Highlights of the first quarter 2009:
-- Total revenues increased 191.7 percent to $13,844,683 in the first
quarter 2009 from $4,746,637 in the first quarter 2008.
-- Net income attributable to China Housing (after non-controlling
interest) increased 3,890.2 percent to $1,902,719 in the first quarter
2009 from $47,685 in the first quarter 2008.
-- Cash and restricted cash totaled $11.3 million at March 31, 2009
compared with $38.2 million at March 31, 2008, down primarily due to an
increase in our investment in the 79 acre Puhua joint venture project.
-- Debt leverage was prudent, with net debt as a percent of total capital
at 29.4 percent as of March 31, 2009 compared with 15.6 percent at
December 31, 2008.
-- Ground breaking for the Puhua joint venture project is scheduled for
June 2009. The project is progressing in planning, design, and the
preparation of the site and is advancing nicely.
-- The acquisition of the Xinxing Property Management Company on January 1,
2009 added $548,945 in revenues during the first quarter 2009. It was
accounted for as a purchase.
XI'AN, China, May 7 /PRNewswire-Asia-FirstCall/ -- China Housing & Land Development, Inc., ("China Housing," Nasdaq: CHLN) today reported that total revenues for the three months ended March 31, 2009 increased 191.7 percent to $13.84 million from $4.75 million in the three months ended March 31, 2008.
Net income attributable to China Housing (after non-controlling interest) increased 3,890.2 percent to $1,902,719 in the first quarter 2009 from $47,685 in the first quarter 2008. Earnings per diluted share increased 700 percent to $0.06 per diluted share in the first quarter 2009 from $(0.01) per diluted share in the first quarter 2008.
Mr. Pingji Lu, Chairman of China Housing & Land Development, Inc., said, "Our financial performance in the first quarter 2009 was dramatically higher that is consistent with the periodic nature of the real estate development business and consistent with our long-term progress. We manage our business to deliver great performance in our operations and believe that superior long-term financial performance will be the likely result.
"The Xi'an real estate market was good in the first quarter, with prices up slightly and sales volume up substantially, measured by square meters bought in signed purchase agreements. The average residential sales price per square meter in the Xi'an market increased by 2.9 percent in the first quarter 2009 from the first quarter 2008. Residential sales volume, measured by square meters sold in the Xi'an market in the first quarter, increased 30.0 percent from the first quarter of 2008.
"While the economic and housing market trends currently look like they are improving, it is too early to say that we have passed the bottom in the market with certainty."
Tsining JunJing II project update
Mr. Xiaohong Feng, Chief Executive Officer of China Housing & Land Development, Inc., said, "Tsining JunJing II, our current project under construction, is a multi-family and retail project on 18 acres with 2,197 apartments.
"In the first quarter 2009, our pre-sales added $12.1 million to our completed sales contracts, which now total $45.6 million since pre-sales began in 2008. We recognized $10.3 million in revenues from phase one in the first quarter 2009 and have recognized $34.3 million in our revenues since pre-sales started in 2008.
"Advances from customers shown on our balance sheet totaled $10.6 million at the end of the first quarter 2009. Those funds will become revenues as our construction progresses. Additional pre-sales, of course, would also add to our revenues in subsequent quarters.
"We expect to complete the construction of phase one in the third quarter 2009. Our estimated total revenues from phase one are about $95.6 million.
"We are operating very well and generating good cash flow from JunJing II phase one, and expect to continue that process in phase two and in JunJing III through the next few years."
Joint venture update
Mr. Lu continued, "Ground breaking for our 79 acre Puhua joint venture project is scheduled for June 2009, with the first pre-sales likely to start in September 2009. Those starts may be delayed somewhat if the real estate market does not improve as we think it will. Construction will be in phases, with the final buildings expected to be finished in 2014. The total land area is 192,582 square meters and the expected gross floor area of the Puhua project is about 610,000 square meters."
