SHANGHAI, Nov. 19, 2014 /PRNewswire-FirstCall/ — E-House (China) Holdings Limited ("E-House" or the "Company") (NYSE: EJ), a leading real estate services company in China, today announced its unaudited financial results for the fiscal quarter ended September 30, 2014, and its plan to distribute certain Leju ordinary shares and American depositary shares ("ADSs") and a cash dividend to holders of E-House’s ordinary shares and ADSs.

Third Quarter 2014 Highlights

  • Total revenues increased by 12% year-on-year to $218.7 million
    • Revenues from real estate online services increased by 32% year-on-year to $128.2 million, including $84.2 million in revenues from e-commerce services, which grew by 63% year-on-year
  • Non-GAAP1 income from operations was $25.5 million
  • Non-GAAP net income attributable to E-House shareholders was $12.6 million, or $0.09 per diluted ADS
  • Newly launched community value-added mobile app "Shi Hui," real estate financial service P2P platform "Fang Jin Suo," real estate brokerage channel platform "Li Tuo Channels" and CRIC home price rating website have been well received by increasing numbers of users

[1] E-House 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 E-House shareholders, (4) net income (loss) attributable to E-House shareholders per basic ADS, and (5) net income (loss) attributable to E-House shareholders per diluted ADS, each of which excludes share-based compensation expense and amortization of intangible assets resulting from business acquisitions. 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.

Leju Share Distribution and Cash Dividend

  • E-House will distribute to holders of its ordinary shares and ADSs 0.05 Leju ordinary shares for each E-House ordinary share or 0.05 Leju ADSs for each E-House ADS
  • E-House will pay a cash dividend of $0.20 per ordinary share (or $0.20 per ADS)

Xin Zhou, E-House’s co-chairman and CEO, said, "We continue to benefit from the growth of our real estate online services unit Leju, which helped us maintain double-digit total revenue growth during the third quarter despite continued softness in China’s real estate market. The market has shown signs of recovery during the fourth quarter following the relaxation of the mortgage lending policy announced on September 30th and as a result of enhanced marketing efforts by developers."

Mr. Zhou continued, "Our new business initiatives launched in July have been met with encouraging initial results. Our community value-added services gained over 1.25 million mobile users in Beijing and Shanghai within the first four months of operations, of which 20% to 30% are active daily users. Over $160 million worth of free products and services have been promoted through our Shi Hui app during this period. Our real estate financial service P2P platform Fang Jin Suo has introduced multiple real estate-related financial products since it was launched and has attracted over 4,500 individuals thus far, resulting in over $12 million of transaction flows through the platform. Our CRIC home price rating website now covers 26 cities with home price ratings for more than 5,000 new residential development projects. In addition, our new Li Tuo Channels division focuses on consolidation of various sales channels aimed at providing customer origination tools and overall sales solutions."

Bin Laurence, E-House’s CFO, said, "Our real estate online services business maintained strong growth despite overall market softness in real estate activities during the third quarter, while the performance of our real estate brokerage and information and consulting segments was below previous expectations. Our operating income was also negatively impacted by increased spending on various new initiatives, in particular community value-added services. Nevertheless, we have witnessed market recovery signals in the fourth quarter as a result of policy easing measures implemented at the end of the third quarter. We are also pleased to see strong initial results from our investments in the new business initiatives that we launched during the third quarter."

Third Quarter 2014 Results

Total revenues were $218.7 million, an increase of 12% from $195.7 million for the same quarter of 2013, primarily driven by growth of revenues from real estate online services.

Revenues from real estate online services were $128.2 million, an increase of 32% from $97.4 million for the same quarter of 2013, contributed by growth of revenues from e-commerce and online advertising services. Revenues from e-commerce services were $84.2 million, an increase of 63% from $51.7 million for the same quarter of 2013, primarily due to a 51% increase in discount coupons redeemed (see "Selected Operating Data" below for more details on the discount coupons sold and redeemed). Revenues from online advertising services were $41.8 million, an increase of 4% from $40.0 million for the same quarter of 2013, primarily due to growth in both the Company’s new home and home furnishing channels. Revenues from listing services were $2.2 million, compared to $5.7 million for the same quarter of 2013, primarily due to the slowdown in secondary home sales.

Revenues from real estate brokerage services were $59.0 million, a decrease of 8% from $63.8 million for the same quarter of 2013. Real estate brokerage services include primary real estate agency services and secondary real estate brokerage services. Revenues from primary real estate agency services were $56.3 million, a decrease of 8% from $61.4 million for the same quarter of 2013. Total gross floor area ("GFA") of new properties sold increased by 2% while total transaction value of new properties sold decreased by 9% compared to the same quarter of 2013. (See "Selected Operating Data" below for more details on the total GFA and transaction value of new properties sold.) Revenues from secondary real estate brokerage services were $2.7 million, which was relatively flat compared to $2.4 million for the same quarter of 2013.

