FingerMotion Provides Supplemental Corporate Update
August 13 2019 - 9:30AM
FingerMotion, Inc. (OTC QB: FNGR), a US FinTech company with mobile
payment and recharge platform operations in China, today provided a
supplemental corporate update in a letter from its CEO Martin Shen
to its shareholders.
To Our Shareholders
The China Unicom Portal
Partnership The China Unicom (NYSE: CHU) deal was an
extremely positive step for our company. Because of this agreement,
we were able to onboard companies such as Pinduoduo (NASDAQ: PDD),
JD.com (NYSE: JD), and Alibaba’s Tmall to our platform. We
believe that this agreement validates our business model of
targeting top-tiered e-commerce platforms and showcases our
capability to handle our e-commerce partner’s significant user
base. These e-commerce sites would likely not have allowed us
to interface with their platforms unless they were convinced we had
the capability to process over a billion transactions per
month.
The partnership agreement between
FingerMotion and China Unicom allows FingerMotion to have direct
access to users for their top-up fulfillment, and also allows
FingerMotion to sell any and all mobile phone products available
from China Unicom through the China Unicom brand portals.
China Unicom will remain responsible for all inventory and
fulfilment costs of physical products, meaning FingerMotion will
have very limited capital costs in handing all revenues coming
through the portals. This partnership allows FingerMotion to share
profits with the second largest telecommunications company in
China. The expected rollout of the China Unicom portals
should begin before November 2019.
SMS BusinessThe SMS
business through China Unicom is now in full operation. While the
overall size of the top-up market will continue to grow
organically, we believe that growth in the SMS market will
accelerate. In the past, SPAM has been a major problem plaguing the
SMS industry as there was an oversaturation of messages that were
not being policed. Recently, the government of China
instituted a policy of oversight, which curbed and eventually
stopped SPAM messages. Since the government essentially
reviews all messages before they are sent, SMS in China is now
essentially SPAM-free with respect to legitimate users, and we are
poised to take advantage of this new landscape.
Our business model relies on clients
who regularly send messages to their retail customer base. We
buy our messages at bulk wholesale prices, then immediately sell
the messages to our retail partners, allowing them to share, in
part, in the discounted rates. This allows us to generate
revenue and increase our margins with little risk of
inventory. Unlike our portal business with China Unicom, we
grant our customers 30-day payment terms, so this business requires
us to invest in carrying client receivables.
Big Data InsightsOur
previous press release mentioned Big Data. Big Data means all
the metadata that FingerMotion can aggregate from the massive China
Unicom user bases of the top-tiered e-commerce platforms.
While we will not own the data, we are responsible for collecting,
storing, and securing this data, and we will be given access to
analyze and potentially formulate powerful conclusions from the
accessed information. Our analytics team has already begun
gathering the information. We predict that using Big Data
could represent a major growth driver and become a business
multiplier for us. However, to ensure adequate development, we
predict that we are at least 6 months to a year away from formally
introducing this business unit.
We are well aware of the obligations
we have to consumers to keep their information private and safe. We
will only use data we accumulate with each individual consumer’s
permission and we will explain what information we wish to obtain,
and how we will use this information to save money for the
consumer.
Capital
RequirementsAlmost all rapidly growing e-commerce
companies need money for marketing. Our need for working
capital arises from the structuring of the top-up transactions from
e-commerce companies. The e-commerce company top-ups require us to
have funds on account with the telecommunications companies.
The SMS business is also capital intensive because we need to buy
the messages at least 30 days in advance of payment. However,
we do not need marketing money to increase our user-base, unlike
most FinTech companies, which spend massive amounts of money to
capture and retain users. Therefore, we continue to be
committed in pursuing financing options.
Corporate Governance and
TransparencyWe want to reiterate that we are a US company
with operations in China. Most of our e-commerce competitors
in China, if not all of them, are foreign filers. Therefore,
as a US filer, we believe we offer a greater level of transparency
and oversight. As a company, we are working to become
Sarbanes-Oxley compliant, and we have been actively working to
finalize our Corporate Governance and Code of Conduct policies.
In line with future planning, we have
hired an in-house investor relations representative to assist in
answering investors’ questions. In addition, we plan to
update our website and keep the information up-to-date and
current. We hope you appreciate our efforts in this regard as
we move to establish a better rapport with our investors.
Our focus is on sustainable
profitability. Like other e-commerce FinTech companies, we are
focused on customer acquisition and growing our Gross Transaction
Volume (GTV). But our strategic relationships also give us
unprecedented access to users and the ability to sell a wide array
of products and services to this expansive user base. We
believe our inflection point to profitability is only months away,
and we hope that our investors appreciate the progress we have made
this year and can see the future direction of our company as we
do.
Sincerely
Martin Shen CEO, FingerMotion
Inc.
About FingerMotion Inc.
FingerMotion is an evolving technology company located in China
with a core competency in mobile payment and recharge platform
solutions. It is one of five companies in China with access
to wholesale rechargeable minutes through top-up credits on the
mobile phone. As the primary business continues to grow its
user base, the company is developing value added technologies to
market to its users. The vision of the company is to rapidly
grow the user base through organic means and have this growth
develop into an ecosystem of users with high engagement rates
utilizing its innovative applications. Developing a highly engaged
ecosystem of users would strategically position the company to
onboard larger customer bases. FingerMotion eventually hopes
to serve over 1 billion users in the China market and eventually
expand the model to other regional markets.
Safe Harbor Statement
This release contains certain “forward-looking statements”
relating to the business of the Company. All statements, other than
statements of historical fact included herein are “forward-looking
statements” including statements regarding: the continued growth of
the e-commerce market and the ability of the Company to continue
its expansion into that market; the ability of the Company to
attract customers and partners and generate revenues; the ability
of the Company to successfully execute its business plan; the
business strategy, plans, and objectives of the Company; and any
other statements of non-historical information. These
forward-looking statements are often identified by the use of
forward-looking terminology such as “believes,” “expects,”
“predicts,” “should,” “will” or similar expressions and involve
known and unknown risks and uncertainties. Although the Company
believes that the expectations reflected in these forward-looking
statements are reasonable, they do involve assumptions, risks, and
uncertainties, and these expectations may prove to be incorrect.
Investors should not place undue reliance on these forward-looking
statements, which speak only as of the date of this news release.
The Company’s actual results could differ materially from those
anticipated or implied in these forward-looking statements as a
result of a variety of factors, including those discussed in the
Company’s periodic reports that are filed with the Securities and
Exchange Commission and available on its website
(http://www.sec.gov). All forward-looking statements attributable
to the Company or persons acting on its behalf are expressly
qualified in their entirety by these factors. Other than as
required under the securities laws, the Company does not assume any
duty to update these forward-looking statements.
For further information e-mail:
info@fingermotion.com
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