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Green Giant (GGE)

Filed: 16 Aug 21, 5:00pm

 

Exhibit 99.1

 

China HGS Announces First Nine Months of Fiscal 2021 Financial Results

 


HANZHONG, CHINA
 – August 16, 2021 – 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 nine months of fiscal 2021 ended June 30, 2021.

 

Third Quarter Fiscal 2021 Highlights

 

lTotal revenues for the third quarter of fiscal 2021 were approximately $31.8 million, representing an increase of 944.6% from approximately $3.0 million in the same quarter of fiscal 2020 due to more gross floor area sold during the current quarter.

 

lNet income for the third quarter of fiscal 2021 totaled approximately $3.6 million, significantly increased from net loss of approximately $2.6 million in the same period of last year.

 

lBasic and diluted net income per share for the third quarter of fiscal 2021 increased to $0.14, compared to net loss per share of $0.11 for the same quarter of the last year.

 

First Nine Months of Fiscal 2021 Highlights

 

lTotal revenues for the first nine months of fiscal 2021 were approximately $52.9 million, representing an increase of 630.0% from approximately $7.2 million in the same period of fiscal 2020.

 

lNet income for the first nine months of fiscal 2021 totaled approximately $6.1 million, significantly increased from net loss of approximately $3.5 million in the same period of last year.

 

lBasic and diluted net income per share for the first nine months of fiscal 2021 increased to $0.26, compared to net loss per share of $0.15 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)

 

  June 30,  September 30, 
   2021  2020 
ASSETS (Unaudited)     
Cash $324,497  $457,699 
Restricted cash  3,382,086   3,409,837 
Contract assets  12,645,871   14,255,328 
Real estate property development completed  92,799,351   94,671,258 
Other assets  9,250,111   8,132,555 
Property, plant and equipment, net  563,086   571,330 
Security deposits  1,951,204   1,855,506 
Real estate property under development  263,416,787   227,741,017 
Due from local governments for real estate property development completed  3,017,624   2,869,623 
         
Total assets $387,350,617  $353,964,153 
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
Construction loans $119,391,636  $109,937,408 
Accounts payable  20,128,624   25,415,352 
Other payables  4,659,605   4,028,048 
Construction deposits  3,338,078   3,202,730 
Contract liabilities  2,082,108   1,847,685 
Customer deposits  22,814,868   19,405,528 
Accrued expenses  1,879,321   1,920,370 
Taxes payable  22,982,722   19,881,211 
    Total liabilities  197,276,962   185,638,332 
         
Commitments and contingencies        
         
Stockholders' equity        
Common stock, $0.001 par value, 50,000,000 shares authorized, 25,617,807 and 22,525,693 shares issued and outstanding June 30, 2021 and September 30, 2020, respectively  25,617   22,525 
Additional paid-in capital  136,522,128   129,930,330 
Statutory surplus  10,458,395   10,458,395 
Retained earnings  41,095,539   34,954,061 
Accumulated other comprehensive income (loss)  1,971,976   (7,039,490)
Total stockholders' equity  190,073,655   168,325,821 
         
Total Liabilities and Stockholders' Equity $387,350,617  $353,964,153 

 

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CHINA HGS REAL ESTATE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

 

