BEIJING, Nov. 30, 2018 /PRNewswire/ -- Fang Holdings
Limited (NYSE: SFUN) ("Fang" or "we"), the leading real estate
Internet portal in China, today
announced its unaudited financial results for the fiscal quarter
ended September 30, 2018.
Third Quarter 2018 Highlights
- Total revenues were $83.6
million, a decrease of 25.5% from $112.2 million in the corresponding period in
2017.
- Operating income was $15.3
million. Non-GAAP operating income was $ 18.9 million. A description of the adjustments
from GAAP to non-GAAP operating income is detailed in the table
captioned "Reconciliation of GAAP and Non-GAAP Results" following
this press release.
- Net income attributable to Fang's shareholders was
$2.3 million, GAAP fully diluted
earnings per ADS were $0.00.
- Non-GAAP net income attributable to Fang's shareholders
was $12.3 million, Non-GAAP fully
diluted earnings per ADS were $0.03.
A description of the adjustments from GAAP to non-GAAP net income
attributable to Fang's shareholders and fully diluted loss per ADS
is detailed in the table captioned "Reconciliation of GAAP and
Non-GAAP Results" following this press release.
- Adjusted EBITDA was $25.7
million. A description of the adjustments from GAAP net
income to Adjusted EBITDA is detailed in the table captioned
"Reconciliation of GAAP and Non-GAAP Results" following this press
release.
"We have been solidifying our platforms and products and
focusing on the effectiveness of our services," commented
Vincent Mo, Chairman and CEO of
Fang. "At the same time, we continue to explore creating empowering
products that serve real estate professionals in China's new and resale markets."
Third Quarter 2018 Results
Revenues
Fang reported total revenues of $83.6
million in the third quarter of 2018, a decrease of 25.5%
from $112.2 million in the
corresponding period of 2017, mainly due to the decline in revenues
from listing and e-commerce services.
Revenue from marketing services was $35.7
million in the third quarter of 2018, a slight decrease of
4.1% from $37.3 million in the
corresponding period of 2017.
Revenue from listing services was $29.2
million in the third quarter of 2018, a decrease of 38% from
$47.2 million in the corresponding
period of 2017, caused by the decreased number of paying
members.
Revenue from value-added services was $10.3 million in the third quarter of 2018, an
increase of 33.3% from $7.7 million
in the corresponding period of 2017, driven by the increased demand
for our database and research services.
Revenue from financial services was $4.7
million in the third quarter of 2018, an increase of 34.6%
from $3.5 million in the
corresponding period of 2017, driven by increased demand for our
financial products.
Revenue from e-commerce services was $3.7
million in the third quarter of 2018, a decrease of 77.7%
from $16.6 million in the
corresponding period of 2017, primarily due to Fang's
transformation back to a technology-driven open platform model.
Cost of Revenue
Cost of revenue was $17.8 million
in the third quarter of 2018, a decrease of 49.8% from $35.4 million in the corresponding period of
2017, primarily due to optimization in our cost structure.
Operating Expenses
Operating expenses were $50.6
million in the third quarter of 2018, a decrease of 13.4%
from $58.4 million in the
corresponding period of 2017.
Selling expenses were $21.0
million in the third quarter of 2018, an increase of 24.3%
from $16.9 million for the
corresponding period of 2017, primarily driven by an increase in
advertising and promotional expenses.
General and administrative expenses were $29.8 million in the third quarter of 2018, a
decrease of 28.5% from $41.8 million
for the corresponding period of 2017, primarily due to effective
cost control and a decrease in bad debt expenses.
Operating Income
Operating income was $15.3 million
in the third quarter of 2018, compared to $18.4 million in the corresponding period of
2017, caused by the decline in revenue from listing services.
Change in Fair Value of Securities
Change in fair value of securities for the third quarter of 2018
was a loss of $11.8 million. The
amount represents changes in fair value of securities in accordance
with FASB ASU 2016-01, which became effective on January 1, 2018.
Income Tax Expenses
Income tax expenses were $3.1
million in the third quarter of 2018, compared to income tax
expenses of $4.1 million in the
corresponding period of 2017.
Net Income and EPS
Net income attributable to Fang's shareholders was $2.3 million in the third quarter of 2018,
compared to net income of $15.2
million in the corresponding period of 2017. Earnings per
fully-diluted ordinary share and ADS were $0.02 and $0.00 in
the third quarter of 2018, compared to $0.16 and $0.03,
respectively, in the corresponding period of 2017.
Adjusted EBITDA
Adjusted EBITDA, defined as GAAP net income before share-based
compensation, investment income, change in fair value of
securities, income taxes, interest expenses, interest income and
depreciation, was $25.7 million in
the third quarter of 2018, compared to the $24.8 million in the corresponding period of
2017.
