Capital Watch
Fangdd Network Group Ltd.
Company Profile
Sector: Real estate
Industry: Property technology industry (PropTech)
Fangdd Network Group Ltd. is China’s largest online real estate marketplace. It operates an online platform connecting real estate agents with customers in China. Powered by cloud and big data, features property listings nationwide and facilitates related transactions with various smart business tools and resources. Its database lists homes for rent or sale, as well as those not currently on the market.
Fangdd describes its tech-driven platform as “agent-centric,” acting as a one-stop shop for completing real estate transactions. It aims to solve the issues of China’s fragmented real estate market by providing accurate property information and easy business management for agents, optimizing their efficiency with analytics. Agents on its platform, which reached 1.07 million in June 2019, are ranked based on user ratings and sales. The company acts as an independent party and does not employ any real estate agents.
Founded in 2011, Fangdd has enjoyed fast growth, generating revenue from commission and value-added services. In the full year 2018, its revenue was $332.4 million, up 27% year-over-year. Net income reached $15.2 million compared with about $85,000 in 2017. For the first half of 2019, Fangdd reported revenue of $233.7 million on income of $14.6 million.
Fangdd said it continues to broaden its revenue sources and aims to expand the portion of non-commission-based revenue. For 2018, it reported revenue from innovation initiatives and other value-added services of $36.1 million, up 69% year-over-year. For the six months through June 2019, revenue from that sector decreased 43% y-o-y to $9.8 million, which Fangdd attributed to an adjustment in its strategy. It said it has encouraged faster sales of properties instead of selling at higher prices, a strategy which raised commission-based revenue.
By December 2018, Fangdd served 45% of China’s 2 million registered real estate agents, more than any other platform of its kind in the nation. Fangdd’s database of verified property listings also outperformed those of other real estate platforms, featuring 131 million homes by June 2019. This data was supported by U.S. market research and consultancy firm Frost & Sullivan.
China’s residential property market is expected to grow at a compound annual growth rate (CAGR) of 9.2% from 2018 to reach 33.4 trillion yuan by 2023, according to Frost & Sullivan. Commission revenue from home sales is expected to rise at a CAGR of 22.6% to 343.6 billion yuan by 2023, the consultancy reported.
Early on, Fangdd has been backed by Shanghai-based private equity fund Vision Knight Capital. The head of the fund and former chief executive of Alibaba Group Holding Ltd. (NYSE: BABA), David Zhe Wei, is now a director on the board of Fangdd.
Corporate Information
18/F, Unit B2, Kexing Science Park,
15 Keyuan Road, Technology Park
Nanshan District, Shenzhen, 518057
Phone: +86-755-2699-8968
Key Executives
Mr. Yi Duan, Co-founder, Chairman and CEO
Before co-founding Fangdd Mr. Duan was the managing director at Suzhou Best Team Real Estate Cooperation Service Co., Ltd. from 2000 to 2011. Mr. Duan received a bachelor’s degree in real estate management from Suzhou Urban Construction and Environmental Protection Institute and an EMBA degree from China Europe International Business School. Mr. Duan also completed the China CEO program at Cheung Kong Graduate School of Business in 2016.
Mr. Xi Zeng, Co-founder and COO
Before co-founding Fangdd, Mr. Zeng was the manager at Suzhou Best Team Real Estate Cooperation Service Co., Ltd. from 2002 to 2010. He received a bachelor’s degree from Suzhou University of Science and Technology and an EMBA degree from China Europe International Business School.
Mr. Jiancheng Li, Co-founder and CTO
Before co-founding Fangdd, Mr. Li worked for Tencent Holdings Ltd (HKEX: 0700) from 2005 to 2010 and served as a general manager of its Shenzhen R&D center. He served as senior manager at UTStarcom from 1999 to 2005. Mr. Li received a bachelor’s and a master’s degree from Huazhong University of Science and Technology and an EMBA degree from China Europe International Business School.
Ms. Li Xiao, Vice President
Ms. Xiao has more than 20 years of experience in China’s real estate industry. From 1994 to 2014, Ms. Xiao worked at China Vanke Co., Ltd. (HKEX: 2202), where she held multiple positions consecutively, including director, vice president, the head of general manager office, the head of the board office, and the secretary of the board. Ms. Xiao received a bachelor’s degree from Wuhan University and an EMBA degree from China Europe International Business School.
Investor FAQs
1. When was Fangdd established?
The company launched in October 2011 through Shenzhen Fangdd Network Technology Co. Ltd.
2. When does Fangdd’s fiscal year end?
Fangdd’s fiscal year ends on December 31.
3. On which exchange is Fangdd’s stock traded and what is the ticker symbol?
Fangdd’s American depositary shares (ADSs) will be listed on the Nasdaq Global Market under the symbol "DUO."
4. How many ordinary shares does one American depositary share ("ADS") represent?
Each American depositary share in Fangdd represents 25 Class A ordinary shares.
5. How can I obtain a copy of Fangdd’s annual report?
Annual reports are available via this website. All SEC documents are also accessible online through the SEC Filings page.
6. Who is Fangdd’s U.S. legal counsel?
Global Law Office (PRC)
7. Who acts as Fangdd’s depositary bank for ADSs?
The Bank of New York Mellon
8. Who are Fangdd’s underwriters?
Morgan Stanley & Co. LLC, Citigroup Global Markets Inc. and UBS Securities LLC will act as the underwriters on the expected IPO. Co-managers are China International Capital Corp. Hong Kong Securities Ltd. and AMTD Global Markets Ltd.
9. What is the use of IPO proceeds?
Fangdd said it intends to use the proceeds of its IPO in New York to enhance its research and development, boost its sales and marketing and invest in working capital, as well as general corporate purposes.