Executive Summary

Q1 FY2022 delivered modest year-over-year growth but a sharp sequential reset after two unusually strong quarters: revenue $2.88M (+4% YoY) and net income $0.36M (+25% YoY); EPS held at $0.01 . Sequentially, revenue fell from $18.28M in Q2 FY2021 and $31.82M in Q3 FY2021 as prior-quarter sales were boosted by bulk sales to the local government .
Gross profit margin expanded materially YoY (calculated ~48% vs ~32% in the prior year) on lower cost of sales; operating income rose to $0.51M (vs $0.49M YoY) despite higher opex, and net income increased to $0.36M .
Balance sheet liquidity improved: cash and restricted cash rose to $5.71M (from $3.47M at FY2021 year-end); customer deposits also increased ($21.80M vs $19.80M). Construction loans and taxes payable remain elevated ($120.97M and $23.08M) .
No formal guidance or earnings call transcript was available; S&P Global consensus estimates were unavailable, so beat/miss analysis cannot be determined (SPGI data not accessible for this ticker).

What Went Well and What Went Wrong

What Went Well
- Margin expansion YoY: gross profit $1.36M on $2.88M sales (calculated ~48% GP margin) vs $0.88M on $2.76M sales in the prior year (calculated ~32%) .
- Operating leverage: operating income improved to $0.51M (from $0.49M YoY) despite higher selling and G&A expenses; net income rose to $0.36M (from $0.29M) .
- Liquidity uptick: cash and restricted cash ended at $5.71M vs $3.47M at FY2021 year-end, aided by positive operating cash flow and financing inflows; customer deposits also increased to $21.80M .
What Went Wrong
- Sequential revenue normalization: revenue fell materially vs prior two quarters that were boosted by bulk sales to the local government—$31.82M in Q3 FY2021 and $18.28M in Q2 FY2021—highlighting volatility from project timing and customer mix .
- Elevated leverage and payables: construction loans remain high at $120.97M; taxes payable $23.08M; customer deposits and accounts payable also sizable (potential working-capital strain if sell-through slows) .
- Opex growth: selling expenses ($0.22M) and G&A ($0.63M) increased YoY, partially offsetting gross profit gains .

Management quotes and context:

“The Company is experiencing a recovery of its real estate development business... due to increasing demand from the local real estate market.” (prior quarter MD&A) .
“For the three months ended June 30, 2021, we sold all residential units in Nanyuan II project to the local government for residence reallocation purposes with total revenue of approximately $29.1 million.” (explains unusual strength in Q3 FY2021) .

Financial Results

Note: Gross margin % and Net margin % are calculated from reported figures.

Metric	Q2 FY2021 (3 mo ended Mar 31, 2021)	Q3 FY2021 (3 mo ended Jun 30, 2021)	Q1 FY2022 (3 mo ended Dec 31, 2021)
Revenue – Real estate sales ($)	$18,278,112	$31,824,097	$2,879,215
Sales tax ($)	$(115,166)	$(197,537)	$(60,221)
Gross Profit ($)	$3,688,682	$6,329,872	$1,363,438
Gross Margin (%)	20.2% (calc)	19.9%	~48.4% (calc)
Operating Expenses ($)	$560,155	$1,492,153	$851,714
Operating Income ($)	$3,128,527	$4,837,719	$511,724
Net Income ($)	$2,221,237	$3,628,654	$364,310
Diluted EPS ($)	$0.10	$0.14	$0.01

Quarter-on-quarter context:

Bulk government-related sales of Nanyuan II in Q2/Q3 FY2021 drove elevated revenues; Q1 FY2022 reflects a normalized run-rate absent bulky transactions .

Q1 FY2022 vs Q1 FY2021 (YoY)

Metric	Q1 FY2021 (3 mo ended Dec 31, 2020)	Q1 FY2022 (3 mo ended Dec 31, 2021)
Revenue – Real estate sales ($)	$2,755,262	$2,879,215
Sales tax ($)	$(23,538)	$(60,221)
Gross Profit ($)	$878,082	$1,363,438
Operating Expenses ($)	$385,270	$851,714
Operating Income ($)	$492,812	$511,724
Net Income ($)	$291,587	$364,310
Diluted EPS ($)	$0.01	$0.01

Project revenue mix (prior two quarters)

