CNinsure Inc. |
||||
By: | /s/ Peng Ge | |||
Name: | Peng Ge | |||
Title: | Chief Financial Officer | |||
IR-119 |
| Total net revenues: RMB313.7 million (US$47.9 million),
representing an increase of 28.3% from the corresponding
period of 2010. |
|
| Operating Income: RMB88.7 million (US$13.6 million),
representing an increase of 33.8% from the corresponding
period of 2010. |
|
| Net income from continuing operations: RMB80.1 million
(US$12.2 million), representing an increase of 23.1%
from the corresponding period of 2010. After
incorporating net income from discontinued
operations2 of RMB157.3 million (US$24.0
million), total net income was RMB237.4 million (US$36.3
million), representing an increase of 240.0% from the
corresponding period of 2010. |
|
| Excluding net income from discontinued operations,
investment income incurred by business combination
achieved in stages, net of tax and share-based
compensation expense, adjusted net income attributable
to the Companys shareholders (non-GAAP): RMB81.1 million
(US$12.4 million), representing an
increase of 36.4% from the corresponding period of 2010. |
|
| Basic and diluted net income per American Depositary
Share (ADS): RMB4.796 (US$0.732) and RMB4.693
(US$0.717), respectively, representing an increase of
224.9% and 228.4%, respectively, from the corresponding
period of 2010. |
1 | This announcement contains translations of
certain Renminbi (RMB) amounts into U.S. dollars (US$) 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 RMB6.5483 to
US$1.00, the effective noon buying rate as of March 31, 2011 in The City of New
York for cable transfers of RMB as set forth in H.10 weekly statistical release
of the Federal Reserve Board. |
|
2 | Following the sale of Beijing Datong Investment
Management Co., Ltd. (Datong), a company primarily engaged in the
distribution of life insurance products, to Winner Sight Global Limited, an
affiliated entity of Warburg Pincus LLC, the Company is required to present its
financial results on a continuing and discontinued basis. Profits and losses
related to Datong are presented as discontinued operations while profits and
losses for the remaining business are presented as continuing operations. |
IR-119 |
| Basic and diluted net income per ADS from continuing operations: RMB1.665 (US$0.254)
and RMB1.629 (US$0.249), respectively, representing an increase of 21.3% and 22.6%,
respectively, from the corresponding period of 2010. |
||
| Basic and diluted net income per ADS from discontinued operations: RMB3.131
(US$0.478) and RMB3.064 (US$0.468), respectively, representing an increase of 2,913.7% and
2,945.8%, respectively, from the corresponding period of 2010. |
IR-119 |
(1) | an increase of 107.4% in amortization of intangible assets from RMB3.3 million for the first
quarter of 2010 to RMB6.7 million (US$1.0 million) for the first quarter of 2011, largely as a
result of the acquisitions made since the second quarter of 2010; |
(2) | an increase of 72.7% in depreciation of fixed assets from RMB3.0 million for the first
quarter of 2010 to RMB5.2 million (US$0.8 million) for the first quarter of 2011, largely as a
result of the operation of the upgraded IT system in more affiliated entities in the first
quarter of 2011; |
(3) | an increase of 22.8% in payroll expense from RMB18.2 million for the first quarter of 2010 to
RMB22.3 million (US$3.4 million) for the first quarter of 2011, largely as a result of the
raise in salary for employees starting from the first quarter of 2011. |
IR-119 |
IR-119 |
| On May 20, 2011, the Companys Board of Directors approved the establishment of a
trust fund for employees and sales agents to invest in investment products,
including but not limited to, the Companys stocks on the open market, the shares
of the Companys affiliated subsidiaries, or low risk wealth management products.
