UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2013
Commission File Number: 001-34862
SOUFUN HOLDINGS LIMITED
(Exact name of registrant as specified in its charter)
F9M, Building 5, Zone E, Hanwei International Plaza, Fengmao South Road, Fengtai District
Beijing 100070, the People’s Republic of China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Unless we otherwise specify, when used in this Form 6-K the terms “SouFun,” “we” and “our” refer to SouFun Holdings Limited and its subsidiaries and consolidated controlled entities.
This Form 6-K contains our unaudited financial results as of and for the three and six months ended June 30, 2013 and a discussion of these results, which we previously publicly released on August 8, 2013.
This Form 6-K, excluding Exhibit 99.1, is hereby incorporated by reference into our Registration Statement on Form F-3 (Registration No. 333-181407).
Second Quarter 2013 Results
Revenues
SouFun reported total revenues of $144.1 million for the second quarter of 2013, representing an increase of 48.6% from the corresponding period in 2012, primarily driven by the growth in listing service and SouFun membership service.
Revenue from marketing services was $58.9 million for the second quarter of 2013, an increase of 5.9% from $55.7 million for the corresponding period in 2012.
Revenue from e-commerce services was $45.0 million for the second quarter of 2013, an 84.2% increase from $24.4 million for the same period in 2012, primarily due to the expansion of SouFun membership services in Beijing, Shanghai and other cities, including Chengdu and Chongqing.
Revenue from listing services was $38.4 million for the second quarter of 2013, an increase of 147.3% from $15.5 million for the corresponding period in 2012, primarily due to the substantial growth in agency subscribers.
Revenue from other value-added services was $1.8 million for the second quarter of 2013, an increase of 30.8% from $1.4 million for the corresponding period in 2012.
Cost of Revenue
Cost of revenue was $26.1 million for the second quarter of 2013, an increase of 43.5 % from $18.2 million for the corresponding period in 2012. The increase in cost of revenue was mainly driven by the increase in staff costs and taxes.
Gross margin was 81.9% for the second quarter of 2013, compared to 81.2% for the corresponding period in 2012.
-2-
Operating Expenses and Income
Operating expenses were $42.4 million for the second quarter of 2013, an increase of 35.5 % from $31.3 million for the corresponding period in 2012.
Selling expenses were $23.0 million for the second quarter of 2013, an increase of 34.0% from $17.1 million for the corresponding period in 2012, primarily due to increased staff cost.
General and administrative expenses were $19.4 million for the second quarter of 2013, an increase of 37.4% from $14.1 million for the corresponding period in 2012, primarily due to increased staff cost.
Operating income was $75.8 million for the second quarter of 2013, an increase of 59.6% from $47.5 million for the corresponding period in 2012, driven by revenue growth and effective cost control.
Income tax expense was $24.7 million for the second quarter of 2013, a 40.2% increase compared to $17.6 million for the corresponding period in 2012, mainly driven by profit growth.
Net income attributable to SouFun’s shareholders was $55.4 million for the second quarter of 2013, a 71.2% increase from $32.3 million for the corresponding period in 2012. Fully diluted earnings per share were $0.67 for the second quarter of 2013, a 67.5% increase from $0.40 for the corresponding period in 2012.
As of June 30, 2013, SouFun had cash, cash equivalents, and short-term investments (excluding the available-for-sale security) of $273.4 million, compared to $143.6 million as of December 31, 2012. Cash flow from operating activities was $79.6 million for the second quarter of 2013, a 79.7% increase from $44.3 million for the same period in 2012.
First Half 2013 Results
Revenues
SouFun reported total revenues of $235.2 million for the first half of 2013, representing an increase of 51.3% from the corresponding period in 2012, primarily driven by the growth in listing services and SouFun membership services.
Revenue from marketing services was $94.8 million for the first half of 2013, an increase of 5.4% from $89.9 million for the corresponding period in 2012.
Revenue from e-commerce services was $71.3 million for the first half of 2013, a 95.6% increase from $36.5 million for the same period in 2012, primarily due to the expansion of SouFun membership services in Beijing, Shanghai and other cities, including Chengdu and Chongqing.
Revenue from listing services was $65.3 million for the first half of 2013, an increase of 146.5% from $26.5 million for the corresponding period in 2012, primarily due to the substantial growth in agency subscribers.
-3-
Revenue from other value-added services was $3.8 million for the first half of 2013, an increase of 45.1% from $2.6 million for the corresponding period in 2012.
Cost of Revenue
Cost of revenue was $46.2 million for the first half of 2013, an increase of 32.9 % from $34.7 million for the corresponding period in 2012. The increase in cost of revenue was primarily due to the increase in staff costs and business taxes.
Gross margin was 80.4% for the first half of 2013, improved from 77.7% for the corresponding period in 2012 as a result of effective cost control and revenue growth.
