China Hgs Real Estate, Inc. (NASDAQ:HGSH)

HANZHONG, China, Jan. 10, 2019 /PRNewswire/ -- 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 2018 ended September 30, 2018 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 2018

Total revenues for the fiscal 2018 were approximately $65.5 million, an increase of approximately 12% from approximately $58.7 million in fiscal 2017.
For the Company's long-term real estate development projects, the related revenue recognized from percentage of completion method was approximately $36.7 million, which accounted for 56% of total revenue in fiscal 2018 and increased 174% from the revenue recognized from percentage completion method in fiscal 2017.
Net income for the fiscal 2018 totaled approximately $5.2 million, a decrease of approximately 17% from the net income of approximately $6.3 million in fiscal 2017.
Basic and diluted net earnings per share ("EPS") attributable to shareholders for the fiscal 2018 were $0.12, compared to $0.14 for the fiscal 2017.

First Quarter 2018 Financial Results

• Total revenues for the first quarter of fiscal 2018 were approximately $14.4 million, an increase of 62.4% from approximately $8.9 million in the same quarter of fiscal 2017 due to more gross floor area sold during the current quarter.
• Basic and diluted net earnings per share ("EPS") attributable to shareholders for the first quarter of fiscal 2018 were $0.03, compared to $0.02 for the same quarter last year. 

First Quarter 2018 Financial Results

• Total revenues for the first quarter of fiscal 2018 were approximately $14.4 million, an increase of 62.4% from approximately $8.9 million in the same quarter of fiscal 2017 due to more gross floor area sold during the current quarter.
• Basic and diluted net earnings per share ("EPS") attributable to shareholders for the first quarter of fiscal 2018 were $0.03, compared to $0.02 for the same quarter last year.

HANZHONG, China, Jan. 3, 2018 /PRNewswire/ -- China HGS Real Estate Inc. (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 2017 ended September 30, 2017 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 2017

Total revenues for the fiscal 2017 were approximately $58.7 million, an increase of approximately 45% from approximately $40.6 million in fiscal 2016.
For the Company's long-term real estate development projects, the related revenue recognized from percentage of completion method was approximately $13.4 million, which accounted for 23% of total revenue in fiscal 2017 and decreased 47% from the revenue recognized from percentage completion method in fiscal 2016.
Net income for the fiscal 2017 totaled approximately $6.3 million, an increase of approximately 26% from the net income of approximately $5.0 million in fiscal 2016.
Basic and diluted net earnings per share ("EPS") attributable to shareholders for the fiscal 2017 were $0.14, compared to $0.11 for the fiscal 2016.

Third Quarter 2017 Financial Results

• Total revenues for the third quarter of fiscal 2017 were approximately $15.7 million, an increase of 25.7% from approximately $12.5 million in the same quarter of fiscal 2016. Total revenues recognized from percentage of completion method were approximately $6.9 million, which accounted for 44.0% of total revenues in the third quarter of fiscal 2017.
• Basic and diluted net earnings per share ("EPS") attributable to shareholders for the third quarter of fiscal 2017 were $0.03, compared to $0.05 for the same quarter last year.

Third Quarter 2016 Financial Results

• Total revenues for the third quarter of fiscal 2016 were approximately $12.5 million, a decrease of 52.0% from approximately $26.0 million in the same quarter of fiscal 2015. Total revenues recognized from percentage of completion method were approximately $9.2 million, which accounted for 73.4% of total revenues in the third quarter of fiscal 2016.
• Basic and diluted net earnings per share ("EPS") attributable to shareholders for the third quarter of fiscal 2016 were $0.05, compared to $0.30 for the same quarter last year.

First Quarter 2016 Financial Results

• Total revenues for the first quarter of fiscal 2016 were approximately $5.9 million, a decrease of 44.6% from approximately $10.6 million in the same quarter of fiscal 2015.
• Basic and diluted net earnings per share ("EPS") attributable to shareholders for the first quarter of fiscal 2016 were $0.03, compared to $0.04 for the same quarter last year. 

"The macro environment remains challenge given the weakening economy in China, coupled with depreciation of Chinese currency. These inevitably contributed to our weaker sales results," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS. "We have been focusing on factors that we have control to drive the sales and timely complete the constructions under development. In the meantime, the Company is executing strategies to develop more commercial and municipal projects and diversify its revenue streams. We remain confident in our ability to executive the strategies and create long-term shareholder value."

HANZHONG, China, Dec. 18, 2015 /PRNewswire/ -- 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 2015 ended September 30, 2015 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 2015

• Total revenues for the fiscal 2015 were approximately $81.1 million, a decrease of approximately 35% from approximately $124.3million in fiscal 2014.
• For the Company's long-term real estate development projects, the related revenue recognized from percentage of completion method was approximately $76.8 million, which accounted for 95% of total revenue in fiscal 2015 and decreased 23% from the revenue recognized from percentage completion method in fiscal 2014.
• Net income for the fiscal 2015 totaled approximately $31.4 million, a decrease of approximately 3% from the net income of approximately $32.4 million in fiscal 2014.
• Basic and diluted net earnings per share ("EPS") attributable to shareholders for the fiscal 2015 were $0.70, compared to $0.72 for the fiscal 2014.

"During the year, despite the overall slowing market and weakening economy in China, the Company has strived to manage its development and sales strategy and also to keep the costs down. I am pleased to see that our efforts have paid off. We were able to achieve a relatively high gross profit margin and maintain a relatively stable net income in the period," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS.

"Looking forward to fiscal 2016, we expect some favorable factors to impact our future performance positively. First, the reform of residency registration policy newly announced by the central government would support continued urbanization. Secondly, a string of policies and measures successively introduced since last year to adjust and stimulate the real estate market, such as looser credit policy and more relaxed housing purchase restrictions, is beginning to take effect and is expected to drive the demand of first-time homebuyers as well as home upgraders. We remain cautiously optimistic about the prospect of the real estate property sector. As for regional strategy, the Company is confident to maintain its leading position and prominent market presence in the local region in the next few years," concluded Mr. Xiaojun Zhu.

Third Quarter 2015 Financial Results

• Total revenues for the third quarter of fiscal 2015 were approximately $26 million, a decrease of 10% from approximately $28.9 million in the same quarter of fiscal 2014. Total revenues recognized from percentage of completion method were approximately $25.6 million, which accounted for 98.2% of total revenues in the third quarter of fiscal 2015.

