XI'AN, China, Aug. 12 /PRNewswire-Asia-FirstCall/ -- China Housing & Land Development, Inc. ("China Housing" or the "Company"; Nasdaq: CHLN) today announced its unaudited financial results for the quarter ended June 30, 2010.
Highlights for 2nd Q 2010:
-- Total revenues increased 9.0% to $36.6 million compared to $33.6
million in the first quarter of 2010, and increased 61.1% from $22.7
million in the second quarter of 2009.
-- Contract sales decreased 15.4% to $38.4 million compared to $45.4
million in the first quarter of 2010 and increased 90.1% from $20.2
million in the second quarter of 2009.
-- Total gross floor area ("GFA") sales were 46,459 sq. meters, compared
to 61,666 sq. meters in the 2010 first quarter period and 31,141 sq.
meters in the 2009 second quarter period.
-- Average residential selling price ("ASP's") in the second quarter were
RMB 5,641, a 12.2% increase from RMB 5,027 in the first quarter of 2010
and 27.3% increase from RMB 4,430 in the second quarter of 2009 .
-- Gross profit increased 59.5% to $10.3 million from $6.5 million in the
first quarter of 2010 and 43.3% from $7.2 million in the second quarter
of 2009. Second quarter 2010 gross profit margin was 28.2% compared to
gross profit margin of 19.3% in the 2010 first quarter period and gross
profit margin of 31.7% in the second quarter of 2009.
-- SG&A expenses as a percentage of total revenue was 10.3%, compared to
7.6% in the 2010 first quarter period and 8.6% in the 2009 second
quarter period.
-- Operating income increased 91.7% to $5.7 million from $3.0 million in
the first quarter of 2010, and increased 51.6% from $3.8 million in the
second quarter of 2009.
-- Net income attributable to the Company in the second quarter of 2010
was $5.6 million, or $0.17 per basic share and $0.13 per diluted share.
Excluding a $1.4 million, or $0.04 gain associated with the revaluation
of derivatives and warrants, net income was $4.2 million, or $0.13 per
basic share and $0.13 per diluted share.
Mr. Pingji Lu, China Housing's Chairman, commented, "Our second quarter results were respectable given the challenging market environment. JunJing II Phase Two and Puhua Project continued to serve as the main revenue drivers in our business. Our average selling price trends were favorable in the second quarter increasing 12.2% sequentially and 27.3% from our prior year second quarter largely due to an improved product mix associated with our Puhua Project. Our project sales direction is trending more toward slightly higher end projects such as Puhua which can result in ongoing ASP and gross margin improvements in the coming quarters."
"We are also encouraged with several important initiatives that can benefit our business performance moving forward. This includes a central government program that offers lower interest rates to first time apartment buyers and upgraders. We also hope to benefit from our establishment of a road show marketing team that travels to nearby provinces to target high income working professionals to purchase our apartments in Xi'an. Industry research shows that average selling prices and transaction volume in the Xi'an market continued to remain stable."
Total revenue in the second quarter of 2010 increased to $36.6 million from $33.6 million in the first quarter of 2010 and $22.7 million in the second quarter of 2009. In the second quarter of 2010, most of the Company's revenue came from its JunJing II Phase Two and Puhua project. Contract sales totaled $38.4 million of residential and commercial unit sales from its JunJing II Phase Two, Puhua project and other completed projects, representing a total of GFA 46,459 square meters.
Gross profit for the three months ended June 30, 2010 was $10.3 million, representing an increase of 43.3 percent from $7.2 million in the same period of 2009. The gross profit margin for the three months ended June 30, 2010 was 28.2 percent compared with 31.7 percent in the same period of 2009 and 19.3 percent in the first quarter of 2010. Due to the increased sales of Jun Jing II Phase Two and Puhua project, gross profit increased as a result of increased revenue. Our gross margin decreased 3.5% compared with same period in 2009, but increased 8.9% compared with first quarter of 2010, as we sold fewer parking lots during the first quarter of 2010, which typically have a 3%-6% gross profit margin.
