PR Newswire | Aug 14, 2020 05:54AM EDT

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08/14 04:53 CDT

Fang Announces Second Quarter and First Half Year 2020 Unaudited Financial Results BEIJING, Aug. 14, 2020

BEIJING, Aug. 14, 2020 /PRNewswire/ -- Fang Holdings Limited (NYSE: SFUN) ("Fang" or "we"), a leading real estate Internet portal in China, today announced its unaudited financial results for the second quarter and the first half year ended June 30, 2020.

Second Quarter 2020 Highlights

* Total revenues were $66.8 million, a decrease of 1.5% from $67.8 million in the corresponding period of 2019. * Operating income from continuing operations was $6.4 million, a decrease of 78.7% from $30.1 million in the corresponding period of 2019. * Net income was $21.5 million, an increase of 321.6% from $5.1 million in the corresponding period of 2019.

First Half 2020 Highlights

* Total revenues were $103.0 million, which remained relatively stable with $102.8 million in the corresponding period of 2019. * Operating income from continuing operations was $6.9 million, a decrease of 62.3% from $18.3 million in the corresponding period of 2019. * Net loss was $19.4 million, compared to net income of $18.5 million in the corresponding period of 2019.

"During the COVID-19 global pandemic, Fang remained solid financially in the first half of 2020," commented Mr. Jian Liu, CEO of Fang. "For the coming quarters we will continue our focus on new initiatives such as live broadcastings, online exhibitions and VR livestreams to better serve our customers."

Second Quarter 2020 Financial Results

Revenues

Fang reported total revenues of $66.8 million in the second quarter of 2020, a decrease of 1.5% from $67.8 million in the corresponding period of 2019, mainly due to the decrease in revenues from listing services.

* Revenue from marketing services was $32.1 million in the second quarter of 2020, a decrease of 1.2% from $32.5 million in the corresponding period of 2019. * Revenue from listing services was $14.2 million in the second quarter of 2020, a decrease of 26.0% from $19.2 million in the corresponding period of 2019, mainly due to the decrease in the number of paying customers. * Revenue from leads generation services was $17.3 million in the second quarter of 2020, an increase of 60.2% from $10.8 million in the corresponding period of 2019, mainly due to an increased acceptance and popularity of our leads generation services. * Revenue from financial services was $1.6 million in the second quarter of 2020, a decrease of 44.8% from $2.9 million in the corresponding period of 2019, mainly due to the decrease in average loan receivable balance.

Cost of Revenue

Cost of revenue was $3.6 million in the second quarter of 2020, a decrease of 56.3% from $8.3 million in the corresponding period of 2019, primarily due to the decline in sales and the optimization in cost structure.

Operating Expenses

Operating expenses were $56.2 million in the second quarter of 2020, an increase of 81.3% from $31.0 million in the corresponding period of 2019, mainly due to the increase in staff related costs.

* Selling expenses were $14.9 million in the second quarter of 2020, a decrease of 7.5% from $16.1 million in the corresponding period of 2019, mainly due to the decrease in staff related costs. * General and administrative expenses were $41.3 million in the second quarter of 2020, an increase of 177.2% from $14.9 million in the corresponding period of 2019, mainly due to the increase in staff related costs.

Operating Income from Continuing Operations

Operating income from continuing operations was $6.4 million in the second quarter of 2020, a decrease of 78.7% from $30.1 million in the corresponding period of 2019, mainly due to the increase in operating expenses.

Change in Fair Value of Securities

Change in fair value of securities for the second quarter of 2020 was a loss of $0.7 million, compared to a loss of $48.5 million in the corresponding period of 2019, mainly due to the fluctuation in market price of investments in equity securities.

Income Tax Benefits

Income tax benefits were $16.7 million in the second quarter of 2020, a decrease of 17.2% compared to income tax benefits of $20.1 million in the corresponding period of 2019, primarily due to the effect of change in fair value of equity securities.

Net Income

Net income was $21.5 million in the second quarter of 2020, an increase of 321.5% from $5.1 million in the corresponding period of 2019.

First half year 2020 Financial Results

Revenues

Fang reported total revenues of $103.0 million in the first half year of 2020, which remained relatively stable with $102.8 million in the corresponding period of 2019.

