Fang Announces First Quarter 2020 Unaudited Financial Results and Change in Board of Directors

UNTV News   •   June 6, 2020   •   277

BEIJING, June 6, 2020 /PRNewswire/ — Fang Holdings Limited (NYSE: SFUN) (“Fang” or the “Company”), a leading real estate Internet portal in China, today announced (i) its unaudited financial results for the first quarter ended March 31, 2020, and (ii) a change in board of directors (the “Board”).

First Quarter 2020 Highlights

  • Total revenues were $38.3 million, an increase of 9.4% from $35.0 million in the corresponding period of 2019.
  • Operating income from continuing operations was $2.7 million, compared to an operating loss from continuing operations of $11.8 million in the corresponding period of 2019. 
  • Net loss from continuing operations was $39.1 million, compared to a net income from continuing operations of $5.1 million in the corresponding period of 2019.

“During the COVID-19 global pandemic, Fang achieved positive operating income in the first quarter of 2020,” commented Mr. Jian Liu, CEO of Fang. “Our leads generation services remain a strong growth contributor to our core business. For the coming quarters we look forward to continuing our focus on new initiatives such as live broadcastings, online exhibitions and VR livestreams to better service our customers.”

First Quarter 2020 Financial Results

Revenues

Fang reported total revenues of $38.3 million in the first quarter of 2020, an increase of 9.4% from $35.0 million in the corresponding period of 2019.

  • Revenue from marketing services was $17.3 million in the first quarter of 2020, an increase of 30.3% from $13.3 million in the corresponding period of 2019, mainly due to the increase in aggregate market demand.
  • Revenue from listing services was $10.2 million in the first quarter of 2020, a decrease of 16.0% from $12.2 million in the corresponding period of 2019, mainly due to the decrease in the number of paying customers.
  • Revenue from leads generation services was $7.5 million in the first quarter of 2020, an increase of 88.6% from $4.0 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 $1.7 million in the first quarter of 2020, a decrease of 50.7% from $3.5 million in the corresponding period of 2019, mainly due to the decrease in average loan receivable balance.

Cost of Revenue

Cost of revenue was $5.4 million in the first quarter of 2020, a decrease of 35.9% from $8.4 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 $32.1 million in the first quarter of 2020, a decrease of 17.0% from $38.7 million in the corresponding period of 2019.

  • Selling expenses were $13.6 million in the first quarter of 2020, a decrease of 16.9% from $16.3 million in the corresponding period of 2019, mainly due to the decrease in staff related costs.
  • General and administrative expenses were $18.6 million in the first quarter of 2020, a decrease of 17.1% from $22.4 million in the corresponding period of 2019, mainly due to the decrease in staff related costs.

Operating Income/(Loss) from Continuing Operations

Operating income from continuing operations was $2.7 million in the first quarter of 2020, compared to operating loss from continuing operations of $11.8 million in the corresponding period of 2019.

Change in Fair Value of Securities

Change in fair value of securities for the first quarter of 2020 was a loss of $42.6 million, compared to a gain of $32.0 million in the corresponding period of 2019, mainly due to the fluctuation in market price of investments in equity securities.

Income Tax Benefits/Expenses

Income tax benefits were $2.5 million in the first quarter of 2020, compared to an expense of $11.1 million in the corresponding period of 2019.

Net (Loss)/income from continuing operations

Net loss from continuing operations was $39.1 million in the first quarter of 2020, compared to a net income from continuing operations of $5.1 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.

Recent Developments

Change in Board of Directors

Ms. Hong Qin, an independent director of the Board, has resigned from the Board for personal reason, effective from June 5, 2020. Ms. Qin’s resignation did not result from any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. Fang thanks Ms. Qin for her efforts and contributions to the Company.

Fang has appointed Mr. Charles Changming Yan as an independent director of the Board, a member of the audit committee and the compensation committee of the Board, and a member and the chair of the nominating and corporate governance committee of the Board, effective from June 5, 2020. Upon the effectiveness of Ms. Qin’s resignation and Mr. Yan’s appointment, the Board will consist of five directors, including three independent directors.

Mr. Yan founded Cada Resource International Limited, a company engaged in high-tech development and mineral resource industry, and has been its president since 1996. Mr.Yan also serves as the President of Tsinghua University Alumni Association (Hong Kong). He was the vice chairman of the Western Returned Scholars Association of China from 2008 to 2013. Mr.Yan had been awarded as one of the top ten overseas returned entrepreneurs in China in 2002. Mr. Yan received a bachelor’s degree and a master’s degree from Tsinghua University in engineering and a master’s degree from University of Ottawa in engineering. 

