BEIJING, May 21, 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
first quarter ended March 31,
2018.
First Quarter 2018 Financial Highlights
- Net revenues grew 53.1% year-over-year to $13.3 million from $8.7
million in the first quarter of 2017
- Revenues from the financial information and advisory business
grew 72.7% year-over-year
- Revenues from financial services grew 24.3% year-over-year
- Gross margin increased to 61.9%, up from 46.4% in the first
quarter of 2017
- Net loss attributable to China Finance Online was $5.2 million, compared with a net loss of
$11.6 million in the first quarter of
2017
- Lingxi Robo-Advisor outperformed most of its peer products in
the Chinese market with an average return of 2.4% and average
drawdown rate of 4.0% in the first quarter of 2018. In the first
quarter of 2018, the aggressive portfolio of Lingxi has beat 92% of
equity funds and hybrid funds in terms of return
Mr. Zhiwei Zhao, Chairman and CEO
of China Finance Online, commented, "As we continued to ramp up our
cloud-based software sales, our bottom line losses narrowed. After
four quarters of streamlining our business units, our efficiency
reached a new recent high. With the bulk of our investment in our
cloud system and user interface completed, we will continue to
improve operational efficiency and leverage our intelligent-finance
driven fintech business to drive better economy of
scale."
"We will continue to focus on fundamental operational measures
to further strength our professional journalism and content
quality. We strongly believe that our continued improvement on
content will be recognized by more and more readers of financial
market news,"
"During the development and extension of our new product for the
enterprise market, Genius Zhisheng, a cloud-based one-stop
investment research platform for institutional investors, we
continued to find new services scenarios. Our products and services
draw interest from brokerage firms and wealth management advisors.
As more potential users are partaking beta testing, we have started
monetizing our products and services for enterprise market
gradually," Mr. Zhao concluded.
First Quarter 2018 Financial Results
Net revenues were $13.3
million, compared with $8.7
million during the first quarter of 2017 and $13.6 million during the fourth quarter of 2017.
During the first quarter of 2018, revenues from financial services,
the financial information and advisory business, and advertising
services contributed 50%, 37% and 13% of the net revenues,
respectively, compared with 62%, 33% and 5%, respectively, for the
corresponding period in 2017.
Revenues from financial services were $6.7 million, compared with $5.4 million during the first quarter of 2017 and
$8.9 million during the fourth
quarter of 2017. Revenues from financial services mainly represent
equity brokerage services. The equity
brokerage business grew 47.1% year-over-year and decreased 27.2%
quarter-over-quarter.
Revenues from the financial information and advisory
business were $4.9 million, an
increase of 72.7% from $2.8 million
during the first quarter of 2017 and 69.2% from $2.9 million in the fourth quarter of 2017.
Revenues from the financial information and advisory business were
comprised of subscription services from individual and
institutional customers. During the first quarter, subscription
revenue from individual investors grew by 1314.3% year-over-year,
mainly due to the increased subscription of the Company's
cloud-based analytical tools among retail investors. The
year-over-year and quarter-over-quarter increases of revenues from
the financial information and advisory business were mainly due to
the increase of subscription revenue from individual investors.
Revenues from advertising were $1.7
million, compared with $0.4
million in the first quarter of 2017 and $1.6 million in the fourth quarter of 2017. The
increased traffic to our site and readership recognition of our
premium content also helped to elevate our advertising
revenues.
Gross profit was $8.2
million, compared with $4.0
million in the first quarter of 2017 and $6.8 million in the fourth quarter of 2017. Gross
margin in the first quarter of 2018 was 61.9%, compared with 46.4%
in the first quarter of 2017 and 49.7% in the fourth quarter of
2017. 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 $3.3 million, a decrease of 20.9% from
$4.1 million in the first quarter of
2017, and a decrease of 19.8% from $4.1
million in the fourth quarter of 2017. The year-over-year
and quarter-over-quarter decreases were mainly attributable to more
stringent expense control measures and streamlining operations.
Sales and marketing expenses were $6.2 million, a decrease of 25.2% from
$8.3 million in the first quarter of
2017, and a decrease of 8.8% from $6.8
million in the fourth quarter of 2017. The year-over-year
and quarter-over-quarter decreases were 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 12.4% from
$4.3 million in the first quarter of
2017 and with no significant difference from $3.8 million in the fourth quarter of 2017. 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 $13.3
million, a decrease of 20.8% from $16.8 million in the first quarter of 2017, and a
decrease of 9.9% from $14.7 million
in the fourth quarter of 2017. The year-over-year and
quarter-over-quarter decreases were mainly due to improved
operational efficiency and effective cost controls.
Loss from operations was $5.0
million, compared with a loss from operations of
$12.5 million in the first quarter of
2017 and a loss from operations of $8.0
million in the fourth quarter of 2017.
