BEIJING, Nov. 28, 2016 /PRNewswire/ -- Fang Holdings
Limited (NYSE: SFUN) ("we," "our," or "Fang"), the leading real
estate Internet portal in China,
announced today its unaudited financial results for the three
months ended September 30, 2016.
Third Quarter 2016 Highlights
- Total revenues were $250.1
million.
- Operating income was $0.2
million. Non-GAAP operating income was $2.4 million. A description of the adjustments
from GAAP to non-GAAP operating income is detailed in the
Reconciliation Statement following this press release.
- Net loss attributable to Fang's shareholders was
$4.9 million. Fully diluted loss per
ADS was $0.01. Non-GAAP net loss
attributable to Fang's shareholders was $14.2 million. Non-GAAP fully diluted loss per
ADS was $0.03. A description of the
adjustments from GAAP to non-GAAP net loss attributable to Fang's
shareholders and fully diluted loss per ADS is detailed in the
Reconciliation Statement following this press release.
"This quarter was one of the toughest quarters in Fang's
history. Our transformation coupled with the market regulations by
the government was very challenging," said Vincent Mo, Chairman and CEO of Fang.
"Transformation is not easy but we are determined and optimizing
the operations details. The Company achieved operational
profitability and we are confident to turn around the
Company."
Third Quarter 2016 Results
Revenues
Fang reported total revenues of $250.1
million in the third quarter of 2016, a 1% increase from
$248.5 million in the corresponding
period of 2015, primarily driven by the growth of e-commerce
services, partially offset by the decline in marketing
services.
Revenue from e-commerce services was $167.4 million in the third quarter of 2016, an
increase of 17.4% from $142.6 million
in the corresponding period of 2015, primarily driven by the growth
of the brokerage services for secondary home, partially offset by
the scaling down of rental and home furnishing due to the
adjustment of Fang's strategies in 2016.
Revenue from marketing services was $35.6
million in the third quarter of 2016, a decrease of 45.8%
from $65.6 million in the
corresponding period of 2015, primarily due to less demand from
property developers for online advertising.
Revenue from listing services was $28.5
million in the third quarter of 2016, an increase of 4.0%
from $27.4 million in the
corresponding period of 2015, primarily due to the increased unit
price per paying member.
Revenue from Internet financial services was $7.3 million in the third quarter of 2016, an
increase of 14.0% from $6.4 million
in the corresponding period of 2015, primarily due to the
contribution from existing loans of new home financial
services.
Revenue from other value-added services was $11.4 million in the third quarter of 2016, an
increase of 75.4% from $6.5 million
in the corresponding period of 2015, primarily due to the growth of
big data services in research business.
Cost of Revenue
Cost of revenue was $157.0 million
in the third quarter of 2016, a decrease of 16.7% from $188.5 million in the corresponding period of
2015 and a decrease of 32.1% from $231.1
million in the second quarter of 2016. The decrease in cost
of revenue was mainly due to the downsizing of the agent team
related to the secondary brokerage services and the scaling down of
rental and home furnishing in ecommerce services.
Operating Expense
Operating expenses were $92.9
million in the third quarter of 2016, generally consistent
with the corresponding period of 2015.
Selling expenses were $56.7
million in the third quarter of 2016, an increase of 7.4%
from $52.8 million in the
corresponding period of 2015, primarily due to the increased
advertising and promotional expenses.
General and administrative expenses were $36.2 million in the third quarter of 2016, a
decrease of 7.2% from $39.0 million
for the corresponding period of 2015, primarily due to the
decreased bad-debt expense and bank surcharges.
Operating Loss/Income
Operating income was $0.2 million
in the third quarter of 2016, compared to operating loss of
$31.7 million in the corresponding
period of 2015.
Income Tax Expenses
Income tax expenses were $8.0
million in the third quarter of 2016, compared to income tax
benefit of $29.2 million in the
corresponding period of 2015.
Net Loss/Income and EPS
Net loss attributable to Fang's shareholders was $4.9 million in the third quarter of 2016,
compared to net income of $1.4
million in the corresponding period of 2015. Loss per
fully-diluted ordinary share and ADS were $0.05 and $0.01,
respectively, in the third quarter of 2016, compared to earnings of
$0.02 and nil in the corresponding
period of 2015.
