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 China Hgs Real Estate (NASDAQ:HGSH)

Friday, May 9, 2014
Second Quarter 2014 Financial Results
  • Total revenues for the second quarter of fiscal 2014 were approximately $49.9 million, an increase of 157.5% from approximately $19.4 million in the same quarter of fiscal 2013.
  • Basic and diluted net earnings per share ("EPS") attributable to shareholders for the second quarter of fiscal 2014 were $0.30, increased by 130.8% from $0.13 for the same quarter last year.

"I am very pleased that the Company has delivered strong performance in this quarter," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS. "During the second quarter, we sold a significant portion of commercial units located in Yang County Pearl Garden Project and successfully delivered two municipal roads constructed for the local government. We also experienced significant sales progress in our newly constructed Mingzhu Beiyuan and Oriental Garden real estate projects. These strong results demonstrate that our growth strategy is working well and our execution is effective."

"As the government is cautiously implementing new policies and strategies to manage a stable economic growth in China, new catalysts will drive the growth. We have confidence that our strategy focusing on the real estate market in Tier 3 and Tier 4 cities and counties in China remains sound and effective going forward." Mr. Zhu continued. "For example, the new airport for the greater Hanzhong area is near its completion and is expected to be in operation in the second half of this year. The new airport will offer several direct flights daily from Tier 1 cities such as Beijing, Shanghai and Shenzhen, and many other regional flights, which we believe will add new catalysts to the economic growth in the greater Hanzhong area. We expect that the regional economy in the area which is our major market will get a boost with the new catalysts." concluded Mr. Xiaojun Zhu.


Monday, March 24, 2014

HANZHONG, China, March 24, 2014 /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 announced that the Hanzhong government accepted the delivery of the two municipal roads that were constructed by the Company on March 21, 2014.

In June 2012, the Company was approved by the Hanzhong local government to construct two municipal roads, namely Mingzhu Road West and Liuhou Road. The related construction was completed and the Hanzhong government performed its quality inspections and accepted these two roads on March 21, 2014. The final construction price for these two roads is approximately $3.16 million (RMB19, 483,589), which was approved by the Hanzhong Ministry of Finance.

Mr. Xiaojun Zhu, China HGS's Chairman and Chief Executive Officer, said, "We are proud that our team was selected for these two important municipal road construction projects as part of the Hanzhong City Urban Redevelopment Program. We successfully completed these projects on a timely basis. It is a new milestone for the Company, demonstrating our commitment to expand our business to the future of Hanzhong City."


Friday, February 7, 2014

First Quarter 2014 Results

  • Total revenues for the first quarter of fiscal 2014 were approximately $14.1 million, an increase of 28.5% from approximately $11.0 million in the same quarter of fiscal 2013.
  • Basic and diluted net earnings per share ("EPS") attributable to shareholders for the first quarter of fiscal 2014 were $0.07, compared to $0.12 for the same quarter last year.

"I am pleased with the recent sales progress under presale stage," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS. "We believe that the demand for real estate in Tier 3 and Tier 4 cities and counties in China remained solid as a result of continuous urbanization and growing personal income. The government recently also announced intention to promote migration to Tier 3 and Tier 4 cities, while restrict migration to Tier 1 and Tier 2 cities. We expect that new policies forthcoming for further urbanization in China will focus more on development of Tier 3 and Tier 4 cities, which will attract more first-time home buyers to these less crowded cities from non-city population. As a leading regional developer, the Company will continue to focus its development on selected Tier 3 and Tier 4 cities, maximize the benefits of new government policies, and provide quality housing with affordable pricing for growing new urban residents in these cities," concluded Mr. Xiaojun Zhu.


Monday, December 16, 2013

Highlights for the Fiscal 2013

  • Total revenues for the fiscal 2013 were approximately $67.8 million, an increase of approximately 260% from approximately$18.9 million in fiscal 2012.
  • Basic and diluted net earnings per share ("EPS") attributable to shareholders for the fiscal 2013 were $0.46, compared to $0.11for the fiscal 2012.

"I am very pleased that the Company delivered an outstanding performance driven by solid market demands despite restrictive measurements imposed by the central government on the real estate market in China," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS.