Operating Expenses and Income
Operating expenses were $76.2 million for the first half of 2013, an increase of 29.1 % from $59.0 million for the corresponding period in 2012.
Selling expenses were $41.7 million for the first half of 2013, an increase of 32.0% from $31.6 million for the corresponding period in 2012, primarily due to increased staff cost.
General and administrative expenses were $34.5 million for the first half of 2013, an increase of 25.7% from $27.4 million for the corresponding period in 2012, primarily due to increased staff cost.
Operating income was $113.0 million for the first half of 2013, an increase of 83.1% from $61.7 million for the corresponding period in 2012, driven by revenue growth and effective cost control.
Income tax expense was $36.4 million for the first half of 2013, an 86.1% increase compared to $19.6 million for the corresponding period in 2012. The increase was primarily due to a $15.2 million incremental tax expense driven by profit growth and a $1.6 million one-time tax benefit in the first half of 2012.
Net income attributable to SouFun’s shareholders was $83.8 million for the first half of 2013, an increase of 78.7% from $46.9 million for the corresponding period in 2012. Fully diluted earnings per share were $1.01 for the first half of 2013, a 74.1% increase from $0.58 for the corresponding period in 2012.
Cash flow from operating activities was $139.4 million for the first half of 2013, a 97.4% increase from $70.7 million for the same period in 2012.
-4-
SouFun Holdings Limited
Condensed Consolidated Balance Sheets
(in U.S. dollars in thousands, except as noted)
| June 30, | Dec 31, | |||||||
| 2013 | 2012 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
255,557 | 118,167 | ||||||
| Short-term investments |
17,803 | 26,841 | ||||||
| Accounts receivable, net |
43,282 | 30,029 | ||||||
| Funds receivable |
17,635 | 7,600 | ||||||
| Prepayment and other current assets |
7,763 | 9,226 | ||||||
| Deferred tax assets, current |
2,875 | 2,734 | ||||||
|
|
|
|
|
|||||
| Total current assets |
344,915 | 194,597 | ||||||
|
|
|
|
|
|||||
| Non-current assets: |
||||||||
| Property and equipment, net |
221,212 | 79,564 | ||||||
| Restricted cash, non-current |
398,181 | 391,416 | ||||||
| Deferred tax assets, non-current |
2,084 | 1,723 | ||||||
| Deposit for non-current assets |
9,065 | 8,750 | ||||||
| Prepayment for BaoAn acquisition |
— | 111,367 | ||||||
| Other non-current assets |
19,234 | 13,744 | ||||||
|
|
|
|
|
|||||
| Total non-current assets |
649,776 | 606,564 | ||||||
|
|
|
|
|
|||||
| Total assets |
994,691 | 801,161 | ||||||
|
|
|
|
|
|||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Short-term loans |
270,670 | 270,670 | ||||||
| Deferred revenue |
113,700 | 65,871 | ||||||
| Accrued expenses and other liabilities |
100,766 | 89,306 | ||||||
| Customers’ refundable fees |
30,187 | 18,449 | ||||||
| Income tax payable |
16,851 | 23,659 | ||||||
| Amounts due to a related party |
175 | — | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
532,349 | 467,955 | ||||||
| Non-current liabilities: |
||||||||
| Long-term loans |
80,750 | 80,750 | ||||||
| Deferred tax liabilities, non-current |
93,714 | 64,947 | ||||||
| Other non-current liabilities |
473 | — | ||||||
|
|
|
|
|
|||||
| Total non-current liabilities |
174,937 | 145,697 | ||||||
|
|
|
|
|
|||||
| Total Liabilities |
707,286 | 613,652 | ||||||
|
|
|
|
|
|||||
| 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, and 56,532,480 shares and 56,013,735 shares issued and outstanding as at June 30, 2013 and December 31, 2012, respectively |
7,259 | 7,192 | ||||||
| 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 June 30, 2013 and December 31, 2012 , respectively |
3,124 | 3,124 | ||||||
| Additional paid-in capital |
76,671 | 69,637 | ||||||
| Accumulated other comprehensive income |
32,913 | 23,974 | ||||||
| Retained earnings |
166,729 | 82,952 | ||||||
|
|
|
|
|
|||||
| Total SouFun shareholders’ equity |
286,696 | 186,879 | ||||||
| Noncontrolling interests |
709 | 630 | ||||||
|
|
|
|
|
|||||
| Total equity |
287,405 | 187,509 | ||||||
|
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|
|
|
|||||
| TOTAL LIABILITIES AND EQUITY |
994,691 | 801,161 | ||||||
|
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|
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|
|||||
-5-
SouFun Holdings Limited
Condensed Consolidated Statements of Comprehensive Income
