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Financial Highlights for First Quarter of 2013
Commenting on the first quarter financial results, Mr.
"Against this backdrop, during the first quarter of 2013, our total net revenues were up 18.9% year-on-year, beating our previous guidance, while gross margin declined. Revenue growth was largely attributable to volume growth in our claims adjusting and P&C businesses, as well as a further increase in commission rate for auto insurance due to intensified competition in the auto insurance market. These higher commission rates also directly squeezed our gross margin. In our life insurance segment, new policy sales continued to drop year-on-year, but at a slower pace as compared to the previous quarter, with net revenues derived from life insurance flat compared with the previous year, benefiting from our continued high persistency ratio. We believe that our high persistency ratio is a reflection of our high service levels and a defendable competitive advantage which will pay off as the life insurance business rebounds.
"The financial results for the first quarter of 2013 also reflect a key decision made by management during the Company's strategic transformation. In view of the continuing increases in the commission costs of our P&C business and the growth slowdown of our life insurance business, we have decided to focus resources on developing our e-commerce business and strengthening our ability to offer comprehensive financial products and services which we believe will become our new growth engines. However, before these two areas start to make meaningful contribution, it is crucial for us to keep the stability of our organization, sales team and operation, maintain our bargain power and safeguard our market position, in order to pave the way for a successful transition to these new areas of focus.
"We are encouraged by the achievements we made on these two initiatives during the first quarter of 2013. We are continuing the pilot of the CNpad, the workstation for our proprietary mobile sales support system, which contributed over
Financial Results for the First 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) an increase of 211.9% in share-based compensation expenses, from
(2) an increase of 11.5% in payroll and social insurance expenses from
(3) an increase of 41.6% 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 0.4% for the first quarter of 2013, compared with 11.5% for the corresponding period in 2012. Non-GAAP operating margin was 3.6% for the first quarter of 2013, compared with 12.7% for the corresponding period in 2012.
Interest income was
Income tax expense was
Net income attributable to the Company's shareholders was
Net margin was 5.2% for the first quarter of 2013 compared with 16.2% for the corresponding period in 2012.
Non-GAAP net income attributable to the Company's shareholders, which excludes share-based compensation expense was
Non-GAAP net margin was 8.4% for the first quarter of 2013 compared with 17.4% 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
Recent developments:
Business Outlook
1This 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
Conference Call | |
The Company will host a conference call to discuss the first quarter 2013 results at | |
Time: |
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or |
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The dial-in numbers: | |
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1-855-500-8701 |
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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 |
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+65-6723-9385 |
A replay of the call will be available for 3 days by dialing the following number: | |
+61 2-8199-0299 | |
Conference ID #: 68076906 | |
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 items that were significant in the first 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.
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Unaudited Condensed Consolidated Balance Sheets | |||
(In thousands) | |||
As of |
As of |
As of |
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2012 | 2013 | 2013 | |
RMB | RMB | US$ | |
ASSETS: | |||
Current assets: | |||
Cash and cash equivalents | 2,525,618 | 2,458,334 | 395,816 |
Restricted cash | 10,871 | 11,036 | 1,777 |
Short term investments | 600 | 95,600 | 15,393 |
Accounts receivable, net | 196,244 | 221,315 | 35,634 |
