Fang Announces Fourth Quarter and Fiscal Year 2019 Unaudited Financial Results

BEIJING, April 24, 2020 /PRNewswire/ -- Fang Holdings Limited (NYSE: SFUN) ("Fang" or the "Company"), a leading real estate Internet portal in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2019.

Fourth Quarter 2019 Highlights

    --  Total revenues were $49.3 million, a decrease of 26.7% from $67.3
        million in the corresponding period of 2018.
    --  Operating loss from continuing operations was $21.0 million, compared to
        an operating income from continuing operations of $21.1 million in the
        corresponding period of 2018.
    --  Net loss was $26.2 million, compared to a net loss of $29.4 million in
        the corresponding period of 2018.

Fiscal Year 2019 Highlights

    --  Total revenues were $219.7 million, a decrease of 8.5% from $240.0
        million in 2018.
    --  Operating income from continuing operations was $24.1 million, an
        increase of 145.7% from $9.8 million in 2018.
    --  Net loss was $7.7 million, compared to a net loss of $114.9 million in
        2018.

"In 2019, we had challenges but also achievements," commented Mr. Jian Liu, CEO of Fang. "For the year of 2020, challenges and opportunities co-exist because of the potential effects of COVID-19. I believe our new initiatives, including online live broadcastings, online exhibitions and VR live, will be strong drivers of our business."

Fourth Quarter 2019 Financial Results

Revenues

Fang reported total revenues of $49.3 million in the fourth quarter of 2019, a decrease of 26.7% from $67.3 million in the corresponding period of 2018.

    --  Revenue from marketing services was $18.9 million in the fourth quarter
        of 2019, a decrease of 35.0% from $29.1 million in the corresponding
        period of 2018, mainly due to the decrease in aggregate market demand.
    --  Revenue from listing services was $12.7 million in the fourth quarter of
        2019, a decrease of 25.3% from $16.9 million in the corresponding period
        of 2018, mainly due to the decrease in the number of paying customers.
    --  Revenue from leads generation services was $14.4 million in the fourth
        quarter of 2019, an increase of 16.2% from $12.4 million in the
        corresponding period of 2018.
    --  Revenue from financial services was $1.4 million in the fourth quarter
        of 2019, a decrease of 69.2% from $4.6 million in the corresponding
        period of 2018, mainly due to the decrease in average loan receivable
        balance.

Cost of Revenue

Cost of revenue was $4.1 million in the fourth quarter of 2019, a decrease of 41.6% from $7.0 million in the corresponding period of 2018, primarily due to the decline in sales and the optimization in cost structure.

Operating Expenses

Operating expenses were $68.4 million in the fourth quarter of 2019, an increase of 74.3% from $39.2 million in the corresponding period of 2018.

    --  Selling expenses were $26.3 million in the fourth quarter of 2019, an
        increase of 78.9% from $14.7 million in the corresponding period of
        2018, mainly due to the increase in promotional expense.
    --  General and administrative expenses were $42.1 million in the fourth
        quarter of 2019, an increase of 71.6% from $24.5 million in the
        corresponding period of 2018, mainly due to the increase in staff
        related costs.

Operating (Loss)/Income from Continuing Operations

Operating loss from continuing operations was $21.0 million in the fourth quarter of 2019, compared to operating income from continuing operations of $21.1 million in the corresponding period of 2018.

Change in Fair Value of Securities

Change in fair value of securities for the fourth quarter of 2019 was a loss of $3.5 million, compared to a loss of $31.4 million in the corresponding period of 2018, mainly due to the fluctuation in market price of investments in equity securities.

Income Tax Benefits/Expenses

Income tax benefits were $3.4 million in the fourth quarter of 2019, compared to an expense of $23.7 million in the corresponding period of 2018.

Net Loss

Net loss was $26.2 million in the fourth quarter of 2019, compared to a net loss of $29.4 million in the corresponding period of 2018.

Fiscal Year 2019 Financial Results

Revenues

Fang reported total revenues of $219.7 million for 2019, a decrease of 8.5% from $240.0 million in 2018.

    --  Revenue from marketing services was $94.6 million for 2019, a decrease
        of 3.8% from $98.4 million in 2018.
    --  Revenue from listing services was $63.5 million for 2019, a decrease of
        22.4% from $81.7 million in 2018, mainly due to the decreased number of
        paying members in listing services.
    --  Revenue from leads generation services was $43.3 million for 2019, an
        increase of 103.3% from $21.3 million in 2018, driven by the increase in
        effectiveness of services and customer acceptance.
    --  Revenue from financial services was $9.6 million for 2019, a decrease of
        47.1% from $18.1 million in 2018.

Cost of Revenue

Cost of revenue was $26.5 million for 2019, a decrease of 42.9% from $46.4 million in 2018, primarily due to cost savings from optimizing our core business.

Operating Expenses

Operating expenses were $174.6 million for 2019, a decrease of 7.2% from $188.3 million in 2018.