(in U.S. dollars in thousands, except share data and per ADS data)
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Revenues: |
||||||||||||||||
| Marketing services |
58,947 | 55,658 | 94,760 | 89,910 | ||||||||||||
| E-commerce services |
44,972 | 24,417 | 71,335 | 36,462 | ||||||||||||
| Listing services |
38,423 | 15,535 | 65,257 | 26,469 | ||||||||||||
| Other value-added services |
1,802 | 1,378 | 3,826 | 2,637 | ||||||||||||
|
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|
|
|
|
|
|
|
|||||||||
| Total revenues |
144,144 | 96,988 | 235,178 | 155,478 | ||||||||||||
| Cost of Revenues: |
||||||||||||||||
| Cost of services |
(26,124 | ) | (18,208 | ) | (46,154 | ) | (34,730 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Cost of Revenues |
(26,124 | ) | (18,208 | ) | (46,154 | ) | (34,730 | ) | ||||||||
| Gross Profit |
118,020 | 78,780 | 189,024 | 120,748 | ||||||||||||
| Operating expenses and income: |
||||||||||||||||
| Selling expenses |
(22,965 | ) | (17,136 | ) | (41,697 | ) | (31,594 | ) | ||||||||
| General and administrative expenses |
(19,424 | ) | (14,138 | ) | (34,484 | ) | (27,437 | ) | ||||||||
| Other income |
167 | — | 167 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Income |
75,798 | 47,506 | 113,010 | 61,717 | ||||||||||||
| Foreign exchange gain |
2 | 57 | 2 | 55 | ||||||||||||
| Interest income |
6,315 | 4,529 | 11,993 | 8,956 | ||||||||||||
| Interest expense |
(3,218 | ) | (2,593 | ) | (6,555 | ) | (5,210 | ) | ||||||||
| Government grants |
432 | 486 | 854 | 923 | ||||||||||||
| Other-than-temporary impairment on available-for-sale security |
— | — | — | (14 | ) | |||||||||||
| Realized gain on available-for-sale security (includes $821 accumulated other comprehensive income reclassifications for unrealized net gains on available-for-sale security) |
821 | — | 821 | — | ||||||||||||
| Gain on bargain purchase |
— | — | 102 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before income taxes and noncontrolling interests |
80,150 | 49,985 | 120,227 | 66,427 | ||||||||||||
| Income tax expenses |
||||||||||||||||
| Income tax expenses |
(24,747 | ) | (17,645 | ) | (36,380 | ) | (19,553 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
55,403 | 32,340 | 83,847 | 46,874 | ||||||||||||
| Net income attributable to noncontrolling interests |
35 | — | 70 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income attributable to SouFun shareholders |
55,368 | 32,340 | 83,777 | 46,874 | ||||||||||||
| Other comprehensive income, net of tax |
||||||||||||||||
| Foreign currency Translation |
8,323 | (1,742 | ) | 9,691 | (1,603 | ) | ||||||||||
| Realized gain on available-for-sale security |
(821 | ) | — | (821 | ) | — | ||||||||||
| Unrealized gain on available-for-sale security |
— | 500 | 78 | 500 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total other comprehensive income, net of tax |
7,502 | (1,242 | ) | 8,948 | (1,103 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Comprehensive income |
62,905 | 31,098 | 92,795 | 45,771 | ||||||||||||
|
|
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|
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|
|
|
|||||||||
| Earnings per share for Class A and Class B ordinary shares |
||||||||||||||||
| Basic |
0.71 | 0.42 | 1.07 | 0.61 | ||||||||||||
|
|
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|
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|
|||||||||
| Diluted |
0.67 | 0.40 | 1.01 | 0.58 | ||||||||||||
|
|
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|
|
|
|
|
|||||||||
| Weighted average number of Class A and Class B ordinary shares outstanding: |
||||||||||||||||
| Basic |
77,923,911 | 76,878,518 | 77,962,391 | 77,241,192 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted |
83,124,647 | 81,392,881 | 83,266,708 | 81,328,134 | ||||||||||||
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-6-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SOUFUN HOLDINGS LIMITED | ||||||
| By: | /s/ Vincent Tianquan Mo | |||||
| Name: | Vincent Tianquan Mo | |||||
| Title: | Executive Chairman | |||||
| Date: August 15, 2013 | ||||||
Exhibit Index
Exhibit 99.1 – Press Release
Exhibit 99.1
SOUFUN ANNOUNCES SECOND QUARTER 2013 RESULTS
BEIJING, Aug. 8, 2013 /PRNewswire/ — SouFun Holdings Limited (NYSE: SFUN) (“SouFun”), the leading real estate Internet portal in China, announced today its unaudited financial results for the second quarter of 2013.
