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China Finance Online Reports 2019 First Quarter Unaudited Financial Results

Published

5 years ago

June 27, 2019

Reading Time: 8 minutes

China Finance Online Co. Limited (“China Finance Online”, or the “Company”, “we”, “us” or “our”) (NASDAQ GS: JRJC), a leading web-based financial services company that provides Chinese retail investors with fintech-powered online access to securities trading services, wealth management products, securities investment advisory services, as well as financial database and analytics services to institutional customers, today announced its unaudited financial results for the first quarter ended March 31, 2019.

First Quarter 2019 Financial Highlights

Net revenues were $9.9 million
Revenues from financial advisory services grew 27.9% year-over-year and 195.6% quarter-over-quarter
Gross margin was 64.5%, up from 61.9% in the first quarter of 2018
Net loss attributable to China Finance Online was $2.8 million, compared with a net loss of $5.2 million in the first quarter of 2018
According to the Company’s proprietary asset allocation system, our Robo-Advisor product, Lingxi, was among the best performing products in the Chinese market with an average return of 5.68% in first quarter of 2019. During the first quarter, the best strategy designed by Lingxi yielded a return of 9.3%.

Mr. Zhiwei Zhao, Chairman and CEO of China Finance Online, commented, “During the first quarter of 2019, our bottom-line loss was further narrowed. With the improvement of our business model and operational efficiency, we also grew our gross margin from the same period of last year.”

“Our business that leverages fintech to empower wealth management is starting to bear fruits. In late 2018, we introduced iTAMP (Turnkey Asset Management Platform), a one-stop ecosystem that empowers financial advisors and wealth managers to provide investment consultations and advice covering stocks, mutual funds, wealth management, insurance, trusts and other financial products. Since then, we have attracted more and more financial advisors to open their online offices on our platform. In the first quarter of 2019, with the market climate recovery and the improvement of our business model, our investment advisory business posted solid growth. At the same time, our initiative to empower wealth management services has witnessed breakthroughs, with over ten financial institutions including brokerage firms, banks and asset management firms forming partnerships with us. Our fintech capability and 20 years’ operation track record in retail customer-oriented services are well received and recognized by these financial institutions.”

“Looking into the future, we will continue to not only strengthen our fintech capabilities through optimization and upgrading of our services and products, but also turn fintech research findings into scalable revenues. While maintaining our goal of fully realizing our future growth potentials, we will strive to further improve our operational efficiency,” Mr. Zhao concluded.

First Quarter 2019 Financial Results

Net revenues were $9.9 million, compared with $13.3 million during the first quarter of 2018 and $10.7 million during the fourth quarter of 2018. During the first quarter of 2019, revenues from financial services, the financial information and advisory business, and advertising services contributed 45%, 33% and 21% of the net revenues, respectively, compared with 50%, 37% and 13%, respectively, for the corresponding period in 2018.

Revenues from financial services were $4.5 million, compared with $6.7 million during the first quarter of 2018 and $5.7 million during the fourth quarter of 2018. Revenues from financial services were mainly generated from equity brokerage services. Revenues from the equity brokerage business decreased by 31.8% year-over-year and 20.5% quarter-over-quarter. The year-over-year and quarter-over-quarter decreases in revenues from financial services were mainly due to reduced revenue from the equity brokerage business.

Revenues from the financial information and advisory business were $3.2 million, compared with $4.9 million during the first quarter of 2018 and $2.0 million in the fourth quarter of 2018. Revenues from the financial information and advisory business were mainly comprised of subscription services from individual and institutional customers and financial advisory services. During the first quarter, subscription revenues from individual investors decreased by 47.6% year-over-year, mainly due to the streamlining of our sales team and upgrading of our business operations for the long-term growth prospects of our business. However, subscription revenues from individual investors rose by 26.9% from the fourth quarter of 2018 as the market conditions improved from late 2018.

