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CNinsure Reports Second Quarter and First Half 2013 Unaudited Financial Results
Financial Highlights for Second Quarter of 2013
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Total net revenues:
RMB421.3 million (US$68.6 million ), representing an increase of 2.8% from the corresponding period in 2012.
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Operating income:
RMB0.2 million (US$31,882 ) representing a decrease of 98.9% from the corresponding period in 2012.
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Non-GAAP operating income:
RMB10.4 million (US$1.7 million ), which excludes share-based compensation expenses, representing a decrease of 80.9% from the corresponding period in 2012.
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Net income attributable to the Company's shareholders:
RMB20.9 million (US$3.4 million ), representing a decrease of 36.3% from the corresponding period in 2012.
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Non-GAAP net income attributable to the Company's shareholders:
RMB31.1 million (US$5.1 million ), which excludes share-based compensation expenses, representing a decrease of 55.2% from the corresponding period in 2012.
-
Basic and diluted net income per ADS:
RMB0.42 (US$0.07 ) andRMB0.42 (US$0.07 ), respectively, representing decreases of 36.0% and 36.2%, respectively, from the corresponding period in 2012.
-
Non-GAAP basic and diluted net income per ADS:
RMB0.62 (US$0.10 ) andRMB0.62 (US$0.10 ), respectively, representing decreases of 55.1% and 55.2%, respectively, from the corresponding period in 2012.
Financial Highlights for First Half of 2013
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Total net revenues:
RMB822.6 million (US$134.0 million ), representing an increase of 10.1% from the corresponding period in 2012.
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Operating income:
RMB1.8 million (US$0.3 million ) representing a decrease of 96.8% from the corresponding period in 2012.
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Non-GAAP operating income:
RMB24.8 million (US$4.0 million ), which excludes share-based compensation expenses, representing a decrease of 74.5% from the corresponding period in 2012.
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Net income attributable to the Company's shareholders:
RMB42.0 million (US$6.8 million ), representing a decrease of 52.0% from the corresponding period in 2012.
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Non-GAAP net income attributable to the Company's shareholders:
RMB64.9 million (US$10.6 million ), which excludes share-based compensation expenses, representing a decrease of 49.4% from the corresponding period in 2012.
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Basic and diluted net income per ADS:
RMB0.84 (US$0.14 ) andRMB0.84 (US$0.14 ), respectively, representing decreases of 52.1% and 51.8%, respectively, from the corresponding period in 2012.
-
Non-GAAP basic and diluted net income per ADS:
RMB1.30 (US$0.21 ) andRMB1.30 (US$0.21 ), respectively, representing decreases of 49.2% and 49.0%, respectively, from the corresponding period in 2012.
Commenting on the second quarter financial results, Mr.
"While margins remained under pressure during the second quarter of 2013, largely as a result of rising labor costs and increased competition in the property and casualty (the "P&C") insurance market, we were excited to see the progress in the promotion and use of CNpad, which aims to enhance efficiency and reduce operating expenses for sales agents and the Company. During the second quarter of 2013, CNpad sparked growing enthusiasm with our sales agents, sales channel partners and underwriters looking for more cost-effective ways to conduct business. Pilot operations or internal testing of CNpad has been extended to a total of five provinces, and auto insurance products from 12 P&C insurance companies are now available through the system. The aggregate number of CNpad units sold exceeded 480 as of
The roll out of our comprehensive financial services strategy is also progressing well. We sold
Financial Results for the Second Quarter of 2013
Total net revenues were
Total operating costs and expenses were
Commissions and fees expenses were
Selling expenses were
General and administrative expenses were
(1) a decrease of 72.2% in share-based compensation expenses, from
(2) an increase of 39.2% in depreciation expense from
As a result of the foregoing factors, operating income was
Non-GAAP operating income, which excludes share-based compensation expenses was
Operating margin was 0.05% for the second quarter of 2013, compared with 4.4% for the corresponding period in 2012. Non-GAAP operating margin was 2.4% for the second quarter of 2013, compared with 13.4% for the corresponding period in 2012.
Interest income was
Income tax expense was
Net income attributable to the Company's shareholders was
Non-GAAP net income attributable to the Company's shareholders, which excludes share-based compensation expenses was
Net margin was 5.0% for the second quarter of 2013 compared with 8.0% for the corresponding period in 2012. Non-GAAP net margin was 7.4% for the second quarter of 2013 compared with 17.0% for the corresponding period in 2012.