Second Quarter 2013 Highlights
Revenue in the second quarter of 2013 was $144.1 million, a 48.6% increase from the corresponding period in 2012.
Operating income in the second quarter of 2013 was $75.8 million, a 59.6% increase from the corresponding period in 2012. Non-GAAP operating income in the second quarter of 2013 was $77.6 million, a 59.2% increase from the corresponding period in 2012.
Net income attributable to SouFun’s shareholders was $55.4 million, or $0.67 per fully diluted share, representing a year-over-year increase of 67.5%. Non-GAAP net income attributable to SouFun’s shareholders was $62.5 million, or $0.75 per fully diluted share, representing a year-over-year increase of 56.3%.
First Half 2013 Highlights
Revenue in the first half of 2013 was $235.2 million, a 51.3% increase from the corresponding period in 2012.
Operating income in the first half of 2013 was $113.0 million, an 83.1% increase from the corresponding period in 2012. Non-GAAP operating income in the first half of 2013 was $116.5 million, an 81.6% increase from the corresponding period in 2012.
Net income attributable to SouFun’s shareholders was $83.8 million, or $1.01 per fully diluted share, representing a year-over-year increase of 74.1%. Non-GAAP net income attributable to SouFun’s shareholders was $95.7 million, or $1.15 per fully diluted share, representing a year-over-year increase of 76.9%.
“We are proud of delivering another solid quarter and our 12th straight growth quarter above our guidance since SouFun’s IPO,” said Vincent Mo, Executive Chairman of SouFun. “We will continue to focus on products and services and invest in new technologies that will enhance SouFun’s websites and mobile applications for SouFun’s future growth and create long-term value for our shareholders.”
Second Quarter 2013 Results
Revenues
SouFun reported total revenues of $144.1 million for the second quarter of 2013, representing an increase of 48.6% from the corresponding period in 2012, primarily driven by the growth in listing service and SouFun membership service.
Revenue from marketing services was $58.9 million for the second quarter of 2013, an increase of 5.9% from $55.7 million for the corresponding period in 2012.
Revenue from e-commerce services was $45.0 million for the second quarter of 2013, an 84.2% increase from $24.4 million for the same period in 2012, primarily due to the expansion of SouFun membership services in Beijing, Shanghai and other cities, including Chengdu and Chongqing.
Revenue from listing services was $38.4 million for the second quarter of 2013, an increase of 147.3% from $15.5 million for the corresponding period in 2012, primarily due to the substantial growth in agency subscribers.
Revenue from other value-added services was $1.8 million for the second quarter of 2013, an increase of 30.8% from $1.4 million for the corresponding period in 2012.
Cost of Revenue
Cost of revenue was $26.1 million for the second quarter of 2013, an increase of 43.5 % from $18.2 million for the corresponding period in 2012. The increase in cost of revenue was mainly driven by the increase in staff costs and taxes.
Gross margin was 81.9% for the second quarter of 2013, compared to 81.2% for the corresponding period in 2012.
Operating Expenses and Income
Operating expenses were $42.4 million for the second quarter of 2013, an increase of 35.5 % from $31.3 million for the corresponding period in 2012.
Selling expenses were $23.0 million for the second quarter of 2013, an increase of 34.0% from $17.1 million for the corresponding period in 2012, primarily due to increased staff cost.
General and administrative expenses were $19.4 million for the second quarter of 2013, an increase of 37.4% from $14.1 million for the corresponding period in 2012, primarily due to increased staff cost.
Operating income was $75.8 million for the second quarter of 2013, an increase of 59.6% from $47.5 million for the corresponding period in 2012, driven by revenue growth and effective cost control.
Income tax expense was $24.7 million for the second quarter of 2013, a 40.2% increase compared to $17.6 million for the corresponding period in 2012, mainly driven by profit growth.
Net income attributable to SouFun’s shareholders was $55.4 million for the second quarter of 2013, a 71.2% increase from $32.3 million for the corresponding period in 2012. Fully diluted earnings per share were $0.67 for the second quarter of 2013, a 67.5% increase from $0.40 for the corresponding period in 2012.
Adjusted EBITDA, defined as non-GAAP net income before income taxes, interest expenses, interest income, depreciation and amortization, was $80.7 million for the second quarter of 2013, an increase of 58.7% as compared to $50.8 million for the corresponding period in 2012.
As of June 30, 2013, SouFun had cash, cash equivalents, and short-term investments (excluding the available-for-sale security) of $273.4 million, compared to $143.6 million as of December 31, 2012. Cash flow from operating activities was $79.6 million for the second quarter of 2013, a 79.7% increase from $44.3 million for the same period in 2012.
First Half 2013 Results
Revenues
SouFun reported total revenues of $235.2 million for the first half of 2013, representing an increase of 51.3% from the corresponding period in 2012, primarily driven by the growth in listing services and SouFun membership services.