First quarter 2009 results
Revenues
Our revenues from sales of properties are mainly derived from the sale of residential and commercial units and buildings, infrastructure work we perform for the local government, and land development projects in the Baqiao area.
In the first quarter of 2009, most of our revenues came from Tsining JunJing II phase one, which consists of 13 residential buildings and 3 auxiliary buildings, including one kindergarten, with a gross floor area of about 136,012 square meters. This project is currently under construction and collecting funds under pre-sales agreements.
3 months 3 months
ended March ended March 31,
Revenues by project 31, 2009 2008
US dollars
Project Under Construction
Tsining JunJing II phase one $10,305,262 $--
Projects Completed
Tsining JunJing I 1,580,565 4,347,648
Tsining-24G 862,593 (286,622)
Tsining Gangwan 158,724 23,336
Tsining Hanyuan -- --
Tsining Home In 18,725 53,220
Tsining Mingyuan -- 44,567
Lidu Mingyuan -- --
Infrastructure Project
Baqiao infrastructure construction -- --
Project In Process
Baqiao -- --
Revenues from the sales of properties $12,925,869 $4,182,149
The revenues from the sale of properties in the three months ended March 31, 2009 increased 209.1% to $12,925,869 from $4,182,149 in the same period 2008. The increase was primarily due to the increased revenue from Tsining JunJing II Phase one, our current project under construction.
The revenue from completed projects totaled $2,620,607 in the three months ended March 31, 2009 compared with $4,182,149 in the same period of 2008. The 37.3% decrease was due mainly to the absence of revenues from Tsining-24G and JunJing I because both projects had come to completion.
We have not recognized revenues from the infrastructure project in the Baqiao area, under full accrual method of accounting, because the project is still in progress. We expect to finish the river dam in second quarter 2009 and recognize the revenues when the project is delivered to the local government.
Our project in process is the Baqiao project where we have the exclusive right to develop 487 acres. We acquired the development rights in 2007 and recognized $24,405,717 as revenue in 2007 as a result of the sale of 18.4 acres to an unrelated developer. Near the end of 2008, we established a joint venture with Prax Capital Real Estate Holdings Limited (Prax Capital) to co-develop 79 acres within the Baqiao project. Prax Capital has invested $29.3 million cash in the joint venture. About 390 acres remain available for development in the Baqiao project.
Other income
Other income includes property management fees, rental income, and revenues from disposal of fixed assets, as well as the government's allowance for the equivalent cost of interest on the company's investments required to support infrastructure construction, continued river management, and suburban planning for the entire Baqiao high-technology industrial park. We recognized $918,814 as other income in the three months ended March 31, 2009 compared with $564,488 in the same period of 2008. The 62.8% increase is mainly due to the acquisition of the Xinxing Property Management Company during the first quarter of 2009, which contributed approximately $548,945 to our consolidated revenues.
Cost of properties and land
The cost of properties and land in the three months ended March 31, 2009 increased 301.3 percent to $9,498,215 compared with $2,367,112 in the same period of 2008. The increase was primarily as a result of the higher sales volume and construction in our JunJing II phase one project.
Selling, general, and administrative expenses
Selling, general, and administrative expenses for the three months ended March 31, 2009 increased 22.7 percent to $1,408,824 from $1,148,601 in the same period of 2008. The increase in selling, general, and administrative expenses was due primarily to the marketing expenses associated with Tsining JunJing II phase one project and the administrative expenses related to the Puhua formation.
Net income
Net income in the three months ended March 31, 2009 increased 3,791.3 percent to $1,855,584 from $47,685 in the same period of 2008.
As explained above, the increase in net income was due primarily to the improvement of market sentiment, higher sales revenues from our current construction project, and a higher average sales price for the units sold, partly offset by the higher selling, general, and administrative expenses and the change in the fair value of warrants and the embedded derivative in the first quarter of 2009.
Basic and diluted earnings per share
Basic earnings per share were $0.06 in the three months ended March 31, 2009, compared with $0.00 in the same period of 2008. Diluted earnings per share were $0.06 in the three months ended March 31, 2009, compared with $(0.01) in the same period of 2008.
