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 November 2017

 

Commission File Number: 001-34862

 

 

FANG HOLDINGS LIMITED

(Exact name of registrant as specified in its charter)

 

 

 

Block A, No. 20 Guogongzhuang Middle Street

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-Fx    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): ¨

 

 

 

 

 

 

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. 

 

         
    FANG HOLDINGS LIMITED
     
Date: November 17, 2017   By:  

/s/ Vincent Tianquan Mo

    Name:   Vincent Tianquan Mo
    Title:   Executive Chairman

 

 

 

 

EXHIBIT INDEX

 

     

Exhibit No.

 

Description

   
Exhibit 99.1   Press Release dated November 17, 2017
       

 

 

 

 

Exhibit 99.1

 

Fang Announces Third Quarter 2017 Results

 

BEIJING, November 17, 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 the fiscal quarter ended September 30, 2017.

 

Third Quarter 2017 Highlights

 

lTotal revenues were $112.2 million, a decrease of 55.1% from the corresponding period in 2016.

 

lOperating income was $18.4 million.

 

lNon-GAAP operating income was $ 19.8 million.

 

l

Net income attributable to Fang's shareholders was $15.2 million. Fully diluted earnings per ADS were $0.03.

 

lNon-GAAP net income attributable to Fang's shareholders was $14.8 million. Non-GAAP fully diluted earnings per ADS were $0.03.

 

lNet cash generated from operating activities was $57.8 million in the third quarter of 2017.

 

"After seven non-profit quarters, I’m glad that Fang has started to turn profitable,” said Vincent Mo, Chairman and CEO of Fang. "With our ongoing focus on transformation back to a technology-driven open platform model, I’m confident that Fang will return to a sustainable and healthy growth track.”

 

Third Quarter 2017 Results

 

Revenues

 

Fang reported total revenues of $112.2 million in the third quarter of 2017, a decrease of 55.1% from $250.1 million in the corresponding period of 2016, primarily due to the decline in e-commerce services revenue by 150.8 million.

 

Revenue from listing services was $47.2 million in the third quarter of 2017, an increase of 65.6% from $28.5 million in the corresponding period of 2016, primarily driven by the increased number of paying members.

 

Revenue from marketing services was $37.3 million in the third quarter of 2017, an increase of 4.8% from $35.6 million in the corresponding period of 2016.

 

Revenue from e-commerce services was $16.6 million in the third quarter of 2017, a decrease of 90.1% from $167.4 million in the corresponding period of 2016, primarily due to Fang’s transformation back to a technology-driven open platform model.

 

Revenue from Internet financial services was $3.5 million in the third quarter of 2017, a decrease of 52.4% from $7.3 million in the corresponding period of 2016, primarily due to the decreased transaction volumes of secondary homes.

 

Revenue from other value-added services was $7.7 million in the third quarter of 2017, a decrease of 12.1% from $11.4 million in the corresponding period of 2016.

 

 

 

 

Cost of Revenue

 

Cost of revenue was $35.4 million in the third quarter of 2017, a decrease of 77.4% from $157.0 million in the corresponding period of 2016, primarily driven by the closing of the self-owned brokerage stores and cost optimization under the open platform model.

 

Operating Expense

 

Operating expenses were $58.4 million in the third quarter of 2017, a decrease of 37.2% from $92.9 million in the corresponding period of 2016.

 

Selling expenses were $16.9 million in the third quarter of 2017, a decrease of 70.2% from $56.7 million for the corresponding period of 2016, primarily driven by the decrease of advertising and promotion fee, sales commission fee and staff cost.

 

General and administrative expenses were $41.8 million in the third quarter of 2017, an increase of 15.4% from $36.2 million for the corresponding period of 2016, primarily due to increased bad debt and disposal fee related to closing the self-owned brokerage stores for secondary home transactions.

 

Operating income

 

Operating income was $18.4 million in the third quarter of 2017, compared to $0.2 million in the corresponding period of 2016, primarily attributable to the agent reduction and effective cost control.

 

Income Tax Expenses

 

Income tax expenses were $4.1 million in the third quarter of 2017, compared to income tax expenses of $8.0 million in the corresponding period of 2016.

