HANZHONG, China, Jan. 10, 2019 /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 2018 ended September 30, 2018 with the U.S. Securities
and Exchange Commission. An electronic copy of the Annual Report on
Form 10-K can be accessed on the SEC's website
at www.sec.gov.
Highlights for the Fiscal 2018
- Total revenues for the fiscal 2018 were approximately
$65.5 million, an increase of
approximately 12% from approximately $58.7
million in fiscal 2017.
- For the Company's long-term real estate development projects,
the related revenue recognized from percentage of completion method
was approximately $36.7 million,
which accounted for 56% of total revenue in fiscal 2018 and
increased 174% from the revenue recognized from percentage
completion method in fiscal 2017.
- Net income for the fiscal 2018 totaled approximately
$5.2 million, a decrease of
approximately 17% from the net income of approximately $6.3 million in fiscal 2017.
- Basic and diluted net earnings per share ("EPS") attributable
to shareholders for the fiscal 2018 were $0.12, compared to $0.14 for the fiscal 2017.
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, 2018, 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,
|
|
|
September
30,
|
|
|
|
2018
|
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
3,267,020
|
|
|
$
|
1,970,199
|
|
Restricted
cash
|
|
|
3,508,557
|
|
|
|
2,746,405
|
|
Cost and earnings in
excess of billings
|
|
|
12,582,965
|
|
|
|
12,673,349
|
|
Real estate property
development completed
|
|
|
58,999,178
|
|
|
|
79,233,948
|
|
Real estate property
under development
|
|
|
60,128,554
|
|
|
|
87,126,402
|
|
Other current
assets
|
|
|
1,408,826
|
|
|
|
1,529,698
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
139,895,100
|
|
|
|
185,280,001
|
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net
|
|
|
718,366
|
|
|
|
825,833
|
|
Real
estate property development completed, net of current
portion
|
|
|
1,217,650
|
|
|
|
1,386,552
|
|
Security
deposits
|
|
|
8,296,782
|
|
|
|
8,564,517
|
|
Real
estate property under development, net of current
portion
|
|
|
215,431,915
|
|
|
|
180,667,276
|
|
Due from
local government for real estate property development
completed
|
|
|
2,836,865
|
|
|
|
2,928,410
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
368,396,678
|
|
|
$
|
379,652,589
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Other
loans
|
|
$
|
55,610,803
|
|
|
$
|
28,545,233
|
|
Accounts
payables
|
|
|
20,507,128
|
|
|
|
24,047,980
|
|
Other
payables
|
|
|
4,894,774
|
|
|
|
3,897,093
|
|
Construction
deposits
|
|
|
1,879,570
|
|
|
|
1,966,115
|
|
Billings in excess of
cost and earnings
|
|
|
5,844,189
|
|
|
|
4,247,477
|
|
Customer
deposits
|
|
|
20,234,072
|
|
|
|
24,613,864
|
|
Shareholder
loans
|
|
|
2,142,110
|
|
|
|
2,304,632
|
|
Accrued
expenses
|
|
|
3,006,150
|
|
|
|
3,158,432
|
|
Taxes
payables
|
|
|
15,492,902
|
|
|
|
17,259,202
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
129,611,698
|
|
|
|
110,040,028
|
|
Deferred
tax liabilities
|
|
|
2,068,257
|
|
|
|
170,950
|
|
Tax
payable – long term
|
|
|
4,960,779
|
|
|
|
5,120,862
|
|
Customer
deposits, net of current portion
|
|
|
1,914,677
|
|
|
|
2,314,641
|
|
Other
loans, less current portion
|
|
|
66,885,378
|
|
|
|
98,797,447
|
|
Construction deposits, net of current portion
|
|
|
1,278,053
|
|
|
|
1,319,295
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
206,718,842
