Exhibit 99.1

 

China HGS Reports Full Year Financial Results for the Fiscal Year 2020

 

HANZHONG, CHINA – January 13, 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, 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

FOR 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)   - 

   

 

 

 

 

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