The trust fund will be under custody by a third party custodian and will be funded
by advances from the Company. Such advances will be settled by employees
and sales agents, who are the beneficiaries of the trust fund, over the benefit period. |
|
| On May 16, 2011, the Company announced that its Board of Directors had received a
preliminary non-binding proposal letter dated May 14, 2011, from TPG Asia V MU,
Inc., Kingsford Resources Limited, a company controlled by Mr. Yinan Hu, chairman
of the Board of Directors and chief executive officer of the Company, and entities
affiliated with him (collectively, the Founder), and CDH Inservice Limited
(CDH), to acquire all of the outstanding ordinary shares of the Company, other
than certain ADSs or ordinary shares held by the Founder and CDH, in a going
private transaction for $19.00 per ADS, or $0.95 per ordinary share, in cash,
subject to certain conditions. |
|
| On April 29, 2011, CNinsure entered into a strategic partnership agreement with
Tianping Auto Insurance Co., Ltd., pursuant to which, both parties agree to work
closely on auto insurance distribution, outsourcing of claims adjusting services
and other business such as online product distribution. |
|
| On April 28, 2011, the Companys board of directors approved the grant of options
to purchase an aggregate of 28,400,000 ordinary shares of the Company to various
directors, officers and employees. The exercise price of these options is US$0.734
per ordinary share, equal to the closing price of the Companys ADS on the Nasdaq
Global Select Market at the grant date (after adjusting for the 20 ordinary shares
to 1 ADS ratio). The options granted will vest over a four-year period starting
from March 31, 2012. |
|
| On April 19, 2011, Fanhua Shiji Insurance Sales Co., Ltd (Fanhua Shiji), which
will be engaged in the distribution of property & casualty insurance business, was
granted an insurance agency license for nation-wide operation by the China
Insurance Regulatory Commission. Fanhua Shiji, which is still in the process of
completing the procedures for its establishment, will be indirectly wholly-owned
by CNinsure through its affiliated subsidiaries. It will have a registered capital
of RMB50 million and headquartered in Shenzhen. Previously, CNinsure obtained a
nationwide operating license for one affiliated life insurance agency which is
indirectly wholly owned by CNinsure through its affiliated subsidiaries. |
|
| As of March 31, 2011, CNinsures distribution and service network consisted of 534
sales and services outlets operating in 23 provinces, compared to 519 sales and
service outlets3 operating in 23 provinces as of March 31, 2010.
CNinsure had 44,253 sales agents and 1, 367 professional claims adjustors as of
March 31, 2011, compared to 36,014 sales agents4 and 1,421
professional claims adjustors as of March 31, 2010. |
3 | Excluding the sales outlets of Datong. |
IR-119 |
| On March 25, 2011, CNinsure completed the sale of its 55% equity interest in
Datong to Winner Sight Global Limited, an affiliated entity of Warburg Pincus LLC.
The cash consideration for the sale was approximately USD63.69 million,
representing a P/E multiple of 26 times based on Datongs net profit in 2010. In
addition, Datong agreed to pay a cash dividend of RMB10 million exclusively to
CNinsure. |
|
| On March 25, 2011, CNinsure announced that it plans to invest a total of RMB500
million from 2011 to 2013 to build up its e-commerce insurance platform.
Approximately 80% of the investment will be spent on marketing and advertising,
and approximately 20% on the construction of the IT infrastructure and call
center. Currently, the platform is under construction which has incurred expenses
amounting to RMB1.6 million expenses, primarily related to research and
development (R&D) and payroll for the e-commerce insurance platform R&D
professionals. |
|
| Net revenues from commissions and fees derived from the property and casualty
insurance, life insurance and claims adjusting businesses for the first quarter of
2011 each contributed 66.0%, 21.5% and 12.5% of the Companys total net revenues,
respectively, compared to 64.3%, 20.5%, 15.2%5 in the corresponding
period of 2010. |
|
| On December 3, 2010, CNinsures board of directors approved a corporate share
repurchase program, authorizing up to US$100 million in ADS repurchases by June
30, 2011. Currently, the Company had repurchased 486,370 ADS for an aggregate
price of approximately US$7.7 million on the open market. |
4 | Excluding the sales agents of Datong. |
|
