CNinsure Inc, (Nasdaq:CISG), (the "Company" or "CNinsure"), a
leading independent online-to-offline ("O2O") financial services
provider in China, today announced its unaudited financial results
for the fourth quarter and fiscal year ended December 31, 20151.
Financial Highlights for
Fourth Quarter of
2015:
|
(In thousands, except per ADS) |
2014
Q4（RMB） |
2015 Q4(RMB) |
2015 Q4 (US$) |
Change % |
|
Total net revenues |
|
632,619 |
|
860,003 |
132,762 |
|
35.9 |
% |
|
Operating (loss) income |
|
(1,911 |
) |
32,827 |
5,068 |
|
- |
|
|
Online spending expenses (1) |
|
30,935 |
|
28,258 |
4,362 |
|
-8.7 |
% |
|
Net income attributable to the Company’s shareholders |
|
27,068 |
|
55,089 |
8,505 |
|
103.5 |
% |
|
Adjusted EBITDA (2) |
|
22,332 |
|
49,514 |
7,644 |
|
121.7 |
% |
|
Basic net income per ADS |
|
0.53 |
|
0.96 |
0.15 |
|
81.1 |
% |
|
Diluted Adjusted EBITDA Per ADS |
|
0.43 |
|
0.82 |
0.13 |
|
90.7 |
% |
| (1) Online spending expenses is defined as expenses
incurred by online and mobile initiatives, such as expenses
relating to the development, implementation and support of CNpad,
Baoxian.com, eHuzhu and Chetong.net. Chetong.net was disposed in
the third quarter of 2015 and expenses related to Chetong.net were
not included in online spending expenses starting from the third
quarter of 2015.(2) Adjusted EBITDA is defined as net income before
income tax expense, investment income, interest income,
depreciation, amortization, and compensation expenses associated
with stock options. |
| |
Financial Highlights for Year
of 2015
|
(In thousands, except per ADS) |
2014
（RMB） |
2015 (RMB) |
2015 (US$) |
Change % |
|
Total net revenues |
2,150,011 |
2,828,308 |
436,616 |
|
31.5 |
% |
|
Operating income |
30,899 |
78,522 |
12,123 |
|
154.1 |
% |
|
Online spending expenses (1) |
62,943 |
89,685 |
13,845 |
|
42.5 |
% |
|
Net income attributable to the Company’s shareholders |
161,760 |
210,086 |
32,432 |
|
29.9 |
% |
|
Adjusted EBITDA (2) |
132,537 |
166,095 |
25,641 |
|
25.3 |
% |
|
Basic net income per ADS |
3.22 |
3.65 |
0.56 |
|
13.4 |
% |
|
Diluted Adjusted EBITDA Per ADS |
2.62 |
2.76 |
0.43 |
|
5.3 |
% |
| (1) Online spending expenses is defined as expenses
incurred by online and mobile initiatives, such as expenses
relating to the development, implementation and support of CNpad,
Baoxian.com, eHuzhu and Chetong.net. Chetong.net was disposed in
the third quarter of 2015 and expenses related to Chetong.net were
not included in online spending expenses starting from the third
quarter of 2015.(2) Adjusted EBITDA is defined as net income before
income tax expense, investment income, interest income,
depreciation, amortization, and compensation expenses associated
with stock options. |
| |
Key Operational Metrics for CNinsure's Online
Initiatives for Year 2015:
- CNpad Mobile Application ("CNpad App"):
- CNpad App was downloaded and activated 109,784
times as of December 31, 2015, representing an increase of
98.6% from 55,273 times as of December 31, 2014;
- The number of active users2 of CNpad
App was 63,591 in 2015, representing an increase of 81.9%
from 34,960 in 2014;
- Insurance premiums generated
through CNpad App were
approximately RMB2.9 billion (US$454.9 million) in 2015,
representing an increase of 131.7% from RMB1.3 billion in 2014 and
accounted for 30.2% of our total insurance premiums in 2015 as
compared to 15.6% in 2014.
- eHuzhu:
- The number of registered members was 678,547
as of December 31, 2015, representing an increase of 154.0% from
267,176 as of December 31, 2014.
- Baoxian.com:
- The number of active customer accounts3 was
72,745 in 2015, representing an approximately 8-fold increase
from 8,104 in 2014;
- Insurance premiums generated on or through
Baoxian.com was RMB48.3 million in 2015, representing an
increase of approximately 189.2% from RMB16.7 million in 2014;
- The number of insurance policies sold on
Baoxian.com was 517,000 in 2015, representing an increase
of approximately 79.5% from 288,000 in 2014.
Commenting
on the fourth quarter and year 2015 financial results, Mr. Chunlin
Wang, chief executive officer of CNinsure, stated, "We ended 2015
on a high note, achieving approximately RMB10 billion in insurance
premiums and over RMB200 million in net income, which are
generally in line with our annual targets. Our solid financial
performance underscored the strengths of our business model and the
successful execution of our growth strategies.
"Our management constantly and carefully
assesses and monitors the market environment and competitive
landscape of our industry. We see attractive growth opportunities
for independent insurance intermediaries like us, presented by a
favorable regulatory environment and changes in consumer
preferences resulting from easier and faster internet access in
China. However, we are also aware that competition is intensifying
as leading insurance companies and e-commerce companies explore
ways to establish a foothold in the online insurance services
market, and as the number of new online platforms providing
professional insurance services increase quickly in China. We
believe we are well positioned to take advantage of the attractive
growth opportunities in our industry to significantly increase
market shares despite the challenges.
"After assessing the current market environment
and encouraged by our success in executing our online-to-offline
strategies, we have decided to invest no less than RMB500 million
in marketing campaigns, expanding our sales and service network and
in O2O platform development in 2016. We plan to continue investing
in these areas over the next few years. Our goal is to achieve over
RMB100 billion in insurance premiums within the next 8 years.