SG&A expense was $3.8 million in the second quarter of 2010, compared to $2.5 million in the first quarter of 2010 and $1.9 million in the second quarter of 2009. As a percentage of total revenue, SG&A expenses increased to 10.3% from 7.6% in the first quarter of 2010 and 8.6% in the second quarter of 2009. The increase in SG&A is associated with the increased sales and increased projects compared with the same period of 2009. The increased SG&A mainly includes marketing and travel expenses associated with Puhua project, as the Company started our marketing road show in other provinces in Western China. The initiation of JunJing III also increased administrative and marketing expenses
Operating income in the second quarter of 2010 increased to $5.7 million from $3.0 million in the first quarter of 2010 and $3.8 million in the second quarter of 2009.
Net income attributable to China Housing in the second quarter of 2010 was $5.6 million, or $0.17 per basic share and $0.13 per diluted share. Excluding a $1.4 million, or $0.04 per share gain associated with the revaluation of derivatives and warrants, net income was $4.2 million, or $0.13 per basic share and $0.13 per diluted share. This performance compares to a net loss of ($10.5) million, or ($0.34) per diluted share, in the second quarter of 2009, which includes a ($13.1) million, or ($0.42) non-cash charge associated with the revaluation of derivatives and warrants.
Sequential Quarterly Revenue Breakout Comparison
Q2 2010
Revenue
Project Recognized GFA Sold ASP
($) (m2) (RMB)
Projects Under Construction
JunJing II Phase Two 21,855,313 23,199 5,691
Puhua Project 8,887,590 18,013 5,524
Projects Completed
JunJing II Phase One 3,135,381 3,504 6,106
Tsining-24G 110,835 35 21,878
JunJing I 1,077,115 1,500 4,900
Additional Project 154,152 208 5,057
Other Income 1,373,409
Total 36,593,795 46,459 5,641
Q-o-Q Change (24.7%) 12.2%
Unsold Q1 2010
Revenue
Project GFA Recognized GFA Sold ASP
(m2) ($) (m2) (RMB)
Projects Under Construction
JunJing II Phase Two 7,609 15,161,722 26,415 5,426
Puhua Project 572,117 11,454,564 25,741 4,742
Projects Completed
JunJing II Phase One 2,584 4,095,525 6,295 5,263
Tsining-24G 1,921 15,684 8 14,015
JunJing I 6,456 1,296,725 2370 3,735
Additional Project 990 366,841 836 2,996
Other Income 1,181,853
Total 591,677 33,572,914 61,666 5,027
As of June 30, 2010, China Housing reported $68.3 million in unrestricted cash, compared to $66.3 million as of March 31, 2010 and $10.1 million as of June 30, 2009. Total debt was $130.9 million on June 30, 2010, compared to $92.9 million as of March 31, 2010, and $48.5 million as of June 30, 2009. Net debt as a percentage of total capital was 40.6% on June 30, 2010, compared to 23.9% on March 31, 2010 and 26.2% on June 30, 2009.
Q2 2010
First
Unsold Pre-sales
Projects in Planning GFA Scheduled
(m2)
JunJing III 47,153 September 2010
Park Plaza 180,000 Q4 2010
Golden Bay 378,887 Q2 2011
Total projects in planning 606,040
2010 Outlook
"Our original full year guidance projection included construction expansion into surrounding provinces. However, central government policies have led to more hesitation in the broader real estate market which has diminished our plans to expand into other nearby provinces at present. This pullback directly resulted in a reduction of our annual revenue growth expectations for this year. We continue to view other real estate projects outside of Xi'an as compelling investment opportunities and will evaluate further expansion initiatives outside of Xi'an as overall real estate market sentiment continues to improve.
Within the Xi'an region, we continue to be quite active with our project plans. In addition to revenue from our primary projects-JunJing II Phase Two and Puhua Project, our plan related to our two other projects remains on schedule. We expect that JunJing Garden III and Park Plaza will generate pre-sales in September and in the fourth quarter of 2010, respectively. As market conditions continue to stabilize, we believe our business will continue to pick up, particularly in the fourth quarter. As we look into 2011, the growth in our business should go forward favorably as we move further away from the 2010 government policies that impacted the entire real estate industry and benefit us from the addition of new projects to our schedule." concluded Mr. Lu.
