China Housing & Land Development Inc. Announces First Quarter 2014 Financial Results

XI'AN, China, May 15, 2014

Highlights for Q1 2014:

• Total revenue in the first quarter of 2014 was $22.0 million compared to $56.1 million in the fourth quarter of 2013 and $51.4 million in the first quarter of 2013. 
• Total gross floor area ("GFA") sales were 20,416 sq. meters during the first quarter of 2014, compared with 28,582 sq. meters in the fourth quarter of 2013 and 89,691 sq. meters in the first quarter of 2013.
• Average residential selling price ("ASP") in the first quarter of 2014 was RMB 5,919, compared with RMB 6,600 in the fourth quarter of 2013, and RMB 5,695 in the first quarter of 2013.
• Gross profit was $5.3 million in the first quarter of 2014 compared to $12.6 million in the fourth quarter of 2013 and $8.8 million in the first quarter of 2013. First quarter 2014 gross margin was 24.1%, compared with 22.4% in the fourth quarter of 2013 and 17.1% in the first quarter of 2013.
• SG&A expenses as a percentage of total revenue increased to 18.1%, from 9.1% in the fourth quarter of 2013 and 6.1% in the first quarter of 2013.
• Operating loss was $205 thousand in the first quarter of 2014 compared to operating income of $6.0 million in the fourth quarter of 2013, and operating income of $4.0 million in the first quarter of 2013.
• Net loss attributable to the Company in the first quarter of 2014 was $774 thousand, or $(0.02) per diluted share, compared to net income of $3.9 million, or $0.11 per diluted share, in the fourth quarter of 2013 and $2.9 million, or $0.08 per diluted share, in the first quarter of 2013.

Mr. Pingji Lu, China Housing's Chairman, commented, "While the market environment was challenging in the first quarter, our revenue performance exceeded the mid-point of our revenue guidance by 38%. Four main projects contributed to the majority of our first quarter revenue along with $6.2 million in property management and construction revenue. We launched one new project in the first quarter, Puhua Phase Four."

"Overall market conditions remain uncertain. Sales of lower end units at our Ankang and Puhua Phase Four projects generally remain stable while sales at our higher end projects, such as Puhua Phase Two are not as strong as they could be as potential buyers in this category wait for greater clarity related to new government real estate policy before committing to new purchases. While Xi'an real estate market conditions remain soft, we believe in the long term strength of the housing market in and around the Xi'an region. Finally, we repurchased shares in the first quarter and intend to continue our share repurchase activity during the second quarter."

Total revenue in the first quarter of 2014 decreased 60.7% to $22.0 million from $56.1 million in the fourth quarter of 2013 and decreased 57.1% from $51.4 million in the first quarter of 2013. Other revenue in the first quarter of 2014 was $6.2 million, compared to $8.9 million in the fourth quarter of 2013 and $11.1 million in the first quarter of 2013.

In the first quarter of 2014, the majority of the Company's real estate revenue came from its Puhua Phase Two and Three projects, Park Plaza and Ankang projects. 2014 first quarter contract sales totaled $19.8 million compared with $31.0 million in the fourth quarter of 2013 and $82.4 million in the first quarter of 2013. Total gross floor area ("GFA") sales were 20,416 sq. meters during the first quarter of 2014, compared with 28,582 sq. meters in the fourth quarter of 2013 and 89,691 sq. meters in the first quarter of 2013. The Company's ASP in the first quarter of 2014 was RMB 5,919, compared with RMB 6,600 in the fourth quarter of 2013, and RMB 5,695 in the first quarter of 2013.

Gross profit for the three months ended March 31, 2014 was $5.4 million, representing a decrease of 57.7% from $12.6 million in the fourth quarter of 2013 and a 39.4% decrease from $8.8 million in the first quarter of 2013. Gross profit margin for the three months ended March 31, 2014 was 24.1%, compared to 22.4% in the fourth quarter of 2013 and the 17.1% in the first quarter of 2013. The increase in gross profit margin was mainly due to an adjustment on the total estimated cost of Park Plaza, Puhua Phase Two and Three projects, of which the accumulated impact was recorded in the first and fourth quarter of 2013 and caused the lower gross margin of those periods. The Company did not make any revision on the total estimated cost during the first quarter of 2014, thus there was no impact on the gross profit margin. Additionally, the Company initiated a group purchase sale on its Puhua Phase Three project at a discounted selling price during the first quarter of 2013 which also reduced the gross margin during that period. The 24.1% gross profit margin during the first quarter of 2014 was within the Company's normal historic range.