"Although these investments may put pressure on
our bottom line in the near term, we believe the optimal strategic
approach is to focus on rapidly expanding our insurance premiums
and further solidifying our market leadership, which will enable us
to capture more market share and ultimately achieve higher
profitability and higher returns to our shareholders over the long
run."
Financial Results for the
Fourth
Quarter of
2015
Total net revenues were
RMB860.0 million (US$132.8 million) for the fourth quarter of 2015,
representing an increase of 35.9% from RMB632.6 million for the
corresponding period in 2014.
- Net revenues for the insurance agency business
were RMB668.4 million (US$103.2 million) for the fourth quarter of
2015, representing an increase of 36.8% from RMB488.7 million for
the corresponding period in 2014. The increase was primarily driven
by a 29.2% increase in net revenues derived from the P&C
insurance agency business from RMB434.1 million for the fourth
quarter of 2014 to RMB561.1 million (US$86.6 million) for the
fourth quarter of 2015, and a 96.5% increase in net revenues
derived from the life insurance agency business from RMB54.6
million for the fourth quarter of 2014 to RMB107.3 million (US$16.6
million) for the fourth quarter of 2015. The growth of the P&C
insurance agency business was primarily due to a 22.8% growth in
insurance premiums as a result of enhanced marketing efforts. The
increase in net revenues generated from the life insurance agency
business was primarily due to a 100% increase in commissions
derived from new long term life insurance policy sales, primarily
driven by enhanced marketing efforts and the successful
implementation of our cross-selling strategy. Revenues generated
from the insurance agency business accounted for 77.7% of total net
revenues in the fourth quarter of 2015.
- Net revenues for the insurance brokerage
business were RMB95.0 million (US$14.7 million) for the
fourth quarter of 2015, representing an increase of 62.0% from
RMB58.7 million for the corresponding period in 2014. This growth
was primarily attributable to continued efforts to cultivate
markets and build customer relationships in recent years. Revenues
generated from the insurance brokerage business accounted for 11.1%
of total net revenues in the fourth quarter of 2015.
- Net revenues for the claims adjusting business
were RMB96.6 million (US$14.9 million) for the fourth quarter of
2015, representing an increase of 13.4% from RMB85.2 million for
the corresponding period in 2014. The increase was primarily due to
increased marketing efforts during the quarter. Revenues generated
from the claims adjusting business accounted for 11.2% of total net
revenues in the fourth quarter of 2015.
Total operating costs and
expenses were RMB827.2 million (US$127.7 million) for the
fourth quarter of 2015, representing an increase of 30.4% from
RMB634.5 million for the corresponding period in 2014.
- Total operating costs were RMB642.7 million
(US$99.2 million) for the fourth quarter of 2015, representing an
increase of 34.3% from RMB478.5 million for the corresponding
period in 2014. The increase was primarily due to sales growth.
- Costs of insurance agency business were
RMB514.4 million (US$79.4 million) for the fourth quarter of 2015,
representing an increase of 33.2% from RMB386.1 million for the
corresponding period in 2014, primarily driven by a 27.9% increase
in costs for the P&C insurance agency business to RMB448.1
million (US$69.2 million) for the fourth quarter of 2015, and a
85.3% increase in costs for the life insurance agency business to
RMB66.3 million (US$10.2 million) for the fourth quarter of 2015.
Costs incurred by the insurance agency business accounted for 80.0%
of total operating costs in the fourth quarter of 2015.
- Costs of insurance brokerage business were
RMB75.6 million (US$11.7 million) for the fourth quarter of 2015,
representing an increase of 60.6% from RMB47.1 million for the
corresponding period in 2014. The increase was primarily due to
sales growth. Costs incurred by the insurance brokerage business
accounted for 11.8% of total operating costs in the fourth quarter
of 2015.
- Costs of claims adjusting business were
RMB52.7 million (US$8.1 million) for the fourth quarter of 2015,
representing an increase of 16.5% from RMB45.2 million for the
corresponding period in 2014. The increase was primarily due to
sales growth. Costs incurred by the claims adjusting business
accounted for 8.2% of total operating costs in the fourth quarter
of 2015.
- Selling expenses were RMB56.6 million (US$8.7
million) for the fourth quarter of 2015, representing an increase
of 78.4% from RMB31.7 million for the corresponding period in 2014,
primarily attributable to RMB19.5 million (US$3.0 million) for
enhanced marketing efforts to promote CNpad App among sales agents
in the fourth quarter of the year.
- General and administrative expenses were
RMB127.9 million (US$19.7 million) for the fourth quarter of 2015,
representing an increase of 2.9% from RMB124.3 million for the
corresponding period in 2014. The increase was primarily due to
increases in payroll and conference expenses, offset by a slight
decline in share-based compensation expense, depreciation and
amortization expenses and research and development expense.
As a result of the preceding factors,
operating income was RMB32.8 million (US$5.1
million) for the fourth quarter of 2015, as compared to an
operating loss of RMB1.9 million for the corresponding period in
2014.
Operating margin was 3.8% for
the fourth quarter of 2015, compared with -0.3% for the
corresponding period in 2014.
Investment income was RMB20.9
million (US$3.2 million) for the fourth quarter of 2015,
representing an increase of 86.8% from RMB11.2 million for the
corresponding period in 2014, primarily due to the increased
short-term investments in financial products that generate higher
yields than term deposits. These investments mainly consisted of
inter-bank deposits or collective trust products with a term of
half a year to two years, which pay interest on a quarterly,
semi-annual or annual basis. Our investment income may fluctuate
from quarter to quarter because these investments are classified as
available for sales and because investment income is recognized
when received.
