China Hgs Real Estate (HGSH) research, news, and more from GeoInvesting

Company description

Tue, 14 May 2013 04:00:00 GMT

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.

see Reverse Merger Filing

Comments & Business Outlook

Mon, 13 May 2013 04:00:00 GMT

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.

Contract Awards

Thu, 21 Feb 2013 05:00:00 GMT

HANZHONG, China, February 21, 2013 /PRNewswire-FirstCall/ -- 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 Company was approved to receive additional 35.25 mu (equivalent to 23,500 square meters) land use right or equivalent amount of cash compensation from the municipal government of Yang County.

In 2011, the Company entered into a preliminary contract (the "Contract") with the municipal government of Yang County for building and providing affordable housing with total Gross Floor Area ("GFA") of 40,000m² apartment buildings. Later, the Company was entrusted to build additional 132 units of affordable apartments in Yang County.

To date, the sales of all the contracted affordable apartments have been completed. The construction of some of these apartment buildings has been completed and some owners have started to move into their apartments. The Company completed total contracted sales of 487 units of these affordable apartments with total GFA of 58,286.89 square meters. The related contracted sales revenues are estimated to be RMB124 million. These affordable apartment buildings used a land of 35.25 mu (approximately 23,500 square meters) in total.

On February 16, 2013, the Company received an approval from the Bureau of Housing and Urban-Rural Development of Yang County to award the Company 35.25 mu land use right (approximately 23,500 square meters) or equivalent amount of cash as compensation. The details regarding the award to be in land use right or in cash will be determined by the municipal government of Yang County.

"I am very pleased that the Company fulfilled this government contract on time and contributed to the local economy by providing affordable housing to the local people," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of the China HGS. "I am very proud of receiving the award from the municipal government. Whether the compensation will be in additional land use right or in cash, I believe they will increase the value for our shareholders."

Comments & Business Outlook

Wed, 06 Feb 2013 05:00:00 GMT

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.

Comments & Business Outlook

Thu, 27 Dec 2012 05:00:00 GMT

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

Resolution of Legal Issues

Fri, 23 Nov 2012 05:00:00 GMT

HANZHONG, China, November 23, 2012 /PRNewswire/ -- China HGS Real Estate Inc. ( the "Company") (NASDAQ:HGSH), a leading real estate developer for Tier 3 and Tier 4 cities and counties in China, today announced that the Company has received a letter dated November 20, 2012 from The NASDAQ Stock Market LLC ("NASDAQ") notifying the Company that it has regained compliance with the minimum bid price of $1.00 per share requirement for continued listing set forth in NASDAQ Listing Rule 5450(a)(1), as its common stock has achieved a closing bid price of $1.00 or more for 14 consecutive business days from October 31, 2012 to November 19, 2012.

On January 18, 2012, NASDAQ notified the Company that the Company's common stock did not maintain a minimum closing bid price of $1.00 per share ("Minimum Bid Price Requirement") for 30 consecutive business days as required by NASDAQ Listing Rule 5550(a)(2). The Company was provided 180 calendar days to regain compliance. In a letter dated July 18, 2012, the NASDAQ notified the Company that it is eligible for an additional 180-day period, or until January 14, 2013, to regain compliance with the Minimum Bid Price Requirement. In connection with the grant of the additional 180-day period, the listing of the Company's common stock was transferred at the Company's request to the NASDAQ Capital Market under the existing ticker symbol (HGSH) at the opening of business on July 20, 2012.

Deal Flow

Sun, 29 Jul 2012 04:00:00 GMT

On July 19, 2012, China HGS Real Estate, Inc. (the “Company”) entered into an amendment (the “Amendment Agreement”) to the Loan Agreement dated June 28, 2011 by and between the Company and Mr. Xiaojun Zhu, the CEO, Chairman and major shareholder of the Company (the “Original Loan Agreement”), pursuant to which the Company borrowed US$1.81 million from Mr. Zhu in order to make a required capital contribution to the registered share capital of one of the Company’s subsidiaries. Pursuant to the Amendment Agreement, the term of the Original Loan Agreement was extended for an additional one year period, or until June 28, 2013. The other terms and conditions of the Original Loan Agreement remain the same.

CFO Trail

Tue, 29 May 2012 04:00:00 GMT

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On May 28, 2012, China HGS Real Estate, Inc. (the “Company”), through Shaanxi Guangsha Investment and Development Group Co., Ltd. (“Guangsha”), a company that the Company controls through a series of contractual arrangements, entered into an employment contract (the “Employment Contract”) with Mr. Wei (Samuel) Shen to serve as Chief Financial Officer of the Company. The appointment of Mr. Shen was unanimously approved by the Company’s Board of Directors on May 28, 2012.