Revenues from real estate information and consulting services were $15.4 million, a decrease of 37% compared to $24.3 million for the same quarter of 2013, due to decreased revenues in consulting services, particularly in land transaction-related consulting services.

Revenues from other services were $16.1 million, an increase of 58% from $10.2 million for the same quarter of 2013. Other services include offline real estate advertising services, promotional events services, and real estate fund management services. The revenue increase from other services in the third quarter was primarily due to carried interest recognized from real estate fund management services of $5.4 million during the third quarter of 2014.

Cost of revenues was $77.9 million, an increase of 13% from $69.1 million for the same quarter of 2013, primarily due to increased staff costs from primary real estate agency services, partially offset by the decrease of the fees paid to third parties for services in connection with the Company’s online listing business, and the decrease of the amortization expenses of intangible assets.

Selling, general and administrative expenses were $128.3 million, an increase of 27% from $101.1 million for the same quarter of 2013, primarily due to the higher marketing expenses and higher staff-related costs for real estate online services, and expenses related to community value-added services commenced in the third quarter of 2014.

Income from operations was $16.2 million, a decrease of 40% from $27.0 million for the same quarter of 2013. Non-GAAP income from operations was $25.5 million, a decrease of 31% from $36.9 million for the same quarter of 2013.

Net income was $13.1 million, a decrease of 37% from $20.6 million for the same quarter of 2013. Non-GAAP net income was $21.9 million, a decrease of 25% from $29.1 million for the same quarter of 2013.

Net income attributable to E-House shareholders was $5.1 million, or $0.03 per diluted ADS, a decrease of 74% from $19.2 million, or $0.14 per diluted ADS, for the same quarter of 2013. Non-GAAP net income attributable to E-House shareholders was $12.6 million, or $0.09 per diluted ADS, a decrease of 54% from $27.6 million, or $0.20 per diluted ADS, for the same quarter of 2013.

First Nine Months 2014 Results

Total revenues were $592.2 million, an increase of 24% from $475.7 million for the same period of 2013, primarily driven by growth of revenues from real estate online services.

Revenues from real estate online services were $324.1 million, an increase of 55% from $209.1 million for the same period of 2013, contributed by growth of revenues from e-commerce and online advertising services. Revenues from e-commerce services were $202.2 million, an increase of 118% from $92.7 million for the same period of 2013, primarily due to an 88% increase in discount coupons redeemed (see "Selected Operating Data" below for more details on the discount coupons sold and redeemed). Revenues from online advertising services were $111.2 million, an increase of 9% from $102.2 million for the same period of 2013, primarily due to growth in both the Company’s new home and home furnishing channels. Revenues from listing services were $10.7 million, compared to $14.1 million for the same period of 2013, primarily due to the slowdown in secondary home sales.

Revenues from real estate brokerage services were $185.6 million, a decrease of 2% from $188.7 million for the same period of 2013. Revenues from primary real estate agency services were $178.9 million, relatively flat compared to $180.4 million for the same period of 2013. Revenues from secondary real estate brokerage services were $6.7 million, a decrease of 19% from $8.3 million for the same period of 2013, due to the Company’s decision to reduce the number of physical stores.

Revenues from real estate information and consulting services were $51.0 million, a decrease of 2% from $52.3 million for the same period of 2013, due to revenue decreases from consulting services, particularly land transaction-related consulting services.

Revenues from other services were $31.5 million, an increase of 23% from $25.6 million for the same period of 2013, due mostly to carried interest recognized from real estate fund management services of $5.4 million during the third quarter of 2014.

Cost of revenues was $209.6 million, an increase of 10% from $190.8 million for the same period of 2013, mostly due to increased staff costs from primary real estate agency services, partially offset by the decrease of the fees paid to third parties for services in connection with the Company’s online listing business, and the decrease of the amortization expenses of intangible assets.

Selling, general and administrative expenses were $359.5 million, an increase of 36% from $264.6 million for the same period of 2013, primarily due to the higher marketing expenses and higher staff-related costs for real estate online services, and increased expenses related to new business lines in 2014.

Income from operations was $31.2 million, an increase of 36% from $23.0 million for the same period of 2013. Non-GAAP income from operations was $59.4 million, an increase of 9% from $54.5 million for the same period of 2013.