|
|
|
|
217,763,223
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
|
|
Common stock, $0.001
par value, 100,000,000 shares authorized,
45,050,000 shares issued and outstanding September 30, 2018 and
2017
|
|
|
45,050
|
|
|
|
45,050
|
|
Additional paid-in
capital
|
|
|
129,907,805
|
|
|
|
129,853,172
|
|
Statutory
surplus
|
|
|
9,925,794
|
|
|
|
9,142,899
|
|
Retained
earnings
|
|
|
30,803,052
|
|
|
|
26,343,030
|
|
Accumulated other
comprehensive deficit
|
|
|
(9,003,865)
|
|
|
|
(3,494,785)
|
|
|
|
|
|
|
|
|
|
|
Total
stockholders' equity
|
|
|
161,677,836
|
|
|
|
161,889,366
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
and Stockholders' Equity
|
|
$
|
368,396,678
|
|
|
$
|
379,652,589
|
|
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, 2018 and 2017
|
|
|
|
2018
|
|
|
2017
|
|
Real estate
sales
|
|
$
|
65,487,296
|
|
|
$
|
58,671,424
|
|
Less: Sales
tax
|
|
|
1,248,230
|
|
|
|
1,215,960
|
|
Net real estate
sales
|
|
|
64,239,066
|
|
|
|
57,455,464
|
|
Cost of real
estate sales
|
|
|
48,642,392
|
|
|
|
45,590,345
|
|
Gross
profit
|
|
|
15,596,674
|
|
|
|
11,865,119
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Selling and
distribution expenses
|
|
|
843,813
|
|
|
|
568,081
|
|
General and
administrative expenses
|
|
|
2,530,269
|
|
|
|
3,177,649
|
|
Total operating
expenses
|
|
|
3,374,082
|
|
|
|
3,745,730
|
|
Operating
income
|
|
|
12,222,592
|
|
|
|
8,119,389
|
|
Interest expense,
net
|
|
|
(499,855)
|
|
|
|
(497,798)
|
|
Other income
(expense), net
|
|
|
(1,407,109)
|
|
|
|
2,222
|
|
Income before
income taxes
|
|
|
10,315,628
|
|
|
|
7,623,813
|
|
Provision for income
taxes
|
|
|
5,072,711
|
|
|
|
1,294,699
|
|
Net
income
|
|
|
5,242,917
|
|
|
|
6,329,114
|
|
Other comprehensive
income (loss)
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
(5,509,080)
|
|
|
|
551,711
|
|
Comprehensive
income (loss)
|
|
$
|
(266,163)
|
|
|
$
|
6,880,825
|
|
Basic and diluted
income per common share
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
0.12
|
|
|
$
|
0.14
|
|
Weighted average
common shares outstanding
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
45,050,000
|
|
|
|
45,050,000
|
|
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, 2018 AND 2017
|
|
|
|
Common
Stock
|
|
|
Additional
|
|
|
Statutory
|
|
|
Retained
|
|
|
Accumulated
Other
Comprehensive
|
|
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Paid-in Capital
|
|
|
Surplus
|
|
|
Earnings
|
|
|
Deficit
|
|
|
Total
|
|
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
|
|
Stock-based
Compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
59,600
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
59,600
|
|
Appropriation of
statutory reserve
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
647,268
|
|
|
|
(647,268)
|
|
|
|
-
|
|
|
|
-
|
|
Net income
for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,329,114
|
|
|
|
-
|
|
|
|
6,329,114
|
|
Foreign currency
translation adjustments
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
551,711
|
|
|
|
551,711
|
|
Balance at September
30, 2017
|
|
|
45,050,000
|
|
|
|
45,050
|
|
|
|
129,853,172
|
|
|
|
9,142,899
|
|
|
|
26,343,030
|
|
|
|
(3,494,785)
|
|
|
|
161,889,366
|
|
Stock-based
Compensation
|
|
|
-
|
|
|
|
-
|
|
|
|
54,633
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
54,633
|
|
Appropriation of
statutory reserve
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