Project	Q2 FY2021 Revenue ($)	Q3 FY2021 Revenue ($)
Nanyuan II Project	$14,432,275 (79.0%)	$29,107,272 (91.5%)
Yangzhou Palace	$3,734,831 (20.4%)	$2,716,825 (8.5%)
Other projects	$110,?k combined	≈$0

KPIs and balance sheet (point-in-time)

KPI ($)	FY2021 Year-End (Sep 30, 2021)	Q1 FY2022 (Dec 31, 2021)
Cash and Equivalents	$170,001	$2,446,011
Restricted Cash	$3,295,188	$3,262,677
Cash + Restricted Cash	$3,465,189	$5,708,688
Construction Loans	$119,636,222	$120,965,389
Accounts Payable	$18,259,151	$13,949,705
Customer Deposits	$19,803,917	$21,801,521
Taxes Payable	$22,954,011	$23,079,067
Total Assets	$385,000,563	$388,518,537
Total Equity	$190,697,711	$193,229,422

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue / EPS / Margins / Opex	FY2022 / Q2 FY2022 onward	None provided	None provided	Maintained (no guidance)

No formal guidance was disclosed in the Q1 FY2022 8-K or related materials .

Earnings Call Themes & Trends

Note: No Q1 FY2022 earnings call transcript was found; trends summarized from recent filings/MD&A.

Topic	Previous Mentions (Q2–Q3 FY2021)	Current Period (Q1 FY2022)	Trend
Government sales/customer mix	Significant sales to local government for residence reallocation (Nanyuan II) driving revenue concentration .	Not discussed in 8-K; no project mix disclosed .	Normalization risk as bulk sales roll off.
Macro policy (PRC real estate tightening)	Continued tightening (higher down-payments, taxes, supply controls) expected; pressure greater in Tier 3/4 cities .	No new commentary in 8-K .	Ongoing headwind.
COVID-19 operational impacts	Prior disruptions; recovery observed in FY2021; uncertainty remains .	No update in 8-K .	Stable but monitor.
Project pipeline (Liangzhou Road & related)	Road substantially completed; related residential/commercial phases planned (Oriental Pearl Garden II, Liangzhou Mansion, Pearl Commercial Plaza) .	No update in 8-K .	Await acceptance/launch cadence.
Liquidity/going concern	Elevated loans/payables; customer deposits aid liquidity; going-concern uncertainty discussed in filings .	Cash improved QoQ; loans still high .	Mixed: liquidity up, leverage elevated.

Management Commentary

“The Company is experiencing a recovery of its real estate development business in the first nine months of fiscal 2021 due to increasing demand from the local real estate market.” (MD&A) .
“For the three months ended June 30, 2021, we sold all residential units in Nanyuan II project to the local government for residence reallocation purposes with total revenue of approximately $29.1 million.” (MD&A) .
Project roadmap (prior disclosure): Oriental Pearl Garden Phase II (370,298 sqm), Liangzhou Mansion (160,000 sqm), Pearl Commercial Plaza (124,191 sqm) planned surrounding Liangzhou Road .

Q&A Highlights

No earnings call or Q&A transcript was available for Q1 FY2022; no analyst questions or management clarifications to report [ListDocuments: no transcript found].

Estimates Context

S&P Global (Capital IQ) consensus estimates for Q1 FY2022 revenue/EPS were not available for this ticker; therefore, a beat/miss assessment versus Street is not possible at this time (Values retrieved from S&P Global unavailable).

Key Takeaways for Investors

Sequential normalization after bulk government sales: Q1 revenue reset to $2.88M from $31.82M/$18.28M in Q3/Q2 FY2021 as prior quarters were boosted by one-off government reallocation sales; expect volatility tied to project timing/mix .
Margin strength YoY suggests favorable mix/cost discipline in the quarter; gross profit rose to $1.36M with EPS steady at $0.01 despite higher opex .
Liquidity improved (cash + restricted cash $5.71M; customer deposits up), but leverage and tax liabilities remain elevated; watch working-capital dynamics into subsequent phases .
Pipeline/regulatory overhang: Execution on Liangzhou-related developments and ongoing PRC real-estate tightening remain key to sustaining sales cadence in Tier 3/4 markets .
No guidance and no call reduce visibility; with SPGI consensus unavailable, near-term trading likely centers on project milestones (e.g., government acceptance, pre-sales launches) and additional disclosures .

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