• Basic and diluted net earnings per share ("EPS") attributable to shareholders for the third quarter of fiscal 2015 were $0.30, an increase of 66.7% from $0.18 for the same quarter of last year.

"I am very pleased that the Company reported strong earnings this quarter, with net income up 68% compared to the same period of last year. As we are selling out our inventory on completed projects, our sales were negatively impacted due to limited number of units for customer selection," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS. "The overall slower economic environment in China posted challenges for real estate industry. However, our regional real estate market remains stable, with average unit price held steady. Our commercial property and parking units with higher average unit price are particularly in strong demand. Our near term effort is to focus on completion of the projects currently under construction as soon as possible. We expect our contract sales and revenue will improve as we have more GFA available for sale," concluded Mr. Xiaojun Zhu.

Second Quarter 2015 Financial Results

• Total revenues for the second quarter of fiscal 2015 were approximately $23.6 million, a decrease of 53% from approximately $49.9 million in the same quarter of fiscal 2014.
• Basic and diluted net earnings per share ("EPS") attributable to shareholders for the second quarter of fiscal 2015 were $0.21, decreased by 31% from $0.30 for the same quarter of last year.

"The Company had a positive operating cash flow during the six months ended March 31, 2015" said Mr.Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS. "Additionally, the Company achieved higher gross margin compared to the same period of last year. In the second half of fiscal 2015, we expect that the completion of several real estate projects currently under development will increase our contracted sales. Meanwhile, we will focus on increasing our marketing efforts to sell our completed real estate properties. Given recent more relaxed central government policy on the real estate industry to bolster economic growth in Chinato a targeted rate, we are positive about the outlook for the local real estate market in a long term," concluded Mr. Xiaojun Zhu.

First Quarter 2015 Financial Results

• Total revenues for the first quarter of fiscal 2015 were approximately $10.6 million, a decrease of 25.3% from approximately $14.1 million in the same quarter of fiscal 2014. Total revenues recognized from percentage of completion method were approximately $9.8 million, which accounted for 92.9% of total revenues in the first quarter of fiscal 2015.
• Basic and diluted net earnings per share ("EPS") attributable to shareholders for the first quarter of fiscal 2015 were $0.04, compared to $0.07 for the same quarter last year.

"We had a slow down in sales during the quarter," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS. "Generally the first quarter is a slow season for the real estate developers. Since the construction of our real estate property under development is close to completion, we expect a recovery of sales when more residence move into our properties. In addition, we will consider increasing our marketing and promotional activities to attract more customers. We are positive about the outlook for the local real estate market in a long term," concluded Mr. Xiaojun Zhu.

HANZHONG, China, December 22, 2014 /PRNewswire/ -- 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 announced that the Company received government's subsidies in the amount of approximately $1.73 million for its Shanty Area Reform Project surrounding Liang Zhou Road located in Hantai District, Hanzhong City.

As a key part of China's urbanization process, the Shanty Area Reform Project is an important public project designed to promote the integration of urban and rural areas, improve the quality of urbanization and facilitate sustained and healthy economic development. In accordance with State Council's circular [2014]-36, the government will optimize investment agendas, allocate more funds for shantytown reforms and encourage financial institutions to strengthen loan support for such projects.

"We are excited to receive the government's subsidies on the Liang Zhou Road shanty area rebuilding project," said Mr. Xiaojun Zhu, Chief Executive Officer of China HGS Real Estate, Inc. "It shows the governments' full support for our projects. The government has pledged to improve housing conditions for the underprivileged and promote urbanization by accelerating Shanty Area reforms," stated Mr. Xiaojun Zhu.

HANZHONG, China, December 12, 2014 /PRNewswire/ -- 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 2014 ended September 30, 2014 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 2014

• Total revenues for the fiscal 2014 were approximately $124.3 million, an increase of approximately 83% from approximately $67.8 million in fiscal 2013.
• For the Company's long-term real estate development projects, the related revenue recognized from percentage of completion method was approximately $99.6 million, which accounted for 80% of total revenue in fiscal 2014 and increased 262% from the revenue recognized from percentage completion method in fiscal 2013.
• Net income for the fiscal 2014 totaled approximately $32.4 million, an increase of approximately 56% from the net income of approximately $20.8 million in fiscal 2013.
• Basic and diluted net earnings per share ("EPS") attributable to shareholders for the fiscal 2014 were $0.72, compared to $0.46 for the fiscal 2013.

"I am pleased to report to shareholders that the Company achieved continuous growth in revenue and net profit in our fiscal 2014, while the whole property sector in China is still under slow recovery," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS.

"Looking ahead in 2015, the Company will remain focused on completing the construction of our on-going apartment complex projects. Meantime, the Company will emphasis on Shanty area reforming projects, which is encouraged by the central government to improve the quality of urbanization and facilitate sustained and healthy economic development. The State Council indicated in its public circular that the government will optimize investment agendas to allocate more funds for shantytown reforms and encourage financial institutions to strengthen loan support for such projects. With such fundamentals undiminished, combined with the favorable development whereby the central government has begun to allow city governments to adapt certain restrict measurement to local conditions and more ready financing for first-time home buyers, we will step up our sales efforts, diversify product development, and expect our sales revenue to steadily increase in a long run," concluded Mr. Xiaojun Zhu.

HANZHONG, China, September 2, 2014 /PRNewswire/ -- 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 announced that the Company signed its second shanty area rebuilding framework agreement with the Hantai District government of Hanzhong City.

Pursuant to the agreement, the Company will be engaged in development of shanty areas surrounding the Lianhuachi Area located in the Hantai District, Hanzhong City. The estimated investment in the project is approximately US$750 million. The local government will coordinate with the Company to implement the reform plans. The Company will closely work with local government on the detail implementation plan and manage the project progress.

"We are excited by signing both the Liangzhou road area and Lianhuachi shanty area rebuilding project agreements with the local government," stated Mr. Xiaojun Zhu, Chief Executive Officer of China HGS Real Estate, Inc. "These two projects are not only important public welfare projects for the local community to improve housing conditions and people's livelihoods, but also promote local economic development. By rebuilding shanty areas, more opportunities will be provided for both local enterprises and residents, which help facilitate sustained and healthy economic development. As a leading regional real estate developer, we look forward to contributing great efforts to our local community," concluded Mr. Xiaojun Zhu.

