China Finance Online Reports First Quarter 2016 Unaudited Financial Results
May 31, 2016, 06:00 ET
BEIJING, May 31, 2016 /PRNewswire/ -- China Finance Online Co. Limited ("China Finance Online", or the "Company", "we", "us" or "our") (NASDAQ GS: JRJC), a leading web-based financial services company that provides Chinese retail investors with online access to securities and commodities trading, wealth management products, investment advisory services, as well as financial database and analytics services to institutional customers, today announced its unaudited financial results for the first quarter ended March 31, 2016.
First quarter 2016 Financial Highlights
- Net revenues were $30.7 million, an increase of 124.2% year-over-year.
- Revenues from financial services were $26.8 million, an increase of 181.8% year-over-year.
- Revenues from financial information and advisory business were $3.2 million, an increase of 46.3% year-over-year.
- Gross margin was 84.3%, compared with 75.0% in the first quarter of 2015.
- Net income attributable to China Finance Online was $2.0 million, compared with a net loss of US$1.3 million in the first quarter of 2015.
Mr. Zhiwei Zhao, Chairman and CEO of China Finance Online commented, "We had a strong start to the year with revenues from our financial services and financial information and advisory businesses increase significantly on a year-over-year basis. I believe this demonstrates the value our services provide as investors increasingly turn to us for professional advice and information during periods of market volatility. iTouGu continued to grow steadily and now has 4.4 million activated users."
Mr. Zhao continued, "To further diversify our FinTech strategy during the quarter, we began developing a robo-advisor investment service which provides automated customizable investment solutions based on proprietary algorithms and investment strategies. We believe that with the right corporate strategy and teams, these technologies will allow us to set the pace in developing a low-cost, high-efficiency, and personalized wealth management service in China."
First Quarter 2016 Financial Results
Net revenues were $30.7 million, an increase of 124.2% from $13.7 million during the first quarter of 2015 and a decrease of 8.7% from $33.6 million during the fourth quarter of 2015. During the first quarter of 2016, revenues from financial services, financial information and advisory business and advertising services contributed 87%, 10% and 2% of the net revenues, respectively, compared with 69%, 16% and 15%, respectively, for the corresponding period in 2015.
Revenues from financial services were $26.8 million, an increase of 181.8% from $9.5 million during the first quarter of 2015 and 3.4% from $25.9 million during the fourth quarter of 2015. Revenues from financial services comprise of equity and commodities brokerage services. The year-over-year increase was mainly due to a significant increase in revenues from the Company's commodities brokerage services.
Revenues from financial information and advisory business were $3.2 million, an increase of 46.3% from $2.2 million during the first quarter of 2015 and a decrease of 47.1% from $6.0 million in the fourth quarter of 2015. Revenues from financial information and advisory business comprise of subscription services from individual and institutional customers.
As of March 31, 2016, iTouGu, the Company's social-driven stock selection platform, had over 4.4 million activated users.
Revenues from advertising were $0.6 million, a decrease of 70.8% from $2.0 million in the first quarter of 2015 and 66.4% from $1.8 million in the fourth quarter of 2015.
Gross profit was $25.9 million, an increase of 152.1% from $10.3 million in the first quarter of 2015 and a decrease of 5.8% from $27.5 million in the fourth quarter of 2015. Gross margin in the first quarter of 2016 was 84.3%, compared with 75.0% in the first quarter of 2015 and 81.8% in the fourth quarter of 2015. The year-over-year increase in gross margin was mainly due to revenues from financial services, which typically have higher gross margins, accounting for a larger proportion of total revenues.
General and administrative expenses were $4.9 million, an increase of 66.1% from $3.0 million in the first quarter of 2015 and a decrease of 13.9% from $5.7 million in the fourth quarter of 2015. The year-over-year increase was mainly attributable to an increase in share-based compensation expenses.
Sales and marketing expenses were $11.8 million, an increase of 44.7% from $8.1 million in the first quarter of 2015 and a decrease of 28.0% from $16.4 million in the fourth quarter of 2015. The year-over-year increase was primarily due to an increase in sales bonus and staff-related expenses.
Research and development expenses were $2.7 million, a decrease of 4.5% from $2.8 million in the first quarter of 2015 and flat with the fourth quarter of 2015.
Income from operations was $7.0 million, compared with a loss from operations of $3.5 million in the first quarter of 2015 and an income from operations of $2.5 million in the fourth quarter of 2015.
Net income attributable to China Finance Online was $2.0 million, compared with a net loss of $1.3 million in the first quarter of 2015 and a net income of $10.0 million in the fourth quarter of 2015.