Revenues from advertising services were $2.0 million, compared with $1.7 million in the first quarter of 2018 and $3.0 million in the fourth quarter of 2018. The increased traffic to our site helped to elevate our advertising revenues on a year-over-year basis.

Gross profit was $6.4 million, compared with $8.2 million in the first quarter of 2018 and $6.9 million in the fourth quarter of 2018. Gross margin in the first quarter of 2019 was 64.5%, compared with 61.9% in the first quarter of 2018 and 65.1% in the fourth quarter of 2018. The year-over-year increase in gross margin was mainly due to an increased revenue contribution from advertising which carries a higher gross margin. The quarter-over-quarter decrease in gross margin was mainly due to the quarter-over-quarter decrease of revenue contribution from advertising and the lower gross margin of equity brokerage business.

General and administrative expenses were $2.7 million, compared with $3.3 million in the first quarter of 2018, and $4.9 million in the fourth quarter of 2018. The year-over-year decrease was mainly attributable to effective cost control measures and the ongoing streamlining of the operations. The quarter-over-quarter decrease was mainly due to a one-time, non-recurring charge to the bad debt provision associated with the security deposit in our previously terminated commodity trading business in the fourth quarter of 2018.

Sales and marketing expenses were $3.6 million, compared with $6.2 million in the first quarter of 2018, and $4.4 millionin the fourth quarter of 2018. The year-over-year and quarter-over-quarter decreases were mainly attributable to the further streamlining of the sales and marketing division for better efficiency.

Research and development expenses were $2.6 million, compared with $3.8 million in the first quarter of 2018 and $2.9 million in the fourth quarter of 2018. The year-over-year and quarter-over-quarter decreases were mainly attributable to improved efficiency after the consolidation of the R&D team throughout different business units. The Company continues to maintain a team of senior software engineers, data scientists and capital market professionals to support further development in its fintech capabilities.

Total operating expenses were $8.9 million, compared with $13.3 million in the first quarter of 2018, and $12.3 million in the fourth quarter of 2018. The year-over-year and quarter-over-quarter decreases were mainly due to improved efficiency and effective cost controls.

Loss from operations was $2.5 million, compared with a loss from operations of $5.0 million in the first quarter of 2018 and a loss from operations of $5.4 million in the fourth quarter of 2018.

Net loss attributable to China Finance Online was $2.8 million, compared with a net loss of $5.2 million in the first quarter of 2018 and a net loss of $4.4 million in the fourth quarter of 2018.

Fully diluted loss per American Depository Shares (“ADS”) attributable to China Finance Online was $0.12 for the first quarter of 2019, compared with fully diluted loss per ADS of $0.23 for the first quarter of 2018 and fully diluted loss per ADS of $0.19 for the fourth quarter of 2018. Basic and diluted weighted average numbers of ADSs for the first quarter of 2019 were 22.8 million, compared with basic and diluted weighted average number of ADSs of 22.8 million for the first quarter of 2018. Each ADS represents five ordinary shares of the Company.

Total shareholders’ equity of China Finance Online was $32.9 million as of March 31, 2019.

Recent Developments

Lingxi Robo-Advisor recorded strong performance in the first quarter of 2019

According to our proprietary asset allocation system, our Robo-Advisor product, Lingxi, provides Chinese retail investors with a wide array of investment combinations and personalized global asset allocations through Chinese domestic mutual funds. Since its inception, Lingxi established a solid track record of balancing performance and risk management. Lingxi produced a return of 5.68% during the first quarter of 2019, once again among the best performing products in the marketplace. The best strategy of Lingxi posted a return of 9.3% in the first quarter of 2019. All strategies of Lingxi managed to control the fluctuation under 6.0% while the volatility of Shanghai index reached 18.77% during the same period.

