BEIJING, April 23, 2019 /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 fintech-powered 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 fourth quarter and full year ended December 31, 2018.
Fourth Quarter 2018 Financial Highlights
- Net revenues were $10.7
million, up from $8.6 million
in the third quarter of 2018
- Revenues from advertising grew 85.5% year-over-year and 109.7%
quarter-over-quarter
- Gross margin was 65.1%, up from 58.2% in the third quarter
of 2018
- Net loss attributable to China Finance Online was
$4.4 million, compared with a net
loss of $8.4 million in the fourth
quarter of 2017
Full Year 2018 Highlights
- Net revenues were $45.5
million, up 6.7% year-over-year
- Revenues from the financial information and advisory business
grew 45.0% year-over-year
- Revenues from advertising increased by 103.8%
year-over-year
- According to the Company's asset allocation system, our
Robo-Advisor product, Lingxi, significantly outperformed all
Chinese market key indices and most of its peer products in the
Chinese market with 95% of all its strategies posting positive
returns in 2018. For the full year, the defensive strategy designed
by Lingxi yielded an annual return of 5.28%.
Mr. Zhiwei Zhao, Chairman and CEO
of China Finance Online, commented, "Our top line further improved
from the third quarter while our net loss was narrowed. Through the
efforts of controlling cost and improving efficiency, for 2018, our
net revenue increased year-over-year and our bottom line losses
were reduced by $16.8 million. With
the priority of strengthening future growth potential, we will
continue to improve efficiency.
While the stock market suffered major losses in China and Hong
Kong during the fourth quarter, our equity-brokerage related
business maintains a strong growth momentum and our
intelligent-finance driven fintech business continued to lock in
contracts with leading brokerage firms in China. We are pleased that we have
established strategic partnerships with influential
financial institutions in China and are developing systems to
empower their wealth management services."
"Our other operations have also been making solid progress. Our
website "JRJ.com.cn" remains a popular destination for news and
analysis on the economy and capital markets, and its unique
visitors all year in 2018 rose to 253 million from 236 million in
2017 and 169 million in 2016. The strong growth of traffic to
our site was attributable to the improvement of our fact-based
journalism, breaking news coverage and proprietary deep dive
content," Mr. Zhao concluded.
Fourth Quarter 2018 Financial Results
Net revenues were $10.7
million, compared with $13.6
million during the fourth quarter of 2017 and $8.6 million during the third quarter of 2018.
During the fourth quarter of 2018, revenues from financial
services, the financial information and advisory business, and
advertising services contributed 53%, 19% and 28% of the net
revenues, respectively, compared with 66%, 21% and 12%,
respectively, for the corresponding period in 2017.
Revenues from financial services were $5.7 million, compared with $8.9 million during the fourth quarter of 2017
and $4.7 million during the third
quarter of 2018. Revenues from financial services consist mainly of
equity brokerage services. The year-over-year decrease of revenues
from financial services was mainly due to the reduced revenue from
the equity brokerage business. The quarter-over-quarter increase
was mainly driven by the strengthening of Rifa's equity brokerage
business.
Revenues from the financial information and advisory
business were $2.0 million,
compared with $2.9 million during the
fourth quarter of 2017 and $2.4
million in the third quarter of 2018. Revenues from the
financial information and advisory business were comprised of
subscription services from individual and institutional customers
and financial advisory service. During the fourth quarter,
subscription revenue from individual investors decreased by 12.3%
year-over-year, mainly due to the effects of streamlining sales
team and upgrading business operation for long-term healthy
growth during the fourth quarter.
Revenues from advertising services were $3.0 million, compared with $1.6 million in the fourth quarter of 2017 and
$1.4 million in the third quarter of
2018. The increased traffic to our site also helped elevate our
advertising revenues on both a year-over-year and
quarter-over-quarter basis.