Fully diluted earnings per ADS attributable to China Finance Online was $0.08 for the first quarter of 2016, compared with a fully diluted loss per ADS of $0.06 for the first quarter of 2015 and a fully diluted earnings per ADS of $0.40 for the fourth quarter of 2015. Basic and diluted weighted average numbers of ADSs for the first quarter of 2016 were 22.6 million and 25.4 million, respectively. Each ADS represents five ordinary shares of the Company.
As of March 31, 2016, total cash and cash equivalents were $89.7 million, compared with $85.7 million as of December 31, 2015.
Total shareholders' equity of China Finance Online was $91.5 million as of March 31, 2016, compared with $88.0 million as of December 31, 2015.
Conference Call Information
The management will host a conference call on May 31, 2016 at 8:00 p.m. U.S. Eastern Time (8:00 a.m. Beijing/Hong Kong time on June 1, 2016). Dial-in details for the earnings conference call are as follows:
US: 1-800-742-9301
Hong Kong: 800-906-648
Singapore: 800-616-2313
China: 800-870-0210/400-120-3170
Conference: ID: 19497120
Please dial in 10 minutes before the call is scheduled to begin and provide the conference ID to join the call.
A replay of the call will be available shortly after the conclusion of the conference call through 8:00 a.m. Eastern Time on June 7, 2016. The dial-in details for the replay are:
US: 1-855-452-5696
Hong Kong: 800-963-117
Singapore: 800-616-2305
China: 800-870-0205/400-632-2162
Conference ID: 19497120
In addition, a live and archived webcast of the conference call will be available at http://edge.media-server.com/m/p/a9y8rykp.
About China Finance Online
China Finance Online Co. Limited is a leading web-based financial services company that provides Chinese retail investors with online access to securities and commodities trading services, wealth management products, securities investment advisory services, as well as financial database and analytics services to institutional customers. The Company's prominent flagship portal site, www.jrj.com, is ranked among the top financial websites in China. In addition to the web-based securities trading platform, the Company offers basic financial software, information services and securities investment advisory services to retail investors in China. Through its subsidiary, Shenzhen Genius Information Technology Co. Ltd., the Company provides financial database and analytics to institutional customers including domestic financial, research, academic and regulatory institutions. China Finance Online also provides brokerage services in Hong Kong.
Safe Harbor Statement
This press release contains forward-looking statements which constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. The statements contained herein reflect management's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of the Company. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, this release contains the following forward-looking statements regarding:
- our prospect and our ability to attract new users and continue to develop iTouGu;
- our prospect on building a comprehensive wealth management ecosystem through providing a fully-integrated online communication and securities-trading platform;
- our prospect on stabilization in cash attrition and improvement of our financial position;
- our initiatives to address customers' demand for intuitive online investment platforms and alternative investment opportunities; and
- the market prospect of the business of securities-trading, securities investment advisory and wealth management.
Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which risk factors and uncertainties include, amongst others, the changing customer needs, regulatory environment and market condition that we are subject to; the uneven condition of the world and Chinese economy that could lead to volatility in the equity markets and affect our operating results in the coming quarters; the impact of the changing conditions of the mainland Chinese stock market, Hong Kong stock market and global financial market on our future performance; the unpredictability of our strategic transformation and growth of new businesses, including our commodities brokerage services; the prospect of our margin-related business and the degree to which our implementation of margin account screening and ongoing monitoring will yield successful outcome; the degree to which our strategic collaborations with partners will yield successful outcome; the prospect for China's high-net-worth and middle-class households; the prospect of equipping our customer specialists with new technology, tools and financial knowledge; wavering investor confidence that could impact our business; and possible non-cash goodwill, intangible assets and investment impairment may adversely affect our net income. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F under "Forward-Looking Information" and "Risk Factors". The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
