China HGS Reports Full Year Financial Results for the Fiscal Year 2020
Published
HANZHONG, China, Jan. 14, 2021 /PRNewswire/ -- January 13, 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 2020 ended September 30, 2020 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 2020*
· Total revenues for the fiscal 2020 were approximately $13.0 million, a decrease of approximately 67.5% from approximately $40.0 million in fiscal 2019.
· Net income for the fiscal 2020 totaled approximately $1.0 million, a decrease of approximately 73.5% from the net income of approximately $3.7 million in fiscal 2019.
· Basic and diluted net earnings per share attributable to shareholders for the fiscal 2020 were $0.04, compared to $0.16 for the fiscal 2019.
*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.
**CONSOLIDATED BALANCE SHEETS*
*September 30,*
*September 30,*
*2020*
*2019*
*ASSETS*
Cash
$
457,699
$
263,139
Restricted cash
3,409,837
3,938,978
Contract assets
14,255,328
12,668,925
Real estate property development completed
94,671,258
101,933,030
Other assets
8,132,555
2,031,937
Property, plant and equipment, net
571,330
614,008
Security deposits
1,855,506
7,972,117
Real estate property under development
227,741,017
215,745,225
Due from local government for real estate property development completed
2,869,623
2,725,854
*Total Assets*
$
353,964,153
$
347,893,213
*LIABILITIES AND STOCKHOLDERS' EQUITY*
Construction loans
$
109,937,408
$
106,797,436
Accounts payables
25,415,352
27,368,510
Other payables
4,028,048
5,289,176
Construction deposits
3,202,730
3,042,273
Contract liabilities
1,847,685
1,907,828
Customer deposits
19,405,528
17,183,264
Shareholder loans
-
2,129,114
Accrued expenses
1,920,370
3,585,644
Taxes payable
19,881,211
21,889,818
*Total liabilities*
185,638,332
189,193,063
*Commitments and Contingencies*
Stockholders' equity
Common stock, $0.001 par value, 50,000,000 shares authorized, 22,525,000* shares issued and outstanding September 30, 2020 and 2019
22,525
22,525
Additional paid-in capital*
129,930,330
129,930,330
Statutory surplus
10,458,395
10,360,251
Retained earnings
34,954,061
34,070,767
Accumulated other comprehensive loss
(7,039,490)
(15,683,723)
*Total stockholders' equity*
168,325,821
158,700,150
*Total Liabilities and Stockholders' Equity*
$
353,964,153
$
347,893,213
*CHINA HGS REAL ESTATE INC.
**CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)
**FOR THE YEARS ENDED SEPTEMBER 30, 2020 and 2019*
*2020*
*2019*
*Real estate sales*
$
12,979,227
$
39,964,556
Less: Sales tax
193,719
389,406
Impairment losses on real estate property development completed
2,703,031
-
Cost of real estate sales
9,369,820
30,253,511
*Gross profit*
712,657
9,321,639
Operating expenses
Selling and distribution expenses
580,639
494,646
General and administrative expenses
2,324,057
2,661,578
*Total operating expenses*
2,904,696
3,156,224
*Operating income*
(2,192,039)
6,165,415
*Interest expense, net*
(65,535)
(131,270)
*Other income (expense), net*
4,080,945
(309,930
*Income before income taxes*
1,823,371
5,724,215
Provision for income taxes
841,933
2,022,043
*Net income*
981,438
3,702,172
Other comprehensive loss
Foreign currency translation adjustment
8,644,233
(6,679,858)
*Comprehensive income (loss)*
$
9,625,671
$
(2,977,686)
*Basic and diluted income per common share*
Basic and diluted
$
0.04
$
0.16
*Weighted average common shares outstanding*
Basic and diluted*
22,525,000
22,525,000
*CHINA HGS REAL ESTATE INC.
**CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
**FOR THE YEARS ENDED SEPTEMBER 30, 2020 AND 2019*
*Common Stock*
*Additional*
*Statutory*
*Retained*
*Accumulated
Other
Comprehensive*
*Shares**
*Amount*
*Paid-in Capital*
*Surplus*
*Earnings*
*Loss*
*Total*
Balance at September 30, 2018
22,525,000
$
22,525
$
129,930,330
$
9,925,794
$
30,803,052
$
(9,003,865)
$
161,677,836
Appropriation of statutory reserve
434,457
(434,457)
-
Net income for the year
3,702,172
3,702,172
Foreign currency translation adjustments
(6,679,858)
(6,679,858)
Balance at September 30, 2019
22,525,000
$
22,525
$
129,930,330
$
10,360,251
$
34,070,767
$
(15,683,723)
$
158,700,150
Appropriation of statutory reserve
-
-
-
Net income for the year
981,438
981,438
Appropriation of statutory reserve
98,144
(98,144)
-
Foreign currency translation adjustments
8,644,233
8,644,233
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
*CHINA HGS REAL ESTATE INC.
**CONSOLIDATED STATEMENTS OF CASH FLOWS
F**OR THE YEARS ENDED SEPTEMBER 30, 2020 and 2019*
*2020*
*2019*
*Cash flows from operating activities*
Net income
$
981,438
$
3,702,172
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Deferred tax provision
-
1,302,606
Depreciation
72,748
79,270
Impairment losses on real estate property development completed
2,703,031
-
Gain on settlement of shareholder loan and payables with suppliers
(4,998,762)
-
Changes in assets and liabilities:
Advances to vendors
-
20,395
Security deposits
6,335,525
-
Contract assets
(889,901)
(601,265)
Real estate property development completed
9,369,820
(45,818,735)
Real estate property under development
(7,511,989)
50,974,817
Other assets
(398,747)
(725,508)
Accounts payables
(1,498,176)
7,967,500
Other payables
23,918
609,156
Contract liabilities
(155,809)
(3,854,568)
Customer deposits
1,275,401
(4,261,166)
Construction deposits
-
8,538
Accrued expenses
(474,420)
700,527
Taxes payables
(2,616,813)
(1,166,158)
*Net cash provided by operating activities*
2,217,264
8,937,581
*Cash flow from financing activities*
Proceeds from construction loans
-
488,307
Repayment of construction loans
(2,415,924)
(11,825,666)
Repayment of shareholder loans
-
-
*Net cash (used in) financing activities*
(2,415,924)
(11,337,359)
*Effect of changes of foreign exchange rate on cash*
(135,921)
(173,682)
*Net (decrease) in cash*
(334,581)
(2,573,460)
*Cash, restricted cash, beginning of year*
4,202,117
6,775,577
*Cash, restricted cash, end of year*
$
3,867,536
$
4,202,117
*Supplemental disclosures of cash flow information:*
Interest paid
$
6,847,515
$
7,199,086
Income taxes paid
$
782,836
$
347,675
Representing
Cash
$
457,699
$
263,139
Restricted cash
$
3,409,837
$
3,938,978
$
3,867,536
$
4,202,117
*Non-cash financing activities:*
Settlement of shareholder loan and related accrued interest
$
(3,402,313)
-
Settlement of payables with suppliers
(3,415,572)
-