Item 8.01 Other Information.

On September 2, 2014, China HGS Real Estate, Inc. (the “Company”) announced that it signed its second shanty area rebuilding framework agreement with the Hantai District government of Hanzhong City. Pursuant to the agreement, the Company will be engaged in the development of shanty areas surrounding the Lianhuachi Area located in the Hantai District, Hanzhong City. The estimated investment in the project is approximately US$750 million. The local government will coordinate with the Company to implement the reform plans. A copy of the press release is filed herewith as Exhibit 99.1 to this Current Report and is incorporated herein by reference.

HANZHONG, China, August 19, 2014 /PRNewswire/ -- 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 announced that the Company signed its first shanty area rebuilding framework agreement with the Hantai District government of Hanzhong City.

Pursuant to the agreement, the Company is engaged in developing the shanty areas surrounding Liang Zhou Road located in the Hantai District, Hanzhong City. The estimated investment in the project is approximately US$580 million. The local government will coordinate with the Company to implement the reform plan.

"We are excited about signing the Liang Zhou Road shanty area rebuilding project agreement," said Mr. Xiaojun Zhu, Chief Executive Officer of China HGS Real Estate, Inc. "As a leading regional real estate developer, we believe that the rebuilding plan will provide the Company with promising business opportunities in the local real estate market. We will contribute great efforts in building a better community for the local residence," stated Mr. Xiaojun Zhu.

HANZHONG, China, Aug. 19, 2014 /PRNewswire/ -- 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 announced that the Company signed its first shanty area rebuilding framework agreement with the Hantai District government of Hanzhong City.

Pursuant to the agreement, the Company is engaged in developing the shanty areas surrounding Liang Zhou Road located in the Hantai District, Hanzhong City. The estimated investment in the project is approximately US$580 million. The local government will coordinate with the Company to implement the reform plan.

"We are excited about signing the Liang Zhou Road shanty area rebuilding project agreement," said Mr. Xiaojun Zhu, Chief Executive Officer of China HGS Real Estate, Inc. "As a leading regional real estate developer, we believe that the rebuilding plan will provide the Company with promising business opportunities in the local real estate market. We will contribute great efforts in building a better community for the local residence," stated Mr. Xiaojun Zhu.

HANZHONG, China, August 11, 2014 /PRNewswire/ -- 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 announced that the Company was in process of signing two project agreements with local government to rebuild large-scale shanty areas located in Hanzhong City. The total investment in these two projects is estimated to exceed USD1.3 billion.

Reforming shanty areas is an important public welfare project for the Chinese government to improve housing conditions and people's livelihoods. It can also promote the people-oriented new urbanization drive and the integration of urban and rural areas, and improve the quality of urbanization and facilitate sustained and healthy economic development. China's Ministry of Housing and Urban-Rural Development urges plans to complete construction of 4.7 million units of government subsidized houses and aims to complete the renovation by the end of 2014 in accordance with a new circular [2014]-36 (the "Circular") from General Office of the State Council of the People's Republic of China published on August 4, 2014. In the Circular, the State Council also indicated that the government will optimize investment agendas to allocate more funds for shantytown reforms and encourage financial institutions to strengthen loan support for such projects.

"We are excited by the local government's shanty area rebuilding plan," commented Mr. Xiaojun Zhu, Chief Executive Officer of China HGS Real Estate, Inc. "We will actively participate in the Shantytown reforming projects and provide a better living environment for the local residences. We remain focused on providing quality housing with affordable pricing for growing new urban residents in these regions," concluded Mr. Xiaojun Zhu, Chief Executive Officer of China HGS Real Estate, Inc.

Third Quarter of Fiscal Year 2014 Results

• Total revenues for the third quarter of fiscal 2014 were approximately $28.9 million, an increase of 302% from approximately $7.2 million in the same quarter of fiscal 2013.
• Basic and diluted net earnings per share ("EPS") attributable to shareholders for the third quarter of fiscal 2014 were $0.18, increased by 260% from $0.05 for the same quarter last year.

"We continued to deliver satisfactory results this quarter as compared to the same period of last year," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS. "The overall real estate market in China remains soft, however, it is generally stable in the Tier 3 and Tier 4 cities. We are also pleased to experience some increase in our average selling prices ("ASP") compared to the third quarter of last year. We believe that the demand for real estate in Tier 3 and Tier 4 cities and counties in China remained solid as the government policy such as the reform of "Hu-Kou" policy will continue to drive migrants to favor Tier 3 and Tier 4 cities and counties. We remain focused on providing quality housing with affordable pricing for growing new urban residents in these regions," concluded Mr. Xiaojun Zhu.

• Total revenues for the second quarter of fiscal 2014 were approximately $49.9 million, an increase of 157.5% from approximately $19.4 million in the same quarter of fiscal 2013.
• Basic and diluted net earnings per share ("EPS") attributable to shareholders for the second quarter of fiscal 2014 were $0.30, increased by 130.8% from $0.13 for the same quarter last year.

"I am very pleased that the Company has delivered strong performance in this quarter," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS. "During the second quarter, we sold a significant portion of commercial units located in Yang County Pearl Garden Project and successfully delivered two municipal roads constructed for the local government. We also experienced significant sales progress in our newly constructed Mingzhu Beiyuan and Oriental Garden real estate projects. These strong results demonstrate that our growth strategy is working well and our execution is effective."

"As the government is cautiously implementing new policies and strategies to manage a stable economic growth in China, new catalysts will drive the growth. We have confidence that our strategy focusing on the real estate market in Tier 3 and Tier 4 cities and counties in China remains sound and effective going forward." Mr. Zhu continued. "For example, the new airport for the greater Hanzhong area is near its completion and is expected to be in operation in the second half of this year. The new airport will offer several direct flights daily from Tier 1 cities such as Beijing, Shanghai and Shenzhen, and many other regional flights, which we believe will add new catalysts to the economic growth in the greater Hanzhong area. We expect that the regional economy in the area which is our major market will get a boost with the new catalysts." concluded Mr. Xiaojun Zhu.

HANZHONG, China, March 24, 2014 /PRNewswire/ -- 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 announced that the Hanzhong government accepted the delivery of the two municipal roads that were constructed by the Company on March 21, 2014.