Insurance premium receivables | 10 | 461 | 74 |
Other receivables | 86,565 | 72,784 | 11,719 |
Deferred tax assets | 4,942 | 4,997 | 805 |
Amounts due from related parties | 151,785 | 111,714 | 17,987 |
Other current assets | 17,265 | 20,087 | 3,234 |
Total current assets | 2,993,900 | 2,996,328 | 482,439 |
Non-current assets: | |||
Property, plant, and equipment, net | 94,921 | 87,470 | 14,084 |
Goodwill and intangible assets, net | 121,333 | 117,917 | 18,986 |
Deferred tax assets | 3,967 | 5,963 | 960 |
Investment in affiliates | 168,620 | 173,954 | 28,008 |
Other non-current assets | 18,048 | 16,648 | 2,680 |
Total non-current assets | 406,889 | 401,952 | 64,718 |
Total assets | 3,400,789 | 3,398,280 | 547,157 |
CNINSURE INC. | |||
Unaudited Condensed Consolidated Balance Sheets-(Continued) | |||
(In thousands) | |||
As of |
As of |
As of |
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2012 | 2013 | 2013 | |
RMB | RMB | US$ | |
LIABILITIES AND EQUITY: | |||
Current liabilities: | |||
Accounts payable (including accounts payable of the consolidated variable interest entities ("VIEs") without recourse to |
98,124 | 81,759 | 13,164 |
Insurance premium payables (including insurance premium payables of the consolidated VIEs without recourse to |
2,941 | 3,107 | 500 |
Other payables and accrued expenses (including other payables and accrued expense of the consolidated VIEs without recourse to |
116,124 | 101,400 | 16,327 |
Accrued payroll (including accrued payroll of the consolidated VIEs without recourse to |
42,317 | 35,166 | 5,662 |
Income tax payable (including income tax payable of the consolidated of VIEs without recourse to |
56,003 | 54,132 | 8,716 |
Amounts due to related parties (including amounts due to related parties of the consolidated of VIEs without recourse to |
3,030 | 3,030 | 488 |
Total current liabilities | 318,539 | 278,594 | 44,857 |
CNINSURE INC. | |||
Unaudited Condensed Consolidated Balance Sheets-(Continued) | |||
(In thousands) | |||
As of |
As of |
As of |
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2012 | 2013 | 2013 | |
RMB | RMB | US$ | |
Non-current liabilities: | |||
Other tax liabilities | 47,589 | 48,924 | 7,877 |
Deferred tax liabilities | 26,754 | 26,018 | 4,189 |
Total non-current liabilities | 74,343 | 74,942 | 12,066 |
Total liabilities | 392,882 | 353,536 | 56,923 |
Ordinary shares | 7,624 | 7,624 | 1,228 |
Additional paid-in capital | 2,284,906 | 2,297,686 | 369,950 |
Statutory reserves | 178,440 | 178,440 | 28,731 |
Retained earnings | 527,542 | 548,570 | 88,325 |
Accumulated other comprehensive loss | (104,132) | (104,888) | (16,888) |
Total |
2,894,380 | 2,927,432 | 471,346 |
Noncontrolling interests | 113,527 | 117,312 | 18,888 |
Total equity | 3,007,907 | 3,044,744 | 490,234 |
Total liabilities and equity | 3,400,789 | 3,398,280 | 547,157 |
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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 | |||
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2012 | 2013 | 2013 | |
RMB | RMB | US$ | |
Net revenues: | |||
Commissions and fees | 337,281 | 401,255 | 64,606 |
Other service fees | 61 | 7 | 1 |
Total net revenues | 337,342 | 401,262 | 64,607 |
Operating costs and expenses: | |||
Commissions and fees | (213,478) | (297,169) | (47,847) |
Selling expenses | (18,680) | (20,103) | (3,237) |
General and administrative expenses | (66,522) | (82,381) | (13,264) |
Total operating costs and expenses | (298,680) | (399,653) | (64,348) |
Income from operations | 38,662 | 1,609 | 259 |
Other income, net: | |||
Interest income | 22,455 | 21,545 | 3,469 |
Others, net | 897 | 109 | 18 |
Income before income taxes and income of affiliates | 62,014 | 23,263 | 3,746 |
Income tax expense | (13,705) | (6,233) | (1,004) |
Share of income of affiliates | 4,525 | 5,334 | 859 |
Net income | 52,834 | 22,364 | 3,601 |
Less: Net (loss) gain attributable to the noncontrolling interests | (1,777) | 1,336 | 215 |
Net income attributable to the Company's shareholders | 54,611 | 21,028 | 3,386 |
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Unaudited Condensed Consolidated Statements of Income and Comprehensive Income - (Continued) | |||
(In thousands, except for shares and per share data) | |||
For The Three Months Ended | |||
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2012 | 2013 | 2013 | |
RMB | RMB | US$ | |
Net income per share: | |||
Basic | 0.05 | 0.02 | — |
Diluted | 0.05 | 0.02 | — |
