HONG KONG, March 28, 2014 /PRNewswire/ -- Pacific Online Ltd. (HKSE: 543) ("Pacific Online," the "Company," or the "Group"), a leading internet content provider in China, today announced its financial results for the full year ended December 31, 2013. The Group will host a conference call to discuss these results at 9:00AM Hong Kong time on March 31, 2014. Dial-in details are provided at the bottom of this release.
Year Ended December 31, 2013 Financial Highlights
- Total revenues increased 18.5% year-over-year to RMB847.9 million
- Net profit increased 7.3% year-over-year to RMB253.6 million
"I am pleased to report an 18.5% year-over-year increase in revenues and a rise of 7.3% in net profit for the 2013 fiscal year," commented Mr. Lam Wai Yan, Chairman and Chief Executive Officer of Pacific Online Limited. "During the year, we achieved steady revenue growth by maintaining a well-balanced multi-portal portfolio. We focused on integrating our content to meaningfully engage our users. We also continued to invest in new technology and marketing given the increasing sophistication of Chinese consumers. This allowed us to drive further growth by offering customized internet advertising solutions last year."
"PCAuto's revenue rose 30% and remained our largest portal in terms of revenue. We continued to benefit from the fierce competition in China's car market as automakers and dealers vied for market share. Growth was mainly driven by increases in both sales volumes and higher advertising rates. We further refined our market segmentation strategy using geographic locations in an effort to increase advertising revenue from our clients. With car sales in China expected to grow in the double digits again next year, we expect to see strong demand in this vertical as both automakers and dealers devote larger portions of their budgets to online advertising."
"Revenue from our IT-focused PConline portal declined 5.3%. While we saw an overall increase in advertising revenue from brands and manufacturers, it was offset by a broader decline in revenue from retail store clients. Despite the slowdown, we are confident that we will be able to maintain our leading position in this important vertical as advertisers increasingly consolidate marketing budgets to include only the most effective web portals. We are also focusing our efforts on higher growth market segments, and improving the overall productivity of this portal going forward."
"PClady's revenue increased 41.6% on the back of increased digital marketing spending by a number of large multinationals that are attempting to expand interest among women in China. With its high quality content, the portal continued to attract higher traffic volumes and increased spending from an important and often underserved demographic in China. We anticipate a larger portion of advertising budgets will be spent online to attract female consumers, and we are confident that PClady will continue to position itself at the forefront of the market."
"Revenue from PCgames, PCbaby, and PChouse increased 38.8% in 2013. With the relaxation of the one child policy in China, we believe PCbaby could see significant growth in the years ahead. We will continue to develop these portals by adding high quality content as we work to gradually build scale."
"Mobile products are an integral part of our strategy to effectively engage our users. The high quality content and user-friendly interfaces of our various portals drove the increase in the number of mobile users last year. Our three online magazines also achieved steady increases in downloads and are expected to contribute meaningfully to our advertising revenue. In order to serve the growing mobile user population, we are committed to continuously developing mobile applications for each of our vertical portals."
"We are pleased with the progress we made during the year and eagerly look forward to 2014. We intend to further strengthen our user-centric content in order to ensure that we can deliver superior marketing returns to our clients. Looking ahead, we plan to develop more innovative products, and will continue to ramp up our brand awareness. We are confident that these investments will benefit the Company over the long-term."
Proposed Final Dividend
The Board has recommended the payment of a final cash dividend of RMB16.25 per ordinary share for the year ended December 31, 2013, which compares with RMB15.26 in 2012. The final dividend is subject to shareholder approval at the Company's forthcoming annual general meeting to be held on Friday, May 23, 2014. The proposed final dividend will be paid in cash on June 12, 2014 to shareholders whose names appear on the shareholder register at the close of business on June 4, 2014.
Full year 2013 Financial Results
Revenue
Revenue increased 18.5% from RMB715.6 million for the year ended December 31, 2012 to RMB847.9 million for the year ended December 31, 2013.
Revenue for PCauto, the Group's automobile portal, increased 30.2% from RMB344.6 million in 2012 to RMB448.7 million in 2013. According to statistics from the China Passenger Car Association, passenger car sales in China grew 17 percent to 17.2 million in 2013. PCauto was able to outperform this broader market growth as automobile advertisers continued to allocate more of their marketing budgets to digital media.
Revenue for PConline, the Group's IT and consumer electronics portal, decreased 5.3% from RMB266.1 million in 2012 to RMB251.8 million in 2013. Advertising spending from smart phones and tablet manufacturers remained strong, but was offset by a decrease in demand from select consumer electronic manufacturers, such as computer and digital camera makers, and a decline in overall advertising spending from retail store clients.
Revenue for PClady, the Group's lady and fashion portal, increased 41.6% from RMB59.0 million in 2012 to RMB83.6 million in 2013. The increase reflected the tremendous demand in the women's segment, especially for luxury and fashion goods.
Revenue for other operations, including the PCgames, PCbaby and PChouse portals, increased by 38.8% from RMB45.9 million in 2012 to RMB63.7 million in 2013. Revenue from these segments increased significantly as advertisers increasingly shifted their marketing spending online.