The term of the Employment Contract is for one year and will expire on May 27, 2013. Upon expiration of the Employment Contract, the parties may agree on the renewal and enter into a new employment contract. Pursuant to the Employment Contract, Mr. Shen will receive a monthly salary of RMB60,000 (approximately US$9,500) and an annual discretional bonus up to RMB180,000 (approximately US$28,000). Mr. Shen is also entitled to 100,000 shares of restricted common stock of the Company at the end of the term, subject to his continuing employment with the Company. According to the Employment Contract, the Company may terminate the employment with Mr. Shen for causes defined in the Employment Contract with thirty days’ advance written notice. Under certain circumstances provided in the Employment Contract, the Company may elect to pay an additional month’s salary to replace its written notice advancement obligation. Mr. Shen may terminate the employment with the Company by giving a ninety-day advance written notice to the Company. The Employment Contract also contains covenants regarding non-competition and confidentiality.

Mr. Shen, age 34, has been a Vice President for Finance, of the Company since November 2011. Prior to joining the Company, Mr. Shen was a Director at Bluehill Investment Advisory Group, a Canada-PRC based consulting firm, where he helped several U.S. and Canadian listed Chinese companies with their financial reporting, internal control implementation, and SOX compliance training. From 2006 to 2011, Mr. Shen served as an Audit Assurance Manager at MSCM LLP, Toronto, where he managed audit engagements for U.S. and Canadian public companies in real estate, health care, manufacturing, and IT industries. Mr. Shen holds both Chartered Accountant and Certified Public Accountant designations and is experienced with financial reporting under IFRS, U.S. and Canadian GAAP. Mr. Shen holds a Master of Management and Accounting from the Rotman School of Management, University of Toronto. Mr. Shen earned a Bachelor of Science in Computer Science and Mathematics from McMaster University and a Bachelor of Commerce in International Trade from Shanghai University.

Mr. Shen has no family relationships with any of the executive officers or directors of the Company. There have been no transactions in the past two years to which the Company or any of its subsidiaries was or is to be a party, in which Mr. Shen had, or will have, a direct or indirect material interest.

On May 28, 2012, Mr. Xiaojun Zhu resigned from his position as Chief Financial Officer of the Company. Upon resignation, Mr. Zhu continues to serve as President, Chief Executive Officer and Chairman of the Board of Directors of the Company.

Comments & Business Outlook

Tue, 08 May 2012 04:00:00 GMT

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."

Comments & Business Outlook

Thu, 23 Feb 2012 05:00:00 GMT

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."

Investor Presentations

Tue, 21 Feb 2012 05:00:00 GMT

Investor presentation from 2/21/2012

Comments & Business Outlook

Wed, 15 Feb 2012 05:00:00 GMT

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

Investor Alert

Tue, 24 Jan 2012 05:00:00 GMT

Item 3.01.Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On January 18, 2012, China HGS Real Estate, Inc. (the “Company”),received a letter from The NASDAQ Stock Market LLC (“Nasdaq”),in which the Nasdaq Staff notified the Company that based upon the closing bid price for the last 30 consecutive business days, the Company no longer meets Listing Rule 5450(a)(1), which requires listed securities to maintain a minimum bid price of $1 per share (the “Rule”).

In order to regain compliance with the Rule, the closing bid price of the Company’s securities must be at least $1 for a minimum of ten consecutive business days. The Company has a compliance period of 180 calendar days in which to regain compliance with the Rule. In the event the Company does not regain compliance with the Rule during the 180 day period, the Company may be eligible for additional time.

The Company’s management, along with its Board of Directors, is currently considering all viable options for the Company to regain compliance with the Rule.

Investor Alert

Mon, 26 Dec 2011 05:00:00 GMT

On December 22, 2011, and as a result of the review of the annual financial statements for fiscal 2011 for China HGS Real Estate Inc. (the “Company”), the Company’s Board of Directors concluded that its unaudited condensed consolidated financial statements (the “Financial Statements”) for the three and six months ended March 31, 2011 and for the three and nine months ended June 30, 2011, contained in the Company’s Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission (“SEC”) on May 16, 2011 and August 15, 2011, respectively, should no longer be relied upon due to certain material errors contained therein.