5 | Excluding the operations of Datong; |
IR-119 |
United States:
|
+1-866-549-1292 | ||
United Kingdom:
|
0808-234-6305 | ||
Canada:
|
+1-866-8691-825 | ||
Singapore:
|
800-852-3576 | ||
Taiwan:
|
0080-185-6004 | ||
Hong Kong & Other Areas:
|
+852-3005-2050 | ||
China (Mainland):
|
400-681-6949 |
IR-119 |
IR-119 |
As of December 31, | As of March 31, | As of March 31, | ||||||||||
2010 | 2011 | 2011 | ||||||||||
RMB | RMB | US$ | ||||||||||
ASSETS: |
||||||||||||
Current assets: |
||||||||||||
Cash and cash equivalents |
1,924,884 | 2,301,771 | 351,507 | |||||||||
Restricted cash |
9,177 | 7,681 | 1,173 | |||||||||
Short term investment |
| 45,492 | 6,947 | |||||||||
Accounts receivable, net |
243,175 | 155,883 | 23,805 | |||||||||
Insurance premium receivables |
92 | 424 | 65 | |||||||||
Other receivables |
67,034 | 57,612 | 8,798 | |||||||||
Deferred tax assets |
5,691 | 3,785 | 578 | |||||||||
Amounts due from related parties |
40,000 | | | |||||||||
Other current assets |
12,372 | 12,202 | 1,863 | |||||||||
Total current assets |
2,302,425 | 2,584,850 | 394,736 | |||||||||
Non-current assets: |
||||||||||||
Property, plant, and equipment, net |
102,175 | 87,308 | 13,333 | |||||||||
Goodwill |
1,154,373 | 1,037,985 | 158,512 | |||||||||
Intangible assets, net |
145,653 | 123,596 | 18,875 | |||||||||
Deferred tax assets |
6,755 | 1,808 | 276 | |||||||||
Investment in affiliates |
139,116 | 141,363 | 21,588 | |||||||||
Other non-current assets |
3,959 | 3,708 | 566 | |||||||||
Total non-current assets |
1,552,031 | 1,395,768 | 213,150 | |||||||||
Total assets |
3,854,456 | 3,980,618 | 607,886 | |||||||||
IR-119 |
As of December 31, | As of March 31, | As of March 31, | ||||||||||
2010 | 2011 | 2011 | ||||||||||
RMB | RMB | US$ | ||||||||||
LIABILITIES AND EQUITY: |
||||||||||||
Current liabilities: |
||||||||||||
Accounts payable (including
accounts payable of the
consolidated variable
interest entities (VIEs)
without recourse to CNinsure
Inc. of RMB75,285 and
RMB66,803 (US$10,202) as of
December 31, 2010 and March
31, 2011, respectively) |
89,573 | 72,420 | 11,059 | |||||||||
Insurance premium payables
(including insurance premium
payables of the consolidated
VIEs without recourse to
CNinsure Inc. of RMB1,364
and RMB1,800 (US$275) as of
December 31, 2010 and March
31, 2011, respectively) |
1,364 | 1,800 | 275 | |||||||||
Other payables and accrued
expenses (including other
payables and accrued expense
of the consolidated VIEs
without recourse to CNinsure
Inc. of RMB52,725 and
RMB39,613 (US$6,049) as of
December 31, 2010 and March
31, 2011, respectively) |
93,460 | 79,057 | 12,073 | |||||||||
Accrued payroll (including
accrued payroll of the
consolidated VIEs without
recourse to CNinsure Inc. of
RMB27,158 and RMB22,101
(US$3,375) as of December
31, 2010 and March 31, 2011,
respectively) |
31,237 | 27,188 | 4,152 | |||||||||
Income tax payable
(including income tax
payable of the consolidated
of VIEs without recourse to
CNinsure Inc. of RMB32,134
and RMB20,531 (US$3,135) as
of December 31, 2010 and
March 31, 2011,
respectively) |
34,927 | 27,280 | 4,166 | |||||||||
Amounts due to related
parties (including amounts
due to related parties of
the consolidated of VIEs
without recourse to CNinsure
Inc. of RMB7,800 and Nil as
of December 31, 2010 and
March 31, 2011,
respectively) |
37,800 | | | |||||||||
Total current liabilities |
288,361 | 207,745 | 31,725 |
IR-119 |
As of December 31, | As of March 31, | As of March 31, | ||||||||||
2010 | 2011 | 2011 | ||||||||||
RMB | RMB | US$ | ||||||||||
Non-current liabilities: |
||||||||||||
Other tax liabilities
(including non-current
portion of other tax
liabilities of the
consolidated VIEs without
recourse to CNinsure Inc. of
Nil and Nil as of December
31, 2010 and March 31, 2011,
respectively) |
5,519 | 8,569 | 1,309 | |||||||||
Deferred tax liabilities
(including non-current
portion of deffered tax
liabilities of the
consolidated VIEs without
recourse to CNinsure Inc. of
Nil and Nil as of December
31, 2010 and March 31, 2011,
respectively) |
43,513 | 38,112 | 5,820 | |||||||||
Total non-current liabilities |
49,032 | 46,681 | 7,129 | |||||||||
Total liabilities |
337,393 | 254,426 | 38,854 | |||||||||
Ordinary shares |
7,649 | 7,642 | 1,167 | |||||||||
Additional paid-in capital |
2,261,849 | 2,249,638 | 343,545 | |||||||||
Statutory reserves |
136,681 | 133,147 | 20,333 | |||||||||
Retained earnings |
738,165 | 982,543 | 150,046 | |||||||||
Accumulated other
comprehensive loss |
(83,360 | ) | (85,031 | ) | (12,985 | ) | ||||||
Total CNinsure Inc.