In June 2012, the Company was approved by the Hanzhong local government to construct two municipal roads, namely Mingzhu Road West and Liuhou Road. The related construction was completed and the Hanzhong government performed its quality inspections and accepted these two roads on March 21, 2014. The final construction price for these two roads is approximately $3.16 million (RMB19, 483,589), which was approved by the Hanzhong Ministry of Finance.

Mr. Xiaojun Zhu, China HGS's Chairman and Chief Executive Officer, said, "We are proud that our team was selected for these two important municipal road construction projects as part of the Hanzhong City Urban Redevelopment Program. We successfully completed these projects on a timely basis. It is a new milestone for the Company, demonstrating our commitment to expand our business to the future of Hanzhong City."

First Quarter 2014 Results

• Total revenues for the first quarter of fiscal 2014 were approximately $14.1 million, an increase of 28.5% from approximately $11.0 million in the same quarter of fiscal 2013.
• Basic and diluted net earnings per share ("EPS") attributable to shareholders for the first quarter of fiscal 2014 were $0.07, compared to $0.12 for the same quarter last year.

"I am pleased with the recent sales progress under presale stage," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS. "We believe that the demand for real estate in Tier 3 and Tier 4 cities and counties in China remained solid as a result of continuous urbanization and growing personal income. The government recently also announced intention to promote migration to Tier 3 and Tier 4 cities, while restrict migration to Tier 1 and Tier 2 cities. We expect that new policies forthcoming for further urbanization in China will focus more on development of Tier 3 and Tier 4 cities, which will attract more first-time home buyers to these less crowded cities from non-city population. As a leading regional developer, the Company will continue to focus its development on selected Tier 3 and Tier 4 cities, maximize the benefits of new government policies, and provide quality housing with affordable pricing for growing new urban residents in these cities," concluded Mr. Xiaojun Zhu.

Item 1.01. Entry into a Material Definitive Agreement.

On December 31, 2013, Shaanxi Guangsha Investment and Development Group Co., Ltd. (the “Guangsha”), the PRC operating subsidiary of China HGS Real Estate, Inc. (the “Company”), entered into a loan agreement with Mr. Xiaojun Zhu, the CEO, Chairman and major shareholder of the Company (the “Loan Agreement”), pursuant to which Guangsha shall from time to time borrow up to RMB 50 million (approximately US$8.2 million) from Mr. Zhu in order to support the Company’s Liang Shan Road construction project development and the Company’s working capital needs. The Loan Agreement has a one-year term at an interest rate, which is equal to the China RMB loan annual benchmark rate.

The foregoing description does not purport to be a complete statement of the parties’ rights and obligations under the Amendment Agreement or the transaction contemplated thereby or a complete explanation of the material terms thereof. The foregoing description is qualified in its entirety by reference to the Amendment Agreement attached hereto as Exhibit 10.1.

Highlights for the Fiscal 2013

• Total revenues for the fiscal 2013 were approximately $67.8 million, an increase of approximately 260% from approximately$18.9 million in fiscal 2012.
• Basic and diluted net earnings per share ("EPS") attributable to shareholders for the fiscal 2013 were $0.46, compared to $0.11for the fiscal 2012.

"I am very pleased that the Company delivered an outstanding performance driven by solid market demands despite restrictive measurements imposed by the central government on the real estate market in China," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS.

"Looking ahead in fiscal 2014, we remain focused on completing the construction of our on-going apartment complex projects. As the construction of some of our large scale high rise apartment buildings are moving closer to the completion stage, we plan to step up our sales efforts and expect our sales revenue to steadily increase. Longer term, the Company will continue to focus on building large-scale and high quality communities in Tier 3 and Tier 4 cities and expand development models into new markets," concluded Mr.Xiaojun Zhu.

October 15, 2013 - 8K

Item 1.01. Entry into a Material Definitive Agreeagreement (the "Loan Agreement") with China Construction Bank, Hanzhong Branch (the “Lender")ment.

On August 23, 2013, China HGS Real Estate, Inc., a Florida corporation (the “Company” or the "Borrower") entered into a project finance loan  for a working capital loan (the “Loan”). The Loan has a three-year term in the principal amount of RMB150 million (equal to approximately USD $24 million) at an interest rate, which is 5% over the benchmark interest rate, adjustable every twelve months from the date of the loan. The purpose of the loan is for the development of the Company’s Mingzhu Beiyuan project. The repayment of the loan is due and payable based on sales progress on the Mingzhu Beiyuan project and fixed milestone dates. The loan is pledged by the Company’s real estate properties in the Mingzhu Beiyuan project. The Loan is also subject to certain other customary terms and conditions as set forth therein.

The foregoing description of the Loan Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the English translation of the Loan Agreement, which is attached hereto as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Third Quarter 2013 Financial Results

• Total revenues for the third quarter of fiscal 2013 were approximately $7.2 million, an increase of 47% from approximately $4.9 million in the same period of fiscal 2012.
• Total gross floor area ("GFA") sold during the three months ended June 30, 2013 was 13,287 square meters, more than 11% from 11,947 square meters sold in the same period of fiscal 2012.
• Net income for the third quarter of fiscal 2013 totaled approximately $2.3 million, representing a 77% increase from the net income of approximately $1.3 million in the same period of fiscal 2012.
• Basic and diluted net earnings per share ("EPS") attributable to shareholders for the third quarter of fiscal 2013 was $0.05, compared to $0.03 for the same period of fiscal 2012.

"We continued to show improved performance over the last year, reflecting a healthy housing demand in the markets we are serving. We have also experienced solid sales activities during this quarter in our pre-sales of the new residential high-rise buildings that are still under constructions. However, due to the full accrual accounting method we are using to recognize revenues, those pre-sale activities are not reflected in our reported revenues. This, combined with reduced sellable inventory levels, has caused our sequential comparison unfavorable," Mr. Xiaojun Zhu, China HGS's Chairman and Chief Executive Officer commented.

"Going forward, we will continue to focus on and speed up the construction of our three on-going development projects: Mingzhu Beiyuan, Oriental Pearl Garden, and Yangzhou Pearl Garden. Upon completion of these high-rise residential buildings, our sellable inventory will be replenished, which, we expect, will accelerate the growth of our revenues long term," concluded Mr. Xiaojun Zhu.

