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21.12.2016 23:00:00
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China HGS Reports Full Year Financial Results for the Fiscal Year 2016
HANZHONG, China, Dec. 21, 2016 /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 filed its Annual Report on Form 10-K for the fiscal year 2016 ended September 30, 2016 with
Highlights for the Fiscal 2016
- Total revenues for the fiscal 2016 were approximately $40.6 million, a decrease of approximately 50% from approximately $81.1 million in fiscal 2015.
- For the Company's long-term real estate development projects, the related revenue recognized from percentage of completion method was approximately $25.2 million, which accounted for 62% of total revenue in fiscal 2016 and decreased 67% from the revenue recognized from percentage completion method in fiscal 2015.
- Net income for the fiscal 2016 totaled approximately $5.0 million, a decrease of approximately 84% from the net income of approximately $31.4 million in fiscal 2015.
- Basic and diluted net earnings per share ("EPS") attributable to shareholders for the fiscal 2016 were $0.11, compared to $0.70 for the fiscal 2015.
Safe Harbor Statement
This press release contains forward-looking statements, which are subject to change. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All "forward-looking statements" relating to the business of China HGS Real Estate Inc., which can be identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties which could cause actual results to differ. These factors include but are not limited to: the uncertain market for the Company's business, macroeconomic, technological, regulatory, or other factors affecting the profitability of real estate business; and other risks related to the Company's business and risks related to operating in China. Please refer to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2016, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. The Company's actual results could differ materially from those contained in the forward-looking statements. The Company undertakes no obligation to revise or update its forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.
About China HGS Real Estate, Inc.
China HGS Real Estate, Inc. (NASDAQ: HGSH), founded in 1995 and headquartered in Hanzhong City, Shaanxi Province, is a leading real estate developer in the region and holds the national grade I real estate qualification. The Company focuses on the development of high-rise, sub-high-rise residential buildings and multi-building apartment complexes in China's Tier 3 and Tier 4 cities and counties with rapidly growing populations driven by increased urbanization. The Company provides affordable housing with popular and modern designs to meet the needs of multiple buyer groups. The Company's development activity spans a range of services, including land acquisition, project planning, design management, construction management, sales and marketing, and property management. For further information about China HGS, please go to www.chinahgs.com.
Company contact:
Randy Xiong
President of Capital Market
China Phone: (86) 091-62622612
Email: randy.xiong@chinahgs.com
CHINA HGS REAL ESTATE INC. | |||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||
September 30, | |||||||||
2016 | 2015 | ||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash | $ | 6,401,237 | $ | 1,333,919 | |||||
Restricted cash | 1,493,537 | 1,715,268 | |||||||
Cost and earnings in excess of billings | 11,891,230 | 11,825,036 | |||||||
Real estate property development completed | 113,185,929 | 75,391,512 | |||||||
Real estate property under development | - | 55,154,153 | |||||||
Other current assets | 2,722,036 | 228,223 | |||||||
Total current assets | 135,693,969 | 145,648,111 | |||||||
Property, plant and equipment, net | 792,650 | 780,038 | |||||||
Real estate property development completed, net of current portion | 1,657,055 | 2,140,271 | |||||||
Security deposits | 7,940,137 | 3,146,237 | |||||||
Real estate property under development, net of current portion | 207,384,015 | 143,660,781 | |||||||
Due from local government for real estate property development completed | 2,920,990 | 3,065,000 | |||||||
Total Assets | $ | 356,388,816 | $ | 298,440,438 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Bank loan |
$ | - | $ | 6,292,474 | |||||
Other loans | 6,125,753 | 5,674,239 | |||||||
Accounts payable | 30,574,497 | 41,501,682 | |||||||
Other payables | 5,200,807 | 12,676,362 | |||||||
Construction deposits | 1,911,158 | 1,959,706 | |||||||
Billings in excess of cost and earnings | 2,110,808 | 3,315,302 | |||||||
Customer deposits | 16,790,208 | 17,387,969 | |||||||
Shareholder loans | 2,709,523 | 1,810,000 | |||||||
