BEIJING, Sept. 13, 2018 /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 trading services, wealth
management products, securities 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 six months ended June 30, 2018.
Second Quarter 2018 Financial Highlights
- Net revenues grew 34.4% year-over-year to $12.9 million from $9.6
million in the second quarter of 2017
- Revenues from the financial information and advisory
business grew 187.5% year-over-year
- Gross margin increased to 65.5%, up from 52.9% in the
second quarter of 2017
- Net loss attributable to China Finance Online was
$4.3 million, compared with a net
loss of $8.3 million in the second
quarter of 2017 and net loss of $5.2
million in the first quarter of 2018
First Six Months of 2018 Highlights
- Net revenues were $26.2
million, an increase of 43.3%, compared with $18.3 million in the first six months of
2017
- Net loss attributable to China Finance Online was
$9.5 million, compared with a net
loss of $19.9 million in the first
six months of 2017
- Lingxi Robo-Advisor ("Lingxi") outperformed most of its peer
products in the Chinese market with an average return of 0.7% in
the first six months of 2018, which significantly outperformed a
loss of 13.9% in the Shanghai Composite Index
Mr. Zhiwei Zhao, Chairman and CEO
of China Finance Online, commented, "During the second quarter of
2018, our revenues were up year-over-year while our costs were
down, and our bottom line losses continued to narrow. Under the
weak market conditions, we continue to reduce cost and improve
efficiency."
"The Chinese stock markets suffered a crushing sell-off during
the second quarter of 2018 and the Shanghai Index plunged from
around 3200 to 2800. However, the traffic to our flagship website,
"JRJ.com.cn", bucked this market trend and rose to No. 430 in
Alexa's Global Ranking and No. 62 in China. We remain one of the most trusted
financial news hubs with our proprietary content, fact-based
journalism, breaking news coverage and analysis on market
trends."
Mr. Zhao continued, "We continue concentrating on expanding our
fintech capabilities as we further develop and optimize our
intelligent finance products, which enable investors to identify
investment opportunities and discover value stocks. As the Shanghai
Index sank to a new three-year low, many value-driven institutional
investors began entering into the market. We believe our
cloud-based investment research platform, Genius Zhisheng, is well
positioned to assist portfolio managers to navigate through the
massive industry data and corporate historical financial data to
enable them to back-test their investment strategies in a speedy
fashion. We have a large number of beta-test programs in place with
leading brokerage firms and wealth management advisors."
"As Lingxi Robo-advisor continues to outperform the benchmark
index as well as its peer products in the marketplace, our superior
track records drew attention from institutions looking for
solutions to enrich their services to their clients. YonYou is an
Enterprise Service powerhouse with over 4 million clients in
China. The Company's
recently-formed partnership on corporate intelligent asset
allocation with YonYou not only demonstrates YonYou's recognition
of our fintech capability, but also opens doors for our cloud-based
Software-as-a-Service (SaaS) to penetrate the large corporate
wealth management market in China," Mr. Zhao concluded.
Second Quarter 2018 Financial Results
Net revenues were $12.9
million, compared with $9.6
million during the second quarter of 2017 and $13.3 million during the first quarter of 2018.
During the second quarter of 2018, revenues from financial
services, the financial information and advisory business, and
advertising services contributed 46%, 44% and 9% of the net
revenues, respectively, compared with 67%, 20% and 10%,
respectively, for the corresponding period in 2017.
Revenues from financial services were $6.0 million, compared with $6.4 million during the second quarter of 2017
and $6.7 million during the first
quarter of 2018. Revenues from financial services consist mainly of
equity brokerage services. The equity brokerage business grew 21.8%
year-over-year. The year-over-year decrease in revenues from
financial services was mainly due to a decline in revenues from the
Company's commodities brokerage services after the suspension of
new commodities trading by the precious metal exchange in
China in 2017. Revenues from the
commodities brokerage were $1.6
million, or 17% of total revenues, in the second quarter of 2017.