Net loss attributable to China Finance Online was
$5.2 million, compared with a net
loss of $11.6 million in the first
quarter of 2017 and a net loss of $8.4
million in the fourth quarter of 2017.
Fully diluted loss per American Depository Shares ("ADS")
attributable to China Finance Online was $0.23 for the first quarter of 2018, compared
with fully diluted loss per ADS of $0.51 for the first quarter of 2017 and fully
diluted loss per ADS of $0.37 for the
fourth quarter of 2017. Basic and diluted weighted average numbers
of ADSs for the first quarter of 2018 were 22.8 million, compared
with basic and diluted weighted average number of ADSs of 22.7
million for the first quarter of 2017. Each ADS represents five
ordinary shares of the Company.
As of March 31, 2018, total cash
and cash equivalents, restricted cash and short-term investments
were $24.7 million.
Recent Developments
- Lingxi Robo-Advisor recorded strong performance in first
quarter of 2018
In the first quarter of 2018, the Company's Robo-Advisor
product, Lingxi, posted an average return of 2.4% (an annualized
return of 10.0%) with an average drawdown rate of 4.0% which
significantly outperformed the Shanghai Composite Index in return
with a significantly lower drawdown. According to China Finance
Online's internal research, Lingxi's performance in the first
quarter of 2018 also exceeded most of its peer products in the
market for its better return with a lower drawdown. Even though
experiencing several market fluctuations in the first quarter of
2018, one of the best-performing strategies by Lingxi produced an
annualized return of 15.81%. Moreover, in the first quarter of
2018, the aggressive portfolio of Lingxi beats 92% of equity funds
and hybrid funds in terms of return. 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, which targets mass affluent investors
in China, outperformed the average
level of public Fund of Funds in return with a significantly lower
drawdown in the first quarter of 2018.
- 2018 China Finance Online Value Discovery Forum for Public
Companies on Chinese Stock Markets
In order to leverage China Finance Online's market influence as
the leading financial media in China and share its robust machine learning
and research capability on public companies' value creation, in
May 2018, the Company hosted the
"2018 Value Discovery Forum for Public Companies on Chinese Stock
Markets" in Chengdu. Over 80
prestigious public companies listed on the Shenzhen and Shanghai stock markets and influential
investors attended the forum.
During the forum, China Finance Online also announced the 2018
Top 30 Growth Non-State-Owned-Companies, 2018 Top 30 Socially
Responsible Non-State-Owned-Companies and 2018 Top 30 Investor
Confidence Non-State-Owned-Companies. These rankings are based on
China Finance Online's proprietary algorithms dynamically tracking
a series of datapoints including financials, valuation, growth
trends, ESG (environment, social and governance) and other metrics,
which enable investors to identify investment opportunities and
discover value stocks.
Conference Call Information
The management will host a conference call on May 21, 2018 at 8:00
p.m. U.S. Eastern Time (8:00
a.m. Beijing/Hong Kong time May 22,
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: 9947319
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/ibdpv4bz.
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)
|
|
Mar.31,
2018
|
Dec. 31,
2017
|
Assets
|
|
|
Current
assets:
|
|
|
Cash and cash
equivalents
|
23,206
|
38,693
|
Restricted
cash
|
1,404
|
2,036
|
Trust bank balances
held on behalf of customers
|
31,996
|
39,169
|
Accounts receivable,
net - others
|
14,623
|
8,977
|
Accounts receivable,
net - Margin clients
|
14,202
|
8,011
|
Short-term
investments
|
80
|
533
|
Prepaid expenses and
other current assets
|
4,522
|
4,198
|
Total current
assets
|
90,033
|
101,617
|
Long-term investments,
net
|
2,630
|
2,531
|
Property and
equipment, net
|
6,215
|
6,885
|
Acquired intangible
assets, net
|
96
|
96
|
Rental
deposits
|
1,178
|
1,141
|
Goodwill
|
108
|
108
|
Deferred tax
assets
|
1,294
|
1,621
|
Other
deposits
|
511
|
605
|
Total
assets
|
102,065
|
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 $8,287 and $8,477 as of March 31, 2018 and
December 31,2017, respectively)
|
9,203
|
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 $5,685 and
$6,109 as of March 31, 2018 and December 31, 2017,
respectively)
|
7,262
|
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 March 31, 2018 and December 31, 2017,
respectively)
|
3
|
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 $4,520 and
$5,375
as of March 31, 2018 and December 31, 2017,
respectively)
|
31,996
|
39,169
|
Accounts payable
(including accounts payable of the consolidated
variable interest entities without recourse to China Finance Online
Co.
