ACROFAN

Fang Announces Second Quarter and First Half Year 2020 Unaudited Financial Results

Published : Friday, August 14, 2020, 5:53 pm
ACROFAN=PRNewswire | mediainquiries@prnewswire.com | SNS

BEIJING, Aug. 14, 2020 /PRNewswire/ -- Fang Holdings Limited (NYSE: SFUN) ("Fang" or "we"), a leading real estate Internet portal in China, today announced its unaudited financial results for the second quarter and the first half year ended June 30, 2020.

Second Quarter 2020 Highlights

  • Total revenues were $66.8 million, a decrease of 1.5% from $67.8 million in the corresponding period of 2019.
  • Operating income from continuing operations was $6.4 million, a decrease of 78.7% from $30.1 million in the corresponding period of 2019.
  • Net income was $21.5 million, an increase of 321.6% from $5.1 million in the corresponding period of 2019.

First Half 2020 Highlights

  • Total revenues were $103.0 million, which remained relatively stable with $102.8 million in the corresponding period of 2019.
  • Operating income from continuing operations was $6.9 million, a decrease of 62.3% from $18.3 million in the corresponding period of 2019.
  • Net loss was $19.4 million, compared to net income of $18.5 million in the corresponding period of 2019.

"During the COVID-19 global pandemic, Fang remained solid financially in the first half of 2020," commented Mr. Jian Liu, CEO of Fang. "For the coming quarters we will continue our focus on new initiatives such as live broadcastings, online exhibitions and VR livestreams to better serve our customers."

Second Quarter 2020 Financial Results

Revenues

Fang reported total revenues of $66.8 million in the second quarter of 2020, a decrease of 1.5% from $67.8 million in the corresponding period of 2019, mainly due to the decrease in revenues from listing services.  

  • Revenue from marketing services was $32.1 million in the second quarter of 2020, a decrease of 1.2% from $32.5 million in the corresponding period of 2019.
  • Revenue from listing services was $14.2 million in the second quarter of 2020, a decrease of 26.0% from $19.2 million in the corresponding period of 2019, mainly due to the decrease in the number of paying customers.
  • Revenue from leads generation services was $17.3 million in the second quarter of 2020, an increase of 60.2% from $10.8 million in the corresponding period of 2019, mainly due to an increased acceptance and popularity of our leads generation services.
  • Revenue from financial services was $1.6 million in the second quarter of 2020, a decrease of 44.8% from $2.9 million in the corresponding period of 2019, mainly due to the decrease in average loan receivable balance.

Cost of Revenue

Cost of revenue was $3.6 million in the second quarter of 2020, a decrease of 56.3% from $8.3 million in the corresponding period of 2019, primarily due to the decline in sales and the optimization in cost structure.

Operating Expenses

Operating expenses were $56.2 million in the second quarter of 2020, an increase of 81.3% from $31.0 million in the corresponding period of 2019, mainly due to the increase in staff related costs.

  • Selling expenses were $14.9 million in the second quarter of 2020, a decrease of 7.5% from $16.1 million in the corresponding period of 2019, mainly due to the decrease in staff related costs.
  • General and administrative expenses were $41.3 million in the second quarter of 2020, an increase of 177.2% from $14.9 million in the corresponding period of 2019, mainly due to the increase in staff related costs.

Operating Income from Continuing Operations

Operating income from continuing operations was $6.4 million in the second quarter of 2020, a decrease of 78.7% from $30.1 million in the corresponding period of 2019, mainly due to the increase in operating expenses.

Change in Fair Value of Securities

Change in fair value of securities for the second quarter of 2020 was a loss of $0.7 million, compared to a loss of $48.5 million in the corresponding period of 2019, mainly due to the fluctuation in market price of investments in equity securities.

Income Tax Benefits

Income tax benefits were $16.7 million in the second quarter of 2020, a decrease of 17.2% compared to income tax benefits of $20.1 million in the corresponding period of 2019, primarily due to the effect of change in fair value of equity securities.

Net Income

Net income was $21.5 million in the second quarter of 2020, an increase of 321.5% from $5.1 million in the corresponding period of 2019.

First half year 2020 Financial Results

Revenues

Fang reported total revenues of $103.0 million in the first half year of 2020, which remained relatively stable with $102.8 million in the corresponding period of 2019.   

  • Revenue from marketing services was $47.2 million in the first half of 2020, an increase of 3.3% from $45.7 million in the corresponding period of 2019, mainly due to the growth of company's new initiative such as live broadcastings., etc.
  • Revenue from listing services was $24.4 million in the first half of 2020, a decrease of 22.3% from $31.4 million in the corresponding period of 2019, mainly due to the decrease in the number of paying customers.
  • Revenue from leads generation services was $24.8 million in the first half of 2020, an increase of 67.6% from $14.8 million in the corresponding period of 2019.
  • Revenue from financial services was $3.3 million in the first half of 2020, a decrease of 48.4% from $6.4 million in the corresponding period of 2019, mainly due to the decrease in average loan receivable balance.