Net income was $30.7 million, an increase of 45% from $21.2 million for the same period of 2013. Non-GAAP net income was $56.8 million, an increase of 17% from $48.4 million for the same period of 2013.

Net income attributable to E-House shareholders was $21.4 million, or $0.14 per diluted ADS, an increase of 6% from $20.2 million, or $0.15 per diluted ADS, for the same period of 2013. Non-GAAP net income attributable to E-House shareholders was $45.0 million, or $0.30 per diluted ADS, a decrease of 5% from $47.2 million, or $0.36 per diluted ADS, for the same period of 2013.

Cash Flow

As of September 30, 2014, the Company’s cash and cash equivalents balance was $586.5 million.

Third quarter 2014 net cash used in operating activities was $36.5 million, mainly attributable to non-GAAP net income of $21.9 million, which was offset by an increase in customer deposits of $46.0 million and an increase in accounts receivable of $16.6 million. Net cash used in investing activities was $5.5 million, mainly comprised of $10.8 million in capital expenditures, partially offset by $3.0 million in proceeds from disposal of property and equipment, and $2.9 million from sale of investment in affiliates and return of capital from investment in affiliates. Net cash provided by financing activities was $20.6 million, mainly comprised of a $19.5 million capital contribution from minority shareholders of the community value-added services for their shares of the registered capital.

Distribution of Leju Shares and Cash Dividend to E-House Shareholders

E-House announced today that its board of directors has authorized and approved the Company’s distribution of Leju shares and ADSs and a cash dividend to holders of E-House’s ordinary shares and ADSs. Leju is a majority-owned subsidiary of E-House, and its ADSs are currently traded on the New York Stock Exchange (NYSE: LEJU). E-House will distribute 0.05 Leju ordinary shares to the holder of each E-House ordinary share (or 0.05 Leju ADSs for each E-House ADS), together with a cash dividend of $0.20 per ordinary share (or $0.20 per ADS). The Leju share distribution and cash dividend will be payable on or about January 15, 2015 to shareholders of record as of the close of business on December 3, 2014. The Leju ADSs and cash dividend to be distributed or paid to the Company’s ADS holders through the depositary bank will be subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. Following the distribution of Leju shares, E-House’s equity stake in Leju will decrease from approximately 75% currently to approximately 70%.

Business Outlook

The Company revised its fiscal year 2014 revenue guidance to $870 million to $890 million, from its previously guided range of $910 million to $930 million, due to lower than expected revenues in real estate brokerage, real estate information and consulting, and Leju’s secondary listing businesses. The revised revenue guidance represents an increase of approximately 19% to 22% from $731.1 million in 2013. This forecast reflects the Company’s current and preliminary view, which is subject to change.

Conference Call Information

E-House’s management will host an earnings conference call on November 19, 2014 at 8:15 a.m. U.S. Eastern Time (9:15 p.m. Beijing/Hong Kong time).

Dial-in details for the earnings conference call are as follows:

U.S./International:

+1-845-507-1610

Hong Kong:

+852-3051-2792

Mainland China:

+86-10-800-870-0210

Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is "E-House earnings call."

A replay of the conference call may be accessed by phone at the following number until November 27, 2014:

International:

+1-646-254-3697

Passcode:

30491684

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

About E-House

E-House (China) Holdings Limited ("E-House") (NYSE: EJ) is China’s leading real estate services company with a nationwide network covering more than 250 cities. E-House offers a wide range of services to the real estate industry, including real estate online services, primary sales agency, secondary brokerage, information and consulting, offline advertising and promotion and real estate investment management services. E-House has received numerous awards for its innovative and high-quality services, including "China’s Best Company" from the National Association of Real Estate Brokerage and Appraisal Companies and "China Enterprises with the Best Potential" from Forbes. For more information about E-House, please visit http://www.ehousechina.com/.