"Looking ahead in fiscal 2014, we remain focused on completing the construction of our on-going apartment complex projects. As the construction of some of our large scale high rise apartment buildings are moving closer to the completion stage, we plan to step up our sales efforts and expect our sales revenue to steadily increase. Longer term, the Company will continue to focus on building large-scale and high quality communities in Tier 3 and Tier 4 cities and expand development models into new markets," concluded Mr.Xiaojun Zhu.


Wednesday, August 14, 2013

Third Quarter 2013 Financial Results

  • Total revenues for the third quarter of fiscal 2013 were approximately $7.2 million, an increase of 47% from approximately $4.9 million in the same period of fiscal 2012.
  • Total gross floor area ("GFA") sold during the three months ended June 30, 2013 was 13,287 square meters, more than 11% from 11,947 square meters sold in the same period of fiscal 2012.
  • Net income for the third quarter of fiscal 2013 totaled approximately $2.3 million, representing a 77% increase from the net income of approximately $1.3 million in the same period of fiscal 2012.
  • Basic and diluted net earnings per share ("EPS") attributable to shareholders for the third quarter of fiscal 2013 was $0.05, compared to $0.03 for the same period of fiscal 2012.

"We continued to show improved performance over the last year, reflecting a healthy housing demand in the markets we are serving. We have also experienced solid sales activities during this quarter in our pre-sales of the new residential high-rise buildings that are still under constructions. However, due to the full accrual accounting method we are using to recognize revenues, those pre-sale activities are not reflected in our reported revenues. This, combined with reduced sellable inventory levels, has caused our sequential comparison unfavorable," Mr. Xiaojun Zhu, China HGS's Chairman and Chief Executive Officer commented.

"Going forward, we will continue to focus on and speed up the construction of our three on-going development projects: Mingzhu Beiyuan, Oriental Pearl Garden, and Yangzhou Pearl Garden. Upon completion of these high-rise residential buildings, our sellable inventory will be replenished, which, we expect, will accelerate the growth of our revenues long term," concluded Mr. Xiaojun Zhu.


Monday, May 13, 2013

Second Quarter 2013 Financial Results

  • Total revenues for the second quarter of fiscal 2013 were $19.4 million, an increase of 573.4% from $2.9 million in the same period of fiscal 2012.
  • Net income for the second quarter of fiscal 2013 totaled $5.8 million, a significant increase compared to the net income of $0.9 million in the same period of fiscal 2012.
  • Basic and diluted net earnings per share ("EPS") attributable to shareholders for the second quarter of fiscal 2013 was $0.13, compared to $0.02 for the same periods of last year.

"We are pleased to report another solid quarter with significantly higher revenues and net income than the same quarter of last year, reflecting a continuous dynamic housing market in Tier 3 and Tier 4 cities and counties," commented Mr. Xiaojun Zhu, China HGS's Chairman and Chief Executive Officer.

"China's State Council recently announced new policies including levying a 20% tax on profits from real estate resales to keep prices from mounting higher the real estate market, with expectations that housing supply in major cities will not be able to meet demands in the short term. The new policies are not targeting at first time home buyers and we believe will have no significant impact on the real estate market in Tier 3 and Tier 4 cities and counties which our company is serving and where most housing purchasers are first time home buyers," continued Mr. Zhu.

"During the second quarter of fiscal 2013, we made good progress on construction of our three on-going projects-Mingzhu Beiyuan, Oriental Pearl Garden, and Yangzhou Pearl Garden. Recently, the Company also received the presale license of Mingzhu Beiyuan, which we expect will facilitate the presales of this development. Once the construction is completed and the presold units are delivered to purchasers, the presales receipts, currently recorded as customer deposits, will contribute to the growth of our bottom line," concluded Mr. Xiaojun Zhu.


