Attached files
| file | filename |
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| 8-K - FORM 8-K - CHINA HGS REAL ESTATE INC. | tm203193d1_8k.htm |
Exhibit 99.1
China HGS Reports Full Year Financial Results for the Fiscal Year 2019
HANZHONG, CHINA – January 14, 2020, 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 2019 ended September 30, 2019 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 2019
| l | Total revenues for the fiscal 2019 were approximately $40.0 million, a decrease of approximately 39% from approximately $65.5 million in fiscal 2018. |
| l | Net income for the fiscal 2019 totaled approximately $3.7 million, a decrease of approximately 29% from the net income of approximately $5.2 million in fiscal 2018. |
| l | Basic and diluted net earnings per share attributable to shareholders for the fiscal 2019 were $0.08, compared to $0.12 for the fiscal 2018. |
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. (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, | |||||||
| 2019 | 2018 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 263,139 | $ | 3,267,020 | ||||
| Restricted cash | 3,938,978 | 3,508,557 | ||||||
| Contract assets | 12,668,925 | 12,582,965 | ||||||
| Real estate property development completed | 100,817,944 | 58,999,178 | ||||||
| Real estate property under development | - | 60,128,554 | ||||||
| Other current assets | 2,031,937 | 1,408,826 | ||||||
| Total current assets | 119,720,923 | 139,895,100 | ||||||
| Property, plant and equipment, net | 614,008 | 718,366 | ||||||
| Real estate property development completed, net of current portion | 1,115,086 | 1,217,650 | ||||||
| Security deposits | 7,972,117 | 8,296,782 | ||||||
| Real estate property under development, net of current portion | 215,745,225 | 215,431,915 | ||||||
| Due from local government for real estate property development completed | 2,725,854 | 2,836,865 | ||||||
| Total Assets | $ | 347,893,213 | $ | 368,396,678 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Construction loans | $ | 77,332,569 | $ | 55,610,803 | ||||
| Accounts payables | 27,368,510 | 20,507,128 | ||||||
| Other payables | 5,289,176 | 4,894,774 | ||||||
| Construction deposits | 1,814,232 | 1,879,570 | ||||||
| Contract liabilities | 1,907,828 | 5,844,189 | ||||||
| Customer deposits | 16,139,572 | 20,234,072 | ||||||
| Shareholder loans | 2,129,114 | 2,142,110 | ||||||
| Accrued expenses | 3,585,644 | 3,006,150 | ||||||
| Taxes payable | 13,882,875 | 15,492,902 | ||||||
| Total current liabilities | 149,449,520 | 129,611,698 | ||||||
| Deferred tax liabilities | - | 2,068,257 | ||||||
| Tax payable - long term | 8,006,943 | 4,960,779 | ||||||
| Customer deposits, net of current portion | 1,043,692 | 1,914,677 | ||||||
| Construction loans, less current portion | 29,464,867 | 66,885,378 | ||||||
| Construction deposits, net of current portion | 1,228,041 | 1,278,053 | ||||||
| Total liabilities | 189,193,063 | 206,718,842 | ||||||
| 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, 2019 and 2018 | 45,050 | 45,050 | ||||||
| Additional paid-in capital | 129,907,805 | 129,907,805 | ||||||
| Statutory surplus | 10,360,251 | 9,925,794 | ||||||
| Retained earnings | 34,070,767 | 30,803,052 | ||||||
| Accumulated other comprehensive loss | (15,683,723 | ) | (9,003,865 | ) | ||||
| Total stockholders’ equity | 158,700,150 | 161,677,836 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 347,893,213 | $ | 368,396,678 | ||||
CHINA HGS REAL ESTATE INC.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE LOSS
FOR THE YEARS ENDED SEPTEMBER 30, 2019 and 2018
| 2019 | 2018 | |||||||
| Real estate sales | $ | 39,964,556 | $ | 65,487,296 | ||||
| Less: Sales tax | 389,406 | 1,248,230 | ||||||
| Net real estate sales | 39,575,150 | 64,239,066 | ||||||
| Cost of real estate sales | 30,253,511 | 48,642,392 | ||||||
| Gross profit | 9,321,639 | 15,596,674 | ||||||
| Operating expenses | ||||||||
| Selling and distribution expenses | 494,646 | 843,813 | ||||||
| General and administrative expenses | 2,661,578 | 2,530,269 | ||||||