 

Net income and EPS

 

Net income attributable to Fang's shareholders was $15.2 million in the third quarter of 2017, compared to net loss of $4.9 million in the corresponding period of 2016. Earnings per fully-diluted ordinary share and ADS were $0.16 and $0.03 in the third quarter of 2017, compared to loss of $0.05 and $0.01, respectively, in the corresponding period of 2016.

 

Adjusted EBITDA

 

Adjusted EBITDA, defined as non-GAAP net income before income taxes, interest expenses, interest income, depreciation and amortization, was $25.6 million in the third quarter of 2017, compared to $1.6 million in the corresponding period of 2016.

 

Cash

 

As of September 30, 2017, Fang had cash, cash equivalents, and short-term investments of $543.3 million, compared to $590.5 million as of December 31, 2016. Net cash generated from operating activities was $57.8 million in the third quarter of 2017, compared to cash flow generated from operating activities of $76.8 million in the same period of 2016. The decrease of cash generated from operating activities was primarily due to the reclassification of certain loan receivable to investment activities compared to the third quarter of 2016.

 

 

 

 

Business Outlook

 

Fang is continuing its transformation back to a technology-driven open platform model and expects a profitable fourth quarter.

 

This forecast does not assume significant adverse market development during the fourth quarter of 2017 and reflects Fang’s current and preliminary views, which are 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 (9:00 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 November 17, 2017 through 7:59 ET November 25, 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:  3384709

 

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 651 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 transformation for its online brokerage business to a franchise model 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.

 

About Non-GAAP Financial Measures

 

To supplement Fang's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Fang uses in this press release the following measures defined as non-GAAP financial measures by the United States Securities and Exchange Commission: (1) non-GAAP operating (loss)/income, (2) non-GAAP net (loss)/income and (3) non-GAAP basic and diluted (loss)/earnings per ordinary share and per ADS (4) adjusted EBITDA. 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.

 

Fang 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, realized gain on available-for-sale security, interest income and expenses, income tax expenses, and depreciation expense for the relevant period, which (1) may not be indicative of Fang'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 Fang'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, interest income and expenses, income tax expenses, and depreciation expenses have been and will continue to be a significant recurring expense that will continue to exist in Fang'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:

 

Dr. Hua Lei

CFO

Phone: +86-10-5631-8661

Email: leihua@fang.com

 

Ms. Dana Cheng

Senior Manager, Investor Relations

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  September 30,     December 31,   
   2017   2016 
Current assets:  (Unaudited)     (Audited)   
Cash and cash equivalents   153,176    336,528 
Restricted cash, current   290,367    211,084 
Short-term investments   99,740    42,929 
Accounts receivable, net   62,482    93,672 
Funds receivable   28,079    20,483 
Prepayment and other current assets   48,692    39,824 
Commitment deposits   504    6,527 
Loan receivable, current   92,274    41,966 
Amount due from related parties   294    197 
Total current assets   775,608    793,210 
Non-current assets:          
Property and equipment, net   553,487    319,897 
Loan receivable, non-current   17,152    16,808 
Deferred tax assets, non-current   6,668    4,915 
Deposit for non-current assets   147,740    240,712 
Long-term investments   466,896    231,880 
Other non-current assets   2,323    7,391 
Total non-current assets   1,194,266    821,603 
Total assets   1,969,874    1,614,813 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Current liabilities:          
Short-term loans   277,544    212,734 
Deferred revenue   153,278    129,765 
Accrued expenses and other liabilities   286,018    318,540 
Customers’ refundable fees   22,574    28,630 
Income tax payable   13,414    6,022 
Total current liabilities   752,828    695,691 
Non-current liabilities:          
Long-term loans   75,895    65,190 
Convertible senior notes   296,598    295,268 
Deferred tax liabilities, non-current   124,077    70,424 
Other non-current liabilities   434    415 
Total non-current liabilities   497,004    431,297 
Total Liabilities   1,249,832    1,126,988 
           
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 64,248,253 shares and 70,736,054 shares issued and outstanding as at September 30, 2017 and December 31, 2016, respectively   9,181    9,157 
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 September 30, 2017 and December 31, 2016 respectively   3,124    3,124 
Treasure stock   (136,615)   (136,615)
Additional paid-in capital   496,648    488,943 
Accumulated other comprehensive income   142,023    (81,349)
Retained earnings   204,994    203,870 
Total Fang Holdings Limited shareholders' equity   719,355    487,130 
Non-controlling interests   687    695 
Total equity   720,042    487,825 
TOTAL LIABILITIES AND EQUITY   1,969,874    1,614,813 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income

