HANZHONG, China, Dec. 18 /PRNewswire-Asia-FirstCall/ -- China HGS Real Estate Inc. (OTC:CAHS) (BULLETIN BOARD: CAHS) ("China HGS" or "the Company"), a leading residential property developer in Hanzhong, China, today announced that the Company has experienced robust growth in sales of units at its Yang Zhou Ming Zhu Project ("Yang Zhou Project") in Yang County, Shaanxi Province, China. China HGS successfully sold all of the 192 apartment units of Phase I of the Yang Zhou Project, which comprises six multi-layer buildings, in a period of less than two months. The Company completed construction of Phase I of the Yang Zhou Project in August 2009 and delivered the units to customers in September 2009. The Company currently has sold 215 apartment units of Phase II and an additional 26 apartment units have been reserved, accounting for 87.3% of the total 276 apartment units available for sale. Phase II comprises nine multi-layer buildings. The Company began selling Phase II units in November 2009 and expects to complete construction and deliver the units to customers at the end of December 2009. The Company's Yang Zhou Ming Zhu Project is located in Yang County, a town with a total population of 440,000 in Hanzhong, Shaanxi Province. The high-quality of construction, well-equipped units, and convenient transportation have resulted in increased popularity of the project among local residents. The Yang Zhou Project covers an area of 147,187 square meters, an aggregate GFA (Gross Floor Area) of 312,900 square meters, and can accommodate more than 3,000 households. "Having successfully sold through Phase I, we have seen solid growth in pre-sales of Phase II of our Yang Zhou led by recovery in the property market and strong fundamentals of Hanzhong's residential real estate market," said Mr. Xiaojun Zhu, Chief Executive Officer of China HGS. "With rapidly growing demand for housing, we expect prices to increase further and favorably impact our margins for FY 2010. We believe we are in a good position to continue our leadership in Hanzhong and extend our presence into other second-tier and third-tier cities in China." About China HGS Real Estate Inc. China HGS Real Estate Inc., through its wholly owned subsidiary, Shaanxi Guangsha Investment and Development Group Co., Ltd., specializes in real estate development in China's second-tier and third-tier cities. The Company's real estate properties include multi-layer, sub-high-rise, and high-rise apartment buildings. The Company possesses the national grade II real estate qualification and was ranked as the No. 1 property developer in Hanzhong, Shaanxi Province in terms of market share in 2007 and 2008 successively. Forward-looking Statements: This press release contains certain statements that may include 'forward-looking statements'. All statements other than statements of historical fact included herein are 'forward-looking statements'. These forward looking statements are often identified by the use of forward-looking terminology such as 'believes,' 'expects' or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website http://www.sec.gov/ . All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements. For more information, please contact: Company Contact: Mr. Ran Xiong, Deputy GM Email: Phone: +86-916-2622612 Investor Relations Contact: Mr. Crocker Coulson, President Email: Phone: +1-646-213-1915 (NY office) DATASOURCE: China HGS Real Estate Inc. CONTACT: Ran Xiong, Deputy GM of China HGS Real Estate Inc., , +86-916-2622612; or Investors, Crocker Coulson, President, +1-646-213-1915 (NY office),

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