Revenue from marketing services was $94.8 million for the first half of 2013, an increase of 5.4% from $89.9 million for the corresponding period in 2012.
Revenue from e-commerce services was $71.3 million for the first half of 2013, a 95.6% increase from $36.5 million for the same period in 2012, primarily due to the expansion of SouFun membership services in Beijing, Shanghai and other cities, including Chengdu and Chongqing.
Revenue from listing services was $65.3 million for the first half of 2013, an increase of 146.5% from $26.5 million for the corresponding period in 2012, primarily due to the substantial growth in agency subscribers.
Revenue from other value-added services was $3.8 million for the first half of 2013, an increase of 45.1% from $2.6 million for the corresponding period in 2012.
Cost of Revenue
Cost of revenue was $46.2 million for the first half of 2013, an increase of 32.9 % from $34.7 million for the corresponding period in 2012. The increase in cost of revenue was primarily due to the increase in staff costs and business taxes.
Gross margin was 80.4% for the first half of 2013, improved from 77.7% for the corresponding period in 2012 as a result of effective cost control and revenue growth.
Operating Expenses and Income
Operating expenses were $76.2 million for the first half of 2013, an increase of 29.1 % from $59.0 million for the corresponding period in 2012.
Selling expenses were $41.7 million for the first half of 2013, an increase of 32.0% from $31.6 million for the corresponding period in 2012, primarily due to increased staff cost.
General and administrative expenses were $34.5 million for the first half of 2013, an increase of 25.7% from $27.4 million for the corresponding period in 2012, primarily due to increased staff cost.
Operating income was $113.0 million for the first half of 2013, an increase of 83.1% from $61.7 million for the corresponding period in 2012, driven by revenue growth and effective cost control.
Income tax expense was $36.4 million for the first half of 2013, an 86.1% increase compared to $19.6 million for the corresponding period in 2012. The increase was primarily due to a $15.2 million incremental tax expense driven by profit growth and a $1.6 million one-time tax benefit in the first half of 2012.
Net income attributable to SouFun’s shareholders was $83.8 million for the first half of 2013, an increase of 78.7% from $46.9 million for the corresponding period in 2012. Fully diluted earnings per share were $1.01 for the first half of 2013, a 74.1% increase from $0.58 for the corresponding period in 2012.
Adjusted EBITDA, defined as non-GAAP net income before income taxes, interest expenses, interest income, depreciation and amortization, was $121.6 million for the first half of 2013, an increase of 78.0% as compared to $68.3 million for the corresponding period in 2012.
Cash flow from operating activities was $139.4 million for the first half of 2013, a 97.4% increase from $70.7 million for the same period in 2012.
Business Outlook
SouFun raises its total revenue guidance for 2013 from between $527.0 million and $538.0 million to between $538.0 million and $548.0 million, or from a year-over-year increase of between 22.5% and 25.0% to between 25.0% and 27.5%, despite uncertainties in China’s property market for the second half of 2013. This forecast reflects SouFun’s current and preliminary view, which is subject to change.
Conference Call Information
SouFun’s management team will host a conference call on August 8, 2013 at 8 a.m. U.S. Eastern Daylight Time (8 p.m. Beijing/Hong Kong time).
The dial-in details for the live conference call are:
| International Toll Dial-In Number: | +65 6723 9381 | |
| International Toll Free Dial-In Number(s): | ||
| Hong Kong | 800 930 346 | |
| United States | +1 866 519 4004 | |
| Local Dial-In Number(s): | ||
| Mainland China | 400 620 8038 / 800 819 0121 | |
| Hong Kong | +852 2475 0994 | |
| United States, New York | +845 675 0437 | |
| Passcode: | SFUN | |
| Conference ID # 21467448 |
Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call.
A telephone replay of the call will be available after the conclusion of the conference call at 10:00 a.m. U.S. Eastern Daylight Time on August 8 through August 15, 2013. The dial-in details for the telephone replay are:
| International: | +61 2 8199 0299 | |
| Toll Free: | ||
| Mainland China | 400 120 0931 / 400 120 0932 / 800 870 0205 | |
| Hong Kong | 800 963 117 | |
| United States | +1 855 452 5696 | |
| Local Toll: | ||
| Hong Kong | +852 3051 2780 | |
| United States, New York | +646 254 3697 | |
| Conference ID # 21467448 |
A live and archived webcast of the conference call will be available on SouFun’s website at http://ir.soufun.com.
About SouFun
SouFun operates the leading real estate Internet portal in China in terms of the number of page views and visitors to our websites in 2012. Through SouFun’s websites, it provides marketing, e-commerce, listing, and other value-added services for China’s fast-growing real estate and home-related sectors. SouFun’s Internet portal is highly focused on user experience, and supports SouFun’s users in seeking information on the real estate and home-related sectors in China. SouFun currently maintains about 100 offices to focus on local market needs and its website and database contains real estate related content covering more than 320 cities in China. For more information about SouFun, please visit http://ir.soufun.com.
