Fang releases results for 2Q19 and first half year 2019

Fang Holdings Limited, a leading real estate Internet portal in China, has announced its unaudited financial results for the second quarter and the first half-year ended June 30, 2019.

Second Quarter 2019 Highlights

• Total revenues were $67.6 million, an increase of 6.8% from $63.3 million in the corresponding period of 2018.
• Operating income from continuing operations was $29.0 million, compared to an operating loss from continuing operations of $9.6 million in the corresponding period of 2018. 
• Net income was $4.2 million, compared to a net loss of $53.5 million in the corresponding period of 2018.

First Half 2019 Highlights

• Total revenues were $102.6 million, a decrease of 8.7% from $112.3 million in the corresponding period of 2018.
• Operating income from continuing operations was $17.2 million, compared to an operating loss from continuing operations of $20.2 million in the corresponding period of 2018.
• Net income was $17.6 million, compared to a net loss of $98.4 million in the corresponding period of 2018.

"We are turning around and achieved revenue growth after many quarters of decrease," commented Jian Liu, CEO of Fang. "The main drivers behind this growth are marketing services and leads generation services, which will continue to generate growth into the coming quarters."

Second Quarter 2019 Results

Revenues

Fang reported total revenues of $67.6 million in the second quarter of 2019, an increase of 6.8% from $63.3 million in the corresponding period of 2018, mainly due to the increase in revenues from marketing services.   

Revenue from marketing services was $32.5 million in the second quarter of 2019, an increase of 19.3% from $27.2 million in the corresponding period of 2018, driven by Fang's efforts in customer development.

Revenue from listing services was $19.2 million in the second quarter of 2019, a decrease of 26.0% from $26.0 million in the corresponding period of 2018, mainly due to the decrease of paying members in listing services.

Revenue from leads generation services was $10.8 million in the second quarter of 2019, an increase of 290.2% from $2.8 million in the corresponding period of 2018, driven by the increased effectiveness of the service and customer development.

Revenue from financial services was $2.6 million in the second quarter of 2019, a decrease of 3.2% from $2.7 million in the corresponding period of 2018.

Cost of Revenue

Cost of revenue was $8.3 million in the second quarter of 2019, compared to $8.4 million in the corresponding period of 2018.

Operating Expenses

Operating expenses were $30.3 million in the second quarter of 2019, a decrease of 53.0% from $64.5 million in the corresponding period of 2018, mainly due to the decrease in bad debt and staff costs.

• Selling expenses were $16.1 million in the second quarter of 2019, an increase of 12.5% from $14.3 million in the corresponding period of 2018.
• General and administrative expenses were $15.7 million in the second quarter of 2019, a decrease of 69.1% from $50.7 million in the corresponding period of 2018, mainly due to the decrease in bad debt and staff costs.

Operating Income/Loss from Continuing Operations

Operating income from continuing operations was $29.0 million in the second quarter of 2019, compared to operating loss from continuing operations of $9.6 million in the corresponding period of 2018, mainly due to the decrease in operating expenses.

Change in Fair Value of Securities

Change in fair value of securities for the second quarter of 2019 was a loss of $48.5 million, compared to a loss of $82.9 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 $20.6 million in the second quarter of 2019, a decrease of 27.2% compared to income tax benefits of $28.3 million in the corresponding period of 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 taxes and interest.

Net Income/Loss

Net income was $4.2 million in the second quarter of 2019, compared to a net loss of $53.5 million in the corresponding period of 2018.

Cash

As of June 30, 2019, Fang had cash and cash equivalents, restricted cash (current and non-current) and short-term investments of $500.6 million, compared to $439.7 million as of December 31, 2018.

First half-year 2019 Results

Revenues

Fang reported total revenues of $102.6 million in the first half-year of 2019, a decrease of 8.7% from $112.3 million in the corresponding period of 2018.

Revenue from marketing services was $45.7 million in the first half-year of 2019, an increase of 5.3% from $43.4 million in the corresponding period of 2018, driven by Fang's efforts in customer development.

Revenue from listing services was $31.4 million in the first half-year of 2019, a decrease of 29.7% from $44.6 million in the corresponding period of 2018, mainly due to the decrease of paying members in listing services.

Revenue from leads generation services was $14.8 million in the second quarter of 2019, an increase of 281.2% from $3.9 million in the corresponding period of 2018, driven by the increased effectiveness of the service and customer development.

Revenue from financial services was $6.1 million in the first half-year of 2019, a decrease of 21.1% from $7.8 million in the corresponding period of 2018.

Cost of Revenue

Cost of revenue was $16.7 million in the first half-year of 2019, a decrease of 34.2% from $25.4 million in the corresponding period of 2018, primarily due to cost savings from optimizing Fang's core business.

Operating Expenses

Operating expenses were $68.6 million in the first half-year of 2019, a decrease of 36.0% from $107.2 million in the corresponding period of 2018, mainly due to the decrease in bad debt and staff costs.

• Selling expenses were $32.5 million in the first half-year of 2019, an increase of 16.9% from $27.8 million in the corresponding period of 2018.
• General and administrative expenses were $38.1 million in the first half-year of 2019, a decrease of 52.6% from $80.2 million in the corresponding period of 2018, mainly due to the decrease in bad debt and staff costs.

Operating Income/Loss from Continuing Operations

Operating income from continuing operations was $17.2 million in the first half-year of 2019, compared to an operating loss from continuing operations of $20.2 million in the corresponding period of 2018, mainly due to the decrease in operating expenses.

Change in Fair Value of Securities

Change in fair value of securities for the first half-year of 2019 was a loss of $16.5 million, compared to a loss of $125.2 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 $9.5 million in the first half-year of 2019, a decrease of 71.7% from $33.5 million in the corresponding period of 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 taxes and interest.

Net Income/Loss

Net income was $17.6 million in the first half-year of 2019, compared to a net loss of $98.4 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.

SOURCE Fang Holdings Limited

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