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China Housing & Land Development Inc. Announces Second Quarter 2013 Financial Results



China Housing & Land Development Inc. Announces Second Quarter 2013 Financial
                                   Results

-- Company Beats 2Q13 Forecast --

PR Newswire

XI'AN, China, Aug. 14, 2013

XI'AN, China, Aug. 14, 2013 /PRNewswire/ -- China Housing & Land Development,
Inc. ("China Housing" or the "Company"; Nasdaq: CHLN) today announced its
financial results for the quarter ended June 30, 2013.

Highlights for Q2 2013:

  o Total revenue in the second quarter of 2013 was $59.7 million, a 9.9%
    increase from $54.4 million in the first quarter of 2013 and a 70.6%
    increase from $35.0 million in the second quarter of 2012.  Second quarter
    recognized revenue significantly exceeded the Company's second quarter
    revenue outlook of $34 to $36 million.
  o Total gross floor area ("GFA") sales were 48,439 sq. meters during the
    second quarter of 2013, compared with 89,691 sq. meters in the first
    quarter of 2013 and 25,908 sq. meters in the second quarter of 2012.
  o Average residential selling price ("ASP") in the second quarter of 2013
    was RMB 7,499, compared with RMB 5,695 in the first quarter of 2013, and
    RMB 5,705 in the second quarter of 2012.
  o Gross profit increased $18.3 million in the second quarter of 2013, a
    101.9% increase from $9.0 million in the first quarter of 2013 and a
    125.3% increase from $8.1 million in the second quarter of 2012. Second
    quarter 2013 gross margin was 30.6%, compared with 16.6% in the first
    quarter of 2013 and 23.2% in the second quarter of 2012.
  o SG&A expenses as a percentage of total revenue increased to 8.2%, from
    5.8% in the first quarter of 2013 and decreased from 11.3% in the second
    quarter of 2012.
  o Operating income was $9.2 million in the second quarter of 2013, a 113.9%
    increase from $4.3 million in the first quarter of 2013, and a 199.4%
    increase from $3.1 million in the second quarter of 2012.
  o Net income attributable to the Company in the second quarter of 2013 was
    $6.4 million, or $0.18 per diluted share, a 107.0% increase from $3.1
    million, or $0.09 per diluted share, in the first quarter of 2013.

Mr. Pingji Lu, China Housing's Chairman, commented, "We are pleased to report
another strong quarter as our second quarter top line results once again
exceeded our guidance forecast. Our strong project development efforts
combined with continued strength in the Xi'an residential housing market led
to higher average selling prices compared to the last quarter and prior year
periods. Four projects contributed the majority of our revenue during the
second quarter of 2013, which include our Puhua Phase Two and Three, Park
Plaza and Ankang projects."

"We experienced a notable increase in gross profit and a higher gross margin
than both the previous quarter and the same period last year, as a result of a
considerable increase in revenue and average selling prices while costs
remained relatively flat. Furthermore, our Ankang project, which began
pre-sales in the fourth quarter of 2012, began to contribute to our revenue
during the second quarter."

"As we enter the second half of the year, our current four projects provide us
with solid sales and profit opportunities. Additionally, we will initiate
marketing for Golden Bay in the third quarter and adjust our sales strategy
based on market feedback on the project. We anticipate that official pre-sales
will start in the fourth quarter. We remain optimistic about our opportunities
in the Xi'an real estate market and continue to focus on the execution of our
development project plan. We believe our financial performance in the second
half of the year will be strong and that our commitment to providing the
highest quality residential properties will continue to drive our growth
forward."

Total revenue in the second quarter of 2013 increased 9.9% to $59.7 million
from $54.4 million in the first quarter of 2013 and increased 70.6% from $35.0
million in the second quarter of 2012. Other revenue in the second quarter of
2013 decreased to $7.0 million from $11.1 million in the first quarter of 2013
and increased from $4.9 million in the second quarter of 2012. The
year-over-year increase was caused by the recognition of interest income on
deposits based on the Company's borrowing activity from several overseas
banks.

