Green Giant Inc. · OTC:GGEI
Green Giant — China HGS Real Estate — Investor Presentation (February 2012)
26 slides from Green Giant's investor presentation, Feb 21, 2012
Slide 1: China HGS Real Estate Inc. (NASDAQ: HGSH)
China HGS Real Estate Inc. (NASDAQ: HGSH)
Slide 2: Forward Looking Statement
2 2 Forward Looking Statement CAUTIONARY STATEMENT REGARDING FORWARD - LOOKING STATEMENTS This presentation includes or incorporates by reference statements that constitute forward - looking statements within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of
Slide 3: Business Overview: capital structure and valuation comparison
3 3 Business Largest multifamily developer in southern Shaanxi Province Exchange/ Ticker NASDAQ / HGSH Capital Structure • Price: $0.70 (1) • Market Cap: $31.5M (1) • Trading Volume: (3M) 10,274 • 52 - Week Range: $0.50 - $3.10 • Shares Outstanding: 45,050,000 Valuation Comparison Overview Ticker St
Slide 4: Overview
4 4 • Founded in 1995 with a solid track record of completed projects • Largest multifamily developer in southern Shaanxi Province • Ten - year aggregate sales of 6.7 million Sq. Ft. • Focused on Tier - III cities in central and western China • A Credit A ssociation of Shaanxi Province “ 2010 Trustw
Slide 5: Overview: multifamily product lines
5 5 • Up to six stories • Construction cycle ~ 200 to 270 days • Accounts for ~70% of our properties Product line is made up of three major subsets in multifamily properties. Properties are recognized for their affordability, high - quality, attractive locations, and safety. In addition to multifami
Slide 6: Investment Highlights
6 6 • Strong market dynamics • Scalable cost - efficient b usiness model with efficient development schedule and no long term debt • Leveraging strong b rand awareness of safety and quality • Experienced management team • Growth strategy surrounding strict cost control, product innovation and large
Slide 7: Dynamic Market: Chinese Real Estate Market Growth
7 7 • Total RMB residential sales have grown on average 34 % from 2000 to 2010 , outpacing the average GDP growth 1 • Total Gross F loor Area (“GFA”) of residential properties sold has grown on average 22 % YOY from 2000 to 2009 ( 2 ) • Total GFA of residential properties sold reached 9 . 6 billion
Slide 8: Dynamic Market: housing demand drivers
8 8 • Real housing demand continues to grow fuelled by China’s robust economy, increasing disposable income, high savings rate and accelerating urbanization process • China’s GDP has grown on average of 10 % from 2000 to 2010 and is expected to maintain that growth rate in 2011 and 2012 • Chinese ho
Slide 9: Dynamic Market: Core Market Economic Overview
9 9 Source: Sha a nxi Statistical Bureau , Hanzhong Statistical Bureau Dynamic Market Core Market Economic Overview 4440 4850 5184 5748 6257 6925 8209 10155 12562 14509 0 2000 4000 6000 8000 10000 12000 14000 16000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Average Disposal Income ( RMB ) 129
Slide 10: Well-Positioned Market Leader
10 10 • Central location • Connecting eastern China with central China • Connecting northwest with southwest China • No . 1 real estate developer with 47% market share in Hanzhong • 1,100,000 sq. ft. of average annual area developed in the past 5 years Scalable Cost Efficient Business Model Well - P
Slide 11: No Long Term Debt – Peer Comparison
11 11 Not dependent on bank debt for: • Operations • L and acquisitions • Cash flow 1 Data supplied by Bloomberg from filings as of February 7, 2012 Positioned to mitigate, and even benefit, from any PRC credit policy Scalable Cost Efficient Business Model No Long Term Debt – Peer Comparison Long Te
Slide 12: Systematic & Standardized Project Development Process
12 12 Opportunity Identification Strategic Planning Geographic and Market Analysis Auction Opportunity Study Land Acquisition Process Feasibility Preliminary Design Costing and Financial Evaluation Land Acquisition Financial Projection Internal Approval Biding Process Architectural & Engineering Des
