CNinsure Announces Preliminary Fourth-Quarter Financial Information
January 20 2009 - 3:00AM
PR Newswire (US)
GUANGZHOU, China, Jan. 20 /PRNewswire-Asia-FirstCall/ -- CNinsure
Inc. (NASDAQ:CISG) (the 'Company' or 'CNinsure'), a leading
independent insurance intermediary company operating in China,
today announced preliminary financial information for the quarter
ended December 31, 2008. Despite the recent economic slowdown in
China, the Company expects to report net revenue for the quarter in
line with the previous guidance of between RMB235 million and
RMB250 million. Gross margin will remain flat as compared with the
previous quarter, while operating margin is expected to be lower
than that in the third quarter of 2008. The decline in operating
margin was primarily attributable to the increase of share-based
compensation expenses in connection with the grant of new options
and voluntary surrender and cancellation of previously granted
options during the fourth quarter of 2008. On November 21, 2008,
various directors, officers and employees were granted options to
acquire 32,000,000 ordinary shares of the Company at an exercise
price of $0.278 per ordinary share, equal to the closing price of
the Company's American Depositary Shares on the Nasdaq Global
Market on the grant date (after adjusting for the 20 ordinary
shares to 1 ADS ratio), which resulted in the recognition of
approximately RMB0.33 million share-based compensation expenses in
the quarter ended December 31, 2008. The remaining expenses related
to these option grants will be amortized over 4 years. In late
December 2008, in response to a call from CNinsure's Chairman and
Chief Executive Officer, Yinan Hu, for all staff members to stand
together to face both challenges and opportunities lying ahead,
various directors, officers and employees voluntarily surrendered
certain previously granted options to purchase an aggregate of
30,804,500 ordinary shares of the Company. Those options had been
granted to them in October 2007 at an exercise price of $0.8 per
share. The surrendered options were cancelled immediately and, in
accordance with paragraph 57 of SFAS123R, approximately RMB30
million share-based compensation expenses were recognized in the
fourth quarter of 2008, representing the remaining unamortized
share-based compensation expenses for these options. 'The surrender
and cancellation of the options granted in 2007 will enable the
company to grant the same number of options to new and existing
staff members in the future as incentive awards, without creating
further dilution to our current shareholders, and therefore to a
certain degree protecting our shareholders' interests,' said Mr.
Hu. He added, 'We always believe that the insurance intermediary
business is a people's business. By proper use of stock options as
incentives, we expect to build a strong sales force and management
team so as to maintain the robust growth momentum of our business
and deliver the best returns to our shareholders in the long run.'
Commenting on the preliminary financial results, CNinsure's Chief
Financial Officer, Peng Ge, said, 'The share-based compensation
expenses were non-cash charges, and as such there was no impact on
the company's business operations and cash flow. We remain
confident in the long-term growth of our business as well as our
ability to further solidify our leading position in China's
insurance intermediary sector.' The Company is still in the process
of finalizing its financial statements for the fourth quarter of
2008 and expects to provide its fourth quarter 2008 earnings
release on February 24, 2009. About CNinsure Inc. CNinsure is a
leading independent intermediary company operating in China.
CNinsure's distribution network reaches many of China's most
economically developed regions and affluent cities. The Company
distributes a wide variety of property and casualty and life
insurance products underwritten by domestic and foreign insurance
companies operating in China, and provides insurance claims
adjusting as well as other insurance-related services.
Forward-looking Statements This press release contains statements
of a forward-looking nature. These statements are made under the
"safe harbor" provisions of the U.S. Private Securities Litigation
Reform Act of 1995. You can identify these forward- looking
statements by terminology such as "will," "expects," "believes,"
"anticipates," "intends," "estimates" and similar statements. Among
other things, the management's quotations contain forward-looking
statements. These forward-looking statements involve known and
unknown risks and uncertainties and are based on current
expectations, assumptions, estimates and projections about CNinsure
and the industry. Potential risks and uncertainties include, but
are not limited to, those relating to CNinsure's limited operating
history, especially its limited experience in selling life
insurance products, its ability to attract and retain productive
agents, especially entrepreneurial agents, its ability to maintain
existing and develop new business relationships with insurance
companies, its ability to execute its growth strategy, its ability
to adapt to the evolving regulatory environment in the Chinese
insurance industry, its ability to compete effectively against its
competitors, and a slowdown in the Chinese economy and its
potential impact on the sales of insurance products. All
information provided in this press release is as of January 20,
2008, and CNinsure undertakes no obligation to update any
forward-looking statements to reflect subsequent occurring events
or circumstances, or to changes in its expectations, except as may
be required by law. Although CNinsure believes that the
expectations expressed in these forward-looking statements are
reasonable, it cannot assure you that its expectations will turn
out to be correct, and investors are cautioned that actual results
may differ materially from the anticipated results. Further
information regarding risks and uncertainties faced by CNinsure is
included in CNinsure's filings with the U.S. Securities and
Exchange Commission, including its annual report on Form 20-F.
DATASOURCE: CNinsure Inc. CONTACT: Oasis Qiu, Investor Relations
Manager of CNinsure Inc., +86-20-6122-2777 x 850,
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