BEIJING, Nov. 18, 2019 /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 third quarter ended September 30, 2019, (ii) a change in its board of directors (the "Board") and (iii) its 2019 annual general meeting of shareholders to be held on December 20, 2019 at 10:00 a.m. (local time) at Fang's Beijing headquarters.
Third Quarter 2019 Highlights
"Our marketing and leads generation services continued to generate growth for our business," commented Mr. Jian Liu, CEO of Fang. "The main drivers behind this growth are our emphasis on new technology and data-driven applications. We are optimistic for the remainder of the year as well as next year, as we continue our focus on the core internet marketing, listing, and leads generation business lines."
Third Quarter 2019 Results
Revenues
Fang reported total revenues of $67.6 million in the third quarter of 2019, an increase of 11.8% from $60.4 million in the corresponding period of 2018, mainly due to the increase in revenues from marketing and leads generation services.
Cost of Revenue
Cost of revenue was $5.7 million in the third quarter of 2019, a decrease of 59.3% from $14.0 million in the corresponding period of 2018, primarily due to optimization in cost structure.
Operating Expenses
Operating expenses were $35.1 million in the third quarter of 2019, a decrease of 3.2% from $36.3 million in the corresponding period of 2018, mainly due to the decrease in staff costs.
Operating Income from Continuing Operations
Operating income from continuing operations was $26.7 million in the third quarter of 2019, an increase of 164.8% from $10.1 million in the corresponding period of 2018.
Change in Fair Value of Securities
Change in fair value of securities for the third quarter of 2019 was a loss of $26.1 million, compared to a loss of $10.9 million in the corresponding period of 2018, mainly due to the fluctuation in market price of investments in equity securities.
Income Tax Benefits
Income tax benefits were $0.1 million in the third quarter of 2019, a decrease of 97.8% compared to income tax benefits of $5.4 million in the corresponding period of 2018.
Net Income
Net income was $0.7 million in the third quarter of 2019, a decrease of 92.8% compared to net income of $10.2 million in the corresponding period of 2018.
Business Outlook
Based on current operations and market conditions, Fang's management remains confident that net income is expected to be positive for the fiscal year ending December 31, 2019. This estimate represents management's current and preliminary view, which is subject to change.
Recent Developments
Board Changes
Mr. Qian Zhao has resigned from the Board, effective from November 18, 2019. Mr. Zhao'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 Mr. Zhao for his efforts and contributions to the Company.
Fang has appointed Ms. Hong Qin as an independent director of the Board, a member of the audit committee, a member of the compensation committee, and a member and the chair of the nominating and corporate governance committee of the Board, effective from November 18, 2019.
Ms. Hong Qin has extensive real estate policy research experience. Ms. Qin is a senior research fellow at the National Institute of Development and Strategy of Renmin University of China since May 2019. Ms. Qin worked at the Policy Research Center of the Ministry of Housing and Urban-Rural Development of the PRC from May 1992 to April 2019, where she served in various positions and was the director from October 2011 to April 2019. Ms. Qin received a bachelor's degree from Shandong University of Finance and Economics in business economics in 1985 and a master's degree from the Chinese Academy of Social Sciences in urban economics in 1988.
Fang to Hold 2019 Annual General Meeting on December 20, 2019
Fang will hold its 2019 annual general meeting of shareholders at Fang's Beijing headquarters at Tower A, No. 20 Guogongzhuang Middle Street, Fengtai District, Beijing 100070, People's Republic of China on December 20, 2019 at 10:00 a.m. (local time).
The proposals to be submitted for shareholders' approval at the annual general meeting are (i) the re-election of Mr. Howard Huyue Zhang as an independent director of the Board and a member and the chair of the audit committee of the Board, and (ii) the re-election of Ms. Hong Qin as an independent director of the Board, a member of the audit committee, a member of the compensation committee, and a member and the chair of the nominating and corporate governance committee of the Board.
November 21, 2019 is the record date (the "Record Date") for determining the shareholders entitled to receive notice of the annual general meeting or any adjournment or postponement thereof. Holders of record of the Company's ordinary shares at the close of business on the Record Date are entitled to attend the annual general meeting and any adjournment or postponement thereof in person.