Wednesday, February 6, 2013

First Quarter of Fiscal 2013

  • Total revenues for the first quarter of fiscal 2013 were $11.0 million, an increase of 339.8% from $2.5 million in the first quarter of fiscal 2012
  • Total gross floor area ("GFA") sold during the first quarter of fiscal 2013 was 13,028 square meters, more than tripled from 3,877.4 square meters sold in the first quarter of fiscal 2012
  • Net income totaled $5.5 million, a significant increase compared to the net income of $1.0 million in the first quarter of fiscal 2012
  • Basic and diluted net earnings per share ("EPS") attributable to shareholders were $0.12, compared to $0.02 for the first quarter of fiscal 2012

"We are pleased to report strong financial results for the first quarter of fiscal 2013. We achieved significantly higher revenues and net income than the same quarter of last year, demonstrating our improved operational performance and higher returns on invested capital," commented Mr. Xiaojun Zhu, China HGS's Chairman and Chief Executive Officer. "Despite the purchase and mortgage restriction policies imposed on real estate market remained in effect, we experienced higher sales activities in the quarter driven by our sales and promotion efforts. These results are very encouraging. We believe the fundamentals underpinning real estate demand in Tier 3 and Tier 4 cities and counties remain strong as the population continues to grow in these cities and counties driven by increased urbanization."

"We now look ahead to 2013 with expectations for somewhat relaxed government policies on the real estate industry and some rebound in the Chinese housing market," continued Mr. Zhu. "Given these expectations, we have been focusing on the investment in three large projects � Mingzhu Beiyuan, Oriental Pearl Garden, and Yangzhou Pearl Garden. We expect to complete the construction of these three multi-building large apartment complexes in two to three years. We have already started pre-sales and signed some sales contracts with buyers. We expect these three large projects to provide us significant revenue and income growth in 2014 and beyond," concluded Mr. Xiaojun Zhu.


Thursday, December 27, 2012

CHINA HGS REAL ESTATE INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE YEARS ENDED SEPTEMBER 30,

 

    2012     2011  
Real estate sales   $ 18,856,978     $ 56,871,409  
Less: Sales tax     1,180,437       3,544,584  
Cost of real estate sales     9,590,009       31,477,449  
Gross profit     8,086,532       21,849,376  
Operating expenses                
Selling and distribution expenses     517,025       657,089  
General and administrative expenses     2,049,388       1,372,345  
Total operating expenses     2,566,413       2,029,434  
Operating income     5,520,119       19,819,942  
Interest income (expense) - net     (73,608 )     2,128  
Other income - net     12,659       6,152  
Income before income taxes     5,459,170       19,828,222  
Provision for income taxes     283,077       1,108,284  
Net income     5, 176,093       18,719,938  
Other comprehensive income                
Foreign currency translation adjustment     862,601       2,720,280  
Comprehensive income   $ 6,038,694     $ 21,440,218  
Basic and diluted income per common share                
Basic   $ 0.11     $ 0.42  
Diluted   $ 0.11     $ 0.42  
Weighted average common shares outstanding                
Basic     45,050,000       45,050,000  
Diluted     45,050,000       45,050,000  

 

The accompany notes are an integral part of these consolidated financial statements


Tuesday, May 8, 2012

HANZHONG, China, May 8, 2012 /PRNewswire-Asia/ -- China HGS Real Estate Inc. (NASDAQ: HGSH - News) ("China HGS" or "the Company"), one of the largest residential and commercial property developers in China's southern Shaanxi Province, today announced that it has entered the construction phase for its Oriental Mingzhu residential project in downtown Hanzhong.

Oriental Mingzhu is centrally located in the heart of Hanzhong and offers apartments to a wide range of residential buyers. When completed, the development is expected to consist of 12 residential towers, encompassing 62,700 square meters of land usage. Zoning plans approved by relevant PRC authorities include building plans of 261,000 square meters, of which 211,000 square meters will be above ground and another 50,000 square meters will be underground parking. Total investment is estimated to be RMB 800 million of which RMB 197 million has been paid as of April 30, 2012.

"Oriental Mingzhu is an important project that HGS has been carefully planning for the last two years," stated Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS. "We are glad the construction phase has successfully began. In the next few years, we believe the real estate market in Hanzhong and the surrounding region will continue its strong growth. We will methodically allocate capital and resources according to plan and strive to make Oriental Mingzhu our next home run."


