Total Net Revenues up 58.0% Year-on-Year to RMB215.9 Million,
Exceeding High End of Company Guidance; Net Income up 30.0%
Year-on-Year to RMB45.5 Million; Basic Net Income Per ADS up 30.0%
Year-on-Year to RMB0.998 GUANGZHOU, China, May 26
/PRNewswire-Asia-FirstCall/ -- CNinsure Inc., (NASDAQ:CISG), (the
"Company" or "CNinsure"), a leading independent insurance
intermediary company operating in China, today announced its
unaudited financial results for the first quarter ended March 31,
2009(1). Financial Highlights -- Highlights for First Quarter 2009
-- Total net revenues: RMB215.9 million (US$31.6 million),
representing an increase of 58.0% from the corresponding period of
2008, exceeding the previous guidance of RMB195 million to RMB215
million. -- Income from operations: RMB 45.9 million (US$6.7
million), representing an increase of 40.6% from the corresponding
period of 2008. -- Net income: RMB45.5 million (US$6.7 million),
representing an increase of 30.0% from the corresponding period of
2008. -- Basic and diluted net income per ADS: RMB0.998 (US$0.146)
and RMB0.997 (US$0.146), respectively, representing an increase of
30.0% and 30.0%, respectively, from the corresponding period of
2008 (1) This announcement contains translations of certain
Renminbi (RMB) amounts into U.S. dollars (US$) at specified rates
solely for the convenience of the reader. Unless otherwise noted,
all translations from RMB to U.S. dollars are made at a rate of
RMB6.8329 to US$1.00, the effective noon buying rate as of March
31, 2009 in The City of New York for cable transfers of RMB as
certified for customs purposes by the Federal Reserve Bank of New
York. Commenting on the first quarter results, Yinan Hu, Chairman
and CEO of CNinsure, stated: "We are pleased to deliver another
quarter of strong results amid the current financial and economic
crisis, with total net revenues growing 58.0% year-on-year to
RMB215.9 million, exceeding our previous guidance, and basic net
income per ADS growing 30.0% year-on-year to RMB0.998. "Although
our revenues in the first quarter were still dominated by the
property and casualty insurance segment, we have seen strong growth
momentum from the life insurance and claims adjusting businesses.
Since we started offering claims adjusting services in the first
quarter of 2008, our claims adjusting services segment has been
growing rapidly and has become a significant and stable contributor
to our revenues and profits. Our P&C insurance, life insurance
and claims adjusting service segments accounted for 74.2%, 15.8%
and 10.0%, respectively, of our total net revenues during the first
quarter, " he continued. He added, "We believe that the strong will
emerge from the financial crisis stronger while the weak will
diminish. Our performance in the first quarter of 2009 was evidence
of our leading position and competitiveness within the industry.
With a clear vision of the current macro-economic and industry
trends, our management has fully demonstrated their wisdom and
execution ability to turn headwind into tailwind, and challenges
into opportunities. "China has become one of the most important
economies in the world and an important engine for the world's
economic growth. We believe more and more Chinese domestic
enterprises will emerge as among the world's leading players in
their respective industries. As an early mover and leader in the
insurance intermediary industry, CNinsure is well positioned to
build itself into a world-class enterprise. With the strategies in
place which have proved to be correct and effective over the past
decade, we are positive that we will be able to fully capitalize on
the golden opportunities presented by the current environment and
fulfill our aspiration to become a world-class financial services
group in the future," he concluded. Financial Results for the First
Quarter Ended March 31, 2009 Total net revenues for the first
quarter ended March 31, 2009 were RMB215.9 million (US$31.6
million), representing an increase of 58.0% from RMB136.6 million
for the corresponding period of 2008. The increase was primarily
attributable to increased sales force and contributions from newly
acquired or established entities. As of March 31, 2009, the number
of our sales professionals and claims adjustors had grown by 70.0%
to 29,125 and 239.3% to 855, respective, from March 31, 2008 while
our sales and service network had expanded to include 41 affiliated
insurance agencies, five affiliated insurance brokerages and three
claims adjusting firms as compared with 25 affiliated insurance
agencies, four affiliated insurance brokerages and one claims
adjusting firm as of March 31, 2008. Total operating costs and