Adjusted EBITDA
Adjusted EBITDA, defined as non-GAAP net income before income
taxes, interest expenses, interest income, depreciation and
amortization, was $1.6 million in the
third quarter of 2016, compared to the loss of $24.3 million in the corresponding period of
2015.
Cash
As of September 30, 2016, Fang had
cash, cash equivalents, and short-term investments of $893.4 million, compared to $983.7 million as of December 31, 2016. Net cash generated from
operating activities was $76.8
million in the third quarter of 2016, compared to cash flow
used in operating activities of $83.2
million in the same period of 2015, primarily due to the
repayment of loan principals in our financial services, which was
$86.8 million for the three months
ended September 30, 2016.
Share Repurchase Program
As of November 28, 2016, Fang had
purchased approximately 17 million ADSs in aggregate with a total
consideration of US$81 million. Fang
will continue to purchase the ADSs with an aggregate value of no
more than US$200 million under the
current program.
Business Outlook
Fang adjusted its total revenue guidance for 2016 from
$1,148.6 million to approximately
927.7 million, representing a year-on-year increase of 5.0%. This
forecast reflects Fang's current and preliminary view, which 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 (9:00 PM Beijing/Hong
Kong time). The dial-in details for the live conference call
are:
International
Toll:
|
+65
67135090
|
Local
Toll:
|
|
United
States
|
+1 845-675-0437 / +1
866-519-4004
|
Hong Kong
|
+852 3018-6771 / +852
800-906-601
|
Mainland
China
|
+86 400-620-8038 /
+86 800-819-0121
|
Passcode:
|
SFUN
|
A telephone replay of the call will be available after the
conclusion of the conference call from 11:00
ET on November 28, 2016
through 7:59 ET December 6, 2016. The dial-in details for the
telephone replay are:
International
Toll:
|
+61
2-8199-0299
|
Toll-Free:
|
|
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:
|
23749283
|
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 the leading real estate Internet portal in
China in terms of the number of
page views and visitors to its websites. Through our websites, we
provide e-commerce, marketing, listing, financial and other
value-added services for China's
fast-growing real estate and home furnishing and improvement
sectors. Our 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 about 100 offices to focus on local market
needs and its website and database contains real estate related
content covering more than 629 cities in China. For more information about Fang, please
visit http://ir.fang.com.
About Non-GAAP Financial Measures
To supplement Fang's consolidated financial results presented in
accordance with United States Generally Accepted Accounting
Principles ("GAAP"), Fang uses in this press release the following
measures defined as non-GAAP financial measures by the United
States Securities and Exchange Commission: (1) non-GAAP operating
income/(loss), (2) non-GAAP net income/(loss) and (3) non-GAAP
basic and diluted earnings/(loss) per ordinary share and per ADS
and (4) adjusted EBITDA. The presentation of the non-GAAP financial
information is not intended to be considered in isolation or as a
substitute for the financial information prepared and presented in
accordance with GAAP. For more information on these non-GAAP
financial measures, please see the table captioned "Reconciliation
of GAAP and non-GAAP Results" set forth at the end of this press
release.
Fang believes that these non-GAAP financial measures provide
meaningful supplemental information to investors regarding its
operating performance by excluding share-based compensation
expenses and the related tax effects, realized gain on
available-for-sale security, interest income and expenses, income
tax expenses, and depreciation expense for the relevant period,
which (1) may not be indicative of Fang's recurring core business
operating results or (2) are not expected to result in future cash
payments. These non-GAAP financial measures also facilitate
management's internal comparisons to Fang's historical performance
and assist its financial and operational decision making. A
limitation of using these non-GAAP financial measures is that
share-based compensation, interest income and expenses, income tax
expenses, and depreciation expenses have been and will continue to
be a significant recurring expense that will continue to exist in
Fang's business for the foreseeable future. Management compensates
for these limitations by providing specific information regarding
the GAAP amounts excluded from each non-GAAP measure. The
accompanying table has more details on the reconciliation between
non-GAAP financial measures and their most directly comparable GAAP
financial measures.