shareholders equity |
3,060,984 | 3,287,939 | 502,106 | |||||||||
Noncontrolling interests |
456,079 | 438,253 | 66,926 | |||||||||
Total equity |
3,517,063 | 3,726,192 | 569,032 | |||||||||
Total liabilities and equity |
3,854,456 | 3,980,618 | 607,886 | |||||||||
IR-119 |
For The Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2010 | 2011 | 2011 | ||||||||||
RMB | RMB | US$ | ||||||||||
Net revenues: |
||||||||||||
Commissions and fees |
244,471 | 313,374 | 47,856 | |||||||||
Other service fees |
29 | 352 | 54 | |||||||||
Total net revenues |
244,500 | 313,726 | 47,910 | |||||||||
Operating costs and expenses: |
||||||||||||
Commissions and fees |
(117,937 | ) | (153,496 | ) | (23,441 | ) | ||||||
Selling expenses |
(11,653 | ) | (18,670 | ) | (2,851 | ) | ||||||
General and administrative expenses |
(48,596 | ) | (52,827 | ) | (8,067 | ) | ||||||
Total operating costs and expenses |
(178,186 | ) | (224,993 | ) | (34,359 | ) | ||||||
Income from operations |
66,314 | 88,733 | 13,551 | |||||||||
Other income, net: |
||||||||||||
Investment income |
10,230 | | | |||||||||
Interest income |
6,215 | 8,677 | 1,325 | |||||||||
Others, net |
104 | 853 | 130 | |||||||||
Income from continuing operations
before income taxes and income of
affiliates and discontinued
operations |
82,863 | 98,263 | 15,006 | |||||||||
Income tax expense |
(21,289 | ) | (20,375 | ) | (3,111 | ) | ||||||
Share of income of affiliates |
3,500 | 2,247 | 343 | |||||||||
Net income from continuing operations |
65,074 | 80,135 | 12,238 | |||||||||
Net income from discontinued
operations, net of tax |
4,741 | 157,253 | 24,014 | |||||||||
Net income |
69,815 | 237,388 | 36,252 | |||||||||
Less: net gain (loss) attributable
to noncontrolling interests |
2,466 | (3,456 | ) | (528 | ) | |||||||
Net income attributable to the
Companys shareholders |
67,349 | 240,844 | 36,780 | |||||||||
IR-119 |
For The Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2010 | 2011 | 2011 | ||||||||||
RMB | RMB | US$ | ||||||||||
Net income per share: |
||||||||||||
Basic: |
||||||||||||
Net income from
continuing operations |
0.069 | 0.083 | 0.013 | |||||||||
Net income from discontinued operations |
0.005 | 0.157 | 0.024 | |||||||||
Net income |
0.074 | 0.240 | 0.037 | |||||||||
Diluted: |
||||||||||||
Net income from continuing operations |
0.066 | 0.082 | 0.012 | |||||||||
Net income from discontinued operations |
0.005 | 0.153 | 0.024 | |||||||||
Net income |
0.071 | 0.235 | 0.036 | |||||||||
Net income per ADS: Basic: |
||||||||||||
Net income from continuing operations |
1.372 | 1.665 | 0.254 | |||||||||
Net income from discontinued operations |
0.104 | 3.131 | 0.478 | |||||||||
Net income |
1.476 | 4.796 | 0.732 | |||||||||
Diluted: |
||||||||||||
Net income from continuing operations |
1.328 | 1.629 | 0.249 | |||||||||
Net income from discontinued operations |
0.101 | 3.064 | 0.468 | |||||||||
Net income |
1.429 | 4.693 | 0.717 | |||||||||
Shares used in calculating net income per share: |
||||||||||||
Basic |
912,497,726 | 1,004,365,726 | 1,004,365,726 | |||||||||
Diluted |
942,535,742 | 1,026,497,371 | 1,026,497,371 |
IR-119 |
For The Three Months Ended March 31, | ||||||||||||
2010 | 2011 | 2011 | ||||||||||
RMB | RMB | US$ | ||||||||||
OPERATING ACTIVITIES |
||||||||||||
Net income |
69,815 | 237,388 | 36,252 | |||||||||
Adjustments to reconcile net income to net cash
generated from operating activities: |
||||||||||||
Depreciation |
6,065 | 7,208 | 1,101 | |||||||||
Amortization of acquired intangible assets |