Conference Call Information
Fang's management team will host a conference call on the same day at 7:00 AM U.S. EST (8:00 PM Beijing/Hong Kong time). The dial-in details for the live conference call are:
International Toll: |
+65 67135090 |
Toll-Free/Local Toll: |
|
United States |
+1 866-519-4004 / +1 845-675-0437 |
Hong Kong |
+852 800-906-601 / +852 3018-6771 |
Mainland China |
+86 800-819-0121 / +86 400-620-8038 |
Passcode: |
SFUN |
A telephone replay of the call will be available after the conclusion of the conference call from 10:00 AM ET on November 18, 2019 through 7:59 AM ET November 26, 2019. 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 / +86 800-870-0205 |
Conference ID: |
4498166 |
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 value-added services for, the real estate and home furnishing and improvement sectors in China. Fang currently maintains approximately 65 offices to focus on local market needs and its website and database contains real estate related content covering 658 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 transformation back to a technology-driven Internet platform 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 |
September 30, |
December 31, |
||
2019 |
2018 |
|||
Current assets: |
||||
Cash and cash equivalents |
214,417 |
171,183 |
||
Restricted cash, current |
214,943 |
245,474 |
||
Short-term investments |
48,739 |
16,043 |
||
Accounts receivable, net |
74,176 |
58,687 |
||
Funds receivable |
7,298 |
5,474 |
||
Prepayment and other current assets |
26,251 |
27,894 |
||
Commitment deposits |
185 |
191 |
||
Loans receivable, current |
40,749 |
117,602 |
||
Current assets of discontinued operations |
- |
26,289 |
||
Total current assets |
626,758 |
668,837 |
||
Non-current assets: |
||||
Property and equipment, net |
693,588 |
727,739 |
||
Land use rights |
31,551 |
33,153 |
||
Loans receivable, non-current |
- |
6,249 |
||
Deferred tax assets |
1,780 |
2,202 |
||
Deposits for non-current assets |
395 |
902 |
||
Restricted cash, non-current portion |
38,965 |
6,990 |
||
Long-term investments |
334,318 |
373,233 |
||
Other non-current assets |
12,198 |
4,558 |
||
Non-current assets of discontinued operations |
- |
573 |
||
Total non-current assets |
1,112,795 |
1,155,599 |
||
Total assets |
1,739,553 |
1,824,436 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||
Current liabilities: |
||||
Short-term loans |
262,022 |
297,811 |
||
Deferred revenue |
130,674 |
142,473 |
||
Accrued expenses and other liabilities |
107,405 |
118,925 |
||
Customers' refundable fees |
4,233 |
3,976 |
||
Income tax payable |
14,367 |
2,383 |
||
Amounts due to related parties |
271 |
19 |
||
Current liabilities of discontinued operations |
- |
35,326 |
||
Total current liabilities |
518,972 |
600,913 |
||
Non-current liabilities: |
||||
Long-term loans |
146,762 |
123,215 |
||
Convertible senior notes |
253,021 |
254,435 |
||
Deferred tax liabilities |
84,404 |
97,578 |
||
Other non-current liabilities |
125,317 |
150,837 |
||
Non-current liabilities of discontinued operations |
- |
2,258 |
||
Total non-current liabilities |
609,504 |
628,323 |
||
Total Liabilities |
1,128,476 |
1,229,236 |
||
Equity: |
||||
Class A ordinary shares, par value Hong Kong Dollar ("HK$") 1 per share, 71,775,686; outstanding shares as of December 31, 2018 and September 30, |
9,244 |
9,286 |
||
Class B ordinary shares, par value HK$1 per share, 600,000,000 shares |
3,124 |
3,124 |
||
Treasury stock |
(123,226) |
(136,615) |
||
Additional paid-in capital |
523,984 |
517,802 |
||
Accumulated other comprehensive loss |
(100,668) |
(75,837) |
||
Retained earnings |
297,925 |
276,746 |
||
Total Fang Holdings Limited shareholders' equity |
610,383 |
594,506 |
||
Non controlling interests |
694 |
694 |
||
Total equity |
611,077 |
595,200 |
||
TOTAL LIABILITIES AND EQUITY |
1,739,553 |
1,824,436 |
||
Unaudited Condensed Consolidated Statements of Comprehensive Income[1] |
||||||||
(in thousands of U.S. dollars, except share data and per share data) |
||||||||
Three months ended |
||||||||
September 30, |
September 30, |
|||||||
2019 |
2018 |
|||||||
Revenues: |
||||||||
Marketing services |
29,993 |
25,843 |
||||||
Listing services |
19,438 |
20,175 |
||||||
Leads generation services |
14,099 |
5,017 |
||||||
Value-added services |
1,514 |
1,524 |
||||||
Financial services |
1,710 |
5,644 |
||||||
E-commerce services |
796 |
2,217 |
||||||
Total revenues |
67,550 |
60,420 |
||||||
Cost of revenues: |
||||||||
Cost of services |
(5,694) |
(14,035) |
||||||
Total cost of revenues |
(5,694) |
(14,035) |
||||||
Gross profit |
61,856 |
46,385 |
||||||
Operating expenses and income: |
||||||||
Selling expenses |
(14,822) |
(16,606) |
||||||
General and administrative expenses |
(21,688) |
(23,355) |
||||||
Other income |
1,385 |
3,670 |
||||||
Operating income |
26,731 |
10,094 |
||||||
Foreign exchange loss |
832 |
195 |
||||||
Interest income |
1,562 |
2,353 |
||||||
Interest expense |
(5,185) |
(5,657) |
||||||
Investment income, net |
2,068 |
918 |
||||||
Realized gain on sale of available-for-sale securities |
711 |
252 |
||||||
Change in fair value of securities |
(26,148) |
(10,880) |
||||||
Government grants |
44 |
26 |
||||||
Other non-operating loss |
- |
442 |
||||||
Income (Loss) before income taxes and noncontrolling interests from continuing operations |
615 |
(2,257) |
||||||
Income tax benefits |
||||||||
Income tax benefits |
117 |
5,356 |
||||||
Net income from continuing operations, net of income taxes |
732 |
3,099 |
||||||
Income from discontinued operations, net of income taxes |
- |
7,125 |
||||||
Net income |
732 |
10,224 |
||||||
Net income attributable to noncontrolling interests |
- |
- |
||||||
Net income attributable to Fang Holdings Limited shareholders |
732 |
10,224 |
||||||
Earnings per share for Class A and Class B ordinary shares and per ADS: |
||||||||
Basic |
0.01 |
0.11 |
||||||
Diluted |
0.01 |
0.11 |
||||||
Earnings from continuing operations per share for Class A and Class B ordinary shares and per ADS: |
||||||||
Basic |
0.01 |
0.03 |
||||||
Diluted |
0.01 |
0.03 |
||||||
Earnings from discontinued operations per share for Class A and Class B ordinary shares and per ADS: |
||||||||
Basic |
- |
0.08 |
||||||
Diluted |
- |
0.08 |
||||||
[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 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).
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