Sino Assurance Inc. Reports First Quarter 2010 Results

SHENZHEN, China, May 11 /PRNewswire-Asia-FirstCall/ -- Sino Assurance Inc. (OTC: SNAS) today reported its first quarter results ended March 31, 2010. Sino Assurance's net income was $585,697 and EPS was $0.01, compared with $14,749 or $0.00 in the first quarter of 2009.

First-Quarter Financial Results

During the first quarter of 2010, the Company's revenues totaled $1,894,270, up 160% versus $727,416 in the first quarter of last year. Higher balances of cash advance guarantee services contributed the largest share of the growth in total revenue during the first quarter. Gross profit margin for the quarter was 82% up from 74% in the first quarter of 2009. The increase reflected the growing demand for credit services, success of bank facility arrangement and effective cost control measures.

Income from operations reached $765,942 in the first quarter of 2010 compared with $19,847 in the same period in 2009 driven by growth in net revenue and lower level of insurance claims. GAAP diluted earnings per share for the first quarter of 2010 was $0.01, compared with $0.00 for the first quarter in 2009.

Financial Outlook

Our management believes that sustained growth in revenue and earnings will be largely associated with the demands for the financial services, primarily in the form of credit guaranty. Other expected drive elements include company's new personal credit products and services as well as potential impact of the regulatory governance in credit guaranty market.

Revenue projection for whole year 2010 is between $14 million and $15 million, and expected EPS for 2010 is between $0.08 and $0.09.

Safe Harbor Statement

This press release may include certain statements that are not descriptions of historical facts, but are forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology such as 'will,' 'believes,' 'expects' or similar expressions. Such information is based upon expectations of our management that were reasonable when made but may prove to be incorrect. All of such assumptions are inherently subject to uncertainties and contingencies beyond our control and based upon premises with respect to future business decisions, which are subject to change. We do not undertake to update the forward-looking statements contained in this press release. For a description of the risks and uncertainties that may cause actual results to differ from the forward-looking statements contained in this press release, see our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission ('SEC'), and our subsequent SEC filings. Copies of filings made with the SEC are available through the SEC's electronic data gathering analysis retrieval system at http://www.sec.gov .

                             SINO ASSURANCE INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                  AS OF MARCH 31, 2010 AND DECEMBER 31, 2009
            (Currency expressed in United States Dollars ("US$"),
                         except for number of shares)

                                              March 31, 2010 December 31, 2009
                                                (Unaudited)      (Audited)
    ASSETS
    Current assets:
    Cash and cash equivalents                 $      86,284    $     559,105
    Restricted cash                               6,727,309        5,817,191
    Guarantee fee receivable                        104,454              790
    Prepayments and other receivable                237,695          197,984
    Loans receivable                              4,437,646        3,268,244

    Total current assets                         11,593,388        9,843,314

    Non-current assets:
    Plant and equipment, net                        361,481          275,232

    TOTAL ASSETS                              $  11,954,869    $  10,118,546

    LIABILITIES AND STOCKHOLDER'S EQUITY
    Current liabilities:
    Accounts payable, trade                   $       9,079    $       7,004
    Customer collateral                           4,642,194        3,729,734
    Deferred revenue                                478,001          364,636
    Amount due to related parties                    59,592           59,582
    Income tax payable                               62,007           29,113
    Deferred tax liabilities                        459,811          345,577
    Accrued liabilities and other payable           652,356          576,768

    Total current liabilities                     6,363,040        5,112,414

    Commitments and contingencies

    Stockholders' equity:
    Common stock, $0.001 par value; 200,000,000
     shares authorized; 60,000,000 shares issued
     and outstanding as of March 31, 2010 and
     December 31, 2009                               60,000           60,000
    Additional paid-in capital                    2,915,121        2,915,121
    Accumulated other comprehensive income          172,859          172,065
    Statutory reserve                               158,314          158,314
    Retained earnings                             2,285,535        1,700,632

    Total stockholders' equity                    5,591,829        5,006,132

    TOTAL LIABILITIES AND STOCKHOLDERS'
     EQUITY                                   $  11,954,869    $  10,118,546




                             SINO ASSURANCE INC.
   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
              FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
            (Currency expressed in United States Dollars ("US$"))
                                 (Unaudited)

                                                Three months ended March 31,
                                                     2010            2009
    REVENUES, NET
    Guarantee fee income                       $   1,871,679   $     711,282
    Interest income                                   22,591          16,134

    Total revenues, net                            1,894,270         727,416

    COST OF REVENUE                                 (345,901)       (189,529)

    GROSS PROFIT                                   1,548,369         537,887

    Operating expenses:
    Depreciation                                     (29,524)        (20,582)
    Selling, general and administrative             (645,249)       (442,686)
    Reserve for guarantee losses                    (107,654)        (54,772)

    Total operating expenses                        (782,427)       (518,040)

    INCOME FROM OPERATIONS                           765,942          19,847

    Other income (expense):
    Other income                                          --               3
    Other expense                                         --          (7,214)

    INCOME BEFORE INCOME TAXES                       765,942          12,636

    Income tax expense                              (181,039)         (1,453)

    NET INCOME                                 $     584,903   $      11,183

    Other comprehensive income:
    - Foreign currency translation gain                  794           3,566

    COMPREHENSIVE INCOME                       $     585,697   $      14,749

    Net income per share - basic and diluted   $        0.01   $        0.00

    Weighted average shares outstanding during
     the period - basic and diluted               60,000,000      60,000,000


                             SINO ASSURANCE INC.
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009
            (Currency expressed in United States Dollars ("US$"))
                                 (Unaudited)

                                                Three months ended March 31,
                                                     2010            2009
    Cash flows from operating activities:
    Net income                                 $     584,903   $      11,183
    Adjustments to reconcile net income to
     net cash provided by (used in) operating
     activities:
    Depreciation                                      29,524          20,582
    Loss on disposal of plant and equipment               --           2,764
    Reserve for guarantee losses                     107,654          54,772
    Unrealized interest income                       (20,561)        (14,811)
    Deferred tax expense                             114,180           1,453
    Changes in operating assets and liabilities:
    Guarantee fee receivable                        (103,666)          2,725
    Prepayments and other receivable                 (39,680)        (42,374)
    Accounts payable, trade                            2,074          25,724
    Deferred revenue                                 113,308         (29,803)
    Income tax payable                                32,890              --
    Accrued liabilities and other payable            (32,159)       (114,304)

    Net cash provided by (used in) operating
     activities                                      788,467         (82,089)

    Cash flows from investing activities:
    Change in restricted cash, net of customer
     collateral                                        2,677         122,698
    Payment on loans receivable                   (1,148,332)             --
    Proceeds from disposal of plant and
     equipment                                            --             616
    Purchase of plant and equipment                 (115,730)             --

    Net cash (used in) provided by investing
     activities                                   (1,261,385)        123,314

    Effect of exchange rate changes in cash and
     cash equivalents                                     97             121

    NET CHANGE IN CASH AND CASH EQUIVALENTS         (472,821)         41,346

    CASH AND CASH EQUIVALENT, BEGINNING OF
     PERIOD                                          559,105          90,158

    CASH AND CASH EQUIVALENT, END OF PERIOD    $      86,284   $     131,504

    SUPPLEMENTAL DISCLOSURE OF CASH FLOW
     INFORMATION:
    Cash paid for income taxes                 $      29,118   $          --
    Cash paid for interest                     $          --   $          --

SOURCE Sino Assurance Inc.