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Press release content from PR Newswire. The AP news staff was not involved in its creation.

China HGS Announces First Nine Months of Fiscal 2021 Financial Results

August 16, 2021 GMT

HANZHONG, China, Aug. 16, 2021 /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, announced its interim financial results for the first nine months of fiscal 2021 ended June 30, 2021.

Third Quarter Fiscal 2021 Highlights

  • 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.
  • 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.
  • 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.

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First Nine Months of Fiscal 2021 Highlights

  • 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.
  • 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.
  • 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

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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


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.

CHINA HGS REAL ESTATE INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)




Common Stock


Additional


Statutory


Retained


Accumulated
Other

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.

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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SOURCE China HGS Real Estate Inc.