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Fang Announces Third Quarter 2019 Results, Board Changes of Directors and Date of 2019 Annual General Meeting

November 18, 2019 GMT

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,
600,000,000 shares authorized for Class A and Class B in aggregate, issued
shares as of December 31, 2018 and September 30, 2019: 72,069,645 and

71,775,686; outstanding shares as of December 31, 2018 and September 30,
2019: 65,004,587 and 65,403,005

9,244

9,286



Class B ordinary shares, par value HK$1 per share, 600,000,000 shares
authorized for Class A and Class B in aggregate, and 24,336,650 shares and
24,336,650 shares issued and outstanding as at December 31, 2018 and
September 30, 2019, respectively

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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SOURCE Fang Holdings Limited