Printer Friendly Version View printer-friendly version
<< Back
Fang Announces Fourth Quarter and Fiscal Year 2016 Results

BEIJING, March 31, 2017 /PRNewswire/ -- Fang Holdings Limited (NYSE: SFUN) ("Fang" or "we"), the leading real estate Internet portal in China, today announced its unaudited financial results for fourth quarter and fiscal year ended December 31, 2016.

Fourth Quarter 2016 Highlights

  • Total revenues were $174.7 million.
  • Operating loss was $8.9 million. Non-GAAP operating loss was $6.4 million. A description of the adjustments from GAAP to non-GAAP operating income is detailed in the Reconciliation Statement following this press release.
  • Net loss attributable to Fang's shareholders was $10.4 million. Fully diluted loss per ADS was 0.02.
  • Non-GAAP net loss attributable to Fang's shareholders was $8.9 million. Non-GAAP fully diluted loss per ADS was 0.02. A description of the adjustments from GAAP to non-GAAP net loss attributable to Fang's shareholders and fully diluted loss per ADS is detailed in the Reconciliation Statement following this press release.
  • Net cash generated from operating activities was $85.1 million in the fourth quarter of 2016, compared to cash flow used in operating activities $31.6 million in the same period of 2015

"I admit that our two-year long transformation is a failure up to today. We did not know in depth of the new markets and new business lines. We were too aggressive in transformations at the same time with all of our business lines," said Vincent Mo, Chairman and CEO of Fang.com. "We are making adjustments to our transformations. We will return to open-platform strategy in which we will support and facilitate businesses of our partners including developers, brokers and agents, property owners and buyers, and other home related companies and professionals."

Fourth Quarter 2016 Results

Revenues

Fang reported total revenues of $174.7 million in the fourth quarter of 2016, a 42% decrease from $300.7 million in the corresponding period of 2015, primarily due to the decline in e-commerce and marketing services. 

Revenue from e-commerce services was $89.9 million in the fourth quarter of 2016, a decrease of 48% from $173.9 million in the corresponding period of 2015. The decline was primarily due to the decreased transaction volume impacted by the tightening regulations, as well as the strategic change to have scaled down on rental and home furnishing business.

Revenue from marketing services was $48.0 million in the fourth quarter of 2016, a decrease of 42% from $83.0 million in the corresponding period of 2015, primarily due to less demand from property developers for online advertising under the regulatory change. 

Revenue from listing services was $38.6 million in the fourth quarter of 2016, an increase of 74.0% from $22.3 million in the corresponding period of 2015, driven by the increased number of paying members and unit price.

Revenue from Internet financial services was $0.6 million in the fourth quarter of 2016, a decrease of 96.0% from $15.6 million in the corresponding period of 2015, primarily due to the policy impact on the new home financial services and the decreased secondary transaction volumes of the Company's own brokerage services.

Revenue from other value-added services was negative $2.4 million in the fourth quarter of 2016, compared to $5.9 million in the corresponding period of 2015, primarily due to the re-classification accounting treatment of BaoAn's revenue.

Cost of Revenue

Cost of revenue was $89.4 million in the fourth quarter of 2016, a decrease of 59.1% from $218.4 million in the corresponding period of 2015. The decrease in cost of revenue was mainly due to the downsizing of the secondary agent team and the scaling down of rental and home furnishing in ecommerce services.

Operating Expense

Operating expenses were $94.6 million in the fourth quarter of 2016, a decrease of 18% from $114.9 million in the corresponding period of 2015.

Selling expenses were $59.2 million in the fourth quarter of 2016, a decrease of 27.2% from $81.3 million in the mainly due to the decrease of sales staff cost.

General and administrative expenses were $35.3 million in the fourth quarter of 2016, an increase of 5.2% from $33.6 million for the corresponding period of 2015, primarily due to the increased bad-debt expense.

Operating Loss/Income

Operating loss was $8.9 million in the fourth quarter of 2016, compared to operating loss of $32.6 million in the corresponding period of 2015, which is attributable to the strategic change of optimization and effective cost control.