Conference call and webcast
China Housing & Land Development will webcast its first quarter 2009 conference call at 8:00 a.m. Eastern Daylight Time (U.S.A.) on Friday, May 8, 2009. The live conference call audio broadcast can be reached using the investor relations page of the China Housing's website at http://www.chldinc.com .
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 subsidiaries in China, since 1992.
China Housing & Land Development is the first and only Chinese real estate development company traded on Nasdaq.
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 & Land Development, Inc.'s public filings with the U.S. Securities and Exchange Commission. All information provided in this news release and in the attachments is as of the date of the release, and the Company does 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.
China Housing & Land Development news releases, project information, photographs, and more are available on the internet at http://www.chldinc.com .
CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
As of March 31, 2009 and December 31, 2008
March December
31, 2009 31, 2008
(Unaudited) (Unaudited)
ASSETS
Cash $10,598,200 $37,425,340
Cash - restricted 750,761 805,012
Accounts receivable, net of allowance
for doubtful accounts of $1,276,211 and
$1,278,156, respectively 4,001,440 813,122
Other receivables and prepaid
expenses, net 1,108,985 446,497
Notes receivable, net 714,515 811,695
Real estate held for development or
sale 108,706,852 60,650,011
Property and equipment, net 12,717,369 12,391,501
Assets held for sale 14,286,913 14,308,691
Advances to suppliers 476,098 704,275
Deposits for land use rights 28,566,252 47,333,287
Intangible assets, net 41,613,577 46,043,660
Goodwill 815,633 --
Deferred financing costs 583,636 622,118
Total assets $224,940,231 $222,355,209
LIABILITIES
Accounts payable $9,627,775 $10,525,158
Advances from customers 10,561,379 9,264,385
Accrued expenses 3,869,126 3,539,842
Payables for acquisition of
businesses 9,428,054 8,429,889
Income and other taxes payable 8,821,074 7,532,730
Other payables 4,208,434 5,183,251
Loans from employees 1,666,203 1,517,039
Loans payable 34,392,425 35,617,442
Deferred tax liability 11,493,395 11,510,915
Warrants liability 949,904 1,117,143
Fair value of embedded derivative 636,360 760,398
Convertible debt 13,903,756 13,621,934
Total liabilities 109,557,885 108,620,126
SHAREHOLDERS' EQUITY
Common stock: $.001 par value,
authorized 100,000,000 shares,
issued and outstanding 30,893,757
and 30,893,757, respectively 30,894 30,894
Additional paid in capital 31,390,750 31,390,750
Statutory reserves 3,696,038 3,541,226
Retained earnings 41,167,781 39,265,062
Accumulated other comprehensive
income 10,034,668 10,397,801
Non-controlling interest 29,062,215 29,109,350
Total shareholders' equity 115,382,346 113,735,083
Total liabilities and shareholders'
equity $224,940,231 $222,355,209
The accompanying notes are an integral part of these consolidated
condensed financial statements.
CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Income and Other Comprehensive Income
As of March 31, 2009 and 2008
3 Months ended 3 Months ended
March 31, 2009 March 31, 2008
(Unaudited) (Unaudited)
REVENUES
Sale of properties $12,925,869 $4,182,149
Other income 918,814 564,488
Total revenues 13,844,683 4,746,637
COSTS AND EXPENSES
Cost of properties and land 9,498,215 2,367,112
Selling, general, and administrative
expenses 1,408,824 1,148,601
Other expenses 39,796 15,910
Interest expense 338,078 439,673
Accretion expense on convertible debt 281,822 171,683
Change in fair value of embedded
derivative (124,038) 284,511
Change in fair value of warrants (167,239) (9,489)
Total costs and expenses 11,275,458 4,418,001
Income before provision for income
taxes 2,569,225 328,636
Provision for income taxes 713,641 280,951
NET INCOME 1,855,584 47,685
Net loss in subsidiaries attributable
to non-controlling interest 47,135 --
Net income attributable to China
Housing & Land Development, Inc. 1,902,719 47,685
(Loss) gain on foreign exchange (363,133) 3,047,864
COMPREHENSIVE INCOME $1,539,586 $3,095,549
EARNINGS PER SHARE
Basic $0.06 $0.00
Diluted $0.06 $(0.01)
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 30,893,757 30,142,565
Diluted 30,922,261 30,298,090
The accompanying notes are an integral part of these consolidated
condensed financial statements.
