Fang Announces Fourth Quarter and Fiscal Year 2019 Unaudited Financial Results

• Revenue from marketing services was $18.9 million in the fourth quarter of 2019, a decrease of 35.0% from $29.1 million in the corresponding period of 2018, mainly due to the decrease in aggregate market demand.
• Revenue from listing services was $12.7 million in the fourth quarter of 2019, a decrease of 25.3% from $16.9 million in the corresponding period of 2018, mainly due to the decrease in the number of paying customers.
• Revenue from leads generation services was $14.4 million in the fourth quarter of 2019, an increase of 16.2% from $12.4 million in the corresponding period of 2018.
• Revenue from financial services was $1.4 million in the fourth quarter of 2019, a decrease of 69.2% from $4.6 million in the corresponding period of 2018, mainly due to the decrease in average loan receivable balance.

Cost of Revenue

Cost of revenue was $4.1 million in the fourth quarter of 2019, a decrease of 41.6% from $7.0 million in the corresponding period of 2018, primarily due to the decline in sales and the optimization in cost structure.

Operating Expenses

Operating expenses were $68.4 million in the fourth quarter of 2019, an increase of 74.3% from $39.2 million in the corresponding period of 2018.

• Selling expenses were $26.3 million in the fourth quarter of 2019, an increase of 78.9% from $14.7 million in the corresponding period of 2018, mainly due to the increase in promotional expense.
• General and administrative expenses were $42.1 million in the fourth quarter of 2019, an increase of 71.6% from $24.5 million in the corresponding period of 2018, mainly due to the increase in staff related costs.

Operating (Loss)/Income from Continuing Operations

Operating loss from continuing operations was $21.0 million in the fourth quarter of 2019, compared to operating income from continuing operations of $21.1 million in the corresponding period of 2018.

Change in Fair Value of Securities

Change in fair value of securities for the fourth quarter of 2019 was a loss of $3.5 million, compared to a loss of $31.4 million in the corresponding period of 2018, mainly due to the fluctuation in market price of investments in equity securities.

Income Tax Benefits/Expenses

Income tax benefits were $3.4 million in the fourth quarter of 2019, compared to an expense of $23.7 million in the corresponding period of 2018.

Net Loss

Net loss was $26.2 million in the fourth quarter of 2019, compared to a net loss of $29.4 million in the corresponding period of 2018.

Fiscal Year 2019 Financial Results

Revenues

Fang reported total revenues of $219.7 million for 2019, a decrease of 8.5% from $240.0 million in 2018.    

• Revenue from marketing services was $94.6 million for 2019, a decrease of 3.8% from $98.4 million in 2018.
• Revenue from listing services was $63.5 million for 2019, a decrease of 22.4% from $81.7 million in 2018, mainly due to the decreased number of paying members in listing services.
• Revenue from leads generation services was $43.3 million for 2019, an increase of 103.3% from $21.3 million in 2018, driven by the increase in effectiveness of services and customer acceptance.
• Revenue from financial services was $9.6 million for 2019, a decrease of 47.1% from $18.1 million in 2018.

Cost of Revenue

Cost of revenue was $26.5 million for 2019, a decrease of 42.9% from $46.4 million in 2018, primarily due to cost savings from optimizing our core business.

Operating Expenses

Operating expenses were $174.6 million for 2019, a decrease of 7.2% from $188.3 million in 2018.

• Selling expenses were $73.6 million for 2019, an increase of 24.6% from $59.1 million in 2018.
• General and administrative expenses were $101.1 million for 2019, a decrease of 21.8% from $129.2 million in 2018, mainly due to the decrease in bad debt.

Operating Income from Continuing Operations

Operating income from continuing operations increased from $9.8 million in 2018 to $24.1 million for 2019.

Change in Fair Value of Securities

Change in fair value of securities for 2019 was a loss of $46.1 million, compared to a loss of $167.4 million in 2018, mainly due to the fluctuation in market price of investments in equity securities.

Income Tax Benefits

Income tax benefits were $12.5 million for 2019, a decrease of 34.2% from $19.0 million in 2018, primarily due to the effect of change in fair value of equity securities and the reversal of previously recorded ASC 740 (FIN 48) income tax and interest liability.

Net Loss

Net loss was $7.7 million for 2019, compared to a net loss of $114.9 million in 2018.

Business Outlook

Based on current operations and market conditions, Fang's management predicts a positive net income for the year of 2020, which represents management's current and preliminary view and is 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. Eastern Time (8:00 PM on the same day, Beijing/Hong Kong time). The dial-in details for the live conference call are:

Please register in advance of the conference using the link provided below. Upon registering, you will be provided with participant dial-in numbers, Direct Event passcode (1578624#) and unique registrant ID. Get prompted 10 min prior to the start of the conference. Enter the Direct Event Passcode above (1578624#), and your unique Registrant ID, followed by the pound or hash (#) sign to get into the call.

Direct Event online registration: http://apac.directeventreg.com/registration/event/8819045

A telephone replay of the call will be available after the conclusion of the conference call from 11:00 AM ET on April 24, 2020 through 9:59 AM ET May 2, 2020. The dial-in details for the telephone replay are:

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 a leading real estate Internet portal in China in terms of the number of page views and visitors to its websites. Through its websites, Fang provides primarily marketing, listing, leads generation and financial services for China's fast-growing real estate and home furnishing and improvement sectors. Its 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 approximately 74 offices to focus on local market needs and its website and database contains real estate related content covering 665 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 back to a technology-driven Internet platform 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.

Fang Holdings Limited
Unaudited Condensed Consolidated Balance Sheets[1]
(in thousands of U.S. dollars, except share data and per share data)
ASSETS		December 31,	December 31,
		2019	2018
Current assets:
	Cash and cash equivalents	181,702	171,183
	Restricted cash, current	218,112	245,474
	Short-term investments	118,979	16,043
	Accounts receivable, net	67,369	58,687
	Funds receivable	8,372	5,474
	Prepayments and other current assets	32,954	27,894
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