Leju Reports First Half Year 2020 Results

Rhea-AI Summary

Leju Holdings Limited (NYSE: LEJU) reported its financial results for H1 2020, revealing total revenues of $279.7 million, nearly unchanged from $280.4 million in H1 2019. E-commerce revenues fell by 2% to $205.4 million, while online advertising revenues rose by 5% to $73.9 million. Operating income improved to $1.2 million from a loss of $7.1 million a year earlier. Net income was $1.5 million, compared to a $4.1 million loss in H1 2019. The company anticipates H2 2020 revenues of $480 million to $500 million, reflecting a 16%-21% increase year-over-year. A board change was also announced.

Positive

• Operating income improved to $1.2 million from a loss of $7.1 million in H1 2019.
• Net income attributable to shareholders increased to $1.5 million from a loss of $4.1 million in H1 2019.
• Non-GAAP net income rose to $7.2 million, a 306% increase from $1.8 million in H1 2019.
• Company forecasts H2 2020 revenues of $480 million to $500 million, indicating a potential 16%-21% growth.

Negative

• E-commerce service revenue decreased by 2% year-on-year.
• Listing services revenue fell by 60% compared to H1 2019.

BEIJING, Aug. 20, 2020 /PRNewswire/ -- Leju Holdings Limited ("Leju" or the "Company") (NYSE: LEJU), a leading online-to-offline ("O2O") real estate services provider in China, today announced its unaudited financial results for the six months ended June 30, 2020.

First Half 2020 Financial Highlights

• Total revenues were $279.7 million, relatively flat compared to $280.4 million for the same period of 2019.

- Revenues from e-commerce services decreased by 2% year-on-year to $205.4 million.
- Revenues from online advertising services increased by 5% year-on-year to $73.9 million.

• Income from operations was $1.2 million, compared to a loss from operations of $7.1 million for the same period of 2019.
• Non-GAAP^[1] income from operations was $8.3 million, compared to $0.4 million for the same period of 2019.
• Net income attributable to Leju Holdings Limited shareholders was $1.5 million, or $0.01 per diluted American depositary share ("ADS"), compared to a net loss attributable to Leju Holdings Limited shareholders of $4.1 million, or $0.03 loss per diluted ADS, for the same period of 2019.
• Non-GAAP net income attributable to Leju Holdings Limited shareholders was $7.2 million, or $0.05 per diluted ADS, an increase of 306% from $1.8 million, or $0.01 per diluted ADS, for the same period of 2019.

[1] Leju uses in this press release the following non-GAAP financial measures: (1) income (loss) from operations, (2) net income (loss), (3) net income (loss) attributable to Leju shareholders, (4) net income (loss) attributable to Leju shareholders per basic ADS, and (5) net income (loss) attributable to Leju shareholders per diluted ADS, each of which excludes share-based compensation expense, amortization of intangible assets resulting from business acquisitions, and income tax impact on the share-based compensation expense and amortization of intangible assets resulting from business combinations. See "About Non-GAAP Financial Measures" and "Unaudited Reconciliation of GAAP and Non-GAAP Results" below for more information about the non-GAAP financial measures included in this press release.

"Against the background of the Covid-19 pandemic, Leju delivered solid results for the first half of 2020 with steady revenue and increased profit," said Mr. Geoffrey He, Leju's Chief Executive Officer. "Due to the impact of the pandemic, we have seen strong interest in Leju's innovative offerings as real estate developers increasingly value and utilize online marketing services amidst the challenging market environment. In addition, we recently announced an exclusive strategic cooperation with Suning, which will further strengthen the development of an online closed-loop transaction model through the combination of vertical platforms and professional e-commerce platforms. Meanwhile, we recently announced a strategic cooperation between E-House (China) Enterprise Holdings Limited, Alibaba Group Holding Limited and Leju to build an online real estate marketing and transaction platform. Leju will become the service provider for digital marketing and operation on the platform, which will greatly enhance the company's core value and expand its business scale in the future."

"Looking to the second half of this year, through our in-depth cooperation with Alibaba and Suning, Leju will further improve our platform, continuously expand our market reach and product innovation, and provide leading online integrated marketing solutions for the property industry. We will also further optimize our operations and management and improve operational efficiency to ensure the healthy and sustainable development of the company."

First Half 2020 Results

Total revenues were $279.7 million, relatively flat compared to $280.4 million for the same period of 2019. Total revenues demonstrated in RMB were RMB1,973.7 million, an increase of 4% from RMB1,906.9 million for the same period of 2019.

Revenues from e-commerce services were $205.4 million, a slight decrease of 2% from $209.2 million for the same period of 2019, mainly due to devaluation of the RMB. Revenues from e-commerce services demonstrated in RMB were RMB1,449.7 million, an increase of 2% from RMB1,422.8 million for the same period of 2019, primarily due to an increase in the number of discount coupons redeemed, partially offset by a decrease in the average price per discount coupon redeemed.

