UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF APRIL 2005
COMMISSION FILE NUMBER: 000-50975
CHINA FINANCE ONLINE CO. LIMITED
(Translation of registrant's name into English)
Room 610B, 6/ F Ping'an Mansion
No. 23 Financial Street
Xicheng District, Beijing 100032
China
(86-10) 6621-4728
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
FORM 20-F [X] FORM 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1):__________
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):__________
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
YES [ ] NO [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 2g3-2(b): 82- N.A. .
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The index of exhibits may be found at Page 2
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CHINA FINANCE ONLINE CO. LIMITED
Form 6-K
Table of Contents
PAGE
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Signature Page 3
Press release regarding first quarter 2005 results, dated April 29, 2005 Page 4
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CHINA FINANCE ONLINE CO. LIMITED
By: /s/ Jun Ning
-----------------------------------------
Name: Jun Ning
Title: Chairman of the Board of
Directors and Chief Executive Officer
Date: April 28, 2005
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CHINA FINANCE ONLINE REPORTS FIRST QUARTER 2005 RESULTS
(Beijing, China, April 29, 2005) China Finance Online Co. Limited (Nasdaq:
JRJC), a leading Chinese online financial information and listed company data
provider, today announced its financial results for the quarter ended March 31,
2005:
* Net revenues grew by 106% compared to the same period in 2004 to
US$1.93 million for the quarter.
* Net income grew by 146% compared to the same period in 2004 to US$1.28
million for the quarter. Basic and diluted income per ADS were each
US$0.06 for the quarter, basic and diluted income per share were each
US$0.01 for the quarter.
* Gross margin for the quarter was 94%, compared to 90% for the same
period in 2004. Net income margin was 66% for the quarter, compared to
56% for the same period in 2004.
FINANCIAL RESULTS
For the first quarter of 2005, China Finance Online reported net revenues of
US$1.93 million, an increase of 106% from US$934,000 for the same period in 2004
primarily due to continued growth in average subscription fee per subscriber, as
compared to the same period in 2004. Net revenues decreased by 7% from US$2.07
million in the fourth quarter of 2004, which is mainly attributable to the
negative impact of the prolonged weak Chinese stock market performance during
the first quarter of 2005. Revenue from our advertising related business for the
quarter contributed US$179,000, representing 9% of net revenues for the first
quarter of 2005.
Gross profit increased by 117% to US$1.81 million for the first quarter of 2005
from US$837,000 for the same period in 2004 because cost of revenues decreased
as a percentage of net revenues. Gross margin was 94% in the first quarter of
2005 compared with 90% for the same period in 2004 or 95% in fourth quarter of
2004.
Operating expenses for the first quarter of 2005 totalled US$721,000, an
increase of 123% from US$323,000 reported for the same period in 2004. This
increase is primarily the result of increases in our general and administrative
expenses, and to a lesser extent, contributed from sales and marketing expenses
and product development expenses. Total operating expenses were 37% of net
revenues for the first quarter of 2005, compared with 35% for the same period in
2004.
o General and administrative expenses for the quarter were US$357,000, an
increase of 401% from US$72,000 for the same period in 2004, which is
mainly due to the purchase of a domain name and reporting and other related
costs associated with our becoming a public company in the U.S. The
increase of the expense, to a lesser extent is also due to the staff
compensation as a result of the increased number of employees.
o Sales and marketing expenses for the quarter increased by 82% from
US$124,000 for the same period in 2004 to US$226,000. This increase is
largely the result of an increase in our advertising expenditures starting
from the second quarter of 2004 and an increase in the number of our
customer service and sales personnel to meet the increased subscription
demand.
o Product development expenses for the quarter were US$58,000, an increase of
59% from US$37,000 for the same period in 2004, primarily due to increases
in the salary and compensation expenses of personnel engaged in the
research, development and implementation of our new products.
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As a result of the foregoing, income from operations for the first quarter of
2005 was US$1.10 million, an increase of 114% from US$514,000 for the same
period in 2004 and a decrease by 24% from US$1.44 million for the previous
quarter. Net income for the first quarter of 2005 was US$1.28 million,
representing an increase of 146% from US$519,000 for the same period in 2004,
and a decrease of 31% from US$1.85 million in the previous quarter.