Revenues from the financial information and advisory
business were $5.7 million, an
increase of 187.5% from $2.0 million
during the second quarter of 2017 and an increase of 15.5% from
$4.9 million in the first quarter of
2018. Revenues from the financial information and advisory business
were mainly comprised of subscription services from individual and
institutional customers. During the second quarter, subscription
revenues from individual customers grew by 1774.6% year-over-year
and 62.7% quarter-over-quarter, driven by the increased
subscription of the Company's cloud-based analytical tools. The
year-over-year and quarter-over-quarter increases of revenues from
the financial information and advisory business were mainly due to
an increase in subscription revenues from individual customers.
Revenues from advertising services were $1.2 million, compared with $0.9 million in the second quarter of 2017 and
$1.7 million in the first quarter of
2018. The increased traffic to our site and readership recognition
of our premium content helped to elevate our advertising revenues
on a year-over-year basis.
Gross profit was $8.5
million, compared with $5.1
million in the second quarter of 2017 and $8.2 million in the first quarter of 2018. Gross
margin in the second quarter of 2018 was 65.5%, compared with 52.9%
in the second quarter of 2017 and 61.9% in the first quarter of
2018. The year-over-year and quarter-over-quarter increases in
gross margin were mainly due to revenue mix changes associated with
the growth of the financial information and advisory
business, which carries a higher margin.
General and administrative expenses were $3.0 million, a decrease of 22.3% from
$3.9 million in the second quarter of
2017, and a decrease of 7.7% from $3.3
million in the first quarter of 2018. The year-over-year
decrease was mainly due to the suspended operations of the
commodities brokerage services, and the quarter-over-quarter
decrease was mainly attributable to more stringent expense control
measures and streamlined operations.
Sales and marketing expenses were $6.6 million, a decrease of 10.2% from
$7.3 million in the second quarter of
2017, and an increase of 5.5% from $6.2
million in the first quarter of 2018. The year-over-year
decrease was mainly attributable to the reduction in headcount and
rental expenses associated with the terminated commodity brokerage
operation.
Research and development expenses were $3.8 million, a decrease of 11.5% from
$4.3 million in the second quarter of
2017 and with no significant difference from $3.8 million in the first quarter of 2018. The
year-over-year decrease was mainly attributable to improved
efficiency after the consolidation of the R&D team. The Company
continues to maintain a team of senior software engineers, data
scientists and capital market professionals to support further
development in its fintech capabilities.
Total operating expenses were $13.4
million, a decrease of 15.2% from $15.7 million in the second quarter of 2017, and
no significant difference from $13.3
million in the first quarter of 2018. The year-over-year
decrease was mainly due to improved operational efficiency and
effective cost controls.
Loss from operations was $4.9
million, compared with a loss from operations of
$10.7 million in the second quarter
of 2017 and a loss from operations of $5.0
million in the first quarter of 2018.
Net loss attributable to China Finance Online was
$4.3 million, compared with a net
loss of $8.3 million in the second
quarter of 2017 and a net loss of $5.2
million in the first quarter of 2018.
Fully diluted loss per American Depository Shares ("ADS")
attributable to China Finance Online was $0.19 for the second quarter of 2018, compared
with fully diluted loss per ADS of $0.37 for the second quarter of 2017 and fully
diluted loss per ADS of $0.23 for the
first quarter of 2018. Basic and diluted weighted average numbers
of ADSs for the second quarter of 2018 were 22.8 million, compared
with basic and diluted weighted average number of ADSs of 22.7
million for the second quarter of 2017. Each ADS represents five
ordinary shares of the Company.
First Six Months of 2018 Financial Results
Net revenues for the first six months of 2018 were
$26.2 million, an increase of 43.3%
compared with $18.3 million in the
first six months of 2017.
Gross profit for the first six months of 2018 was
$16.7 million, an increase of 83.2%
compared with $9.1 million in the
first six months of 2017.
Net loss attributable to China Finance Online for
the first six months of 2018 was $9.5
million, compared to a net loss of $19.9 million in the first six months of
2017.