Cost of Revenue

Cost of revenue was $9.0 million in the first half year of 2020, a decrease of 46.1% from $16.7 million in the corresponding period of 2019, primarily due to cost savings from optimizing Fang's core business.

Operating Expenses

Operating expenses were $88.3 million in the first half year of 2020, an increase of 26.5% from $69.8 million in the corresponding period of 2019, mainly due to the increase in staff related costs.

  • Selling expenses were $28.5 million in the first half year of 2020, a decrease of 12.3% from $32.5 million in the corresponding period of 2019, mainly due to the decrease in staff related costs.
  • General and administrative expenses were $59.8 million in the first half year of 2020, an increase of 60.3% from $37.3 million in the corresponding period of 2019, mainly due to the increase in staff related costs.

Operating Income from Continuing Operations

Operating income from continuing operations was $6.9 million in the first half year of 2020, a decrease of 62.3% from $18.3 million in the corresponding period of 2019, mainly due to the increase in operating expenses.

Change in Fair Value of Securities

Change in fair value of securities for the first half year of 2020 was a loss of $43.3 million, compared to a loss of $16.5 million in the corresponding period of 2019, mainly due to the fluctuation in market price of investments in equity securities.

Income Tax Benefits

Income tax benefits were $19.5 million in the first half year of 2020, an increase of 116.7% from $9.0 million in the corresponding period of 2019.

Net Income (Loss)

Net loss was $19.4 million in the first half year of 2020, compared to a net income of $18.5 million in the corresponding period of 2019.

Business Outlook

Based on current operations and market conditions, Fang's management predicts a positive net income for the year of 2020, which represents management's current and preliminary view and is subject to change.

Conference Call Information

Fang's management team will host a conference call on the same day at 8:00 AM U.S. EST (8:00 PM Beijing/Hong Kong time). The dial-in details for the live conference call are:

International Toll:

+65 67135600

Toll-Free/Local Toll:


United States

+1 877-440-9253 / +1 631-460-7472

Hong Kong

+852 800-906-603 / +852 3018-6773

Mainland China

+86 800-870-0075 / +86 400-120-0948

Direct Event Passcode

1383200#

Please register in advance of the conference using the link provided below. Upon registering, you will be provided with participant dial-in numbers, Direct Event passcode (1383200#) and unique registrant ID. Get prompted 10 min prior to the start of the conference. Enter the Direct Event Passcode above (1383200#), and your unique Registrant ID, followed by the pound or hash (#) sign to get into the call.

Direct Event online registration: https://apac.directeventreg.com/registration/event/6379533  

A telephone replay of the call will be available after the conclusion of the conference call from 11:00 AM ET on August 14, 2020 through 9:59 AM ET August 22, 2020. The dial-in details for the telephone replay are:

International Toll:

+61 2-8199-0299

Toll-Free/Local Toll:


United States

+1 855-452-5696 / +1 646-254-3697

Hong Kong

+852 800-963-117 / +852 3051-2780

Mainland China

+86 400-602-2065 / +86 800-870-0206

Conference ID:

6379533

A live and archived webcast of the conference call will be available on Fang's website at https://ir.fang.com.

About Fang

Fang operates a leading real estate Internet portal in China in terms of the number of page views and visitors to its websites. Through its websites, Fang provides primarily marketing, listing, leads generation and financial services for China's fast-growing real estate and home furnishing and improvement sectors. Its user-friendly websites support active online communities and networks of users seeking information on, and other value-added services for, the real estate and home furnishing and improvement sectors in China. Fang currently maintains approximately 74 offices to focus on local market needs and its website and database contains real estate related content covering 665 cities in China. For more information about Fang, please visit https://ir.fang.com.

Safe Harbor Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995.

These forward-looking statements can be identified by terminology such as "will," "expects," "is expected to," "anticipates," "aim," "future," "intends," "plans," "believes," "are likely to," "estimates," "may," "should" and similar expressions, and include, without limitation, statements regarding Fang's future financial performance, revenue guidance, growth and growth rates, market position and continued business transformation. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond Fang's control, which may cause its actual results, performance or achievements to differ materially from those in the forward-looking statements. Potential risks and uncertainties include, without limitation, the impact of Fang's business development strategies, the impact of the COVID-19 pandemic, and the impact of current and future government policies affecting China's real estate market. Further information regarding these and other risks, uncertainties or factors is included in Fang's filings with the U.S. Securities and Exchange Commission. Fang does 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.