    --  Selling expenses were $73.6 million for 2019, an increase of 24.6% from
        $59.1 million in 2018.
    --  General and administrative expenses were $101.1 million for 2019, a
        decrease of 21.8% from $129.2 million in 2018, mainly due to the
        decrease in bad debt.

Operating Income from Continuing Operations

Operating income from continuing operations increased from $9.8 million in 2018 to $24.1 million for 2019.

Change in Fair Value of Securities

Change in fair value of securities for 2019 was a loss of $46.1 million, compared to a loss of $167.4 million in 2018, mainly due to the fluctuation in market price of investments in equity securities.

Income Tax Benefits

Income tax benefits were $12.5 million for 2019, a decrease of 34.2% from $19.0 million in 2018, primarily due to the effect of change in fair value of equity securities and the reversal of previously recorded ASC 740 (FIN 48) income tax and interest liability.

Net Loss

Net loss was $7.7 million for 2019, compared to a net loss of $114.9 million in 2018.

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. Eastern Time (8:00 PM on the same day, 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            
     1578624#

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 (1578624#) and unique registrant ID. Get prompted 10 min prior to the start of the conference. Enter the Direct Event Passcode above (1578624#), 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/8819045

A telephone replay of the call will be available after the conclusion of the conference call from 11:00 AM ET on April 24, 2020 through 9:59 AM ET May 2, 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:                                    8819045

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 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[1]


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





     
                ASSETS                                                                                                                         
     
     December 31,   December 31,


                                                                                                                                                              2019            2018



     
                Current assets:


       
              Cash and cash equivalents                                                                                                                  181,702         171,183


       
              Restricted cash, current                                                                                                                   218,112         245,474


       
              Short-term investments                                                                                                                     118,979          16,043


       
              Accounts receivable, net                                                                                                                    67,369          58,687


       
              Funds receivable                                                                                                                             8,372           5,474


       
              Prepayments and other current assets                                                                                                        32,954          27,894


       
              Commitment deposits                                                                                                                            188             191


       
              Loans receivable, current                                                                                                                   60,490         117,602


       
              Amounts due from related parties                                                                                                               369


       
              Current assets of discontinued operations                                                                                                                  26,289



     
                Total current assets                                                                                                                    688,535         668,837



     
                Non-current assets:


       
              Property and equipment, net                                                                                                                695,457         727,739


       
              Land use rights                                                                                                                                            33,153


       
              Loans receivable, non-current                                                                                                                               6,249


       
              Deferred tax assets                                                                                                                          6,362           2,202


       
              Deposits for non-current assets                                                                                                                618             902


       
              Restricted cash, non-current portion                                                                                                        42,452           6,990


       
              Long-term investments                                                                                                                      341,946         373,233


       
              Other non-current assets                                                                                                                    39,400           4,558


       
              Non-current assets of discontinued operations                                                                                                                 573



     
                Total non-current assets                                                                                                              1,126,235       1,155,599



     
                Total assets                                                                                                                          1,814,770       1,824,436





     
                LIABILITIES AND SHAREHOLDERS' EQUITY



     
                Current liabilities:


       
              Short-term loans                                                                                                                           267,029         297,811


       
              Short term bond payable                                                                                                                    102,779


       
              Deferred revenue                                                                                                                           136,859         142,473


       
              Accrued expenses and other liabilities                                                                                                     118,977         118,924


       
              Customers' refundable fees                                                                                                                   5,538           3,976


       
              Income tax payable                                                                                                                           3,834           2,383


       
              Amounts due to related parties                                                                                                               9,227              19


       
              Current liabilities of discontinued operations                                                                                                             35,327



     
                Total current liabilities                                                                                                               644,243         600,913



     
                Non-current liabilities:


       
              Long-term loans                                                                                                                            182,321         123,215


       
              Convertible senior notes                                                                                                                   169,146         254,435


       
              Deferred tax liabilities                                                                                                                    84,964          97,578


       
              Other non-current liabilities                                                                                                              138,001         150,837


       
              Non-current liabilities of discontinued operations                                                                                                          2,258



     
                Total non-current liabilities                                                                                                           574,432         628,323



     
                Total Liabilities                                                                                                                     1,218,675       1,229,236





     
                Equity:


       
              Class A ordinary shares, par value Hong Kong Dollar ("HK$") 1 per share,                                                                     9,244           9,286
       600,000,000 shares authorized for Class A and Class B in aggregate, issued
       shares as of December 31, 2018 and December 31, 2019: 72,069,645 and

       
              71,775,686; outstanding shares as of December 31, 2018 and December 31,
       2019: 65,004,587 and 65,403,005


       
              Class B ordinary shares, par value HK$1 per share, 600,000,000 shares                                                                        3,124           3,124
       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, 2018 and
       December 31, 2019, respectively


       
              Less: Treasury stock                                                                                                                     (123,226)      (136,615)


       
              Additional paid-in capital                                                                                                                 528,357         517,802


