Fanhua Received Notice from PICC P&C
March 03 2017 - 9:41AM
Fanhua Inc., (Nasdaq:FANH), (the "Company" or "Fanhua"), a leading
independent online-to-offline ("O2O") financial services provider
in China, today announced that the Company had received notice from
PICC Property and Casualty Company Limited, or PICC P&C, that
it had temporarily suspended business cooperation with Fanhua.
On March 1, 2017, Fanhua's subsidiaries were
notified verbally by PICC P&C's local branches that PICC
P&C was temporary suspending its business cooperation with
Fanhua on areas such as insurance agency, brokerage and claims
adjustment because certain of PICC P&C’s senior management
members were being investigated by the government. As a decade-long
business partner of PICC P&C, the Company was disappointed by
this unilateral notice. However, the Company also understands that
as a state-owned enterprise, it may be necessary for PICC P&C
to take such precautionary measures as a result of internal or
external investigation. At this stage, the Company is unable to
predict when and whether the business cooperation with PICC P&C
might resume. The Company plans to engage in ongoing dialogue with
PICC P&C and urges it to resume their mutual business
cooperation relationship as early as possible.
As a public company listed on Nasdaq, the
Company believes it conducts its business operation in compliance
with all applicable laws in China and in the U.S. including the
Foreign Corrupt Practices Act. The Company does not believe it or
its employees were involved in any business dealings with PICC
P&C that might be the target of this investigation. The Company
believes it has established and maintained its strategic
partnership with PICC P&C on an arms-length basis.
In 2016, the Company derived 27% of its total
revenues from PICC P&C. Currently its P&C insurance agency
and brokerage businesses have small profit margins due largely to
the significant marketing expenses while the life insurance
business is the most profitable business segment. Therefore,
assuming the business relationship with PICC P&C will not be
able to resume in 2017, this disruption may cause the Company's
total revenue to decrease as compared to 2016 but the impact on its
net profits will be limited at around RMB3 million to RMB5
million.
Fanhua has been operating as a market-oriented
company ever since its establishment and has established itself as
the largest insurance intermediary company in China. At this
moment, the Company will use its best efforts to minimize the
impact of this disruption of business relationship with PICC
P&C by searching for new strategic partners and strengthening
existing strategic partnerships. The management of the Company
remains confident in its prospects and believes that it will be
able to achieve its profit target for 2017.
About Fanhua
Inc.Fanhua 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) Baoxian.com, an online
entry portal for comparing and purchasing health, accident, travel
and homeowner insurance products; (2) CNpad, a mobile sales support
application and (3) eHuzhu (www.ehuzhu.com), a non-profit online
mutual aid platform in China.
Our extensive distribution and service network
covers 29 provinces in China, including most economically developed
regions and cities.
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 Fanhua and
the industry. Potential risks and uncertainties include, but are
not limited to, Fanhua’s ability to attract and retain key
personnel and productive 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 Fanhua 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 Fanhua 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 Fanhua is included
in Fanhua's filings with the U.S. Securities and
Exchange Commission, including its annual report on Form 20-F.
For more information about Fanhua Inc., please
visit http://ir.fanhuaholdings.com/.
CONTACT: Oasis Qiu
Investor Relations Manager
Tel: (8620) 83883191
Email: qiusr@fanhuaholdings.com
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