BEIJING,
June 14, 2017
/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 services, 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, 2017.
First Quarter 2017 Financial Highlights
- Net revenues were $8.7
million
- Equity brokerage business grew
424.8% year-over-year
- Commodities brokerage business declined by 96.8%
year-over-year
- Gross margin was
46.4%
- Total cash and cash equivalents, restricted cash and
short-term investments were $67.9 million
as of March 31, 2017
- China Finance Online's Robo-Advisor product outperformed
its peer products in the Chinese market in the first 5 months of
2017
- China Finance Online inaugurated China A-Share Market
Non-state-owned-enterprises Top 1000 Wealth list
Mr. Zhiwei Zhao, Chairman
and CEO of China Finance Online, commented, "In the recent period,
increased regulatory enforcement pressured a number of commodities
exchanges to significantly reduce their commodity trading and
eventually led to complete suspension of opening new trades on
several commodities exchanges during the second quarter. These
dynamics and its ripple effect negatively impacted our commodity
brokerage business. However, for our overall business, we believe
that the worst is now behind us and we expect to turn a positive
net cash-flow in the fourth quarter, as our dedication to develop
our intelligent-finance driven fintech business starts to bear
fruits and our cost control measures will take effect. We are
determined to become the one-stop investment and wealth management
gateway for Chinese investors by providing our best-in-class
fintech products to meet Chinese investors' growing
needs."
First Quarter 2017 Financial Results
Net revenues were $8.7
million, compared with $30.7
million during the first quarter of 2016 and $19.2 million during the fourth quarter of 2016.
During the first quarter of 2017, revenues from financial services,
the financial information and advisory business, and advertising
services contributed 62%, 33% and 5% of the net revenues,
respectively, compared with 87%, 10% and 2%, respectively, for the
corresponding period in 2016.
Revenues from financial services were $5.4 million, compared with $26.8 million during the first quarter of 2016
and $16.0 million during the fourth
quarter of 2016. Revenues from financial services mainly represent
equity and commodities brokerage services. The equity brokerage
business grew 424.8% year-over-year and
declined 0.8% quarter-over-quarter. The
year-over-year decrease of revenues from financial services was
mainly due to a decline in revenues from the Company's commodities
brokerage services. Revenue from commodities brokerage declined by
96.8% year-over-year and 92.7% quarter-over-quarter.
Revenues from the financial information and advisory
business were $2.8 million, a
decrease of 9.9% from $3.2 million
during the first quarter of 2016, but an increase of 20.5% from
$2.4 million in the fourth quarter of
2016. Revenues from the financial information and advisory business
were comprised of subscription services from individual and
institutional customers. The year-over-year revenue decline from
the financial information and advisory business was mainly due to
the sale of a less profitable division in the financial information
segment. Driven by an effective campaign and increased user
engagement, iTougu's revenue contribution posted a 23.3%
year-over-years increase and a 102.5% quarter-over-quarter
increase.
Revenues from advertising were $0.4 million, compared with $0.6 million in the first quarter of 2016
and $0.7 million in the fourth quarter of
2016.
Gross profit was $4.0
million, compared with $25.9
million in the first quarter of 2016 and $12.0 million in the fourth quarter of 2016.
Gross margin in the first quarter of 2017 was
46.4%, compared with
84.3% in the first quarter of 2016 and
62.5% in the fourth 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 carry higher gross
margins.
General and administrative expenses were $4.1 million, a decrease of
16.4% from $4.9
million in the first quarter of 2016, and a decrease
of 8.7% from $4.5
million in the fourth quarter of 2016. The year-over-year
and quarter-over-quarter decreases were mainly attributable to more
stringent expense control measures.
Sales and marketing expenses were $8.3 million, a decrease of
29.2% from $11.8
million in the first quarter of 2016, and a decrease of
42.2% from $14.4
million in the fourth quarter of 2016. The year-over-year
and quarter-over-quarter decreases were mainly attributable to
sales bonus reductions associated with the weaker commodities
brokerage services business during the first quarter of
2017.
Research and development expenses were $4.3 million, an increase of
59.4% from $2.7
million in the first quarter of 2016 and a decrease of
14.2% from $5.0
million in the fourth quarter of 2016. The year-over-year
increase was mainly attributable to an increase in recruitment of
senior software engineers and capital market professionals to
support further development in fintech capability.