Cash
As of September 30, 2018, Fang had
cash and cash equivalents, restricted cash (current and
non-current) and short-term investments of $439.9 million, compared to $547.1 million as of December 31, 2017. Net cash generated from
operating activities was $33.5
million in the third quarter of 2018, compared to cash flow
generated from operating activities of $57.8
million in the same period of 2017.
Business Outlook
Based on current operations and market conditions, Fang's
non-GAAP net income is expected to be profitable for the fiscal
year ending December 31, 2018. These
estimates represent management's current and preliminary view,
which are subject to change.
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
(loss)/income, (2) non-GAAP net (loss)/income, (3) non-GAAP basic
and diluted (loss)/earnings 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 measures help identify
underlying trends in Fang's business that could otherwise be
distorted by the effect of the change in fair value of equity
securities, and the expenses and gains that Fang includes in income
from operations and net income. Fang believes that these non-GAAP
measures provide useful information about its operating results,
enhance the overall understanding of its past performance and
future prospects and allow for greater visibility with respect to
key metrics used by Fang's management in its financial and
operational decision-making. A limitation of using these non-GAAP
financial measures is that share-based compensation, investment
income, change in fair value of equity securities, interest income
and expenses, income tax expenses, and depreciation expenses have
been and will continue to be a significant recurring item 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 tables have more details on the
reconciliation between non-GAAP financial measures and their most
directly comparable GAAP financial measures.
New Accounting Pronouncements
The new revenue recognition standard (ASU No. 2014-09 'Revenue
from Contracts with Customers') was released in 2014 and becomes
effective for Fang with effect from January
1, 2018. Fang has elected to adopt the new standard (ASC 606
- 'Revenue from Contracts with Customers') using cumulative effect
method for all contracts that are not completed contracts at the
date of initial application. Under this transition method, the new
standard is applied from January 1,
2018 without restatement of comparative period amounts. The
cumulative effect of initially applying the new standard is
reflected as an adjustment to opening retained earnings as of
January 1, 2018 in the amount of
$0.3 million.
In January 2016, the FASB issued
ASU No. 2016-01, Financial Instruments Overall (Subtopic 825-10):
Recognition and Measurement of Financial Assets and Financial
Liabilities, which is an amendment which addresses certain aspects
of recognition, measurement, presentation, and disclosure of
financial instruments. This guidance includes the requirement that
equity investments that do not result in consolidation and are not
accounted for under the equity method be measured at fair value
with changes in the fair value recognized in net income. An entity
may choose to measure equity investments that do not have readily
determinable fair values at cost minus impairment, if any, plus or
minus changes resulting from observable price changes in orderly
transactions for the identical or a similar investment. Fang
adopted this standard from the quarter beginning January 1, 2018, and Fang recognized a
cumulative-effect adjustment to retained earnings of $163.8 million as of January 1, 2018 for the after-tax unrealized
gains of available-for-sale equity securities previously recognized
in accumulated other comprehensive income.
Conference Call Information
Fang's management team will host a conference call on the same
day at 7:30 AM U.S. ET (8:30 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 11:00
ET on November 30, 2018
through 9:59 ET December 8, 2018. 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:
|
9369764
|
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 its websites, Fang
provides marketing, listing, financial, e-commerce and other
value-added 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 about 100 offices to focus on local market
needs and its website and database contains real estate related
content covering more than 651 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.