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. Such forward-looking statements include, without
limitation, statements regarding our future financial performance,
revenue guidance for 2016, growth and growth rates, and market
position and continued business transformation. Statements that are
not historical facts, including statements about our beliefs and
expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. A number of
important factors could cause actual results to differ materially
from those contained in any forward-looking statement. Potential
risks and uncertainties include, without limitation, whether the
transactions contemplated by the restructuring of our assets and
businesses will receive the requisite approvals, whether such
restructuring will be carried out as planned, the impact of such
restructuring on our assets and businesses, the impact of our
transformation from a pure Internet information platform to a
transaction-oriented platform, the impact of our implementation of
a "zero tolerance policy" that has resulted in dismissal of
employees, the impact of the slowdown in China's real estate market on us and the
impact on revenues of our existing and new service fees reductions,
our ability to retain real estate listing agencies as customers
during challenging economic periods, the success of our new
business initiatives, our ability to manage its operating expenses,
the impact of, measures taken or to be taken by the Chinese
government to control real estate growth and prices and other
events which could occur in the future, economic challenges in
China's real estate market, the
impact of competitive market conditions for our services, our
ability to maintain and increase our leadership in China's home related internet sector, the
uncertain regulatory landscape in China, fluctuations in our quarterly operating
results, our continued ability to execute business strategies
including our SouFun membership services and SouFun Online Shop,
our ability to continue to expand in local markets, our reliance on
online advertising sales and listing services and transactions for
our revenues, any failure to successfully develop and expand our
content, service offerings and features, including the success of
new features to meet evolving market needs, and the technologies
that support them, the quality of the loans we originate and resell
and the performance of those loans in the future, our ability to
successfully service and process customer loans for our own benefit
and for the purchasers of those loans and, should we in the future
make acquisitions, any failure to successfully integrate acquired
businesses.
For investor and media inquiries, please contact:
Dr. Hua Lei
CFO
Phone: +86-10-5631-8661
Email: leihua@fang.com
Ms. Joyce Tang
Senior Investor Relations Manager
Phone: +86-10-5631 8659
Email: tangjunning@fang.com
Ms. Dana Cheng
Investor Relations Manager
Phone: +86-10-5631 8174
Email: chengyu.bj@fang.com
Fang Holdings
Limited
|
Condensed
Consolidated Balance Sheets
|
(in thousands of
U.S. dollars, except share data and per share data)
|
|
|
|
September 30,
2016
|
December 31,
2015
|
ASSETS
|
|
|
|
Current
assets:
|
(Unaudited)
|
(Audited)
|
|
Cash and cash
equivalents
|
866,929
|
817,921
|
|
Restricted cash,
current
|
-
|
103,179
|
|
Short-term
investments
|
26,457
|
62,559
|
|
Accounts receivable,
net
|
122,250
|
147,516
|
|
Funds
receivable
|
25,649
|
45,400
|
|
Prepayment and other
current assets
|
56,198
|
60,265
|
