Fiscal Year 2009 Highlights -- Revenues increased 65.0% year-over-year to $28.5 million -- Gross profit increased 65.4% to $13.4 million with gross margin of 47.0% -- Operating income increased 81.3% to $11.4 million -- Net income increased 83.7% to $11.1 million, or $0.28 per diluted share
"Our record revenue and net income growth during the year reflects our
leading market position in Hanzhong and our growing recognition as a prominent
real estate developer. During the year, our efficient pricing strategy and
marketing efforts enhanced our market reputation driving rapid growth in sales
of our completed residential units," commented Mr.
Fiscal Year 2009 Results
Revenues for fiscal year ended
Gross profit for the fiscal year ended
Total operating expenses for fiscal year ended
Operating income was
Interest expense for fiscal year ended
Net income for fiscal year ended
The Company's major projects under development include Mingzhu Xinju in
Hanzhong City and Yangzhou Pearl Garden in Yang County. During the quarter
"The recovery in the real estate market and sales pricing combined with
strong fundamentals of the Hanzhong market indicate positive future growth
opportunities for China HGS," said Mr.
Guidance for Fiscal 2009
China HGS expects revenue for first quarter of fiscal year 2010 ending
About China HGS Real Estate Inc.
China HGS Real Estate Inc., through its wholly-owned subsidiary, Shaanxi
Guangsha Investment and Development Group Co., Ltd., specializes in real
estate development in
This press release contains certain statements that may include 'forward-looking statements'. All statements other than statements of historical fact included herein are 'forward-looking statements'. These forward looking statements are often identified by the use of forward-looking terminology such as 'believes,' 'expects' or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website http://www.sec.gov . All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
--Financial Tables Follow-- CHINA HGS REAL ESTATE INC. (FORMERLY CHINA ARGO SCIENCES CORP.) CONSOLIDATED BALANCE SHEETS As of September 30, 2009 2008 ASSETS Current assets: Cash & cash equivalents $820,783 $2,121,060 Restricted cash 412,373 596,258 Accounts receivable - net of allowance for doubtful accounts -- 7,294 Loans to outside parties, net of allowance 1,762,022 210,037 Real estate property development completed 2,392,003 13,657,042 Real estate property under development 42,522,287 22,699,749 Other current assets 71,985 29,175 Total current assets 47,981,453 39,320,615 Property, plant and equipment, net 713,008 401,635 Total Assets $48,694,461 $39,722,250 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term loans $672,751 $1,312,891 Accounts payable 730,838 1,251,733 Other payables 1,021,147 1,072,600 Customer deposits 14,900,334 17,398,247 Accrued expenses 125,742 40,279 Taxes payable 1,380,694 339,009 Total current liabilities 18,831,506 21,414,759 Stockholders' equity Common stock, $0.001 par value, 100,000,000 shares authorized, 45,050,000 shares and 39,000,000 shares issued and outstanding as of September 30, 2009 and 2008, respectively 45,050 39,000 Additional paid-in capital 17,632,348 127,682 Statutory surplus 2,330,259 2,023,641 Retained earnings 7,904,531 14,224,594 Accumulated other comprehensive income 1,950,767 1,892,575 Total stockholders' equity 29,862,955 18,307,491 Total Liabilities and Stockholders' Equity $48,694,461 $39,722,250 CHINA HGS REAL ESTATE INC. (FORMERLY CHINA ARGO SCIENCES CORP.) CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED SEPTEMBER 30, 2009 2008 Real estate sale, net of sales tax of $1,745,490 and $1,155,106, respectively $28,459,176 $17,249,539 Cost of real estate sales, exclusive of depreciation 15,084,017 9,161,948 Gross profit 13,375,159 8,087,591 Operating expenses Selling and distribution expense 353,907 261,030 General and administrative expense 1,618,926 1,537,524 Total operating expenses 1,972,833 1,798,554 Operating income 11,402,326 6,289,037 Other expenses Interest expenses 121,372 92,347 Other expenses 309 53,442 Total other expenses 121,681 145,789 Income before income taxes 11,280,645 6,143,248 Provision for income taxes 223,095 123,517 Net income $11,057,550 $6,019,731 Other comprehensive income Foreign currency translation adjustment $58,191 $1,287,479 Comprehensive income $11,115,741 $7,307,210 Basic and diluted income per common share Basic $0.28 $0.15 Diluted $0.28 $0.15 Weighted average common shares outstanding Basic 39,513,836 39,000,000 Diluted 39,513,836 39,000,000 CHINA HGS REAL ESTATE INC. (FORMERLY CHINA ARGO SCIENCES CORP.) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 2009 2008 Cash flows from operating activities Net income $11,057,550 $6,019,731 Adjustments to reconcile net income to net cash used in operating activities: Depreciation 66,589 35,348 Loss on disposal of fixed assets 309 42,191 Changes in assets and liabilities: (Increase) decrease in - Restricted cash 185,205 187,971 Accounts receivable 7,304 -- Loans to outside parties (1,549,723) (194,051) Real estate property development completed 11,287,430 (8,612,453) Real estate property under development (19,742,469) 4,412,656 Other current assets (42,686) (16,356) Increase (decrease) in - Accounts payables (523,516) (1,372,573) Other payables (54,137) 526,568 Customer deposits (2,539,616) (5,867,984) Accrued expenses 85,264 (70,190) Taxes payable 1,039,661 317,074 Net cash used in operating activities (722,835) (4,592,068) Cash flow from investing activities Purchase of fixed assets (376,898) (401,928) Proceeds from disposal of fixed assets -- 114,674 Net cash used in investing activities (376,898) (287,254) Cash flow from financing activities Proceeds from (repayment for) shareholder loans (438,263) 421,905 Repayment of short-term loans (204,523) (70,317) Capital contribution 438,722 -- Net cash provided by (used in) financing activities (203,063) 351,588 Effect of changes of foreign exchange rate on cash and cash equivalent 2,520 432,045 Net decrease in cash and cash equivalents (1,300,276) (4,095,689) Cash and cash equivalents, beginning of year 2,121,060 6,216,749 Cash and cash equivalents, end of year $820,783 $2,121,060 Supplemental disclosures of cash flow information: Interest paid $109,420 $96,895 Income taxes paid $14,002 $42,190 Non-cash financing activities: Capital contribution converted from dividend payable $5,483,508 $-- Capital contribution converted from retained earnings $10,788,349 $-- Capital contribution converted from surplus $799,137 $-- For more information, please contact: Company Contact: Mr. Ran Xiong, Deputy GM Email: email@example.com Tel: +86-916-2622612 Investor Relations Contact: CCG Investor Relations Crocker Coulson, President Email: firstname.lastname@example.org Tel: +1-646-213-1915 (NY office) Elaine Ketchmere, Partner Email: email@example.com Tel: +1-310-954-1345 (LA office)
SOURCE China HGS Real Estate Inc.