Interest income was RMB9.2
million (US$1.4 million) for the fourth quarter of 2015,
representing a decrease of 51.0% from RMB18.8 million for the
corresponding period in 2014. The decrease in interest income was
primarily due to decreases in interest rates and term deposits as a
result of an increase in short-term investments.
Income tax expense was RMB8.9
million (US$1.4 million) for the fourth quarter of 2015,
representing an increase of 59.6% from RMB5.6 million for the
corresponding period in 2014. The increase was primarily due to an
increase in operating income. The effective tax rate for the fourth
quarter of 2015 was 13.1% compared with 19.4% for the corresponding
period in 2014. The decrease in effective tax rate was primarily
due to preferential tax treatment enjoyed by one of our
subsidiaries.
Share of income of affiliates
was RMB2.5 million (US$0.4 million) for the fourth quarter of 2015,
representing a decrease of 69.9% from RMB8.2 million for the
corresponding period in 2014, mainly attributable to a decrease of
profits from Sincere Fame International Limited, in which the
Company owns 20.6% of the equity interests, resulting from (i)
narrower interest spreads as a result of reduction in interest
rates charged to customers for retail loans; and (ii) increased
marketing expenses related to its online platform.
Net income attributable to the Company’s
shareholders was RMB55.1 million (US$8.5 million) for the
fourth quarter of 2015, representing an increase of 103.5% from
RMB27.1 million for the corresponding period in 2014.
Net margin was 6.4% for the
fourth quarter of 2015 compared with 4.3% for the corresponding
period in 2014.
Basic and
diluted net income per ADS were RMB 0.96
(US$0.15) and RMB 0.91 (US$0.14) for the fourth quarter of 2015,
respectively, representing an increase of 81.1% and 75.0% from
RMB0.53 and RMB0.52 for the corresponding period in 2014,
respectively.
Adjusted
EBITDA was RMB49.5 million (US$7.6 million) for
the fourth quarter of 2015, representing an increase of 121.7% from
RMB22.3 million for the corresponding period in 2014.
Adjusted EBITDA
margin was 5.8% for the fourth quarter of 2015, compared
with 3.5% for the corresponding period in 2014.
Diluted adjusted EBITDA per ADS was RMB0.82
(US$0.13) for the fourth quarter of 2015, representing an increase
of 90.7% from RMB0.43 for the corresponding period in 2014.
Financial Results for the Year Ended
December 31, 2015
Total net revenues were RMB2.8
billion (US$436.6 million) for year 2015, representing an increase
of 31.5% from RMB2.2 billion in year 2014.
- Net revenues of insurance agency business were
RMB2.2 billion (US$332.7 million) for 2015, representing an
increase of 32.7% from RMB1.6 billion in 2014. The increase was
primarily driven by (i) a 28.6% increase in net revenues derived
from the P&C insurance agency business from RMB1.4 billion for
2014 to RMB1.8 billion (US$283.3 million) for 2015, and (ii) a
62.2% increase in net revenues derived from the life insurance
agency business from RMB197.2 million for 2014 to RMB319.9 million
(US$49.4 million) for 2015. The growth of the P&C insurance
agency business was primarily due to insurance premiums growth, as
a result of increased marketing efforts and an increase in
commission rates that we received from insurance companies. The
increase in net revenues generated from the life insurance agency
business was primarily driven by enhanced marketing efforts and the
successful implementation of our cross-selling strategy. Revenues
generated from the insurance agency business accounted for 76.2% of
total net revenues in 2015.
- Net revenues of insurance brokerage business
were RMB369.2 million (US$57.0 million) for 2015, representing an
increase of 58.7% from RMB232.6 million in 2014. The increase was
primarily attributable to continued efforts to develop new markets
and sales channels. Revenues generated from the insurance brokerage
business accounted for 13.1% of total net revenues in 2015.
- Net revenues of claims adjusting business were
RMB303.8 million (US$46.9 million) for 2015, representing an
increase of 3.7% from RMB293.0 million in 2014. Revenues generated
from the claims adjusting business accounted for 10.7% of total net
revenues in 2015.
Total operating costs and
expenses were RMB2.7 billion (US$424.5 million) for 2015,
representing an increase of 29.8% from RMB2.1 billion in 2014.
- Total operating costs were RMB2.2 billion
(US$332.0 million) for 2015, representing an increase of 33.1% from
RMB1.6 billion in 2014.
- Costs of insurance agency business were RMB1.7
billion (US$258.6 million) for 2015, representing an increase of
32.8% from RMB1.3 billion in 2014, primarily driven by an increase
of 29.8% in costs for the P&C insurance agency business
to RMB1.5 billion (US$226.9 million) and an increase of 58.7%
in costs for the life insurance agency business to RMB205.3 million
(US$31.7 million), which were largely in line with the growth in
net revenues of the P&C and life insurance agency businesses.
Costs incurred by the insurance agency business accounted for 77.9%
of total operating costs in 2015.
- Costs of insurance brokerage business were
RMB293.9 million (US$45.4 million) for 2015, representing an
increase of 58.3% from RMB185.6 million in 2014. The increase was
primarily due to sales growth. Costs incurred by the insurance
brokerage business accounted for 13.7% of total operating costs in
2015.
- Costs of claims adjusting business were
RMB181.4 million (US$28.0 million) for 2015, representing an
increase of 8.2% from RMB167.7 million in 2014. The increase was
primarily attributable to sales growth and the increased average
salaries for claims adjustors. Costs incurred by the claims
adjusting business accounted for 8.4% of total operating costs in
2015.
- Selling expenses were RMB143.3 million
(US$22.1 million) for 2015, representing an increase of 33.6% from
RMB107.3 million in 2014, primarily attributable to RMB19.5 million
(US$3.0 million) of marketing expenses to promote CNpad App among
sales agents in the fourth quarter of the year.