2018 was a difficult year for the stock markets in China. The Shanghai Composite Index experienced a loss of 24.6%. However, 95% of the strategies in Lingxi, posted positive returns, with a defensive strategy yielding an annual return of 5.28% in 2018. Since its inception in 2017 to the end of 2018, the accumulative returns of Lingxi’s high-risk, medium-risk and low-risk strategies were 16.94%, 13.91% and 10.79%, respectively.

2019 China Finance Online Value Discovery Forum for Public Companies on Chinese Stock Markets

In May 2019, the Company hosted the “2019 Value Discovery Forum for Public Companies on Chinese Stock Markets” in Shenzhen. A total of 260 professionals from over 230 prestigious technology companies and public companies listed on the Shenzhen and Shanghai stock markets and influential financial institutions attended the forum. The main topics in the forum were technology-driven productivity, industries for the future, and social benefits of innovations.

During the forum, China Finance Online also announced the 2019 Future Enterprise List, 2019 Top Tech and Innovation Value Company List, and 2019 Best Value Public Company List. These rankings are based on China Finance Online’s proprietary algorithms dynamically tracking a series of datapoints including financials, valuation, growth trends, ESG (environment, social and governance) and other metrics, which enable investors to identify investment opportunities and discover value companies.

Conference Call Information

The management will host a conference call on June 26, 2019 at 8:00 p.m. U.S. Eastern Time (8:00 a.m. Beijing/Hong Kong time June 27, 2019). Dial-in details for the earnings conference call are as follows:

US: 1-800-742-9301
Hong Kong: 800-906-648
Singapore: 800-616-2313
China: 800-870-0210 or 400-120-3170
Conference ID: 2148496

Please dial in 10 minutes before the call is scheduled to begin and provide the conference ID to join the call.

A recording of the call will be available on China Finance Online’s website under the investor relations section.

In addition, a live and archived webcast of the conference call will be available at https://edge.media-server.com/mmc/p/cmnjcewg.

About China Finance Online

China Finance Online Co. Limited is a leading web-based financial services company that provides Chinese retail investors with fintech-powered online access to securities trading services, wealth management products, securities investment advisory services, as well as financial database and analytics services to institutional customers. The Company’s prominent flagship portal site, www.jrj.com, is ranked among the top financial websites in China. In addition to the web-based securities trading platform, the Company offers basic financial software, information services and securities investment advisory services to retail investors in China. Through its subsidiary, Shenzhen Genius Information Technology Co. Ltd., the Company provides financial database and analytics to institutional customers including domestic financial, research, academic and regulatory institutions. China Finance Online also provides brokerage services in Hong Kong.

Safe Harbor Statement

This press release contains forward-looking statements which constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. The statements contained herein reflect management’s current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of the Company. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, this release contains the following forward-looking statements regarding:

our prospect and our ability to attract new users;
our prospect on building a comprehensive wealth management ecosystem through providing a fully-integrated online communication and securities-trading platform;
our prospect on stabilization in cash attrition and improvement of our financial position;
our initiatives to address customers’ demand for intuitive online investment platforms and alternative investment opportunities; and
the market prospect of the business of securities-trading, securities investment advisory and wealth management.

Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which risk factors and uncertainties include, amongst others, changing customer needs, regulatory environment and market conditions that we are subject to; the uneven condition of the world and Chinese economies that could lead to volatility in the equity markets and affect our operating results in the coming quarters; the impact of the changing conditions of the mainland Chinese stock market, mainland Chinese precious metals exchanges, Hong Kong stock market and global financial markets on our future performance; the unpredictability of our strategic transformation and growth of new businesses; the prospect of our margin-related business and the degree to which our implementation of margin account screening and ongoing monitoring will yield successful outcomes; the degree to which our strategic collaborations with partners will yield successful outcomes; the prospects for China’s high-net-worth and middle-class households; the prospects of equipping our customer specialists with new technology, tools and financial knowledge; wavering investor confidence that could impact our business; and possible non-cash goodwill, intangible assets and investment impairments may adversely affect our net income. Further information regarding these and other risks is included in the Company’s filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F under “Forward-Looking Information” and “Risk Factors”. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

SOURCE China Finance Online Co., Ltd.

