China HGS Announces First Six Months of Fiscal 2021 Financial Results

Rhea-AI Summary

China HGS Real Estate Inc. (NASDAQ: HGSH) reported robust financial results for the second quarter and first six months of fiscal 2021. Total revenues for Q2 surged to approximately $18.3 million, a remarkable 867.2% increase from $1.9 million in Q2 2020, driven by higher gross floor area sales. Net income rose to approximately $2.2 million, a turnaround from a $0.6 million loss last year. For the first half, revenues reached about $21.0 million, up 401.5% from $4.2 million in H1 2020, with net income of approximately $2.5 million compared to a loss of $0.9 million.

Positive

• Total revenues for Q2 fiscal 2021 increased 867.2% to $18.3 million.
• Net income for Q2 fiscal 2021 reached $2.2 million, up from a net loss of $0.6 million.
• First six months of fiscal 2021 revenues were $21.0 million, a 401.5% increase.
• Net income for the first half was $2.5 million, compared to a loss of $0.9 million.

Negative

• None.

HANZHONG, China, May 18, 2021 /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, announced its interim financial results for the first half of fiscal 2021 ended March 31, 2021.

Second Quarter Fiscal 2021 Highlights

• Total revenues for the second quarter of fiscal 2021 were approximately $18.3 million, representing an increase of 867.2% from approximately $1.9 million in the same quarter of fiscal 2020 due to more gross floor area sold during the current quarter.
• Net income for the second quarter of fiscal 2021 totaled approximately $2.2 million, significantly increased from net loss of approximately $0.6 million in the same period of last year.
• Basic and diluted net income per share attributable to shareholders for the second quarter of fiscal 2021 increased to $0.10, compared to net loss per share of $0.01 for the same quarter of the last year.  

First Six Months of Fiscal 2021 Highlights

• Total revenues for the first six months of fiscal 2021 were approximately $21.0 million, representing an increase of 401.5% from approximately $4.2 million in the same period of fiscal 2020.
• Net income for the first six months of fiscal 2021 totaled approximately $2.5 million, significantly increased from net loss of approximately $0.9 million in the same period of last year.
• Basic and diluted net income per share attributable to shareholders for the second quarter of fiscal 2021 increased to $0.11, compared to net loss per share of $0.02 for the same period of the last year.  

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, 2020, 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
		March 31,				September 30,
		2021				2020
ASSETS			(Unaudited)
Cash		$	555,576			$	457,699
Restricted cash			3,297,734				3,409,837
Contract assets			15,195,730				14,255,328
Real estate property development completed			93,359,420				94,671,258
Other assets			9,709,848				8,132,555
Property, plant and equipment, net			567,292				571,330
Security deposits			1,922,853				1,855,506
Real estate property under development			251,151,767				227,741,017
Due from local governments for real estate property development completed			2,973,777				2,869,623
Total Assets		$	378,733,997			$	353,964,153
LIABILITIES AND STOCKHOLDERS' EQUITY
Construction loans		$	116,060,624			$	109,937,408
Accounts payable			31,854,281				25,415,352
Other payables			4,569,384				4,028,048
Construction deposits			3,318,974				3,202,730
Contract liabilities			1,885,982				1,847,685
Customer deposits			21,498,027				19,405,528
Accrued expenses			1,861,745				1,920,370
Taxes payable			20,592,607				19,881,211
Total liabilities			201,641,624				185,638,332
Commitments and Contingencies
Stockholders' equity
Common stock, $0.001 par value, 50,000,000 shares authorized, 22,525,000 shares issued and outstanding March 31, 2021 and September 30, 2020			22,525				22,525
Additional paid-in capital			129,930,330				129,930,330
Statutory surplus			10,458,395				10,458,395
Retained earnings			37,466,885				34,954,061
Accumulated other comprehensive loss			(785,762)				(7,039,490)
Total stockholders' equity			177,092,373				168,325,821
Total Liabilities and Stockholders' Equity		$	378,733,997			$	353,964,153

 

 

CHINA HGS REAL ESTATE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
		Three months ended March 31,								Six months ended March 31,
		2021				2020				2021				2020
Real estate sales		$	18,278,112			$	1,889,829			$	21,033,374			$	4,194,073
Less: Sales tax			(115,166)				(27,048)				(138,704)				(66,281)
Cost of real estate sales			(14,474,264)				(1,466,381)				(16,327,906)				(3,171,993)
Gross profit			3,688,682				396,400				4,566,764				955,799
Operating expenses
Selling and distribution expenses			16,821				200,390				96,166				400,558
General and administrative expenses			543,334				819,415				849,259				1,408,254
Total operating expenses			560,155				1,019,805				945,425				1,808,812
Operating income (loss)			3,128,527				(623,405)				3,621,339				(853,013)
Interest income (expense), net			712				(15,586)				3,537				(32,839)
Other expense			(166,571)				(96,729)				(272,428)				(96,729)
Income (loss) before income taxes			2,962,668				(735,720)				3,352,448				(982,581)
Provision (benefit) for income taxes			741,431				(111,699)				839,624				(101,179)
Net income (loss)			2,221,237				(624,021)				2,512,824				(881,402)
Other Comprehensive income (loss)
Foreign currency translation adjustment			(737,431)				(2,823,145)				6,253,728				1,557,717
Comprehensive income (loss)		$	1,483,806			$	(3,447,166)			$	8,766,552			$	676,315
Basic and diluted income (loss) per common share
Basic and diluted		$	0.10			$	(0.01)			$	0.11			$	(0.02)
Weighted average common shares outstanding
Basic and diluted			22,525,000				22,525,000				22,525,000				22,525,000