Limited $385 and $1,067 as of March 31, 2018 and December 31,
2017,
respectively)
|
12,051
|
9,462
|
Income taxes payable
(including income taxes payable of the
consolidated variable interest entities without recourse to China
Finance
Online Co. Limited $6 and $484 as of March 31, 2018 and December
31,
2017, respectively)
|
75
|
553
|
Total current
liabilities
|
60,590
|
68,511
|
Deferred tax
liabilities (including deferred tax liabilities of the
consolidated variable interest entities without recourse to China
Finance
Online Co. Limited $109 and $218 as of March 31, 2018 and
December
31, 2017, respectively)
|
127
|
237
|
Deferred revenue,
non-current (including deferred revenue, non-current
of the consolidated variable interest entities without recourse to
China
Finance Online Co. Limited $1 and $25 as of March 31, 2018 and
December 31, 2017, respectively)
|
107
|
144
|
Total
liabilities
|
60,824
|
68,892
|
Noncontrolling
interests
|
(8,579)
|
(8,335)
|
Total China Finance
Online Co. Limited Shareholders' equity
|
49,820
|
54,047
|
Total liabilities and
equity
|
102,065
|
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
|
|
Mar. 31,
2018
|
Mar. 31,
2017
|
Dec. 31,
2017
|
Net
revenues
|
13,280
|
8,672
|
13,597
|
Cost of
revenues
|
(5,055)
|
(4,650)
|
(6,837)
|
Gross
profit
|
8,225
|
4,022
|
6,760
|
Operating
expenses
|
|
|
|
General and
administrative(includes share-based
compensation expenses of $578, $837 and $561
respectively)
|
(3,252)
|
(4,112)
|
(4,055)
|
Sales and marketing
(includes share-based
compensation expenses of $68, $36 and $26
respectively)
|
(6,243)
|
(8,343)
|
(6,845)
|
Product development
(includes share-based
compensation expenses of $63, $61 and $69
respectively)
|
(3,767)
|
(4,300)
|
(3,822)
|
|
|
|
|
Total operating
expenses
|
(13,262)
|
(16,755)
|
(14,722)
|
Government
subsidies
|
-
|
230
|
-
|
Income (loss) from
operations
|
(5,037)
|
(12,503)
|
(7,962)
|
Interest
income
|
60
|
74
|
235
|
Interest
expense
|
-
|
(1)
|
-
|
Short-term investment
income, net
|
1
|
85
|
(2)
|
Gain (loss) on the
interest sold and retained
noncontrolling investment
|
(2)
|
(738)
|
(2,406)
|
Loss from equity
method investment
|
(1)
|
(8)
|
(3)
|
Other income (loss),
net
|
(378)
|
(236)
|
208
|
Exchange gain (loss),
net
|
47
|
21
|
(153)
|
|
|
|
|
Income (loss) before
income tax expenses
|
(5,310)
|
(13,306)
|
(10,083)
|
Income tax
expenses
|
(268)
|
(512)
|
170
|
|
|
|
|
Net income
(loss)
|
(5,578)
|
(13,818)
|
(9,913)
|
Less: Net income
(loss) attributable to the
noncontrolling interest
|
(419)
|
(2,209)
|
(1,538)
|
Net income (loss)
attributable to China Finance
Online Co. Limited
|
(5,159)
|
(11,609)
|
(8,375)
|
|
|
|
|
Net income
(loss)
|
(5,578)
|
(13,818)
|
(9,913)
|
Changes in foreign
currency translation adjustment
|
399
|
681
|
19
|
Net unrealized gain on
available-for-sale
securities, net of tax effects of nil, nil and nil
respectively
|
-
|
(35)
|
118
|
Other comprehensive
income (loss), net of tax
|
399
|
646
|
137
|
Comprehensive income
(loss)
|
(5,179)
|
(13,172)
|
(9,776)
|
Less: comprehensive
income (loss) attributable to
noncontrolling interest
|
(419)
|
(2,209)
|
(1,538)
|
Comprehensive income
(loss) attributable to China
Finance Online Co. Limited
|
(4,760)
|
(10,963)
|
(8,238)
|
|
|
|
|
Net income (loss) per
share attributable to China
Finance Online Co. Limited
|
|
|
|
Basic
|
(0.05)
|
(0.10)
|
(0.07)
|
Diluted
|
(0.05)
|
(0.10)
|
(0.07)
|
Net income (loss) per
ADS attributable to China
Finance Online Co. Limited
|
|
|
|
Basic
|
(0.23)
|
(0.51)
|
(0.37)
|
Diluted
|
(0.23)
|
(0.51)
|
(0.37)
|
Weighted average
ordinary shares
|
|
|
|
Basic
|
113,846,041
|
113,532,543
|
113,693,018
|
Diluted
|
113,846,041
|
113,532,543
|
113,693,018
|
Weighted average
ADSs
|
|
|
|
Basic
|
22,769,208
|
22,706,509
|
22,738,604
|
Diluted
|
22,769,208
|
22,706,509
|
22,738,604
|
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SOURCE China Finance Online Co., Ltd.