960
|
|
|
2,102,616
|
Net real estate
sales
|
|
57,455,464
|
|
|
38,474,101
|
Cost of real
estate sales
|
|
45,590,345
|
|
|
28,670,778
|
Gross
profit
|
|
11,865,119
|
|
|
9,803,323
|
Operating
expenses
|
|
|
|
|
|
Selling and
distribution expenses
|
|
568,081
|
|
|
1,118,282
|
General and
administrative expenses
|
|
3,177,649
|
|
|
2,466,717
|
Total operating
expenses
|
|
3,745,730
|
|
|
3,584,999
|
Operating
income
|
|
8,119,389
|
|
|
6,218,324
|
Interest expense -
net
|
|
(497,798)
|
|
|
(225,155)
|
Other income -
net
|
|
2,222
|
|
|
459
|
Income before
income taxes
|
|
7,623,813
|
|
|
5,993,628
|
Provision for income
taxes
|
|
1,294,699
|
|
|
974,688
|
Net
income
|
|
6,329,114
|
|
|
5,018,940
|
Other comprehensive
income (loss)
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
551,711
|
|
|
(7,604,743)
|
Comprehensive
income (loss)
|
$
|
6,880,825
|
|
$
|
(2,585,803)
|
Basic and diluted
income per common share
|
|
|
|
|
|
Basic
|
$
|
0.14
|
|
$
|
0.11
|
Diluted
|
$
|
0.14
|
|
$
|
0.11
|
Weighted average
common shares outstanding
|
|
|
|
|
|
Basic
|
|
45,050,000
|
|
|
45,050,000
|
Diluted
|
|
45,050,000
|
|
|
45,050,000
|
CHINA HGS REAL
ESTATE INC.
|
CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY
|
FOR THE YEARS
ENDED SEPTEMBER 30, 2017 AND 2016
|
|
|
Common
Stock
|
|
Additional
|
|
Statutory
|
|
Retained
|
|
Accumulated
Other
Comprehensive
|
|
|
|
Shares
|
|
Amount
|
|
Paid-in Capital
|
|
Surplus
|
|
Earnings
|
|
Income
(Loss)
|
|
Total
|
Balance at September
30, 2015
|
|
45,050,000
|
|
$
|
45,050
|
|
$
|
17,764,316
|
|
$
|
16,439,333
|
|
$
|
119,668,198
|
|
$
|
3,558,247
|
|
$
|
157,475,144
|
Stock-based
Compensation
|
|
-
|
|
|
-
|
|
|
59,600
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
59,600
|
Appropriation of
statutory reserve
|
|
-
|
|
|
-
|
|
|
-
|
|
|
516,314
|
|
|
(516,314)
|
|
|
-
|
|
|
-
|
Net income for the
year
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
5,018,940
|
|
|
-
|
|
|
5,018,940
|
Recapitalization of
VIE ("Guangsha")
equity*
|
|
-
|
|
|
-
|
|
|
111,969,656
|
|
|
(8,460,016)
|
|
|
(103,509,640)
|
|
|
-
|
|
|
-
|
Foreign currency
translation adjustments
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(7,604,743)
|
|
|
(7,604,743)
|
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
|
CHINA HGS REAL
ESTATE INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
FOR THE YEARS
ENDED SEPTEMBER 30,
|
|
|
2017
|
|
2016
|
Cash flows from
operating activities
|
|
|
|
|
|
Net income
|
$
|
6,329,114
|
|
$
|
5,018,940
|
Adjustments to
reconcile net income to net cash used in
operating
activities:
|
|
|
|
|
|
Deferred tax
provision
|
|
167,007
|
|
|
631,099
|
Depreciation
|
|
67,074
|
|
|
74,723
|
Stock based
compensation
|
|
59,600
|
|
|
59,600
|
Changes in assets and
liabilities:
|
|
|
|
|
|
Restricted
cash
|
|
207,817
|
|
|
144,112
|
Advances to
vendors
|
|
-
|
|
|
(60,480)
|
Security
deposits
|
|
(590,274)
|
|
|
(5,045,816)
|
Cost and earnings in
excess of billings
|
|
(734,569)
|
|
|
(634,893)
|
Real estate property
development completed
|
|
33,718,033
|
|
|
(41,816,677)
|
Real estate property
under development
|
|
(58,501,531)
|
|
|
(18,287,677)
|
Other current
assets
|
|
1,171,589
|
|
|
(2,496,811)
|
Accounts
payable
|
|
(6,451,836)
|
|
|
(9,166,316)
|
Other
payables
|
|
(1,286,545)
|
|
|
(7,024,872)
|
Billings in excess of
cost and earnings
|
|
2,082,143
|
|
|
(1,070,814)
|
Customer
deposits
|
|
(604,497)
|
|
|
3,112,121
|
Construction
deposits
|
|
35,365
|
|
|
456,014
|
Accrued
expenses
|
|
(50,932)
|
|
|
(1,468,888)
|
Taxes
payable
|
|
1,343,421
|
|
|
772,684
|
Net cash used in
operating activities
|
|
(23,039,021)
|
|
|
(76,803,951)
|
|
|
|
|
|
|
Cash flow from
investing activities
|
|
|
|
|
|
Purchases of fixed
assets
|
|
(97,524)
|
|
|
(125,023)
|
Net cash used in
investing activities
|
|
(97,524)
|
|
|
(125,023)
|
|
|
|
|
|
|
Cash flow from
financing activities
|
|
|
|
|
|
Proceeds from other
loans
|
|
26,657,111
|
|
|
93,658,620
|
Repayment of other
loans
|
|
(6,039,415)
|
|
|
(6,286,930)
|
Repayment of bank
loan
|
|
-
|
|
|
(6,123,137)
|
Proceeds from
shareholder loan
|
|
8,444,575
|
|
|
3,236,078
|
Repayment of
shareholder loan
|
|
(8,842,359)
|
|
|
(2,317,607)
|
Net cash provided
by financing activities
|
|
20,219,912
|
|
|
82,167,024
|
Effect of changes
of foreign exchange rate on cash
|
|
(52,607)
|
|
|
(170,732)
|
Net (decrease)
increase in cash
|
|
(2,969,240)
|
|
|
5,067,318
|
Cash, beginning of
year
|
|
6,401,237
|
|
|
1,333,919
|
Cash, end of
year
|
$
|
3,431,997
|
|
$
|
6,401,237
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
Interest
paid
|
$
|
5,756,560
|
|
$
|
5,102,735
|
Income taxes
paid
|
$
|
721,177
|
|
$
|
424,970
|
Non-cash financing
activities:
|
|
|
|
|
|
Recapitalization of
VIE ("Guangsha")
|
$
|
-
|
|
$
|
111,969,656
|
Reclassification of
deferred tax liability to income tax
payable
|
$
|
5,120,862
|
|
|
-
|
View original
content:http://www.prnewswire.com/news-releases/china-hgs-reports-full-year-financial-results-for-the-fiscal-year-2017-300576803.html
SOURCE China HGS Real Estate Inc.