Thursday, February 23, 2012

HANZHONG, China, February 23, 2012 /PRNewswire-Asia-FirstCall/ -- China HGS Real Estate Inc. (NASDAQ: HGSH) ("China HGS" or "the Company"), one of the largest residential and commercial property developers in China's southern Shaanxi Province, signed an agreement (the "Agreement") on February 3, 2012 to sell multiple units in the Company's Yangzhou Pearl Garden project (currently under development and located in Yang County, Shaanxi Province) to Pingdu National Forest Farm (the "Buyer").

According to the Agreement, the Buyer will purchase from the Company 68 residential apartments in the project for an estimated total contract value of RMB 20 million (approximately $3.2 million). The unit prices will adhere to Yang County's pricing policy for low and middle income residential housing, with units fewer than 1,076 square feet priced from RMB 158 to RMB 200 (approximately $25.08 to $31.75) per square foot and units greater than 1,076 square feet priced from RMB 262 to RMB 291 (approximately $41.59 to $46.20) per square foot.

Under the Agreement, China HGS is required to deliver one phase of residential apartments in Towers 1, 16, and 17 to the Buyer by June 30, 2012; a second phase of residential apartments in Towers 31 and 45 by December 31, 2012; a third phase of residential apartments in Tower 50 by December 31, 2014; and a fourth phase of residential apartments in Tower 30 immediately upon closing. The Buyer is required to make an initial payment of RMB 4.1 million (approximately $0.6 million) as a deposit for the units, and if the remaining balance is paid within 30 days from the initial payment date, the Buyer will be entitled to a 1% discount on the total purchase price of the units.

"Large-scale bulk-purchase agreements continue to be a beneficial component of our sales strategy, and we are pleased to have further secured our future revenue stream for the Yangzhou Pearl Garden project," stated Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS Real Estate, Inc. "With the Spring Festival holiday now behind us, we are entering a period that has historically seen robust sales. This improved selling environment, in combination with several phases of our projects nearing completion, positions us to generate increased sales in the coming quarters."


Wednesday, February 15, 2012

Financial Results reported February 15, 2012

First-Quarter Fiscal 2012 Results 

    Three months ended December 31,  
    2011     2010  
Real estate sales   $ 2,501,981     $ 135,952  
Less: Sales tax     (175,905 )     (55,039 )
       Cost of real estate sales, exclusive of depreciation     (881,900 )     (79,783 )
Gross profit     1,444,176       1,130  
Operating expenses                
Selling and distribution expenses     42,441       30,915  
General and administrative expenses     318,772       71,146  
Total operating expenses     361,213       102,061  
Operating income (loss)     1,082,963       (100,931 )
Interest income     13,937       6,335  
Interest (expense)     (18,100 )     -  
Income (loss) before income taxes     1,078,800       (94,596 )
Provision for income taxes     48,338       1,699  
Net income (loss)     1,030,462       (96,295 )
Other comprehensive income                
Foreign currency translation adjustment     344,589     $ 627,807  
Comprehensive income   $ 1,375,051     $ 531,512  
Basic and diluted income per common share                
Basic   $ 0.02     $ -  
Diluted   $ 0.02     $ -  
Weighted average common shares outstanding                
Basic     45,050,000       45,050,000  
Diluted     45,050,000       45,059,434  

During the fiscal first quarter ended December 31, 2011, revenue increased 1,740.3% to $2.5 million, from $0.1 million in the year-ago quarter. The increase was mainly attributable to higher unit sales prices and extenuating circumstances in the comparable period of 2011. The decrease in revenue recognized for the three months ended December 31, 2010 was attributable to the delay of revenue recognition caused by the inability of the Company to obtain property sales invoices from the Hanzhong City Local Taxation Bureau during the first quarter of fiscal 2011. As a result, the Company could not transfer the property ownership to the buyers and the related sales were deferred.

For the quarter ended December 31, 2011, China HGS sold a total of 37 units of residential and commercial properties, of which 24 units were derived from sales of the Yangzhou Pearl Garden project, which generated$1.1 million in revenue, or 45.4% of the Company's quarterly sales. The average sales price at Yangzhou Pearl Garden was $444 per square meter for the three months ended December 31, 2011, a year-over-year increase of $61 per square meter, or 16%, compared to fiscal 2011's average selling price of $383 per square meter.