- General and administrative expenses were
RMB456.0 million (US$70.4 million) for 2015, representing an
increase of 15.0% from RMB396.7 million in 2014. The increase was
primarily due to increases in research and development expenses
associated with our online initiatives, payroll expenses and
conference expenses, though partially offset by the decline in
share-based compensation, amortization and depreciation expenses.
The percentage increase in general and administrative expenses was
lower than that of net revenues primarily because of a reduction in
back office operational expenses as a result of the increased use
of CNpad App by our sales agents.
As a result of the preceding factors,
operating income was RMB78.5 million (US$12.1
million) for 2015, representing an increase of 154.1% from RMB30.9
million in 2014.
Operating margin was 2.8% for
2015, compared with 1.4% in 2014.
Investment income was RMB65.6
million (US$10.1 million) for 2015, representing an increase of
48.3% from RMB44.2 million in 2014. The increase was primarily
attributable to an increase in short term investments in financial
products which mainly consisted of inter-bank deposits and
collective trust products.
Interest income was RMB57.2
million (US$8.8 million) for 2015, representing a decrease of 30.4%
from RMB82.3 million in 2014. The decrease in interest income was
primarily due to decreases in interest rates and term deposits as a
result of an increase in short-term investments.
Income tax expense was RMB25.9
million (US$4.0 million) for 2015, representing an increase of 6.5%
from RMB24.3 million in 2014. The effective tax rate for 2015 was
12.1% compared with 15.2% in 2014. The decrease in effective tax
rate was primarily due to preferential tax treatment enjoyed by one
of our subsidiaries.
Share of income of affiliates
was RMB26.9 million (US$4.2 million) for 2015, representing a
decrease of 12.2% from RMB30.6 million in 2014, mainly attributable
to a decrease of profits from Sincere Fame International Limited,
in which the Company owns 20.6% of the equity interests, resulting
from (i) narrower interest spreads as a result of reduction in
interest rates charged to customers for retail loans; and (ii)
increased marketing expenses related to its online platform.
Net income attributable to the Company’s
shareholders was RMB210.1 million (US$32.4 million) for
2015, representing an increase of 29.9% from RMB161.8 million in
2014.
Net margin was 7.4% for 2015
compared with 7.5% in 2014.
Basic and
diluted net income per ADS was RMB3.65
(US$0.56) and RMB3.49 (US$0.54) for 2015, respectively,
representing increases of 13.4% and 9.4% from RMB3.22 and RMB3.19
in 2014.
Adjusted EBITDA was RMB166.1
million (US$25.6 million) for 2015, representing an increase of
25.3% from RMB132.5 million in 2014.
Adjusted EBITDA margin was 5.9%
for 2015, compared with 6.2% in 2014.
Diluted adjusted EBITDA per ADS was RMB2.76
(US$0.43) for 2015, representing an increase of 5.3% from
RMB2.62 in 2014.
As of December 31, 2015, the Company had RMB1.1 billion
(US$172.2 million) in cash and cash
equivalents.
Year-end Operating Data:
- As of December 31, 2015, CNinsure’s distribution and service
network consisted of 574 sales and services outlets operating in 27
provinces, compared with 548 sales and service outlets operating in
27 provinces as of December 31, 2014. CNinsure had 116,164 sales
agents and 1,451 professional claims adjustors as of December 31,
2015, compared with 62,248 sales agents and 1,516 professional
claims adjustors as of December 31, 2014.
Business
Outlook
CNinsure expects its total net revenues to grow
by approximately 30% for the first quarter of 2016 compared with
the corresponding period in 2015. This forecast reflects CNinsure’s
current view, which is subject to change.
Conference Call
The Company will host a conference call to
discuss its fourth quarter and fiscal year 2015 results as per the
following details.
Time: 8:00 pm Eastern Standard Time on March 8, 2016
or 9:00 am Beijing/Hong Kong Time on March
9, 2016
| |
|
| The toll free dial-in numbers: |
|
| United States |
1-855-500-8701 |
| United Kingdom |
0800-015-9724 |
| France |
0800-918-648 |
| Germany |
0800-184-4876 |
| Australia |
1-300-713-759 |
| Canada |
1-855-757-1565 |
| Taiwan |
0080-665-1951 |
| Hong Kong |
800-906-606 |
| |
|
| The toll dial-in numbers: |
|
| China (Mainland) |
400-120-0654 |
| Singapore & Other Areas |
+65-6713-5440 |
| |
|
| Conference ID #: 55616195 |
|
| |
|
Additionally, a live and archived web cast of this call will be
available at: http://ir.cninsure.net/events.cfm
About CNinsure Inc.
CNinsure Inc. is a leading independent
online-to-offline financial services provider. Through our online
platforms and offline sales and service network, we offer a wide
variety of financial products and services to individuals and
businesses, including property and casualty and life insurance
products. We also provide insurance claims adjusting services, such
as damage assessments, surveys, authentications and loss
estimations, as well as value-added services, such as emergency
vehicle roadside assistance.
Our online platforms include (1) CNpad, a mobile
sales support application, (2) Baoxian.com, an online entry portal
for comparing and purchasing health, accident, travel and homeowner
insurance products; and (3) eHuzhu (www.ehuzhu.com), a non-profit
online mutual aid platform in China. Our extensive distribution and
service network covers 27 provinces in China, including most
economically developed regions and cities.
For more information about CNinsure Inc., please
visit http://ir.cninsure.net/.
Forward-looking Statements
This press release contains statements of a
forward-looking nature. These statements, including the statements
relating to the Company’s future financial and operating results,
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, 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, 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, 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 the date
hereof, and CNinsure undertakes no obligation to update any
forward-looking statements to reflect subsequent occurring events
or circumstances, or 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.
