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| 8-K - FORM 8-K - CHINA HGS REAL ESTATE INC. | tm2125014d1_8k.htm |
Exhibit 99.1
China HGS Announces First Nine Months of Fiscal 2021 Financial Results
HANZHONG, CHINA – August 16, 2021 – 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
| l | 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. |
| l | 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. |
| l | 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
| l | 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. |
| l | 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. |
| l | 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: randy.xiong@chinahgs.com
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 | ||||
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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.
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CHINA HGS REAL ESTATE INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
| Common Stock | Additional | Statutory | Retained | Accumulated 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.
4
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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