China HGS Real Estate : Reports Full Year Financial Results for the Fiscal Year 2021 - Form 8-K

China HGS Reports Full Year Financial Results for the Fiscal Year 2021

HANZHONG, CHINA - January 13, 2022 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 2021 ended September 30, 2021 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 2021

·	Total revenues for the fiscal 2021 were approximately $58.9 million, significantly increased from approximately $13.0 million in fiscal 2020.

·	Net income for the fiscal 2021 totaled approximately $6.4 million, increased by $5.4 million from the net income of approximately $1.0 million in fiscal 2020.

·	Basic and diluted net earnings per share attributable to shareholders for the fiscal 2021 were $0.27, compared to $0.04 for the fiscal 2020.

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, 2021, 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: [phone]

Email: [e-mail]

CHINA HGS REAL ESTATE INC.

CONSOLIDATED BALANCE SHEETS

		September 30,			September 30,
		2021			2020
ASSETS
Cash		$	170,001			$	457,699
Restricted cash			3,295,188				3,409,837
Contract assets			13,723,793				14,255,328
Real estate property-development completed			88,145,841				94,671,258
Other assets			8,358,925				8,132,555
Property, plant and equipment, net			558,086				571,330
Security deposits			1,955,202				1,855,506
Real estate property under development			265,769,721				227,741,017
Due from local government - development completed			3,023,806				2,869,623
Total Assets		$	385,000,563			$	353,964,153
LIABILITIES AND STOCKHOLDERS' EQUITY
Construction loans		$	119,636,222			$	109,937,408
Accounts payable			18,259,151				25,415,352
Other payables			6,430,992				4,028,048
Construction deposits			3,344,917				3,202,730
Contract liabilities			1,886,075				1,847,685
Customer deposits			19,803,917				19,405,528
Accrued expenses			1,987,567				1,920,370
Taxes payable			22,954,011				19,881,211
Total liabilities			194,302,852				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 September 30, 2021 and 2020			25,617				22,525
Additional paid-in capital			136,535,303				129,930,330
Statutory surplus			11,095,939				10,458,395
Retained earnings			40,691,955				34,954,061
Accumulated other comprehensive loss			2,348,897				(7,039,490	)
Total stockholders' equity			190,697,711				168,325,821
Total Liabilities and Stockholders' Equity		$	385,000,563			$	353,964,153

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

CHINA HGS REAL ESTATE INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)

FOR THE YEARS ENDED SEPTEMBER 30, 2021 and 2020

		2021			2020
Real estate sales		$	58,915,239			$	12,979,227
Less: Sales tax			(424,074	)			(193,719	)
Impairment losses on real estate property completed			-				(2,703,031	)
Cost of real estate sales			(46,510,001	)			(9,369,820	)
Gross profit			11,981,164				712,657
Operating expenses
Selling and distribution expenses			186,886				580,639
General and administrative expenses			2,691,170				2,324,057
Total operating expenses			2,878,056				2,904,696
Operating income (loss)			9,103,108				(2,192,039	)
Interest income (expense), net			5,690				(65,535	)
Other (expense) income, net			(246,814	)			4,080,945
Income before income taxes			8,861,984				1,823,371
Provision for income taxes			2,486,546				841,933
Net income			6,375,438				981,438
Other comprehensive income:
Foreign currency translation adjustment			9,388,387				8,644,233
Comprehensive income		$	15,763,825			$	9,625,671
Basic and diluted income per common share:
Basic and diluted		$	0.27			$	0.04
Weighted average common shares outstanding:
Basic and diluted			23,944,328				22,525,000

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

CHINA HGS REAL ESTATE INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE YEARS ENDED SEPTEMBER 30, 2021 AND 2020

																	Accumulated
																	Other
		Common Stock			Additional			Statutory			Retained			Comprehensive
		Shares			Amount			Paid-in Capital			Reserve			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	)		$	158,700,150
Net income			-				-				-				-				981,438				-				981,438
Appropriation to statutory reserve			-				-				-				98,144				(98,144	)			-				-
Foreign currency translation adjustments			-				-				-				-				-				8,644,233				8,644,233
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
Issuance of shares for debt settlement			3,092,114				3,092				6,604,973				-				-				-				6,608,065
Net income			-				-				-				-				6,375,438				-				6,375,438
Appropriation to statutory reserve			-				-				-				637,544				(637,544	)			-				-
Foreign currency translation adjustments			-				-				-				-				-				9,388,387				9,388,387
Balance at September 30, 2021			25,617,807			$	25,617			$	136,535,303			$	11,095,939			$	40,691,955			$	2,348,897			$	190,697,711

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

CHINA HGS REAL ESTATE INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED SEPTEMBER 30, 2021 and 2020

		2021			2020
Cash flows from operating activities:
Net income		$	6,375,438			$	981,438
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Deferred tax provision			-				-
Depreciation			43,510				72,748
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:
Security deposits			-				6,335,525
Contract assets			1,284,745				(889,901	)
Real estate property development completed			11,498,195				9,369,820
Real estate property under development			(21,784,670	)			(7,511,989	)
Other assets			208,522				(398,747	)
Accounts payables			(1,830,135	)			(1,498,176	)
Other payables			2,165,081				23,918
Contract liabilities			(60,288	)			(155,809	)
Customer deposits			(637,942	)			1,275,401
Construction deposits			(29,601	)			-
Accrued expenses			-				(474,420	)
Taxes payables			2,162,978				(2,616,813	)
Net cash (used in) provided by operating activities			(604,167	)			2,217,264
Cash flow from financing activities:
Repayment of construction loans			-				(2,415,924	)
Net cash (used in) financing activities			-				(2,415,924	)
Effect of changes in foreign exchange rate on cash			201,820				(135,921	)
Net (decrease) in cash			(402,347	)			(334,581	)
Cash, restricted cash, beginning of year			3,687,536				4,202,117
Cash, restricted cash, end of year		$	3,465,189			$	3,867,536
Supplemental disclosures of cash flow information:
Interest paid		$	2,018,918			$	6,847,515
Income taxes paid		$	266,999			$	782,836
Cash		$	170,001			$	457,699
Restricted cash		$	3,295,188			$	3,409,837
		$	3,465,189			$	3,867,536
Non-cash financing activities:
Reclassification of interest payable to construction loan		$	5,024,385			$	-
Settlement of shareholder loan and related accrued interest		$	-			$	(3,402,313	)
Settlements of accounts payable with real estate property under development		$	(14,532,967	)		$	-
Issuance of stock for settlement of accounts payable		$	6,608,065			$	-
Settlement of payables with suppliers		$	-			$	(3,415,572	)

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