Stock Buzz: China Finance Online Co. Limited (NASDAQ: JRJC)

On Wednesday, Shares of China Finance Online Co. Limited (NASDAQ: JRJC) showed no change to $1.58. The stock traded total volume of 4,743 shares lower than the average volume of 25.27K shares.

China Finance Online Co. Limited (NASDAQ GS: JRJC), a leading web-based financial services company, recently declared its unaudited financial results for the second quarter and first six months ended June 30, 2018.

Second Quarter 2018 Financial Results:

Net revenues were $12.90M, contrast with $9.60M during the second quarter of 2017 and $13.30M during the first quarter of 2018. During the second quarter of 2018, revenues from financial services, the financial information and advisory business, and advertising services contributed 46%, 44% and 9% of the net revenues, respectively, contrast with 67%, 20% and 10%, respectively, for the corresponding period in 2017.

Revenues from financial services were $6.00M, contrast with $6.40M during the second quarter of 2017 and $6.70M during the first quarter of 2018. Revenues from financial services consist mainly of equity brokerage services. The equity brokerage business grew 21.8% year-over-year. The year-over-year decrease in revenues from financial services was mainly because of a decline in revenues from the Company’s commodities brokerage services after the suspension of new commodities trading by the precious metal exchange in China in 2017. Revenues from the commodities brokerage were $1.60M, or 17% of total revenues, in the second quarter of 2017.

Revenues from the financial information and advisory business were $5.70M, a boost of 187.5% from $2.00M during the second quarter of 2017 and a boost of 15.5% from $4.90M in the first quarter of 2018. Revenues from the financial information and advisory business were mainly comprised of subscription services from individual and institutional customers. During the second quarter, subscription revenues from individual customers grew by 1774.6% year-over-year and 62.7% quarter-over-quarter, driven by the increased subscription of the Company’s cloud-based analytical tools. The year-over-year and quarter-over-quarter increases of revenues from the financial information and advisory business were mainly because of a boost in subscription revenues from individual customers.

Revenues from advertising services were $1.20M, contrast with $0.90M in the second quarter of 2017 and $1.70M in the first quarter of 2018. The increased traffic to our site and readership recognition of our premium content assisted to elevate our advertising revenues on a year-over-year basis.

Gross profit was $8.50M, contrast with $5.10M in the second quarter of 2017 and $8.20M in the first quarter of 2018. Gross margin in the second quarter of 2018 was 65.5%, contrast with 52.9% in the second quarter of 2017 and 61.9% in the first quarter of 2018. The year-over-year and quarter-over-quarter increases in gross margin were mainly because of revenue mix changes associated with the growth of the financial information and advisory business, which carries a higher margin.

General and administrative expenses were $3.00M, a decrease of 22.3% from $3.90M in the second quarter of 2017, and a decrease of 7.7% from $3.30M in the first quarter of 2018. The year-over-year decrease was mainly because of the suspended operations of the commodities brokerage services, and the quarter-over-quarter decrease was mainly attributable to more stringent expense control measures and streamlined operations.

Sales and marketing expenses were $6.60M, a decrease of 10.2% from $7.30M in the second quarter of 2017, and a boost of 5.5% from $6.20M in the first quarter of 2018. The year-over-year decrease was mainly attributable to the reduction in headcount and rental expenses associated with the terminated commodity brokerage operation.

Research and development expenses were $3.80M, a decrease of 11.5% from $4.30M in the second quarter of 2017 and with no noteworthy difference from $3.80M in the first quarter of 2018. The year-over-year decrease was mainly attributable to improved efficiency after the consolidation of the R&D team. 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 $13.40M, a decrease of 15.2% from $15.70M in the second quarter of 2017, and no noteworthy difference from $13.30M in the first quarter of 2018. The year-over-year decrease was mainly because of improved operational efficiency and effective cost controls.

Loss from operations was $4.90M, contrast with a loss from operations of $10.70M in the second quarter of 2017 and a loss from operations of $5.00M in the first quarter of 2018.

Net loss attributable to China Finance Online was $4.30M, contrast with a net loss of $8.30M in the second quarter of 2017 and a net loss of $5.20M in the first quarter of 2018.

First Six Months of 2018 Financial Results:

Net revenues for the first six months of 2018 were $26.20M, a boost of 43.3% contrast with $18.30M in the first six months of 2017.

Gross profit for the first six months of 2018 was $16.70M, a boost of 83.2% contrast with $9.10M in the first six months of 2017.

Net loss attributable to China Finance Online for the first six months of 2018 was $9.50M, contrast to a net loss of $19.90M in the first six months of 2017. Fully diluted loss per ADS attributable to China Finance Online was $0.42 for the first six months of 2018, contrast with fully diluted loss of $0.88 for the first six months of 2017.

As of June 30, 2018, total cash and cash equivalents, restricted cash and short-term investments were $17.00M.

Total shareholders’ equity of China Finance Online was $45.40M as of June 30, 2018.

JRJC has the market capitalization of $37.34M and its EPS growth ratio for the past five years was -24.30%. The return on assets ratio of the Company was -25.00% while its return on investment ratio stands at -78.90%. Price to sales ratio was 0.74 while 8.00% of the stock was owned by institutional investors.

Michelle Smith

Michelle Smith

I am Michelle Smith and I give “Stocks Market Cap” an insight into the most recent news hitting the “Technology” sector in Wall Street. I have been an independent financial adviser for over 11 years in the city and in recent years turned my experience in finance and passion for journalism into a full time role. I perform analysis of Companies and publicize valuable information for shareholder community.

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