Business Outlook

The Company keeps a vigilant watch on the impact of the restriction policies on the real estate market. The increasingly restrictive policies started to have a significant impact on the real estate market in Tier-3 and Tier-4 cities in late 2011. These policies also negatively affected buyers' confidence, with some buyers taking a wait-and-see attitude. As a result, the sales volume for the three months ended December 31, 2011 dropped significantly compared to the average quarterly sales during fiscal 2011.

The People's Bank of China ("PBOC") posted a statement on its website on February 7, 2012, indicating that the PBOC would guarantee lending support to affordable housing projects and ensure that loan demand from first-time home buyers is met. With the ease of the mortgage policies from the PBOC and the lowering of mortgage rates by certain commercial banks in February 2012, the Company expects to see improvement of the real estate market in the remaining quarters of fiscal 2012.

"We believe the fundamentals underpinning real estate demand remain strong. Since most of our customers are first-time home buyers, and our affordable housing units are in the pre-sales stage, we expect our cash flow will continue to improve in the first half of 2012. Moving forward, we intend to remain focused on our existing construction projects in Hanzhong city and Yang County, deepen our institutional sales network, enhance our cost and operational synergies, improve cash flows, and strengthen our balance sheet. We expect these imperatives will help us cope with this difficult period and better position us to capitalize on opportunities during a future market upturn," added Mr. Zhu


Tuesday, November 29, 2011
HANZHONG, China, November 29, 2011 /PRNewswire-Asia-FirstCall/ -- China HGS Real Estate Inc. (NASDAQ: HGSH) ("China HGS" or "the Company"), the leading residential and commercial property developer in China's southern Shaanxi province, today announced the Company is continuing to expand in Shaanxi Province with two new construction parcels totaling 90,776 square meters (980,380 square feet) it has acquired for $12.43 million in downtown Yang County, a fast growing city near Hanzhong. It anticipates constructing mainly a residential development with gross floor area of up to 1.9 million square feet, with ground breaking expected in 2012.

Wednesday, November 2, 2011

HANZHONG, China, Nov. 2, 2011 /PRNewswire-Asia-FirstCall/ -- China HGS Real Estate Inc. (NASDAQ: HGSH) ("China HGS" or "the Company"), one of the largest residential and commercial property developers in China's southern Shaanxi province, today announced it has been qualified to expand its real-estate development operations beyond Shaanxi province into new regional real-estate markets in China.

This significant new growth opportunity stems from the receipt of the National Grade-I real-estate development qualification, which was awarded to its operating entity in China, the Guangsha Group, by the Ministry of Housing and Urban-Rural Development of the People's Republic of China ("MOHURD").

"The National Grade-I qualification is a major milestone in China HGS' development which will allow us to pursue new regional real-estate growth opportunities, while continuing our leadership in Shaanxi province," stated Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS Real Estate Inc.  He added, "This important advance would not be possible without contributions from all China HGS employees, and we are most grateful for their diligent efforts."


Tuesday, August 16, 2011

Third Quarter 2011 Results

  • Revenue increased 55.2% year-over-year to $12.7 million
  • Gross profit increased 96.0% year-over-year to $7.2 million
  • Gross margin was 56.5%, compared with 44.7% in the fiscal third quarter of 2010
  • Net income increased 102.3% year-over-year to $6.4 million, or $0.14 per basic and diluted share, compared with $0.07 in the year-ago period
  • Signed two residential apartment bulk purchase agreements in Hanzhong for an aggregate price of RMB 180 million (approximately $27.7 million) for delivery in 2012 to 2013.
  • Acquired the development and use rights for 62,700 square meters (approximately 675,000 square feet) of construction land in Hanzhong for a total price of RMB 178.7 million (approximately $27.5 million)

"We are delighted to report a strong quarter with solid growth in both revenue and net income. Due to robust demand and the increasing property prices in our market, we were also able to achieve higher gross profit and net income for the quarter," stated Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS Real Estate, Inc. "During the fiscal third quarter of 2011, we secured a substantial amount of future revenues from two residential-apartment bulk sales at our Mingzhu Beiyuan projects, for which we expect to collect 50% of the total payment, or about $13.9 million, by the end of August. We were also pleased to successfully acquire a large piece of land in downtown Hanzhong, which will become an important platform for our ongoing business development in the next several years. Finally, we are continually striving to improve our transparency and corporate governance. We plan to hire a senior capital-market executive. We also expect to engage a Sarbanes-Oxley consultant to activate our SOX compliance program by the end of August 2011."