782,895
|
|
|
|
(782,895)
|
|
|
|
-
|
|
|
|
-
|
|
Net income
for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,242,917
|
|
|
|
-
|
|
|
|
5,242,917
|
|
Foreign currency
translation adjustments
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,509,080)
|
|
|
|
(5,509,080)
|
|
Balance at September
30, 2018
|
|
|
45,050,000
|
|
|
$
|
45,050
|
|
|
$
|
129,907,805
|
|
|
$
|
9,925,794
|
|
|
$
|
30,803,052
|
|
|
$
|
(9,003,865)
|
|
|
$
|
161,677,836
|
|
The accompanying notes are an integral part of these
consolidated financial statements
CHINA HGS REAL
ESTATE INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
FOR THE YEARS
ENDED SEPTEMBER 30, 2018 and 2017
|
|
|
|
2018
|
|
|
2017
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
5,242,917
|
|
|
$
|
6,329,114
|
|
Adjustments to
reconcile net income to net cash provided by (used in)
operating
activities:
|
|
|
|
|
|
|
|
|
Deferred tax
provision
|
|
|
1,999,052
|
|
|
|
167,007
|
|
Depreciation
|
|
|
85,788
|
|
|
|
67,074
|
|
Stock based
compensation
|
|
|
54,633
|
|
|
|
59,600
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
|
Restricted
cash
|
|
|
(917,026)
|
|
|
|
(1,253,981)
|
|
Advances to
vendors
|
|
|
38,990
|
|
|
|
-
|
|
Security
deposits
|
|
|
-
|
|
|
|
(590,274)
|
|
Cost and earnings in
excess of billings
|
|
|
(321,291)
|
|
|
|
(734,569)
|
|
Real estate property
development completed
|
|
|
18,789,499
|
|
|
|
33,718,033
|
|
Real estate property
under development
|
|
|
(16,955,946)
|
|
|
|
(58,501,531)
|
|
Other current
assets
|
|
|
37,764
|
|
|
|
1,171,589
|
|
Accounts
payables
|
|
|
(2,930,405)
|
|
|
|
(6,451,836)
|
|
Other
payables
|
|
|
1,176,231
|
|
|
|
(1,286,545)
|
|
Billings in excess of
cost and earnings
|
|
|
1,817,121
|
|
|
|
2,082,143
|
|
Customer
deposits
|
|
|
(4,137,470)
|
|
|
|
(604,497)
|
|
Construction
deposits
|
|
|
(26,353)
|
|
|
|
35,365
|
|
Accrued
expenses
|
|
|
(74,789)
|
|
|
|
(50,932)
|
|
Taxes
payables
|
|
|
(1,413,508)
|
|
|
|
1,343,421
|
|
Net cash provided
by (used in) operating activities
|
|
|
2,465,207
|
|
|
|
(24,500,819)
|
|
|
|
|
|
|
|
|
|
|
Cash flow from
investing activities
|
|
|
|
|
|
|
|
|
Purchases of fixed
assets
|
|
|
-
|
|
|
|
(97,524)
|
|
Net cash used in
investing activities
|
|
|
-
|
|
|
|
(97,524)
|
|
|
|
|
|
|
|
|
|
|
Cash flow from
financing activities
|
|
|
|
|
|
|
|
|
Proceeds from other
loans
|
|
|
5,150,795
|
|
|
|
26,657,111
|
|
Repayment of other
loans
|
|
|
(6,060,305)
|
|
|
|
(6,039,415)
|
|
Proceeds from
shareholder loan
|
|
|
1,505,324
|
|
|
|
8,444,575
|
|
Repayment of
shareholder loan
|
|
|
(1,659,834)
|
|
|
|
(8,842,359)
|
|
Net cash (used in)
provided by financing activities
|
|
|
(1,064,020)
|
|
|
|
20,219,912
|
|
Effect of changes
of foreign exchange rate on cash
|
|
|
(104,366)
|
|
|
|
(52,607)
|
|
Net increase
(decrease) in cash
|
|
|
1,296,821
|
|
|
|
(4,431,038)
|
|
Cash, beginning of
year
|
|
|
1,970,199
|
|
|
|
6,401,237
|
|
Cash, end of
year
|
|
$
|
3,267,020
|
|
|
$
|
1,970,199
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
$
|
6,643,169
|
|
|
$
|
5,756,560
|
|
Income taxes
paid
|
|
$
|
772,337
|
|
|
$
|
721,177
|
|
Reclassification of
deferred tax liability to income tax payable
|
|
$
|
-
|
|
|
$
|
5,120,862
|
|
View original
content:http://www.prnewswire.com/news-releases/china-hgs-reports-full-year-financial-results-for-the-fiscal-year-2018-300776209.html
SOURCE China HGS Real Estate Inc.