Fully diluted loss per ADS attributable to China Finance
Online was $0.42 for the first
six months of 2018, compared with fully diluted loss of
$0.88 for the first six months of
2017.
As of June 30, 2018, total
cash and cash equivalents, restricted cash and short-term
investments were $17.0 million.
Total shareholders' equity of China Finance Online was
$45.4 million as of June 30, 2018.
Recent Developments
- Partnership with the world-leading enterprise service provider,
YonYou Network Technology (600588.SS), for corporate intelligent
asset allocation
On August 18th, 2018,
the Company and YonYou Network Technology ("YonYou") entered into a
partnership and launched the first financial product, "Enterprise
Xianjin Bao", on YonYou Financial Cloud platform, aiming to manage
enterprises' liquid assets to produce steady returns. On such
platform, China Finance Online will provide its intelligent
corporate cash management solutions to over 4 million corporate
customers and other organizational customers of YonYou. Built upon
the Company's extensive research of comprehensive fund performances
and intelligent asset allocation, this cash management product will
help YonYou's customers to maximize the efficiency of their
funds.
- Lingxi Robo-Advisor recorded strong performance in second
quarter of 2018
In the second quarter of 2018, the Chinese stock market
experienced one of the largest sell-offs, pushing the quarterly
loss of Shanghai Composite Index to 10.1% and year-to-date loss to
13.9%. However, the Company's Robo-Advisor product, Lingxi, posted
an average loss of 0.5% in the second quarter of 2018 and an
average return of 0.7% gain in the first six months of 2018, with
an average drawdown rate of 2.1% in the second quarter of 2018 and
4.6% in the first six months of 2018, respectively. These results
significantly outperformed the Shanghai Composite Index for
investment return with a substantially lower drawdown. According to
China Finance Online's internal research, Lingxi's performance in
the first six months of 2018 also exceeded most of its peer
products in the market with its better return and lower drawdown.
In the second quarter of 2018, one of the best-performing
strategies by Lingxi produced an annualized return of 6.0%.
Since its inception in late 2016, Lingxi provides Chinese
middle-class retail investors with a wide array of investment
combinations and personalized global asset allocations through
Chinese domestic mutual funds. Lingxi Platinum Product, catering
for mass affluent investors in China, outperformed the average level of
public fund- of- funds for investment return with a significantly
lower drawdown in the second quarter of 2018. During the second
quarter, Shanghai-Shenzhen 300 Index suffered a 9.9% loss, while
Lingxi Platinum Product core strategy was only down 1.4%. Lingxi
Platinum Product alleviated the broad market sell-off impact to its
clients and demonstrated the resilience and efficiency of its
multiple strategy global asset allocation program.
- Class Action against the Company is officially closed
The Company have received a court judgement on the class action
lawsuit (Wang et al., v. China Finance Online, Case no.
1:15-cv-07894-RMB) dated August 10,
2018 in which the court ordered to close this case. As with
all judgments in federal court, parties may appeal a judgment
within 30 days after such judgment is entered. The 30-day
deadline for appeals has passed, and no appeals have been filed by
any objecting shareholders or other parties. The case is officially
closed.
Conference Call Information
The management will host a conference call on September 13, 2018 at 8:00
p.m. U.S. Eastern Time (8:00
a.m. Beijing/Hong Kong time September 14, 2018). 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: 2366699
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
https://edge.media-server.com/m6/p/6pvony2j.