|
Commitment
deposits
|
8,293
|
10,646
|
|
Loan receivable,
current
|
104,486
|
266,990
|
|
Amount due from
related parties
|
384
|
262
|
Total current
assets
|
1,210,646
|
1,514,738
|
Non-current
assets:
|
|
|
|
Property and
equipment, net
|
330,187
|
326,504
|
|
Loan receivable,
non-current
|
34,718
|
55,349
|
|
Deferred tax assets,
non-current
|
9,801
|
5,490
|
|
Deposit for
non-current assets
|
259,694
|
137,715
|
|
Long-term
investments
|
242,058
|
244,678
|
|
Other non-current
assets
|
8,710
|
6,795
|
Total non-current
assets
|
885,438
|
777,305
|
Total
assets
|
2,096,083
|
2,292,043
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
Current
liabilities:
|
|
|
|
Short-term
loans
|
91,496
|
100,000
|
|
Deferred
revenue
|
125,865
|
145,321
|
|
Accrued expenses and
other liabilities
|
333,021
|
361,593
|
|
Customers' refundable
fees
|
63,921
|
59,107
|
|
Income tax
payable
|
10,137
|
9,948
|
|
Convertible senior
notes-current1
|
399,456
|
396,716
|
Total current
liabilities
|
1,023,896
|
1,072,685
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
Long-term
loans
|
82,204
|
-
|
|
Convertible senior
notes
|
289,113
|
287,887
|
|
Deferred tax
liabilities, non-current
|
71,775
|
76,631
|
|
Other non-current
liabilities
|
303
|
312
|
Total non-current
liabilities
|
443,395
|
364,830
|
Total
Liabilities
|
1,467,291
|
1,437,515
|
|
|
|
|
|
|
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, and
67,612,571 shares and 70,736,679 shares issued and
outstanding as at September 30, 2016 and December 31, 2015,
respectively
|
9,130
|
9,110
|
|
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 September
30, 2016 and September 30, 2015, respectively
|
3,124
|
3,124
|
|
Treasury
stock
|
(81,367)
|
-
|
|
Additional paid-in
capital
|
484,690
|
478,391
|
|
Accumulated other
comprehensive income(loss)
|
1,350
|
(10,364)
|
|
Retained
earnings
|
211,165
|
373,505
|
Total Fang
Holdings Limited shareholders' equity
|
628,092
|
853,766
|
|
Non-controlling
interests
|
700
|
761
|
Total
equity
|
628,792
|
854,527
|
TOTAL LIABILITIES
AND EQUITY
|
2,096,083
|
2,292,042
|
1.Certain
reclassifications in other non-current assets and convertible
senior notes as of December 31, 2015 were retrospectively adjusted
as a result of the adoption of a new accounting standard effective
in 2016.
|
Fang Holdings
Limited
|
Condensed
Consolidated Statements of Comprehensive Income
|
(in
thousands of U.S. dollars, except share data and per share
data)
|
|
|
Three months
ended
|
|
|
September 30,
2016
(Unaudited)
|
|
September 30,
2015
(Unaudited)
|
Revenues:
|
|
|
|
|
E-commerce
services
|
167,413
|
|
142,576
|
|
Marketing
services
|
35,574
|
|
65,604
|
|
Listing
services
|
28,493
|
|
27,406
|
|
Financial
services
|
7,267
|
|
6,376
|
|
Other
value-added services and other services
|
11,380
|
|
6,546
|
Total
revenues
|
250,127
|
|
248,508
|
|
|
|
|
|
Cost of
Revenues:
|
|
|
|
|
Cost of
services
|
(157,001)
|
|
(188,462)
|
Total Cost of
Revenues
|
(157,001)
|
|
(188,462)
|
|
|
|
|
|
Gross
Profit
|
93,126
|
|
60,046
|
|
|
|
|
|
Operating expenses
and income:
|
|
|
|
Selling
expenses
|
(56,729)
|
|
(52,819)
|
|
General and
administrative expenses
|
(36,177)
|
|
(38,966)
|
|
Other
income
|
-
|
|
5
|
Operating Income
(loss)
|
220
|
|
(31,734)
|
|
Foreign
exchange gain (loss)
|
(8,390)
|
|
86
|
|
Interest
income
|
2,010
|
|
4,680
|
|
Interest
expense
|
(4,071)
|
|
(3,927)
|
|
Investment
income
|
11,453
|
|
660
|
|
Government
grants
|
1,862
|
|
2,405
|
Income (loss)