Total operating expenses were
$16.8 million, a decrease of 13.6% from
$19.4 million in the first quarter of
2016, and a decrease of 30.1% from
$24.0 million in the fourth quarter
of 2016.
Loss from operations was $12.5
million, compared with an income from operations of
$7.0 million in the first quarter of
2016 and a loss from operations of $11.9
million in the fourth quarter of 2016.
Net loss attributable to China
Finance Online was $11.6
million, compared with a net income of $2.0 million in the first quarter of 2016 and a
net loss of $12.8 million in the
fourth quarter of 2016.
Fully diluted loss per American Depository Shares ("ADS")
attributable to China Finance Online was $0.51 for the first quarter of 2017, compared
with fully diluted earnings per ADS of $0.08 for the first quarter of 2016 and fully
diluted loss per ADS of $0.57 for the
fourth quarter of 2016. Basic and diluted weighted average numbers
of ADSs for the first quarter of 2017 were 22.7 million, compared
with basic and diluted weighted average number of ADSs of 22.6
million and 25.4 million, respectively, for the first quarter of
2016. Each ADS represents five ordinary shares of the
Company.
As of March 31,
2017, total cash and cash equivalents, restricted cash and
short-term investments were $67.9
million.
Total shareholders' equity of China Finance Online
was $75.9 million as of March 31, 2017.
Recent Developments
- China Finance Online's Robo-Advisor product posted
leading performance in comparison to its peer products in the
Chinese market
Based upon different user risk profiles, China Finance
Online's Robo-Advisor product offers a wide array of investment
combinations and personalized global asset allocations through
Chinese domestic mutual funds. During the first 5 months of 2017,
the Company's Robo-Advisor product significantly outperformed the
Shanghai Composite Index in return with a significantly lower
drawdown. More encouragingly, this Robo-Advisor product also beat
most of its peer products in the market for its better return with
a lower drawdown. In addition, this Robo-Advisor product has the
industry's lowest entry, RMB 500. The Company plans to
continue building out its core capabilities in fintech to lay a
solid foundation for its further expansion into services for
institutional and retail investors.
- Inauguration of China A-Share Market
Non-state-owned-enterprises Top 1000 Wealth list
In May, the Company inaugurated China's first A-Share market
non-state-owned-enterprises Top 1000 wealth list ("A-Share Top 1000
Wealth List") that tracks and publishes the 1000 most successful
companies publicly listed in Chinese stock market measured by both
their shareholder value creation and their societal contributions.
Based on the proprietary market data from the company's
wholly-owned industry leading market data services - Genius,
A-Share Top 1000 Wealth List screens all
non-state-owned-enterprises publicly listed on Shanghai Stock
Exchange and Shenzhen Stock Exchange, and analyzes their market
capitalizations, tax contributions, employee compensations and cash
dividends with four key metrics, Fundamental Support Coefficient,
Environmental Contribution Coefficient, Fundamental Support Value
and Social Contribution Value. Powered by 420,000 lines of records
from Genius and a series of advanced algorithms engineered by our
fintech experts, the A-Share Top 1000 Wealth List features three
proprietary rankings: Family Wealth Value, Corporate Wealth
Creation Value, and Comprehensive Wealth Creation Score. Through a
multi-dimensional intelligent evaluation mechanism, this list
enables investors to better understand these companies and to
discover values in these companies from a brand-new angle, which
bodes well with China Finance Online's corporate motto – making
investment easier. The full list along with top 50 tax
contributors, top 50 dividend payers, and other analytics of
geographical mappings, industries, and ages is available at the
following
URL:
http://mapp.jrj.com.cn/news/biz/2017/05/18124022497641.shtml.
Conference Call Information
The management will host a conference call on June 14, 2017 at 8:00
p.m. U.S. Eastern Time (8:00
a.m. Beijing/Hong Kong time on June
15, 2017). 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 or
400-120-3170
Conference ID: 38940753
Please dial in 10 minutes before the call is scheduled to
begin and provide the conference ID to join the call.
A recording of the call will be available on China Finance
Online's website under the investor relations section.