For investor and media inquiries, please contact:
Dr. Hua Lei
CFO
Phone: +86-10-5631-8661
Email: leihua@fang.com
Ms. Jessie Yang
Investor Relations Director
Phone: +86-10-5631 8805
Email: jessieyang@fang.com
Fang Holdings
Limited
|
Condensed
Consolidated Balance Sheets
|
(in thousands of
U.S. dollars, except share data and per share data)
|
ASSETS
|
September
30,
|
December
31,
|
|
|
|
2018
|
2017
|
|
Current
assets:
|
(Unaudited)
|
(Audited)
|
|
|
Cash and cash
equivalents
|
151,159
|
228,276
|
|
|
Restricted cash,
current
|
211,818
|
223,002
|
|
|
Short-term
investments
|
40,043
|
55,801
|
|
|
Accounts receivable,
net
|
69,640
|
66,884
|
|
|
Funds
receivable
|
6,068
|
6,264
|
|
|
Prepayment and other
current assets
|
33,856
|
32,704
|
|
|
Commitment
deposits
|
191
|
5,876
|
|
|
Loan receivable,
current
|
149,796
|
129,438
|
|
|
Amount due from
related parties
|
134
|
167
|
|
Total current
assets
|
662,705
|
748,412
|
|
Non-current
assets:
|
|
|
|
|
Property and
equipment, net
|
737,362
|
622,145
|
|
|
Prepaid land lease
payments
|
32,563
|
35,728
|
|
|
Loan receivable,
non-current
|
7,010
|
14,674
|
|
|
Deferred tax assets,
non-current
|
8,164
|
7,602
|
|
|
Restricted cash,
non-current portion
|
36,897
|
39,982
|
|
|
Deposit for
non-current assets
|
7,594
|
58,722
|
|
|
Long-term
investments
|
392,231
|
470,964
|
|
|
Other non-current
assets
|
870
|
2,026
|
|
Total non-current
assets
|
1,222,691
|
1,251,843
|
|
Total
assets
|
1,885,396
|
2,000,255
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
|
Short-term
loans
|
274,670
|
236,985
|
|
|
Deferred
revenue
|
182,111
|
168,884
|
|
|
Accrued expenses and
other liabilities
|
123,243
|
158,799
|
|
|
Customers' refundable
fees
|
12,282
|
7,070
|
|
|
Income tax
payable
|
5,597
|
4,374
|
|
|
Convertible senior
notes
|
5,700
|
5,700
|
|
|
Due to related
parties
|
322
|
-
|
|
Total current
liabilities
|
603,925
|
581,812
|
|
Non-current
liabilities:
|
|
|
|
|
Long-term
loans
|
124,381
|
114,109
|
|
|
Convertible senior
notes
|
292,731
|
291,365
|
|
|
Deferred tax
liabilities, non-current
|
91,037
|
126,641
|
|
|
Other non-current
liabilities
|
131,266
|
146,053
|
|
Total non-current
liabilities
|
639,415
|
678,168
|
|
Total
Liabilities
|
1,243,340
|
1,259,980
|
|
|
|
|
|
|
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 September 30, 2018 and
December 31, 2017: 72,093,308 and 71,425,120; outstanding
shares as of September 30, 2018 and December 31, 2017:
65,028,250 and 64,360,062
|
9,285
|
9,204
|
|
|
|
|
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, 2018 and December 31, 2017
respectively
|
3,124
|
3,124
|
|
|
|
|
Treasure
stock
|
(136,615)
|
(136,615)
|
|
|
Additional paid-in
capital
|
515,870
|
500,666
|
|
|
Accumulated other
comprehensive income
|
(70,833)
|
137,630
|
|
|
Retained
earnings
|
320,532
|
225,574
|
|
Total Fang
Holdings Limited shareholders' equity
|
641,363
|
739,583
|
|
|
Non-controlling
interests
|
693
|
692
|
|
Total
equity
|
642,056
|
740,275
|
|
TOTAL LIABILITIES
AND EQUITY
|
1,885,396
|
2,000,255
|
|
Condensed
Consolidated Statements of Comprehensive Income
|
(in thousands of
U.S. dollars, except share data and per share data)
|
|
|
|
|
|
Three months
ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2018
|
|
2017
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenues:
|
|
|
|
|
Marketing
services
|
35,725
|
|
37,265
|
|
Listing
services
|
29,237
|
|
47,175
|
|
Value-added
services
|
10,278
|
|
7,708
|
|
Financial
services
|
4,658
|
|
3,461
|
|
E-commerce
services
|
3,702
|
|
16,574
|
Total
revenues
|
83,600
|
|
112,183
|
|
|
|
|
|
Cost of
Revenues:
|
|
|
|
|
Cost of
services
|
(17,780)
|
|
(35,443)
|
Total Cost of
Revenues
|
(17,780)
|
|
(35,443)
|
|
|
|
|
|
Gross
Profit
|
65,820
|
|
76,740
|
|
|
|
|
|
Operating expenses
and income:
|
|
|
|
Selling
expenses
|
(21,035)
|
|
(16,921)
|
|
