20-F: Fang Holdings Navigates China's Real Estate Downturn

Fang Holdings Limited reports a significant decline in total revenues for 2024, alongside a reduced net loss, as it navigates a challenging PRC real estate market and implements cost control measures.

Summary

• Total revenues decreased by 38.7% year-over-year in 2024 to US$30.7 million, following a 37.9% decline in 2023.
• Net loss significantly reduced to US$28.8 million in 2024 from US$179.7 million in 2023.
• Marketing services revenue, primarily from new home business, decreased by 34.0% in 2024 to US$11.0 million.
• Listing services revenue, mainly from secondary home listings, decreased by 39.4% in 2024 to US$4.7 million.
• Leads generation services revenue decreased by 40.8% in 2024 to US$8.0 million.
• Financial services revenue increased by 8.6% in 2024 to US$5.0 million, from a lower base.
• Other services revenue, including licensing agreements, decreased by 73.4% in 2024 to US$2.0 million.
• Gross profit decreased by 40.7% in 2024 to US$25.0 million, with gross margin at 81.4%.
• Operating loss improved to US$34.4 million in 2024 from US$205.9 million in 2023.
• Impairment of long-lived assets was US$55.1 million in 2024, following US$151.1 million in 2023.
• A net reversal of credit losses of US$41.3 million was recorded in 2024 due to the recovery of certain long-outstanding receivables.
• Cash and cash equivalents and short-term investments decreased to US$123.9 million in 2024 from US$192.6 million in 2023.
• Net cash inflow from operating activities was US$3.6 million in 2024, a positive shift from outflows in previous years.
• A material weakness in internal control over financial reporting was identified as of December 31, 2024, due to insufficient financial reporting and accounting personnel.
• The company settled a shareholder winding-up petition in the Cayman Court in October 2023 without further financial obligations.
• A shareholder derivative action was settled on October 25, 2025, involving a US$30.0 million cash payment from defendants and delivery of 20,471,063 CIH Holdings Limited shares to the company, along with corporate governance reforms.
• A new shareholder winding-up petition was filed on January 19, 2024, alleging unfair prejudice and oppression to minority shareholders, which remains pending.

Sentiment

Score: 4

Explanation: While Fang Holdings Limited showed an improved net loss and positive operating cash flow in 2024, these improvements were largely driven by cost controls, impairment adjustments, and credit loss reversals rather than a robust rebound in core business revenue, which continued to decline significantly. The company operates in a challenging and highly regulated PRC real estate market, facing intense competition and macroeconomic headwinds. Ongoing shareholder litigation and a pending winding-up petition introduce substantial uncertainty and governance risks. The going-private proposal from Mr. Dai, while potentially offering a premium, is non-binding and its outcome is uncertain. The recent capital raise provides some liquidity but does not fundamentally alter the challenging business environment.

Positives

• Net loss significantly reduced from US$179.7 million in 2023 to US$28.8 million in 2024.
• Operating loss improved from US$205.9 million in 2023 to US$34.4 million in 2024.
• Net cash inflow from operating activities of US$3.6 million in 2024, a positive shift from outflows in previous years.
• Financial services revenue increased by 8.6% in 2024 to US$5.0 million.
• A net reversal of credit losses of US$41.3 million was recorded in 2024 due to the full recovery of certain long-outstanding receivables.
• Successful restructuring of a CNY 720 million structured note, reducing the principal to CNY 360 million and the interest rate to 4.25%.
• Settlement of a shareholder winding-up petition in the Cayman Court (FSD 278 of 2020) in October 2023, releasing parties from undertakings.
• A favorable appellate court judgment in an equity transfer agreement dispute, awarding RMB200 million principal plus default interest to a subsidiary.
• Obtained new bank facilities totaling RMB253,050,000 in 2025, with RMB245,050,000 already withdrawn.