Basic and diluted net income per ADS were
Non-GAAP basic and diluted net income per ADS were
Financial Results for the First Half of 2013
Total net revenues were
Total operating costs and expenses were
Commissions and fees expenses were
Selling expenses were
General and administrative expenses were
(1) a decrease of 43.7% in share-based compensation expenses, from
(2) an increase of 6.1% in payroll and social insurance expenses from
(3) an increase of 40.4% in depreciation expenses, from
As a result of the foregoing factors, operating income was
Non-GAAP operating income, which excludes share-based compensation expenses was
Operating margin was 0.2% for the first half of 2013, compared with 7.6% for the corresponding period in 2012. Non-GAAP operating margin was 3.0% for the first half of 2013, compared with13.1% for the corresponding period in 2012.
Interest income was
Income tax expense was
Net income attributable to the Company's shareholders was
Non-GAAP net income attributable to the Company's shareholders, which excludes share-based compensation expenses, was
Net margin was 5.1% for the first half of 2013 compared with 11.7% for the corresponding period in 2012. Non-GAAP net margin was 7.9% for the first half of 2013, compared with 17.2% for the corresponding period in 2012.
Basic and diluted net income per ADS were
Non-GAAP basic and diluted net income per ADS were
As of
Business Highlights:
-
As of
June 30, 2013 ,CNinsure's distribution and service network consisted of 479 sales and services outlets operating in 27 provinces, compared with 508 sales and service outlets operating in 23 provinces as ofJune 30, 2012 .CNinsure had 47,554 sales agents and representatives and 1,344 professional claims adjustors as ofJune 30, 2013 , compared with 47,162 sales agents and representatives, and 1,341 professional claims adjustors as ofJune 30, 2012 . The increase in the number of sales agents and professional claims adjustors was primarily a result of enhanced recruitment efforts during the second quarter of 2013 while the decrease in the number of sales outlets was primarily because we closed sales outlets that were less productive during the second and third quarters of 2012.
Business Outlook
Conference Call
The Company will host a conference call to discuss the second quarter and first half 2013 results at
Time:
or
The dial-in numbers:
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1-845-675-0438 |
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0800-015-9724 |
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1-855-757-1565 |
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0080-665-1951 |
| Hong Kong | 852-3051-2745 |
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400-120-0654 |
| Singapore & Other Areas | +65-6723-9385 |
A replay of the call will be available for three days by dialing the following number:
+ 61 2 8199 0299
Conference ID #: 27587592
Additionally, a live and archived web cast of this call will be available at:
http://ir.cninsure.net/events.cfm
About
Forward-looking Statements
This press release contains statements of a forward-looking nature. These statements, including the statements relating to the Company's future financial and operating results, 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 the Business Outlook section 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
About Non-GAAP Financial Measures
In addition to the Company's consolidated financial results under GAAP, the Company also provides non-GAAP financial measures, which are adjusted to exclude share-based compensation expenses. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company's performance and when planning and forecasting future periods. One limitation of using these non-GAAP financial measures is that these non-GAAP measures exclude the item that was significant in the second quarter of 2013 and the corresponding period of 2012. Another is that items such as share-based compensation expenses have been, and will continue to be, a significant recurring factor in our business.
In light of the limitations, the presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. We encourage investors and other interested persons to review our financial information in its entirety and not rely on a single financial measure. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures" set forth at the end of this release.
