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Market: OTCBB
Sector: Real Estate
EPIC: CAHS
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China HGS Real Estate
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China HGS Real Estate Inc. 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.

Full China HGS Real Estate profile here
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China HGS Real Estate reports 65% jump in full year revenues

4th Jan 2010, 2:20 pm
China HGS Real Estate reports 65% jump in full year revenues

Residential property developer China HGS Real Estate Inc. (OTCBB: CAHS) ("China HGS"), reported record revenues in its financial results for the fiscal year ended September 30, 2009.


Financial highlights released today included a 65% jump in revenues to $28.5 million and 65.4% increase in gross profits to $13.4 million. Operating income soared 81.3% to $11.4 million while net income jumped 83.7% to $11.1 million, or 28 cents per diluted share. Gross margins were 47%. General & Administrative (“G&A”) expenses climbed 5.3% to $1.6 million, while operating expenses as a percentage of revenue, declined to 6.9% from 10.4% a year ago. 


Cash in the bank fell to $0.8 million from $2.4 million a year ago as the company expanded construction activities and land acquisition prices rose. “The Company expects cash flow from operating activities to turn positive in the first quarter of fiscal year 2010,” China HGS noted, “At the end of fiscal year 2009, the Company had working capital of $29.1 million and no long-term debt.”


China HGS's attributed the solid numbers to an increase in sales of the completed residential units at its two projects located in Yang County and Hanzhong City.


"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. Xiaojun Zhu, chairman and CEO of China HGS. "With the broad property market recovery in China, we have experienced increasing pre-sales of our residential projects and favorable pricing environment enhancing our overall profitability."


Looking ahead, the real estate development company noted that second and third tier cities in China were continuing to experience “strong GDP growth and rising level of disposable incomes” which would continue drive the property market.


"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. Xiaojun Zhu. "With our solid project pipeline and abundant land reserves for future development, we expect the ongoing positive trend of our financial performance to continue into fiscal year 2010 and through fiscal year 2011. We believe our aggressive marketing efforts, disciplined cost control, growing market recognition and competitive pricing strategy will further contribute to our revenue growth and profitability."


China HGS is expecting revenues for first quarter of fiscal year 2010 (ending December 31, 2009) to be $12.5 million and diluted earnings per share of $0.09 per, and full year results (ending September 30, 2010) to show revenues of $46.4 million and diluted earnings per share of $0.37.

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