Revenues from online advertising services were $73.9 million, an increase of 5% from $70.3 million for the same period of 2019, primarily due to an increase in property developers' demand for online advertising.

Revenues from listing services were $0.3 million, a decrease of 60% from $0.9 million for the same period of 2019, primarily due to a decrease in secondary real estate brokers' demand.

Cost of revenues was $41.1 million, a decrease of 2% from $41.8 million for the same period of 2019, primarily due to decreased editorial personnel related costs, partially offset by increased cost of advertising resources purchased from media platforms.

Selling, general and administrative expenses were $237.7 million, a decrease of 3% from $246.0 million for the same period of 2019, primarily due to decreased expenses related to the Company's e-commerce business.

Income from operations was $1.2 million, compared to loss from operations of $7.1 million for the same period of 2019. Non-GAAP income from operations was $8.3 million, compared to $0.4 million for the same period of 2019.

Net income was $1.9 million, compared to net loss of $3.9 million for the same period of 2019. Non-GAAP net income was $7.6 million, an increase of 284% from $2.0 million for the same period of 2019.

Net income attributable to Leju Holdings Limited shareholders was $1.5 million, or $0.01 per diluted ADS, compared to net loss attributable to Leju Holdings Limited shareholders of $4.1 million, or $0.03 loss per diluted ADS, for the same period of 2019. Non-GAAP net income attributable to Leju Holdings Limited shareholders was $7.2 million, or $0.05 per diluted ADS, an increase of 306% from $1.8 million, or $0.01 per diluted ADS, for the same period of 2019.

Cash Flow

As of June 30, 2020, the Company's cash and cash equivalents and restricted cash balance was $258.2 million.

First half 2020 net cash provided by operating activities was $101.1 million, primarily comprised of non-GAAP net income of $7.6 million, an increase in advance from customer of $70.7 million, an increase in amounts due to related parties of $49.7 million and a decrease in customer deposits of $31.1million, partially offset by an increase in accounts receivable and contract assets of $47.0 million and a decrease in other payables of $23.7 million.

Business Outlook

The Company estimates that its total revenues for the second half of 2020 will be approximately $480 million to $500 million, which would represent an increase of approximately 16% to 21% from $412.2 million in the same period of 2019. This forecast reflects the Company's current and preliminary view, which is subject to change.

Board of Directors Changes

The Company also announced that Mr. Martin Chi Ping Lau has resigned as a director of the Company's Board of Directors (the "Board"). The Board has appointed Ms. Juhong Chen as the new director to replace Mr. Lau, effective August 18, 2020.

Ms. Juhong Chen currently serves as a Vice President of Tencent. She joined Tencent in 2006 as the editor-in-chief of QQ.com and general manager of its integrated information departments. In 2014, Ms. Chen was promoted to Vice President of Tencent responsible for QQ.com, Tencent News, Tencent Sports and other businesses. Ms. Chen holds a Bachelor's degree of Arts from Wuhan University with a major in journalism.

"We would like to express our sincere gratitude to Mr. Martin Chi Ping Lau for his dedication and valuable contributions over the past few years," said Mr. Xin Zhou, Leju's Executive Chairman. "We also look forward to working with Ms. Juhong Chen. We believe she is a great addition to our board of directors, and we are confident that Leju will benefit from her experience and contributions."

Conference Call Information

Leju's management will host an earnings conference call on August 20, 2020 at 7 a.m. U.S. Eastern Time (7 p.m. Beijing/Hong Kong time).

Please register in advance of the conference using the link provided below and dial in 10 minutes prior to the call, using participant dial-in numbers, Direct Event passcode and unique registrant ID which would be provided upon registering. You will be automatically linked to the live call after completion of this process, unless required to provide the conference ID below due to regional restrictions.

PRE-REGISTER LINK: http://apac.directeventreg.com/registration/event/6956248  

CONFERENCE ID: 6956248

A replay of the conference call may be accessed by phone at the following number until August 28, 2020:

U.S./International:	+1-855-452-5696
Hong Kong:	800-963-117
Mainland China:	400-632-2162
Passcode:	6956248

Additionally, a live and archived webcast will be available at http://ir.leju.com.

About Leju

Leju Holdings Limited ("Leju") (NYSE: LEJU) is a leading e-commerce and online media platform for real estate and home furnishing industries in China, offering real estate e-commerce, online advertising and online listing services. Leju's integrated online platform comprises various mobile applications along with local websites covering more than 380 cities, enhanced by complementary offline services to facilitate residential property transactions. In addition to the Company's own websites, Leju operates the real estate and home furnishing websites of SINA Corporation, and maintains a strategic partnership with Tencent Holdings Limited. For more information about Leju, please visit http://ir.leju.com. 