Negatives

• Total revenues decreased by 38.7% in 2024 to US$30.7 million, continuing a multi-year decline.
• Marketing, listing, and leads generation services all experienced significant revenue declines in 2024 due to the prolonged downturn in the PRC real estate market.
• Continued impairment charges on long-lived assets (US$55.1 million in 2024, US$151.1 million in 2023) reflect deteriorating property market conditions.
• Cash and cash equivalents and short-term investments decreased significantly from US$192.6 million in 2023 to US$123.9 million in 2024.
• Identified a material weakness in internal control over financial reporting as of December 31, 2024, due to insufficient financial reporting and accounting personnel.
• An ongoing shareholder winding-up petition (Koa Capital L.P. and 507 Summit LLC) was filed on January 19, 2024, alleging unfair prejudice and oppression to minority shareholders, with an uncertain outcome.
• A pending appeal in a property management contract dispute, with a first-instance judgment ordering payment of RMB40.93 million (US$5.7 million) plus penalties.
• Uncertainty regarding the recovery from a favorable judgment in a loans and guarantees dispute due to counterparties' involvement in multiple litigations and designation as dishonest judgment debtors.
• Interest expense increased by 19.5% to US$9.7 million in 2024 due to new long-term bank borrowings.
• Negative change in fair value of securities resulted in a loss of US$2.9 million in 2024.
• Investment income, net, recorded a loss of US$1.4 million in 2024.

Risks

• May continue to incur losses and may not be able to return to profitability.
• Business could be materially and adversely affected by fluctuations in, and government measures influencing, China's real estate industry.
• Business depends substantially on revenues from marketing services, and participants in the real estate and home-related sectors may choose other advertising media.
• Inability to continue to obtain listings from key customer groups (real estate developers, agents, brokers, property owners/managers).
• Future growth depends in part on the ability to continue to operate the retained business after the separation of CIH.
• Derives a substantial portion of revenues from several major urban centers in China, facing market risks due to concentration.
• Failure to obtain or maintain applicable licenses and approvals under the complex regulatory environment for Internet-based and online advertising businesses in China.
• Required to comply with PRC and other applicable laws relating to privacy and cybersecurity; improper use or disclosure of data could have a material adverse effect.
• If the PRC government determines that the structure contracts for business operations do not comply with applicable PRC laws, severe penalties or restructuring could occur.
• Substantial uncertainties exist with respect to the adoption of new or revised PRC laws relating to corporate structure, governance, and business operations.
• May lose the ability to utilize assets held by consolidated controlled entities if any go bankrupt or become subject to dissolution/liquidation.
• Contractual arrangements, including voting proxies, with consolidated controlled entities may not be as effective as direct ownership in providing operational control.
• Shareholders of consolidated controlled entities may have potential conflicts of interest.
• Controlled by significant shareholders whose interests may differ from other shareholders.
• China's economic, political, and social conditions, as well as government policies, could have a material adverse effect.
• Uncertainties with respect to the PRC legal system could adversely affect the company.
• The PRC government's significant oversight over business operations could result in a material adverse change.
• Relies primarily on dividends and other distributions from subsidiaries, and any limitation on their ability to make payments could have a material adverse effect.
• PRC regulations on loans to PRC entities by offshore holding companies may affect the ability to capitalize or fund PRC operations.
• May be subject to fines and legal or administrative sanctions in connection with certain historical intra-group funding transactions.
• Government significant influence of currency conversion may limit the ability to utilize revenues effectively.
• PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject beneficial owners or PRC subsidiaries to liability or penalties.
• Approval of and/or report and filing with the CSRC or other PRC government authorities may be required in connection with offshore offerings under PRC law.
• ADSs or ordinary shares may be delisted under the Holding Foreign Companies Accountable Act (HFCA Act) if the PCAOB is unable to adequately inspect audit documentation located in China.
• Difficulties in protecting interests and ability to protect rights through U.S. courts may be limited due to incorporation under Cayman Islands law and primary operations in China.
• Changes in international trade policies and rising political tensions, particularly between the U.S. and China, may adversely impact business.
• The delisting of ADSs from the New York Stock Exchange (NYSE) may continue to have a material adverse effect on trading and price.
• The market price of ADSs has been and may continue to be highly volatile.
• There can be no assurance that any agreement will be executed with respect to the going-private proposal made by Mr. Richard Jiangong Dai.
• May need additional capital, and the sale of additional ADSs, convertible notes, or other equity securities could result in dilution.
• Cayman Islands corporate governance practices may differ significantly from U.S. standards, affording less protection to shareholders.
• As a foreign private issuer, exempt from certain disclosure requirements under the Exchange Act, affording less protection to shareholders.
• Voting rights of holders of ADSs are limited by the terms of the deposit agreement.
• May not be able to participate in rights offerings and may experience dilution.
• Return on investment in ADSs will primarily depend upon future price appreciation, with no guarantee of dividends.
• May not receive distributions on ordinary shares or any value for them if it is illegal or impractical to make them available.
• May be required to withhold PRC income tax on any dividend paid, and any gain realized on transfer of ordinary shares/ADSs may be subject to PRC withholding tax.
• Dual-class ordinary share structure with different voting rights could discourage change of control transactions.
• Articles of association contain anti-takeover provisions.
• The future sale of substantial amounts of ADSs could lower the market price.
• May be or become a passive foreign investment company (PFIC), which could result in adverse U.S. tax consequences to U.S. investors.
• Difficulties for overseas regulators to conduct investigation or collect evidence within China.