Item 1.01. Entry into a Material Definitive Agreement.

On July 19, 2013, China HGS Real Estate, Inc. (the “Company”) entered into a second amendment (the “ Second Amendment”) to the original loan agreement dated June 28, 2011 by and between the Company and Mr. Xiaojun Zhu, the CEO, Chairman and major shareholder of the Company (the “Original Loan Agreement”), pursuant to which the Company borrowed US$1.81 million from Mr. Zhu in order to make a required capital contribution to the registered share capital of one of the Company’s subsidiaries. On July 19, 2012, the Company and Mr. Xiaojun Zhu entered into a first amendment to the Original Loan Agreement, which extended the term of the loan to June 28, 2013 with the other terms and conditions unchanged. Pursuant to the Second Amendment, the term of the Original Loan Agreement, as amended, was extended for an additional one year period, or until June 28, 2014. The other terms and conditions remain the same.

Second Quarter 2013 Financial Results

• Total revenues for the second quarter of fiscal 2013 were $19.4 million, an increase of 573.4% from $2.9 million in the same period of fiscal 2012.
• Net income for the second quarter of fiscal 2013 totaled $5.8 million, a significant increase compared to the net income of $0.9 million in the same period of fiscal 2012.
• Basic and diluted net earnings per share ("EPS") attributable to shareholders for the second quarter of fiscal 2013 was $0.13, compared to $0.02 for the same periods of last year.

"We are pleased to report another solid quarter with significantly higher revenues and net income than the same quarter of last year, reflecting a continuous dynamic housing market in Tier 3 and Tier 4 cities and counties," commented Mr. Xiaojun Zhu, China HGS's Chairman and Chief Executive Officer.

"China's State Council recently announced new policies including levying a 20% tax on profits from real estate resales to keep prices from mounting higher the real estate market, with expectations that housing supply in major cities will not be able to meet demands in the short term. The new policies are not targeting at first time home buyers and we believe will have no significant impact on the real estate market in Tier 3 and Tier 4 cities and counties which our company is serving and where most housing purchasers are first time home buyers," continued Mr. Zhu.

"During the second quarter of fiscal 2013, we made good progress on construction of our three on-going projects-Mingzhu Beiyuan, Oriental Pearl Garden, and Yangzhou Pearl Garden. Recently, the Company also received the presale license of Mingzhu Beiyuan, which we expect will facilitate the presales of this development. Once the construction is completed and the presold units are delivered to purchasers, the presales receipts, currently recorded as customer deposits, will contribute to the growth of our bottom line," concluded Mr. Xiaojun Zhu.

Item 5.02         Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On May 28, 2012, China HGS Real Estate, Inc. (the “Company”), through Shaanxi Guangsha Investment and Development Group Co., Ltd. (“Guangsha”), a company that the Company controls through a series of contractual arrangements, entered into an employment contract (the “Employment Contract”) with Mr. Wei (Samuel) Shen  to serve as Chief Financial Officer of the Company.  The appointment of Mr. Shen was unanimously approved by the Company’s Board of Directors on May 28, 2012.

The term of the Employment Contract is for one year and will expire on May 27, 2013. Upon expiration of the Employment Contract, the parties may agree on the renewal and enter into a new employment contract. Pursuant to the Employment Contract, Mr. Shen will receive a monthly salary of RMB60,000 (approximately US$9,500) and an annual discretional bonus up to RMB180,000 (approximately US$28,000). Mr. Shen is also entitled to 100,000 shares of restricted common stock of the Company at the end of the term, subject to his continuing employment with the Company.  According to the Employment Contract, the Company may terminate the employment with Mr. Shen for causes defined in the Employment Contract with thirty days’ advance written notice. Under certain circumstances provided in the Employment Contract, the Company may elect to pay an additional month’s salary to replace its written notice advancement obligation. Mr. Shen may terminate the employment with the Company by giving a ninety-day advance written notice to the Company.  The Employment Contract also contains covenants regarding non-competition and confidentiality.

Mr. Shen, age 34, has been a Vice President for Finance, of the Company since November 2011. Prior to joining the Company, Mr. Shen was a Director at Bluehill Investment Advisory Group, a Canada-PRC based consulting firm, where he helped several U.S. and Canadian listed Chinese companies with their financial reporting, internal control implementation, and SOX compliance training. From 2006 to 2011, Mr. Shen served as an Audit Assurance Manager at MSCM LLP, Toronto, where he managed audit engagements for U.S. and Canadian public companies in real estate, health care, manufacturing, and IT industries. Mr. Shen holds both Chartered Accountant and Certified Public Accountant designations and is experienced with financial reporting under IFRS, U.S. and Canadian GAAP. Mr. Shen holds a Master of Management and Accounting from the Rotman School of Management, University of Toronto. Mr. Shen earned a Bachelor of Science in Computer Science and Mathematics from McMaster University and a Bachelor of Commerce in International Trade from Shanghai University.

Mr. Shen has no family relationships with any of the executive officers or directors of the Company. There have been no transactions in the past two years to which the Company or any of its subsidiaries was or is to be a party, in which Mr. Shen had, or will have, a direct or indirect material interest.

On May 28, 2012, Mr. Xiaojun Zhu resigned from his position as Chief Financial Officer of the Company. Upon resignation, Mr. Zhu continues to serve as President, Chief Executive Officer and Chairman of the Board of Directors of the Company.

HANZHONG, China, May 8, 2012 /PRNewswire-Asia/ -- China HGS Real Estate Inc. (NASDAQ: HGSH - News) ("China HGS" or "the Company"), one of the largest residential and commercial property developers in China's southern Shaanxi Province, today announced that it has entered the construction phase for its Oriental Mingzhu residential project in downtown Hanzhong.

Oriental Mingzhu is centrally located in the heart of Hanzhong and offers apartments to a wide range of residential buyers. When completed, the development is expected to consist of 12 residential towers, encompassing 62,700 square meters of land usage. Zoning plans approved by relevant PRC authorities include building plans of 261,000 square meters, of which 211,000 square meters will be above ground and another 50,000 square meters will be underground parking. Total investment is estimated to be RMB 800 million of which RMB 197 million has been paid as of April 30, 2012.

