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Financial Highlights for Third Quarter of 2012
"We are pleased that as a result of strong execution we beat our prior guidance with a 5% year-over-year growth in total net revenues for the third quarter of 2012 despite a challenging market environment. While our margins remained under pressure as we had to increase commissions paid to sales agents in order to safeguard our market share due to intensified competition, we saw our gross margin bottoming out in the third quarter in 2012. In addition, we believe that our strategy execution in the past year has well prepared us for a gradual turnaround," said Mr.
Financial Results for the Third Quarter of 2012
Total net revenues were
Total operating costs and expenses were
Commissions and fees expenses were
Selling expenses were
General and administrative expenses were
1) recognition of approximately
2) recognition of
The decrease was partially offset by a 189.1% increase in share-based compensation expenses, from
As a result of the foregoing factors, operating income was
Non-GAAP operating income, which excluded (1) share-based compensation expenses for the third quarter of 2012 and the corresponding period of 2011, (2) impairment losses in respect of goodwill for the claims adjusting segment and intangible assets for the third quarter of 2011, and (3) professional fees relating to a non-binding going-private proposal that was later withdrawn for the third quarter of 2011, was
Operating margin was 0.7% for the third quarter of 2012, compared to 18.9% for the corresponding period in 2011. Non-GAAP operating margin was 4.0% for the third quarter of 2012, compared to 27.9% for the corresponding period in 2011.
Interest income was
Income tax expense was
Net income attributable to the Company's shareholders was
Net margin was 5.7% for the third quarter of 2012 compared to 20.4% for the corresponding period in 2011.
Non-GAAP net income attributable to the Company's shareholders, which excluded (1) share-based compensation expense for the third quarter of 2012 and the corresponding period of 2011, (2) impairment losses in respect of goodwill for the claims adjusting segment and intangible assets, net of tax, for the third quarter of 2011 and (3) professional fees relating to a non-binding going-private proposal that was later withdrawn for the third quarter of 2011, was
Non-GAAP net margin was 9.0% for the third quarter of 2012 compared to 28.9% for the corresponding period in 2011.
Basic net income per ADS was
Non-GAAP basic net income per ADS was
As of
Recent developments:
Business Outlook
Conference Call
The Company will host a conference call to discuss the third quarter 2012 results at | |
Time: |
|
or |
|
United States | 1-855-500-8701 |
United Kingdom | 0800-015-9724 |
Canada | 1-855-757-1565 |
Hong Kong | 800-903-737 |
|
0080-665-1951 |
|
+65-6723-9385 |
|
400-120-0654 |
A replay of the call will be available for 3 days as follows: | |
+61 2 8199 0299 | |
Conference ID number: 69020340 | |
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, excluding share-based compensation expenses for the third quarter of 2012 and the corresponding periods in 2011, professional fees relating to the non-binding going-private proposal that was later withdrawn and intangible asset and goodwill impairment losses for the third quarter of 2011. 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 third quarter of 2012 and the corresponding period of 2011. 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$) at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of
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Unaudited Condensed Consolidated Balance Sheets | |||
(In thousands) | |||
As of |
As of |
As of |
|
2011 | 2012 | 2012 | |
RMB | RMB | US$ | |
ASSETS: | |||
Current assets: | |||
Cash and cash equivalents | 2,222,160 | 2,686,572 | 427,471 |
Restricted cash | 10,076 | 11,787 | 1,876 |
Short term investment | 31,230 | 600 | 95 |
Accounts receivable, net | 166,363 | 189,625 | 30,172 |
Insurance premium receivables | 3 | 9 | 1 |
Other receivables | 82,736 | 86,595 | 13,779 |
Deferred tax assets | 7,369 | 5,317 | 846 |
Amounts due from related parties | 365,636 | 49,346 | 7,852 |
Other current assets | 12,841 | 17,515 | 2,787 |
Total current assets | 2,898,414 | 3,047,366 | 484,879 |
Non-current assets: | |||
Property, plant, and equipment, net | 84,712 | 70,592 | 11,232 |
Goodwill | 78,553 | 78,553 | 12,499 |
Intangible assets, net | 58,054 | 46,505 | 7,400 |
Deferred tax assets | 1,892 | 3,584 | 570 |
Investment in affiliates | 153,962 | 168,010 | 26,733 |
Other non-current assets | 5,409 | 7,457 | 1,186 |
Total non-current assets | 382,582 | 374,701 | 59,620 |
Total assets | 3,280,996 | 3,422,067 | 544,499 |
As of |
As of |
As of |
|
2011 | 2012 | 2012 | |
RMB | RMB | US$ | |
LIABILITIES AND EQUITY: | |||
Current liabilities: | |||
Accounts payable (including accounts payable of the consolidated variable interest entities ("VIEs") without recourse to |
107,042 | 121,632 | 19,353 |
Insurance premium payables (including insurance premium payables of the consolidated VIEs without recourse to |
2,684 | 3,347 | 533 |