* Revenue from marketing services was $47.2 million in the first half of 2020, an increase of 3.3% from $45.7 million in the corresponding period of 2019, mainly due to the growth of company's new initiative such as live broadcastings., etc. * Revenue from listing services was $24.4 million in the first half of 2020, a decrease of 22.3% from $31.4 million in the corresponding period of 2019, mainly due to the decrease in the number of paying customers. * Revenue from leads generation services was $24.8 million in the first half of 2020, an increase of 67.6% from $14.8 million in the corresponding period of 2019. * Revenue from financial services was $3.3 million in the first half of 2020, a decrease of 48.4% from $6.4 million in the corresponding period of 2019, mainly due to the decrease in average loan receivable balance.

Cost of Revenue

Cost of revenue was $9.0 million in the first half year of 2020, a decrease of 46.1% from $16.7 million in the corresponding period of 2019, primarily due to cost savings from optimizing Fang's core business.

Operating Expenses

Operating expenses were $88.3 million in the first half year of 2020, an increase of 26.5% from $69.8 million in the corresponding period of 2019, mainly due to the increase in staff related costs.

* Selling expenses were $28.5 million in the first half year of 2020, a decrease of 12.3% from $32.5 million in the corresponding period of 2019, mainly due to the decrease in staff related costs. * General and administrative expenses were $59.8 million in the first half year of 2020, an increase of 60.3% from $37.3 million in the corresponding period of 2019, mainly due to the increase in staff related costs.

Operating Income from Continuing Operations

Operating income from continuing operations was $6.9 million in the first half year of 2020, a decrease of 62.3% from $18.3 million in the corresponding period of 2019, mainly due to the increase in operating expenses.

Change in Fair Value of Securities

Change in fair value of securities for the first half year of 2020 was a loss of $43.3 million, compared to a loss of $16.5 million in the corresponding period of 2019, mainly due to the fluctuation in market price of investments in equity securities.

Income Tax Benefits

Income tax benefits were $19.5 million in the first half year of 2020, an increase of 116.7% from $9.0 million in the corresponding period of 2019.

Net Income (Loss)

Net loss was $19.4 million in the first half year of 2020, compared to a net income of $18.5 million in the corresponding period of 2019.

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. EST (8:00 PM 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 1383200#

Please register in advance ofthe conference using the link provided below. Upon registering, you will be provided with participant dial-in numbers, Direct Event passcode (1383200#) and unique registrant ID. Get prompted 10 min prior to the start of the conference. Enter the Direct Event Passcode above (1383200#), 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/6379533

A telephone replay of the call will be available after the conclusion of the conference call from 11:00 AM ET on August 14, 2020 through 9:59 AM ETAugust 22, 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: 6379533

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 business development strategies, the impact of the COVID-19 pandemic, 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 June 30, December 31,

2020 2019

Current assets:

Cash and cash equivalents 85,461 105,282

Restricted cash, current 217,259 219,096

Short-term investments 148,382 194,720

Accounts receivable, net 87,885 66,379

Funds receivable 4,092 8,372

Prepayment and other current assets 32,834 31,509

Commitment deposits 185 188

Loans receivable, current 58,979 60,490

Amounts due from related parties 1,350 644

Total current assets 636,427 686,680

Non-current assets:

Property and equipment, net 676,564 695,457

Loans receivable, non-current - -

Deferred tax assets 13,220 6,570

Deposits for non-current assets 482 618

Restricted cash, non-current portion 40,917 42,452

Long-term investments 325,863 341,946

Other non-current assets 36,975 39,179

Total non-current assets 1,094,021 1,126,222

Total assets 1,730,448 1,812,902

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Short-term loans 361,220 367,403

Deferred revenue 130,083 134,143

Accrued expenses and other liabilities 100,695 120,244

Customers' refundable fees 3,703 4,981

Income tax payable 11,675 4,207

Amounts due to related parties 10,048 9,227

Total current liabilities 617,424 640,205

Non-current liabilities:

Long-term loans 178,365 184,158

Convertible senior notes 168,614 168,929

Deferred tax liabilities 92,080 90,723

Other non-current liabilities 107,217 138,435

Total non-current liabilities 546,276 582,245

Total Liabilities 1,163,700 1,222,450

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, 2019 and June 30, 2020: 71,775,686 and 9,244 9,244

