Fangdd Network Group Ltd (DUO)

Fangdd Network Group Ltd: Annual Financial Analysis (FY 2024)

Report Date: 2025-04-24
Period Covered: Fiscal year ended December 31, 2024
Form Type: 20-F

Profit & Debt Analysis

• Net income for FY 2024: ¥283 million (US$ 39 million), compared to a net loss of ¥931 million in FY 2023.
• Gross profit increased by 21% to ¥61.7 billion, driven by higher transaction volumes and tighter cost control.
• Operating expenses fell 39% year-on-year to ¥18.7 billion, reflecting lower R&D and G&A costs.
• Cash flow from operations improved to an outflow of ¥604 million, down from ¥1.86 billion in 2023, aided by faster accounts receivable collection.
• Total debt (short- and long-term bank borrowings) at year-end was ¥346 million (US$ 47.5 million), flat versus prior year.

Drivers of Profitability:

• A recovering Chinese real-estate market spurred transaction volumes.
• Strategic exit from high-risk developer partnerships improved receivables collectability.
• Focus on high-margin new‐property commissions versus low‐margin secondary sales.

Risks & Challenges:

• Continuing credit risk among developers and homebuyers.
• Regulatory oversight in China (licensing, data security, VIE structure).
• Currency controls and FX fluctuations limit offshore cash repatriation.

Pros and Cons

Pros:

• Turned profitable with positive operating leverage.
• Strong market position in digitized real-estate transactions and agent SaaS tools.
• Growing asset-management services with municipal partners.

Cons:

• High credit exposure to developers and reliance on receivable collections.
• Regulatory risks around VIEs, cybersecurity and offshore listings.
• Limited free cash; continued equity/dilutive financing likely.

FY 2024 Revenue Breakdown (¥ 000s):
• Base Property-Transaction Commissions: ¥320,757 (94.6%)
• Innovation-Initiative Income (sales incentives): ¥18,347 (5.4%)
• Value-Added Services (SaaS, loans, parking): ¥0 (0.0%)

Fangdd has shifted to profitability in FY 2024, reducing its operating losses while maintaining a lean cost structure. Transaction commission revenue remains the core driver, supplemented by a small but growing innovation income stream. The company’s pivot away from high-risk developer deals and tighter credit controls have trimmed bad-debt provisioning. Looking ahead, Fangdd must balance its growth in SaaS and asset-management services with ongoing developer credit risk and China-specific regulatory headwinds. FX and offshore cash repatriation constraints will keep the firm reliant on on-shore reinvestment or new equity raises. Continued focus on operational efficiency, deeper penetration of high-frequency agent tools, and careful management of receivables will be critical to sustaining its upward trajectory.