In addition, a live and archived webcast of the conference
call will be available at
http://edge.media-server.com/m/p/uju36sqv
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, changing customer needs,
regulatory environment and market conditions that we are subject
to; the uneven condition of the world and Chinese economies 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 markets 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 outcomes; the degree to which our strategic
collaborations with partners will yield successful outcomes; the
prospects for China's
high-net-worth and middle-class households; the prospects 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 impairments 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.
For more information, please contact:
China Finance Online
+86-10-8336-3100
ir@jrj.com
Kevin
Theiss
(212)
521-4050
kevin.theiss@awakenlab.com
-- Tables Follow --
China Finance Online Co. Limited
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS
|
(In thousands of U.S. dollars)
|
|
Mar. 31,
2017
|
Dec. 31,
2016
|
Assets
|
|
|
Current assets:
|
|
|
Cash and cash
equivalents
|
44,184
|
66,152
|
Restricted cash
|
3,133
|
2,484
|
Trust bank balances held on behalf
of customers
|
37,693
|
33,174
|
Accounts receivable, net -
others
|
15,397
|
14,411
|
Accounts receivable, net - Margin
clients
|
7,823
|
7,557
|
Short-term investments
|
20,552
|
16,444
|
Prepaid expenses and other current
assets
|
8,939
|
8,241
|
Deferred tax assets, current
|
969
|
1,370
|
Total current assets
|
138,690
|
149,833
|
Long-term investments, net
|
2,639
|
2,561
|
Property and equipment, net
|
7,150
|
7,398
|
Acquired intangible assets,
net
|
395
|
396
|
Rental deposits
|
1,424
|
1,292
|
Goodwill
|
109
|
109
|
Deferred tax assets,
non-current
|
27
|
33
|
Other deposits
|
3,723
|
6,002
|
Total assets
|
154,157
|
167,624
|
|
|
|
Liabilities and equity
|
|
|
Current liabilities:
|
|
|
Deferred revenue, current (including
deferred revenue, current of the
consolidated variable interest entities
without recourse to China Finance Online
Co. Limited $4,608 and $5,286 as of March
31, 2017 and December 31,2016,
respectively)
|
5,635
|
6,526
|
Accrued expenses and other current
liabilities (including accrued expenses and
other current liabilities of the
consolidated variable interest entities
without recourse to China Finance Online
Co. Limited $24,598 and $26,352 as of March
31, 2017 and December 31, 2016,
respectively)
|
26,669
|
29,621
|
Contingent liability (including
contingent liability of the consolidated
variable interest entities without recourse
to China Finance Online Co. Limited nil and
nil as of March 31, 2017 and December 31,
2016, respectively)
|
3,000
|
3,000
|
Amount due to customers for trust bank
balances held on behalf of customers
(including amount due to customers for
trust bank balances held on behalf of
customers of the consolidated variable
interest entities without recourse to China
Finance Online Co. Limited $3,594 and
$3,071 as of March 31, 2017 and December
31, 2016, respectively)
|
37,693
|
33,174
|
Accounts payable (including accounts
payable of the consolidated variable
interest entities without recourse to China
Finance Online Co. Limited $334 and $2,151
as of March 31, 2017 and December 31, 2016,
respectively)
|
6,463
|
8,746
|
Deferred tax liabilities, current
(including deferred tax liabilities,
current of the consolidated variable
interest entities without recourse to China
Finance Online Co. Limited $317 and $234 as
of March 31, 2017 and December 31, 2016,
respectively)
|
319
|
236
|
Income taxes payable (including income
taxes payable of the consolidated variable
interest entities without recourse to China
Finance Online Co. Limited $3,800 and
$3,819 as of March 31, 2017 and December
31,2016, respectively)
|
3,800