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 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, mainland Chinese
precious metals exchanges, Hong
Kong stock market and global financial markets on our future
performance; the unpredictability of our strategic transformation
and growth of new businesses; 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)
|
|
Jun. 30,
2018
|
Dec. 31,
2017
|
Assets
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
16,009
|
38,693
|
Restricted
cash
|
-
|
2,036
|
Trust bank balances
held on behalf of customers
|
32,950
|
39,169
|
Accounts receivable,
net - others
|
7,960
|
8,977
|
Accounts receivable,
net - Margin clients
|
14,943
|
8,011
|
Short-term
investments
|
952
|
533
|
Prepaid expenses and
other current assets
|
4,007
|
4,198
|
Total current
assets
|
76,821
|
101,617
|
Long-term investments,
net
|
2,498
|
2,531
|
Property and
equipment, net
|
5,589
|
6,885
|
Acquired intangible
assets, net
|
-
|
96
|
Rental
deposits
|
1,101
|
1,141
|
Goodwill
|
108
|
108
|
Deferred tax
assets
|
1,307
|
1,621
|
Other
deposits
|
466
|
605
|
Total
assets
|
87,890
|
114,604
|
|
|
|
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 $5,996 and $8,477 as of June 30, 2018 and
December
31, 2017, respectively)
|
6,980
|
9,371
|
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
$3,369 and
$6,109 as of June 30, 2018 and December 31, 2017,
respectively)
|
5,260
|
9,953
|
Contingent
liability (including contingent liability of the
consolidated
variable interest entities without recourse to China Finance Online
Co.
Limited nil and nil as of June 30, 2018 and December 31, 2017,
respectively)
|
-
|
3
|
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 $3,341 and
$5,375
as of June 30, 2018 and December 31, 2017, respectively)
|
32,950
|
39,169
|
Accounts payable
(including accounts payable of the consolidated
variable interest entities without recourse to China Finance Online
Co.
Limited $1,417 and $1,067 as of June 30, 2018 and December 31,
2017,
respectively)
|
5,855
|
9,462
|
Income taxes payable
(including income taxes payable of the
consolidated variable interest entities without recourse to China
Finance
Online Co. Limited $(2) and $484 as of June 30, 2018 and December
31,
2017, respectively)
|
67
|
553
|
Total current
liabilities
|
51,112
|
68,511
|
Deferred tax
liabilities (including deferred tax liabilities of the
consolidated variable interest entities without recourse to China
Finance
Online Co. Limited $39 and $218 as of June 30, 2018 and December
31,
2017, respectively)
|
41
|
237
|
Deferred revenue,
non-current (including deferred revenue, non-current
of the consolidated variable interest entities without recourse to
China
Finance Online Co. Limited nil and $25 as of June 30, 2018 and
December
31, 2017, respectively)
|
63
|
144
|
Total
liabilities
|
51,216
|
68,892
|
Noncontrolling
interests
|
(8,763)
|
(8,335)
|
Total China Finance
Online Co. Limited Shareholders' equity
|
45,437
|
54,047
|
Total liabilities and
equity
|
87,890
|
114,604
|
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,
2018
|
Jun. 30,
2017
|
Mar. 31,
2018
|
Jun. 30,
2018
|
Jun. 30,
2017
|
Net
revenues
|
12,927
|
9,615
|
13,280
|
26,207
|
18,287
|
Cost of
revenues
|
(4,464)
|
(4,526)
|
(5,055)
|
(9,519)
|
(9,176)
|
Gross
profit
|
8,463
|
5,089
|
8,225
|
16,688
|
9,111
|
Operating
expenses
|
|
|
|
|
|
General and
administrative (includes