Gross profit was $6.9
million, compared with $6.8
million in the fourth quarter of 2017 and $5.0 million in the third quarter of 2018. Gross
margin in the fourth quarter of 2018 was 65.1%, compared with 49.7%
in the fourth quarter of 2017 and 58.2% in the third quarter of
2018. The year-over-year and quarter-over-quarter increases in
gross margin were mainly due to increased revenue contribution from
advertising which carries a higher gross margin.
General and administrative expenses were $4.9 million, compared with $4.1 million in the fourth quarter of 2017, and
$3.1 million in the third quarter of
2018. The year-over-year and quarter-over-quarter increases were
mainly attributable to increased bad debt provisions.
Sales and marketing expenses were $4.4 million, compared with $6.8 million in the fourth quarter of 2017, and
$4.8 million in the third quarter of
2018. The year-over-year decrease of 35.1% was mainly
attributable to the reduction of consulting fees related to
commodities brokerage business and sales commissions. The
quarter-over-quarter decrease of 7.4% was mainly attributable
to the reduction in advertising.
Research and development expenses were $2.9 million, compared with $3.8 million in the fourth quarter of 2017 and
$3.5 million in the third quarter of
2018. The year-over-year and quarter-over-quarter decreases were
mainly attributable to improved efficiency after the consolidation
of the R&D team throughout different business units. 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 $12.3 million, compared with $14.7 million in the fourth quarter of 2017,
and $11.3 million in the third
quarter of 2018. The year-over-year decrease was mainly due to
improved efficiency and effective cost controls. The
quarter-over-quarter increase was mainly due to bad debt
provisions.
Loss from operations was $5.4 million, compared with a loss from
operations of $8.0 million in the
fourth quarter of 2017 and a loss from operations of $6.3 million in the third quarter of 2018.
Net loss attributable to China Finance Online was
$4.4 million, compared with a
net loss of $8.4 million in the
fourth quarter of 2017 and a net loss of $6.0 million in the third quarter of 2018.
Fully diluted loss per American Depository Shares ("ADS")
attributable to China Finance Online was $0.19 for the fourth quarter of 2018,
compared with fully diluted loss per ADS of $0.37 for the fourth quarter of 2017 and fully
diluted loss per ADS of $0.26 for the
third quarter of 2018. Basic and diluted weighted average numbers
of ADSs for the fourth quarter of 2018 were 22.8 million, compared
with basic and diluted weighted average number of ADSs of
22.7 million for the fourth quarter of 2017. Each ADS
represents five ordinary shares of the Company.
Full Year 2018 Financial Results
Net revenues for full year 2018 were $45.5 million, an increase of 6.7% compared with
$42.6 million for 2017.
Revenues from financial services for the full year 2018 were
$23.1 million, a decrease of 18.3%
compared with $28.2 million for
2017.
Revenues from the financial information and advisory business
for the full year 2018 were $14.9
million, an increase of 45.0% compared with $10.3 million for 2017.
Revenues from advertising services for the full year 2018 were
$7.3 million, an increase of 103.8%
compared with $3.6 million for
2017.
Gross profit for the full year 2018 was $28.6 million, an increase of 38.4% compared with
$20.7 million in the full year 2017.
Gross margin was 63.0% compared with 48.5% in 2017.
Net loss attributable to China Finance Online for
the full year 2018 was $20.0 million,
compared with $36.7 million in
2017.
Fully diluted loss per ADS attributable to China Finance
Online was $0.88 for the full
year 2018, compared with $1.62 in
2017. Basic and diluted weighted average numbers of ADSs for the
full year 2018 were 22.8 million.
Recent Developments
- Lingxi Robo-Advisor recorded strong performance in the fourth
quarter of 2018 and full year of 2018
According to our proprietary asset allocation system, our
Robo-Advisor product, Lingxi, provides Chinese retail investors
with a wide array of investment combinations and personalized
global asset allocations through Chinese domestic mutual funds.
Since its inception, Lingxi significantly outperformed all
Chinese market key indices and most of its peer products in the
Chinese market. In 2018, the Shanghai Composite Index experienced a
loss of 24.6%. However, 95% of the strategies in the Company's
Robo-Advisor product, Lingxi, posted positive returns, with a
defensive strategy yielding an annual return of 5.28% in 2018.