2010 total contract sales are expected to reach US$168 to $205 million, a 62%-97% increase compared to $103.9 million in 2009. Total recognized revenue in 2010 is expected to reach US$135 to $165 million, a 56%-91% increase compared to $86.6 million in 2009. The Company is reporting contract sales estimates compared to revenue as it is not subject to percentage of completion alterations.
Conference Call Information
China Housing's management will host an earnings conference call on Thursday, August 12, 2010 at 8:30 a.m. U.S. Eastern Time. Listeners may access the call by dialing #1-719-457-2677. To listen to the live webcast of the event, please go to http://www.viavid.net . Listeners may access the call replay, which will be available through August 19th, by dialing
#1-719-457-0820; passcode: 5244707.
About China Housing & Land Development, Inc.
Based in Xi'an, the capital city of China's Shaanxi province, China Housing & Land Development, Inc., is a leading developer of residential and commercial properties in northwest China. China Housing has been engaged in land acquisition, development, and management, including the sales of residential and commercial real estate properties through its wholly-owned subsidiary in China, since 1992.
China Housing & Land Development is the first and only Chinese real estate development company traded on NASDAQ. The Company's news releases, project information, photographs, and more are available on the internet at http://www.chldinc.com .
Safe Harbor
This news release may contain forward-looking information about China Housing & Land Development, Inc. which is covered under the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward- looking terminology such as believe, expect, may, will, should, project, plan, seek, intend, or anticipate or the negative thereof or comparable terminology, and include discussions of strategy, and statements about industry trends and China Housing & Land Development's future performance, operations, and products.
Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Actual performance results may vary significantly from expectations and projections. Further information regarding this and other risk factors are contained in China Housing's public filings with the U.S. Securities and Exchange Commission.
All information provided in this news release and in any attachments is as of the date of the release, and the companies do not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.
For more information, please contact:
China Housing contacts
Mr. Cangsang Huang
Chief Financial Officer
Tel: +86-29-8258-2648 in Xi'an
Email: chuang@chldinc.com
Ms. Jing Lu
Chief Operating Officer, Board Secretary, and Investor Relations Officer
Tel: +86-29-8258-2639 in Xi'an
Email: jinglu@chldinc.com / English and Chinese
Mr. Shuai Luo
Investor Relations
Tel: +86 29.8258.2632 in Xi'an
Email: Laurentluo@chldinc.com / English and Chinese
Mr. Bill Zima, ICR
Tel: +1-203-682-8200 in United States
Email: William.Zima@icrinc.com
Ms. Annie Chen, ICR
Tel: +86-10-6599-7966 in Beijing
Email: Annie.Chen@icrinc.com
(Financial Tables Follow)
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES
Interim Condensed Consolidated Balance Sheets
As of June 30, 2010 and December 31, 2009
(Unaudited)
June 30, December 31,
2010 2009
ASSETS
Cash & cash equivalents $ 68,316,347 $ 36,863,216
Cash - restricted 779,672 701,017
Accounts receivable, net of
allowance for doubtful
accounts of $392,550 and
$389,996, respectively 8,966,489 6,088,482
Other receivables and prepaid
expenses 4,029,933 2,484,221
Real estate held for development or
sale 109,755,284 103,003,529
Property and equipment, net 15,283,212 15,307,478
Asset held for sale 14,720,084 14,301,564
Advance to suppliers 652,859 10,368,386
Deposits on land use rights 53,114,051 28,084,346
Intangible assets, net 41,625,895 41,355,134
Goodwill 821,815 816,469
Deferred financing costs 475,628 411,457
Total assets $ 318,541,269 $ 259,785,299
LIABILITIES
Accounts payable $ 16,735,426 $ 20,706,263
Advances from customers 40,796,137 21,301,876
Accrued expenses 2,506,148 5,587,837
Payable for acquisition of
businesses 6,663,588 5,916,354
