GUANGZHOU, China, Dec. 13 /Xinhua-PRNewswire-FirstCall/ -- CNinsure Inc., (Nasdaq: CISG), a leading independent insurance agency and brokerage company operating in China, today announced its unaudited financial results for the third quarter ended September 30, 2007.(1)
Highlights for Third Quarter 2007
-- Total net revenues were RMB116.9 million (US$15.6 million),
representing an increase of 14.8% from the second quarter of 2007 and
124.8% from the third quarter of 2006
-- Net revenues from commissions and fees were RMB116.2 million (US$15.5
million), representing an increase of 14.2% from the second quarter
of 2007 and 124.7% from the third quarter of 2006
-- Net income was RMB42.4 million (US$5.7 million), representing an
increase of 28.9% from the second quarter of 2007 and 508.0% from the
third quarter of 2006
-- Basic and diluted net income per ADS were RMB 1.247 (US$0.166) and
RMB 1.244 (US$0.166), respectively.
Commenting on the third quarter results, Yinan Hu, Chairman and CEO of CNinsure stated: "We are encouraged by the strong top and bottom line growth achieved during the third quarter of 2007. CNinsure's leading position among professional insurance intermediaries in China and our unified operating platform give us extensive reach to distribute insurance products underwritten by many insurance companies operating in China. With an innovative entrepreneurial agent program, an extensive distribution network and a large customer database, I'm optimistic about our future growth prospects."
"Looking forward, we will remain focused on executing on our strategy of further expanding our property and casualty insurance business, developing new opportunities in the life insurance sector, and expanding our business through selective acquisitions and other measures," continued Mr. Hu, "Building upon our successful listing on the Nasdaq in October, we will continue to bring on top talent, expand our distribution networks and invest in the necessary technology and resources to further scale up our operating platform."
Financial Results for the Third Quarter of 2007
Total net revenues for the third quarter ended September 30, 2007 were RMB116.9 million (US$15.6 million), representing a 14.8% increase over RMB101.8 (US$13.6 million) for the preceding quarter, and a 124.8% increase from RMB52.0 million (US$6.9 million) for the third quarter in 2006, primarily reflecting the increase in revenues from commissions and fees.
Revenues from commissions and fees were RMB116.2 million (US$15.5 million) for the third quarter of 2007, representing an increase of 14.2 % as compared to RMB101.7 million (US$13.6 million) for the previous quarter and an increase of 124.7% as compared to RMB51.7 million (US$6.9 million) for the third quarter of 2006. We derive commissions and fees from the distributions of property and casualty and life insurance products. The substantial year-over-year increase was primarily attributable to the further expansion of our business and the fact that our commissions and fees in the third quarter of 2006 had experienced a temporary decline due to the introduction of mandatory third party automobile liability insurance by the PRC government.
Revenues from other service fees were RMB0.7 million (US$0.1 million) for the third quarter of 2007.
Total operating costs and expenses were RMB77.1 million (US$10.3 million) for the third quarter of 2007, representing growth of 8.8% as compared to RMB70.9 million (US$9.5million) for the previous quarter and an increase of 61.1% as compared to RMB47.9 million (US$6.4 million) for the third quarter of 2006.
Commissions and fees expenses were RMB62.2 million (US$8.3 million) for the third quarter of 2007, representing growth of 14.6% as compared to RMB54.3 million (US$7.2 million) for the previous quarter and an increase of 98.6% as compared to RMB31.3 million (US$4.2 million) for the third quarter of 2006, primarily due to the increase in the distribution of insurance products..
Selling expenses were RMB2.3 million (US$0.3 million) for the third quarter of 2007, representing growth of 16.8% as compared to RMB2.0 million (US$0.3 million) for the previous quarter and a decrease of 21.5% as compared to RMB3.0 million (US$0.4 million) for the third quarter of 2006. The quarter-over-quarter increase reflects results largely from the overall growth of our business. The year-over-year decrease was primarily due to decreases in office expenses following further centralization of management functions.
