Leju Holdings Limited
Investor Presentation
Disclaimer
This presentation contains forward-looking statements. These statements include descriptions and information regarding the intent, belief or current expectations of the Company or its officers about the future. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions, many of which are beyond the Company’s control. Neither the Company nor any of its affiliates, advisors or representatives has any obligation to, or undertakes to, revise forward-looking statements to reflect future events or circumstances.
This presentation also contains non-GAAP financial measures, which are provided as additional information to help you compare business trends among different reporting periods on a consistent basis and to enhance your overall understanding of the historical and current financial performance of the Company’s operations. The Company believes that both management and you benefit from referring to these non-GAAP financial measures in assessing the Company’s performance and when planning and forecasting future periods. These non-GAAP financial measures should be considered in addition to results prepared in accordance with the U.S. GAAP, but should not be considered a substitute for or superior to the Company’s GAAP results. In addition, the Company’s calculation of these non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.
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Leading O2O Real Estate E-commerce Platform
Launched the first real estate
e-commerce product in 2011
Open platform and enhanced
purchasing power to home buyers
E-House and SINA established JV
to offer online advertising services
JV with SINA
2008
E-House acquired a controlling
stake in Leju in 2009
Consolidation of Leju
2009
100%E-commerce 1.0 to
4.0 2011-2013
Mobile E-commerce 1.0
March 2014
IPO on NYSE
April 17, 2014
Our O2O Real Estate Services
Our services
Our customers
Revenue model
Online
advertising
Online advertising services on SINA’s and Baidu’s new residential properties and home furnishing websites, as well as our own websites
Real estate developers
Home furnishing suppliers
Advertising contracts are signed between Leju and developers and home furnishing suppliers
Revenue recognized ratably over the advertising contract period
E-commerce
Home buyers Real estate developers Home furnishing suppliers Home buyers receive a discount upon home purchase when coupon is redeemed
Revenue recognized when confirmation of discount coupon redemption is received
Listing
Offer fee-based and “verified” listing services to real estate brokers for authentic listings
Secondary real estate brokers
Individual property owners
Revenue recognized ratably over the contract period of display for brokers and free of charge for individuals
Sales of discount coupons
Detailed online property viewing for buyers
Free physical property and showroom visits
arrangement
Arrange phone calls between buyers and developers
Pre-sale customer support
Arrange real estate exhibitions for developers
Business Updates
Strategic cooperation with Tencent: Weixin sales center currently under development
Tencent became strategic investor
Mobile ecommerce 1.0 platform including
Weibo sales center
Mobile APP Fangniujia
IPO on NYSE on April 17, 2014
Q1 2014 Earnings Summary
Total revenues increased by 97% year-on-year to $78.5 million
Revenues from e-commerce services increased 238% year-on-year to $49.7 million
Non-GAAP income from operations was $8.4 million (10.7% margin)
Summary Investment Highlights
Leading innovator in China’s O2O real estate services pioneering
e-commerce and mobile products
2
Strong O2O service platform combining extensive online services with
complementary offline support
3
Scalable business model with high operating efficiency
4
Comprehensive online real estate platform attracting customers from major
internet and mobile entry points
1
Experienced and motivated management team
Open Online and Mobile Platforms Attract the
Maximum Number of Potential Buyers
(1) Based on Alexa estimates as of Feb 9, 2014
E-commerce