Accrued expenses | 3,205,099 | 4,855,891 | |||||||
Taxes payable | 15,843,815 | 15,830,886 | |||||||
Total current liabilities | 84,471,668 | 111,304,511 | |||||||
Deferred tax liabilities | 5,107,887 | 4,711,161 | |||||||
Customer deposits, net of current portion | 10,687,272 | 8,246,004 | |||||||
Other loans, less current portion | 99,843,228 | 15,731,186 | |||||||
Construction deposits, net of current portion | 1,329,820 | 972,432 | |||||||
Total liabilities | 201,439,875 | 140,965,294 | |||||||
Commitments and Contingencies | |||||||||
Stockholders' equity | |||||||||
Common stock, $0.001 par value, 100,000,000 shares | |||||||||
authorized, 45,050,000 shares issued and outstanding | $ | 45,050 | $ | 45,050 | |||||
Additional paid-in capital | 129,793,572 | 17,764,316 | |||||||
Statutory surplus | 8,495,631 | 16,439,333 | |||||||
Retained earnings | 20,661,184 | 119,668,198 | |||||||
Accumulated other comprehensive income (loss) | (4,046,496) | 3,558,247 | |||||||
Total stockholders' equity | 154,948,941 | 157,475,144 | |||||||
Total Liabilities and Stockholders' Equity | $ | 356,388,816 | $ | 298,440,438 | |||||
The accompanying notes are an integral part of these consolidated financial statements
CHINA HGS REAL ESTATE INC. | |||||||||||||
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) | |||||||||||||
FOR THE YEARS ENDED SEPTEMBER 30, | |||||||||||||
2016 | 2015 | ||||||||||||
Real estate sales | $ | 40,576,717 | $ | 81,115,494 | |||||||||
Less: Sales tax | 2,102,616 | 5,194,616 | |||||||||||
Cost of real estate sales | 28,670,778 | 39,258,557 | |||||||||||
Gross profit | 9,803,323 | 36,662,321 | |||||||||||
Operating expenses | |||||||||||||
Selling and distribution expenses | 1,118,282 | 917,344 | |||||||||||
General and administrative expenses | 2,466,717 | 2,304,706 | |||||||||||
Total operating expenses | 3,584,999 | 3,222,050 | |||||||||||
Operating income | 6,218,324 | 33,440,271 | |||||||||||
Interest expense- net | (225,155) | (61,419) | |||||||||||
Other income - net | 459 | - | |||||||||||
Income before income taxes | 5,993,628 | 33,378,852 | |||||||||||
Provision for income taxes | 974,688 | 1,951,226 | |||||||||||
Net income | 5,018,940 | 31,427,626 | |||||||||||
Other comprehensive income (loss) | |||||||||||||
Foreign currency translation adjustment | (7,604,743) | (5,186,242) | |||||||||||
Comprehensive income (loss) | $ | (2,585,803) | $ | 26,241,384 | |||||||||
Basic and diluted income per common share | |||||||||||||
Basic | $ | 0.11 | $ | 0.70 | |||||||||
Diluted | $ | 0.11 | $ | 0.70 | |||||||||
Weighted average common shares outstanding | |||||||||||||
Basic | 45,050,000 | 45,050,000 | |||||||||||
Diluted | 45,050,000 | 45,052,252 | |||||||||||
The accompanying notes are an integral part of these consolidated financial statements
CHINA HGS REAL ESTATE INC. | ||||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||||||||||
FOR THE YEARS ENDED SEPTEMBER 30, 2016 AND 2015 | ||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Statutory Surplus | Retained Earnings | Accumulated Comprehensive | Total | |||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||
Balance at September 30, 2014 | 45,050,000 | $ | 45,050 | $ | 17,759,349 | $ | 12,845,197 | $ | 91,834,708 | $ | 8,744,489 | $ | 131,228,793 | |||||||||||||||||||
Stock-based Compensation | 4,967 | 4,967 | ||||||||||||||||||||||||||||||
Appropriation of statutory reserve | 3,594,136 | (3,594,136) | - | |||||||||||||||||||||||||||||
Net income for the year | - | 31,427,626 | 31,427,626 | |||||||||||||||||||||||||||||
Foreign currency translation adjustments | (5,186,242) | (5,186,242) | ||||||||||||||||||||||||||||||
Balance at September 30, 2015 | 45,050,000 | $ | 45,050 | $ | 17,764,316 | $ | 16,439,333 | $ | 119,668,198 | $ | 3,558,247 | $ | 157,475,144 | |||||||||||||||||||
Stock-based Compensation | 59,600 | 59,600 | ||||||||||||||||||||||||||||||
Appropriation of statutory reserve | 516,314 | (516,314) | - | |||||||||||||||||||||||||||||
Net income for the year | 5,018,940 | 5,018,940 | ||||||||||||||||||||||||||||||
Recapitalization of VIE ("Guangsha") equity* | 111,969,656 | (8,460,016) | (103,509,640) | - | ||||||||||||||||||||||||||||
Foreign currency translation adjustments | (7,604,743) | (7,604,743) | ||||||||||||||||||||||||||||||
Balance at September 30, 2016 | 45,050,000 | $ | 45,050 | $ | 129,793,572 | $ | 8,495,631 | $ | 20,661,184 | $ | (4,046,496) | $ | 154,948,941 | |||||||||||||||||||
* For the year ended September 30, 2016, Shaanxi Guangsha Investment and Development Group Co., Ltd ("Guangsha"), the VIE of the Company, had a recapitalization. The VIE's accumulated retained earnings and statutory reserve were reclassified to additional paid-in capital in the consolidated financial statements.