Since its inception in 2017 to the end of 2018, the accumulative
returns of Lingxi's high-risk, medium-risk and low-risk strategies
were 16.94%, 13.91% and 10.79%, respectively.
- China Finance Online Launched its Turnkey Asset Management
Platform (TAMP)
In late 2018, the Company launched the i-TAMP platform (Turnkey
Asset Management Platform) to provide financial advisors
consultation and advice on stocks, mutual funds, wealth management
products, insurance, trust and other financial products. Featuring
best-in-class TAMP, this platform has already attracted hundreds of
financial advisors to open their online offices to provide services
to mass retail investors. The key benefits of the i-TAMP platform
are the superior user experience and robust product functionalities
which empower financial advisors to better serve their clients.
- China Finance Online Forms Strategic Partnership with Leading
Futures Brokerage Firm CIFCO
In January 2019, the Company
signed a strategic partnership agreement with Founder CIFCO Futures
Co. Ltd ("Founder CIFCO Futures"), a leading futures brokerage firm
in China. Pursuant to the
partnership agreement, both parties will collaborate in the
development of more advanced trading system, smart market news
alert, cloud-based research platform and industry forums.
- China Finance Online Entered into Multiple Contracts from
Leading Brokerage Firms
In January 2019, the Company
announced it had entered into a contract from Orient Securities
Co., Ltd. ("Orient Securities"), a Top 10 leading brokerage firm in
China according to Securities
Association of China, to construct
an intelligent, contextual, pragmatic online nationwide investor
education center to equip Orient Securities with industry-leading
comprehensive intelligent solution for investor education. In
addition to Orient Securities, the Company also entered into
contracts with other leading brokerage firms such as BOCI
International (China) Limited
(BOCI) and Southwest Securities to develop smart and customized
solutions for investor education.
- 2018 Fintech & Leading China Annual Forum
In December 2018, the Company
hosted the "2018 Fintech Forum & Leading China Annual Awards"
in Beijing. The key discussions
were artificial intelligence, data security, big data, risk
management, IoT and blockchain. The conference is committed to
promoting the long-term health of the financial industry in
China and has received high
recognition from financial regulators and institutions.
- Awards and Letters of Appreciation from the China Banking
Association, China Banking Regulatory Commission, China Securities
Investment Association and National Internet Finance Association of
China.
In 2018, the Company's media content department received a slew
of awards and letters of appreciation from the China Banking
Association, China Banking Regulatory Commission, Securities
Investment Association and National Internet Finance Association of
China for its outstanding media
coverages on the Chinese banking industry and stock markets. These
accolades are government endorsements of our efforts in promoting
rational and long-term investment philosophy. As the No. 2 most
popular financial news website in China by Sina, the Company has 253 million
unique visitors in 2018 along with a robust presence in large
Chinese social media domains including 2.7 million followers on
Weibo, 1 million followers on Wechat, and 1.8 million followers on
TikTok. In recent months, the Company has been consistently ranked
No. 1 on Baidu's financial institutions value board for its 500,000
followers and accumulative reads of 410 million.
Conference Call Information
The management will host a conference call on April 23, 2019 at 8:00
p.m. U.S. Eastern Time (8:00
a.m. Beijing/Hong Kong time April
24, 2019). 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: 8985259
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/mr48xpx3.