Artificial Intelligence

Leo Wang, CEO of Duotech, Addresses Impact of AI on Fintech Industry During Chinese New Year Speech

Published

2 months ago

February 22, 2024

Wladimir P.

Leo Wang, CEO of Duotech, delivered a captivating speech during the Chinese New Year festivities, shedding light on the transformative power of artificial intelligence (AI) in the fintech industry. Wang’s address resonated strongly with the young professional audience, who make up nearly 70% of Duotech’s staff strength.

Wang began his speech by highlighting the significant impact AI has had on the fintech industry over the last few years. Citing recent statistics from industry reports, he noted that AI adoption in finance has surged, with an estimated 89% of financial services firms globally using AI in some form.

“The fintech landscape has undergone a profound transformation fuelled by AI technologies,” Wang stated. “From algorithmic trading to fraud detection, AI has revolutionised traditional financial practices, enhancing efficiency, accuracy, and security.”

Wang referenced another study which revealed that AI-powered solutions have contributed to a 20% reduction in costs and a 30% increase in revenue for financial institutions. “These statistics underscore the tangible benefits AI brings to the table, driving innovation and profitability in the fintech sector,” Wang added.

In his speech, Wang encouraged the younger generation to embrace AI technologies, emphasising the immense opportunities for growth and innovation in the evolving fintech landscape. He urged them to stay up to date on industry advancements and leverage AI skills to drive positive change within their organisations.

Furthermore, Wang showcased Duotech’s cutting-edge AI solutions tailored for the finance industry, designed to enhance trading strategies, bolster cybersecurity, and streamline compliance processes.

Wang concluded his speech by reaffirming Duotech’s commitment to driving innovation in the fintech industry through AI-powered solutions. “At Duotech, we’re dedicated to leveraging AI to revolutionise finance and empower the younger generation to shape the future of our industry,” he said.

Artificial Intelligence

WeLASER, CLOSER TO PESTICIDE-FREE AGRICULTURE

Published

4 months ago

December 18, 2023

Wladimir P.

After 3 years of work, an international partnership has realised a precision weeding tool proving that herbicide free agriculture is at hand.

The partnership formed by research centres, universities, private companies and farmers’ organisations from Spain, Germany, Denmark, France, Poland, Belgium, Italy and the Netherlands, by WeLASER project funded by the EU within its “Horizon 2020” programme, has completed the first stage of the development of the a precision weeding prototype tool that allows progress in eradicating the use of herbicides, improving the productivity and competitiveness of crops, thus eliminating health risks and the adverse environmental effects of chemicals.

The prototype includes an autonomous vehicle that drives through the crop and is equipped with an advanced detection system based on artificial intelligence (AI) through image acquisition and data processing, which allows it to distinguish and localize the centre of growth of the weed to be eradicated. Once targeted through the scanner, it directs the high-powered fibre laser source to that meristem. This fast modulation concept allows precise energy pulses to be directed for highly efficient weed treatment. Data management are managed by a cloud computing architecture and the system includes the IoT technology.

Although this project is currently concluding this first phase of development, further work will be needed, for example, to reduce the time required to work in the field, to make the prototype easier to handle and connect, and to reduce production costs in order to achieve a marketable model on the market.

A project of maximum cooperation between entities from all over Europe

WeLASER is the result of the cooperation of 10 partners from 8 EU member states. On the Spanish side, the Centro de Automática y Robótica (CAR) belonging to the Consejo Superior de Investigaciones Científicas (CSIC) and coordinator of the project and the Coordinadora de Organizaciones de Agricultores y Ganaderos (COAG); on the German side, the Laser Zentrum Hannover e.V. (LZH) and the company Futonics Laser GmbH (FUT); from Denmark, the Department of Plant and Environmental Sciences of the University of Copenhagen (CPH); from France, the company AgreenCulture (AGC); from Italy, the Interdepartmental Centre for Industrial Agri-Food Research of the University of Bologna (UNIBO); from Poland, the Instytut Ekologii Terenów Uprzemysłowionych (Institute of Ecology of Industrial Areas) (IETU) in Katowice; from Belgium, the Department of Agricultural Economics of the Faculty of Biosciences Engineering of the University of Ghent; and from the Netherlands (UGENT), Van Den Borne Projecten BV, the innovation department of the Van Den Borne Aardappelen (VDBP) farm located in Reusel.

