China Housing & Land Development Inc. Announces Second Quarter 2010 Financial Results

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: [phone] in Xi'an Email: [e-mail] Ms. Jing Lu Chief Operating Officer, Board Secretary, and Investor Relations Officer Tel: [phone] in Xi'an Email: [e-mail] / English and Chinese Mr. Shuai Luo Investor Relations Tel: [phone] in Xi'an Email: [e-mail] / English and Chinese Mr. Bill Zima, ICR Tel: [phone] in United States Email: [e-mail] Ms. Annie Chen, ICR Tel: [phone] in Beijing Email: [e-mail] (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.

China Housing & Land Development, Inc.

CONTACT: Mr. Cangsang Huang, Chief Financial Officer at [phone]
in Xi'an or [e-mail]; Ms. Jing Lu, Chief Operating Officer, Board
Secretary, and Investor Relations Officer at [phone] in Xi'an or
[e-mail] (English and Chinese); Mr. Shuai Luo, Investor Relations at
[phone] in Xi'an or [e-mail] (English and Chinese); Mr.
Bill Zima, ICR at [phone] in United States or [e-mail];
Ms. Annie Chen, ICR at [phone] in Beijing or [e-mail]

Web site: http://www.chldinc.com/