before income taxes and non-controlling interests
|
3,084
|
|
(27,830)
|
Income tax benefit
(expenses)
|
|
|
|
|
Income tax
benefit (expenses)
|
(8,032)
|
|
29,230
|
Net income
(loss)
|
(4,948)
|
|
1,400
|
|
Net income (loss)
attributable to non-controlling interests
|
1
|
|
(5)
|
Net income (loss)
attributable to Fang Holdings Limited shareholders
|
(4,949)
|
|
1,405
|
Other
comprehensive income (loss), net of tax
|
|
|
|
Foreign currency
Translation
|
41,804
|
|
(34,180)
|
|
Unrealized gain
(loss) on available-for-sale security
|
1,197
|
|
(23,085)
|
Total other
comprehensive income (loss), net of tax
|
43,001
|
|
(57,265)
|
Comprehensive
income (loss)
|
38,052
|
|
(55,865)
|
Earnings (loss)
per share for Class A and Class B ordinary shares
|
|
Basic
|
(0.05)
|
|
0.02
|
|
Diluted
|
(0.05)
|
|
0.02
|
Earnings (loss)
per ADS
|
|
|
|
|
Basic
|
(0.01)
|
|
-
|
|
Diluted
|
(0.01)
|
|
-
|
Weighted average
number of Class A and Class B ordinary shares
outstanding:
|
|
Basic
|
93,798,520
|
|
83,215,146
|
|
Diluted
|
93,798,520
|
|
90,617,966
|
Weighted average
number of ADSs outstanding:
|
|
|
Basic
|
468,992,600
|
|
416,075,730
|
|
Diluted
|
468,992,600
|
|
453,089,830
|
Fang Holdings
Limited
|
Reconciliation of
GAAP and Non-GAAP Results
|
( in thousands of
U.S. dollars, except share data and per share data)
|
|
|
Three months
ended
|
|
|
|
September 30,
2016
|
|
September 30,
2015
|
|
|
GAAP income from
operations
|
220
|
|
(31,734)
|
|
|
Share-based
compensation expense
|
2,223
|
|
1,125
|
|
|
Non-GAAP income
from operations
|
2,443
|
|
(30,609)
|
|
|
|
|
|
|
|
|
GAAP net
income
|
(4,948)
|
|
1,400
|
|
|
One-off tax
benefit
|
-
|
|
(30,578)
|
|
|
Withholding tax
related to dividends
|
-
|
|
(3,146)
|
|
|
Investment
income
|
(11,453)
|
|
(660)
|
|
|
Share-based
compensation expense
|
2,223
|
|
1,125
|
|
|
Non-GAAP net
income
|
(14,178)
|
|
(31,859)
|
|
|
|
|
|
|
|
|
Net Income
attributable to Fang shareholders
|
(4,949)
|
|
1,405
|
|
|
One-off tax
benefit
|
-
|
|
(30,578)
|
|
|
Withholding tax
related to dividends
|
-
|
|
(3,146)
|
|
|
Investment
income
|
(11,453)
|
|
(660)
|
|
|
Share-based
compensation expense
|
2,223
|
|
1,125
|
|
|
Non-GAAP net
Income attributable to Fang Holdings Limited
shareholders
|
(14,179)
|
|
(31,854)
|
|
|
|
|
|
|
|
|
GAAP earnings per
share for Class A and Class B ordinary shares:
|
|
|
|
|
|
Basic
|
(0.05)
|
|
0.02
|
|
|
Diluted
|
(0.05)
|
|
0.02
|
|
|
GAAP earnings per
ADS:
|
|
|
|
|
|
Basic
|
(0.01)
|
|
0.00
|
|
|
Diluted
|
(0.01)
|
|
0.00
|
|
|
Non-GAAP earnings per
share for Class A and Class B ordinary shares:
|
|
|
|
|
|
Basic
|
(0.15)
|
|
(0.38)
|
|
|
Diluted
|
(0.15)
|
|
(0.38)
|
|
Non-GAAP earnings
per ADS:
|
|
|
|
|
Basic
|
(0.03)
|
|
(0.08)
|
|
|
Diluted
|
(0.03)
|
|
(0.08)
|
|
|
Weighted average
number of Class A and Class B ordinary shares
outstanding:
|
|
|
|
|
|
Basic
|
93,798,520
|
|
83,215,146
|
|
|
Diluted
|
93,798,520
|
|
90,617,966
|
|
Weighted average
number of ADSs outstanding:
|
|
|
Basic
|
468,992,600
|
|
416,075,730
|
|
|
Diluted
|
468,992,600
|
|
453,089,830
|
|
|
|
|
|
|
|
|
Non-GAAP Net
income
|
(14,178)
|
|
(31,859)
|
|
Add
back:
|
|
|
|
|
|
Interest
expense
|
4,071
|
|
3,927
|
|
|
Income tax
expenses
|
8,032
|
|
4,494
|
|
|
Depreciation
expenses
|
5,672
|
|
3,813
|
|
Subtract:
|
|
|
|
|
|
Interest
income
|
(2,010)
|
|
(4,680)
|
|
|
Adjusted
EBITDA
|
1,587
|
|
(24,305)
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/fang-announces-third-quarter-2016-results-300368810.html
SOURCE Fang Holdings Limited