|
3,828
|
Total current liabilities
|
83,579
|
85,131
|
Deferred tax liabilities, non-current
(including deferred tax liabilities, non-
current of the consolidated variable
interest entities without recourse to China
Finance Online Co. Limited $72 and $72 as
of March 31, 2017 and December 31, 2016,
respectively)
|
90
|
90
|
Deferred revenue, non-current (including
deferred revenue, non-current of the
consolidated variable interest entities
without recourse to China Finance Online
Co. Limited $59 and $78 as of March 31,
2017 and December 31,2016, respectively)
|
530
|
609
|
Total liabilities
|
84,199
|
85,830
|
Noncontrolling interests
|
(5,902)
|
(4,370)
|
Total China Finance Online Co. Limited
Shareholders' equity
|
75,860
|
86,164
|
Total liabilities and equity
|
154,157
|
167,624
|
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,
2017
|
Mar. 31,
2016
|
Dec. 31,
2016
|
Net revenues
|
8,672
|
30,713
|
19,237
|
Cost of revenues
|
(4,650)
|
(4,807)
|
(7,215)
|
Gross profit
|
4,022
|
25,906
|
12,022
|
Operating
expenses
|
|
|
|
General and administrative
(includes share-based
compensation expenses of $837, $1,419 and $999,
respectively)
|
(4,112)
|
(4,918)
|
(4,505)
|
Sales and marketing
(includes share-based
compensation expenses of $36, $(21) and $233,
respectively)
|
(8,343)
|
(11,778)
|
(14,426)
|
Product development
(includes share-based
compensation expenses of $61, $(127) and $731,
respectively)
|
(4,300)
|
(2,698)
|
(5,009)
|
Loss from impairment
of goodwill
|
-
|
-
|
(18)
|
|
|
|
|
Total operating
expenses
|
(16,755)
|
(19,394)
|
(23,958)
|
Government subsidies
|
230
|
508
|
-
|
Income (loss) from
operations
|
(12,503)
|
7,020
|
(11,936)
|
Interest income
|
74
|
244
|
217
|
Interest expense
|
(1)
|
-
|
(2)
|
Short-term investment income,
net
|
85
|
119
|
510
|
Loss on the interest sold and
retained
noncontrolling investment
|
(738)
|
-
|
-
|
Equity method investment
income
|
(8)
|
(62)
|
(7)
|
Other income (loss),
net
|
(236)
|
71
|
(408)
|
Exchange gain (loss),
net
|
21
|
(157)
|
26
|
|
|
|
|
Income (loss) before income tax
expenses
|
(13,306)
|
7,235
|
(11,600)
|
Income tax expenses
|
(512)
|
(424)
|
(3,309)
|
|
|
|
|
Net income (loss)
|
(13,818)
|
6,811
|
(14,909)
|
Less: Net income (loss)
attributable to the
noncontrolling interest
|
(2,209)
|
4,794
|
(2,071)
|
Net income (loss)
attributable to China Finance
Online Co. Limited
|
(11,609)
|
2,017
|
(12,838)
|
|
|
|
|
Net income (loss)
|
(13,818)
|
6,811
|
(14,909)
|
Changes in foreign currency translation
adjustment
|
681
|
448
|
(2,437)
|
Net unrealized gain on
available-for-sale
securities, net of tax effects of nil, nil, and
nil
respectively
|
(35)
|
-
|
-
|
Other comprehensive income (loss), net
of tax
|
646
|
448
|
(2,437)
|
Comprehensive income
(loss)
|
(13,172)
|
7,259
|
(17,346)
|
Less: comprehensive income (loss)
attributable to
noncontrolling interest
|
(2,209)
|
4,794
|
(2,071)
|
Comprehensive income (loss) attributable
to China
Finance Online Co. Limited
|
(10,963)
|
2,465
|
(15,275)
|
|
|
|
|
Net income (loss) per share attributable
to China
Finance Online Co. Limited
|
|
|
|
Basic
|
(0.10)
|
0.02
|
(0.11)
|
Diluted
|
(0.10)
|
0.02
|
(0.11)
|
Net income (loss) per ADS attributable
to China
Finance Online Co. Limited
|
|
|
|
Basic
|
(0.51)
|
0.09
|
(0.57)
|
Diluted
|
(0.51)
|
0.08
|
(0.57)
|
Weighted average ordinary
shares
|
|
|
|
Basic
|
113,532,543
|
112,939,783
|
113,465,823
|
Diluted
|
113,532,543
|
126,822,437
|
113,465,823
|
Weighted average ADSs
|
|
|
|
Basic
|
22,706,509
|
22,587,957
|
22,693,165
|
Diluted
|
22,706,509
|
25,364,487
|
22,693,165
|
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visit:http://www.prnewswire.com/news-releases/china-finance-online-reports-first-quarter-2017-unaudited-financial-results-300473886.html
SOURCE China Finance Online Co., Ltd.