Income Tax Benefit/Expenses

Income tax expenses were $3.1 million in the fourth quarter of 2016, compared to income tax expenses of $7.5 million in the corresponding period of 2015.

Net Loss and EPS

Net loss attributable to Fang's shareholders was $10.4 million in the fourth quarter of 2016, compared to net loss of $38.8 million in the corresponding period of 2015. Loss per fully-diluted ordinary share and ADS were $0.11 and $0.02 in the fourth quarter of 2016, compared to loss of $0.44 and $0.09, respectively, in the corresponding period of 2015.

Adjusted EBITDA

Adjusted EBITDA, defined as non-GAAP net income before income taxes, interest expenses, interest income, depreciation and amortization, was $2.4 million in the fourth quarter of 2016, compared to the loss of $23.4 million in the corresponding period of 2015.

Cash

As of December 31, 2016, Fang had cash, cash equivalents, and short-term investments of $590.5 million, compared to $983.7 million as of December 31, 2016. Net cash generated from operating activities was $85.1 million in the fourth quarter of 2016, compared to cash flow used in operating activities of $31.6 million in the same period of 2015, primarily due to the decrease of loan receivables of $80.4 million for the three months ended December 31, 2016.

Fiscal Year 2016 Results

Revenues

Fang reported total revenues of $916.4 million for 2016, representing an increase of 4% from $883.5 million for 2015, primarily driven by the growth in e-commerce services.

Revenue from marketing services was $165.4 million for 2016, a decrease of 34% from $249.9million for 2015, primarily due to less demand from property developers.

Revenue from e-commerce services was $577.7 million for 2016, an increase of 22% from $474.8 million for 2015, primarily driven by the fast growth of our secondary brokerage services.

Revenue from listing services was $118.1 million for 2016, an increase of 9% from $107.9 million for 2015, driven by the increased number of paying member and unit price.

Revenue from financial services was $29.6 million for 2016, flat with $29.6 million in 2015

Revenue from other value-added services was $25.6 million for 2016, an increase of 20% from $21.4 million for 2015, primarily driven by the rapid growth of our research related products.

Cost of Revenue

Cost of revenue was $687.2 million for 2016, an increase of 23.7% from $555.4 million for 2015. The increase in cost of revenue was mainly due to the increased staff cost in secondary brokerage services.

Operating Expenses

Operating expenses were $381.1 million for 2016, an increase of 5.3% from $362.0 million for 2015.

Selling expenses were $229.8 million for 2016, a decrease of 2.9% from $236.6 million for 2015, primarily due to slightly decreased staff cost in selling expenses.

General and administrative expenses were $151.3 million for 2016, an increase of 20.6% from $125.4 million for 2015, primarily due to increased bad-debt expense.

Operating Loss

Operating loss was $151.5 million for 2016, compare with operating loss of $34.5 million for 2015.

Income Tax Expenses/Benefit

Income tax expenses were $25.0 million for 2016, compared to $5.9 million of income tax benefit for the corresponding period in 2015. The expenses increase was primarily due to no reversal or accrual of withholding tax for the dividend declared in 2016.

Net Loss and EPS

Net loss attributable to Fang's shareholders was $169.6 million for 2016, compared to $15.1 million for the corresponding period in 2015. Fully diluted loss per ADS was $0.36 for 2016, compared to $0.04 for 2015.

Adjusted EBITDA

Adjusted EBITDA, defined as non-GAAP net income before income taxes, interest expenses, interest income, depreciation and amortization, was $121.2 million of loss for 2016, compared to $9.6 million of loss for 2015.

Cash

Cash generated from operating activities was $131.2 million for 2016, compared to net cash used in operating activities $165.3 million for 2015, primarily due to the decrease of loan receivables of $263.6 million for the three months ended December 31, 2016.