About China Finance Online
China Finance Online Co. Limited is a leading web-based
financial services company that provides Chinese retail investors
with fintech-powered 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
Awaken Advisors
(212) 521-4050
kevin.theiss@awakenlab.com
China Finance Online
Co. Limited
|
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In thousands of U.S.
dollars)
|
|
|
Dec. 31,
2018
|
Dec. 31,
2017
|
Assets
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
12,493
|
38,693
|
Restricted
cash
|
-
|
2,036
|
Trust bank balances
held on behalf of customers
|
31,218
|
39,169
|
Accounts receivable,
net - others
|
7,102
|
8,977
|
Accounts receivable,
net - Margin clients
|
17,751
|
8,011
|
Short-term
investments
|
-
|
533
|
Prepaid expenses and
other current assets
|
2,409
|
4,198
|
Total current
assets
|
70,973
|
101,617
|
Long-term investments,
net
|
2,411
|
2,531
|
Property and
equipment, net
|
4,459
|
6,885
|
Acquired intangible
assets, net
|
85
|
96
|
Rental
deposits
|
964
|
1,141
|
Goodwill
|
108
|
108
|
Deferred tax
assets
|
1,473
|
1,621
|
Other
deposits
|
216
|
605
|
Total
assets
|
80,689
|
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 of $7,119 and $8,477 as of Dec. 31, 2018 and December
31,2017, respectively)
|
8,127
|
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 $3,846 and
$6,109 as of Dec. 31, 2018 and December 31, 2017,
respectively)
|
11,728
|
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 Dec. 31, 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 $5,599 and
$5,375 as of Dec. 31, 2018 and December 31, 2017,
respectively)
|
31,218
|
39,169
|
Accounts payable
(including accounts payable of the consolidated variable interest
entities without recourse to China Finance Online Co. Limited $189
and $1,067 as of Dec. 31, 2018 and December 31, 2017,
respectively)
|
2,947
|
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 Dec. 31, 2018 and December 31, 2017,
respectively)
|
155
|
553
|
Total current
liabilities
|
54,175
|
68,511
|
Deferred tax
liabilities (including deferred tax liabilities of the consolidated
variable interest entities without recourse to China Finance Online
Co. Limited $13 and $218 as of Dec. 31, 2018 and December 31, 2017,
respectively)
|
29
|
237
|
Deferred revenue,
non-current (including deferred revenue, non-current of the
consolidated variable interest entities without recourse to China
Finance Online Co. Limited (9) and $25 as of Dec. 31, 2018 and
December 31, 2017, respectively)
|
149
|
144
|
Total
liabilities
|
54,353
|
68,892
|
Noncontrolling
interests
|
(9,110)
|
(8,335)
|
Total China Finance
Online Co. Limited
Shareholders' equity
|
35,446
|
54,047
|
Total liabilities and
equity
|
80,689
|
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
|
The year
ended
|
|
Dec.
31,2018
|
Dec. 31,
2017
|
Sep.30,2018
|
Dec.
31,2018
|
Dec. 31,
2017
|
Net
revenues
|
10,657
|
13,597
|
8,614
|
45,478
|
42,623
|
Cost of
revenues
|
(3,723)
|
(6,837)
|
(3,600)
|
(16,842)
|
(21,934)
|
Gross
profit
|
6,934
|
6,760
|
5,014
|
28,636
|
20,689
|
Operating
expenses
|
|
|
|
|
|
General and
administrative(includes share-based compensation expenses of $315,
$561,$371, $1,829 and $1,119 respectively)
|
(4,936)
|
(4,055)
|
(3,063)
|
(14,254)
|
(15,250)
|
