China Finance Online Reports Second Quarter and First Half Ended June 30, 2016 Unaudited Financial Results
BEIJING, Aug. 18, 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 second quarter and first half ended June 30, 2016.
Second Quarter 2016 Financial Highlights
- Net revenues were $16.0 million, a decrease of 30.6% year-over-year.
- Gross margin was 75.7%, compared with 78.9% in the second quarter of 2015.
- Net income attributable to China Finance Online was $12.8 million, increased 213.5% compared with $4.1 million in the second quarter of 2015.
First Half 2016 Highlights
- Net revenues were $46.8 million, increased 27.0% compared with $36.8 million in the first half of 2015.
- Gross profit was $38.0 million, increased 33.4% compared with $28.5 million in the first half of 2015.
- Net income attributable to China Finance Online for the first half of 2016 was $14.8 million, increased 440.5% compared to $2.7 million in the first half of 2015.
Mr. Zhiwei Zhao, Chairman and CEO of China Finance Online commented, "After multiple quarters of strong double-digit growth, our pace of growth slowed during the quarter due to unfavorable market conditions. We are taking measures to adapt to China's ever-changing financial markets. Nevertheless, our newest growth drivers continued to make good progress during the quarter with Yinglibao and iTougu growing strongly as we attract more investors and advisors. I'm pleased with the progress we have made in executing our financial services and advisory growth strategy and look forward to further strengthening our position in the Chinese Fintech market."
Second Quarter 2016 Financial Results
Net revenues were $16.0 million, a decrease of 30.6% from $23.1 million during the second quarter of 2015 and a decrease of 47.8% from $30.7 million during the first quarter of 2016. During the second quarter of 2016, revenues from financial services, financial information and advisory business and advertising services contributed 76%, 18% and 5% of the net revenues, respectively, compared with 73%, 20% and 7%, respectively, for the corresponding period in 2015.
Revenues from financial services were $12.2 million, a decrease of 27.6% from $16.8 million during the second quarter of 2015 and 54.5% from $26.8 million during the first quarter of 2016. Revenues from financial services comprise of equity and commodities brokerage services. The year-over-year and quarter-over-quarter decreases were mainly due to a decrease in revenues from the Company's commodities brokerage services.
Revenues from financial information and advisory business were $2.9 million, a decrease of 38.6% from $4.7 million during the second quarter of 2015 and 8.5% from $3.2 million in the first quarter of 2016. Revenues from financial information and advisory business comprise of subscription services from individual and institutional customers.
Revenues from advertising were $0.9 million, a decrease of 43.7% from $1.5 million in the second quarter of 2015 and an increase of 45.4% from $0.6 million in the first quarter of 2016.
Gross profit was $12.1 million, a decrease of 33.5% from $18.2 million in the second quarter of 2015 and 53.1% from $25.9 million in the first quarter of 2016. Gross margin in the second quarter of 2016 was 75.7%, compared with 78.9% in the second quarter of 2015 and 84.3% in the first quarter of 2016. The year-over-year and quarter-over-quarter decreases in gross margin were mainly due to a decrease in revenues from the Company's commodities brokerage services, which typically have higher gross margins.
General and administrative expenses were $5.6 million, a decrease of 7.5% from $6.1 million in the second quarter of 2015 and an increase of 14.8% from $4.9 million in the first quarter of 2016. The year-over-year decrease was mainly attributable to a decrease in share-based compensation expenses.
Sales and marketing expenses were $11.0 million, an increase of 23.8% from $8.8 million in the second quarter of 2015 and a decrease of 7.0% from $11.8 million in the first quarter of 2016. The year-over-year increase was primarily due to an increase in marketing expenses and staff-related expenses which were primarily driven by an increase in the number of staff. The quarter-over-quarter decrease was mainly attributable to a decrease in sales bonus.
Research and development expenses were $3.1 million, an increase of 16.1% from $2.7 million in the second quarter of 2015 and 15.9% from $2.7 million in the first quarter of 2016. The year-over-year and quarter-over-quarter increases were mainly attributable to an increase in staff-related expenses, primarily driven by an increase in the number of staff to support further growth.
Total operating expenses were $27.5 million, an increase of 55.8% from $17.6 million in the second quarter of 2015 and 41.7% from $19.4 million in the first quarter of 2016. During the second quarter of 2016, the Company recorded a non-cash impairment loss of $1.1 million in intangible assets and a non-cash impairment loss of $6.6 million in goodwill.