As a percentage of total revenue, PCauto accounted for 48.2% in 2012 and 52.9% in 2013, whereas PConline accounted for 37.2% in 2012 and 29.7% in 2013, PClady accounted for 8.2% in 2012 and 9.9% in 2013 and other operations accounted for 6.4% in 2012 and 7.5% in 2013. The Group continued to diversify its revenue base across the different industry segments.
Cost of Revenue
Cost of revenue increased 20.3% from RMB207.7 million in 2012 to RMB249.9 million in 2013. The gross profit margin was 71.0% in 2012 and 70.5% in 2013.
The increase in cost of revenue was due to a rise in personnel-related expenses, promotion fees and higher sales commissions during the year.
Selling and Marketing Costs
Selling and marketing costs increased 46.8% from RMB114.4 million in 2012 to RMB167.9 million in 2013. The increase was mainly due to increases in staff costs and marketing expenses.
Administrative Expenses
Administrative expenses increased by 15.3% from RMB67.1 million in 2012 to RMB77.4 million in 2013, due to an increase in staff costs during the year.
Product Development Expenses
Product development expenses increased by 15.7% from RMB39.7 million in 2012 to RMB45.9 million in 2013. The increase was primarily due to greater staff recruitment in research and development.
Operating Profit before Share-based Compensation Expenses (non-GAAP)
Operating profit before share-based compensation expenses (non-GAAP) was RMB317.9 million in 2013, representing 6.7% increase from RMB297.9 million in 2012.
Finance Income and Cost
Net finance income was RMB4.7 million in 2012 and RMB9.0 million in 2013. The increase in net finance income was mainly due to higher interest income on bank deposits.
Income Tax Expense
Income tax expenses increased 15.7% from RMB60.0 million in 2012 to RMB69.4 million in 2013. The rise was mainly due to an increase in tax expenses for which no deferred income tax asset was recognized during the year.
Net Profit
Net profit increased 7.3% from RMB236.5 million in 2012 to RMB253.6 million in 2013.
Liquidity and Financial Resources
As of December 31, 2013, the Group had short-term deposits and cash totaling RMB450.5 million, compared with RMB439.9 million as of December 31, 2012.
In 2013, net cash flow from operating activities was RMB207.2 million, net cash used in investing activities was RMB54.8 million, net cash used in financing activities was RMB152.9 million. The Group had a net decrease in cash and cash equivalents of RMB0.5 million for the year 2013.
In 2012, net cash flow from operating activities was RMB199.5 million, net cash used in investing activities was RMB23.3 million, net cash used in financing activities was RMB168.0 million. The Group had a net increase in cash and cash equivalents of RMB8.1 million for the year 2012.
The Company had no external debt as of December 31, 2013 and 2012.
Business Outlook
The Group believes that advertising spending will continue to migrate towards the internet at an increasing pace. With the growing popularity of ecommerce, the Group will expand its advertising offerings to B2C clients. It will also continue to pursue innovations to enhance the user experience. In addition, the Group is committed to building brand equity by improving productivity, attracting and maintaining a highly motivated work force and expanding marketing efforts. The Group is confident that it will continue to benefit from the rapid growth of the online advertising market in China.
Conference Call
Management will host a conference call to discuss the results at 9:00 AM Hong Kong time on March 31, 2014 (9:00 PM Eastern Daylight Time on Sunday, March 30, 2014). Mr. Lam Wai Yan, Chairman and Chief Executive Officer and, Mr. Ma Man Ho, Chief Financial Officer, will discuss the results and take questions following the prepared remarks.
The dial-in details for the live conference call are as follows:
- Hong Kong Toll Free Number: |
+852 3060 0227 |
|
- Mainland China Toll Free Number: |
800-803-6152 |
|
- U.S. Toll Free Number: |
+1 877-679- 2987 |
|
- International dial-in number: |
+852 3060 0227 |
Passcode: 147076#
A live and archived webcast of the conference call will be available on the investor relations section of the Group's website at: http://corp.pconline.com.cn.
A telephone replay of the call will be available for seven days after the conclusion of the conference call. The dial-in details for the replay are as follows:
- Hong Kong Number |
+852 3060 0238 |
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- U.S. Toll Free Number: |
+1 866 345 5132 |
Passcode: 212193#
About Pacific Online Ltd. (corp.pconline.com.cn)
Pacific Online is one of the leading Internet content providers in the PRC in terms of total advertising revenue. The Company operates six vertically-integrated portals, which, according to industry practice, are portals that focus on specific content. Among the Company's portals are PConline, one of the largest portals in the PRC specializing in IT product-related content, and PCauto, one of the largest portals in the PRC specializing in automobile-related content.
Safe Harbor Statement
This press release contains forward-looking statements which are subject to risks and uncertainties. Actual results may differ from those discussed in the press release. In addition, any projections about the Company's future performance represent management's estimates as of today March 28, 2014. The Company assumes no obligation to update these projections in the future as business and market conditions change.
For further information, please contact:
Pacific Online Ltd.
Hudson Wong
Company Secretary
Tel: +852 2121 0634
Email: [email protected]
Christensen Investor Relations
Tip Fleming
Tel: +852-9212-0684
Email: [email protected]
For a detailed look at the Group's financial statements, please visit its website at corp.pconline.com.cn
SOURCE Pacific Online Ltd.
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