About Non-GAAP Financial
Measures
In addition to the Company’s consolidated
financial results under GAAP, the Company also provides adjusted
EBITDA, adjusted EBITDA margin and diluted adjusted EBITDA per ADS,
all of which are non-GAAP financial measures. Adjusted EBITDA is
defined as net income before income tax expense, investment income,
interest income, depreciation, amortization, and compensation
expenses associated with stock options. Adjusted EBITDA margin is
defined as adjusted EBITDA divided by total net revenues. Diluted
adjusted EBITDA per ADS is defined as adjusted EBITDA divided by
total number of ADS on a diluted basis. The Company believes that
both management and investors benefit from referring to these
non-GAAP financial measures in assessing the Company’s performance
and when planning and forecasting future periods. One limitation of
using these non-GAAP financial measures is that such measures
exclude items that were significant in the fourth quarter and year
of 2015 and the corresponding periods of 2014, and these items have
been, and will continue to be, significant recurring factors in our
business.
In light of these limitations, the presentation
of these non-GAAP financial measures is not intended to be
considered in isolation or as a substitute for the financial
information prepared and presented in accordance with GAAP. We
encourage investors and other interested persons to review our
financial information in its entirety and not rely on a single
financial measure. For more information on these non-GAAP financial
measures, please see the tables captioned “Reconciliations of Net
Income to Adjusted EBITDA and Adjusted EBITDA Margin” set forth at
the end of this release.
| |
| CNINSURE
INC. |
| Unaudited
Condensed Consolidated Balance Sheets |
| (In
thousands) |
| |
| |
As of
December 31, |
As
of December 31, |
As
of December 31, |
| |
|
2014 |
|
|
2015 |
|
|
2015 |
|
| |
RMB |
RMB |
US$ |
| ASSETS: |
|
|
|
| Current assets: |
|
|
|
| Cash and cash equivalents |
|
2,103,068 |
|
|
1,115,266 |
|
|
172,167 |
|
| Restricted cash |
|
7,478 |
|
|
17,585 |
|
|
2,715 |
|
| Short term investments |
|
688,900 |
|
|
2,026,256 |
|
|
312,800 |
|
| Accounts receivable, net |
|
186,150 |
|
|
241,264 |
|
|
37,245 |
|
| Insurance premium receivables |
|
472 |
|
|
1,526 |
|
|
236 |
|
| Other receivables |
|
88,149 |
|
|
51,828 |
|
|
8,001 |
|
| Amounts due from related parties |
|
209,601 |
|
|
36,508 |
|
|
5,636 |
|
| Other current assets |
|
17,908 |
|
|
22,828 |
|
|
3,524 |
|
| Total current assets |
|
3,301,726 |
|
|
3,513,061 |
|
|
542,324 |
|
| |
|
|
|
| Non-current assets: |
|
|
|
| Property, plant, and equipment, net |
|
47,171 |
|
|
34,145 |
|
|
5,271 |
|
| Goodwill and intangible assets, net |
|
165,072 |
|
|
153,182 |
|
|
23,647 |
|
| Deferred tax assets |
|
2,638 |
|
|
1,658 |
|
|
256 |
|
| Investment in affiliates |
|
219,703 |
|
|
284,194 |
|
|
43,872 |
|
| Other non-current assets |
|
12,176 |
|
|
28,188 |
|
|
4,351 |
|
| Total non-current assets |
|
446,760 |
|
|
501,367 |
|
|
77,397 |
|
| Total assets |
|
3,748,486 |
|
|
4,014,428 |
|
|
619,721 |
|
| |
|
|
|
|
|
|
|
|
|
| LIABILITIES AND EQUITY: |
|
|
|
| Current liabilities: |
|
|
|
| Accounts payable (including accounts payable of
the consolidated variable interest entities ("VIEs") without
recourse to CNinsure Inc. of RMB4,453 and RMB4,141 (US$639) as of
December 31, 2014 and 2015, respectively) |
|
128,765 |
|
|
160,891 |
|
|
24,837 |
|
| Insurance premium payables (including insurance
premium payables of the consolidated VIEs without recourse to
CNinsure Inc. of RMB268 and RMB1,680 (US$259) as of December 31,
2014 and 2015, respectively) |
|
2,942 |
|
|
5,187 |
|
|
801 |
|
| Other payables and accrued expenses (including
other payables and accrued expense of the consolidated VIEs without
recourse to CNinsure Inc. of RMB7,099 and RMB5,720 (US$883) as of
December 31, 2014 and 2015, respectively) |
|
109,412 |
|
|
213,562 |
|
|
32,968 |
|
| Accrued payroll (including accrued payroll of the
consolidated VIEs without recourse to CNinsure Inc. of RMB1,083 and
RMB1,625 (US$251) as of December 31, 2014 and 2015,
respectively) |
|
40,096 |
|
|
48,150 |
|
|
7,433 |
|
| Income tax payable (including income tax payable
of the consolidated of VIEs without recourse to CNinsure Inc. of
RMB2,571 and RMB1,152 (US$178) as of December 31, 2014 and 2015,