Future Outlook

The PRC real estate market is expected to continue facing challenges, including subdued consumer confidence, financial pressure on property developers, and adjustments in market supply and demand dynamics. Government policies aimed at stabilizing the market may take time to materialize. The company plans to streamline operations, re-prioritize resources toward core service lines, and cautiously manage future capital spending. It will also continue to assess evolving regulatory requirements applicable to online marketing and data usage.

Management Comments

• We believe we operate a leading real estate Internet portal in China in terms of the number of page views and visitors to our websites in 2024.
• We believe user satisfaction ultimately rests on the appeal, attraction and functionality of our websites.
• Management believes that the ultimate outcome of the [shareholder winding-up] petition and any potential financial impact cannot be reliably estimated at this time.
• Management has assessed these developments [property management dispute] and determined that no adjustment to the consolidated financial statements as of December 31, 2024 is required.
• Management will continue to monitor developments relating to the enforcement of the [equity transfer dispute] judgment and would update the financial statements if, and only to the extent that, new information were to become available.

Industry Context

The PRC real estate market is experiencing a prolonged and deepening downturn, characterized by subdued consumer confidence, widespread financial pressure on property developers, and adjustments in market supply and demand dynamics. This environment has negatively impacted transaction volumes for both new and secondary properties, as well as related sectors like home furnishing and improvement. The online real estate Internet service market in China remains highly competitive with low barriers to entry, and government policies continue to play a significant role in regulating the industry.

Management Changes

Corporate Governance

Legal Proceedings

• Property Management Contract Dispute: On July 30, 2025, a Beijing court issued a first-instance judgment ordering the company's subsidiary and seven affiliates to pay approximately RMB40.93 million (US$5.7 million) plus late payment penalties. The company has filed an appeal, and the second-instance outcome is uncertain. An accrual of RMB50.70 million (US$7.0 million) was recorded as of December 31, 2024.
• Shareholder Winding-Up Petition (Koa Capital L.P. and 507 Summit LLC): Filed on January 19, 2024, in the Grand Court of the Cayman Islands, seeking the winding up of Fang Holdings Limited due to alleged unfairly prejudicial and oppressive conduct by management towards minority shareholders. The petition remains pending as of December 31, 2024, with the outcome uncertain and no reliable estimate of financial impact.
• Derivative Action (Oasis Investments II Master Fund Ltd.): A settlement was entered into on October 25, 2025, resolving a shareholder derivative action. Defendants agreed to pay US$30.0 million cash into a settlement fund for minority shareholders and deliver 20,471,063 CIH Holdings Limited shares to the company. The company also committed to corporate governance reforms. The settlement is subject to court approval.
• Arbitration Award Recognition and Enforcement (Yao Lin): On April 12, 2023, the U.S. District Court Central District of California entered judgment in favor of Beijing SouFun Science and Technology Development Co., Ltd. against Yao Lin for US$17,989,991.87 plus interest, enforcing a CIETAC arbitration award. Cross-border enforcement actions are ongoing, but the timing and amount of recovery remain highly uncertain.
• Equity Transfer Agreement Dispute: On April 11, 2025, an appellate court issued a final judgment ruling that former shareholders are liable to compensate a company subsidiary RMB200 million (US$27.8 million) plus default interest. The timing and amount of potential recovery are highly uncertain due to the counterparties' involvement in multiple litigations and designation as dishonest judgment debtors.