Online advertising
Listing
Operates the real estate online platform of
Home buyers
Real estate developers
Home furnishing suppliers
Real estate developers
Home furnishing suppliers
Secondary real estate brokers
Individual property sellers
Real estate services
China’s leading internet media company Leading Chinese language search engine 110 mn visits on SINA per day(1)200 mn visits on Baidu per day(1)
微信 Leading mobile messaging application in China Weixin Leju Leading social media platform in China Weibo Leju
China’s first mobile real estate e-commerce platform
Pocket Leju
Mobile application for real estate
brokers Fang Niu Jia
Comprehensive Online and Offline Services Lead
to Successful O2O Service Model
Online
Offline
Prospective home
buyers
Developers
Detailed online property viewing
Targeted housing search function
Convenient online registration for property visit
Free physical property visit arrangement
Pre-sale customer support
Phone call arrangement with developers
Receive discount on purchase price
Real estate exhibitions
Bring in prospective home buyers to showrooms
Phone call arrangement with prospective buyers
Marketing events
Maximum exposure to potential buyers
Accurately measure the marginal improvement in property sales through discount coupons redemption
Refund SINA Leju
Online
Offline
Home buyer SINA Weibo (PC)Baidu Leju, Brand Link
Registration for property visit
Purchase discount coupon
Leju 400 Service Hotline
Showrooms
Transaction completed Third party payment platform
POS
Leju E-commerce platform
Enhanced Closed-loop E-commerce Platform –
PC + Mobile and Customer + Business
SINA Leju
SINA Weibo
(PC) Baidu Leju, Brand Link
Show-room
Mobile platform
（Weibo / Weixin） User account Home buyerPC
Custo
me
r
Pl
atf
or
m
O n line O ff lineCusto
me
r
P
la
tf
orm
M
obile
Busi
nes
s
P
la
tf
orm
Purchase discount coupon Refund Refund Cloud data Fang Niu JiaHome Buyer
Agent A
Agent B
Agent X
……
Settlement and payment of commission
R e gi s tra tion for propert y v is it
Leju E-commerce platform
Third party payment platform POS
Leju 400 Service Hotline
Weibo Online Sales Center from Mobile App –
Interactive features create better user experience
Price details
400 service hotline (press to make the call) Sign up discount coupons
Sign up for a bus tour
Purchase discount coupons
Online Advertising Platform with Multiple China
Internet Entry Points through Strategic Partners
China’s leading search engine platform China’s leading internet media company
We operate SINA’s real estate website and home
furnishing website
Leju is entitled to all advertising revenues from these platforms
Leju is also the exclusive advertising agent of SINA’s
homepage and non-real estate websites until 2024 − entitled to 85% of the revenue derived from real estate
and home furnishing advertising on these websites
Service offerings include: online advertising, sponsorship arrangements, outsourcing arrangements and keyword advertising
We launched Baidu’s real estate website and home
furnishing website in Aug 2010
Leju is the exclusive real property advertising partner of Baidu
We have exclusive right to build and operate all of Baidu’s
websites related to real estate and home furnishing until Mar 2015
− entitled to retain all such advertising revenues in exchange for a fixed fee paid to Baidu
We have obtained the exclusive right to sell Baidu’s real
estate Brand-Link product to advertisers
Service offerings include: search-based advertising
Secondary Property Listing Platform
esf.sina.com.cn and esf.baidu.com
Property certification enhance viewers’ confidence in the accuracy and reliability of property listing information
Property listing with the “V” certified logo means that property
agent has been screened by different criteria, including mandate by the property owner, property rights, verified property price, etc
Multiple portal entry through SINA Leju and Baidu Leju
Search function enabling users to look for their preferred properties conveniently
Users can search for their preferred properties by location, price, types, names of properties, etc.