share-based compensation expenses of
$564, $784, $578, $1,142 and $1,621
respectively)
|
(3,003)
|
(3,863)
|
(3,252)
|
(6,255)
|
(7,975)
|
Sales and marketing
(includes share-
based compensation expenses of $65,
$22, $68, $133 and $58, respectively)
|
(6,586)
|
(7,331)
|
(6,243)
|
(12,829)
|
(15,674)
|
Product development
(includes share-
based compensation expenses of $64,
$22, $63, $127 and $83, respectively)
|
(3,764)
|
(4,253)
|
(3,767)
|
(7,531)
|
(8,553)
|
Loss from impairment
of intangible
assets
|
-
|
(292)
|
-
|
-
|
(292)
|
Total operating
expenses
|
(13,353)
|
(15,739)
|
(13,262)
|
(26,615)
|
(32,494)
|
Government
subsidies
|
-
|
-
|
-
|
-
|
230
|
Income (loss) from
operations
|
(4,890)
|
(10,650)
|
(5,037)
|
(9,927)
|
(23,153)
|
Interest
income
|
18
|
119
|
60
|
78
|
193
|
Interest
expense
|
(1)
|
(1)
|
-
|
(1)
|
(2)
|
Short-term investment
income, net
|
(80)
|
(122)
|
1
|
(79)
|
(37)
|
Gain(loss)on the
interest sold and
retained noncontrolling investment
|
1
|
1,147
|
(2)
|
(1)
|
409
|
Gain from sale of
equity method
investment
|
-
|
111
|
-
|
-
|
111
|
Equity method
investment income
|
(2)
|
(1)
|
(1)
|
(3)
|
(9)
|
Other income (loss),
net
|
69
|
(323)
|
(378)
|
(309)
|
(559)
|
Exchange gain (loss),
net
|
66
|
39
|
47
|
113
|
60
|
Income (loss) before
income tax
expenses
|
(4,819)
|
(9,681)
|
(5,310)
|
(10,129)
|
(22,987)
|
Income tax
expenses
|
133
|
(5)
|
(268)
|
(135)
|
(517)
|
Net income
(loss)
|
(4,686)
|
(9,686)
|
(5,578)
|
(10,264)
|
(23,504)
|
Less: Net income
(loss) attributable to
the noncontrolling interest
|
(348)
|
(1,387)
|
(419)
|
(767)
|
(3,596)
|
Net income (loss)
attributable to China
Finance Online Co. Limited
|
(4,338)
|
(8,299)
|
(5,159)
|
(9,497)
|
(19,908)
|
Net income
(loss)
|
(4,686)
|
(9,686)
|
(5,578)
|
(10,264)
|
(23,504)
|
Changes in foreign
currency translation
adjustment
|
(479)
|
1,045
|
399
|
(80)
|
1,726
|
Net unrealized gain
on available-for-
sale securities, net of tax effects of
nil, nil, nil, nil and nil respectively
|
-
|
(71)
|
-
|
-
|
(106)
|
Other comprehensive
income (loss), net
of tax
|
(479)
|
974
|
399
|
(80)
|
1,620
|
Comprehensive income
(loss)
|
(5,165)
|
(8,712)
|
(5,179)
|
(10,344)
|
(21,844)
|
Less: comprehensive
income (loss)
attributable to noncontrolling interest
|
(348)
|
(1,387)
|
(419)
|
(767)
|
(3,596)
|
Comprehensive income
(loss)
attributable to China Finance Online
Co. Limited
|
(4,817)
|
(7,325)
|
(4,760)
|
(9,577)
|
(18,288)
|
Net income (loss) per
share
attributable to China Finance Online
Co. Limited
|
|
|
|
|
|
Basic
|
(0.04)
|
(0.07)
|
(0.05)
|
(0.08)
|
(0.18)
|
Diluted
|
(0.04)
|
(0.07)
|
(0.05)
|
(0.08)
|
(0.18)
|
Net income (loss) per
ADS attributable to
China Finance Online Co. Limited
|
|
|
|
|
|
Basic
|
(0.19)
|
(0.37)
|
(0.23)
|
(0.42)
|
(0.88)
|
Diluted
|
(0.19)
|
(0.37)
|
(0.23)
|
(0.42)
|
(0.88)
|
Weighted average
ordinary shares
|
|
|
|
|
|
Basic
|
113,866,602
|
113,586,708
|
113,846,041
|
113,856,379
|
113,559,775
|
Diluted
|
113,866,602
|
113,586,708
|
113,846,041
|
113,856,379
|
113,559,775
|
Weighted average
ADSs
|
|
|
|
|
|
Basic
|
22,773,320
|
22,717,342
|
22,769,208
|
22,771,276
|
22,711,955
|
Diluted
|
22,773,320
|
22,717,342
|
22,769,208
|
22,771,276
|
22,711,955
|
View original
content:http://www.prnewswire.com/news-releases/china-finance-online-reports-second-quarter-and-first-six-months-of-2018-unaudited-financial-results-300712168.html
SOURCE China Finance Online Co., Ltd.