"Oriental Mingzhu is an important project that HGS has been carefully planning for the last two years," stated Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS. "We are glad the construction phase has successfully began. In the next few years, we believe the real estate market in Hanzhong and the surrounding region will continue its strong growth. We will methodically allocate capital and resources according to plan and strive to make Oriental Mingzhu our next home run."

HANZHONG, China, February 23, 2012 /PRNewswire-Asia-FirstCall/ -- China HGS Real Estate Inc. (NASDAQ: HGSH) ("China HGS" or "the Company"), one of the largest residential and commercial property developers in China's southern Shaanxi Province, signed an agreement (the "Agreement") on February 3, 2012 to sell multiple units in the Company's Yangzhou Pearl Garden project (currently under development and located in Yang County, Shaanxi Province) to Pingdu National Forest Farm (the "Buyer").

According to the Agreement, the Buyer will purchase from the Company 68 residential apartments in the project for an estimated total contract value of RMB 20 million (approximately $3.2 million). The unit prices will adhere to Yang County's pricing policy for low and middle income residential housing, with units fewer than 1,076 square feet priced from RMB 158 to RMB 200 (approximately $25.08 to $31.75) per square foot and units greater than 1,076 square feet priced from RMB 262 to RMB 291 (approximately $41.59 to $46.20) per square foot.

Under the Agreement, China HGS is required to deliver one phase of residential apartments in Towers 1, 16, and 17 to the Buyer by June 30, 2012; a second phase of residential apartments in Towers 31 and 45 by December 31, 2012; a third phase of residential apartments in Tower 50 by December 31, 2014; and a fourth phase of residential apartments in Tower 30 immediately upon closing. The Buyer is required to make an initial payment of RMB 4.1 million (approximately $0.6 million) as a deposit for the units, and if the remaining balance is paid within 30 days from the initial payment date, the Buyer will be entitled to a 1% discount on the total purchase price of the units.

"Large-scale bulk-purchase agreements continue to be a beneficial component of our sales strategy, and we are pleased to have further secured our future revenue stream for the Yangzhou Pearl Garden project," stated Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS Real Estate, Inc. "With the Spring Festival holiday now behind us, we are entering a period that has historically seen robust sales. This improved selling environment, in combination with several phases of our projects nearing completion, positions us to generate increased sales in the coming quarters."

Financial Results reported February 15, 2012

First-Quarter Fiscal 2012 Results 

During the fiscal first quarter ended December 31, 2011, revenue increased 1,740.3% to $2.5 million, from $0.1 million in the year-ago quarter. The increase was mainly attributable to higher unit sales prices and extenuating circumstances in the comparable period of 2011. The decrease in revenue recognized for the three months ended December 31, 2010 was attributable to the delay of revenue recognition caused by the inability of the Company to obtain property sales invoices from the Hanzhong City Local Taxation Bureau during the first quarter of fiscal 2011. As a result, the Company could not transfer the property ownership to the buyers and the related sales were deferred.

For the quarter ended December 31, 2011, China HGS sold a total of 37 units of residential and commercial properties, of which 24 units were derived from sales of the Yangzhou Pearl Garden project, which generated$1.1 million in revenue, or 45.4% of the Company's quarterly sales. The average sales price at Yangzhou Pearl Garden was $444 per square meter for the three months ended December 31, 2011, a year-over-year increase of $61 per square meter, or 16%, compared to fiscal 2011's average selling price of $383 per square meter.

Business Outlook

The Company keeps a vigilant watch on the impact of the restriction policies on the real estate market. The increasingly restrictive policies started to have a significant impact on the real estate market in Tier-3 and Tier-4 cities in late 2011. These policies also negatively affected buyers' confidence, with some buyers taking a wait-and-see attitude. As a result, the sales volume for the three months ended December 31, 2011 dropped significantly compared to the average quarterly sales during fiscal 2011.

The People's Bank of China ("PBOC") posted a statement on its website on February 7, 2012, indicating that the PBOC would guarantee lending support to affordable housing projects and ensure that loan demand from first-time home buyers is met. With the ease of the mortgage policies from the PBOC and the lowering of mortgage rates by certain commercial banks in February 2012, the Company expects to see improvement of the real estate market in the remaining quarters of fiscal 2012.

"We believe the fundamentals underpinning real estate demand remain strong. Since most of our customers are first-time home buyers, and our affordable housing units are in the pre-sales stage, we expect our cash flow will continue to improve in the first half of 2012. Moving forward, we intend to remain focused on our existing construction projects in Hanzhong city and Yang County, deepen our institutional sales network, enhance our cost and operational synergies, improve cash flows, and strengthen our balance sheet. We expect these imperatives will help us cope with this difficult period and better position us to capitalize on opportunities during a future market upturn," added Mr. Zhu

Item 3.01.Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On January 18, 2012, China HGS Real Estate, Inc. (the “Company”),received a letter from The NASDAQ Stock Market LLC (“Nasdaq”),in which the Nasdaq Staff notified the Company that based upon the closing bid price for the last 30 consecutive business days, the Company no longer meets Listing Rule 5450(a)(1), which requires listed securities to maintain a minimum bid price of $1 per share (the “Rule”).

In order to regain compliance with the Rule, the closing bid price of the Company’s securities must be at least $1 for a minimum of ten consecutive business days. The Company has a compliance period of 180 calendar days in which to regain compliance with the Rule. In the event the Company does not regain compliance with the Rule during the 180 day period, the Company may be eligible for additional time.

The Company’s management, along with its Board of Directors, is currently considering all viable options for the Company to regain compliance with the Rule.

On December 22, 2011, and as a result of the review of the annual financial statements for fiscal 2011 for China HGS Real Estate Inc. (the “Company”), the Company’s Board of Directors concluded that its unaudited condensed consolidated financial statements (the “Financial Statements”) for the three and six months ended March 31, 2011 and for the three and nine months ended June 30, 2011, contained in the Company’s Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission (“SEC”) on May 16, 2011 and August 15, 2011, respectively, should no longer be relied upon due to  certain material errors contained therein.