Fang Holdings Limited

Unaudited Condensed Consolidated Balance Sheets[i]

(in thousands of U.S. dollars, except share data and per share data)


ASSETS

June 30,

December 31,



2020

2019


Current assets:





Cash and cash equivalents

85,461

105,282



Restricted cash, current

217,259

219,096



Short-term investments

148,382

194,720



Accounts receivable, net

87,885

66,379



Funds receivable

4,092

8,372



Prepayment and other current assets

32,834

31,509



Commitment deposits

185

188



Loans receivable, current

58,979

60,490



Amounts due from related parties

1,350

644


Total current assets 

636,427

686,680


Non-current assets:





Property and equipment, net

676,564

695,457



Loans receivable, non-current

-

-



Deferred tax assets

13,220

6,570



Deposits for non-current assets

482

618



Restricted cash, non-current portion

40,917

42,452



Long-term investments

325,863

341,946



Other non-current assets

36,975

39,179


Total non-current assets

1,094,021

1,126,222


Total assets

1,730,448

1,812,902







LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:





Short-term loans

361,220

367,403



Deferred revenue

130,083

134,143



Accrued expenses and other liabilities

100,695

120,244



Customers' refundable fees

3,703

4,981



Income tax payable

11,675

4,207



Amounts due to related parties

10,048

9,227


Total current liabilities

617,424

640,205


Non-current liabilities:





Long-term loans

178,365

184,158



Convertible senior notes

168,614

168,929



Deferred tax liabilities

92,080

90,723



Other non-current liabilities

107,217

138,435


Total non-current liabilities

546,276

582,245


Total Liabilities  

1,163,700

1,222,450







Equity:





Class A ordinary shares, par value Hong Kong Dollar ("HK$") 1 per share,
600,000,000 shares authorized for Class A and Class B in aggregate, issued
shares as of December 31, 2019 and June 30, 2020: 71,775,686 and    

71,775,686; outstanding shares as of December 31, 2019 and June 30, 2020: 
65,403,527 and 65,403,527

9,244

9,244



Class B ordinary shares, par value HK$1 per share, 600,000,000 s
hares authorized for Class A and Class B in aggregate, and 24,336,650 shares and
24,336,650 shares issued and outstanding as at December 31, 2019 and
June 30, 2020, respectively

3,124

3,124



Treasury stock

(123,216)

(123,216)



Additional paid-in capital

536,352

528,620



Accumulated other comprehensive loss

(110,381)

(98,371)



Retained earnings

250,931

270,358


Total Fang Holdings Limited shareholders' equity

566,054

589,759



Non controlling interests

694

693


Total equity

566,748

590,452


TOTAL LIABILITIES AND EQUITY

1,730,448

1,812,902



[i] Impact of the Separation of China Index Holdings Ltd (NASDAQ: CIH) ("CIH") on the Company's
Financial Statements:
The separation of CIH represents a strategic shift of Fang and has a major effect
on Fang's results of operations, the business operated by CIH has been reclassified as discontinued
operations. For the periods presented in this press release, the results of the discontinued operations,
less applicable income taxes, are reported as a separate component of income, which is income from
discontinued operations, on the consolidated statements of comprehensive income (loss)

 

 

Unaudited Condensed Consolidated Statements of Comprehensive Income[ii]

(in thousands of U.S. dollars, except share data and per share data)








Three months ended

Six months ended




June 30,


June 30,

June 30,

June 30,




2020


2019

2020

2019










Revenues:








Marketing services

32,072


32,465

47,208

45,728



Listing services

14,197


19,212

24,413

31,371



Leads generation services

17,288


10,801

24,806

14,787



Value-added services

1,525


1,665

2,941

2,667



Financial services

1,557


2,926

3,283

6,425



E-commerce services

206


779

315

1,860


Total revenues

66,845


67,848

102,966

102,838










Cost of revenues:








Cost of services

(3,603)


(8,254)

(9,010)

(16,692)


Total cost of revenues

(3,603)


(8,254)

(9,010)

(16,692)










Gross profit

63,242


59,594

93,956

86,146










Operating expenses and income:







Selling expenses

(14,889)


(16,137)

(28,450)

(32,456)



General and administrative expenses

(41,268)


(14,900)

(59,824)

(37,293)



Other (expense) income

(691)


1,508

1,223

1,895










Operating income from continuing operations

6,394


30,065

6,905

18,292










Foreign exchange (loss) gain

(248)


(371)

1,468

(633)



Interest income

2,198


1,630

6,121

3,319



Interest expense

(3,806)


(5,696)

(12,267)

(11,741)



Investment income, net

516


485

1,338

490



Realized gain on sale of available-for-sale
securities

-


573

-

871



Change in fair value of securities

(692)


(48,513)

(43,326)

(16,464)



Government grants


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