Safe Harbor Statements
This announcement 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. Such forward-looking statements include, without limitation, statements regarding the revenue outlook for 2013 and statements regarding SouFun’s strategic and operational plans and focus, current and future market positions the impact of government policies and China’s real estate and home furnishings market. Statements that are not historical facts, including statements about SouFun’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, SouFun’s limited operating history, current global economic conditions and their potential impact on the Chinese economy, measures taken or to be taken by the Chinese government to control real estate growth and prices and other events which could occur in the future, challenges in China’s real estate market, the impact of competitive market conditions for our services and our ability to maintain and increase our leadership in China’s home related internet sector, the uncertain regulatory landscape in China, fluctuations in our quarterly operating results, our continued ability to execute business strategies including our SouFun membership services and SouFun Online Shop, our ability to continue to expand in local markets, our reliance on online advertising sales and listing services for our revenues, any failure to successfully develop and expand our content, service offerings and features, including the success of new features to meet evolving market needs, and the technologies that support them, and, should we in the future make acquisitions, any failure to successfully integrate acquired businesses.
Further information regarding these and other risks and uncertainties is included in our annual report on form 20-F and other documents we have filed with the U.S. Securities and Exchange Commission. SouFun does not assume any obligation to update any forward-looking statements in this release and elsewhere, which apply only as of the date of this press release.
About Non-GAAP Financial Measures
To supplement SouFun’s consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles (“GAAP”), SouFun uses in this press release the following measures defined as non-GAAP financial measures by the United States Securities and Exchange Commission: (1) operating income, (2) net income and (3) basic and diluted earnings per ordinary share. 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.
SouFun believes that these non-GAAP financial measures provide meaningful supplemental information to investors regarding its operating performance by excluding share-based compensation expenses and the related tax effects, as well as realized gain on available-for-sale security for the three months ended June 30, 2013, which (1) may not be indicative of SouFun’s recurring core business operating results or (2) are not expected to result in future cash payments. These non-GAAP financial measures also facilitate management’s internal comparisons to SouFun’s historical performance and assist its financial and operational decision making. A limitation of using these non-GAAP financial measures is that share-based compensation has been and will continue to be a significant recurring expense that will continue to exist in SouFun’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.
For investor and media inquiries, please contact:
Mr. Hong Zhao
Vice President of Finance
SouFun Holdings Limited
Phone: +86-10-5631-8707
Email: hongzhao@soufun.com
Or
Ms. Yiwen Zhang
Investor Relations Manager
SouFun Holdings Limited
Phone: +86-10-5631 8659
E-mail: zhangyiwen@soufun.com
SouFun Holdings Limited
Condensed Consolidated Balance Sheets
(in U.S. dollars in thousands, except as noted)
| June 30, | Dec 31, | |||||||
| 2013 | 2012 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
255,557 | 118,167 | ||||||
| Short-term investments |
17,803 | 26,841 | ||||||
| Accounts receivable, net |
43,282 | 30,029 | ||||||
| Funds receivable |
17,635 | 7,600 | ||||||
| Prepayment and other current assets |
7,763 | 9,226 | ||||||
| Deferred tax assets, current |
2,875 | 2,734 | ||||||
|
|
|
|
|
|||||
| Total current assets |
344,915 | 194,597 | ||||||
|
|
|
|
|
|||||
| Non-current assets: |
||||||||
| Property and equipment, net |
221,212 | 79,564 | ||||||
| Restricted cash, non-current |
398,181 | 391,416 | ||||||
| Deferred tax assets, non-current |
2,084 | 1,723 | ||||||
| Deposit for non-current assets |
9,065 | 8,750 | ||||||
| Prepayment for BaoAn acquisition |
— | 111,367 | ||||||
| Other non-current assets |