respectively) |
|
54,225 |
|
|
60,658 |
|
|
9,364 |
|
| Total current liabilities |
|
335,440 |
|
|
488,448 |
|
|
75,403 |
|
| |
|
|
|
| Non-current liabilities: |
|
|
|
| Other tax liabilities |
|
53,855 |
|
|
70,354 |
|
|
10,861 |
|
| Deferred tax liabilities |
|
24,931 |
|
|
22,057 |
|
|
3,405 |
|
| Total non-current
liabilities |
|
78,786 |
|
|
92,411 |
|
|
14,266 |
|
| Total liabilities |
|
414,226 |
|
|
580,859 |
|
|
89,669 |
|
| |
|
|
|
| Ordinary shares |
|
8,563 |
|
|
8,592 |
|
|
1,326 |
|
| Additional paid-in capital |
|
2,601,401 |
|
|
2,454,244 |
|
|
378,870 |
|
| Statutory reserves |
|
198,422 |
|
|
302,115 |
|
|
46,639 |
|
| Retained earnings |
|
764,963 |
|
|
871,356 |
|
|
134,514 |
|
| Accumulated other comprehensive loss |
|
(105,106 |
) |
|
(50,048 |
) |
|
(7,726 |
) |
| Subscription receivables |
|
(257,491 |
) |
|
(268,829 |
) |
|
(41,500 |
) |
| Total CNinsure Inc. shareholders’
equity |
|
3,210,752 |
|
|
3,317,430 |
|
|
512,123 |
|
| Non-controlling interests |
|
123,508 |
|
|
116,139 |
|
|
17,929 |
|
| Total equity |
|
3,334,260 |
|
|
3,433,569 |
|
|
530,052 |
|
| Total liabilities and
equity |
|
3,748,486 |
|
|
4,014,428 |
|
|
619,721 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| CNINSURE INC. |
| Unaudited Condensed
Consolidated Statements of Income and Comprehensive
Income |
| (In thousands, except for shares and per share
data) |
|
|
| |
For The Three Months Ended |
For The Twelve
Months Ended |
| |
December 31, |
December 31, |
| |
|
2014 |
|
|
2015 |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2015 |
|
| |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
| Net
revenues: |
|
|
|
|
|
|
| Agency |
|
488,713 |
|
|
668,356 |
|
|
103,176 |
|
|
1,624,410 |
|
|
2,155,264 |
|
|
332,716 |
|
| Brokerage |
|
58,672 |
|
|
95,034 |
|
|
14,671 |
|
|
232,620 |
|
|
369,198 |
|
|
56,994 |
|
| Claims adjusting |
|
85,234 |
|
|
96,613 |
|
|
14,915 |
|
|
292,981 |
|
|
303,846 |
|
|
46,906 |
|
| Total net
revenues |
|
632,619 |
|
|
860,003 |
|
|
132,762 |
|
|
2,150,011 |
|
|
2,828,308 |
|
|
436,616 |
|
| Operating costs
and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Agency |
|
(386,149 |
) |
|
(514,350 |
) |
|
(79,402 |
) |
|
(1,261,888 |
) |
|
(1,675,261 |
) |
|
(258,616 |
) |
| Brokerage |
|
(47,093 |
) |
|
(75,620 |
) |
|
(11,674 |
) |
|
(185,593 |
) |
|
(293,875 |
) |
|
(45,366 |
) |
| Claims adjusting |
|
(45,245 |
) |
|
(52,691 |
) |
|
(8,134 |
) |
|
(167,676 |
) |
|
(181,370 |
) |
|
(27,999 |
) |
| Total operating
costs |
|
(478,487 |
) |
|
(642,661 |
) |
|
(99,210 |
) |
|
(1,615,157 |
) |
|
(2,150,506 |
) |
|
(331,981 |
) |
| Selling expenses |
|
(31,740 |
) |
|
(56,609 |
) |
|
(8,739 |
) |
|
(107,263 |
) |
|
(143,279 |
) |
|
(22,118 |
) |
| General and
administrative expenses |
|
(124,303 |
) |
|
(127,906 |
) |
|
(19,745 |
) |
|
(396,692 |
) |
|
(456,001 |
) |
|
(70,394 |
) |
| Total operating
costs and expenses |
|
(634,530 |
) |
|
(827,176 |
) |
|
(127,694 |
) |
|
(2,119,112 |
) |
|
(2,749,786 |
) |
|
(424,493 |
) |
|
(Loss) income from
operations |
|
(1,911 |
) |
|
32,827 |
|
|
5,068 |
|
|
30,899 |
|
|
78,522 |
|
|
12,123 |
|
| Other income,
net: |
|
|
|
|
|
|
| Investment income |
|
11,178 |
|
|
20,886 |
|
|
3,224 |
|
|
44,240 |
|
|
65,624 |
|
|
10,131 |
|
| Interest income |
|
18,789 |
|
|
9,206 |
|
|
1,421 |
|
|
82,251 |
|
|
57,234 |
|
|
8,835 |
|
| Others, net |
|
595 |
|
|
5,033 |
|
|
777 |
|
|
2,330 |
|
|
13,042 |
|
|
2,013 |
|
|
Income before income
taxes and income of affiliates |
|
28,651 |
|
|
67,952 |
|
|
10,490 |
|
|
159,720 |
|
|
214,422 |
|
|
33,102 |
|
| Income tax expense |
|
(5,563 |
) |
|
(8,876 |
) |
|
(1,370 |
) |
|
(24,289 |
) |
|
(25,865 |
) |
|
(3,993 |
) |
| Share of income of
affiliates |
|
8,228 |
|
|
2,480 |
|
|
383 |
|
|
30,649 |
|
|
26,924 |
|
|
4,156 |
|
| Net
income |
|
31,316 |
|
|
61,556 |
|
|
9,503 |
|
|
166,080 |
|
|
215,481 |
|
|
33,265 |
|
| less: net income
attributable to noncontrolling interests |
|
4,248 |
|
|
6,467 |
|
|
998 |
|
|
4,320 |
|
|
5,395 |
|
|
833 |
|
| Net income
attributable to the Company’s shareholders |
|
27,068 |
|
|
55,089 |
|
|
8,505 |
|
|
161,760 |
|
|
210,086 |
|
|
32,432 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
0.03 |
|
|
0.05 |
|
|
0.01 |
|
|
0.16 |
|
|
0.18 |
|
|
0.03 |
|
| Diluted |
|
0.03 |
|
|
0.05 |
|
|
0.01 |
|
|
0.16 |
|
|
0.17 |
|
|