Conference Call Information

Fang’s management team will host a conference call on the same day at 8:00 AM U.S. ET (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: http://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 June 4, 2020 through 9:59 AM ET June 12, 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 http://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 http://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

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

ASSETS

March 31,

December 31,

2020

2019

Current assets:

Cash and cash equivalents

107,018

105,282

Restricted cash, current

215,599

219,096

Short-term investments

181,303

194,720

Accounts receivable, net

75,379

66,379

Funds receivable

4,460

8,372

Prepayment and other current assets

37,409

31,509

Commitment deposits

185

188

Loans receivable, current

60,922

60,490

Amounts due from related parties

412

644

Total current assets 

682,687

686,680

Non-current assets:

Property and equipment, net

629,969

644,726

Land use rights

50,731

50,731

Deferred tax assets

12,109

6,570

Deposits for non-current assets

482

618

Restricted cash, non-current portion

41,409

42,452

Long-term investments

296,003

341,946

Other non-current assets

38,610

39,179

Total non-current assets

1,069,313

1,126,222

Total assets

1,752,000

1,812,902

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Short-term bank borrowings

263,045

264,624

Bond payable-short term

101,777

102,779

Deferred revenue

140,690

134,143

Accrued expenses and other liabilities

111,693

120,244

Customers’ refundable fees

7,755

4,981

Income tax payable

4,272

4,207

Amounts due to related parties

9,215

9,227

Total current liabilities

638,447

640,205

Non-current liabilities:

Long-term bank borrowings

175,881

184,158

Convertible senior notes

168,773

168,929

Deferred tax liabilities

89,253

90,723

Other non-current liabilities

138,179

138,435

Total non-current liabilities

572,086

582,245

Total Liabilities  

1,210,533

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 March 31, 2020: 71,775,686 and
71,775,686; outstanding shares as of December 31, 2019 and March 31,
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 shares
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 March
31, 2020, respectively

3,124

3,124

Treasury stock

-123,216

-123,216

Additional paid-in capital

534,100

528,620

Accumulated other comprehensive loss

-113,760

-98,371

Retained earnings

231,283

270,358

Total Fang Holdings Limited shareholders’ equity

540,775

589,759

Non controlling interests

692

693

Total equity

541,467

590,452

TOTAL LIABILITIES AND EQUITY

1,752,000

1,812,902

 

 

Unaudited Condensed Consolidated Statements of Comprehensive Income[1]

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

 Three months ended

 March 31,

 March 31,

2020

2019

Revenues:

Marketing services

17,288

13,263

Listing services

10,216

12,159

Leads generation services

7,518

3,986

Value-added services

1,416

1,002

Financial services

1,726

3,499

E-commerce services

109

1,081

Total revenues

38,273

34,990

Cost of revenues:

Cost of services

-5,407

-8,438

Total cost of revenues

-5,407

-8,438

Gross profit

32,866

26,552

Operating expenses and income:

Selling expenses

-13,561

-16,319

General and administrative expenses

-18,556

-22,393

Other income

1,914

387

Operating income/(loss) from continuing operations

2,663

-11,773

Foreign exchange gain/(loss)

1,716

-262

Interest income

3,923

1,689

Interest expense

-8,461

-6,045

Investment income, net

822

5

Realized gain on sale of available-for-sale securities

298

Change in fair value of securities

-42,634

32,049

Government grants

369

235

Other non-operating loss

Income (Loss) before income taxes and noncontrolling interests from continuing
operations

-41,602

16,196

Income tax benefits

Income tax benefits

2,527

-11,119

Net income from continuing operations, net of income taxes

-39,075

5,077

Income from discontinued operations, net of income taxes

8,323

Net (loss)/income

-39,075

13,400

Net income attributable to noncontrolling interests

Net income attributable to Fang Holdings Limited shareholders

-39,075

13,400

Earnings per share for Class A and Class B ordinary shares and per ADS:

 Basic

-0.41

0.15

 Diluted

-0.41

0.14

 Earnings from continuing operations per share for Class A and Class B ordinary shares and per ADS:

 Basic

-0.41

0.06

 Diluted

-0.41

0.05

 Earnings from discontinued operations per share for Class A and Class B ordinary shares and per ADS:

 Basic

0.09

 Diluted

0.09

________________________

[1] 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 assets and liabilities of the discontinued operations are presented separately on the consolidated balance sheets, and 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).

 

Related Links :

http://www.fang.com

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