Third Quarter 2019 results: Fang sees board changes of Directors

Third Quarter 2019 Highlights

• Total revenues were $67.6 million, an increase of 11.8% from $60.4 million in the corresponding period of 2018.
• Operating income from continuing operations was $26.7 million, an increase of 164.8% from $10.1 million in the corresponding period of 2018.
• Net income was $0.7 million, a decrease of 92.8% from $10.2 million in the corresponding period of 2018.

Fang Holdings Limited, a leading real estate Internet portal in China, today announced its unaudited financial results for the third quarter ended September 30, 2019, a change in its board of directors and 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.

"Our marketing and leads generation services continued to generate growth for our business. 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."

— Jian Liu, CEO of Fang

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.   

• Revenue from marketing services was $30.0 million in the third quarter of 2019, an increase of 16.1% from $25.8 million in the corresponding period of 2018, driven by Fang's efforts in customer development.
• Revenue from listing services was $19.4 million in the third quarter of 2019, a decrease of 3.7% from $20.2 million in the corresponding period of 2018.
• Revenue from leads generation services was $14.1 million in the third quarter of 2019, an increase of 181.0% from $5.0 million in the corresponding period of 2018, driven by the increased effectiveness of the service and customer development.
• Revenue from financial services was $1.7 million in the third quarter of 2019, a decrease of 69.7% from $5.6 million in the corresponding period of 2018, due to a decrease in average loan receivable balances.

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.

• Selling expenses were $14.8 million in the third quarter of 2019, a decrease of 10.7% from $16.6 million in the corresponding period of 2018.
• General and administrative expenses were $21.7 million in the third quarter of 2019, a decrease of 7.1% from $23.4 million in the corresponding period of 2018.

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

Qian Zhao has resigned from the Board, effective from November 18, 2019. 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 Zhao for his efforts and contributions to the Company.

Fang has appointed 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.

Hong Qin has extensive real estate policy research experience. Qin is a senior research fellow at the National Institute of Development and Strategy of Renmin University of China since May 2019. 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. 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 the re-election of Howard Huyue Zhang as an independent director of the Board and a member and the chair of the audit committee of the Board, and the re-election of 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 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.

SOURCE Fang Holdings Limited