Business Outlook

The Company is undergoing adjustments to its transformations and the company is planning to return to open-platform strategy. Before these changes are finalized, the company will see a decrease in its top line revenue but will expect to be profitable for the whole year 2017.

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 67135090

Local Toll:


United States

+1 845-675-0437 / +1 866-519-4004

Hong Kong

+852 3018-6771 / +852 800-906-601

Mainland China

+86 400-620-8038 / +86 800-819-0121

Passcode:

SFUN

A telephone replay of the call will be available after the conclusion of the conference call from 11:00 ET on Mar 31, 2017 through 9:59 ET April 8, 2017. The dial-in details for the telephone replay are:

International Toll:

+61 2-8199-0299

Toll-Free:


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:

94961713


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 the leading real estate Internet portal in China in terms of the number of page views and visitors to its websites. Through our websites, we provide e-commerce, marketing, listing, financial and other value-added services for China's fast-growing real estate and home furnishing and improvement sectors. Our 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 about 100 offices to focus on local market needs and its website and database contains real estate related content covering more than 629 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. Such forward-looking statements include, without limitation, statements regarding Fang's future financial performance, revenue guidance for 2017, growth and growth rates, and market position and continued business transformation. Statements that are not historical facts, including statements about Fang'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, without limitation, the impact of Fang's transformation from a pure Internet information platform to a transaction-oriented platform, the impact of Fang's implementation of a "zero tolerance policy" that has resulted in dismissal of employees, the impact of the slowdown in China's real estate market on Fang and the impact on revenues of our existing and new service fees reductions, the ability of Fang to retain real estate listing agencies as customers during challenging economic periods, the success of Fang's new business initiatives, the ability of Fang to manage its operating expenses, the impact of, 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, economic challenges in China's real estate market, the impact of competitive market conditions for our services, 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 and transactions 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, the quality of the loans we originate and resell and the performance of those loans in the future, our ability to successfully service and process customer loans for our own benefit and for the purchasers of those loans and, should we in the future make acquisitions, any failure to successfully integrate acquired businesses.

For investor and media inquiries, please contact:

Dr. Hua Lei
CFO
Phone: +86-10-5631-8661
Email: leihua@fang.com

Ms. Joyce Tang
Senior Investor Relations Manager
Phone: +86-10-5631 8659
Email: tangjunning@fang.com

Ms. Dana Cheng
Investor Relations Manager
Phone: +86-10-5631 8174
Email: chengyu.bj@fang.com  

 

Fang Holdings Limited 

Condensed Consolidated Balance Sheets

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

 ASSETS 

 December 31, 

 December 31, 


2,016

2,015

 Current assets: 

 (Unaudited) 

 (Audited) 


 Cash and cash equivalents 

336,528

817,921


 Restricted cash, current 

211,084

103,179


 Short-term investments 

42,929

62,559


 Accounts receivable, net  

93,672

147,516


 Funds receivable 

20,483

45,400


 Prepayment and other current assets  

39,824

60,265


 Commitment deposits 

6,527

10,646


 Loan receivable, current 

41,966

266,990


 Amount due from related parties 

197

262

 Total current assets   

793,210

1,514,738

 Non-current assets: 




 Property and equipment, net 

319,897

326,504


 Loan receivable, non-current 

16,808

55,349


 Deferred tax assets, non-current 

4,915

5,490


 Deposit for non-current assets 

240,712

137,715


 Long-term investments 

231,880

244,678


 Other non-current assets1 

7,391

7,569

 Total non-current assets 

821,603

777,305

 Total assets  

1,614,813

2,292,043





 LIABILITIES AND SHAREHOLDERS' EQUITY 



 Current liabilities: 




 Short-term loans 

212,734

100,000


 Deferred revenue 

129,765

145,321


 Accrued expenses and other liabilities 

318,540

361,593


 Customers' refundable fees 

28,630

59,107


 Income tax payable 

6,022

9,948


 Convertible senior notes-current1 

-

396,716

 Total current liabilities  

695,691

1,072,685

 Non-current liabilities: 