  Three months ended June 30,  Nine months ended June 30, 
  2021  2020  2021  2020 
Real estate sales $31,824,097  $3,046,430  $52,857,471  $7,240,503 
Less: Sales tax  (197,537)  (29,222)  (336,241)  (95,503)
Impairment losses on real estate property development completed  -   (2,703,031)  -   (2,703,031)
Cost of real estate sales  (25,296,688)  (1,728,217)  (41,624,594)  (4,900,210)
Gross profit  6,329,872   (1,414,040)  10,896,636   (458,241)
Operating expenses                
Selling and distribution expenses  81,002   77,404   177,168   477,962 
General and administrative expenses  1,411,151   973,318   2,260,410   2,381,572 
Total operating expenses  1,492,153   1,050,722   2,437,578   2,859,534 
Operating income (loss)  4,837,719   (2,464,762)  8,459,058   (3,317,775)
Interest income (expense), net  2,857   (16,171)  6,394   (49,010)
Other expense  (1,354)  (58,380)  (273,782)  (155,109)
Income (loss) before income taxes  4,839,223   (2,539,313)  8,191,671   (3,521,894)
Provision (benefit) for income taxes  1,210,569   35,860   2,050,193   (65,319)
Net income (loss)  3,628,654   (2,575,173)  6,141,478   (3,456,575)
Other comprehensive income (loss)                
Foreign currency translation adjustment  2,757,738   363,273   9,011,466   1,920,990 
Comprehensive income (loss) $6,386,392  $(2,211,900) $15,152,944  $(1,535,585)
Basic and diluted income (loss) per common share                
Basic and diluted $0.14  $(0.11) $0.26  $(0.15)
Weighted average common shares outstanding                
Basic and diluted  25,102,455   22,525,693   23,378,298   22,525,693 

 

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

 

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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  22,525,693  $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  22,525,693   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 June 30,2020  22,525,693   22,525   129,930,330   10,360,251   33,189,365   (14,126,006)  159,376,465 
Net (loss) for the period  -   -   -   -   (2,575,173)  -   (2,575,173)
Foreign currency translation adjustments  -   -   -   -   -   363,273   363,273 
Balance at June 30, 2020  22,525,693  $22,525  $129,930,330  $10,360,251  $30,614,365  $(13,762,733) $157,164,565 
                             
                             
Balance at September 30, 2020  22,525,693  $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  22,525,693   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 June 30,2021  22,525,693   22,525   129,930,330   10,458,395   37,466,885   (785,762)  177,092,373 
Issuance of stock for settlement of accounts payable  3,092,114   3,092   6,591,798   -   -   -   6,594,890 
Net income for the period  -   -   -   -   3,628,654   -   3,628,654 
Foreign currency translation adjustments  -   -   -   -   -   2,757,738   2,757,738 
Balance at June 30, 2021  25,617,807  $22,525  $136,522,128  $10,458,395  $41,095,539  $1,971,976  $190,073,655 

  

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

 

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CHINA HGS REAL ESTATE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

  Nine months ended June 30, 
  2021  2020 
Cash flows from operating activities        
Net income (loss) $6,141,478  $(3,456,575)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:        
Deferred tax provision (benefit)  -   (266,319)
Depreciation  37,342   56,366 
Impairment losses on real estate property development completed  -   2,703,031 
Changes in operating assets and liabilities:        
Contract assets  2,321,807   12,600,352 
Real estate property development completed  6,688,702   (7,549,755)
Real estate property under development  (19,949,297)  (4,393,458)
Other current assets  (691,310)  (1,170,228)
Security deposit      4,761,043 
Accounts payables  61,717   (657,012)
Other payables  419,675   150,939 
Contract liabilities  137,771   (139,990)
Customer deposits  2,385,004   1,785,335 
Construction deposits  (29,542)  (426)
Accrued expenses      (631,420)
Taxes payables  2,224,269   (1,979,971)
Net cash (used in) provided by operating activities  (252,384)  1,811,912 
         
Cash flow from financing activities        
Repayments of construction loans  -   (2,405,349)
Net cash (used in) financing activities  -   (2,405,349)
         
Effect of changes of foreign exchange rate on cash and restricted cash  91,431   184,993 
Net (decrease) in cash and restricted cash  (160,953)  (408,444 
Cash and restricted cash, beginning of period  3,867,536   4,202,117 
Cash and restricted cash, end of period $3,706,583  $3,793,673 
Supplemental disclosures of cash flow information:        
Interest paid $2,014,791  $5,142,658 
Income taxes paid $265,149  $504,064 
         
Reconciliation to amounts on condensed consolidated balance sheets:        
Cash $324,497  $516,272 
Restricted  3,382,086   3,277,401 
Total cash and restricted cash $3,706,583  $3,793,673 
         
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 $3,269,932  $- 
Real estate sales for settlements in real estate property under development $(14,503,991) $- 
Issuance of stock for settlement of accounts payable $6,594,890  $- 

 

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

 

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