JQW PLC Pre-Close Trading Update (9410E)
February 16 2015 - 2:01AM
UK Regulatory
TIDMJQW
RNS Number : 9410E
JQW PLC
16 February 2015
Press Release 16 February 2015
JQW plc
("JQW", the "Group" or the "Company")
Pre-Close Trading Update
Notice of Preliminary Results
JQW plc, a domestic Chinese B2B e-commerce operator, provides
the following trading update as the Group enters its close
period.
The Board confirms that revenues for the period were ahead of
market expectations, with unaudited management accounts showing
revenues reaching approximately RMB 784 million (2013: RMB 490
million).
Profits for the period were in line with expectations and profit
before tax for the period has increased to around RMB 212 million
(2013: RMB 170 million) (exchange rate: RMB 9.6 : GBP1). Consistent
with recent trends, our distribution mix has seen a further rise in
the sales agencies channel, as opposed to our own sales force
channel, from 78% of revenues in 2013 to 88% in 2014. This has
translated into higher cost of sales as a result of commissions
paid to agents. Similarly, our client base has continued to trade
up to more expensive packages, which provide them with advertorial
services through other media channels. The cost for JQW to purchase
advertising rights on different media channels to support the
advertorial services rose from RMB 10 million in 2013 to around RMB
58 million in 2014. This has also translated into a decline in
gross margin.
As at 31 December 2014, the Group had 241,000 active fee paying
members which compares to 221,000 at the end of June 2014 and
197,000 at the end of December 2013. JQW remains highly cash
generative and the Group maintains its strong balance sheet with
cash as at 31 December 2014 amounting to RMB 395 million (2013: RMB
344 million). This robust cash position, which is after the Group
paid an interim and special dividend to shareholders totalling RMB
101.6 million in October 2014, is equal to 21.3 pence per share or
195% of the Group's market capitalisation as at 13 February
2015.
Yongde Cai, Chairman of JQW, said: "The Board is extremely
pleased with the solid progress that the Group has made throughout
2014. Trading in the new financial year has started positively and
we are close to finalising the development of our platforms for
smartphone users which will further broaden our offering and take
advantage of the rapidly growing Chinese B2B e-commerce market.
"As expected in such a fast growth marketplace, we are beginning
to witness some increased pricing competition from other B2B
platforms in China. JQW's management team anticipated this market
evolution and have already initiated a focused marketing strategy
as well as a review of the packages that we offer our customers in
order to maintain our competitive advantage.
"JQW remains committed to its AIM listing and the Board believes
that JQW continues to be well positioned for future growth."
The Group will be announcing its 2014 Final Results on Thursday,
30 April 2015. An analyst briefing given by Peter Chen (Chief
Executive Officer) and Wei Boon Kooi (Chief Financial Officer),
will be held at 9.30 a.m. at the offices of Abchurch
Communications, 125 Old Broad Street, London, EC2N 1AR.
- Ends -
For further information:
JQW plc
Cai Yongde, Chairman Tel: +44 (0) 20 7398
7710
Chen Daocai, Chief Executive Officer www.jqw-ir.com
Kooi Wei Boon, Chief Financial Officer
Cairn Financial Advisers LLP (Nomad
& Broker)
Sandy Jamieson / Liam Murray Tel: +44 (0) 20 7148
7900
www.cairnfin.com
Media enquiries:
Abchurch Communications Limited
Henry Harrison-Topham / Quincy Allan Tel: +44 (0) 20 7398
7710
jqw@abchurch-group.com www.abchurch-group.com
About JQW plc
JQW is a leading domestic business-to-business e-commerce
provider based in the Chinese province of Jiangsu. The Group's core
business is its online B2B platform, www.jqw.com, which has been
developed to encourage domestic trade by connecting Chinese SMEs
with potential trade partners. Founded in 2004, the platform was
developed to help to market Chinese SME's websites. JQW has evolved
rapidly to become the second highest ranked B2B e-commerce website
in China in terms of traffic and operates, what the director's
believe to be, the first dedicated B2B search engine,
www.jqw.cn.
JQW offers a low-cost entry point for Chinese SMEs to promote
themselves and their B2B products to potential buyers. In order to
increase transaction opportunities, JQW offers its clients a broad
range of services including website design, commercial search
services and advertising.
There are approximately 49 million SMEs in China manufacturing a
diverse range of products, accounting for 60% of the country's GDP.
The number of mobile internet-access users in China stood at 871
million at September 2014 and there is a considerable amount being
invested into the country's telecommunications infrastructure.
These factors have driven an increased demand for domestic trade of
B2B, B2C and C2C e-commerce. With the majority of these SMEs
requiring the use of third party B2B e-commerce platforms to
promote their businesses and access trade partners, the Board
believes that JQW offers a robust and highly reputable branded
platform. With exposure in over 50 industry sectors and
considerable scope for future growth, JQW is in a strong position
to capitalise on the development of this market.
The Group recently has:
11 million Registered users
5 million Page views per day
1,046,000 Sheng-Yi-Tong members with website "shops"
241,000 Fee-paying members as of 31December 2014
600 Rated in the top 600 websites for global website traffic rankings
44 Sales agencies
3 Top 3 in Chinese B2B website traffic rankings
This information is provided by RNS
The company news service from the London Stock Exchange
END
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