China Finance Online Co. Limited
Q2 2015 Earnings Call Transcript

Published: 15 Sep 2015

[Operator:]

Good day everyone and welcome to China Finance Online's Second Quarter and First Half 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. We'll be facilitating a question-and-answer session towards the end of this conference call. At this point, I would like to turn the call to Ms. Julie Zhu, please go ahead.

[Julie Zhu:]

Thank you, operator. Welcome to China Finance Online second quarter and first half 2015 earnings conference call. With us today are Mr. Zhiwei Zhao, Chairman and CEO; Mr. Jeff Wang, Director and CFO; and Mr. David Tan, Vice President of Strategy and Finance. Before we begin, I'll remind all listeners that throughout this call we may present statements that may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words believe, estimate, plans, expect, anticipate, project, target, optimistic, intend, aim, future, will or similar expressions are intended to identify forward-looking statements. All statements other than historical facts may be deemed forward-looking statements. These forward-looking statements are based on current expectations or beliefs including but not limited to statements concerning China Finance Online's operation, financial performance and condition. China Finance Online cautions that these statements by their nature involve risks and uncertainties and actual results may differ materially depending on a variety of important factors, including those discussed in China Finance Online's reports filed with the Securities and Exchange Commission from time-to-time. China Finance Online specifically disclaims any obligation to update the forward-looking information in the future. At this time, I would now like to turn the conference call over to Mr. Zhiwei Zhao, Chairman and CEO of China Finance Online for prepared remarks.

[Zhiwei Zhao:]

Good day, everyone. I am the Chairman and CEO of China Finance Online, Zhiwei Zhao. We are encouraged by our solid quarterly results and strong signs of traction of our business model. As of today, we have quadrupled our membership base from early July. The key metrics of our second quarter demonstrated strong sequential and year-over-year improvements from top-line to net profit. Our stock investment advisory platform, iTouGu, is well received by retail investors as well as grassroots and professional investment advisors across China. As of early July there were over 730 investment advisors began mentoring and advising retail investors. Despite the record volatility in the Chinese stock market the number of advisors on our platform has been rapidly growing to over 1,800. Retail investors can not only receive advice on stock picks but also review their mentors recommended portfolio and daily investment strategy. Due to the recent market complexity a large portion of retail investors realized that they lack adequate investment knowledge, discipline and judgment. We believe that we’re a forerunner in developing a platform of investment advisors in China. It is also worth mentioning that our financial portals, our data and trading systems and our commodities investment company which is in a transition to a high-net-worth asset management Company have all seen progress in user growth and activeness. In summary, we’re pleased to see our business lines working in tandem to create value for our users and members. We’re pleased with the results, yet we have a lot of work ahead of us. As the Chinese equity market is starting to get differentiated and market frenzy returning to rationality, we are seeing higher demand for investment advisory services. Our mission is to lead Chinese retail investors to a new age of educated investment decision and world appreciation making investment easier, it is our mission possible. With that, I now turn the call to our CFO, Jeff Wang, to go over our second quarter and first half 2015 financials. Thank you.

[Jeff Wang:]

Thank you, Zhiwei. First of all, let me review our second quarter and first half 2015 interim results. Please note that all financial numbers are represented in U.S. dollars and rounded to 1 decimal-point for approximation. Net revenues for the second quarter of 2015 were $23.1 million, an increase of 12.2% from $20.6 million for the corresponding period in 2014 and a increase of 68.7% from $13.7 million for the preceding period in 2015. The Company’s net revenues were categorized under (NYSE

[Operator:]

Thank you. Ladies and gentlemen, we'll now begin the question-and-answer session. [Operator Instructions]. The first question comes from the line of [indiscernible]. Please ask the question.

[Unidentified Analyst:]

Great conference guys, two quick questions. On the investment you exited during the quarter, I’m wondering how much did you invest and why did you decide to sell?

[Jeff Wang:]

Hi Dan. Yes, we sold minority shares in that non-core business in order to streamline our main core business line. So we bought those shares for a little over $1 million and sold those shares in the quarter for amounts of about $5.8 million.

[Unidentified Analyst:]

All right, and then why did your G&A expense grow up so much in the second quarter?

[Jeff Wang:]

Yes, in the second quarter due to the fluctuation of our stock price we did adjustment on the options expenses, so most of the increase was from the adjustments of the option expenses, otherwise our G&A expenses are mostly stable. We did -- we have installed a lot of measures to control the expenses.

[Unidentified Analyst:]

Thank you very much.

[Operator:]

We have now reached to end of our Q&A session I will turn the call back to Ms. Julie Zhu. Please go ahead.

[Julie Zhu:]

Thank you to all for participating in this earnings call and webcast. We look forward to speaking with you again.