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CHLN China Stock News : China Housing Announces Second Quarter 2009 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 second quarter ended June 30, 2009.

    Highlights for the Second Quarter 2009:

    -- Total revenues increased 71.2% to US$22.6 million compared to US$13.2
       million in the second quarter of 2008, and increased 63.3% sequentially
       from $13.8 million in the first quarter of 2009.
    -- Total gross floor area ('GFA') sales were 31,141 sq. meters compared to
       19,920 sq. meters in the second quarter of 2008 and 20,922 sq. meters
       in the first quarter of 2009.
    -- SG&A expenses as a percent of total revenue declined by approximately
       210 basis points to 8.6% compared to 10.7% in the second quarter of
       2008.
    -- Operating income increased 989% to $5.1 million compared to $470,000 in
       the second quarter of 2008 and increased 76.5% compared to $2.9 million
       in the first quarter of 2009.
    -- Net loss was (US$10.0 million) compared to a net income of US$1.1
       million in the second quarter of 2008 and net income of $1.9 million in
       the first quarter of 2009. Net loss was primarily due to a $13.1
       million non-cash charge associated with the revaluation of derivatives
       and warrants. Excluding the charge, non-GAAP net income would have been
       $3.0 million.
    -- Diluted net loss per share attributable to ordinary shareholders was
       (US$0.32) compared to diluted earnings per share of US$0.03 in the
       second quarter of 2008 and diluted earnings per share of $0.06 in the
       first quarter of 2009. Excluding the non-cash charge, earnings per
       share would have been $0.10 per share.

'We are pleased with our results for the second quarter, in which our revenues grew sequentially by 63.3% to $22.6 million. We are seeing stabilization in the Chinese housing market and believe we are well positioned to benefit from Government policies such as the 'Go West' policy to encourage migration into western cities, as well as government stimulus policies,' said Mr. Pingji Lu, China Housing's Chairman. 'China's overall economic growth continues to be strong, and in Xi'an, we are seeing double-digit economic growth, as more technology and multinational companies are moving into Xi'an and the surrounding areas. All these elements have contributed, and we believe will continue to contribute, to our success.'

Financial Results for the 2009 Second Quarter

For the quarter ended June 30, 2009, the Company's revenues were $22.6 million, an increase of 71.2% year-over-year from $13.2 million in the second quarter last year, and an increase of 63.3% sequentially, from $13.8 million in the first quarter of 2009. This increase was primarily the result of pre-sales of the JunJing II Phase I project, and represented both an increase in total square meters sold, as well as higher selling price per square meter.

Total gross floor area ('GFA') sold were 31,141 sq. meters, as compared to 19,920 sq. meters in the second quarter of the prior year and 20,922 sq. meters in the first quarter of this year. Selling price per square meter of our current JunJing II Project increased to RMB 4,432 from RMB 4,269 in the first quarter, reflecting increasing strength in the marketplace.

Gross profit for the second quarter of 2009 was US$7.2 million, up 261.9% from $2.0 million in the same period of 2008, and up 66% sequentially from $4.3 million in the first quarter of this year. The gross profit margin for the second quarter was 31.9% compared with 15.0% in the same period last year, and up slightly from the first quarter gross margin of 31.4%. The year-over-year increase in gross margin is primarily due to the use of favorable pricing in the second quarter of 2008 for the initial marketing of the JunJing II project in order to attract market interest and encourage future sales.

Selling, general and administrative ('SG&A') expenses were US$1.9 million for the second quarter of 2009 compared to US$1.4 million for the second quarter of 2008 and US$1.4 million for the first quarter of 2009. As a percentage of total revenue, SG&A expenses declined year-over-year by approximately 210 basis points to 8.6% compared to 10.7% in the second quarter of 2008 and decreased 1.6% compared to 10.2% in the first quarter of 2009.

Operating income increased 989% to $5.1 million compared to $470,000 in the second quarter of 2008 and increased 76.5% compared to $2.9 million in the first quarter of 2009.

Net loss for the second quarter of 2009 was (US$10.0) million compared to a net income of US$1.1 million in the second quarter of 2008 and net income of $1.9 million in the first quarter of 2009. Diluted losses per share for the second quarter of 2009 was ($0.32), compared to diluted earnings per share of US$0.03 in the second quarter of 2008 and $0.06 in the first quarter of 2009. Net loss and diluted net loss per share were primarily due to a $13.1 million, or $0.42 per share, non-cash charge associated with the periodic revaluation of derivatives and warrants. Excluding this charge, net income and earnings per share would have been $3.0 million and $0.10 per diluted share.

As of June 30, 2009, China Housing reported US$10.1 million in cash compared to US$10.6 million at the end of the first quarter of 2009. Total debt was $48.5 million, down from $59.4 million at the end of the 2009 first quarter, as the Company repaid a portion of its $147 million revolving credit line. Net debt as a percent of total capital was 26.2% at the end of the second quarter of 2009 compared to 29.4% at end of the first quarter of 2009.

Mr. Lu concluded, 'We are thrilled with the response to our three current projects -- JunJing II Phases I and II and Puhua -- and are moving ahead with additional new developments that we believe will bode well for our future growth. We believe that we have a strong portfolio of projects in process and a solid pipeline for future revenues. We believe that our geographic location, combined with our solid balance sheet and experienced management will enable us to continue to benefit from the positive economic and migration trends within China.'

Conference Call Information

China Housing's management will host an earnings conference call on August 13, 2009 at 8:00 a.m. U.S. Eastern Time. Listeners may access the call by dialing #1-913-312-1469. 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 20th, by dialing #1-719-457-0820; passcode: 2571094.

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 are 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.

Notes to Unaudited Financial Information

This release contains unaudited financial information which is subject to year end audit adjustments. In addition, we are in the process of conducting further evaluations of our internal control over financial reporting for compliance with the requirements of Section 404 under the Sarbanes-Oxley Act. We make no representation of management's assessment regarding internal control over financial reporting or include an attestation report of the Company's independent auditors due to a transition period established by rules of the Securities and Exchange Commission for newly public companies. Adjustments to the financial statements may be identified when the audit work is completed, which could result in significant differences between our audited financial statements and this unaudited financial information.