 Long-term loans 

65,190

-


 Convertible senior notes 

295,268

287,887


 Deferred tax liabilities, non-current 

70,424

76,631


 Other non-current liabilities 

415

312

 Total non-current liabilities 

431,297

364,830

 Total Liabilities    

1,126,988

1,437,515





 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 64,012,758 shares and
70,736,679 shares issued and outstanding as at December 31, 2016 and December 31,
2015, respectively

9,157

9,110


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, 2016 and December 31, 2015, respectively 

3,124

3,124


Treasure stock 

(136,615)

-


Additional paid-in capital 

488,943

478,391


Accumulated other comprehensive income 

(81,349)

(10,364)


Retained earnings 

203,870

373,505

 Total Fang Holdings Limited shareholders' equity 

487,130

853,766


 Non-controlling interests 

695

761

 Total equity 

487,825

854,527

 TOTAL LIABILITIES AND  EQUITY  

1,614,813

2,292,043

 

 

 Condensed Consolidated Statements of Comprehensive Income 

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




 Three months ended 


 Year ended 



 December 31, 


 December 31, 


 December 31, 


 December 31, 



2,016


2,015


2,016


2,015



 (Unaudited) 


 (Unaudited) 


 (Unaudited) 


 (Audited) 

 Revenues: 









  E-commerce services

89,853


173,863


577,684


474,810


  Marketing services

48,019


82,995


165,437


249,862


  Listing services

38,628


22,261


118,109


107,922


  Financial services

606


15,648


29,602


29,582


  Other value-added services and
other services

(2,443)


5,895


25,559


21,373

 Total revenues 

174,663


300,662


916,391


883,549










 Cost of Revenues: 









  Cost of services

(89,403)


(218,367)


(687,184)


(555,389)

 Total Cost of Revenues 

(89,403)


(218,367)


(687,184)


(555,389)










 Gross Profit 

85,260


82,295


229,207


328,160










 Operating expenses and income: 








Selling expenses

(59,227)


(81,306)


(229,817)


(236,603)


General and administrative expenses

(35,338)


(33,595)


(151,251)


(125,405)


Other income

415


37


415


(625)

 Operating Income (loss) 

(8,891)


(32,569)


(151,446)


(34,473)


  Foreign exchange gain (loss)

6,451


1,307


(1,882)


1,464


  Realized (loss) gain on
available-for-sale securities
(including accumulated other
comprehensive income
reclassifications for unrealized
(loss) gain on available-for-sale
securities of nil, US$10,583 for
the year ended December 31,
2015, 2016 respectively)

-


-


10,583


-


  Interest income

2,884


2,833


11,367


22,221


  Interest expense

(7,514)


(4,367)


(20,791)


(16,519)


  Investment income

1,056


358


3,281


1,333


  Government grants

940


1,150


6,469


4,936


  Other-than-temporary
impairment on available-for-sale
securities

(2,232)


-


(2,232)


-

 Income (loss) before income taxes
and noncontrolling interests 

(7,305)


(31,288)


(144,651)


(21,038)

 Income tax expenses 









  Income tax expenses

(3,079)


(7,530)


(24,983)


5,905

 Net income (loss) 

(10,385)


(38,818)


(169,635)


(15,133)


  Net income attributable to noncontrolling interests

(2)


(4)


-


(37)

 Net income (loss) attributable to Fang
Holdings Limited shareholders 

(10,383)


(38,814)


(169,635)


(15,096)

 Other comprehensive income (loss), net of tax 








Foreign currency Translation 

(81,642)


(21,593)


(67,728)


(55,928)


Amounts reclassified from
accumulated other
comprehensive income

-


-


(10,583)


-


Unrealized gain on available-for-
sale security

(1,057)


4,612


7,326


(4,002)

 Total other comprehensive income
(loss), net of tax 

(82,699)


(16,981)


(70,985)


(59,930)

 Comprehensive income (loss) 

(93,084)


(55,799)


(240,620)


44,830

 Earnings per share for Class A and Class B ordinary shares 






Basic

(0.11)