| China Finance Online Co. Limited |
||
| UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
||
| (In thousands of U.S. dollars) |
||
| Mar. 31, 2016 |
Dec. 31, 2015 |
|
| Assets |
||
| Current assets: |
||
| Cash and cash equivalents |
89,712 |
85,734 |
| Trust bank balances held on behalf of customers |
12,700 |
14,168 |
| Accounts receivable, net - others |
9,021 |
12,008 |
| Accounts receivable, net - Margin clients |
4,966 |
4,367 |
| Prepaid expenses and other current assets |
7,650 |
3,489 |
| Deferred tax assets, current |
566 |
969 |
| Total current assets |
124,615 |
120,735 |
| Long-term investments, net |
1,729 |
1,782 |
| Property and equipment, net |
6,170 |
5,790 |
| Acquired intangible assets, net |
1,478 |
1,539 |
| Rental deposits |
1,825 |
1,423 |
| Goodwill |
6,733 |
6,700 |
| Deferred tax assets, non-current |
15 |
20 |
| Other deposits |
2,942 |
6,076 |
| Total assets |
145,507 |
144,065 |
| Liabilities and equity |
||
| Current liabilities: |
||
| Deferred revenue, current (including deferred revenue, |
6,347 |
6,659 |
| Accrued expenses and other current liabilities (including |
15,165 |
15,655 |
| Amount due to customers for trust bank balances held on |
12,700 |
14,168 |
| Accounts payable (including accounts payable of the |
2,443 |
5,494 |
| Deferred tax liabilities, current (including deferred tax |
26 |
15 |
| Income taxes payable (including income taxes payable of |
59 |
1,768 |
| Total current liabilities |
36,740 |
43,759 |
| Deferred tax liabilities, non-current (including deferred tax |
370 |
385 |
| Deferred revenue, non-current (including deferred |
613 |
692 |
| Total liabilities |
37,723 |
44,836 |
| Noncontrolling interests |
16,258 |
11,191 |
| Total China Finance Online Co. Limited Shareholders' equity |
91,526 |
88,038 |
| Total liabilities and equity |
145,507 |
144,065 |
| China Finance Online Co. Limited |
|||
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
|||
| (in thousands of U.S. dollars, except share and ADS related data) |
|||
| Three months ended |
|||
| Mar. 31, 2016 |
Mar. 31, 2015 |
Dec. 31, 2015 |
|
| Net revenues |
30,713 |
13,701 |
33,634 |
| Cost of revenues |
(4,807) |
(3,424) |
(6,119) |
| Gross profit |
25,906 |
10,277 |
27,515 |
| Operating expenses |
|||
| General and administrative(includes share-based |
(4,918) |
(2,961) |
(5,712) |
| Sales and marketing (includes share-based |
(11,778) |
(8,138) |
(16,362) |
| Product development (includes share-based |
(2,698) |
(2,824) |
(2,716) |
| Loss from impairment of intangible assets |
- |
- |
(250) |
| Total operating expenses |
(19,394) |
(13,923) |
(25,040) |
| Government subsidies |
508 |
99 |
- |
| Income (loss) from operations |
7,020 |
(3,547) |
2,475 |
| Interest income |
244 |
1,200 |
1,336 |
| Short-term investment income, net |
119 |
33 |
79 |
| Gain on the interest sold and retained noncontrolling |
- |
- |
10,000 |
| Loss from equity method investment |
(62) |
- |
(47) |
| Other income (loss), net |
71 |
(315) |
15 |
| Exchange loss, net |
(157) |
(65) |
(161) |
| Income (loss) before income tax expenses |
7,235 |
(2,694) |
13,697 |
| Income tax expenses |
(424) |
(716) |
(752) |
| Net income (loss) |
6,811 |
(3,410) |
12,945 |
| Less: Net income (loss) attributable to the |
4,794 |
(2,073) |
2,933 |
| Net income (loss) attributable to China Finance |
2,017 |
(1,337) |
10,012 |
| Net income (loss) |
6,811 |
(3,410) |
12,945 |
| Changes in foreign currency translation adjustment |
448 |
106 |
(1,424) |
| Net unrealized gain on available-for-sale |
- |
2 |
- |
| Other comprehensive income (loss), net of tax |
448 |
108 |
(1,424) |
| Comprehensive income (loss) |
7,259 |
(3,302) |
11,521 |
| Less: comprehensive income (loss) attributable to |
4,794 |
(2,073) |
2,933 |
| Comprehensive income (loss) attributable to China |
2,465 |
(1,229) |
8,588 |
| Net income (loss) per share attributable to China |
|||
| Basic |
0.02 |
(0.01) |
0.09 |
| Diluted |
0.02 |
(0.01) |
0.08 |
| Net income (loss) per ADS attributable to China |
|||
| Basic |
0.09 |
(0.06) |
0.45 |
| Diluted |
0.08 |
(0.06) |
0.40 |
| Weighted average ordinary shares |
|||
| Basic |
112,939,783 |
110,673,397 |
111,152,526 |
| Diluted |
126,822,437 |
110,673,397 |
125,948,776 |
| Weighted average ADSs |
|||
| Basic |
22,587,957 |
22,134,679 |
22,230,505 |
| Diluted |
25,364,487 |
22,134,679 |
25,189,755 |
For more information, please contact:
China Finance Online Co. Limited
+86-10-8336-3100
[email protected]
SOURCE China Finance Online Co., Ltd.