Safe Harbor: Forward-Looking Statements

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "may," "intend," "confident," "is currently reviewing," "it is possible," "subject to" and similar statements. Among other things, the Business Outlook section and quotations from management in this press release, as well as E-House’s strategic and operational plans, contain forward-looking statements. E-House may also make written or oral forward-looking statements in its reports filed or furnished with the U.S. Securities and Exchange Commission, including Forms 20-F and 6-K, 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 E-House’s beliefs and expectations, are forward-looking statements and are subject to change. Forward-looking statements 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 in this press release. Potential risks and uncertainties include, but are not limited to, a severe or prolonged downturn in the global economy, E-House’s susceptibility to fluctuations in the real estate market of China, government measures aimed at China’s real estate industry, failure of the real estate services industry in China to develop or mature as quickly as expected, diminution of the value of E-House’s brand or image, E-House’s inability to successfully execute its strategy of expanding into new geographical markets in China, E-House’s failure to manage its growth effectively and efficiently, E-House’s failure to successfully execute the business plans for its strategic alliances and other new business initiatives, E-House’s loss of its competitive advantage if it fails to maintain and improve its proprietary CRIC system or to prevent disruptions or failure in the system’s performance, E-House’s failure to compete successfully, fluctuations in E-House’s results of operations and cash flows, E-House’s reliance on a concentrated number of real estate developers, natural disasters or outbreaks of health epidemics and other risks outlined in E-House’s filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of this press release, and E-House does not undertake any obligation to update any such information, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement E-House’s consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), E-House 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 E-House shareholders, (4) net income (loss) attributable to E-House shareholders per basic ADS, and (5) net income (loss) attributable to E-House shareholders per diluted ADS, each of which excludes share-based compensation expense and amortization of intangible assets resulting from business acquisitions. 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.

E-House 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 E-House’s operating performance. These non-GAAP financial measures also facilitate management’s internal comparisons to E-House’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 that may continue to exist in E-House’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 comparable GAAP financial measures.

For investor and media inquiries please contact:

In China:

Ms. Michelle Yuan
Director of Investor Relations
E-House (China) Holdings Limited
Phone: +86 (21) 6133-0754
E-mail: michelleyuan@ehousechina.com

Mr. Derek Mitchell
Ogilvy Financial, Beijing
Phone: +86 (10) 8520-6139
E-mail: ej@ogilvy.com

In the United States:

Mr. Justin Knapp
Ogilvy Financial, U.S.
Phone: +1 (616) 551-9714
E-mail: ej@ogilvy.com

 

E-HOUSE (CHINA) HOLDINGS LIMITED
UNAUDITED CONSOLIDATED BALANCE SHEET
(In thousands of U.S. dollars)

December 31,

September 30,

2013

2014

ASSETS

Current assets

Cash and cash equivalents

413,319

586,493

Restricted cash

2,310

1,784

Customer deposits, net

67,602

67,652

Accounts receivable, net

357,442

384,933

Advance payment for properties, current

60,076

46,134

Properties held for sale

15,305

33,771

Short-term investment

1,279

1,512

Deferred tax assets, net

66,332

65,723

Prepaid expenses and other current assets

44,235

40,892

Amounts due from related parties

1,263

6,947

Total current assets

1,029,163

1,235,841

Property and equipment, net

50,077

49,225

Intangible assets, net

141,232

125,872

Investment in affiliates

39,052

47,127

Goodwill

51,600

51,449

Customer deposits, non-current, net

652

48,074

Investment in preferred shares of a private entity

30,349

Other non-current assets

43,744

65,891

Total assets

1,355,520

1,653,828

LIABILITIES AND EQUITY

Current liabilities

Accounts payable

11,265

6,421

Accrued payroll and welfare expenses

102,632

76,743

Income tax payable

98,686

96,803

Other tax payable

40,001

43,768

Amounts due to related parties

5,536

6,305

Advance from property buyers

2,453

1,784

Advance from customers and deferred revenue

24,617

21,669

Liability for exclusive rights, current

8,968

3,251

Other current liabilities

62,467

81,856

Total current liabilities

356,625

338,600

Deferred tax liabilities

29,901

29,895

Convertible senior notes

131,651

132,478

Other non-current liabilities

1,472

6,657

Total liabilities

519,649

507,630

Equity

Ordinary shares ($0.001 par value): 1,000,000,000 and
1,000,000,000 shares authorized, 137,816,482 and 
141,072,308 shares issued and outstanding, as of December
31, 2013 and September 30, 2014, respectively

138

141

Additional paid-in capital

859,468

1,058,196

Subscription receivables

(2,148)

(539)

Accumulated deficit

(107,705)

(86,299)

Accumulated other comprehensive income

72,185

71,707

Total E-House equity

821,938

1,043,206

Non-controlling interests

13,933

102,992

Total equity

835,871

1,146,198

TOTAL LIABILITIES AND EQUITY

1,355,520

1,653,828

 

E-HOUSE (CHINA) HOLDINGS LIMITED
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share data and per share data)

Three months ended

Nine months ended

September 30,

September 30,

2013

2014

2013

2014

Revenues

195,681

218,718

475,703

592,174

Cost of revenues

(69,067)

(77,890)

(190,793)

(209,618)

Selling, general and administrative expenses

(101,098)

(128,332)

(264,607)

(359,517)

Other operating income

1,446

3,674

2,683

8,134

Income from operations

26,962

16,170

22,986

31,173

Interest expenses

(1,326)