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
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| Unaudited Condensed Consolidated Balance Sheets | |||
| (In thousands) | |||
|
As of 2012 |
As of 2013 |
As of 2013 |
|
| RMB | RMB | US$ | |
| ASSETS: | |||
| Current assets: | |||
| Cash and cash equivalents | 2,525,618 | 2,315,545 | 377,284 |
| Restricted cash | 10,871 | 12,050 | 1,963 |
| Short term investments | 600 | 233,900 | 38,111 |
| Accounts receivable, net | 196,244 | 218,844 | 35,658 |
| Insurance premium receivables | 10 | 749 | 122 |
| Other receivables | 86,565 | 62,272 | 10,146 |
| Deferred tax assets | 4,942 | 4,996 | 814 |
| Amounts due from related parties | 151,785 | 136,644 | 22,264 |
| Other current assets | 17,265 | 20,242 | 3,298 |
| Total current assets | 2,993,900 | 3,005,242 | 489,660 |
| Non-current assets: | |||
| Property, plant, and equipment, net | 94,921 | 81,732 | 13,317 |
| Goodwill and intangible assets, net | 121,333 | 114,500 | 18,656 |
| Deferred tax assets | 3,967 | 6,349 | 1,034 |
| Investment in affiliates | 168,620 | 179,264 | 29,209 |
| Other non-current assets | 18,048 | 16,648 | 2,713 |
| Total non-current assets | 406,889 | 398,493 | 64,929 |
| Total assets | 3,400,789 | 3,403,735 | 554,589 |
| LIABILITIES AND EQUITY: | |||
| Current liabilities: | |||
|
Accounts payable (including accounts payable of the consolidated variable interest entities ("VIEs") without recourse to |
98,124 | 81,078 | 13,210 |
|
Insurance premium payables (including insurance premium payables of the consolidated VIEs without recourse to |
2,941 | 4,160 | 678 |
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Other payables and accrued expenses (including other payables and accrued expense of the consolidated VIEs without recourse to |
116,124 | 75,275 | 12,265 |
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Accrued payroll (including accrued payroll of the consolidated VIEs without recourse to |
42,317 | 35,508 | 5,785 |
|
Income tax payable (including income tax payable of the consolidated of VIEs without recourse to |
56,003 | 54,449 | 8,872 |
|
Amounts due to related parties (including amounts due to related parties of the consolidated of VIEs without recourse to |
3,030 | 3,030 | 494 |
| Total current liabilities | 318,539 | 253,500 | 41,304 |
| Non-current liabilities: | |||
| Other tax liabilities | 47,589 | 50,060 | 8,157 |
| Deferred tax liabilities | 26,754 | 25,281 | 4,119 |
| Total non-current liabilities | 74,343 | 75,341 | 12,276 |
| Total liabilities | 392,882 | 328,841 | 53,580 |
| Ordinary shares | 7,624 | 7,624 | 1,242 |
| Additional paid-in capital | 2,284,906 | 2,307,888 | 376,037 |
| Statutory reserves | 178,440 | 178,440 | 29,074 |
| Retained earnings | 527,542 | 569,495 | 92,791 |
| Accumulated other comprehensive loss | (104,132) | (107,819) | (17,568) |
|
Total |
2,894,380 | 2,955,628 | 481,576 |
| Noncontrolling interests | 113,527 | 119,266 | 19,433 |
| Total equity | 3,007,907 | 3,074,894 | 501,009 |
| Total liabilities and equity | 3,400,789 | 3,403,735 | 554,589 |
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||||||
| Unaudited Condensed Consolidated Statements of Income and Comprehensive Income | ||||||
| (In thousands, except for shares and per share data) | ||||||
|
For The Three Months Ended |
For The Six Months Ended |
|||||
| 2012 | 2013 | 2013 | 2012 | 2013 | 2013 | |
| RMB | RMB | US$ | RMB | RMB | US$ | |
| Net revenues: | ||||||
| Commissions and fees | 409,827 | 421,282 | 68,642 | 747,108 | 822,537 | 134,020 |
| Other service fees | 104 | 7 | 1 | 165 | 14 | 2 |
| Total net revenues | 409,931 | 421,289 | 68,643 | 747,273 | 822,551 | 134,022 |
| Operating costs and expenses: | ||||||
| Commissions and fees | (266,256) | (313,044) | (51,006) | (479,734) | (610,213) | (99,425) |
| Selling expenses | (20,995) | (24,364) | (3,970) | (39,675) | (44,467) | (7,245) |
| General and administrative expenses | (104,841) | (83,686) | (13,635) | (171,363) | (166,067) | (27,058) |