General and administrative expenses were RMB12.6 million (US$1.7 million) for the third quarter of 2007, representing a decrease of 13.8% as compared to RMB14.6 million (US$1.9 million) for the previous quarter and a decrease of 7.5% as compared to RMB13.6 million (US$1.8 million) for the third quarter of 2006. The quarter-over-quarter decrease was primarily due to the recognition of certain IPO-related expenses during the second quarter of 2007. The year-over-year decrease was primarily due to a decrease in share-based compensation expenses.
Operating margin was 34.0% for the third quarter of 2007 as compared with 30.4% for the previous quarter and 7.9% for the third quarter of 2006.
Interest income for the third quarter of 2007 was RMB2.7 million (US$0.4 million), representing an increase of 181.1% as compared to RMB1.0 million (US$0.1 million) for the previous quarter and an increase of 36.4% as compared to RMB2.0 million (US$0.4 million) for the third quarter of 2006. The increases resulted primarily from an increase in cash and cash equivalents arising from overall positive cash flows and increases in interest rates in China.
Net income was RMB42.4 million (US$5.7 million) for the third quarter of 2007, representing growth of 28.9% as compared to RMB32.9 million (US$4.4 million) for the previous quarter, and an increase of 508.0% as compared to RMB7.0 million (US$0.9 million) for the third quarter of 2006. Net margin was 36.3% for the third quarter of 2007 as compared to 32.3% for the previous quarter and 13.4% for the third quarter of 2006.
As of September 30, 2007, the Company had RMB419.9 million (US$56.0 million) in cash and cash equivalents.
Business Outlook
For the fourth quarter 2007, CNinsure expects its total net revenues to be between RMB135 million (US$18.0 million) and RMB150 million (US$20.0 million). This forecast reflects CNinsure's current and preliminary view, which is subject to change.
Conference Call
The Company will host a conference call to discuss the third quarter results at
Time: 8:00 pm Eastern Standard Time on December 13, 2007
or 9:00 am Beijing/Hong Kong Time on December 14, 2007
The Toll Free dial-in number:
US: 1866-549-1292
UK: 0808-234-6305
Singapore: 800-852-3576
Taiwan: 0080-185-6004
Hong Kong: 3005-2050
China (Mainland): 800-869-7678
China (Mainland) local dial-in number: 400-733-1511
Password: 573031#
A replay of the call will be available for three days as follows:
3005-2020 (Hong Kong)
+852-3005-2020 (international)
PIN number: 133470#
Additionally, a live and archived web cast of this call will be available at: http://www.corpasia.net/us/CISG/irwebsite/index.php?mod=event
(1) This announcement contains translations of certain Renminbi (RMB)
amounts into U.S. dollars (US$) at specified rates solely for the
convenience of the reader. Unless otherwise noted, all translations
from RMB to U.S. dollars are made at a rate of RMB7.4928 to US$1.00,
the effective noon buying rate as of September 28, 2007 in The City
of New York for cable transfers of RMB as certified for customs
purposes by the Federal Reserve Bank of New York.
About CNinsure Inc.
CNinsure is a leading independent insurance agency and brokerage company operating in China. CNinsure's distribution network reaches some of China's most economically developed regions and affluent cities. The Company distributes a wide variety of property and casualty and life insurance products underwritten by domestic and foreign insurance companies operating in China and provides insurance-related services.
Forward-looking Statements
This press release contains statements of a forward-looking nature. These statements 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, the management's quotations and "Business Outlook" 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 CNinsure and the industry. Potential risks and uncertainties include, but are not limited to, those relating to CNinsure's limited operating history, especially its limited experience in selling life insurance products, its ability to attract and retain productive agents, especially entrepreneurial 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 Chinese insurance industry, and its ability to compete effectively against its competitors. All information provided in this press release is as of December 13, 2007, and CNinsure undertakes no obligation to update any forward looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although CNinsure 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 CNinsure is included in CNinsure's filings with the U.S. Securities and Exchange Commission, including its registration statement on Form F-1.
