China HGS Reports Full Year Financial Results for the Fiscal Year 2013 -- Revenue and Net Profit Up by Approximately 260% and 300%, Respectively PR Newswire HANZHONG, China, Dec. 13, 2013 HANZHONG, China, Dec. 13, 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 filed its Annual Report on Form 10-K for the fiscal year 2013 ended September 30, 2013 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 atwww.sec.gov. Highlights for the Fiscal 2013 oTotal revenues for the fiscal 2013 were approximately $67.8 million, an increase of approximately 260% from approximately $18.9 million in fiscal 2012. oThe Company adopted Percentage of Completion method to recognize real estate sales from long term real estate development projects, total revenue recognized from percentage of completion method was approximately $27.5 million, which accounted for 40.6% of total revenue in fiscal 2013. oNet income for the fiscal 2013 totaled approximately $20.8 million, an increase of approximately 300% from the net income of approximately $5.2 million in fiscal 2012. oBasic and diluted net earnings per share ("EPS") attributable to shareholders for the fiscal 2013 were $0.46, compared to $0.11 for the fiscal 2012. "I am very pleased that the Company delivered an outstanding performance driven by solid market demands despite restrictive measurements imposed by the central government on the real estate market in China," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS. "Looking ahead in fiscal 2014, we remain focused on completing the construction of our on-going apartment complex projects. As the construction of some of our large scale high rise apartment buildings are moving closer to the completion stage, we plan to step up our sales efforts and expect our sales revenue to steadily increase. Longer term, the Company will continue to focus on building large-scale and high quality communities in Tier 3 and Tier 4 cities and expand development models into new markets," concluded Mr. Xiaojun Zhu. SafeHarborStatement 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, 2013, 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: email@example.com CHINA HGS REAL ESTATE INC. CONSOLIDATED BALANCE SHEETS September 30, 2013 2012 ASSETS Current assets: Cash $ 5,878,101 $ 1,104,686 Restricted cash 1,332,807 1,080,985 Advances to vendors 109,134 2,566,422 Loans to outside parties, net - 20,957 Cost and earnings in excess of billings 2,178,270 - Real estate property development completed 11,607,164 19,534,088 Real estate property under development 1,580,670 8,590,275 Other current assets 368,377 171,863 Total current assets 23,054,523 33,069,276 Property, plant and equipment, net 977,739 1,037,080 Real estate property development 7,619,811 6,691,813 completed, net of current portion Security deposits for land use right 3,259,240 22,894,698 Real estate property under development, 142,916,601 56,021,787 net of current portion Total Assets $ 177,827,914 $ 119,714,654 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: 4,888,860 $ - Bank loan – current portion $ Accounts payable 22,527,686 3,828,880 Other payables 1,863,922 1,213,394 Construction deposits 357,447 301,318 Billings in excess of cost and 5,109,758 - earnings Customer deposits 6,130,466 11,597,422 Shareholder loan 1,810,000 1,810,000 Accrued expenses 2,896,539 2,305,086 Taxes payable 6,612,707 4,336,458 Total current liabilities 52,197,385 25,392,558 Deferred tax liabilities 650,067 - Customer deposits, net of current 13,410,081 17,743,993 portion Long-term bank loan, less current 11,407,340 - portion Construction deposits, net of current 1,013,877 864,259 portion Total liabilities 78,678,750 44,000,810 Commitments and Contingencies Stockholders' equity Common stock, $0.001 par value, 100,000,000 shares authorized, 45,050,000 shares issued and outstanding as of September 30, 2013 and 2012 45,050 $ 45,050 $ Additional paid-in capital 17,759,349 17,750,337 Statutory surplus 8,977,230 6,549,354 Retained earnings 63,257,918 44,894,229 Accumulated