expenses were RMB170.0 million (US$24.9 million) for the first
quarter of 2009, representing an increase of 63.5% from RMB104.0
million for the corresponding period of 2008. Commissions and fees
expenses were RMB121.6 million (US$17.8 million) for the first
quarter of 2009, representing an increase of 71.1% from RMB71.1
million for the corresponding period of 2008. The increase largely
tracked the growth of sales volume and was partially attributable
to higher commissions and fees paid out to sales agents for the
distribution of property and casualty insurance products in newly
entered markets as part of our interim marketing strategies to
expand our market shares in those regions. Selling expenses were
RMB7.8 million (US$1.1 million) for the first quarter of 2009,
representing an increase of 87.8% from RMB4.1 million for the
corresponding period of 2008. The increase was primarily due to
sales growth and the increase in expenses incurred by newly
acquired entities. General and administrative expenses were RMB40.6
million (US$5.9 million) for the first quarter of 2009,
representing an increase of 41.0% from RMB28.8 million for the
corresponding period of 2008. The increase was primarily due to 1)
increases in salaries and other related fees for management and
administrative staff as a result of both increased headcount
including more senior managers, and higher basic salaries for the
management and administrative staff; 2) increases in office rental
expenses and organization expense due to business expansion; 3) an
increase in intangible assets amortization as a result of
acquisitions we made in 2008; and 4) an increase in depreciation
expenses as a result of the operation of our upgraded IT system in
certain affiliated entities. As a result of the foregoing factors,
income from operations was RMB45.9 million (US$6.7 million) for the
first quarter of 2009, representing an increase of 40.6% from
RMB32.7 million for the corresponding period of 2008. Operating
margin was 21.3% for the first quarter of 2009 as compared with
23.9% for the corresponding period of 2008. Interest income for the
first quarter of 2009 was RMB9.8 million (US$1.4 million),
representing a decrease of 25.0% from RMB13.0 million for the
corresponding period of 2008, primarily due to the decrease in bank
deposit interest rate. Income tax expense for the first quarter of
2009 was RMB15.5 million (US$2.3 million), representing an increase
of 38.3% from RMB11.2 million for the corresponding period of 2008.
The increase was primarily attributable to the increase of income
tax rate in Shenzhen from 18% in the first quarter of 2008 to 20%
and the increase of expenses incurred outside China, including
legal and audit fees, which were non-tax deductible for PRC tax
purposes. Effective income tax rate was 27.4% for the first quarter
of 2009 compared to 24.5% for the corresponding period of 2008. Net
income was RMB45.5 million (US$6.7 million) for the first quarter
of 2009, representing an increase of 30.0% from RMB35.0 million for
the corresponding period of 2008. Net margin was 21.1% for the
first quarter of 2009 as compared with 25.6% for the corresponding
period of 2008. Fully diluted net income per ADS was RMB0.997
(US$0.146) for the first quarter of 2009, representing an increase
of 30.0% from RMB0.768 for the corresponding period of 2008. As of
March 31, 2009, the Company had RMB1,712.9 million (US$250.7
million) in cash and cash equivalents. Recent developments: On May
21, 2009, the Company's board of directors declared a cash dividend
of US$0.011 per ordinary share, equivalent to US$0.22 per American
Depositary Share, which amounts to a total payment of
US$10,037,475. The cash dividend is payable on or around July 15,
2009 to shareholders of record as of the close of business on June
26, 2009. The dividends to be paid to the ADS holders through the
depositary bank will be subject to the terms of the deposit
agreement, including the fees and expenses payable thereunder. On
May 20, 2009, CNinsure signed a Memorandum of Agreement ("MOA") for
a strategic partnership with Ping An Property & Casualty
Insurance Company Of China, Ltd. ("Ping An Property &
Casualty"). CNinsure and Ping An Property & Casualty will work
closely in product distribution, development of customized products
and outsourcing of claims adjusting services. On March 31, 2009,
CNinsure announced the signing of separate definitive agreements to
acquire 1) an additional 41% equity interest in Hangzhou Fanhua
Zhixin Insurance Agency Co., Ltd. ("Zhixin"), bringing its
shareholdings from 10% to 51%, and 2) an additional 46% equity
interest in Zhengzhou Fanhua Anlian Insurance Agency Co., Ltd.