Business Outlook

"We have already earned the net income we earned in all of fiscal 2010 in just the first nine months of fiscal 2011. Looking ahead, we believe demand for properties will continue to rise in Hanzhong and surrounding areas, as the local economy and Gross Domestic Product ("GDP") are continuing to improve rapidly under the China central government's guidance for the development of the economies in western regions. Hanzhong's GDP registered a year-on-year increase of 15.1% in 2010. (Source: Statistical Bureau of Hanzhong). According to a Hanzhong government interim report, Hanzhong's GDP for the first half of 2011 is expected to increase 14% from the prior comparable period. In addition to the 62,700 square meters (approximately 675,000 square feet) land we acquired in May 2011, we are actively seeking additional land. We believe that continuous land acquisition will help ensure the sustainability of our business development. We also anticipate a strong fiscal fourth quarter, which is normally a peak season for the real estate market. In summary, we are very positive about the dynamics in our market and we feel confident that China HGS will continue its steady and healthy growth over the next several years," added Mr. Zhu


Tuesday, June 14, 2011

HANZHONG, China, June 14, 2011 /PRNewswire-Asia/ -- China HGS Real Estate Inc. (NASDAQ: HGSH) ("China HGS" or "the Company"), a leading residential and commercial property developer in China's southern Shaanxi province, today announced that the Company signed a residential-apartment bulk-purchase agreement (the "Agreement") for a total price of RMB 60 million (approximately $9.2 million) with the Hanzhong Municipal Bureau of Justice (the "Purchaser") on June 8, 2011.

The Agreement covers the entire Tower B3 of the Company's "Mingzhu Beiyuan" project, which is comprised of a total of 112 residential-apartment units and is located in downtown Hanzhong. The contracted project is expected to be completed and delivered to the Purchaser within two and a half years after the date of the Agreement, according to the timeline set forth in the Agreement. The total price of the Agreement is RMB 60 million (approximately $9.2 million), with an average sales price of RMB 309 per square foot (approximately $47.50 per sq. ft.). According to the Agreement, the Hanzhong Municipal Bureau of Justice has agreed to make an initial payment of RMB 100,000 (approximately $15,385) for each apartment unit within 10 days of the date of the Agreement and make an additional payment to China HGS by the end of August 2011, raising its total payment to 50% of the total price (RMB 30 million, or approximately $4.6 million). Upon due payment of the contract price as agreed in the Agreement, China HGS is required to complete the project design, obtain the necessary approvals, and perform the related preparation work within three months of the date of the Agreement.

"We are pleased to reach a second bulk-purchase agreement for our Mingzhu Beiyuan project only 10 days after signing our first bulk-purchase agreement with the Hanzhong Public Security Bureau," commented Mr. Xiaojun Zhu, Chief Executive Officer of China HGS Real Estate, Inc. "The robust demand for China HGS's properties reflects our leading reputation and the recognition of our company in our core market. We look forward to continuing to deliver high-quality real estate products to our customers in the future."


Friday, May 20, 2011

First Quarter Results:

  • Revenue increased 88.6% year-over-year to $26.2 million
  • Gross profit increased 124.5% year-over-year to $12.7 million
  • Gross margin was 48.4%, compared with 40.6% in the fiscal second quarter of 2010
  • Net income increased 136.0% year-over-year to $11.8 million, or $0.26 per diluted share, compared with $0.11 in the year-ago period

"Due to the continuing strong demand for new residential real-estate properties in our core Hanzhong market, we have achieved solid operating results in the fiscal second quarter of 2011.  Several of our projects, such as the Yangzhou Pearl Garden Phase III project, have experienced brisk sales thus far in 2011," stated Mr. Xiaojun Zhu, Chief Executive Officer of China HGS Real Estate Inc. "During the previous quarter, our revenue recognition was affected by the delay of government initiatives to launch an online invoicing system, which was ultimately completed and activated in late February 2011.  In order to ensure that China HGS will be immune from similar factors, we have modified our internal accounting process to embrace a model that recognizes revenue only when the keys are handed over to the buyer.  We believe this modified internal practice will help us to more effectively and accurately report our operating performance in the future."