(0.44)


(1.81)


(0.18)


Diluted

(0.11)


(0.44)


(1.81)


(0.18)

 Earnings per ADS 









Basic

(0.02)


(0.09)


(0.36)


(0.04)


Diluted

(0.02)


(0.09)


(0.36)


(0.04)

 Weighted average number of Class A and Class B ordinary shares outstanding: 






Basic

91,214,789


88,189,443


93,659,152


85,170,886


Diluted

91,214,789


88,189,443


93,659,152


85,170,886

 Weighted average number of ADSs outstanding: 








Basic

456,073,946


440,947,315


468,295,759


425,854,430


Diluted

456,073,946


440,947,315


468,295,759


425,854,430

 

Fang Holdings Limited

 Reconciliation of GAAP and Non-GAAP Results 

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



 Three months ended 


 Year ended 



 December 31, 


 December 31, 


 December 31, 


 December 31, 



2,016


2,015


2,016


2,015


 GAAP income from operations 

(8,891)


(32,567)


(151,447)


(34,473)


 Share-based compensation expense 

2,545


856


9,477


4,008


 Non-GAAP income from operations 

(6,346)


(31,711)


(141,970)


(30,465)











 GAAP net income 

(10,385)


(38,816)


(169,635)


(15,133)


 One-off tax benefit 

-


(30,578)


-


(61,162)


 Investment income 

(1,056)


(358)


(13,864)


(1,333)


 Share-based compensation expense 

2,545


856


9,477


4,008


 Non-GAAP net income 

(8,896)


(68,896)


(174,022)


(73,620)











 Net Income attributable to Fang
shareholders 

(10,383)


(38,812)


(169,635)


(15,096)


 One-off tax benefit 

-


(30,578)


-


(61,162)


 Investment income 

(1,056)


(358)


(13,864)


(1,333)


 Share-based compensation expense 

2,545


856


9,477


4,008


 Non-GAAP net Income attributable to
Fang Holdings Limited shareholders 

(8,894)


(68,892)


(174,022)


(73,583)











 GAAP earnings per share for Class A and
Class B ordinary shares: 









 Basic 

(0.11)


(0.44)


(1.81)


(0.18)


 Diluted 

(0.11)


(0.44)


(1.81)


(0.18)


 GAAP earnings per ADS: 









 Basic 

(0.02)


(0.09)


(0.36)


(0.04)


 Diluted 

(0.02)


(0.09)


(0.36)


(0.04)


 Non-GAAP earnings per share for Class A
and Class B ordinary shares: 









 Basic 

(0.10)


(0.78)


(1.86)


(0.86)


 Diluted 

(0.10)


(0.78)


(1.86)


(0.86)

 Non-GAAP earnings per ADS: 









 Basic 

(0.02)


(0.16)


(0.37)


(0.17)


 Diluted 

(0.02)


(0.16)


(0.37)


(0.17)


 Weighted average number of Class
A and Class B ordinary shares outstanding: 









 Basic 

91,214,789


88,189,443


93,659,152


85,170,886


 Diluted 

91,214,789


88,189,443


93,659,152


85,170,886

 Weighted average number of ADSs outstanding: 








 Basic 

456,073,946


440,947,215


468,295,759


425,854,430


 Diluted 

456,073,946


440,947,215


468,295,759


425,854,430











 Non-GAAP Net income 

(8,896)


(68,896)


(174,022)


(73,620)

 Add back: 









 Interest expense 

7,514


3,927


20,791


16,519


 Income tax expenses 

3,079


42,371


24,983


59,519


 Depreciation expenses 

3,562


3,813


18,442


14,544

 Subtract: 









 Interest income 

(2,884)


(4,680)


(11,367)


(22,221)


 Adjusted EBITDA 

2,375


(23,465)


(121,173)


(5,259)

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/fang-announces-fourth-quarter-and-fiscal-year-2016-results-300432534.html

SOURCE Fang Holdings Limited