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

 

     
   Three months ended 
   September 30,   September 30, 
   2017   2016 
   (Unaudited)   (Unaudited) 
Revenues:        
  Listing services   47,175    28,493 
  Marketing services   37,265    35,574 
  E-commerce services   16,574    167,413 
  Financial services   3,461    7,267 
  Other value-added services and other services   7,708    11,380 
Total revenues   112,183    250,127 
           
Cost of Revenues:          
  Cost of services   (35,443)   (157,001)
Total Cost of Revenues   (35,443)   (157,001)
           
Gross Profit   76,740    93,126 
           
Operating expenses and income:          
 Selling expenses   (16,921)   (56,729)
 General and administrative expenses   (41,758)   (36,177)
 Other income   302    - 
           
Operating Income (loss)   18,363    220 
  Foreign exchange gain (loss)   (1)   (8,390)
  Interest income   3,196    2,010 
  Interest expense   (4,538)   (4,071)
  Investment income   1,857    11,453 
  Government grants   480    1,862 
Income (loss) before income taxes and noncontrolling interests   19,357    3,084 
Income tax expenses          
  Income tax expenses   (4,124)   (8,032)
Net income (loss)   15,233    (4,848)
  Net income attributable to noncontrolling interests   -    1 
Net income (loss) attributable to Fang Holdings Limited shareholders   15,233    (4,849)
Other comprehensive income (loss), net of tax          
  Foreign currency translation   17,739    41,804 
  Amounts reclassified from accumulated other comprehensive income   (801)   - 
  Unrealized gain on available-for-sale security   102,032    1,197 
  Loss on intra-entity foreign transactions of long-term-investment nature   1,544    - 
Total other comprehensive income (loss), net of tax   120,514    43,001 
Comprehensive income (loss)   135,747    38,052 
Earnings per share for Class A and Class B ordinary shares:          
  Basic   0.17    (0.05)
  Diluted   0.16    (0.05)
Earnings per ADS:          
  Basic   0.03    (0.01)
  Diluted   0.03    (0.01)
Weighted average number of Class A and Class B ordinary shares outstanding:          
  Basic   88,486,099    93,798,520 
  Diluted   94,093,312    93,798,520 
Weighted average number of ADSs outstanding:          
  Basic   442,430,494    468,992,600 
  Diluted   470,466,562    468,992,600 

 

 

 

 

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 
   September 30,   September 30, 
   2017   2016 
GAAP income from operations   18,363    220 
Share-based compensation expense   1,390    2,223 
Non-GAAP income from operations   19,753    2,443 
           
GAAP net income   15,233    (4,948)
Investment income   (1,857)   (11,453)
Share-based compensation expense   1,390    2,233 
Non-GAAP net income   14,766    (14,178)
           
Net Income attributable to Fang shareholders   15,233    (4,949)
Investment income   (1,857)   (11,453)
Share-based compensation expense   1,390    2,233 
Non-GAAP net Income attributable to Fang Holdings Limited shareholders   14,766    (14,179)
           
GAAP earnings per share for Class A and Class B ordinary shares:          
Basic   0.17    (0.05)
Diluted   0.16    (0.05)
GAAP earnings per ADS:          
Basic   0.03    (0.01)
Diluted   0.03    (0.01)
Non-GAAP earnings per share for Class A and Class B ordinary shares:          
Basic   0.17    (0.15)
Diluted   0.16    (0.15)
Non-GAAP earnings per share for Class A and Class B ordinary shares:          
Basic   0.03    (0.03)
Diluted   0.03    (0.03)
Weighted average number of Class A and Class B ordinary shares outstanding:          
Basic   88,486,099    93,789,520 
Diluted   94,093,312    93,789,520 
Weighted average number of ADSs outstanding:          
Basic   442,430,494    468,992,600 
Diluted   470,466,562    468,992,600 
           
Non-GAAP net income   14,766    (14,178)
Add back:          
Interest expense   4,538    4,071 
Income tax expenses   4,124    8,032 
Depreciation expenses   5,398    5,672 
Subtract:          
Interest income   (3,196)   (2,010)
Adjusted EBITDA   25,630    1,587