HGSH [CHINA HGS REAL ESTATE] 8-K: China HGS Reports Full Year Financial Results for

Ticker: HGSH, Company: CHINA HGS REAL ESTATE INC., Type: 8-K, Date: 2019-01-10
Original SEC Filing: Click here


Webplus: HGSH/20190110/8-K/2_EX-99.1/000.htm SEC Original: tv510474_ex99-1.htm
China HGS Reports Full Year Financial Results for the Fiscal Year 2018 HANZHONG, CHINA January 10, 2019 Highlights for the Fiscal 2018 l Total revenues for the fiscal 2018 were approximately $65.5 million, an increase of approximately 12% from approximately $58.7 million in fiscal 2017. l For the Company’s long-term real estate development projects, the related revenue recognized from percentage



s:27521:" EX-99.1 2 tv510474_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

China HGS Reports Full Year Financial Results for the Fiscal Year 2018

HANZHONG, CHINA –January 10, 2019 – 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

l Total revenues for the fiscal 2018 were approximately $65.5 million, an increase of approximately 12% from approximately $58.7 million in fiscal 2017.

l 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.

l 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.

l 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

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Webplus: HGSH/20190110/8-K/1/000.htm SEC Original: tv510474_8k.htm



s:3236:" 8-K 1 tv510474_8k.htm 8-K



Item 2.02 Results of Operations and Financial Condition.

On January 10, 2019, China HGS Real Estate, Inc. issued a press release regarding its financial results for the fiscal year ended September 30, 2018. A copy of the press release is filed herewith as Exhibit 99.1 to this Current Report and is incorporated herein by reference.

As provided in General Instruction B.2 of SEC Form 8-K, such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and it shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or under the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No. Description
99.1 Press Release dated January 10, 2019

2

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: January 10, 2019 China HGS Real Estate, Inc.
By: /s/ Xiaojun Zhu
Name: Xiaojun Zhu
Title: Chief Executive Officer and Chairman

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Company Info:

Ticker: HGSH, Company: CHINA HGS REAL ESTATE INC., Type: 8-K, Date: 2019-01-10CIK: 0001158420, Location: F4, SIC: 6500, SIC Desc: REAL ESTATE
Business Phone & Address:
6 XINGHAN ROAD, 19TH FLOOR, HANZHONG
SHAANXI 723000

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