Loss from operations was $15.3 million, compared with an income from operations of $0.6 million in the second quarter of 2015 and $7.0 million in the first quarter of 2016. The Company completed the remaining part of the framework agreement signed on December 11, 2015 with Shanghai EBI Capital Co., Ltd. for the sale of the financial portal stockstar.com and recorded a gain of $22.4 million from the execution of this agreement during the second quarter of 2016. The Company has received the entirety of the consideration related to the transaction as of June 30, 2016. The Company will use the proceeds to reinvest in and fully focus on developing new businesses like Yinglibao, the Company's investment advisory services, and on further strengthening the competitive advantages the Company's existing financial services have.
Net income attributable to China Finance Online was $12.8 million, an increase of 213.5% from $4.1 million in the second quarter of 2015 and 532.9% from $2.0 million in the first quarter of 2016.
Fully diluted earnings per ADS attributable to China Finance Online was $0.50 for the second quarter of 2016, compared with $0.16 for the second quarter of 2015 and $0.08 for the first quarter of 2016. Basic and diluted weighted average numbers of ADSs for the second quarter of 2016 were 22.6 million and 25.4 million, respectively. Each ADS represents five ordinary shares of the Company.
As of June 30, 2016, total cash and cash equivalents were $69.1 million, compared with $85.7 million as of December 31, 2015.
Total shareholders' equity of China Finance Online was $103.2 million as of June 30, 2016, compared with $88.0 million as of December 31, 2015.
First Half 2016 Financial Results
Net revenues for the first half of 2016 was $46.8 million, increased 27.0% compared with $36.8 million in the first half of 2015.
Gross profit for the first half of 2016 was $38.0 million, increased 33.4% compared with $28.5 million in the first half of 2015.
Net income attributable to China Finance Online for the first half of 2016 was $14.8 million, increased 440.5% compared to $2.7 million in the first half of 2015.
Fully diluted earnings per ADS attributable to China Finance Online was $0.58 for the first half of 2016, compared with $0.11 for the first half of 2015.
Conference Call Information
The management will host a conference call on August 18, 2016 at 8:00 p.m. U.S. Eastern Time (8:00 a.m. Beijing/Hong Kong time on August 19, 2016). Dial-in details for the earnings conference call are as follows:
US: 1-855-823-0291
Hong Kong: 800-963-435
Singapore: 800-616-2312
China: 800-870-0211/400-120-3169
Conference: ID: 65822892
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 August 26, 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: 65822892
In addition, a live and archived webcast of the conference call will be available at http://edge.media-server.com/m/p/qom4jf49.
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;
- 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) |
||
| Jun. 30, 2016 |
Dec. 31, 2015 |
|
| Assets |
||
| Current assets: |
||
| Cash and cash equivalents |
69,064 |
85,734 |
| Trust bank balances held on behalf of customers |
22,158 |
14,168 |
| Accounts receivable, net - others |
6,283 |
12,008 |
| Accounts receivable, net - Margin clients |
9,909 |
4,367 |
| Short-term investments |
8,103 |
- |
| Prepaid expenses and other current assets |
9,709 |
3,489 |
| Deferred tax assets, current |
466 |
969 |
| Total current assets |
125,692 |
120,735 |
| Long-term investments, net |
2,481 |
1,782 |
| Property and equipment, net |
6,957 |
5,790 |
| Acquired intangible assets, net |
302 |
1,539 |
| Rental deposits |
1,846 |
1,423 |
| Goodwill |
18 |
6,700 |
| Deferred tax assets, non-current |
25 |
20 |
| Other deposits |
4,094 |
6,076 |
| Total assets |
141,415 |
144,065 |
| Liabilities and equity |
||
| Current liabilities: |
||
| Deferred revenue, current (including deferred revenue, current of the consolidated |
2,393 |
6,659 |
| Accrued expenses and other current liabilities (including accrued expenses and |
9,280 |
15,655 |
| Amount due to customers for trust bank balances held on behalf of |