General and
administrative expenses
|
(29,845)
|
|
(41,758)
|
|
Other
income
|
318
|
|
302
|
|
|
|
|
|
Operating
Income
|
15,258
|
|
18,363
|
|
Foreign
exchange gain (loss)
|
7
|
|
(1)
|
|
Interest
income
|
4,877
|
|
3,196
|
|
Interest
expense
|
(5,810)
|
|
(4,538)
|
|
Investment
income
|
2,034
|
|
1,857
|
|
Government
grants
|
323
|
|
480
|
|
Other
non-operating income
|
442
|
|
-
|
|
Change in fair
value of securities
|
(11,752)
|
|
-
|
Income before
income taxes and noncontrolling interests
|
5,379
|
|
19,357
|
Income tax
expenses
|
|
|
|
|
Income tax
expenses
|
(3,101)
|
|
(4,124)
|
Net
income
|
2,278
|
|
15,233
|
|
Net loss
attributable to noncontrolling interests
|
(1)
|
|
-
|
Net income
attributable to Fang Holdings Limited shareholders
|
2,279
|
|
15,233
|
Other
comprehensive (loss) income, net of tax
|
|
|
|
Foreign currency
translation
|
(33,577)
|
|
17,739
|
|
Amounts reclassified
from accumulated other comprehensive
income
|
-
|
|
(801)
|
|
Unrealized gain on
available-for-sale security
|
-
|
|
102,032
|
|
(Loss) income on
intra-entity foreign transactions of
long-term-investment nature
|
(2,019)
|
|
1,544
|
Total other
comprehensive (loss) income, net of tax
|
(35,596)
|
|
120,514
|
Comprehensive
(loss) income
|
(33,318)
|
|
135,747
|
Earnings per share
for Class A and Class B ordinary shares:
|
|
Basic
|
0.03
|
|
0.17
|
|
Diluted
|
0.02
|
|
0.16
|
Earnings per
ADS:
|
|
|
|
|
Basic
|
0.01
|
|
0.03
|
|
Diluted
|
0.00
|
|
0.03
|
Weighted average
number of Class A and Class B ordinary shares
outstanding:
|
|
Basic
|
88,979,317
|
|
88,486,099
|
|
Diluted
|
91,242,914
|
|
94,093,312
|
Weighted average
number of ADSs outstanding:
|
|
|
|
Basic
|
444,896,584
|
|
442,430,494
|
|
Diluted
|
456,214,572
|
|
470,466,562
|
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,
|
|
September
30,
|
|
|
2018
|
|
2017
|
|
GAAP income from
operations
|
15,258
|
|
18,363
|
|
Share-based
compensation expense
|
3,671
|
|
1,390
|
|
Non-GAAP income
from operations
|
18,929
|
|
19,753
|
|
|
|
|
|
|
GAAP net
income
|
2,279
|
|
15,233
|
|
Reconciliation
items:
|
|
|
|
|
Share-based
compensation
|
3,671
|
|
1,390
|
|
Realized gain on
available-for-sale securities
|
-
|
|
(801)
|
|
Investment
income
|
(2,034)
|
|
(1,857)
|
|
Change in fair value
of securities
|
11,752
|
|
-
|
|
Subtotal
|
13,389
|
|
(1,268)
|
|
|
|
|
|
|
Tax impact of
reconciliation items
|
(3,378)
|
|
(155)
|
|
|
|
|
|
|
Non-GAAP net
income
|
12,290
|
|
13,810
|
|
|
|
|
|
|
GAAP earnings per
share for Class A and Class B ordinary
shares:
|
|
|
|
|
Basic
|
0.03
|
|
0.17
|
|
Diluted
|
0.02
|
|
0.16
|
|
GAAP earnings per
ADS:
|
|
|
|
|
Basic
|
0.01
|
|
0.03
|
|
Diluted
|
0.00
|
|
0.03
|
|
Non-GAAP earnings
per share for Class A and Class B
ordinary shares:
|
|
|
|
|
Basic
|
0.14
|
|
0.16
|
|
Diluted
|
0.13
|
|
0.15
|
|
Non-GAAP earnings
per ADS
|
|
|
|
|
Basic
|
0.03
|
|
0.03
|
|
Diluted
|
0.03
|
|
0.03
|
|
Weighted average
number of Class A and Class B ordinary
shares outstanding:
|
|
|
|
|
Basic
|
88,979,317
|
|
88,486,099
|
|
Diluted
|
91,242,914
|
|
94,093,312
|
Weighted average
number of ADSs outstanding:
|
|
|
|
Basic
|
444,896,584
|
|
442,430,494
|
|
Diluted
|
456,214,572
|
|
470,466,562
|
|
|
|
|
|
|
GAAP net
income
|
2,279
|
|
15,233
|
Add
back:
|
|
|
|
|
Share-based
compensation expense
|
3,671
|
|
1,390
|
|
Change in fair value
of securities
|
11,752
|
|
-
|
|
Interest
expense
|
5,810
|
|
4,538
|
|
Income tax
expenses
|
3,101
|
|
4,124
|
|
Depreciation
expenses
|
5,957
|
|
5,398
|
Subtract:
|
|
|
|
|
Investment
income
|
(2,034)
|
|
(1,857)
|
|
Interest
income
|
(4,877)
|
|
(3,196)
|
|
Realized gain on
available-for-sale securities
|
|
|
(801)
|
|
Adjusted
EBITDA
|
25,659
|
|
24,829
|
View original
content:http://www.prnewswire.com/news-releases/fang-announces-third-quarter-2018-results-300758165.html
SOURCE Fang Holdings Limited