| Total operating costs and expenses | (392,092) | (421,094) | (68,611) | (690,772) | (820,747) | (133,728) |
| Income from operations | 17,839 | 195 | 32 | 56,501 | 1,804 | 294 |
| Other income, net: | ||||||
| Investment income | — | 1,320 | 215 | — | 1,320 | 215 |
| Interest income | 22,467 | 20,323 | 3,311 | 44,922 | 41,868 | 6,822 |
| Others, net | 2,234 | 1,533 | 250 | 3,131 | 1,642 | 268 |
| Income before income taxes and income of affiliates | 42,540 | 23,371 | 3,808 | 104,554 | 46,634 | 7,599 |
| Income tax expense | (14,392) | (5,802) | (945) | (28,097) | (12,035) | (1,961) |
| Share of income of affiliates | 4,894 | 5,310 | 865 | 9,419 | 10,644 | 1,734 |
| Net income | 33,042 | 22,879 | 3,728 | 85,876 | 45,243 | 7,372 |
| Less: net gain (loss) attributable to noncontrolling interests | 199 | 1,953 | 318 | (1,578) | 3,289 | 536 |
| Net income attributable to the Company's shareholders | 32,843 | 20,926 | 3,410 | 87,454 | 41,954 | 6,836 |
| Net income per share: | ||||||
| Basic | 0.03 | 0.02 | — | 0.09 | 0.04 | 0.01 |
| Diluted | 0.03 | 0.02 | — | 0.09 | 0.04 | 0.01 |
| Net income per ADS: | ||||||
| Basic | 0.66 | 0.42 | 0.07 | 1.75 | 0.84 | 0.14 |
| Diluted | 0.65 | 0.42 | 0.07 | 1.74 | 0.84 | 0.14 |
| Shares used in calculating net income per share: | ||||||
| Basic | 1,002,564,246 | 998,861,526 | 998,861,526 | 1,002,557,732 | 998,861,526 | 998,861,526 |
| Diluted | 1,004,316,034 | 1,002,321,530 | 1,002,321,530 | 1,006,123,724 | 1,002,278,510 | 1,002,278,510 |
| Net income | 33,042 | 22,879 | 3,728 | 85,876 | 45,243 | 7,372 |
| Other comprehensive income (loss), net of tax: Foreign currency translation adjustments | 1,874 | (2,931) | (478) | 2,093 | (3,686) | (601) |
| Comprehensive income | 34,916 | 19,948 | 3,250 | 87,969 | 41,557 | 6,771 |
| Less: Comprehensive income (loss) attributable to the noncontrolling interests | 199 | 1,953 | 318 | (1,578) | 3,289 | 536 |
|
Comprehensive income attributable to the |
34,717 | 17,995 | 2,932 | 89,547 | 38,268 | 6,235 |
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Unaudited Condensed Consolidated Statements of |
||||||
| (In thousands) | ||||||
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For The Three Months Ended |
For The Six Months Ended |
|||||
| 2012 | 2013 | 2013 | 2012 | 2013 | 2013 | |
| RMB | RMB | US$ | RMB | RMB | US$ | |
| OPERATING ACTIVITIES | ||||||
| Net income | 33,042 | 22,879 | 3,728 | 85,876 | 45,243 | 7,372 |
| Adjustments to reconcile net income to net cash generated from operating activities: | ||||||
| Depreciation | 6,587 | 8,073 | 1,315 | 13,337 | 16,009 | 2,608 |
| Amortization of intangible assets | 3,806 | 3,416 | 557 | 7,834 | 6,832 | 1,113 |
| Allowance for doubtful receivables | 1,497 | 447 | 73 | 2,513 | 1,196 | 195 |
| Compensation expenses associated with stock option | 36,702 | 10,202 | 1,662 | 40,799 | 22,982 | 3,745 |
| Gain on disposal of property, plant and equipment | (36) | (16) | (3) | (36) | (16) | (3) |
| Share of income of affiliates | (4,894) | (5,310) | (865) | (9,419) | (10,644) | (1,734) |
| Changes in operating assets and liabilities | (4,868) | 11,900 | 1,939 | (66,940) | (38,411) | (6,258) |
| Net cash generated from operating activities | 71,836 | 51,591 | 8,406 | 73,964 | 43,191 | 7,038 |
| Cash flows used in investing activities: | ||||||
| Purchase of property, plant and equipment | (4,472) | (27,221) | (4,435) | (6,195) | (32,719) | (5,331) |
| Proceeds from disposal of property and equipment | 390 | 16 | 3 | 577 | 30 | 5 |
| Proceeds from disposal of short term investments | 57,450 | 600 | 97 | 71,080 | 600 | 97 |
| Purchase of short term investments | (40,600) | (138,900) | (22,632) | (40,600) | (233,900) | (38,111) |
| Disposal of subsidiaries, net of cash | (80) | — | — | (33) | — | — |
| Increase in restricted cash | (2,577) | (1,013) | (165) | (1,923) | (1,179) | (192) |
| Increase in other receivables | (3,400) | — | — | (3,400) | — | — |
| Addition in investment in non-current assets | — | — | — | (1,948) | — | — |
| Return of investment in non-current assets | 300 | — | — | 1,300 | — | — |
