Fang Holdings(SFUNY) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - CIH reported total revenues of RMB110.2 million in Q2 2022, a decrease of 27.8% from RMB152.7 million in Q2 2021, primarily due to macro environment challenges [6] - Net income was RMB21.2 million in Q2 2022, a decrease of 68.6% from RMB67.3 million in Q2 2021 [10] - For the first half of 2022, total revenues were RMB228.7 million, a decrease of 20.1% from RMB286.4 million in the corresponding period of 2021 [10] Business Line Data and Key Metrics Changes - Revenues from information and analytics services (SaaS) were RMB63.4 million in Q2 2022, a decrease of 14.4% from RMB74.1 million in Q2 2021 [6] - Revenues from marketplace services were RMB46.8 million in Q2 2022, a decrease of 40.4% from RMB78.5 million in Q2 2021 [7] - For the first half of 2022, revenues from information and analytics services were RMB120.1 million, a decrease of 12.9% from RMB137.9 million in the corresponding period of 2021 [11] - Revenues from marketplace services were RMB108.6 million in the first half of 2022, a decrease of 26.8% from RMB148.5 million in the corresponding period of 2021 [11] Market Data and Key Metrics Changes - The company noted that the Chinese real estate market is currently in an adjustment phase, with first and second-tier cities being relatively more stable compared to third and fourth-tier cities [23] - CIH monitors land sales and auctions, tracking land prices and project developments to provide analytics for clients [20][22] Company Strategy and Development Direction - Management believes that CIH's 2022 annual revenue is expected to record a double-digit decrease year-over-year due to current unstable market conditions [15] - The company is focusing on developing new clients in various sectors to mitigate the impact of the broader real estate market downturn [25] Management's Comments on Operating Environment and Future Outlook - Management indicated that the Chinese government is implementing policies to stimulate the real estate market, which are beginning to show effects, particularly in second-tier cities [22] - The company is actively monitoring the situation regarding stock price compliance and is considering options such as a reverse stock split [30] Other Important Information - CIH's income tax expenses increased by 152.4% in Q2 2022, attributed to a strong dollar and preparations for potential USD expenses [9][30] - The company has not received any new offers regarding the going private proposal from General Atlantic since the last offer was made nearly two years ago [43][50] Q&A Session Summary Question: Why did Information Analytics revenue increase between Q2 and Q1 while Marketplace revenues fell? - Management explained that data services are a fundamental need for clients, especially during market changes, while marketplace services are less critical [19] Question: What key data indicators does CIH collect to monitor the Chinese real estate market? - CIH monitors land sales, prices, and project developments, providing analytics reports and tools for clients [20][22] Question: What are the options CIH can consider regarding the minimum bid price issue? - Management stated that they are discussing the possibility of a reverse stock split among other options [30] Question: Is there concern about the significant increase in accounts receivable? - Management noted that collection times are longer due to market adjustments, but most products are prepaid, resulting in low bad debt risk [25] Question: Can you elaborate on the amounts due from related parties? - Management clarified that the RMB31.788 million is a payment in advance that CIH repaid, part of normal operations [29] Question: Why did income tax expenses increase significantly? - The increase is due to a strong dollar and preparations for potential USD expenses [30] Question: Will the Chinese government require state-owned banks to absorb losses from developers? - Management indicated that the government will provide financial support on a project-by-project basis, focusing on specific projects rather than the sector as a whole [40]