Related Party Transactions

• Lease of office building from Mr. Vincent Tianquan Mo (Executive Chairman): Deemed rental expense of US$0.2 million in 2024. The agreement was renewed in 2022, extending the maturity date to 2032.
• Management services provided by Beihai Silver Beach (controlled by Mr. Vincent Tianquan Mo): Management fees incurred were US$0.5 million in 2024.
• Lease of office building to CIH (a company under the control of Mr. Vincent Tianquan Mo and the company can exercise significant influence): Lease income of US$1.1 million in 2024.
• IT service income from CIH: US$1.1 million in 2024. This decreased from US$5.9 million in 2023 due to CIH's internal resource allocation and procurement adjustments.
• Software license income from CIH: The software license agreement with CIH was terminated in 2023 by mutual consent, resulting in no income from this source in 2023 or 2024.
• Operating loan to Shanghai Yuyue (controlled by Mr. Vincent Tianquan Mo): US$0.4 million in 2024 to meet working capital needs. These loans are unsecured, repayable on demand, and bear interest at prevailing market rates.
• Amounts due from related parties: US$0.3 million as of December 31, 2024, primarily from Beihai Silver Beach and Shanghai Yuyue.
• Amounts due to related parties: US$4.5 million as of December 31, 2024, primarily from CIH related to its payment of US$84.3 million on behalf of the company in 2021 to settle a convertible bond. These balances are unsecured, non-interest bearing, and have no fixed repayment terms.

Stakeholder Impact

• Shareholders: Impacted by the delisting from the NYSE and trading on the OTC Expert Market, leading to reduced liquidity and market price volatility. Affected by ongoing shareholder litigation and the uncertainty of the going-private proposal. Potential benefit from the derivative action settlement.
• Employees: Workforce downsizing occurred in 2024 due to restructuring and operating strategy adjustments. Employees receive base salaries, performance-based bonuses, and have been granted share options.
• Customers (real estate developers, agents, brokers): Affected by declining demand for marketing, listing, and leads generation services due to the prolonged downturn in the PRC real estate market.
• Creditors: Impacted by debt repayments, new borrowings, and ongoing legal disputes that could affect the collectability of certain receivables and overall financial stability.
• Regulatory Bodies: The company is subject to significant oversight by PRC government authorities, with evolving regulations in areas like data security, foreign investment, and online advertising, which could lead to penalties or operational restrictions.

Next Steps

• Continue to streamline operations and re-prioritize resources toward core service lines.
• Monitor cash collections and partner credit risk.
• Monitor ongoing regulatory changes and adjust tax strategies accordingly.
• Vigorously contest the shareholder winding-up petition filed on January 19, 2024.
• Monitor developments and update financial statements regarding the loans and guarantees dispute.
• Continue to monitor the property management contract dispute and update financial statements if new information becomes available.
• Implement specified corporate governance reforms as per the derivative action settlement, including appointing a new fully independent outside director and establishing a special committee for related party transactions.

Key Dates

Recommendation

While Fang Holdings Limited showed an improved net loss and positive operating cash flow in 2024, these improvements were largely driven by cost controls, impairment adjustments, and credit loss reversals rather than a robust rebound in core business revenue, which continued to decline significantly. The company operates in a challenging and highly regulated PRC real estate market, facing intense competition and macroeconomic headwinds. Ongoing shareholder litigation and a pending winding-up petition introduce substantial uncertainty and governance risks. The going-private proposal from Mr. Dai, while potentially offering a premium, is non-binding and its outcome is uncertain. Given the mix of operational challenges, regulatory risks, and legal uncertainties, a 'hold' recommendation is appropriate. Investors should monitor the resolution of legal matters, the progress of the going-private proposal, and any signs of sustainable revenue growth in core segments before considering further investment. The recent capital raise provides some liquidity but does not fundamentally alter the challenging business environment.

Keywords

Real Estate China, Online Property Portal, SEC Filing 20-F, Financial Services China, Marketing Services Real Estate, Leads Generation, Corporate Governance, VIE Structure, PRC Regulations, Delisting, Shareholder Litigation, Financial Performance, Property Market Downturn, Cybersecurity, Internal Controls