Safe Harbor: Forward-Looking Statements

This announcement contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "going forward," "outlook" and similar statements. Leju may also make written or oral forward-looking statements in its reports filed or furnished with the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Leju's beliefs and expectations, are forward-looking statements that involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained, either expressly or impliedly, in any of the forward-looking statements. Such factors include, but are not limited to, fluctuations in China's real estate market; the highly regulated nature of, and government measures affecting, the real estate and internet industries in China; Leju's ability to compete successfully against current and future competitors; its ability to continue to develop and expand its content, service offerings and features, and to develop or incorporate the technologies that support them; its limited operating history and lack of experience as a stand-alone public company, given its carve-out from E-House and prior reliance on E-House for various corporate services; its reliance on SINA and others with which it has developed, or may develop in the future, strategic partnerships; substantial revenue contribution from a limited number of real estate markets; complexities resulting from its ongoing relationships with E-House, due to E-House's status as a principal shareholder of Leju; and relevant government policies and regulations relating to the corporate structure, business and industry of Leju. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and the Company 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 applicable law.

About Non-GAAP Financial Measures

To supplement Leju's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Leju uses in this press release the following non-GAAP financial measures: (1) income (loss) from operations, (2) net income (loss), (3) net income (loss) attributable to Leju shareholders, (4) net income (loss) attributable to Leju shareholders per basic ADS, and (5) net income (loss) attributable to Leju shareholders per diluted ADS, each of which excludes share-based compensation expense, amortization of intangible assets resulting from business acquisitions, and income tax impact on the share-based compensation expense and amortization of intangible assets resulting from business combinations. The presentation of these non-GAAP financial measures 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 "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.

Leju believes that these non-GAAP financial measures provide meaningful supplemental information to investors regarding its operating performance by excluding share-based compensation expense and amortization of intangible assets resulting from business acquisitions, which may not be indicative of Leju's operating performance. These non-GAAP financial measures also facilitate management's internal comparisons to Leju'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 expense and amortization of intangible assets resulting from business acquisitions may continue to exist in Leju'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 provide more details on the reconciliation between non-GAAP financial measures and their most comparable GAAP financial measures.

For investor and media inquiries please contact:

Ms. Christina Wu
Leju Holdings Limited
Phone: +86 (10) 5895-1062
E-mail: ir@leju.com

Philip Lisio
Foote Group
Phone: +86 135-0116-6560
E-mail: phil@thefootegroup.com

 

 

LEJU HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars)
			December 31,						June 30,
			2019						2020
ASSETS
Current assets
Cash and cash equivalents				159,012						254,175
Restricted cash				—						3,997
Accounts receivable, net				147,638						190,416
Contract assets				830						1,659
Marketable securities				3,438						3,504
Prepaid expenses and other current assets				5,436						5,177
Customer deposits				57,174						26,075
Amounts due from related parties				9,673						1,400
Total current assets				383,201						486,403
Property and equipment, net				18,108						16,241
Intangible assets, net				45,581						39,619
Right-of-use assets				26,776						25,721
Investment in affiliates				53						30
Deferred tax assets				49,311						48,591
Other non-current assets				1,450						1,385
Total assets				524,480						617,990
LIABILITIES AND EQUITY
Current liabilities
Accounts payable				1,523						5,472
Accrued payroll and welfare expenses				32,787						26,498
Income tax payable				56,691						56,520
Other tax payable				20,056						20,759
Amounts due to related parties				4,407						54,100
Advances from customers				34,246						104,896
Lease liabilities, current				5,189						5,521
Accrued marketing and advertising expenses				49,830						35,544
Other current liabilities				32,784						23,298
Total current liabilities				237,513						332,608
Lease liabilities, non-current				22,866						21,491
Deferred tax liabilities				11,742						11,570
Total liabilities				272,121						365,669
Shareholders' Equity
Ordinary shares ($0.001 par value): 1,000,000,000 shares    authorized, 135,812,719 and 135,973,615 shares issued and    outstanding, as of December 31, 2019 and June 30, 2020,    respectively				136						136
Additional paid-in capital				796,192						797,294
Accumulated deficit				(517,303)						(515,811)
Subscription receivables				—						(20)
Accumulated other comprehensive loss				(23,624)						(26,934)
Total Leju Holdings Limited shareholders' equity				255,401						254,665
Non-controlling interests				(3,042)						(2,344)
Total equity				252,359						252,321
TOTAL LIABILITIES AND EQUITY				524,480						617,990

 

 