The accompanying notes are an integral part of these consolidated financial statement
CHINA HGS REAL ESTATE INC. | |||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
FOR THE YEARS ENDED SEPTEMBER 30, | |||||||||||||||
2016 | 2015 | ||||||||||||||
Cash flows from operating activities | |||||||||||||||
Net income | $ | 5,018,940 | $ | 31,427,626 | |||||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||||||||||
Deferred tax provision | 631,099 | 1,870,180 | |||||||||||||
Depreciation | 74,723 | 83,701 | |||||||||||||
Stock based compensation | 59,600 | 4,967 | |||||||||||||
Changes in assets and liabilities: | |||||||||||||||
Advances to vendors | (60,480) | - | |||||||||||||
Security deposits | (5,045,816) | - | |||||||||||||
Cost and earnings in excess of billings | (634,893) | 118,861 | |||||||||||||
Real estate property development completed | (41,816,677) | (71,332,340) | |||||||||||||
Real estate property under development | (18,287,677) | 63,376,691 | |||||||||||||
Other current assets | (2,496,811) | 1,171,630 | |||||||||||||
Accounts payable | (9,166,316) | (14,428,567) | |||||||||||||
Other payables | (7,024,872) | (684,063) | |||||||||||||
Billings in excess of cost and earnings | (1,070,814) | 462,916 | |||||||||||||
Customer deposits | 3,112,121 | (8,439,960) | |||||||||||||
Construction deposits | 456,014 | 1,654,075 | |||||||||||||
Accrued expenses | (1,468,888) | 1,201,727 | |||||||||||||
Taxes payable | 772,684 | 3,765,165 | |||||||||||||
Net cash (used in) provided by operating activities | (76,948,063) | 10,252,609 | |||||||||||||
Cash flow from investing activities | |||||||||||||||
Purchase of fixed assets | (125,023) | - | |||||||||||||
Net cash used in investing activities | (125,023) | - | |||||||||||||
Cash flow from financing activities | |||||||||||||||
Restricted cash | 144,112 | (181,392) | |||||||||||||
Proceeds from other loans | 93,658,620 | 27,670,998 | |||||||||||||
Repayment of other loans | (6,286,930) | (20,865,164) | |||||||||||||
Repayment of bank loan | (6,123,136) | (12,975,849) | |||||||||||||
Proceeds from shareholder loan | 3,236,078 | 11,642,580 | |||||||||||||
Repayment of shareholder loan | (2,317,607) | (15,292,038) | |||||||||||||
Net cash provided by (used in) financing activities | 82,311,136 | (10,000,865) | |||||||||||||
Effect of changes of foreign exchange rate on cash | (170,732) | (43,370) | |||||||||||||
Net increase in cash | 5,067,318 | 208,374 | |||||||||||||
Cash, beginning of year | 1,333,919 | 1,125,545 | |||||||||||||
Cash, end of year | 6,401,237 | 1,333,919 | |||||||||||||
Supplemental disclosures of cash flow information: | |||||||||||||||
Interest paid | $ | 5,102,735 | $ | 1,840,535 | |||||||||||
Income taxes paid | $ | 424,970 | $ | 144,742 | |||||||||||
Non-cash financing activities: | |||||||||||||||
Recapitalization of VIE ("Guangsha") | $ | 111,969,656 | - | ||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/china-hgs-reports-full-year-financial-results-for-the-fiscal-year-2016-300382327.html
SOURCE China HGS Real Estate Inc.
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