       
              Accumulated other comprehensive loss                                                                                                      (93,070)       (75,837)


       
              Retained earnings                                                                                                                          270,973         276,746



     
                Total Fang Holdings Limited shareholders' equity                                                                                        595,402         594,506


       
              Noncontrolling interests                                                                                                                       693             694



     
                Total equity                                                                                                                            596,095         595,200



     
                TOTAL LIABILITIES AND EQUITY                                                                                                          1,814,770       1,824,436


                                                                                                       
              
                Unaudited Condensed Consolidated Statements of Comprehensive Loss[1]


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




                                                                                                                                                                                                    Three months ended                        Year ended


                                                                                                                              December 31,                                                     
         
                December 31, December 31,  
              
     December 31,


                                                                                                                                                                                      2019                                            2018                        2019           2018



              
                Revenues:


                                                                     
              Marketing services                                                                                    18,919                                          29,117                      94,639         98,377


                                                                     
              Leads generation services                                                                             14,414                                          12,407                      43,300         21,303


                                                                     
              Listing services                                                                                      12,662                                          16,948                      63,471         81,741


                                                                     
              Value-added services                                                                                   1,712                                           1,381                       5,893          5,182


                                                                     
              Financial services                                                                                     1,426                                           4,637                       9,561         18,060


                                                                     
              E-commerce services                                                                                      191                                           2,787                       2,847         15,384



              
                Total revenues                                                                                                                                          49,324                                          67,277                     219,711        240,047





              
                Cost of revenues:


                                                                     
              Cost of services                                                                                     (4,086)                                        (6,995)                   (26,472)      (46,392)



              
                Total Cost of Revenues                                                                                                                                 (4,086)                                        (6,995)                   (26,472)      (46,392)





              
                Gross Profit                                                                                                                                            45,238                                          60,282                     193,239        193,655





              
                Operating (expenses) income:


                                                                     
              Selling expenses                                                                                    (26,290)                                       (14,692)                   (73,568)      (59,064)


                                                                     
              General and administrative expenses                                                                 (42,099)                                       (24,539)                  (101,080)     (129,224)


                                                                     
              Other income                                                                                           2,197                                               5                       5,477          4,427





              
                Operating (loss) / Income from continuing                                                                                                             (20,954)                                         21,056                      24,068          9,794
    operations




                                                                     
              Foreign exchange gain/loss                                                                              (46)                                          (606)                        153          (598)


                                                                     
              Interest income                                                                                        4,319                                           1,910                       9,200         10,202


                                                                     
              Interest expense                                                                                     (9,006)                                        (5,217)                   (25,932)      (21,174)


                                                                     
              Investment income, net                                                                                    86                                           1,011                       2,644          6,816


                                                                     
              Realized gain on sale of available-for-sale                                                            (721)                                            148                         861            761
                                                                     securities


                                                                     
              Change in fair value of securities                                                                   (3,450)                                       (31,361)                   (46,062)     (167,402)


                                                                     
              Government grants                                                                                        184                                             584                         927          1,224


                                                                     
              Other non-operating loss                                                                                                                                (7)                                     (30)



              
                Loss before income taxes and noncontrolling                                                                                                           (29,588)                                       (12,482)                   (34,141)     (160,407)
    interests from continuing operations



              
                Income tax benefits(expenses)


                                                                     
              Income tax benefits                                                                                    3,370                                        (23,697)                     12,495         18,989



              
                Net (loss) income from continuing operations,                                                                                                         (26,218)                                       (36,179)                   (21,646)     (141,418)
    net of income taxes



              Income from discontinued operations, net of income                                                                                                                                                        6,777        13,937                      26,509
    taxes



              Net loss                                                                                                                                                           (26,218)                                       (29,402)                    (7,709)     (114,909)


                                                                     
              Net loss attributable to noncontrolling interests                                                        (1)                                              2                         (1)             2



              
                Net loss attributable to Fang Holdings Limited                                                                                                        (26,217)                                       (29,404)                    (7,708)     (114,911)
    shareholders



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


                                                                     
              Basic                                                                                                 (0.29)                                         (0.33)                     (0.09)        (1.29)


                                                                     
              Diluted                                                                                               (0.29)                                         (0.33)                     (0.09)        (1.29)



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


                                                                     
              Basic                                                                                                 (0.29)                                         (0.41)                     (0.24)        (1.59)


                                                                     
              Diluted                                                                                               (0.29)                                         (0.41)                     (0.24)        (1.59)



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


                                                                     
              Basic                                                                                                                                                  0.08                        0.16           0.30


                                                                     
              Diluted                                                                                                                                                0.07                        0.15           0.29



              
                Weighted average number of Class A and Class B ordinary shares outstanding and ADSs outstanding:


                                                                     
              Basic                                                                                             89,739,655                                      89,180,170                  89,510,533     88,749,432


                                                                     
              Diluted                                                                                           89,739,655                                      90,473,173                  90,073,715     91,994,057


                            [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).

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SOURCE Fang Holdings Limited