other comprehensive income 9,109,617 6,474,874 Total stockholders' equity 99,149,164 75,713,844 Total Liabilities and Stockholders' Equity 177,827,914 119,714,654 $ $ CHINA HGS REAL ESTATE INC. CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME FOR THE YEARS ENDED SEPTEMBER 30, 2013 2012 Real estate sales $ 67,809,073 $ 18,856,978 Less: Sales tax 4,244,644 1,180,437 Cost of real estate sales 37,284,088 9,590,009 Gross profit 26,280,341 8,086,532 Operating expenses Selling and distribution expenses 915,217 517,025 General and administrative expenses 3,087,434 2,049,388 Total operating expenses 4,002,651 2,566,413 Operating income 22,277,690 5,520,119 Interest income (expense) - net (98,305) (73,608) Other income - net 10,398 12,659 Income before income taxes 22,189,783 5,459,170 Provision for income taxes 1,398,218 283,077 Net income 20,791,565 5, 176,093 Other comprehensive income Foreign currency translation adjustment 2,634,743 862,601 Comprehensive income $ 23,426,308 $ 6,038,694 Basic and diluted income per common share Basic $ 0.46 $ 0.11 Diluted $ 0.46 $ 0.11 Weighted average common shares outstanding Basic 45,050,000 45,050,000 Diluted 45,124,474 45,050,000 CHINA HGS REAL ESTATE INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED SEPTEMBER 30, 2013 AND 2012 Accumulated Additional Statutory Retained Other Par Paid-in Total Common value Surplus Earnings Comprehensive Stock $0.001 Capital Amount Income Shares Balance at September 30, 45,050,000 $ 45,050 $ 17,724,085 $ 5,945,384 $ 40,322,106 $ 5,612,273 $ 69,648,898 2011 26,252 26,252 Stock-based Compensation Appropriation 603,970 (603,970) - of statutory reserve - 5,176,093 5,176,093 Net income for the year Foreign currency 862,601 862,601 translation adjustments Balance at 45,050,000 $ 45,050 $ 17,750,337 $ 6,549,354 $ 44,894,229 $ 6,474,874 $ 75,713,844 September 30, 2012 Stock-based 9,012 9,012 Compensation Appropriation 2,427,876 (2,427,876) - of statutory reserve - 20,791,565 20,791,565 Net income for the year Foreign 2,634,743 2,634,743 currency translation adjustments Balance at 45,050,000 $ 45,050 $ 17,759,349 $ 8,977,230 $ 63,257,918 $ 9,109,617 $ 99,149,164 September 30, 2013 CHINA HGS REAL ESTATE INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2013 2012 Cash flows from operating activities Net income $ 20,791,565 $ 5,176,093 Adjustments to reconcile net income to net cash used in operating activities: Depreciation 88,818 89,363 Stock based compensation 9,012 26,252 Changes in assets and liabilities: Restricted cash (216,286) (184,604) Advances to vendors 2,494,790 3,435,815 Loans to outside parties 21,249 2,581,379 Security deposits for land use rights 20,005,071 (16,562,486) Cost and earnings in excess of billings (2,144,855) - Real estate property development 7,659,989 (7,110, 766) completed Real estate property under development (76,766,598) (126,162) Other current assets (188,464) (85,398) Accounts payables 18,299,774 (3,700,969) Other payables 604,996 885,072 Customer deposits (10,510,235) 7,089,879 Construction deposits 168,439 106,436 Billings in excess of cost and earnings 5,031,374 - Accrued expenses 518,602 277,201 Taxes payable 2,114,271 264,205 Net cash used in operating activities $ (12,018,488) $ (7,838,690) Cash flow from financing activities Proceeds from bank loan 16,046,213 - Proceeds from shareholder loan - 3,142,332 Repayment of shareholder loan - (3,142,332) Net cash provided by financing $ 16,046,213 $ - activities Effect of changes of foreign exchange 745,690 105,581 rate on cash Net increase (decrease) in cash 4,773,415 (7,733,109) Cash, beginning of year 1,104,686 8,837,795 Cash, end of year $ 5,878,101 $ 1,104,686 Supplemental disclosures of cash flow information: Interest paid $ 55,839 $ - Income taxes paid $ 780,908 $ 129,863 SOURCE China HGS Real Estate Inc. Website: http://www.chinahgs.com
China HGS Reports Full Year Financial Results for the Fiscal Year 2013 -- Revenue and Net Profit Up by Approximately 260% and
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