(3,991)

Interest income

661

805

1,586

2,180

Other income (expenses), net

(236)

117

(862)

3,180

Income before taxes and equity in affiliates

27,387

15,766

23,710

32,542

Income tax expense

(6,539)

(3,132)

(5,987)

(5,379)

Income before equity in affiliates

20,848

12,634

17,723

27,163

Income (loss) from equity in affiliates

(205)

424

3,482

3,553

Net income

20,643

13,058

21,205

30,716

Less: net income attributable to

non-controlling interests

1,409

7,968

1,000

9,310

Net income attributable to E-House
  shareholders

19,234

5,090

20,205

21,406

Earnings per share:

Basic

0.14

0.04

0.16

0.15

Diluted

0.14

0.03

0.15

0.14

Shares used in computation:

Basic

133,343,905

139,374,967

128,274,432

138,472,922

Diluted

138,922,900

146,962,092

132,151,974

146,680,245

 

Note 1:

The conversion of Renminbi ("RMB") amounts into USD amounts is based on the rate of USD1 = RMB6.1525 on September 30, 2014 and USD1 = RMB6.1594 for the three months ended September 30, 2014

 

 

E-HOUSE (CHINA) HOLDINGS LIMITED
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(In thousands of U.S. dollars)

Three months ended

Nine months ended

September 30,

September 30,

2013

2014

2013

2014

Net income

20,643

13,058

21,205

30,716

Other comprehensive income, net of tax of nil:

Foreign currency translation adjustment

3,195

300

12,491

(5,441)

Unrealized holding gains for investment in preferred shares of a private entity

4,629

4,629

Comprehensive income

23,838

17,987

33,696

29,904

Less: Comprehensive income attributable to non-controlling interests

1,666

7,931

1,374

8,980

Comprehensive income attributable to E-House shareholders

22,172

10,056

32,322

20,924

 

 

E-HOUSE (CHINA) HOLDINGS LIMITED
Unaudited Reconciliation of GAAP and Non-GAAP Results
(In thousands of U.S. dollars, except share data and per ADS data)

Three months ended

Nine months ended

September 30,

September 30,

2013

2014

2013

2014

(unaudited)

(unaudited)

(unaudited)

(unaudited)

GAAP income from operations

26,962

16,170

22,986

31,173

Share-based compensation expense

4,250

5,919

14,520

16,369

Amortization of intangible assets resulting from business
  acquisitions

5,672

3,448

16,946

11,819

Non-GAAP income from operations

36,884

25,537

54,452

59,361

GAAP net income

20,643

13,058

21,205

30,716

Share-based compensation expense (net of tax)

4,250

5,919

14,520

16,369

Amortization of intangible assets resulting from

business acquisitions (net of tax)

4,254

2,894

12,709

9,707

Non-GAAP net income

29,147

21,871

48,434

56,792

Net income attributable to E-House shareholders

19,234

5,090

20,205

21,406

Share-based compensation expense

(net of tax and non-controlling interests)

4,250

5,329

14,520

15,367

Amortization of intangible assets resulting from business
  acquisitions (net of tax and non-controlling interests)

4,166

2,179

12,445

8,263

Non-GAAP net income attributable to E-House

shareholders

27,650

12,598

47,170

45,036

GAAP earnings per ADS – basic

0.14

0.04

0.16

0.15

GAAP earnings per ADS – diluted

0.14

0.03

0.15

0.14

Non-GAAP earnings per ADS – basic

0.21

0.09

0.37

0.33

Non-GAAP earnings per ADS – diluted

0.20

0.09

0.36

0.30

Shares used in calculating basic GAAP / non-GAAP net
  income attributable to shareholders per ADS

133,343,905

139,374,967

128,274,432

138,472,922

Shares used in calculating diluted GAAP net income
  attributable to shareholders per ADS

138,922,900

146,962,092

132,151,974

146,680,245

 

E-HOUSE (CHINA) HOLDINGS LIMITED
SELECTED OPERATING DATA

Three months ended

Nine months ended

September 30,

September 30,

2013

2014

2013

2014

Primary real estate agency services

Total Gross Floor Area ("GFA") of new 
  properties sold (thousands of square meters)  

4,902

4,991

14,423

14,824

Total value of new properties sold (millions of 
  RMB)

47,178

42,986

132,197

131,615

Total value of new properties sold (millions of $)

7,624

7,019

21,267

21,490

E-commerce services

Number of discount coupons issued to
  prospective purchasers (number of
  transactions)

75,082

85,843

138,481

223,807

Number of discount coupons redeemed (number
  of transactions)

39,654

59,811

76,422

143,407