Net income margin for the first quarter of 2005 was 66%, compared to 56% for the
same period in 2004, and 89% in the previous quarter. The total income tax
expenses for the quarter were US$160,000 compared to the US$9,000 for the same
period in 2004. The difference is attributable primarily to the fact that CFO
Beijing was exempted from enterprise income tax in 2004 and will be subject to
12% enterprise income tax rate in 2005. Basic income per ADS was US$0.06, and
basic income per share was US$0.01 for the first quarter of 2005. Diluted income
per ADS was US$0.06, and diluted income per share was US$0.01 for the first
quarter of 2005.
The number of new subscribers for the first quarter of 2005 was 2,606,
representing a decrease of 78% from 11,745 for the same period in 2004. Repeat
subscribers for the first quarter of 2005 were 3,713, representing a decrease of
26% from 4,992 for the same period in 2004. Decreases in number of new
subscribers and in number of repeat subscribers were primarily due to further
weakening in China's stock markets during the first quarter of 2005.
Average subscription fee per subscriber, or ASF, for new subscribers increased
by 51% to US$208 for the first quarter of 2005 from US$138 for the same period
in 2004 but decreased by 27% from US$285 in the previous quarter. ASF for repeat
subscribers increased by 51% to US$238 for the first quarter of 2005 from US$158
for the same period in 2004 but decreased by 20% from US$297 in the previous
quarter. We believe that the decrease in our ASF quarter over quarter for both
new and repeat subscribers is primarily attributable to further weakening in
China's stock markets during the first quarter of 2005, which has dampened the
investors' interests in more expensive and more comprehensive products.
NEW PRODUCTS AND PARTNERSHIPS
In April, we signed framework cooperation agreements with China Construction
Bank (CCB), China Minsheng Banking (CMBC) and CITIC Industrial Bank (CITICIB).
According to the agreements, CCB, CMBC and CITICIB will help promote and market
our new service offering, Personal Finance, to their existing banking customers.
Personal Finance is our new proprietary financial service package. It combines
personal finance tools such as book keeping, financial report and payment alert
with comprehensive real time personal wealth management product information and
news. We expect to launch Personal Finance in early third quarter in 2005.
Since January 2005, we have signed more content co-branding partnerships with
high-traffic Chinese Internet portals such as tom.com, china.com and 21cn.com.
According to the arrangements we will embed our contents directly in our
partners' finance or securities channels. We believe that these sponsorships
will help our brand awareness and attract more users to our website.
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CONFERENCE CALL
China Finance Online's management team will host a conference call at 9:00PM
Eastern Standard Time on April 28, 2005 (or 9:00AM on April 29, 2005 in the
Beijing/HK time zone) following the announcement.
The conference call will be available on Webcast live and for replay at:
http://www.chinafinanceonline.com/investor/earning_releases.asp. The call will
be archived for 12 months at this website.
The dial-in details for the live conference call: U.S. toll free number
+1-877-847-0047, Hong Kong toll free number +852-3006-8191, Singapore toll free
number +800-852-3396; Password for all regions: 4429.
A replay of the call will be available from approximately 10:00PM Eastern Time
on April 28, 2005 (or 10:00AM April 29, 2005 in the Beijing/HK time zone) to
10:00PM Eastern Time on May 12, 2005(or 10:00AM May 13, 2005 in the Beijing/HK
time zone). The dial-in details for the replay: U.S. Toll Free Number
+1-877-847-0047, HK Toll Free Number +852- 3006-8191, Singapore Toll Free Number
800-852-3396, Passcode: 671054.
SAFE HARBOR STATEMENT
This announcement contains forward-looking statements. These statements are made
under the "safe harbor" provisions of the U.S. Private Securities Litigation
Reform Act of 1995. 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,
discussion of China Finance Online's strategic and operational plans, contain
forward looking statements. China Finance Online may also make written or oral
forward-looking statements in its periodic reports to the U.S. Securities and
Exchange Commission on forms 20-F and 6-K, etc., in its annual report to
shareholders, in press releases and other written materials and in oral
statements made by its officers, directors or employees to third parties.