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

CHINA HGS REAL ESTATE INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
		Common Stock								Additional				Statutory				Retained				Accumulated Other Comprehensive
		Shares				Amount				Paid-in Capital				Surplus				Earnings				Income (loss)				Total
Balance at September 30, 2019			22,525,000			$	22,525			$	129,930,330			$	10,360,251			$	34,070,767			$	(15,683,723)			$	158,700150
Net loss for the period			-				-												(257,381)								(257,381)
Foreign currency translation adjustments			-				-																4,380,862				4,380,862
Balance at December 31, 2019			22,525,000				22,525				129,930,330				10,360,251				33,189,365				(11,302,861)				162,823,631
Net loss for the period			-				-												(624,021)								(624,021)
Foreign currency translation adjustments			-				-																(2,823,145)				(2,823,145)
Balance at March 31, 2020			22,525,000			$	22,525			$	129,930,330			$	10,360,251			$	33,189,365			$	(14,126,006)			$	159,376,465
Balance at September 30, 2020			22,525,000			$	22,525			$	129,930,330			$	10,458,395			$	34,954,061			$	(7,039,490)			$	168,325,821
Net income for the period			-				-				-				-				291,587				-				291,587
Foreign currency translation adjustments			-				-				-				-				-				6,991,159				6,991,159
Balance at December 31, 2020			22,525,000				22,525				129,930,330				10,458,395				35,245,648				(48,331)				175,608,567
Net income for the period			-				-				-				-				2,221,237				-				2,221,237
Foreign currency translation adjustments			-				-				-				-				-				(737,431)				(737,431)
Balance at March 31, 2021			22,525,000			$	22,525			$	129,930,330			$	10,458,395			$	37,466,885			$	(785,762)			$	177,092,373

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

CHINA HGS REAL ESTATE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		Six months ended March 31,
		2021				2020
Cash flows from operating activities
Net income (loss)		$	2,512,824			$	(881,402)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Deferred tax provision (benefit)			-				(235,179)
Depreciation			24,772				37,710
Changes in operating assets and liabilities:
Contract assets			(422,948)				651,289
Real estate property development completed			4,747,385				2,937,724
Real estate property under development			(13,010,220)				(2,835,288)
Other current assets			(1,281,964)				(935,053)
Security deposit							3,195,887
Accounts payable			5,515,797				89,325
Other payables			395,088				111,347
Contract liabilities			(28,762)				(71,507)
Customer deposits			1,387,999				2,349,028
Construction deposits							(428)
Accrued expenses							(675,478)
Taxes payables			109,454				(1,379,060)
Net cash (used in) provided by operating activities			(50,575)				2,358,915
Cash flow from financing activities
Repayments of construction loans			-				(2,128,585)
Net cash used in financing activities			-				(2,128,585)
Effect of changes of foreign exchange rate on cash and restricted cash			36,349				103,801
Net (decrease) increase in cash and restricted cash			(14,226)				334,131
Cash and restricted cash, beginning of period			3,867,536				4,202,117
Cash and restricted cash, end of period		$	3,853,310			$	4,536,248
Supplemental disclosures of cash flow information:
Interest paid		$	1,847,904			$	3,416,592
Income taxes paid		$	135,462			$	375,601
Reconciliation to amounts on condensed consolidated balance sheets:
Cash		$	555,576			$	658,313
Restricted		$	3,297,734			$	3,877,935
Total cash and restricted cash		$	3,853,310			$	4,536,248
Cash, beginning of period		$	457,699			$	263,139
Restricted, beginning of period		$	3,409,837			$	3,938,978
Total cash and restricted cash, beginning of period		$	3,867,536			$	4,202,117
Non-cash financing activities:
Reclassification of interest payable to construction loan		$	1,626,210			$	-
Real estate sales for settlements in real estate property under development		$	(14,432,275)			$	-

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

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SOURCE China HGS Real Estate Inc.

FAQ

What were China HGS's revenues for Q2 fiscal 2021?

Total revenues for Q2 fiscal 2021 were approximately $18.3 million.

How much did net income increase for China HGS in Q2 fiscal 2021?

Net income increased to approximately $2.2 million for Q2 fiscal 2021.

What was the revenue growth percentage for the first half of fiscal 2021?

Revenues for the first half of fiscal 2021 increased by 401.5%.

What was the net income for China HGS in the first six months of fiscal 2021?

Net income for the first six months was approximately $2.5 million.