For Pablo González de Santos, from the CSIC’s Centro de Automática y Robótica, coordinator of the project, “WeLASER has been a perfect collaboration between leading organisations in each of their fields of work, which has made it possible to have the latest technologies and advances necessary for the development of such a cutting-edge and necessary project”.

Beyond the development of the prototype, this project has resulted in the development of different innovations with multiple applications such as a high-power fibre laser source for the control of adventitious weeds through precise energy pulses, with an innovative pump and cooling concept that minimises the energy demand of the laser for the weeding process; an improved power supply system for autonomous robotic platforms; an intelligent navigation manager for autonomous robots applicable to precision farming that enables navigation throughout the farm, not limited exclusively to the crop field and integrates different Artificial Intelligence (AI) methodologies to identify various types of crops, including wide and narrow crops; and an AI-based laser weed control implement that enables a wide working range for individualised plant treatment in crops of different types, while complying with all safety regulations required for working with laser technology.

Ensuring food production on a safe planet

Faced with an increasingly growing population in an environment of climate change like the one we live in, humanity´s great challenge is how to guarantee food production without harming the environment or the health of the population with increasingly efficient and less polluting production systems.

In Europe alone, around 130 million tonnes of synthetic herbicides are used each year (not counting other chemicals), substances which, when applied, do not discriminate between beneficial plants and insects in the soil that are not their target and which, moreover, can have effects on the health of animals and humans.

In addition, weeds are developing resistance, which means that existing herbicides are becoming less and less effective.

For González de Santos, “The WeLASER consortium is motivated to adopt smarter farming methods and build more sustainable food production systems while preserving the environment and health. WeLASER opens up a reliable and safe option and offers breakthroughs to solve a global problem”.

Artificial Intelligence

Huawei and MDES Signed MoU to Establish Thailand as a Regional AI Hub

Published

4 months ago

December 18, 2023

Wladimir P.

Huawei Cloud Thailand, in collaboration with Thailand’s Ministry of Digital Economy and Society (MDES), today hosted the Huawei Cloud AI Summit Thailand 2023. The event brought together hundreds of government representatives, industry experts, local customers, partners, and Chinese enterprises to discuss Thailand’s AI development and digital transformation. During the summit, Huawei Cloud and MDES signed a memorandum of understanding (MoU) on digital development with the aim to provide support towards AI development, industry applications, ecosystem building, and talent cultivation. This partnership will help Thailand establish itself as a regional AI hub through digitalization.

In his keynote address, H.E. Mr. Prasert Jantararuangtong，Minister of Digital Economy and Society of Thailand, explained that MDES aims to drive forward Cloud-First policies as the new growth engine of Thailand and believes that cloud and AI are the future of the country: “As a representative from MDES, I would like to thank Huawei Thailand for taking the leading role within the private sector in setting up this important event and bringing the global experience of Huawei and its partners to Thailand, as well as for helping foster the country’s cloud and AI digital ecosystems. Through cooperation with private sector partners like Huawei, we will continue to promote Thailand as an AI hub of the region. MDES will fully support the country to accelerate digital transformation, cultivate talents, achieve economic sustainability, and enhance the overall quality of life for Thai people.”

Sarana Boonbaichaiyapruck, Clinical Professor and Chairman of National Broadcasting and Telecommunications Commission (NBTC), stated that the event witnessed the fast development of cloud and AI technology. As a Thai regulator, NBTC will take could and AI into consideration for policy making to digitalize the Thai society and economy.