0.03 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income per
ADS: |
|
|
|
|
|
|
| Basic |
|
0.53 |
|
|
0.96 |
|
|
0.15 |
|
|
3.22 |
|
|
3.65 |
|
|
0.56 |
|
| Diluted |
|
0.52 |
|
|
0.91 |
|
|
0.14 |
|
|
3.19 |
|
|
3.49 |
|
|
0.54 |
|
| |
|
|
|
|
|
|
| Shares used in calculating
net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
1,023,391,993 |
|
|
1,152,826,984 |
|
|
1,152,826,984 |
|
|
1,005,842,212 |
|
|
1,151,705,374 |
|
|
1,151,705,374 |
|
| Diluted |
|
1,036,069,705 |
|
|
1,206,237,783 |
|
|
1,206,237,783 |
|
|
1,012,591,387 |
|
|
1,203,323,521 |
|
|
1,203,323,521 |
|
| Net
income |
|
31,316 |
|
|
61,556 |
|
|
9,503 |
|
|
166,080 |
|
|
215,481 |
|
|
33,265 |
|
| Other comprehensive income, net of
tax: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign currency translation
adjustments |
|
2,805 |
|
|
1,010 |
|
|
156 |
|
|
6,008 |
|
|
6,153 |
|
|
949 |
|
| Share of other comprehensive income
of affiliates, net of tax |
|
— |
|
|
37,567 |
|
|
5,799 |
|
|
— |
|
|
37,567 |
|
|
5,799 |
|
| Comprehensive
income |
|
34,121 |
|
|
100,133 |
|
|
15,458 |
|
|
172,088 |
|
|
259,201 |
|
|
40,013 |
|
| Less: Comprehensive income
attributable to the noncontrolling interests |
|
4,248 |
|
|
6,467 |
|
|
998 |
|
|
4,320 |
|
|
5,395 |
|
|
833 |
|
| Comprehensive income
attributable to the CNinsure Inc’s shareholders |
|
29,873 |
|
|
93,666 |
|
|
14,460 |
|
|
167,768 |
|
|
253,806 |
|
|
39,180 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| CNINSURE INC. |
| Unaudited Condensed
Consolidated Statements of Cash Flow |
| (In thousands) |
| |
|
|
For The Three Months Ended |
|
|
For The Twelve Months
Ended |
|
|
December 31, |
|
|
December 31, |
|
|
|
2014 |
|
|
2015 |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2015 |
|
|
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
|
OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
31,316 |
|
|
61,556 |
|
|
9,503 |
|
|
166,080 |
|
|
215,481 |
|
|
33,265 |
|
|
Adjustments to reconcile net income to net cash generated
from operating activities: |
|
|
|
|
|
|
|
Depreciation |
|
6,008 |
|
|
4,075 |
|
|
629 |
|
|
28,235 |
|
|
18,383 |
|
|
2,838 |
|
|
Amortization of intangible assets |
|
4,728 |
|
|
2,270 |
|
|
350 |
|
|
16,826 |
|
|
11,571 |
|
|
1,786 |
|
|
Allowance for doubtful receivables |
|
2,148 |
|
|
4,694 |
|
|
725 |
|
|
6,060 |
|
|
7,597 |
|
|
1,173 |
|
| Compensation expenses associated
with stock option |
|
4,684 |
|
|
2,829 |
|
|
437 |
|
|
23,598 |
|
|
17,653 |
|
|
2,725 |
|
|
Investment income |
|
(766 |
) |
|
(1,352 |
) |
|
(209 |
) |
|
(15,419 |
) |
|
(31,091 |
) |
|
(4,800 |
) |
| Loss
(gain) on disposal of property, plant and equipment |
|
243 |
|
|
(143 |
) |
|
(22 |
) |
|
292 |
|
|
(126 |
) |
|
(20 |
) |
| Share of
income of affiliates |
|
(8,228 |
) |
|
(2,480 |
) |
|
(383 |
) |
|
(30,649 |
) |
|
(26,924 |
) |
|
(4,156 |
) |
| Changes
in operating assets and liabilities |
|
33,310 |
|
|
101,951 |
|
|
15,738 |
|
|
66,626 |
|
|
68,760 |
|
|
10,615 |
|
|
Net cash generated from operating
activities |
|
73,443 |
|
|
173,400 |
|
|
26,768 |
|
|
261,649 |
|
|
281,304 |
|
|
43,426 |
|
|
Cash flows generated from (used in)
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Purchase
of property, plant and equipment |
|
(1,626 |
) |
|
(2,845 |
) |
|
(439 |
) |
|
(6,209 |
) |
|
(6,663 |
) |
|
(1,029 |
) |
| Proceeds
from disposal of property and equipment |
|
248 |
|
|
159 |
|
|
25 |
|
|
614 |
|
|
539 |
|
|
83 |
|
| Purchase
of short term investments |
|
(16,600 |
) |
|
(1,353,956 |
) |
|
(209,015 |
) |
|
(546,600 |
) |
|
(2,308,956 |
) |
|
(356,441 |
) |
| Proceeds
from disposal of short term investments |
|
47,366 |
|
|
704,052 |
|
|
108,687 |
|
|
118,208 |
|
|
994,839 |
|
|
153,577 |
|
|
Acquisition of subsidiaries, net of cash |
|
— |
|
|
— |
|
|
— |
|
|
(62,709 |
) |
|
— |
|
|
— |
|
| Disposal
of subsidiaries, net of cash |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
15,476 |
|
|
2,389 |
|
| Purchase
of intangible assets |
|
— |
|
|
— |
|
|
— |
|
|
(118 |
) |
|
— |
|
|
— |
|
| Decrease
(increase) in restricted cash |
|
2,677 |
|
|
(1,771 |
) |
|
(273 |
) |
|
3,622 |
|
|
(10,107 |
) |
|
(1,560 |
) |
|
(Increase) decrease in other receivables |
|
(9,000 |
) |
|
16,120 |
|
|
2,488 |
|
|
113,632 |
|
|
16,120 |
|
|
2,489 |
|
| Return
of investment in non-current assets |
|
— |
|
|
— |
|
|
— |
|
|
3,900 |
|
|
— |
|
|
— |
|
| Addition