The Company’s upcoming annual report on Form 10-K for the fiscal year ended September 30, 2011 will include a disclosure of the effect of the restatement in the quarterly financial information footnote for the periods as indicated above. The restatement of the interim financial information is to correct the allocation of certain construction costs that were inappropriately allocated between the real estate property development completed and real estate property under development, which resulted in understatements of cost of sales for the six months ended March 31, 2011 and nine months ended June 30, 2011. The Company will restate the unaudited condensed consolidated balance sheets as of March 31, 2011 and June 30, 2011 and the unaudited condensed consolidated statements of income and comprehensive income for the periods ended March 31, 2011 and June 30, 2011 to reflect the corrected figures. The effects on net income and earnings per share for such periods are as follows:

Net income for the three and six months ended March 31, 2011 will decrease by $1,615,453. Both basic and diluted earnings per share for the three and six months ended March 31, 2011 will decrease by $0.03 and $0.04 per share, respectively.

Net income for the three and nine months ended June 30, 2011 will decrease by $1,211,941 and $2,827,394, respectively. Both basic and diluted earnings per share for the three and nine months ended June 30, 2011 will decrease by $0.02 and $0.06 per share, respectively.

Comments & Business Outlook

Tue, 29 Nov 2011 05:00:00 GMT

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.

Comments & Business Outlook

Wed, 02 Nov 2011 04:00:00 GMT

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."

Comments & Business Outlook

Tue, 16 Aug 2011 04:00:00 GMT

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

Comments & Business Outlook

Tue, 14 Jun 2011 04:00:00 GMT

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."

Comments & Business Outlook

Fri, 20 May 2011 04:00:00 GMT

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."

Comments & Business Outlook

Tue, 22 Feb 2011 05:00:00 GMT

CHINA HGS REAL ESTATE INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(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.

Liquidity Requirements

Tue, 22 Feb 2011 05:00:00 GMT

Based on our current operating plan, we believe that existing cash and cash equivalents balances, as well as cash forecast by management to be generated by operations will be sufficient to meet our working capital and capital requirements for our current operations. In order to fully implement our business plan, however, we may need to require capital contributions far in excess of our current asset value.

Our expectation, therefore, is that we will seek to access the capital markets in both the U.S. and China to obtain the funds we require. At the present time, however, we do not have commitments of funds from any source.

Comments & Business Outlook

Wed, 12 Jan 2011 05:00:00 GMT

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."

Comments & Business Outlook

Sun, 22 Aug 2010 04:00:00 GMT

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.

Comments & Business Outlook

Tue, 18 May 2010 04:00:00 GMT

"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

Reverse Merger Activity

Sat, 19 Dec 2009 05:00:00 GMT

Due to a recent merger agreement with HGS/Shaanxi Guangsha, CHAS has changed its business focus:

Shaanxi Guangsha Investment is engaged in developing large scale and high quality commercial and residential projects, which typically consist of multi-functional buildings that include multi-layer apartment buildings and office buildings, sub-high-rise apartment buildings or high-rise buildings.

Shaanxi Guangsha Investment also develops small scale commercial and residential properties. Shaanxi Guangsha Investment is aiming at providing middle-income consumers with a comfortable and convenient community life.

In addition, it also provides property management as an auxiliary service to its residents. Shaanxi Guangsha Investment acquires development sites primarily through public auctions of government land. This acquisition method allows Shaanxi Guangsha Investment to obtain unencumbered land use rights to unoccupied land without the need for additional work, re-settlement or protracted legal processes to obtain title. As a result, Shaanxi Guangsha Investment is able to commence construction relatively quick after a site for development is acquired.

Investor Alert

Tue, 22 Sep 2009 04:00:00 GMT

Ye Shun is a Hong Kong registered enterprise that has its ownership in Runze as its primary asset. Runze is a state-appointed pesticide manufacturer in China. Through Runze, we specialize in the manufacturing of various pesticides and herbicides, particularly the herbicide Acetochlor. However, during the quarterly period ended June 30, 2009, we did not sell any product or have any revenues as a result of not being able to utilize DHC’s facilities because of the new regulation regarding all manufacturing plants being in “chemical zones.” Although we hope to be able to manufacture product in the near future, we may not be able to do so and would have to undertake a significant expense in building a new manufacturing facility if we decided to continue with our current business plan and manufacture herbicides and pesticides.

Source: SEC From 10Q (For the quarterly period ended June 30, 2009, page 7)

We had no revenues for the three months ended June 30, 2009, compared to no revenues for the same period one year ago. Going forward we will not be able to manufacture product at our existing plant due to the new “chemical zone” regulation. Therefore, if we are not able to contract with a third party to utilize a qualified manufacturing facility to produce our products we will be not be able to manufacture product in the future and we will not have any revenues during those periods. Building a new manufacturing facility in a “chemical zone” would be at a substantial cost to the company and our management does not believe that is likely to occur and we may seek an alternative business in the future.

Source: SEC From 10Q (For the quarterly period ended June 30, 2009, management discussion section)