22,158 |
14,168 |
| Accounts payable (including accounts payable of the consolidated variable interest |
3,812 |
5,494 |
| Deferred tax liabilities, current (including deferred tax liabilities, current of the |
26 |
15 |
| Income taxes payable (including income taxes payable of the consolidated |
2,544 |
1,768 |
| Total current liabilities |
40,213 |
43,759 |
| Deferred tax liabilities, non-current (including deferred tax liabilities, non-current of |
75 |
385 |
| Deferred revenue, non-current (including deferred revenue, non-current of the |
826 |
692 |
| Total liabilities |
41,114 |
44,836 |
| Noncontrolling interests |
(2,874) |
11,191 |
| Total China Finance Online Co. Limited Shareholders' equity |
103,175 |
88,038 |
| Total liabilities and equity |
141,415 |
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 |
Six months ended |
||||
| Jun. 30, 2016 |
Jun. 30, 2015 |
Mar. 31, 2016 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
| Net revenues |
16,045 |
23,115 |
30,713 |
46,758 |
36,816 |
| Cost of revenues |
(3,905) |
(4,867) |
(4,807) |
(8,712) |
(8,291) |
| Gross profit |
12,140 |
18,248 |
25,906 |
38,046 |
28,525 |
| Operating expenses |
|||||
| General and administrative(includes |
(5,647) |
(6,102) |
(4,918) |
(10,565) |
(9,063) |
| Sales and marketing (includes share-based |
(10,952) |
(8,845) |
(11,778) |
(22,730) |
(16,983) |
| Product development (includes share-based |
(3,127) |
(2,693) |
(2,698) |
(5,825) |
(5,517) |
| Loss from impairment of intangible assets |
(1,111) |
- |
- |
(1,111) |
- |
| Loss from impairment of goodwill |
(6,642) |
- |
- |
(6,642) |
- |
| Total operating expenses |
(27,479) |
(17,640) |
(19,394) |
(46,873) |
(31,563) |
| Government subsidies |
36 |
- |
508 |
544 |
99 |
| Income (loss) from operations |
(15,303) |
608 |
7,020 |
(8,283) |
(2,939) |
| Interest income |
377 |
43 |
244 |
621 |
1,243 |
| Loss from disposal of affiliates |
(4,123) |
- |
- |
(4,123) |
- |
| Short-term investment income, net |
138 |
34 |
119 |
257 |
67 |
| Gain on the interest sold and retained |
22,445 |
- |
- |
22,445 |
- |
| Gain from sale of cost method investment |
- |
4,648 |
- |
- |
4,648 |
| Loss from equity method investment |
(49) |
(9) |
(62) |
(111) |
(9) |
| Other income (loss), net |
(14) |
(74) |
71 |
57 |
(389) |
| Exchange gain (loss), net |
73 |
80 |
(157) |
(84) |
15 |
| Income before income tax provision (expenses) |
3,544 |
5,330 |
7,235 |
10,779 |
2,636 |
| Income tax provision (expenses) |
(2,693) |
312 |
(424) |
(3,117) |
(404) |
| Net income |
851 |
5,642 |
6,811 |
7,662 |
2,232 |
| Less: Net income (loss) attributable to the |
(11,914) |
1,570 |
4,794 |
(7,120) |
(503) |
| Net income attributable to China Finance |
12,765 |
4,072 |
2,017 |
14,782 |
2,735 |
| Net income |
851 |
5,642 |
6,811 |
7,662 |
2,232 |
| Changes in foreign currency translation |
(1,748) |
181 |
448 |
(3,894) |
287 |
| Net unrealized gain on available-for-sale |
- |
(2) |
- |
- |
|
| Other comprehensive income (loss), net of tax |
(1,748) |
179 |
448 |
(3,894) |
287 |
| Comprehensive income (loss) |
(897) |
5,821 |
7,259 |
3,768 |
2,519 |
| Less: comprehensive income (loss) |
(11,914) |
1,570 |
4,794 |
(7,120) |
(503) |
| Comprehensive income attributable to China |
11,017 |
4,251 |
2,465 |
10,888 |
3,022 |
| Net income per ADS attributable to China |
|||||
| Basic |
0.11 |
0.04 |
0.02 |
0.13 |
0.02 |
| Diluted |
0.10 |
0.03 |
0.02 |
0.12 |
0.02 |
| Loss per ADS |
|||||
| Basic |
0.56 |
0.18 |
0.09 |
0.65 |
0.12 |
| Diluted |
0.50 |
0.16 |
0.08 |
0.58 |
0.11 |
| Weighted average ordinary shares |
|||||
| Basic |
113,049,666 |
111,031,161 |
112,939,783 |
112,994,727 |
110,853,266 |
| Diluted |
126,914,643 |
125,714,306 |
126,822,437 |
126,868,543 |
125,216,585 |
| Weighted average ADSs |
|||||
| Basic |
22,609,933 |
22,206,232 |
22,587,957 |
22,598,945 |
22,170,653 |
| Diluted |
25,382,929 |
25,142,861 |
25,364,487 |
25,373,709 |
25,043,317 |
For more information, please contact:
China Finance Online Co. Limited
+86-10-8336-3100
[email protected]
SOURCE China Finance Online Co., Ltd.
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