| Refund of contingent consideration | — | 4,500 | 733 | 12,500 | 4,500 | 733 |
| Decrease (increase) in amounts due from related parties | 70,677 | (29,431) | (4,795) | 163,368 | 10,640 | 1,734 |
| Net cash generated from (used in) investing activities | 77,688 | (191,449) | (31,194) | 194,726 | (252,028) | (41,065) |
| Cash flows (used in ) generated from financing activities: | ||||||
| Acquisition of additional interest in subsidiaries | (20,455) | — | — | (20,455) | — | — |
| Capital injection by noncontrolling interests | 4,830 | — | — | 11,360 | 2,450 | 399 |
| Proceeds on exercise of stock options res | — | — | — | 48 | — | — |
| Net cash (used in) generated from financing activities | (15,625) | — | — | (9,047) | 2,450 | 399 |
| Net increase (decrease) in cash and cash equivalents | 133,899 | (139,858) | (22,788) | 259,643 | (206,387) | (33,628) |
| Cash and cash equivalents at beginning of period | 2,348,123 | 2,458,334 | 400,550 | 2,222,160 | 2,525,618 | 411,513 |
| Effect of exchange rate changes on cash and cash equivalents | 1,874 | (2,931) | (478) | 2,093 | (3,686) | (601) |
| Cash and cash equivalents at end of period | 2,483,896 | 2,315,545 | 377,284 | 2,483,896 | 2,315,545 | 377,284 |
| Interest paid | — | — | — | — | — | — |
| Income taxes paid | 15,603 | 5,275 | 859 | 44,885 | 14,772 | 2,407 |
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| Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures | |||
| (In RMB in thousands, except shares and per share data) | |||
|
For The Three Months Ended |
|||
| GAAP | < 1 > | Non-GAAP | |
| Operating income | 17,839 | 36,702 | 54,541 |
| Operating margin | 4.4% | 9.0% | 13.4% |
| Net income attributable to the Company's shareholders | 32,843 | 36,702 | 69,545 |
| Net margin | 8.0% | 9.0% | 17.0% |
| Shares used in calculating basic net income per share | 1,002,564,246 | — | 1,002,564,246 |
| Basic net income per ADS | 0.66 | 0.73 | 1.39 |
| Shares used in calculating diluted net income per share | 1,004,316,034 | — | 1,004,316,034 |
| Diluted net income per ADS | 0.65 | 0.73 | 1.38 |
|
For The Three Months Ended |
|||
| GAAP | < 1 > | Non-GAAP | |
| Operating income | 195 | 10,202 | 10,397 |
| Operating margin | 0.0% | 2.4% | 2.4% |
| Net income attributable to the Company's shareholders | 20,926 | 10,202 | 31,128 |
| Net margin | 5.0% | 2.4% | 7.4% |
| Shares used in calculating basic net income per share | 998,861,526 | — | 998,861,526 |
| Basic net income per ADS | 0.42 | 0.20 | 0.62 |
| Shares used in calculating diluted net income per share | 1,002,321,530 | — | 1,002,321,530 |
| Diluted net income per ADS | 0.42 | 0.20 | 0.62 |
| < 1 > share-based compensation expenses. | |||
|
For The Six Months Ended |
|||
| GAAP | < 1 > | Non-GAAP | |
| Operating income | 56,501 | 40,799 | 97,300 |
| Operating margin | 7.6% | 5.5% | 13.1% |
| Net income attributable to the Company's shareholders | 87,454 | 40,799 | 128,253 |
| Net margin | 11.7% | 5.5% | 17.2% |
| Shares used in calculating basic net income per share | 1,002,557,732 | — | 1,002,557,732 |
| Basic net income per ADS | 1.75 | 0.81 | 2.56 |
| Shares used in calculating diluted net income per share | 1,006,123,724 | — | 1,006,123,724 |
| Diluted net income per ADS | 1.74 | 0.81 | 2.55 |
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For The Six Months Ended |
|||
| GAAP | < 1 > | Non-GAAP | |
| Operating income | 1,804 | 22,982 | 24,786 |
| Operating margin | 0.2% | 2.8% | 3.0% |
| Net income attributable to the Company's shareholders | 41,954 | 22,982 | 64,936 |
| Net margin | 5.1% | 2.8% | 7.9% |
| Shares used in calculating basic net income per share | 998,861,526 | — | 998,861,526 |
| Basic net income per ADS | 0.84 | 0.46 | 1.30 |
| Shares used in calculating diluted net income per share | 1,002,278,510 | — | 1,002,278,510 |
| Diluted net income per ADS | 0.84 | 0.46 | 1.30 |
| < 1 > share-based compensation expenses. | |||
CONTACT:Source:Oasis Qiu Investor Relations Manager Tel: +86 (20) 6122-2731 Email: qiusr@cninsure.net
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