Xin Zhou
Executive Chairman
Chairman since inception
Co-founder of E-House
Over 20 years of experience
Yinyu (Geoffrey) He
Chief Executive Officer
Previously vice-president of Leju
Keyi Chen
Co-President
Previously general manager of our Beijing branch
Li-Lan Cheng
Executive Director
COO of E-House
Previously CFO of E-House and former CFO of SouFun
Min Chen
Chief Financial Officer
Previously MD, head of Asia corporate finance and head of China real estate and lodging at BoAML
Weijie Ma Co-President Deputy CFO of E-House Previously financial controller of E-House
Experienced and Motivated Management Team
Deep industry expertise in real estate services and internet
Strong innovation capabilities and proven execution capabilities
Driven by strong motivation and incentives
Strategic planning leading to significant growth opportunities
Dedicated, experienced operating team
27.0 170.2 132.1 138.8 145.4 5.0 5.5 19.8
FY2011 FY2012 FY2013
E-commerce Online advertising services Listing services
14.7 49.7 21.7 24.6 3.4 4.2 1Q2013 1Q2014
E-commerce Online advertising services Listing services
Strong Growth Momentum and Compelling
Revenue Model
Substantial growth in revenue brought by E-commerce business through sales of discount coupons
Scalable Business Model with High Operating
Efficiency
Improving income (loss) from operations
(1)Rapid growth of net profit attributable to shareholders
(2)(1) Adjusted income (loss) from operations is arrived by adjusting the GAAP income from operations by share-based compensation expense, amortization of intangible assets resulting from business acquisitions and goodwill impairment charge
(2) Adjusted net income (loss) attributable to Leju shareholders is arrived by adjusting the GAAP net income (loss) attributable to Leju shareholders by share-based compensation expense (net of tax and NCI), amortization of intangible assets resulting from business acquisitions (net of tax and NCI) and goodwill impairment charge (net of tax and NCI)
(3) “NM” indicates Not Meaningful
(US$ mn) (US$ mn) 17 10.9 (10.9) 63.0 (9.8) 2.2 7
.9%
18.8% 10.8%FY2011 FY2012 FY2013 1Q2013 1Q2014
NM (3) 12.8 (9.0) 74.2 (2.6) 8.4 9.3% 22.1% 10.7%
FY2011 FY2012 FY2013 1Q2013 1Q2014
NM (3) NM (3)
Key Financial Statement Items
Income statement items (US$ mn) FY2011 FY2012 FY2013 1Q2013 1Q2014
E-commerce - 27.0 170.2 14.7 49.7
Online advertising services 132.1 138.8 145.4 21.7 24.6
Listing services 5.0 5.5 19.8 3.4 4.2
Total revenues 137.1 171.3 335.4 39.8 78.5
Gross profit 99.5 117.2 271.4 24.5 66.4
Income from operations (439.9) (46.2) 45.9 (9.6) 2.0
Net income (loss) attributable to Leju
shareholders(2) (438.8) (44.8) 42.5 (9.8) 2.2
Non-GAAP measures:
Adjusted income (loss) from
operations(1) 12.8 (9.0) 74.2 (2.6) 8.4
Adjusted net income (loss)
attributable to Leju shareholders(2) 10.9 (10.9) 63.0 (4.3) 7.7
Margins and growth rates FY2011 FY2012 FY2013 1Q2013 1Q2014
Revenue growth (yoy) NA 25.0% 95.8% 1736.3% 238.5%
Adjusted operating margin(1) 9.3% (5.2%) 22.1% (6.6%) 10.7%
Key Financial Statement Items (Cont’d)
Key Balance Sheet Items (US$ mn) FY2011 FY2012 FY2013 1Q2014
Cash and cash equivalents 64.3 71.1 98.7 99.3
Accounts receivable 62.7 86.7 87.3 84.6
Total current assets 143.9 179.0 222.8 221.9
Intangible assets, net 199.9 163.2 128.5 121.6
Total assets 393.8 393.9 402.9 394.3
Total liabilities 178.9 200.6 151.1 156.3
Total shareholders’ equity 214.8 193.3 251.8 238.0
Key Cash Flow Statement Items (US$ mn) FY2011 FY2012 FY2013 1Q2014 Net cash provided by operating activities 11.2 3.3 83.4 6.7 Net cash used in investing activities (26.6) (18.2) (16.7) (0.3) Net cash from financing activities 26.8 21.5 (41.4) (5.1) Net increase in cash and cash equivalents 12.7 6.8 27.6 0.6
Ending cash balance 64.3 71.1 98.7 99.3
E-commerce operating data 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