Sales and marketing
(includes share-based compensation expenses of $22, $26, $65, $219
and $54, respectively)
|
(4,442)
|
(6,845)
|
(4,796)
|
(22,066)
|
(29,467)
|
Product development
(includes share-based compensation expenses of $4, $69, $61, $192
and $133, respectively)
|
(2,925)
|
(3,822)
|
(3,468)
|
(13,924)
|
(16,208)
|
Loss from impairment
of intangible assets
|
-
|
|
-
|
-
|
(292)
|
Total operating
expenses
|
(12,303)
|
(14,722)
|
(11,327)
|
(50,244)
|
(61,217)
|
Government
subsidies
|
-
|
-
|
-
|
-
|
230
|
Income (loss) from
operations
|
(5,369)
|
(7,962)
|
(6,313)
|
(21,608)
|
(40,298)
|
Interest
income
|
15
|
235
|
4
|
97
|
487
|
Interest
expense
|
-
|
-
|
-
|
(1)
|
(3)
|
Short-term investment
income, net
|
4
|
(2)
|
2
|
(73)
|
63
|
Gain(loss)on the
interest sold
and retained noncontrolling
investment
|
(1,186)
|
(2,406)
|
-
|
(1,187)
|
(1,997)
|
Gain from sale of
equity
method investment
|
-
|
-
|
-
|
-
|
111
|
Equity method
investment
income
|
4
|
(3)
|
(1)
|
-
|
(13)
|
Other income (loss),
net
|
549
|
208
|
(132)
|
107
|
(283)
|
Exchange gain (loss),
net
|
73
|
(153)
|
61
|
247
|
(131)
|
Income (loss) before
income
tax expenses
|
(5,910)
|
(10,083)
|
(6,379)
|
(22,418)
|
(42,064)
|
Income tax
expenses
|
6
|
170
|
76
|
(52)
|
(324)
|
Net income
(loss)
|
(5,904)
|
(9,913)
|
(6,303)
|
(22,470)
|
(42,388)
|
Less: Net income
(loss) attributable to the noncontrolling interest
|
(1,470)
|
(1,538)
|
(283)
|
(2,520)
|
(5,652)
|
Net income (loss)
attributable
to China Finance Online Co. Limited
|
(4,434)
|
(8,375)
|
(6,020)
|
(19,950)
|
(36,736)
|
Net income
(loss)
|
(5,904)
|
(9,913)
|
(6,303)
|
(22,470)
|
(42,388)
|
Changes in foreign
currency translation adjustment
|
(93)
|
19
|
(189)
|
(362)
|
2,400
|
Net unrealized gain on
available-for-sale securities, net of tax effects of nil, nil, nil,
nil and nil respectively
|
-
|
118
|
-
|
-
|
-
|
Other comprehensive
income (loss), net of tax
|
(93)
|
137
|
(189)
|
(362)
|
2,400
|
Comprehensive income
(loss)
|
(5,997)
|
(9,776)
|
(6,492)
|
(22,832)
|
(39,988)
|
Less: comprehensive
income (loss) attributable to noncontrolling interest
|
(1,470)
|
(1,538)
|
(283)
|
(2,520)
|
(5,652)
|
Comprehensive income
(loss) attributable to China Finance Online Co. Limited
|
(4,527)
|
(8,238)
|
(6,209)
|
(20,312)
|
(34,336)
|
Net income (loss) per
share attributable to China Finance Online Co. Limited
|
|
|
|
|
|
Basic
|
(0.04)
|
(0.07)
|
(0.05)
|
(0.18)
|
(0.32)
|
Diluted
|
(0.04)
|
(0.07)
|
(0.05)
|
(0.18)
|
(0.32)
|
Net income (loss) per
ADS attributable to China Finance Online Co. Limited
|
|
|
|
|
|
Basic
|
(0.19)
|
(0.37)
|
(0.26)
|
(0.88)
|
(1.62)
|
Diluted
|
(0.19)
|
(0.37)
|
(0.26)
|
(0.88)
|
(1.62)
|
Weighted average
ordinary
shares
|
|
|
|
|
|
Basic
|
113,912,936
|
113,693,018
|
113,905,561
|
113,883,030
|
113,601,949
|
Diluted
|
113,912,936
|
113,693,018
|
113,905,561
|
113,883,030
|
113,601,949
|
Weighted average
ADSs
|
|
|
|
|
|
Basic
|
22,782,587
|
22,738,604
|
22,781,112
|
22,776,606
|
22,720,390
|
Diluted
|
22,782,587
|
22,738,604
|
22,781,112
|
22,776,606
|
22,720,390
|
View original
content:http://www.prnewswire.com/news-releases/china-finance-online-reports-fourth-quarter-and-full-year-2018-unaudited-financial-results-300836598.html
SOURCE China Finance Online Co., Ltd.