Net income per ADS: | |||
Basic | 1.09 | 0.42 | 0.07 |
Diluted | 1.08 | 0.42 | 0.07 |
Shares used in calculating net income per share: | |||
Basic | 1,002,551,217 | 998,861,526 | 998,861,526 |
Diluted | 1,008,067,534 | 1,002,235,490 | 1,002,235,490 |
Net income (loss) | 52,834 | 22,364 | 3,601 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | 219 | (755) | (121) |
Comprehensive income (loss) | 53,053 | 21,609 | 3,480 |
Less: Comprehensive income (loss) attributable to the noncontrolling interests | (1,777) | 1,336 | 215 |
Comprehensive income attributable to the |
54,830 | 20,273 | 3,265 |
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Unaudited Condensed Consolidated Statements of |
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(In thousands) | |||
For The Three Months Ended | |||
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2012 | 2013 | 2013 | |
RMB | RMB | US$ | |
OPERATING ACTIVITIES | |||
Net income | 52,834 | 22,364 | 3,601 |
Adjustments to reconcile net income to net cash generated from (used in) operating activities: | |||
Depreciation | 6,750 | 7,936 | 1,278 |
Amortization of intangible assets | 4,028 | 3,416 | 550 |
Allowance for doubtful receivables | 1,016 | 749 | 121 |
Compensation expenses associated with stock option | 4,097 | 12,780 | 2,058 |
Share of income of affiliates | (4,525) | (5,334) | (859) |
Changes in operating assets and liabilities | (62,072) | (50,311) | (8,101) |
Net cash generated from (used in) operating activities | 2,128 | (8,400) | (1,352) |
Cash flows used in investing activities: | |||
Purchase of property, plant and equipment | (1,723) | (5,498) | (885) |
Proceeds from disposal of property and equipment | 187 | 14 | 2 |
Proceeds from disposal of short term investments | 13,630 | — | — |
Purchase of short term investments | — | (95,000) | (15,296) |
Disposal of subsidiaries, net of cash | 47 | — | — |
Decrease (increase) in restricted cash | 654 | (166) | (27) |
Purchase of non-current assets | (1,948) | — | — |
Return of investment in non-current assets | 1,000 | — | — |
Refund of contingent consideration | 12,500 | — | — |
Decrease in amounts due from related parties | 92,691 | 40,071 | 6,452 |
Net cash generated from (used in) investing activities | 117,038 | (60,579) | (9,754) |
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Unaudited Condensed Consolidated Statements of |
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(In thousands) | |||
For The Three Months Ended | |||
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2012 | 2013 | 2013 | |
RMB | RMB | US$ | |
Cash flows generated from financing activities: | |||
Capital injection by noncontrolling interests | 6,530 | 2,450 | 394 |
Proceeds on exercise of stock options | 48 | — | — |
Net cash generated from financing activities | 6,578 | 2,450 | 394 |
Net increase (decrease) in cash and cash equivalents | 125,744 | (66,529) | (10,712) |
Cash and cash equivalents at beginning of period | 2,222,160 | 2,525,618 | 406,649 |
Effect of exchange rate changes on cash and cash equivalents | 219 | (755) | (121) |
Cash and cash equivalents at end of period | 2,348,123 | 2,458,334 | 395,816 |
Interest paid | — | — | — |
Income taxes paid | 29,282 | 9,497 | 1,529 |
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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 |
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GAAP | < 1 > | Non-GAAP | |
Operating income | 38,662 | 4,097 | 42,759 |
Operating margin | 11.5% | 1.2% | 12.7% |
Net income attributable to the Company's shareholders | 54,611 | 4, 097 | 58,708 |
Net margin | 16.2% | 1.2% | 17.4% |
Shares used in calculating basic net income per share | 1,002,551,217 | — | 1,002,551,217 |
Basic net income per ADS | 1.09 | 0.08 | 1.17 |
For The Three Months Ended |
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GAAP | < 1 > | Non-GAAP | |
Operating income | 1,609 | 12,780 | 14,389 |
Operating margin | 0.4% | 3.2% | 3.6% |
Net income attributable to the Company's shareholders | 21,028 | 12,780 | 33,808 |
Net margin | 5.2% | 3.2% | 8.4% |
Shares used in calculating basic net income per share | 998,861,526 | — | 998,861,526 |
Basic net income per ADS | 0.42 | 0.26 | 0.68 |
< 1 > share-based compensation expenses. |
CONTACT: For more information, please contact:Source:Oasis Qiu Investor Relations Manager Tel: +86 (20) 6122-2731 Email: qiusr@cninsure.net
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