Fang Holdings Limited

Thank you, operator. Hello, everyone.

Welcome to Fang Holdings Third Quarter 2020 Earnings Conference Call. Joining us today to discuss fund results are our CEO, Mr.

Jian Liu; and our acting CFO, Mr. Ke Wang.

After this prepared remark, our management will answer your questions. Before we get started, I would like to remind you that during the course of this conference call, we may make forward-looking statements that is not a historical fact, including statements that we believe is our expectation.

Forward-looking statements may have inherent risks and uncertainty. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements.

Fang assumes no obligation to forward-looking statements in this conference call and as outlier. Potential risks and uncertainties include, but not limited to the acting filing with SEC, including our form 8-1.

Now I would like to walk you through the third quarter 2020 results. After this, Mr.

Liu will answer your question during the Q&A session. Fang reported total revenue of $56.7 million in the third quarter of 2020, a decrease of 16.1% from $67.6 million in the corresponding period of 2019, mainly due to the decrease in revenues from leasing services.

Revenue from Marketing Service was $30.3 million in the third quarter of 2020, which remained relatively stable with $30 million in the corresponding period of 2019. Revenue from Leasing Service was $10.1 million in the third quarter of 2020, a decrease of 48.2% from $19.4 million in the corresponding period of 2019, mainly due to the decrease in the number of paying customers.

Revenue from Lease Generation Service was $12.9 million in the third quarter of 2020, a decrease of 0.8% from $14.1 million in the corresponding period of 2019. Revenue from Financial Service was $1.9 million in the third quarter of 2020, an increase of 9% from $1.7 million in the corresponding period of 2019, mainly due to an increase in average loan receivable balances.

Cost of revenue was $5.1 million in the third quarter of 2020, a decrease of 11% from $5.7 million in the corresponding period of 2019, primarily due to optimization in cost structure. Operating expense was $35.1 million in the third quarter of 2020, a decrease of 3.9% from $36.5 million in the corresponding period of 2019, mainly due to the decrease in staff-related costs.

Selling expense were $15.1 million in the third quarter of 2020, which remained relatively stable with $14.8 million in the corresponding period of 2019. General and administrative expense was $20.0 million in the third quarter of 2020, a decrease of 7.8% from $21.7 million in the corresponding period of 2019.

This is mainly due to the decrease in staff-related costs. Operating income from continuing operations was $17.7 million in the third quarter of 2020, a decrease of 33% -- 33.7% from $26.7 million in the corresponding period of 2019, mainly due to the decrease in total revenue.

Change in fair value of securities for the third quarter of 2020 was a gain of $19.4 million compared to a loss of $26.1 million in the corresponding period of 2019. This is mainly due to the fluctuation in market price of the investment in equity securities.

Income tax expense was $19.2 million in the third quarter of 2020 compared to income tax benefit of $0.1 million in the corresponding period of 2019, mainly due to the effect of the change in fair value of equity securities. Net income was $10.9 million in the third quarter of 2020, an increase of 1,393.3% from net income of $0.7 million in the corresponding period of 2019.

So based on current operations and market conditions, Fang’s management predicts a positive net income for the year of 2020, which represents management current and preliminary view and is subject to the change. Thank you for joining us today.

And now we are open for questions. Operator, please go ahead.

All right. Thank you, operator.

Thank you again for joining our third quarter earnings call today. We're looking forward to speaking with you soon for our fourth quarter 2020 call.

Thank you, everyone.