Tuesday, February 22, 2011
 
   
 
(Unaudited)
 
   
Three months ended December 31,
 
   
2010
   
2009
 
             
Real estate sales
  $ 135,952     $ 11,054,103  
Sales tax
    (55,039 )     (663,246 )
Cost of real estate sales, exclusive of depreciation
    79,783       5,552,590  
Gross profit     1,130       4,838,267  
                 
Operating expenses
               
Selling and distribution expenses
    30,915       299,081  
General and administrative expenses
    71,146       817,230  
Total operating expenses
    102,061       1,116,311  
                 
Operating (loss) income
    (100,931 )     3,721,956  
                 
Interest expense – net
    (6,335 )     14,752  
Income before income taxes
    (94,596 )     3,707,204  
                 
Provision for income taxes
    1,699       138,176  
Net (loss) income   $ (96,295 )   $ 3,569,028  
                 
Other comprehensive income
               
Foreign currency translation adjustment
  $ 627,807     $ 1,136  
                 
Comprehensive income
  $ 531,512     $ 3,570,164  
                 
Basic and diluted income per common share
               
Basic
  $ 0.00     $ 0.08  
Diluted
  $ 0.00     $ 0.08  
                 
Weighted average common shares outstanding
               
 Basic
    45,050,000       45,050,000  
Diluted
    45,059,434       45,050,000

Revenues decreased by 99% to approximately $135,952 for the three months ended December 31, 2010 from approximately $11.1 million for the three months ended December 31, 2009. The $10.9 million decrease was attributable to the delay of revenue recognition caused by the inability of the Company to obtain property sales invoices from the Hanzhong City Local Taxation Bureau’s website.

Revenue relating to additional completed units for which we received customer deposits is expected to be recognized once we obtain the invoices generated by the government’s new website. Therefore, the revenue reported during this quarter does not necessarily reflect the demand for the Company’s products. Management believes that customer deposits are a better indicator of the demand for these residential and commercial units. Down payments from buyers are recorded as customer deposits, which are typically 10%-20% of the unit price for cash sales and 30%-50% of the unit price for those customers who purchase properties with mortgage proceeds. Customer deposits as of December 31, 2010 were $21,158,009 compared to $13,794,890 at September 30, 2010. Revenue relating to additional completed units for which we received customer deposits is expected to be recognized once we obtain the invoices generated by the government’s new website. Therefore, the revenue reported during this quarter does not necessarily reflect the demand for the Company’s products. Management believes that customer deposits are a better indicator of the demand for these residential and commercial units. Down payments from buyers are recorded as customer deposits, which are typically 10%-20% of the unit price for cash sales and 30%-50% of the unit price for those customers who purchase properties with mortgage proceeds. Customer deposits as of December 31, 2010 were $21,158,009 compared to $13,794,890 at September 30, 2010.


Wednesday, January 12, 2011

HANZHONG, China, Jan. 12, 2010 /PRNewswire-Asia-FirstCall/ -- China HGS Real Estate Inc. today reported financial results for the fourth quarter and fiscal year ended September 30, 2010.

Fourth-Quarter 2010 Highlights

  • Gross revenues(*) decreased 27.3% to $14.2 million year over year from $19.5 million 
  • Gross profit was $6.8 million, with a gross margin of 47.7%
  • Net income was $5.5 million, or $0.12 per diluted share, compared to $7.3 million, or $0.18 per diluted share, a year ago
  • China HGS stock commenced trading on the NASDAQ Global Market in September 2010

Revenues grew 56.7% and net income increased 56.6% in fiscal 2010

"Although the revenues we recognized in our fourth fiscal quarter fell short of our increased guidance from our fiscal third-quarter earnings report, we still experienced higher price and sales volume of our existing projects and strong pre-sales of our newest project, Mingzhu Beiyuan, in the fiscal fourth quarter of 2010. We also benefited from higher margins due to our continued cost-control efforts, leading us to report fiscal 2010 net income in line with our guidance," commented Mr. Xiaojun Zhu, China HGS' Chief Executive Officer. "In September, our stock started trading on the NASDAQ Global Market under the new stock symbol, 'HGSH'. We view this as a major milestone and will continue to improve our operations and governance in an effort to increase shareholder value."