In the second quarter of 2013, the majority of the Company's real estate
revenue came from its Puhua Phase Two and Three projects, Park Plaza and
Ankang projects. Second quarter 2013 contract sales totaled $59.0 million
compared with $82.4 million in the first quarter of 2013 and $24.8 million in
the second quarter of 2012. Total gross floor area ("GFA") sales were 48,439
sq. meters during the second quarter of 2013, compared with 89,691 sq. meters
in the first quarter of 2013 and 25,908 sq. meters in the second quarter of
2012. The Company's ASP in the second quarter of 2013 was RMB 7,499, compared
with RMB 5,695 in the first quarter of 2013, and RMB 5,705 in the second
quarter of 2012.

Gross profit for the three months ended June 30, 2013 was $18.3
million, representing an increase of 101.9% from $9.0 million in the first
quarter of 2013 and a 125.3% increase from $8.1 million in the second quarter
of 2012. Gross profit margin for the three months ended June 30, 2013 was
30.6%, which is above the 16.6% in the first quarter of 2013 and the 23.2% in
the second quarter of 2012. The increase in gross profit margin was mainly due
to a combination of increased sales volume, increased average selling prices,
and sales of Puhua Phase Two commercial units, which had higher gross margin.
The Company continues to expect full year gross margin to be in the 25% to 30%
range in 2013.

SG&A expense was $4.9 million in the second quarter of 2013, compared with
$3.2 million in the first quarter of 2013 and $4.0 million in the second
quarter of 2012. SG&A expense as a percentage of total revenue was 8.2%,
compared with 5.8% in the first quarter of 2013 and 11.3% in the second
quarter of 2012. The year-over-year increase in SG&A expense was due to
increased selling expenses during the second quarter of 2013 associated with
new projects commencing pre-sales activity. 

Operating income in the second quarter of 2013 was $9.2 million, or 15.3% of
total revenue, compared with $4.3 million, or 7.9% of total revenue, in the
first quarter of 2013, and $3.1 million, or 8.7% of total revenue in the
second quarter of 2012. The year-over-year increase in operating income was
mainly due to increased sales revenue and improved gross profit margin.

Net income attributable to China Housing in the second quarter of 2013 was
$6.4 million, or $0.18 per diluted share. This performance compares with net
income of $3.1 million, or $0.09 per diluted share, in the first quarter of
2013 and net income of $1.9 million, or $0.06 per diluted share, in the second
quarter of 2012.

Sequential Quarterly Revenue Breakout Comparison

Project         Q2 2013                                            Q1 2013
                Recognized  Contract   GFA           Unsold        Recognized Contract   GFA
                                              ASP            POC                                ASP
                Revenue     Sales      Sold          GFA           Revenue    Sales      Sold
                ($)         ($)        (m^2)  (RMB)  (m^2)         ($)        ($)        (m^2)  (RMB)
Projects Under Construction
Park Plaza      21,709,086  25,098,516 17,348 8,903  110,323 70.9% 19,794,628 30,152,026 22,151 8,439
Puhua Phase
                9,168,480   10,163,137 8,665  7,218  71,733  50.9% 17,348,070 36,469,024 48,902 4,624
Three
Puhua Phase
                14,621,508  14,039,803 9,181  9,411  127,204 79.9% 5,372,159  7,122,505  5,076  8,700
Two
Ankang          5,526,291   8,024,028  12,655 3,902  191,151 21.5% -          7,876,083  12,909 4,631
Projects Completed
Puhua Phase
                1,673,638   1,673,638  591    17,427 7,311   100%  649,744    649,744    569    7,080
One
JunJing III     24,132      24,132     -      -      873     100%  109,970    109,970    84     8,118
JunJing II
                -           -          -      -      817     100%  -          -          -      -
Phase One
JunJing I       -           -          -      -      4,699   100%  -          -          -      -
Other Projects  19,500      -          -      -      -             -          -          -      -
Other Income    6,996,473   -          -                           11,099,124 -          -
Total           59,739,107  59,023,253 48,439 7,499  514,110 -     54,373,695 82,379,352 89,691 5,695
Q-o-Q Change    9.9%        -28.4%     -46.0% 31.7%

Total debt outstanding as of June 30, 2013 was $301.9 million compared with
$202.6 million on December 31, 2012. Net debt outstanding (total debt less
cash and restricted cash) as of June 30, 2013 was $88.7 million compared with
$85.9 million on December 31, 2012. The Company's net debt as a percentage of
total capital (net debt plus shareholders' equity) was 35.3 percent on June
30, 2013 and 36.6 percent on December 31, 2012.