The Company’s upcoming annual report on Form 10-K for the fiscal year ended September 30, 2011 will include a disclosure of the effect of the restatement in the quarterly financial information footnote for the periods as indicated above.   The restatement of the interim financial information is to correct the allocation of certain construction costs that were inappropriately allocated between the real estate property development completed and real estate property under development, which resulted in understatements of cost of sales for the six months ended March 31, 2011 and nine months ended June 30, 2011.  The Company will restate the unaudited condensed consolidated balance sheets as of March 31, 2011 and June 30, 2011 and the unaudited condensed consolidated statements of income and comprehensive income for the periods ended March 31, 2011 and June 30, 2011 to reflect the corrected figures. The effects on net income and earnings per share for such periods are as follows:

• Net income for the three and six months ended March 31, 2011 will decrease by $1,615,453. Both basic and diluted earnings per share for the three and six months ended March 31, 2011 will decrease by $0.03 and $0.04 per share, respectively.
  
  Net income for the three and nine months ended June 30, 2011 will decrease by $1,211,941 and $2,827,394, respectively. Both basic and diluted earnings per share for the three and nine months ended June 30, 2011 will decrease by $0.02 and $0.06 per share, respectively.
  

HANZHONG, China, Nov. 2, 2011 /PRNewswire-Asia-FirstCall/ -- China HGS Real Estate Inc. (NASDAQ: HGSH) ("China HGS" or "the Company"), one of the largest residential and commercial property developers in China's southern Shaanxi province, today announced it has been qualified to expand its real-estate development operations beyond Shaanxi province into new regional real-estate markets in China.

This significant new growth opportunity stems from the receipt of the National Grade-I real-estate development qualification, which was awarded to its operating entity in China, the Guangsha Group, by the Ministry of Housing and Urban-Rural Development of the People's Republic of China ("MOHURD").

"The National Grade-I qualification is a major milestone in China HGS' development which will allow us to pursue new regional real-estate growth opportunities, while continuing our leadership in Shaanxi province," stated Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of China HGS Real Estate Inc.  He added, "This important advance would not be possible without contributions from all China HGS employees, and we are most grateful for their diligent efforts."

Third Quarter 2011 Results

HANZHONG, China, June 14, 2011 /PRNewswire-Asia/ -- China HGS Real Estate Inc. (NASDAQ: HGSH) ("China HGS" or "the Company"), a leading residential and commercial property developer in China's southern Shaanxi province, today announced that the Company signed a residential-apartment bulk-purchase agreement (the "Agreement") for a total price of RMB 60 million (approximately $9.2 million) with the Hanzhong Municipal Bureau of Justice (the "Purchaser") on June 8, 2011.

The Agreement covers the entire Tower B3 of the Company's "Mingzhu Beiyuan" project, which is comprised of a total of 112 residential-apartment units and is located in downtown Hanzhong. The contracted project is expected to be completed and delivered to the Purchaser within two and a half years after the date of the Agreement, according to the timeline set forth in the Agreement. The total price of the Agreement is RMB 60 million (approximately $9.2 million), with an average sales price of RMB 309 per square foot (approximately $47.50 per sq. ft.). According to the Agreement, the Hanzhong Municipal Bureau of Justice has agreed to make an initial payment of RMB 100,000 (approximately $15,385) for each apartment unit within 10 days of the date of the Agreement and make an additional payment to China HGS by the end of August 2011, raising its total payment to 50% of the total price (RMB 30 million, or approximately $4.6 million). Upon due payment of the contract price as agreed in the Agreement, China HGS is required to complete the project design, obtain the necessary approvals, and perform the related preparation work within three months of the date of the Agreement.

"We are pleased to reach a second bulk-purchase agreement for our Mingzhu Beiyuan project only 10 days after signing our first bulk-purchase agreement with the Hanzhong Public Security Bureau," commented Mr. Xiaojun Zhu, Chief Executive Officer of China HGS Real Estate, Inc. "The robust demand for China HGS's properties reflects our leading reputation and the recognition of our company in our core market. We look forward to continuing to deliver high-quality real estate products to our customers in the future."

First Quarter Results:

• Revenue increased 88.6% year-over-year to $26.2 million
• Gross profit increased 124.5% year-over-year to $12.7 million
• Gross margin was 48.4%, compared with 40.6% in the fiscal second quarter of 2010
• Net income increased 136.0% year-over-year to $11.8 million, or $0.26 per diluted share, compared with $0.11 in the year-ago period

"Due to the continuing strong demand for new residential real-estate properties in our core Hanzhong market, we have achieved solid operating results in the fiscal second quarter of 2011.  Several of our projects, such as the Yangzhou Pearl Garden Phase III project, have experienced brisk sales thus far in 2011," stated Mr. Xiaojun Zhu, Chief Executive Officer of China HGS Real Estate Inc. "During the previous quarter, our revenue recognition was affected by the delay of government initiatives to launch an online invoicing system, which was ultimately completed and activated in late February 2011.  In order to ensure that China HGS will be immune from similar factors, we have modified our internal accounting process to embrace a model that recognizes revenue only when the keys are handed over to the buyer.  We believe this modified internal practice will help us to more effectively and accurately report our operating performance in the future."

Revenues decreased by 99% to approximately $135,952 for the three months ended December 31, 2010 from approximately $11.1 million for the three months ended December 31, 2009. The $10.9 million decrease was attributable to the delay of revenue recognition caused by the inability of the Company to obtain property sales invoices from the Hanzhong City Local Taxation Bureau’s website.

Revenue relating to additional completed units for which we received customer deposits is expected to be recognized once we obtain the invoices generated by the government’s new website. Therefore, the revenue reported during this quarter does not necessarily reflect the demand for the Company’s products. Management believes that customer deposits are a better indicator of the demand for these residential and commercial units. Down payments from buyers are recorded as customer deposits, which are typically 10%-20% of the unit price for cash sales and 30%-50% of the unit price for those customers who purchase properties with mortgage proceeds. Customer deposits as of December 31, 2010 were $21,158,009 compared to $13,794,890 at September 30, 2010. Revenue relating to additional completed units for which we received customer deposits is expected to be recognized once we obtain the invoices generated by the government’s new website. Therefore, the revenue reported during this quarter does not necessarily reflect the demand for the Company’s products. Management believes that customer deposits are a better indicator of the demand for these residential and commercial units. Down payments from buyers are recorded as customer deposits, which are typically 10%-20% of the unit price for cash sales and 30%-50% of the unit price for those customers who purchase properties with mortgage proceeds. Customer deposits as of December 31, 2010 were $21,158,009 compared to $13,794,890 at September 30, 2010.