| Total operating expenses | 3,156,224 | 3,374,082 | ||||||
| Operating income | 6,165,415 | 12,222,592 | ||||||
| Interest expense, net | (131,270 | ) | (499,855 | ) | ||||
| Other income (expense), net | (309,930 | ) | (1,407,109 | ) | ||||
| Income before income taxes | 5,724,215 | 10,315,628 | ||||||
| Provision for income taxes | 2,022,043 | 5,072,711 | ||||||
| Net income | 3,702,172 | 5,242,917 | ||||||
| Other comprehensive loss | ||||||||
| Foreign currency translation adjustment | (6,679,858 | ) | (5,509,080 | ) | ||||
| Comprehensive loss | $ | (2,977,686 | ) | $ | (266,163 | ) | ||
| Basic and diluted income per common share | ||||||||
| Basic and diluted | $ | 0.08 | $ | 0.12 | ||||
| Weighted average common shares outstanding | ||||||||
| Basic and diluted | 45,050,000 | 45,050,000 | ||||||
CHINA HGS REAL ESTATE INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE YEARS ENDED SEPTEMBER 30, 2019 AND 2018
| Common Stock | Additional | Statutory | Retained | Accumulated Comprehensive | ||||||||||||||||||||||||
| Shares | Amount | Paid-in Capital | Surplus | Earnings | Loss | Total | ||||||||||||||||||||||
| 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 | ||||||||||||||
| Stock-based Compensation | ||||||||||||||||||||||||||||
| Appropriation of statutory reserve | 434,457 | (434,457 | ) | - | ||||||||||||||||||||||||
| Net income for the year | 3,702,172 | 3,702,172 | ||||||||||||||||||||||||||
| Foreign currency translation adjustments | (6,679,858 | ) | (6,679,858 | ) | ||||||||||||||||||||||||
| Balance at September 30, 2019 | ||||||||||||||||||||||||||||
| 45,050,000 | $ | 45,050 | $ | 129,907,805 | $ | 10,360,251 | $ | 34,070,767 | $ | (15,683,723 | ) | $ | 158,700,150 | |||||||||||||||
CHINA HGS REAL ESTATE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 2019 and 2018
| 2019 | 2018 | |||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 3,702,172 | $ | 5,242,917 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
| Deferred tax provision | 1,302,606 | 1,999,052 | ||||||
| Depreciation | 79,270 | 85,788 | ||||||
| Stock based compensation | - | 54,633 | ||||||
| Changes in assets and liabilities: | ||||||||
| Advances to vendors | 20,395 | 38,990 | ||||||
| Security deposits | - | |||||||
| Contract assets | (601,265 | ) | (321,291 | ) | ||||
| Real estate property development completed | (45,818,735 | ) | 18,789,499 | |||||
| Real estate property under development | 50,974,817 | (16,955,946 | ) | |||||
| Other current assets | (725,508 | ) | 37,764 | |||||
| Accounts payables | 7,967,500 | (2,930,405 | ) | |||||
| Other payables | 609,156 | 1,176,231 | ||||||
| Contract liabilities | (3,854,568 | ) | 1,817,121 | |||||
| Customer deposits | (4,261,166 | ) | (4,137,470 | ) | ||||
| Construction deposits | 8,538 | (26,353 | ) | |||||
| Accrued expenses | 700,527 | (74,789 | ) | |||||
| Taxes payables | (1,166,158 | ) | (1,413,508 | ) | ||||
| Net cash provided by operating activities | 8,937,581 | 3,382,233 | ||||||
| Cash flow from financing activities | ||||||||
| Proceeds from construction loans | 488,307 | 5,150,795 | ||||||
| Repayment of construction loans | (11,825,666 | ) | (6,060,305 | ) | ||||
| Proceeds from shareholder loans | - | 1,505,324 | ||||||
| Repayment of shareholder loans | - | (1,659,834 | ) | |||||
| Net cash used in financing activities | (11,337,359 | ) | (1,064,020 | ) | ||||
| Effect of changes of foreign exchange rate on cash | (173,682 | ) | (259,240 | ) | ||||
| Net increase (decrease) in cash | (2,573,460 | ) | 2,058,973 | |||||
| Cash, restricted cash, beginning of year | 6,775,577 | 4,716,604 | ||||||
| Cash, restricted, cash, end of year | $ | 4,202,117 | $ | 6,775,577 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Interest paid | $ | 7,199,086 | $ | 6,643,169 | ||||
| Income taxes paid | $ | 347,675 | $ | 772,337 | ||||
| Representing | ||||||||
| Cash | $ | 263,139 | $ | 3,267,020 | ||||
| Restricted cash | $ | 3,938,978 | $ | 3,508,557 | ||||
| $ | 4,202,117 | $ | 6,775,577 | |||||