In Thailand, for Thailand: Establishing Thailand as a Regional AI Hub

AI stands as a driving force behind the current wave of global technological advancements and industry transformations, creating a profound impact on human society and reshaping industries. By recognizing AI’s transformative potential, Thailand remains committed to enhancing its global competitiveness by strengthening its AI capabilities and becoming a regional AI hub. Huawei Cloud is proud to support this vision through its ‘In Thailand, for Thailand‘ commitment.

David Li, CEO of Huawei Thailand, highlighted Huawei Cloud’s commitment to enabling cloud and AI development in Thailand: “Huawei Cloud is firmly dedicated to its ‘In Thailand, for Thailand‘ commitments and has personally witnessed, contributed to, and benefitted from Thailand’s digitalization over the past two decades. Thailand now finds itself at a critical juncture in its digital transformation journey. Recognizing this, Huawei Cloud remains steadfast in its commitment to invest in the local cloud ecosystem and its capabilities. By building a robust digital foundation in Thailand and constructing AI infrastructure for the government and enterprises, Huawei Cloud is empowering the nation to harness the transformative power of AI. This will in turn lead to the proliferation of AI applications across industries, ultimately benefiting Thai people and driving the country’s digital progress.”

At the summit, Huawei Cloud served as a bridge between Chinese and Thai enterprises with the aim of empowering Thailand with advanced AI technologies, applications, and expertise from China. By leveraging its extensive localization experiences in over 170 countries and regions, Huawei Cloud is ready to provide valuable insights into global and regional industries and now stands as the preferred partner for Thai enterprises seeking global expansion and for Chinese enterprises venturing into the Thai market.

Huawei Cloud: A Better Cloud for Thailand

With its cutting-edge technologies and industry expertise, Huawei Cloud aims to build the cloud foundation for an intelligent future, providing better options for each customer. At the summit, Huawei Cloud showcased a range of cutting-edge AI solutions and models specifically tailored to Thailand’s needs, including models for the Thai language, meteorology, government, and AI solutions for the finance and retail sectors.

Huawei Cloud’s government model brings intelligence to government processes and city affairs, from perception and understanding to handling and decision-making. Citizen’s requests can be assigned automatically and managed round the clock, enabling governments to deliver high-quality services without concerns about human resource shortages.

The Thai language model, trained on Thai corpus and converged with Huawei’s industry knowledge accumulated over three decades, continuously optimizes by learning massive amounts of the Thai language data. This breakthrough removes language barriers to accessing foundation models, allowing Thailand to transition from an AI user to an AI creator.

In meteorology, Huawei Cloud collaborated with the Thai Meteorological Department to develop its Pangu weather model for Thailand in an endeavor to deepen the digitization of Thailand’s agricultural and tourism sectors. The model has already surpassed current state-of-the-art numerical weather prediction (NWP) methods with prediction speeds several orders of magnitude faster. In the past, predicting the trajectory of a typhoon for the next 10 days took 5 hours. Now, the Pangu weather model can do the same calculations in just 10 seconds.

Talent is indispensable for AI transformation, but their acquisition requires concerted efforts from both the public and private sectors. At the summit, Huawei Cloud, MDES, the Digital Economy Promotion Agency (depa), universities such as Chulalongkorn University, AI associations, enterprises, and partners came together to launch the Cloud & AI Community Thailand. This collaborative initiative aims to nurture AI technology development and cooperation, ultimately elevating Thailand’s presence in the global AI landscape.

Equipped with a robust portfolio of innovative AI technologies, extensive industry expertise, and exceptional customer service, Huawei Cloud is poised to support Thailand in its quest to become a prominent AI hub in the region. Through sustained investments in the local ecosystem and industries, Huawei Cloud demonstrates its unwavering commitment to fostering the high-quality growth of Thailand’s digital economy.