Slide 13: Financial Performance: Peer Comparison
13 13 China HGS is one of the most profitable publicly listed Chinese real estate companies due to its competitive cost structure and unique end market characteristics Margin Comparisons with National and Local Competitors Note: Selected public company competitor data from company filings as of Sept
Slide 14: Strong Brand Awareness and Quality Control
14 14 Strict Quality Control Throughout the Entire Development Process • Disciplined bidding process for selecting partners • Developed systematic quality control process to monitor our property’s quality throughout all stages • Senior management closely supervises management and planning process Lo
Slide 15: Management Team
15 15 Zhu Xiaojun President, CEO & Chairman • President, CEO and Chairman of China HGS since 2007 and Chairman and General Manager of its predecessor since 1995 • More than 20 years of experience in the real estate industry in China and a well - known industry leader • Rated as one of “Top 100 Manag
Slide 16: Cost Efficient Business Model
16 16 Effectively Control Land Acquisition Cost Stable Construction Material and Building Cost • With over 15 years of experience, we have established long - term relationships with key material suppliers and construction vendors • Our scale and creditworthiness also allow us to negotiate better rat
Slide 17: Current and Completed Projects
17 Current and Completed Projects
Slide 18: Track Record of Completed Projects
18 18 All data as of June 30, 2011 Location Type of Projects Completion Date Total GFA (sq ft) % of Units Sold Weinan Lijing Garden - Project Weinan City M December 2008 1,120,255 100% Yangzhou Pearl Garden - Project Yang County M March 2011 2,273,786 100% Mingzhu Nan Yuan Hanzhong M January 2011 49
Slide 19: Under Construction and Planned Projects
19 19 Location Type of Projects Expected Completion Date Total GFA* (sq ft) % of Units Pre - sold Projects under Construction Yangzhou Pearl Garden Yang County M September 2011 (12#,13#,34#,35#) 292.125 Average over 65% M March 2012 (1#, 16#, 17#, 30#, 31#, 45#) 766,331 Average over 55% Mingzhu Xinj
Slide 20: Financial Summary
20 Financial Summary Mingzhu Nanyuan (under construction)
Slide 21: Strong Revenue Growth
21 21 $17.2 $28.5 $ 47. 3 $56.9 0 10 20 30 40 50 2008 2009 2010 2011 $US Million Strong Revenue Growth
Slide 22: Attractive Net Income Growth
22 22 $6.0 $11.1 17.3 $18.7 $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 $20.0 2008 2009 2010 2011 Attractive Net Income Growth
Slide 23: Select Income Statement
23 23 Fiscal Year Ended September 30 2011 Fiscal Year Ended September 30 2010 Fiscal Year Ended September 30 2009 Real estate sales $56,871,409 $47,330,991 $30,204,666 Gross Profit 21,849,376 20,922,249 13,375,159 Gross Margin 38.4% 44.2% 44.3% Operating Income 19,819,942 18,196,232 11,402,017 Opera
Slide 24: Select Balance Sheet
24 24 September 30 2011 September 30 2010 September 30 2009 ASSETS Cash & cash equivalents $8,837,795 $12,621,845 $820,783 Restricted cash 885,678 923,245 412,373 Real estate property development completed 18,886,485 10,922,339 2,392,003 Real estate property under development 16,707,423 28,021,880 2
Slide 25: Conclusion
25 25 • Strong market dynamics • Scalable cost - efficient business model with efficient development schedule and no long term debt • Leveraging strong brand awareness of safety and quality • Experienced management team • Growth strategy surrounding strict cost control, product innovation and large
Slide 26: Company Contact
26 26 Company Contact China HGS Real Estate Inc. Mr. Ran Xiong, President Finance China HGS Real Estate Inc. Tel: +86 - 916 - 2622612 E - mail: xr968@163.net Independent Auditor Friedman LLP 1700 Broadway New York, NY 10019 Legal Counsel Loeb & Loeb LLP 345 Park Ave, Suite 18 New York, NY 10154 IR C
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