in investment in non-current assets |
|
— |
|
|
(3,980 |
) |
|
(614 |
) |
|
(7,019 |
) |
|
(13,980 |
) |
|
(2,158 |
) |
|
(Increase) decrease in amounts due from related parties |
|
(3,866 |
) |
|
69,242 |
|
|
10,689 |
|
|
(62,716 |
) |
|
181,181 |
|
|
27,969 |
|
|
Net cash generated from
(used in) investing activities |
|
19,199 |
|
|
(572,979 |
) |
|
(88,452 |
) |
|
(445,395 |
) |
|
(1,131,551 |
) |
|
(174,681 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash
flows generated from
(used in) financing
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Acquisition of additional
interest in subsidiaries |
|
— |
|
|
— |
|
|
— |
|
|
(11,000 |
) |
|
(153,500 |
) |
|
(23,696 |
) |
| apital injection by
noncontrolling interests |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
17,000 |
|
|
2,624 |
|
| Dividend distributed to
noncontrolling interest |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(2,450 |
) |
|
(378 |
) |
| Repurchase of ordinary
shares |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(6,276 |
) |
|
(969 |
) |
| Proceeds on exercise of
stock options |
|
— |
|
|
397 |
|
|
61 |
|
|
3,183 |
|
|
1,518 |
|
|
234 |
|
| Net cash generated
from (used in) financing activities |
|
— |
|
|
397 |
|
|
61 |
|
|
(7,817 |
) |
|
(143,708 |
) |
|
(22,185 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net
increase (decrease) in cash and
cash equivalents |
|
92,642 |
|
|
(399,182 |
) |
|
(61,623 |
) |
|
(191,563 |
) |
|
(993,955 |
) |
|
(153,440 |
) |
| Cash and cash
equivalents at beginning of period |
|
2,007,621 |
|
|
1,513,438 |
|
|
233,634 |
|
|
2,288,623 |
|
|
2,103,068 |
|
|
324,658 |
|
| Effect of exchange rate
changes on cash and cash equivalents |
|
2,805 |
|
|
1,010 |
|
|
156 |
|
|
6,008 |
|
|
6,153 |
|
|
949 |
|
| Cash and cash
equivalents at end of period. |
|
2,103,068 |
|
|
1,115,266 |
|
|
172,167 |
|
|
2,103,068 |
|
|
1,115,266 |
|
|
172,167 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest paid |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Income taxes paid |
|
1,265 |
|
|
534 |
|
|
82 |
|
|
19,135 |
|
|
4,383 |
|
|
677 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| CNINSURE INC. |
| Reconciliations of Net Income
to Adjusted EBITDA and Adjusted EBITDA Margin |
| (In
thousands,
unaudited) |
|
|
| |
For The Three Months Ended |
For The Twelve
Months Ended |
| |
December 31, |
December 31, |
| |
|
2014 |
|
|
2015 |
|
|
2015 |
|
|
2014 |
|
|
2015 |
|
|
2015 |
|
| |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
| Net
income |
|
31,316 |
|
|
61,556 |
|
|
9,503 |
|
|
166,080 |
|
|
215,481 |
|
|
33,265 |
|
| Income tax expense |
|
5,563 |
|
|
8,876 |
|
|
1,370 |
|
|
24,289 |
|
|
25,865 |
|
|
3,993 |
|
| Investment income |
|
(11,178 |
) |
|
(20,886 |
) |
|
(3,224 |
) |
|
(44,240 |
) |
|
(65,624 |
) |
|
(10,131 |
) |
| Interest income |
|
(18,789 |
) |
|
(9,206 |
) |
|
(1,421 |
) |
|
(82,251 |
) |
|
(57,234 |
) |
|
(8,835 |
) |
| Depreciation |
|
6,008 |
|
|
4,075 |
|
|
629 |
|
|
28,235 |
|
|
18,383 |
|
|
2,838 |
|
| Amortization of
intangible assets |
|
4,728 |
|
|
2,270 |
|
|
350 |
|
|
16,826 |
|
|
11,571 |
|
|
1,786 |
|
| Compensation expenses
associated with stock options |
|
4,684 |
|
|
2,829 |
|
|
437 |
|
|
23,598 |
|
|
17,653 |
|
|
2,725 |
|
| Adjusted
EBITDA |
|
22,332 |
|
|
49,514 |
|
|
7,644 |
|
|
132,537 |
|
|
166,095 |
|
|
25,641 |
|
| Total net revenues |
|
632,619 |
|
|
860,003 |
|
|
132,762 |
|
|
2,150,011 |
|
|
2,828,308 |
|
|
436,616 |
|
| Adjusted EBITDA
Margin |
|
3.5 |
% |
|
5.8 |
% |
|
5.8 |
% |
|
6.2 |
% |
|
5.9 |
% |
|
5.9 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 This announcement contains currency
conversions 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 RMB6.4778 to US$1.00, the effective noon
buying rate as of December 31, 2015 in The City of New York for
cable transfers of RMB as set forth in H.10 weekly statistical
release of the Federal Reserve Board.
2 Active users are defined as users who made at least one
purchase through CNpad App during the specified period.
3 Active customer accounts are defined as
customer accounts that made at least one purchase directly through
www.baoxian.com or its mobile application during the specified
period.
For more information, please contact:
Oasis Qiu
Investor Relations Manager
Tel: +86 (20) 8388-3191
Email: qiusr@cninsure.net
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