Based on our current operating plan, we believe that existing cash and cash equivalents balances, as well as cash forecast by management to be generated by operations will be sufficient to meet our working capital and capital requirements for our current operations. In order to fully implement our business plan, however, we may need to require capital contributions far in excess of our current asset value.

Our expectation, therefore, is that we will seek to access the capital markets in both the U.S. and China to obtain the funds we require. At the present time, however, we do not have commitments of funds from any source.

Revenues grew 56.7% and net income increased 56.6% in fiscal 2010

Third Quarter Fiscal Year 2010 Highlights 

• Revenue increased to $7.7 million, up from $0.3 million a year ago.
  
• Gross profit was $3.7 million with gross margin of 47.7%.
  
• Net income totaled $3.2 million vs. (107,349), or $0.07 per diluted share vs. $0.00.

"During the third quarter of fiscal year 2010, market demand for residential properties in Hanzhong, our core market, continued to exhibit solid growth. Thanks to a larger inventory of units available and our strong reputation, we sold a total of 288 residential and commercial property units and car parks at attractive margins. This resulted in another quarter of significant top line and bottom line growth," said Mr. Xiaojun Zhu, Chief Executive Officer of China HGS Real Estate Inc.

Business Outlook

"Despite the Chinese government's tightening policy and regulations to constrain growth in the domestic real estate market, we maintain our positive outlook for the property market in second-tier and third-tier cities in western China. We believe that Hanzhong and the surrounding areas will continue to enjoy the benefits of China's "Go to the West" policy in the coming years," commented Mr. Zhu. "While we continue our efforts to strengthen our market leadership in Hanzhong, we are also actively planning to expand into the neighboring cities in Southern Shaanxi Province and Northern Sichuan Province."

As of June 30, 2010, the Company's major projects under development include Yangzhou Mingzhu Project, Mingzhu Xinju Project and Mingzhu Project V which have completed construction up to 43.1%, 75.0% and 26.7%, respectively, as of June 30, 2010.

China HGS expects to complete construction of its Hanzhong Mingzhu Nanyuan #8 and #9 building, Yangzhou Mingzhu Project #27 and #30 building and several other projects during the fourth quarter of fiscal 2010.

For the fiscal year ending September 30, 2010, China HGS raises its:

• Revenue guidance from previously announced $47.5 million - $49.0 million to $52.5 million to $53.0 million.
  
• Net income guidance from $15.5-$16 million to $17.0-$17.5 million, or diluted earnings per share of approximately $0.38 to $0.39.

"While the Chinese government has recently implemented tighter policies to control the overheating domestic real estate market, we continued to experience strong demand for our new residential real estate projects in Hanzhong during the second quarter of fiscal 2010. We experienced tenfold growth in revenue and net income and maintained healthy gross margins of 40% to 55% on our projects. This was the result of a larger inventory of units available for sale, China HGS' enhanced brand recognition among consumers, and rising levels of disposable income in China's second-tier and third-tier cities," commented Mr. Xiaojun Zhu, Chief Executive Officer of China HGS Real Estate Inc.

"We are a rapidly growing residential real estate developer with a strong focus on second-tier and third-tier cities in China. We maintain our positive outlook for real estate growth momentum in these markets," commented Mr. Zhu. "The remarkable growth in personal income in Hanzhong and the surrounding areas has resulted in significant improvement in standards of living and demand for better housing. Therefore, we believe Hanzhong's real estate market will experience sustainable growth for the foreseeable future.

"We have enhanced our corporate governance by establishing a strong board with a majority of independent directors and creating audit, compensation and nominating and corporate governance committee. We believe we now meet all the corporate governance requirements to list our common stock on a major U.S. stock market."

As of March 31, 2010, the Company's major projects under development include Ming Zhu Xin Ju project, Ming Zhu Nan Yuan Phase II project in Hanzhong, Mingzhu Garden in Hanzhong and Yangzhou Pearl Garden in Yang County.

For the fiscal year ending September 30, 2010, China HGS reaffirms its guidance of revenue of approximately $47.5 million to $49.0 million and net income of $15.5 million to $16.0 million. 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.

see release

Due to a recent merger agreement with HGS/Shaanxi Guangsha, CHAS has changed its business focus:

Shaanxi Guangsha Investment is engaged in developing large scale and high quality commercial and residential projects, which typically consist of multi-functional buildings that include multi-layer apartment buildings and office buildings, sub-high-rise apartment buildings or high-rise buildings.

Shaanxi Guangsha Investment also develops small scale commercial and residential properties. Shaanxi Guangsha Investment is aiming at providing middle-income consumers with a comfortable and convenient community life.

 In addition, it also provides property management as an auxiliary service to its residents. Shaanxi Guangsha Investment acquires development sites primarily through public auctions of government land. This acquisition method allows Shaanxi Guangsha Investment to obtain unencumbered land use rights to unoccupied land without the need for additional work, re-settlement or protracted legal processes to obtain title. As a result, Shaanxi Guangsha Investment is able to commence construction relatively quick after a site for development is acquired.

Ye Shun is a Hong Kong registered enterprise that has its ownership in Runze as its primary asset. Runze is a state-appointed pesticide manufacturer in China. Through Runze, we specialize in the manufacturing of various pesticides and herbicides, particularly the herbicide Acetochlor. However, during the quarterly period ended June 30, 2009, we did not sell any product or have any revenues as a result of not being able to utilize DHC’s facilities because of the new regulation regarding all manufacturing plants being in “chemical zones.” Although we hope to be able to manufacture product in the near future, we may not be able to do so and would have to undertake a significant expense in building a new manufacturing facility if we decided to continue with our current business plan and manufacture herbicides and pesticides.

Source: SEC From 10Q (For the quarterly period ended June 30, 2009, page 7)

We had no revenues for the three months ended June 30, 2009, compared to no revenues for the same period one year ago. Going forward we will not be able to manufacture product at our existing plant due to the new “chemical zone” regulation. Therefore, if we are not able to contract with a third party to utilize a qualified manufacturing facility to produce our products we will be not be able to manufacture product in the future and we will not have any revenues during those periods. Building a new manufacturing facility in a “chemical zone” would be at a substantial cost to the company and our management does not believe that is likely to occur and we may seek an alternative business in the future.

Source: SEC From 10Q (For the quarterly period ended June 30, 2009, management discussion section)