Income and other taxes payable 11,463,416 8,194,659
Other payables 4,771,743 4,524,288
Loans from employees 4,853,646 2,864,824
Loans payable 52,348,301 36,185,705
Deferred tax liability 13,723,678 11,505,181
Warrants liability 2,537,867 5,074,191
Fair value of embedded derivatives 4,037,264 3,991,047
Convertible debt 15,510,095 14,834,987
Mandatorily redeemable noncontrolling
interests in Subsidiaries 51,570,844 --
Total liabilities 227,518,153 140,687,212
SHAREHOLDERS' EQUITY
Common stock: $.001 par value,
authorized 100,000,000 shares
issued and outstanding
33,065,386 and 31,884,969,
respectively 33,065 31,885
Additional paid in capital 40,745,457 35,461,706
Common stock subscribed -- 252,118
Statutory reserves 4,922,248 4,922,248
Retained earnings 34,352,016 39,895,179
Accumulated other comprehensive
income 10,970,330 10,163,483
Total China Housing & Land
Development, Inc. shareholders'
equity 91,023,116 90,726,619
Noncontrolling interests -- 28,371,468
Total shareholders' equity 91,023,116 119,098,087
Total liabilities and
shareholders' equity $ 318,541,269 $ 259,785,299
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES
Interim Condensed Consolidated Statements of Income (Loss)
For The Three and Six Months Ended June 30, 2010 and 2009
(Unaudited)
3 Months 3 Months 6 Months 6 Months
June 30, June 30, June 30, June 30,
2010 2009 2010 2009
REVENUES
Sale of properties $35,220,386 $21,180,940 $67,611,447 $34,106,809
Other income 1,373,409 1,534,893 2,555,262 2,536,951
Total revenues 36,593,795 22,715,833 70,166,709 36,643,760
COST OF SALES
Cost of sales of
properties 25,691,338 15,016,997 52,253,225 24,138,943
Cost of other
income 576,854 491,387 1,113,627 950,900
Total cost of sales 26,268,192 15,508,384 53,366,852 25,089,843
Gross margin 10,325,603 7,207,449 16,799,857 11,553,917
OPERATING EXPENSES
Selling, general, and
administrative
expenses 3,758,565 1,942,946 6,296,449 3,351,770
Security registration
expenses -- 606,742 -- 1,206,742
Other expenses 65,381 150,327 188,032 190,123
Interest expense 447,475 446,899 954,500 784,977
Accretion expense on
convertible debt 345,926 296,164 675,108 577,986
Total operating
expenses 4,617,347 3,443,078 8,114,089 6,111,598
NET INCOME FROM
BUSINESS OPERATION 5,708,256 3,764,371 8,685,768 5,442,319
CHANGE IN FAIR VALUE
OF DERIVATIVES
Loss on extinguishment
of debt 2,180,492 -- 2,180,492 --
Change in fair value
of embedded
derivatives (1,307,129) 5,836,616 (1,873,335) 5,712,578
Change in fair value
of warrants (2,242,663) 7,222,727 (2,797,264) 7,055,488
Total change in
fair value of
derivatives (1,369,300) 13,059,343 (2,490,107) 12,768,066
Income (loss) before
provision for
income taxes and
noncontrolling
interest 7,077,556 (9,294,972) 11,175,875 (7,325,747)
Provision for income
taxes 1,531,461 1,347,914 2,540,992 2,061,555
Recovery of deferred
income taxes (21,851) -- (50,997) --
Net income (loss) 5,567,946 (10,642,886) 8,685,880 (9,387,302)
Charge to
noncontrolling
interest -- 145,899 (14,229,043) 193,034
NET INCOME (LOSS)
ATTRIBUTABLE TO CHINA
HOUSING & LAND
DEVELOPMENT, INC. $ 5,567,946 $(10,496,987) $(5,543,163) $(9,194,268)
WEIGHTED AVERAGE
SHARES OUTSTANDING
Basic 33,065,386 30,932,745 32,824,416 30,913,359
Diluted 35,302,785 30,938,070 34,752,732 30,916,036
NET INCOME (LOSS)
PER SHARE
Basic $ 0.17 $ (0.34) $ (0.17) $ (0.30)
Diluted $ 0.13 $ (0.34) $ (0.20) $ (0.30)
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES
Interim Condensed Consolidated Statements of Comprehensive Income (Loss)
For The Three and Six Months Ended June 30, 2010 and 2009
(Unaudited)
3 Months 3 Months 6 Months 6 Months
June 30, June 30, June 30, June 30,
2010 2009 2010 2009
NET INCOME (LOSS) $ 5,567,946 $(10,642,886) $ 8,685,880 $(9,387,302)
OTHER COMPREHENSIVE
INCOME (LOSS)
Gain (loss) in
foreign exchange 834,531 51,713 806,847 (311,420)
COMPREHENSIVE INCOME
(LOSS) 6,402,477 (10,591,173) 9,492,727 (9,698,722)
Charge to non
controlling
interest -- 145,899 (14,229,043) 193,034
Comprehensive
income (loss)
attributable
to China Housing &
Land Development,
Inc. $ 6,402,477 $(10,445,274) $(4,736,316) $(9,505,688)
The accompanying notes are an integral part of these interim condensed
consolidated financial statements.
CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
Interim Condensed Consolidated Statements of Cash Flows
For The Six Months Ended June 30, 2010 and 2009
(Unaudited)
June 30, June 30,
2010 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 8,685,880 $ (9,387,302)
Adjustments to reconcile net income to
cash provided by (used in) operating
activities:
Bad debt recovery -- (275,265)
Depreciation 593,498 315,026
Gain on disposal of property and
equipment (23,292) (16,200)
Amortization of deferred financing costs 77,391 77,391
Recovery of future income taxes (50,997) --
Loss on extinguishment of debt 2,180,492 --
Change in fair value of embedded
derivatives (1,873,335) 5,712,578
Change in fair value of warrants (2,797,264) 7,055,488
Accretion expense on convertible debt 675,108 577,986
Non-cash proceeds from sales -- (23,804)
(Increase) decrease in assets:
Accounts receivable (2,554,513) (2,689,972)
Other receivable and prepaid expense (1,529,450) (838,539)
Real estate held for development or sale 4,205,242 (33,922,050)
Advances to suppliers 9,424,848 13,738
(Deposit) refund on land use rights (24,680,429) 13,363,368
Deferred financing costs (140,684) --
Increase (decrease) in liabilities:
Accounts payable (4,134,870) 3,205,445
Advances from customers 19,230,257 922,457
Accrued expense 5,615,440 790,270
Other payable 207,410 (3,191,392)
Income and other taxes payable 3,204,854 2,031,450
Accrued security registration expenses -- 1,206,742
Net cash provided by (used in) operating
activities 16,315,586 (15,072,585)
CASH FLOWS FROM INVESTING ACTIVITIES:
Change in restricted cash (73,606) 52,887
Purchase of property and equipment (970,673) (478,557)
Notes receivable collected -- 149,549
Cash acquired from acquisition of
business 2,179 519,309
Proceed from sale of property and
equipment -- 194,006
Net cash (used in) provided by investing
activities (1,042,100) 437,194
CASH FLOWS FROM FINANCING ACTIVITIES:
Investment and advances from
noncontrolling interest -- 267,605
Loans from bank 31,491,680 --
Payments on loans payable (15,678,807) (11,127,389)
Loans from or repayment to employees, net 1,956,931 670,493
Repayment of payables for acquisition of
businesses (2,022,431) (2,533,242)
Proceeds from exercise of warrants -- 320,815
Net cash provided by (used in) financing
activities 15,747,373 (12,401,718)
INCREASE/(DECREASE) IN CASH AND CASH
EQUIVALENTS 31,020,859 (27,037,109)
Effects on foreign currency exchange 432,272 (254,631)
CASH AND CASH EQUIVALENTS, beginning of
period 36,863,216 37,425,340
CASH AND CASH EQUIVALENTS, end of period $ 68,316,347 $ 10,133,600
The accompanying notes are an integral part of these interim condensed consolidated financial statements.
Source: China Housing & Land Development, Inc.