CHINA HOUSING & LAND DEVELOPMENT INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
For The periods Ended March 31, 2009 and 2008
March 31, 2009 March 31, 2008
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,855,584 $47,685
Adjustments to reconcile net income
to cash provided by (used in) operating
activities:
Depreciation 154,088 93,821
(Gain) loss on disposal of fixed
assets and inventory (16,945) 86
Amortization of deferred financing
costs 38,482 28,458
Change in fair value of warrants (167,239) (9,489)
Change in fair value of embedded
derivative (124,038) 284,511
Accretion expense on convertible debt 281,822 171,683
Non-cash proceeds from sale of
properties (15,835) (2,851,908)
(Increase) decrease in assets:
Accounts receivable (3,107,443) (141,670)
Real estate held for development or
sale (36,452,495) (670,715)
Advances to suppliers 227,051 (298,253)
Refund (deposit) for land use rights 11,372,462 (1,147,224)
Other receivables and prepaid
expenses 643,186 (12,024)
Increase (decrease) in liabilities:
Accounts payable (892,860) (503,618)
Advances from customers 1,182,958 444,062
Accrued expenses 198,281 337,253
Other payables (2,127,062) 239,699
Income and other taxes payable 1,148,392 459,799
Net cash used in operating activities (25,801,611) (3,527,844)
CASH FLOWS FROM INVESTING ACTIVITIES:
Change in restricted cash 53,002 (188)
Purchase of property and equipment (63,224) (313,056)
Notes receivable collected 111,737 67,613
Cash acquired in business combination 519,309 0
Proceed from sale of property and
equipment 193,098 14
Net cash provided by (used in)
investing activities 813,922 (245,617)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of
convertible debt -- 19,230,370
Loans payable (1,170,292) --
Payments on loans payable -- --
Loans to or repayments from
employees, net 151,407 (316,093)
Repayment of payables for acquisition
of businesses (753,416) (2,961,307)
Proceeds from issuance of common
stock and warrants -- 8,415
Net cash (used in) provided by
financing activities (1,772,301) 15,961,385
(DECREASE) INCREASE IN CASH (26,759,990) 12,187,924
Effects on foreign currency exchange (67,150) 394,163
CASH, beginning of year 37,425,340 2,351,015
CASH, end of year $10,598,200 $14,933,102
The accompanying notes are an integral part of these consolidated
condensed financial statements.
CHINA HOUSING & LAND DEVELOPMENT, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Shareholders' Equity
As of March 31, 2009 and December 31, 2008
Additional
Common stock paid-in Statutory
Shares Par Value capital reserves
BALANCE, December 31,
2008 30,893,757 $30,894 $31,390,750 $3,541,226
Net income -- -- -- --
Adjustment to
statutory reserve -- -- -- 154,812
Foreign currency
translation
adjustment -- -- -- --
BALANCE, March 31,
2009 30,893,757 $30,894 $31,390,750 $3,696,038
Accumulated
other Non-
Retained comprehensive controlling
earnings income interest Total
BALANCE, December 31,
2008 $39,265,062 $10,397,801 $29,109,350 $113,735,083
Net income 1,902,719 -- (47,135) 1,855,584
Adjustment to
statutory reserve -- -- -- 154,812
Foreign currency
translation
adjustment -- (363,133) -- (363,133)
BALANCE, March 31,
2009 $41,167,781 $10,034,668 $29,062,215 $115,382,346
The accompanying notes are an integral part of these consolidated
condensed financial statements.