19,234 | 13,744 | ||||||
|
|
|
|
|
|||||
| Total non-current assets |
649,776 | 606,564 | ||||||
|
|
|
|
|
|||||
| Total assets |
994,691 | 801,161 | ||||||
|
|
|
|
|
|||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Short-term loans |
270,670 | 270,670 | ||||||
| Deferred revenue |
113,700 | 65,871 | ||||||
| Accrued expenses and other liabilities |
100,766 | 89,306 | ||||||
| Customers’ refundable fees |
30,187 | 18,449 | ||||||
| Income tax payable |
16,851 | 23,659 | ||||||
| Amounts due to a related party |
175 | — | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
532,349 | 467,955 | ||||||
| Non-current liabilities: |
||||||||
| Long-term loans |
80,750 | 80,750 | ||||||
| Deferred tax liabilities, non-current |
93,714 | 64,947 | ||||||
| Other non-current liabilities |
473 | — | ||||||
|
|
|
|
|
|||||
| Total non-current liabilities |
174,937 | 145,697 | ||||||
|
|
|
|
|
|||||
| Total Liabilities |
707,286 | 613,652 | ||||||
|
|
|
|
|
|||||
| 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, and 56,532,480 shares and 56,013,735 shares issued and outstanding as at June 30, 2013 and December 31, 2012, respectively |
7,259 | 7,192 | ||||||
| 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 June 30, 2013 and December 31, 2012 , respectively |
3,124 | 3,124 | ||||||
| Additional paid-in capital |
76,671 | 69,637 | ||||||
| Accumulated other comprehensive income |
32,913 | 23,974 | ||||||
| Retained earnings |
166,729 | 82,952 | ||||||
|
|
|
|
|
|||||
| Total SouFun shareholders’ equity |
286,696 | 186,879 | ||||||
| Noncontrolling interests |
709 | 630 | ||||||
|
|
|
|
|
|||||
| Total equity |
287,405 | 187,509 | ||||||
|
|
|
|
|
|||||
| TOTAL LIABILITIES AND EQUITY |
994,691 | 801,161 | ||||||
|
|
|
|
|
|||||
SouFun Holdings Limited
Condensed Consolidated Statements of Comprehensive Income
(in U.S. dollars in thousands, except share data and per ADS data)
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Revenues: |
||||||||||||||||
| Marketing services |
58,947 | 55,658 | 94,760 | 89,910 | ||||||||||||
| E-commerce services |
44,972 | 24,417 | 71,335 | 36,462 | ||||||||||||
| Listing services |
38,423 | 15,535 | 65,257 | 26,469 | ||||||||||||
| Other value-added services |
1,802 | 1,378 | 3,826 | 2,637 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total revenues |
144,144 | 96,988 | 235,178 | 155,478 | ||||||||||||
| Cost of Revenues: |
||||||||||||||||
| Cost of services |
(26,124 | ) | (18,208 | ) | (46,154 | ) | (34,730 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total Cost of Revenues |
(26,124 | ) | (18,208 | ) | (46,154 | ) | (34,730 | ) | ||||||||
| Gross Profit |
118,020 | 78,780 | 189,024 | 120,748 | ||||||||||||
| Operating expenses and income: |
||||||||||||||||
| Selling expenses |
(22,965 | ) | (17,136 | ) | (41,697 | ) | (31,594 | ) | ||||||||
| General and administrative expenses |
(19,424 | ) | (14,138 | ) | (34,484 | ) | (27,437 | ) | ||||||||
| Other income |
167 | — | 167 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating Income |
75,798 | 47,506 | 113,010 | 61,717 | ||||||||||||
| Foreign exchange gain |
2 | 57 | 2 | 55 | ||||||||||||
| Interest income |
6,315 | 4,529 | 11,993 | 8,956 | ||||||||||||
| Interest expense |
(3,218 | ) | (2,593 | ) | (6,555 | ) | (5,210 | ) | ||||||||
| Government grants |
432 | 486 | 854 | 923 | ||||||||||||
| Other-than-temporary impairment on available-for-sale security |
— | — | — | (14 | ) | |||||||||||
| Realized gain on available-for-sale security (includes $821 accumulated other comprehensive income reclassifications for unrealized net gains on available-for-sale security) |
821 | — | 821 | — | ||||||||||||
| Gain on bargain purchase |
— | — | 102 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Income before income taxes and noncontrolling interests |
80,150 | 49,985 | 120,227 | 66,427 | ||||||||||||
| Income tax expenses |
||||||||||||||||
| Income tax expenses |
(24,747 | ) | (17,645 | ) | (36,380 | ) | (19,553 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income |
55,403 | 32,340 | 83,847 | 46,874 | ||||||||||||
| Net income attributable to noncontrolling interests |
35 | — | 70 | — | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net income attributable to SouFun shareholders |
55,368 | 32,340 | 83,777 | 46,874 | ||||||||||||
| Other comprehensive income, net of tax |
||||||||||||||||
| Foreign currency Translation |
8,323 | (1,742 | ) | 9,691 | (1,603 | ) | ||||||||||
| Realized gain on available-for-sale security |
(821 | ) | — | (821 | ) | — | ||||||||||
