China HGS Raises Guidance for Fiscal Year 2010

- Revenue Guidance raised to $47.5 million

- $49.0 million

- Fully diluted earnings to reach $0.39 to $0.40 per share

Jan 21, 2010, 08:00 ET from China HGS Real Estate Inc.

HANZHONG, China, Jan. 21 /PRNewswire-Asia-FirstCall/ -- China HGS Real Estate Inc. (OTC Bulletin Board: CAHS) ("China HGS" or "the Company"), a leading residential property developer in Hanzhong, China, today raised its financial guidance for the fiscal year ended September 30, 2010, signaling stronger than expected growth in the local residential property market.

China HGS expects revenues for the fiscal year ended September 30, 2010 to be approximately 47.5 million (RMB325 million) to $49.0 million (RMB335 million) and net income of $15.5 million (RMB105 million) to $16.0 million (RMB110 million), higher than the Company's earlier guidance of $46.4 million (RMB317.0 million) and $13.0 million (RMB88.7 million), respectively. The Company expects fully diluted earnings to be in the range of $0.39 to $0.40 per share, based on current weighted average shares outstanding. China HGS's guidance has been increased to reflect stronger than expected growth in ASPs (Average Selling Prices), which increased approximately $14.6 (RMB100) to $43.9 (RMB300) per square meter in January 2010, based on a complete evaluation of its major projects in Hanzhong City and Yang County.

"During the second quarter of fiscal year 2010, we are experiencing robust growth in ASP's of our real estate projects and expect these prices to continue to trend higher in 2010," commented Mr. Xiaojun Zhu, chairman and Chief Executive Officer of China HGS. "The key growth drivers for rapid growth in Hanzhong have remained intact and prices for residential properties have steadily increased since 2009. Most importantly, we have not witnessed significant speculation in the local real estate market. While the Chinese government has recently tightened the monetary policy, we believe it largely targets tier I and tier II cities and will be of minimal impact to our operations. We are confident in our ability to achieve our guidance for fiscal year 2010."

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 China's second-tier and third-tier cities. The Company's real estate properties include multi-layer, sub-high-rise, and high-rise apartment buildings. The Company possesses the national grade II real estate qualification and was ranked as the No. 1 property developer in Hanzhong, Shaanxi Province in terms of market share in 2007 and 2008 successively.

Forward-looking Statements:

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 . 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.

    For more information, please contact:

    Company Contact:
     Mr. Ran Xiong, Deputy GM
     Tel:   +86-916-2622612

    Investor Relations Contact:
     CCG Investor Relations
     Elaine Ketchmere, Partner
     Tel:   +1-310-954-1345

     Crocker Coulson, President
     Tel:   +1-646-213-1915

SOURCE China HGS Real Estate Inc.