Understanding Fangdd’s Prospectus

Shenzhen-based Fangdd Network Group Ltd. (Fangdd) has filed its initial prospectus with the U.S. Securities and Exchange Commission on Oct. 9. The company aims to become the first publicly listed industry internet SaaS company in China. The following is a set of data showing Fangdd’s strong market performance.

1.Fangdd’s net profit exceeded 100 million in the first half of 2019, and the company continues to maintain profitability. The company had a net income of 0.6 million yuan in 2017 and 104.0 million yuan ($15.2 million) in 2018, compared with a net loss of 332.1 million yuan in 2016. The company had a net income of 100.3 million yuan ($14.6 million) in the six months ended June 30, 2019, increased by 166.6% from 37.6 million yuan in the six months ended June 30, 2018.

2.The company’s revenue reached 1.6 billion yuan in the first half of 2019, an increase of 55.4%. According to the prospectus, in 2019 alone, Fangdd's revenue increased by 55.4% compared with the same period of the previous year with 1.6 billion yuan ($233.7 million) in revenue as of June 30, 2019. Its revenue increased by 21.9% from 1.5 billion yuan in 2016 to 1.8 billion yuan in 2017, and further by 26.9% to 2.3 billion yuan ($332.4 million) in 2018.

3.Closed-loop GMV reached 91.3 billion yuan ($13.3 billion) in the six months ended June 30, 2019.

Fangdd’s innovative business model makes “closed-loop online real estate transactions” possible. Not only does the company provide agents with access to local and cross-regional and intra-city listings and buyers, it also provides the services and tools required to complete transactions. As a result, as agents more effectively and actively use its tools, more transactions are facilitated through Fangdd’s marketplace.

According to the filing, the closed-loop GMV completed on its platform increased by 53.9% from 73.9 billion yuan in 2017 to 113.7 billion yuan ($16.6 billion) in 2018, and by 100.2% from 45.6 billion yuan in the six months ended June 30, 2018, to 91.3 billion yuan ($13.3 billion) in the six months ended June 30, 2019.

4.Fangdd had more than 1.07 million registered agents as of June 2019, and it aims to become the largest industry internet SaaS company in China.

According to data from Frost & Sullivan, as of December 31, 2018, Fangdd operated the biggest SaaS-powered online real estate transaction marketplace in China.  At the end of 2018, the company said its platform was used by 911,000 of China's 2 million real estate agents with a penetration rate of over 45%. As of June 30, 2019, Fangdd’s marketplace had approximately 1,071,000 registered agents.

5.More than 131 million genuine property information - one of China's largest real estate databases
Fangdd’s marketplace is an agent-centric, open and data-driven transaction platform that empowers real estate agents to complete transactions by providing them with access to extensive verified listings, genuine real estate buyers, sellers, landlords and renters, transaction facilitation services and data analytic products. Fangdd’s database is one of the largest of its kind in China, according to Frost & Sullivan. As of June 30, 2019, its database had 131 million properties, verified through a comprehensive process, covering homes listed for sale or for rent as well as those not currently on the market.

6.Agent’s per capita income more than 1 million yuan in the first half of 2019, higher than the industry average.
FDD has efficient operational capabilities, and its platform operational efficiency is much higher than the industry average. According to the prospectus, the closed-loop GMV per employee grew from 17.8 million yuan in 2016 to approximately 34.6 million yuan in 2017, and further to 84.5 million yuan ($12.2 million) in 2018. It increased from 34.6 million yuan in the six months ended June 30, 2018, to approximately 58.3 million yuan ($8.9 million) in the six months ended June 30, 2019.

Fangdd’s revenue per employee grew from 0.4 million yuan in 2016 to 0.8 million yuan in 2017 and further to 1.7 million yuan ($246,000) in 2018. It increased from 784,000 yuan in the six months ended June 30, 2018, to 1 million yuan ($156,000) in the six months ended June 30, 2019.

As a pioneer of the property technology industry, or PropTech industry, in China, Fangdd has fundamentally revolutionized the way real estate agents conduct business through its products and SaaS-based solutions that help to connect them with essential business resources, including customers, property listings, capital and transaction data. Through innovative use of mobile internet, cloud and big data, the company strives to empower agents to easily conduct business online, improve productivity and broaden the scope of their services.