("Anlian"), bringing its shareholdings from 5% to 51%. Pursuant to
these agreements, the total considerations of RMB100 million and
RMB40 million, respectively, for the acquisitions of the additional
equity interests in Zhixin and Anlian are subject to a downward
adjustment if Zhixin and Anlian fail to achieve certain performance
targets, and will be paid in cash in installments based on the
achievement of those performance targets. On March 9, 2009, the
Company's board of directors voted to grant options to purchase up
to 10,000,000 ordinary shares to employees under the amended and
restated 2007 share incentive plan. The exercise price of these
options is US$0.336 per ordinary share, equal to the closing price
of our ADS on the Nasdaq Global Select Market at the grant date
(after adjusting for the 20 ordinary shares to 1 ADS ratio). These
options will vest over a four-year period starting from March 31,
2010. As of March 31, 2009, options to purchase 49,492,631 ordinary
shares were outstanding. In March 2009, CNinsure was awarded "Best
Insurance Intermediary Company in China of the Year 2008" by
Insurance Manager Magazine. In January 2009, Beijing Fanhua Datong
Investment Management Co., Ltd. ("Datong"), which is majority owned
by a consolidated affiliated entity of CNinsure, established two
insurance agencies to distribute life insurance products in
Shandong and Henan, in each of which Datong owned 60% equity
interests. As of March 31, 2009, Datong had eight insurance
agencies, with its distribution network expanding to eight
provinces including Beijing, Yunnan, Hainan, Jiangsu, Hebei,
Shaanxi, Shandong and Henan. Commissions and fees revenues
contributed by Datong and its insurance agencies are expected to
increase significantly and constitute a larger portion of our total
commissions and fees revenues in the third quarter of 2009. As of
March 31, 2009, CNinsure had 29,125 sales professionals as compared
with approximately 17,137 sales professionals as of March 31, 2008.
Its distribution and service network consisted of 41 insurance
agencies, five insurance brokerages and three claims adjusting
firms with 348 sales and services outlets operating in 21 provinces
as of the end of March 31, 2009, as compared with 25 insurance
agencies, four insurance brokerages and one claims adjusting firm
with 232 sales and service outlets operating in 11 provinces as of
March 31, 2008. In addition, CNinsure's insurance claims adjusting
business had 855 professional adjustors as of March 31, 2009 as
compared with 252 professional adjustors as of March 31, 2008. Net
revenues from commissions and fees derived from property and
casualty insurance, life insurance and claims adjusting businesses
for the first quarter 2009 grew 49.9%, 37.6% and 331.4%,
respectively, from the corresponding period of last year, each
contributing 74.2%, 15.8% and 10.0% of its total commissions and
fees revenues for the first quarter of 2009. Business Outlook For
the second quarter of 2009, CNinsure expects its total net revenues
to be between RMB285.0 million (US$41.7 million) and RMB300.0
million (US$43.9 million). This forecast reflects CNinsure's
current and preliminary view, which is subject to change,
particularly in light of the uncertainties in the global economic
and financial climate. Conference Call The Company will host a
conference call to discuss the first quarter 2009 results at Time:
9:00 pm Eastern Daylight Time on May 26, 2009 or 9:00 am
Beijing/Hong Kong Time on May 27, 2009 The Toll Free dial-in
numbers: United States: 1866-549-1292 United Kingdom: 0808-234-6305
Canada: 1866-8691-825 Singapore: 800-852-3576 Taiwan: 0080-185-6004
China (Mainland): 800-701-1223 Hong Kong & Other Areas:
+852-3005-2050 China (Mainland) local dial-in number: 400-681-6949
Password: 885507# A replay of the call will be available for three
days as follows: +852-3005-2020 (Hong Kong & other areas) PIN
number: 136443# Additionally, a live and archived web cast of this
call will be available at:
http://www.corpasia.net/us/CISG/irwebsite/index.php?mod=event 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 and the
Business Outlook section 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 and
offering claims adjusting services, its ability to attract and
retain productive agents, especially entrepreneurial agents, and
qualified claims adjustors, its ability to maintain existing and
develop new business relationships with insurance companies, its
ability to successfully manage its growth and execute its growth