71,775,686; outstanding shares as of December 31, 2019 and June 30, 2020: 65,403,527 and 65,403,527

Class B ordinary shares, par value HK$1 per share, 600,000,000 s hares authorized for Class A and Class B in aggregate, and 24,336,650 shares and 3,124 3,124 24,336,650 shares issued and outstanding as at December 31, 2019 and June 30, 2020, respectively

Treasury stock (123,216) (123,216)

Additional paid-in capital 536,352 528,620

Accumulated other comprehensive loss (110,381) (98,371)

Retained earnings 250,931 270,358

Total Fang Holdings Limited shareholders' equity 566,054 589,759

Non controlling interests 694 693

Total equity 566,748 590,452

TOTAL LIABILITIES AND EQUITY 1,730,448 1,812,902

^[i] Impact of the Separation of China Index Holdings Ltd (NASDAQ: CIH) ("CIH")on the Company'sFinancial Statements: The separation of CIH represents a strategic shift ofFang and has a major effecton Fang's results of operations, the business operated by CIH has beenreclassified as discontinuedoperations. For the periods presented in this press release, the results of thediscontinued operations,less applicable income taxes, are reported as a separate component of income,which is income fromdiscontinued operations, on the consolidated statements of comprehensive income(loss)

Unaudited Condensed Consolidated Statements of Comprehensive Income^[ii]

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

Three months ended Six months ended

June 30, June 30, June 30, June 30,

2020 2019 2020 2019

Revenues:

Marketing services 32,072 32,465 47,208 45,728

Listing services 14,197 19,212 24,413 31,371

Leads generation services 17,288 10,801 24,806 14,787

Value-added services 1,525 1,665 2,941 2,667

Financial services 1,557 2,926 3,283 6,425

E-commerce services 206 779 315 1,860

Total revenues 66,845 67,848 102,966 102,838

Cost of revenues:

Cost of services (3,603) (8,254) (9,010) (16,692)

Total cost of revenues (3,603) (8,254) (9,010) (16,692)

Gross profit 63,242 59,594 93,956 86,146

Operating expenses and income:

Selling expenses (14,889) (16,137) (28,450) (32,456)

General and administrative expenses (41,268) (14,900) (59,824) (37,293)

Other (expense) income (691) 1,508 1,223 1,895

Operating income from continuing operations 6,394 30,065 6,905 18,292

Foreign exchange (loss) gain (248) (371) 1,468 (633)

Interest income 2,198 1,630 6,121 3,319

Interest expense (3,806) (5,696) (12,267) (11,741)

Investment income, net 516 485 1,338 490

Realized gain on sale of available-for-sale - 573 - 871 securities

Change in fair value of securities (692) (48,513) (43,326) (16,464)

Government grants 441 465 810 700

Income (Loss) before income taxes and noncontrolling interests from continuingoperations 4,803 (21,362) (38,951) (5,166)

Income tax benefits

Income tax benefits 16,675 20,127 19,525 9,008

Net income (loss) from continuing operations, net of income taxes 21,478 (1,235) (19,426) 3,842

Income from discontinued operations, net of income - 6,349 - 14,672taxes

Net income (loss) 21,478 5,114 (19,426) 18,514

Net loss attributable to noncontrolling interests 1 - 1 -

Net income (loss) attributable to Fang Holdings Limited shareholders 21,477 5,114 (19,427) 18,514

Earnings /(loss) per share for Class A and Class B ordinary shares:

Basic 0.24 0.06 (0.22) 0.21

Diluted 0.24 0.06 (0.22) 0.20

Earnings /(loss) from continuing operations per share for Class A and Class Bordinary shares:

Basic (0.01) 0.04

Diluted (0.01) 0.04

Earnings from discontinued operations per share for Class A and Class Bordinary shares:

Basic 0.07 0.16

Diluted 0.07 0.16

^[ii] On June 19, 2020, a ratio change that had the same effect as a 1-for-10reverse ADS split took effect,and as a result, one ADS currently represents ten Class A ordinary shares.

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SOURCE Fang Holdings Limited