3,577 | 6,741 | 1,029 | |||||||||
Allowance for doubtful receivables |
780 | (1,243 | ) | (190 | ) | |||||||
Compensation expenses associated with stock
options |
4,542 | (2,457 | ) | (375 | ) | |||||||
Loss (gain) on disposal of property, plant and
equipment |
(90 | ) | 33 | 5 | ||||||||
Gain on disposal of subsidiaries |
| (157,253 | ) | (24,014 | ) | |||||||
Investment income |
(10,230 | ) | | | ||||||||
Share of income of affiliates |
(3,500 | ) | (2,247 | ) | (343 | ) | ||||||
Deferred taxes |
(293 | ) | (22,111 | ) | (3,377 | ) | ||||||
Changes in operating assets and liabilities |
(16,535 | ) | 51,949 | 7,933 | ||||||||
Net cash generated from operating activities |
54,131 | 118,008 | 18,021 | |||||||||
Cash flows from investing activities: |
||||||||||||
Addition in other investments |
(325 | ) | (45,242 | ) | (6,909 | ) | ||||||
Purchase of property, plant and equipment |
(3,590 | ) | (2,210 | ) | (337 | ) | ||||||
Proceeds from disposal of property and equipment |
315 | 116 | 18 | |||||||||
Acquisition of subsidiaries, net of cash acquire |
(46,297 | ) | | | ||||||||
Repayments to related parties |
(17,231 | ) | | | ||||||||
Decrease (increase) in restricted cash |
(9,337 | ) | 1,496 | 228 | ||||||||
Proceeds from disposal of subsidiaries, net of
cash |
(2,527 | ) | 394,463 | 60,239 | ||||||||
Net cash generated from (used in) investing
activities |
(78,992 | ) | 348,623 | 53,239 | ||||||||
Cash flows from financing activities: |
||||||||||||
Payment for contingent consideration |
(85,380 | ) | (100,000 | ) | (15,271 | ) | ||||||
Acquisition of additional interest in a
subsidiary |
(2,410 | ) | | | ||||||||
Increase in capital injection by noncontrolling
interests |
800 | 1,687 | 258 | |||||||||
Repayments from related parties |
126 | 20,000 | 3,054 | |||||||||
Proceeds on exercise of stock options |
| 3,962 | 605 | |||||||||
Repurchase of ordinary shares |
| (13,722 | ) | (2,096 | ) | |||||||
Net cash used in financing activities |
(86,864 | ) | (88,073 | ) | (13,450 | ) | ||||||
Net increase (decrease) in cash and cash equivalents |
(111,725 | ) | 378,558 | 57,810 | ||||||||
Cash and cash equivalents at beginning of period |
1,457,890 | 1,924,884 | 293,952 | |||||||||
Effect of exchange rate changes on cash and cash equivalents |
16 | (1,671 | ) | (255 | ) | |||||||
Cash and cash equivalents at end of period |
1,346,181 | 2,301,771 | 351,507 | |||||||||
Interest paid |
| | | |||||||||
Income taxes paid |
21,969 | 36,669 | 5,600 |
IR-119 |
Three Months Ended March 31, 2010 | ||||||||||||||||||||
GAAP | <1> | <2> | <3> | Non-GAAP | ||||||||||||||||
Net income attributable
to the Companys
shareholders |
67,349 | (7,673 | ) | (4,741 | ) | 4,542 | 59,477 | |||||||||||||
Shares used in
calculating diluted net
income per ADS |
942,535,742 | | | | 942,535,742 | |||||||||||||||
Diluted net income per ADS |
1.429 | (0.163 | ) | (0.101 | ) | 0.096 | 1.261 |
Three Months Ended March 31, 2011 | ||||||||||||||||
GAAP | <2> | <3> | Non-GAAP | |||||||||||||
Net income attributable to the
Companys shareholders |
240,844 | (157,252 | ) | (2,457 | ) | 81,135 | ||||||||||
Shares used in calculating
diluted net income per ADS |
1,026,497,371 | | | 1,026,497,371 | ||||||||||||
Diluted net income per ADS |
4.693 | (3.064 | ) | (0.048 | ) | 1.581 |
<1> | Investment income incurred by business combination achieved in stages, net of tax; |
|
<2> | Net income from discontinued operations income, net of tax; |
|
<3> | Share-based compensation expense. |
IR-119 |