strategies, its ability to adapt to the evolving regulatory
environment in the Chinese insurance industry, its ability to
compete effectively against its competitors, quarterly variations
in its operating results caused by factors beyond its control and
macroeconomic conditions in China and their potential impact on the
sales of insurance products. All information provided in this press
release is as of May 26, 2009 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. CNinsure Inc. Unaudited Condensed
Consolidated Statements of Balance Sheets (In thousands, except for
shares and per share data) As of As of As of December 31, March
March 2008 (2)(As 31, 31, Adjusted) 2009 (2) 2009 (2) RMB RMB US$
ASSETS: Current assets: Cash and cash equivalents 1,510,432
1,712,883 250,682 Restricted cash 4,200 2,514 368 Accounts
receivable, net 90,452 73,643 10,778 Insurance premium receivables
21 137 20 Other receivables, net 57,151 47,162 6,902 Deferred tax
assets 1,808 5,054 740 Amounts due from related parties 207,595
14,744 2,158 Other current assets 5,224 6,308 923 Total current
assets 1,876,883 1,862,445 272,571 Non-current assets: Property,
plant, and equipment, net 72,538 84,535 12,372 Goodwill 37,888
57,314 8,388 Intangible assets 53,518 52,404 7,669 Deferred tax
assets 4,836 3,750 549 Investment in an affiliate 427 394 57 Other
non-current assets 425 4,612 675 Total assets 2,046,515 2,065,454
302,281 LIABILITIES AND SHAREHOLDERS' EQUITY: Current liabilities:
Accounts payable 59,867 53,959 7,897 Insurance premium payables
4,200 2,514 368 Other payables and accrued expenses 73,712 63,552
9,301 Accrued payroll 15,336 9,908 1,450 Income tax payable 26,140
23,945 3,504 Amounts due to related parties 10,967 9,750 1,427
Total current liabilities 190,222 163,628 23,947 Non-current
liabilities: Other tax liabilities 1,871 1,988 291 Deferred tax
liabilities 8,351 8,055 1,179 Total liabilities 200,444 173,671
25,417 Common stock 7,036 7,036 1,030 Additional paid-in capital
1,666,723 1,667,983 244,111 Statutory reserves 71,237 71,237 10,425
Retained earrings 80,462 126,007 18,441 Accumulated other
comprehensive loss (73,810) (72,380) (10,593) Total CNinsure Inc.
shareholders' equity 1,751,648 1,799,883 263,414 Noncontrolling
interests (3) 94,423 91,900 13,450 Total shareholders' equity
1,846,071 1,891,783 276,864 Total liabilities and shareholders'
equity 2,046,515 2,065,454 302,281 (2) Effective January 1, 2009,
the Company adopted Statement of Financial Accounting Standard No.
160 ("SFAS 160"). SFAS 160, which was retrospectively applied,
requires noncontrolling interests to be separately presented as a
component of stockholders' equity on the unaudited condensed
consolidated financial statements. (3) 3December 31, 2008 balances
were extracted from the form 20-F for the year ended December 31,
2008, as adjusted resulting from the adoption of SFAS 160. CNinsure
Inc. Unaudited Condensed Consolidated Statements of Operations (In
thousands, except for shares and per share and per ADS data) For
the three months ended March 31 2008 (2)(As Adjusted) 2009 (2) 2009
(2) RMB RMB US$ Net revenues: Commissions and fees 136,482 215,654
31,561 Other service fees 136 217 32 Total net revenues 136,618
215,871 31,593 Operating costs and expenses: Commissions and fees
(71,069) (121,627) (17,800) Selling expenses (4,135) (7,764)
(1,136) General and administrative expenses (28,764) (40,571)
(5,938) Total operating costs and expenses (103,968) (169,962)
(24,874) Net income from operations 32,650 45,909 6,719 Other
income, net: Interest income 13,033 9,775 1,430 Interest expense
(7) (2) -- Others, net 1 854 125 Net income before income tax
45,677 56,536 8,274 Income tax expense (11,205) (15,493) (2,267)
Share of loss of an affiliated company -- (34) (5) Net income
34,472 41,009 6,002 Less: Net loss attributable to the
noncontrolling interests (4) 560 4,537 664 Net income attributable
to CNinsure Inc. 35,032 45,546 6,666 Net income per share: Basic
0.038 0.050 0.007 Diluted 0.038 0.050 0.007 Net income per American
Depositary Share ("ADS"): Basic 0.768 0.998 0.146 Diluted 0.768
0.997 0.146 Shares used in calculating net income per share and
ADS: Basic 912,497,726 912,497,726 912,497,726 Diluted 912,497,726
913,489,567 913,489,567 (4) Amounts were extracted from the form
6-K for the quarter ended March 31 2008, as adjusted resulting from
the adoption of SFAS 160. DATASOURCE: CNinsure Inc. CONTACT: Oasis
Qiu, Investor Relations Manager at +86-20-6122-2777 x850 or
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