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

XI'AN, China, Aug. 14, 2014

Highlights for Q2 2014:

• Total revenue in the second quarter of 2014 was $44.1 million compared to $22.0 million in the first quarter of 2014 and $57.8 million in the second quarter of 2013.
• Total gross floor area ("GFA") sales were 30,408 sq. meters during the second quarter of 2014, compared with 20,416 sq. meters in the first quarter of 2014 and 48,439 sq. meters in the second quarter of 2013.
• Average residential selling price ("ASP") in the second quarter of 2014 was RMB 6,493, compared with RMB 5,919 in the first quarter of 2014, and RMB 7,499 in the second quarter of 2013.
• Gross profit was $(816,509) in the second quarter of 2014 compared to $5.3 million in the first quarter of 2014 and $17.6 million in the second quarter of 2013. Second quarter 2014 gross margin was (-1.9)%, compared with 24.1% in the first quarter of 2014 and 30.4% in the second quarter of 2013.
• SG&A expenses as a percentage of total revenue was 8.8%, from 18.1% in the first quarter of 2014 and 8.5% in the second quarter of 2013.
• Operating loss was $6.6 million in the second quarter of 2014 compared to operating loss of $205 thousand in the first quarter of 2014, and operating income of $8.5 million in the second quarter of 2013.
• Net loss attributable to the Company in the second quarter of 2014 was $6.8 million, or $(0.20) per diluted share, compared to a net loss of $774 thousand, or $(0.02) per diluted share, in the first quarter of 2014 and net income of $5.9 million, or $0.17 per diluted share, in the second quarter of 2013.

Mr. Pingji Lu, China Housing's Chairman, commented, "While our second quarter contract sales came within the high end of projections, our profitability was impacted by revenue and cost adjustments at three of our projects as well as an impairment charge. Five projects contributed to the majority of our sales in the second quarter, led by our Park Plaza project. We also began to recognize revenues from our Puhua Phase IV project."

"On a macro level, China's real estate market environment is slowing with both sales and ASP's on the decline. For the remainder of this year, we expect market conditions to remain challenging.  In an effort to strengthen sales, we are implementing new incentives, including lowering down payment requirements for home buyers."

"As we look at the second half of the year, we will concentrate on reducing our unit inventory and driving pre-sales at our Golden Bay and Puhua Phase IV projects. We have also delayed the pre-sales start dates of our Park Plaza Phase II and Ankang Project Phase II projects from the third quarter of this year to 2015 in an effort to reduce expenses and conserve our balance sheet until market conditions improve. Finally, we repurchased 131,600 shares totaling $0.3 million in the second quarter."

Total revenue in the second quarter of 2014 increased 99.9% to $44.1 million from $22.0 million in the first quarter of 2014 and decreased 23.7% from $57.8 million in the second quarter of 2013. Other revenue in the second quarter of 2014 was $3.3 million, compared to $6.2 million in the first quarter of 2014 and $7.0 million in the second quarter of 2013.

In the second quarter of 2014, the majority of the Company's real estate revenue came from its Park Plaza, Ankang, Puhua Phase Two and Three projects. Second quarter of 2014 contract sales totaled $31.7 million compared with $19.8 million in the first quarter of 2014 and $59.0 million in the second quarter of 2013. Total gross floor area ("GFA") sales were 30,408 sq. meters during the second quarter of 2014, compared with 20,416 sq. meters in the first quarter of 2014 and 48,439 sq. meters in the second quarter of 2013. The Company's ASP in the second quarter of 2014 was RMB 6,493, compared with RMB 5,919 in the first quarter of 2014, and RMB 7,499 in the second quarter of 2013.