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China HGS Reports Full Year Financial Results for the Fiscal Year 2013 -- Revenue and Net Profit Up by Approximately 260% and

  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: randy.xiong@chinahgs.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
 
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