Sunday, August 22, 2010
Third Quarter Fiscal Year 2010 Highlights 
  • Revenue increased to $7.7 million, up from $0.3 million a year ago.
  • Gross profit was $3.7 million with gross margin of 47.7%.
  • Net income totaled $3.2 million vs. (107,349), or $0.07 per diluted share vs. $0.00.

"During the third quarter of fiscal year 2010, market demand for residential properties in Hanzhong, our core market, continued to exhibit solid growth. Thanks to a larger inventory of units available and our strong reputation, we sold a total of 288 residential and commercial property units and car parks at attractive margins. This resulted in another quarter of significant top line and bottom line growth," said Mr. Xiaojun Zhu, Chief Executive Officer of China HGS Real Estate Inc.

Business Outlook

"Despite the Chinese government's tightening policy and regulations to constrain growth in the domestic real estate market, we maintain our positive outlook for the property market in second-tier and third-tier cities in western China. We believe that Hanzhong and the surrounding areas will continue to enjoy the benefits of China's "Go to the West" policy in the coming years," commented Mr. Zhu. "While we continue our efforts to strengthen our market leadership in Hanzhong, we are also actively planning to expand into the neighboring cities in Southern Shaanxi Province and Northern Sichuan Province."

As of June 30, 2010, the Company's major projects under development include Yangzhou Mingzhu Project, Mingzhu Xinju Project and Mingzhu Project V which have completed construction up to 43.1%, 75.0% and 26.7%, respectively, as of June 30, 2010.

China HGS expects to complete construction of its Hanzhong Mingzhu Nanyuan #8 and #9 building, Yangzhou Mingzhu Project #27 and #30 building and several other projects during the fourth quarter of fiscal 2010.

For the fiscal year ending September 30, 2010, China HGS raises its:

  • Revenue guidance from previously announced $47.5 million - $49.0 million to $52.5 million to $53.0 million.
  • Net income guidance from $15.5-$16 million to $17.0-$17.5 million, or diluted earnings per share of approximately $0.38 to $0.39.

Tuesday, May 18, 2010

"While the Chinese government has recently implemented tighter policies to control the overheating domestic real estate market, we continued to experience strong demand for our new residential real estate projects in Hanzhong during the second quarter of fiscal 2010. We experienced tenfold growth in revenue and net income and maintained healthy gross margins of 40% to 55% on our projects. This was the result of a larger inventory of units available for sale, China HGS' enhanced brand recognition among consumers, and rising levels of disposable income in China's second-tier and third-tier cities," commented Mr. Xiaojun Zhu, Chief Executive Officer of China HGS Real Estate Inc.

"We are a rapidly growing residential real estate developer with a strong focus on second-tier and third-tier cities in China. We maintain our positive outlook for real estate growth momentum in these markets," commented Mr. Zhu. "The remarkable growth in personal income in Hanzhong and the surrounding areas has resulted in significant improvement in standards of living and demand for better housing. Therefore, we believe Hanzhong's real estate market will experience sustainable growth for the foreseeable future.

"We have enhanced our corporate governance by establishing a strong board with a majority of independent directors and creating audit, compensation and nominating and corporate governance committee. We believe we now meet all the corporate governance requirements to list our common stock on a major U.S. stock market."

As of March 31, 2010, the Company's major projects under development include Ming Zhu Xin Ju project, Ming Zhu Nan Yuan Phase II project in Hanzhong, Mingzhu Garden in Hanzhong and Yangzhou Pearl Garden in Yang County.

For the fiscal year ending September 30, 2010, China HGS reaffirms its guidance of revenue of approximately $47.5 million to $49.0 million and net income of $15.5 million to $16.0 million. Company expects fully diluted earnings to be in the range of $0.39 to $0.40 per share, based on current weighted average shares outstanding.

see release