Statements that are not historical facts, including statements about China
Finance Online's beliefs and expectations, are forward-looking statements.
Forward-looking statements involve inherent risks and uncertainties. A number of
important factors could cause actual results to differ materially from those
contained in any forward-looking statement. Potential risks and uncertainties
include, but are not limited to, China Finance Online's historical losses, its
limited operating history, declines or disruptions in the online financial
industry, the recurrence of SARS, China Finance Online's reliance on
relationships with Chinese stock exchanges and raw data providers, fluctuations
in quarterly operating results, failure to successfully compete against new and
existing competitors, and other risks outlined in China Finance Online's filings
with the U.S. Securities and Exchange Commission, including its registration
statement on Form F-1, as amended. China Finance Online does not undertake any
obligation to update any forward-looking statement, except as required under
applicable law.
ABOUT CHINA FINANCE ONLINE CO. LIMITED
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China Finance Online Co. Limited specializes in providing online financial and
listed company data and information in China. Through its website, www.jrj.com,
the company offers subscription-based service packages that integrate financial
and listed company data and information from multiple sources with features and
functions such as data and information search, retrieval, delivery, storage and
analysis. These features and functions are delivered through proprietary
software that is available by download.
For further information please contact:
Jing Wu
China Finance Online Co. Limited
Tel: (86-10) 6621-0425
Email: ir@jrj.com
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China Finance Online Co. Limited
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands of U.S. dollars, except per share data)
For the three months ended
Mar. 31 2005 Mar. 31 2004 Dec. 31 2004
(unaudited) (unaudited) (unaudited)
Gross revenues $1,940 $945 $2,097
Business tax (15) (11) (23)
----------- ---------- -----------
Net revenues 1,925 934 2,074
Cost of revenues (111) (97) (103)
----------- ---------- -----------
Gross profit 1,814 837 1,971
Operating expenses
General and administrative (357) (72) (172)
Product development (58) (37) (50)
Sales and marketing (226) (124) (245)
Stock-based compensation (80) (90) (66)
----------- ---------- -----------
Total operating expenses (721) (323) (533)
Income from operations 1,093 514 1,438
Interest income 343 14 217
Other expenses, net - - (1)
Income before income taxes 1,436 528 1,654
Income tax (expense) benefit (160) (9) 199
----------- ---------- -----------
Net income $1,276 $519 $1,853
Income attributable to
ordinary shareholders 1,276 519 1,853
Income per share
Basic 0.01 0.02 0.02
Diluted 0.01 0.01 0.02
Income per ADS
Basic 0.06 0.12 0.11
Diluted 0.06 0.03 0.09
Weighted average ordinary shares
Basic 99,329,933 22,123,600 87,940,639
Diluted 110,899,696 74,138,013 107,832,969
Weighed average ADSs
Basic 19,865,987 4,424,720 17,588,128
Diluted 22,179,939 14,827,603 21,566,594
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China Finance Online Co. Limited
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands of U.S. dollars)
Mar. 31 2005 Dec. 31 2004
(unaudited) (note)
ASSETS
Current assets:
Cash and cash equivalents 71,291 70,596
Account receivable 7 34
Income tax recoverable - 14
Prepaid expenses and other current assets 465 332
Deferred tax assets 308 386
Total current assets 72,071 71,362
Property and equipment, net 400 417
Rental deposit 43 31
Goodwill, net 51 51
Total assets 72,565 71,861
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Deferred revenue 2,941 3,487
Accrued expenses and other current liabilities 98 286
Income tax payable 82 -
Total current liabilities 3,121 3,773
Shareholders' equity
Ordinary shares 13 13
Additional paid in capital 64,190 64,175
Retained earnings 5,501 4,225
Deferred stock compensation (260) (325)
Total shareholders' equity 69,444 68,088
Total liabilities and shareholders' equity 72,565 71,861
Note: The information as of December 31, 2004 is derived from the audited
financial statements contained in the Company's annual report on Form 20-F.
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