| Unrealized gain on available-for-sale security |
— | 500 | 78 | 500 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total other comprehensive income, net of tax |
7,502 | (1,242 | ) | 8,948 | (1,103 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Comprehensive income |
62,905 | 31,098 | 92,795 | 45,771 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Earnings per share for Class A and Class B ordinary shares |
||||||||||||||||
| Basic |
0.71 | 0.42 | 1.07 | 0.61 | ||||||||||||
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|
|
|
|
|
|
|
|||||||||
| Diluted |
0.67 | 0.40 | 1.01 | 0.58 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Weighted average number of Class A and Class B ordinary shares outstanding: |
||||||||||||||||
| Basic |
77,923,911 | 76,878,518 | 77,962,391 | 77,241,192 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Diluted |
83,124,647 | 81,392,881 | 83,266,708 | 81,328,134 | ||||||||||||
|
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|
|
|
|
|
|
|||||||||
SouFun Holdings Limited
Reconciliation of GAAP and Non-GAAP Results
(in U.S. dollars in thousands, except share data and per share data)
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| GAAP income from operations |
75,798 | 47,506 | 113,010 | 61,717 | ||||||||||||
| Share-based compensation expense |
1,761 | 1,202 | 3,524 | 2,464 | ||||||||||||
| Non-GAAP income from operations |
77,559 | 48,708 | 116,534 | 64,181 | ||||||||||||
| GAAP net income |
55,403 | 32,340 | 83,847 | 46,874 | ||||||||||||
| One-off tax benefit |
— | — | — | (1,631 | ) | |||||||||||
| Withholding tax related to dividends |
6,156 | 5,208 | 9,305 | 5,208 | ||||||||||||
| Other-than-temporary impairment on available-for-sale security |
— | — | — | 14 | ||||||||||||
| Realized gain on available-for-sale security (includes $821 accumulated other comprehensive income reclassifications for unrealized net gains on available-for-sale security) |
(821 | ) | — | (821 | ) | — | ||||||||||
| Share-based compensation expense |
1,761 | 1,202 | 3,524 | 2,464 | ||||||||||||
| Gain on bargain purchase |
— | — | (102 | ) | — | |||||||||||
| Non-GAAP net income |
62,499 | 38,750 | 95,753 | 52,929 | ||||||||||||
| Net Income attributable to SouFun shareholders |
55,368 | 32,340 | 83,777 | 46,874 | ||||||||||||
| One-off tax benefit |
— | — | — | (1,631 | ) | |||||||||||
| Withholding tax related to dividends |
6,156 | 5,208 | 9,305 | 5,208 | ||||||||||||
| Other-than-temporary impairment on available-for-sale security |
— | — | — | 14 | ||||||||||||
| Realized gain on available-for-sale security (includes $821 accumulated other comprehensive income reclassifications for unrealized net gains on available-for-sale security) |
(821 | ) | — | (821 | ) | — | ||||||||||
| Share-based compensation expense |
1,761 | 1,202 | 3,524 | 2,464 | ||||||||||||
| Gain on bargain purchase |
— | — | (102 | ) | — | |||||||||||
| Non-GAAP net Income attributable to SouFun Holdings Limited shareholders |
62,464 | 38,750 | 95,683 | 52,929 | ||||||||||||
| GAAP earnings per share for Class A and Class B ordinary shares: |
||||||||||||||||
| Basic |
0.71 | 0.42 | 1.07 | 0.61 | ||||||||||||
| Diluted |
0.67 | 0.40 | 1.01 | 0.58 | ||||||||||||
| Non-GAAP earnings per share for Class A and Class B ordinary shares: |
||||||||||||||||
| Basic |
0.80 | 0.50 | 1.23 | 0.69 | ||||||||||||
| Diluted |
0.75 | 0.48 | 1.15 | 0.65 | ||||||||||||
| Weighted average number of Class A and Class B ordinary shares outstanding: |
||||||||||||||||
| Basic |
77,923,911 | 76,878,518 | 77,962,391 | 77,241,192 | ||||||||||||
| Diluted |
83,124,647 | 81,392,881 | 83,266,708 | 81,328,134 | ||||||||||||
SouFun Holdings Limited
Reconciliation of Non-GAAP and Adjusted EBITDA
(in U.S. dollars in thousands)
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | June 30, | June 30, | |||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Non-GAAP |
||||||||||||||||
| Net income |
62,499 | 38,750 | 95,753 | 52,929 | ||||||||||||
| Add back: |
||||||||||||||||
| Interest expense |
3,218 | 2,593 | 6,555 | 5,210 | ||||||||||||
| Income tax expenses |
18,591 | 12,437 | 27,075 | 15,976 | ||||||||||||
| Depreciation expenses |
2,663 | 1,573 | 4,162 | 3,110 | ||||||||||||
| Subtract: |
||||||||||||||||
| Interest income |
(6,315 | ) | (4,529 | ) | (11,993 | ) | (8,956 | ) | ||||||||
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|
|||||||||
| Adjusted EBITDA |
80,656 | 50,824 | 121,552 | 68,269 | ||||||||||||
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