CNinsure Inc.
Unaudited Condensed Consolidated Balance Sheets
As of As of As of
December September September
31, 2006 30, 2007 30, 2007
RMB RMB USD
(In thousands, except for shares
and per share data)
ASSETS:
Current assets
Cash and cash equivalents 223,926 419,873 56,037
Restricted cash 7,413 20,136 2,687
Accounts receivable 26,569 16,157 2,156
Insurance premium receivable 994 1,382 184
Other receivables, net 16,988 30,254 4,038
Amounts due from related parties 78,957 1,400 187
Other current assets 856 26,162 3,492
Total current assets 355,703 515,364 68,781
Non-current assets
Property, plant, and equipment, net 9,741 10,924 1,458
Goodwill 7,042 7,042 940
Intangibles 4,471 4,249 567
Deferred tax assets 2,365 3,958 528
Other 300 350 47
Total assets 379,622 541,887 72,321
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payables 14,275 38,501 5,138
Insurance premium payable 7,413 20,136 2,687
Other payables and accrued expenses 12,139 32,101 4,284
Accrued payroll 4,902 5,341 713
Income tax payable 798 1,795 240
Amounts due to related parties 3,679 2,394 320
Dividend payable 32,000 39,970 5,335
Current portion of long-term
borrowings 318 133 18
Total current liabilities 75,524 140,371 18,735
Non-current liabilities:
Long-term borrowings 237 78 10
Deferred tax liabilities 560 2,064 275
Total liabilities 76,321 142,513 19,020
Commitments and contingencies
Minority interests 13,717 15,858 2,116
Common stock 5,073 5,333 712
Additional paid-in capital 369,781 398,670 53,207
Accumulated (deficit) profit (85,091) (22,265) (2,971)
Accumulated other comprehensive loss (179) 1,778 237
Total owners' equity 289,584 383,516 51,185
Total liabilities and owners' equity 379,622 541,887 72,321
CNinsure Inc.
Unaudited Condensed Consolidated Statements of Operations
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2006 2007 2007 2006 2007
RMB RMB USD RMB RMB
(In thousands, except for shares and per share data)
Net revenues:
Commissions
and fees 51,700 116,154 15,502 158,243 288,477
Other service
fees 305 745 99 553 983
Total net
revenues 52,005 116,899 15,601 158,796 289,460
Operating
costs and
expenses:
Commissions
and fees (31,315) (62,205) (8,302) (84,636) (149,480)
Selling
expenses (2,973) (2,333) (311) (8,261) (6,529)
General and
administrative
expenses (13,585) (12,562) (1,677) (39,378) (38,477)
Total operating
costs and
expenses (47,873) (77,100) (10,290) (132,275) (194,486)
Income from
operations 4,132 39,799 5,311 26,521 94,974
Other income
(expense),
net:
Interest
income 1,964 2,679 358 3,560 4,659
Interest
expense (2) (4) (1) (30) (70)
Others, net (5) (62) (8) 5 (47)
Income before
income taxes 6,089 42,412 5,660 30,056 99,516
Income tax
benefit
(expense) 70 (812) (108) 112 (988)
Net income
before minority
interest 6,159 41,600 5,552 30,168 98,528
Minority interest 822 841 112 982 2,603
Net income 6,981 42,441 5,664 31,150 101,131
Net income per
share, basic 0.011 0.062 0.008 0.048 0.153
Net income per
share diluted 0.010 0.062 0.008 0.047 0.150
Net income per
ADS, basic 0.215 1.247 0.166 0.958 3.063
Net income per
ADS, diluted 0.210 1.244 0.166 0.943 2.995
Shares used in calculating net income per share
Basic 650,000,000 680,491,991 680,491,991 650,000,000 660,275,689
Diluted 666,399,739 682,136,595 682,136,595 660,577,708 675,435,546