                           Q2 2013
                                     First
                           Unsold
Projects in Planning                 Pre-sales
                           GFA
                                     Scheduled
                           (m^2)
Golden Bay                 252,540   Q4 2013
Puhua Phase Four           263,833   Q3 2014
Textile City               630,000   Q3 2014
Total projects in planning 1,146,373

2013 Third Quarter Outlook

Total recognized revenue for the 2013 third quarter is expected to reach $34
million to $36 million, compared with $59.7 million in the 2013 second quarter
and $28.9 million in the third quarter of 2012. The Company is reporting
revenues, which are subject to percentage of completion alterations.

Conference Call Information

Management will host a conference call at 8:30 am ET on August 14, 2013.
Listeners may access the call by dialing #1-913-312-0643. To listen to the
live webcast of the event, please go to http://www.viavid.net. Listeners may
access the call replay, which will be available through August 21, 2013, by
dialing #1-858-384-5517; passcode: 7803652.

About China Housing & Land Development, Inc.

Based in Xi'an, the capital city of China's Shaanxi province, China Housing &
Land Development, Inc., is a leading developer of residential and commercial
properties in northwest China. China Housing has been engaged in land
acquisition, development, and management, including the sales of residential
and commercial real estate properties through its wholly-owned subsidiary in
China, since 1992.

China Housing & Land Development is the first Chinese real estate development
company traded on NASDAQ. The Company's news releases, project information,
photographs, and more are available on the internet at www.chldinc.com.

Safe Harbor

This news release may contain forward-looking information about China Housing
& Land Development, Inc. which is covered under the safe harbor for
forward-looking statements provided by the Private Securities Litigation
Reform Act of 1995. Forward-looking statements are statements that are not
historical facts. These statements can be identified by the use of forward-
looking terminology such as believe, expect, may, will, should, project, plan,
seek, intend, or anticipate or the negative thereof or comparable terminology,
and include discussions of strategy, and statements about industry trends and
China Housing & Land Development's future performance, operations, and
products.

Such statements are subject to risks and uncertainties that could cause actual
results to differ materially from those projected. Actual performance results
may vary significantly from expectations and projections. Further information
regarding this and other risk factors are contained in China Housing's public
filings with the U.S. Securities and Exchange Commission.

All information provided in this news release and in any attachments is as of
the date of the release, and the companies do not undertake any obligation to
update any forward-looking statement as a result of new information, future
events or otherwise, except as required under law.

China Housing contacts
Mr. Cangsang Huang
Chief Financial Officer
Tel:   +86 29.8258.2648 in Xi'an
Email: chuang@chldinc.com

Ms. Jing Lu
Chief Operating Officer, Board Secretary, and Investor Relations Officer
+86 29.8258.2639 in Xi'an
jinglu@chldinc.com / English and Chinese

Mr. Shuai Luo, CFA
Investor Relations
+86 29.8258.2632 in Xi'an
Laurentluo@chldinc.com / English and Chinese

Mr. Bill Zima, ICR
+86 10 6583 7511
William.Zima@icrinc.com

China Housing Investor Relations Department 
+1 646.308.1285

 

CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
Unaudited Interim Consolidated Statements of Income
For Three and Six Months Ended June 30, 2013 and 2012
                                                   3 months      3 months      6 months       6 months
                                                   June 30,      June 30,      June 30, 2013  June 30,
                                                   2013          2012                         2012
REVENUES
 Real estate sales                                 $ 52,742,634  $ 30,069,549  $ 96,017,205   $ 50,503,892
 Other revenue                                       6,996,473     4,945,971     18,095,597     8,013,399
Total revenues                                       59,739,107    35,015,520    114,112,802    58,517,291
COST OF REVENUES
 Cost of real estate sales                           37,235,900    23,115,905    73,024,315     37,348,769
 Cost of other revenue                               4,232,921     3,792,088     13,768,820     6,031,958
Total cost of revenues                               41,468,821    26,907,993    86,793,135     43,380,727
Gross margin                                         18,270,286    8,107,527     27,319,667     15,136,564
OPERATING EXPENSES
 Selling, general and administrative expenses        4,904,517     3,956,069     8,066,398      6,979,754
 Stock-based compensation                            1,006,736     690,390       1,104,273      812,996
 Other expenses                                      390,567       58,455        450,549        64,888
 Financing expense                                   2,807,094     100,676       4,253,880      330,948
 Accretion expense on convertible debt               -             241,665       -              474,151
Total operating expenses                             9,108,914     5,047,255     13,875,100     8,662,737
                                                     9,161,372     3,060,272
CHANGE IN FAIR VALUE OF DERIVATIVES
 Change in fair value of embedded derivatives        -             (150,181)     -              (221,284)
 Change in fair value of warrants                    -             (3,554)       -              (3,186)
Total change in fair value of derivatives            -             (153,735)     -              (224,470)
Income before provision for income taxes             9,161,372     3,214,007     13,444,567     6,698,297
 Provision for income taxes                          2,835,057     1,372,027     4,102,200      2,341,512
 (Recovery of) provision for deferred income taxes   (50,013)      (64,768)      (114,648)      214,624
Provision for income taxes                           2,785,044     1,307,259     3,987,552      2,556,136
NET INCOME                                         $ 6,376,328   $ 1,906,748   $ 9,457,015    $ 4,142,161
WEIGHTED AVERAGE SHARES OUTSTANDING
 Basic                                               35,086,599    34,914,731    35,086,599     34,822,496
 Diluted                                             35,086,599    34,914,731    35,086,599     34,822,496
NET INCOME PER SHARE
 Basic                                             $ 0.18        $ 0.06        $ 0.27         $ 0.12
 Diluted                                           $ 0.18        $ 0.06        $ 0.27         $ 0.12
The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 

CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
Unaudited Interim Condensed Consolidated Balance Sheets 
As of June 30, 2013 and December 31, 2012
                                                  March 31,      December 31,
                                                  2013           2012
ASSETS
 Cash                                             $ 100,960,800  $ 6,121,448
 Cash - restricted                                  112,235,956    110,576,248
 Accounts receivable, net of allowance for
 doubtful
         accounts of $586,439 and $577,713,         50,137,448     26,897,958
         respectively
 Construction in excess of billing                  953,735        1,484,626
 Other receivables, prepaid expenses and other      7,972,560      6,854,325
 assets, net
 Real estate held for development or sale           225,395,977    238,111,545
 Property and equipment, net                        34,354,503     33,837,346
 Advances to suppliers                              460,774        1,363,817
 Deposits on land use rights                        43,393,688     42,748,017
 Intangible asset, net                              55,192,879     54,482,252
 Goodwill                                           1,943,098      1,914,186
 Deferred financing costs                           116,221        194,162
                 Total assets                       633,117,639    524,585,930
LIABILITIES
 Accounts payable                                 $ 52,640,327   $ 55,142,928
 Advances from customers                            43,172,088     48,829,289
 Accrued expenses                                   17,467,815     22,229,514
 Income and other taxes payable                     27,265,975     20,929,485
 Other payables                                     12,532,968     11,228,553
 Loans from employees                               23,002,319     27,868,785
 Loans payable                                      278,893,997    174,749,368
 Deferred tax liability                             14,625,370     14,521,613
         Total liabilities                          469,600,859    375,499,535
SHAREHOLDERS' EQUITY
 Common stock: $.001 par value, authorized
 100,000,000 shares;
         Issued 35,438,079 and 35,438,079,          35,438         35,438
         respectively
 Common stock subscribed                            900,364        -
 Additional paid in capital                         50,176,083     49,972,174
 Treasury Stock                                     (434,240)      (434,240)
 Statutory reserves                                 9,903,457      9,903,457
 Retained earnings                                  74,514,348     65,057,333
 Accumulated other comprehensive income             28,421,330     24,552,233
         Total shareholders' equity                 163,516,780    149,086,395
                 Total liabilities and            $ 633,117,639  $ 524,585,930
                 shareholders' equity
The accompanying notes are an integral part of these interim condensed
consolidated financial statements.

 

SOURCE China Housing & Land Development, Inc.

Website: http://www.chldinc.com
Website: http://www.viavid.net
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