LEJU HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share data and per share data)
		Six months ended
		June 30,
		2019		2020
Revenues
E-commerce		209,214		205,448
Online advertising		70,332		73,929
Listing		852		339
Total net revenues		280,398		279,716
Cost of revenues		(41,831)		(41,138)
Selling, general and administrative expenses		(246,017)		(237,670)
Other operating income, net		368		245
Income (loss) from operations		(7,082)		1,153
Interest income, net		585		699
Other income, net		1,293		713
Income (loss) before taxes and loss from equity
in affiliates		(5,204)		2,565
Income tax benefits/(expenses)		1,307		(618)
Income (loss) before loss from equity in affiliates		(3,897)		1,947
Loss from equity in affiliates		(26)		(22)
Net income (loss)		(3,923)		1,925
Less: net income attributable to non-controlling interests		216		433
Income (loss) attributable to Leju Holdings
Limited shareholders		(4,139)		1,492
Earnings (loss) per ADS:
Basic		(0.03)		0.01
Diluted		(0.03)		0.01
Shares used in computation of earnings (loss) per ADS:
Basic		135,763,962		135,891,617
Diluted		135,763,962		136,039,569
The conversion of Renminbi ("RMB") amounts into reporting currency USD amounts is based on the rate of USD1
= RMB7.0795 on June 30, 2020 and USD1 = RMB7.0562 for the six months ended June 30, 2020

 

 

LEJU HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS
(In thousands of U.S. dollars)
		Six months ended
		June 30,
		2019		2020
Net income (loss)		(3,923)		1,925
Other comprehensive loss, net of tax of nil
Foreign currency translation adjustment		(471)		(3,279)
Comprehensive loss		(4,394)		(1,354)
Less: Comprehensive income attributable to non-controlling
interest		216		464
Comprehensive loss attributable to Leju Holdings Limited
shareholders		(4,610)		(1,818)

 

 

LEJU HOLDINGS LIMITED
Unaudited Reconciliation of GAAP and Non-GAAP Results
(In thousands of U.S. dollars, except share data and per ADS data)
		Six months ended
		June 30,
		2019		2020
GAAP income (loss) from operations		(7,082)		1,153
Share-based compensation expense		1,171		1,236
Amortization of intangible assets resulting from business
acquisitions		6,306		5,901
Non-GAAP income from operations		395		8,290
GAAP net income (loss)		(3,923)		1,925
Share-based compensation expense		1,171		1,236
Amortization of intangible assets resulting from		6,306		5,901
business acquisitions
Income tax benefit:
Current		—		—
Deferred[2]		(1,576)		(1,476)
Non-GAAP net income		1,978		7,586
Net income (loss) attributable to Leju Holdings Limited		(4,139)		1,492
shareholders
Share-based compensation expense (net of non-controlling		1,171		1,236
interests)
Amortization of intangible assets resulting from business
acquisitions (net of non-controlling interests)		6,306		5,901
Income tax benefit:
Current		—		—
Deferred		(1,576)		(1,476)
Non-GAAP net income attributable to Leju Holdings
Limited shareholders		1,762		7,153
GAAP net income (loss) per ADS — basic		(0.03)		0.01
GAAP net income (loss) per ADS — diluted		(0.03)		0.01
Non-GAAP net income per ADS — basic		0.01		0.05
Non-GAAP net income per ADS — diluted		0.01		0.05
Shares used in calculating basic GAAP/non-GAAP net income
(loss) attributable to shareholders per ADS		135,763,962		135,891,617
Shares used in calculating diluted GAAP net income (loss)
attributable to Leju Holdings Limited shareholders per ADS		135,763,962		136,039,569
Shares used in calculating diluted non-GAAP net income
attributable to Leju Holdings Limited shareholders per ADS		135,766,869		136,039,569
[2]Amount represents the realization of deferred tax liabilities recognized for the temporary difference between the tax
basis of intangible assets recognized from acquisitions and their reported amounts in the financial statements. The
income tax impact on the share-based compensation expense is nil.

 

 

LEJU HOLDINGS LIMITED
SELECTED OPERATING DATA
		Six months ended
		June 30,
		2019				2020
Operating data for e-commerce services
Number of discount coupons issued to prospective purchasers      (number of transactions)			94,369				94,215
Number of discount coupons redeemed (number of transactions)			55,794				67,268

 

 

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SOURCE Leju Holdings Limited

FAQ

What were Leju's total revenues for the first half of 2020?

Leju's total revenues for the first half of 2020 were $279.7 million.

How did Leju's net income change in H1 2020 compared to 2019?

Leju's net income in H1 2020 was $1.5 million, a significant improvement from a net loss of $4.1 million in H1 2019.

What revenue forecast did Leju provide for the second half of 2020?

Leju estimates its total revenues for H2 2020 to be between $480 million and $500 million.

How did the COVID-19 pandemic impact Leju's business?

Leju experienced strong interest in its online marketing services amid the pandemic's challenges.

Who is the new board director appointed by Leju?

Ms. Juhong Chen was appointed as a new director effective August 18, 2020, replacing Mr. Martin Chi Ping Lau.