Other payables and accrued expenses (including other payables and accrued expenses of the consolidated VIEs without recourse to |
92,682 | 80,870 | 12,868 |
Accrued payroll (including accrued payroll of the consolidated VIEs without recourse to |
35,219 | 36,905 | 5,872 |
Income tax payable (including income tax payable of the consolidated of VIEs without recourse to |
70,377 | 54,114 | 8,610 |
Amounts due to related parties (including amounts due to related parties of the consolidated of VIEs without recourse to |
20,305 | — | — |
Total current liabilities | 328,309 | 296,868 | 47,236 |
As of |
As of |
As of |
|
2011 | 2012 | 2012 | |
RMB | RMB | US$ | |
Non-current liabilities: | |||
Other tax liabilities | 43,586 | 47,965 | 7,632 |
Deferred tax liabilities | 30,106 | 27,569 | 4,386 |
Total non-current liabilities | 73,692 | 75,534 | 12,018 |
Total liabilities | 402,001 | 372,402 | 59,254 |
Ordinary shares | 7,646 | 7,646 | 1,217 |
Additional paid-in capital | 2,272,580 | 2,326,587 | 370,193 |
Statutory reserves | 167,147 | 167,147 | 26,595 |
Retained earnings | 408,325 | 518,779 | 82,545 |
Accumulated other comprehensive loss | (101,651) | (102,022) | (16,233) |
Total |
2,754,047 | 2,918,137 | 464,317 |
Noncontrolling interests | 124,948 | 131,528 | 20,928 |
Total equity | 2,878,995 | 3,049,665 | 485,245 |
Total liabilities and equity | 3,280,996 | 3,422,067 | 544,499 |
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Unaudited Condensed Consolidated Statements of Operations | ||||||
(In thousands, except for shares and per share data) | ||||||
For The Three Months Ended | For The Nine Months Ended | |||||
|
|
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2011 | 2012 | 2012 | 2011 | 2012 | 2012 | |
RMB | RMB | US$ | RMB | RMB | US$ | |
Net revenues: | ||||||
Commissions and fees | 381,449 | 402,989 | 64,121 | 1,095,385 | 1,150,097 | 182,996 |
Other service fees | 2,224 | 28 | 5 | 2,688 | 193 | 31 |
Total net revenues | 383,673 | 403,017 | 64,126 | 1,098,073 | 1,150,290 | 183,027 |
Operating costs and expenses: | ||||||
Commissions and fees | (192,902) | (294,254) | (46,820) | (551,578) | (773,988) | (123,152) |
Selling expenses | (19,963) | (19,442) | (3,094) | (57,918) | (59,117) | (9,406) |
General and administrative expenses | (98,124) | (86,390) | (13,746) | (223,387) | (257,753) | (41,012) |
Total operating costs and expenses | (310,989) | (400,086) | (63,660) | (832,883) | (1,090,858) | (173,570) |
Income from operations | 72,684 | 2,931 | 466 | 265,190 | 59,432 | 9,457 |
Other income, net: | ||||||
Interest income | 13,635 | 25,346 | 4,033 | 35,450 | 70,268 | 11,181 |
Others, net | 9,301 | 215 | 34 | 10,432 | 3,346 | 532 |
Income from continuing operations before income taxes and income of affiliates and discontinued operations | 95,620 | 28,492 | 4,533 | 311,072 | 133,046 | 21,170 |
Income tax expense | (22,272) | (12,735) | (2,026) | (65,447) | (40,832) | (6,497) |
Share of income of affiliates | 2,989 | 4,629 | 737 | 8,316 | 14,048 | 2,235 |
Net income from continuing operations | 76,337 | 20,386 | 3,244 | 253,941 | 106,262 | 16,908 |
Net income from discontinued operations, net of tax | — | — | — | 157,253 | — | — |
Net income | 76,337 | 20,386 | 3,244 | 411,194 | 106,262 | 16,908 |
Less: net loss attributable to noncontrolling interests | (1,834) | (2,614) | (416) | (8,066) | (4,192) | (667) |
Net income attributable to the Company's shareholders | 78,171 | 23,000 | 3,660 | 419,260 | 110,454 | 17,575 |
For The Three Months Ended | For The Nine Months Ended | |||||
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2011 | 2012 | 2012 | 2011 | 2012 | 2012 | |
RMB | RMB | US$ | RMB | RMB | US$ | |
Net income per share: | ||||||
Basic: | ||||||
Net income from continuing operations | 0.08 | 0.02 | — | 0.26 | 0.11 | 0.02 |
Net income from discontinued operations | — | — | — | 0.16 | — | — |
Net income | 0.08 | 0.02 | — | 0.42 | 0.11 | 0.02 |
Diluted: | ||||||
Net income from continuing operations | 0.08 | 0.02 | — | 0.26 | 0.11 | 0.02 |
Net income from discontinued operations | — | — | — | 0.15 | — | — |
Net income | 0.08 | 0.02 | — | 0.41 | 0.11 | 0.02 |
Net income per ADS: | ||||||
Basic: | ||||||
Net income from continuing operations | 1.56 | 0.46 | 0.07 | 5.22 | 2.20 | 0.35 |
Net income from discontinued operations | — | — | — | 3.14 | — | — |
Net income | 1.56 | 0.46 | 0.07 | 8.36 | 2.20 | 0.35 |
Diluted: | ||||||
Net income from continuing operations | 1.53 | 0.46 | 0.07 | 5.12 | 2.20 | 0.35 |
Net income from discontinued operations | — | — | — | 3.08 | — | — |
Net income | 1.53 | 0.46 | 0.07 | 8.2 | 2.20 | 0.35 |
Shares used in calculating net income per share: | ||||||
Basic | 1,002,365,585 | 1,002,564,246 | 1,002,564,246 | 1,002,905,439 | 1,002,559,919 | 1,002,559,919 |
Diluted | 1,019,042,812 | 1,003,504,594 | 1,003,504,594 | 1,022,752,642 | 1,005,250,696 | 1,005,250,696 |
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Unaudited Condensed Consolidated Statements of |
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(In thousands) | ||||||
For the Three Months Ended | For The Nine Months Ended | |||||
|
|
|||||
2011 | 2012 | 2012 | 2011 | 2012 | 2012 | |
RMB | RMB | US$ | RMB | RMB | US$ | |
OPERATING ACTIVITIES | ||||||
Net income | 76,337 | 20,386 | 3,244 | 411,194 | 106,262 | 16,908 |
Adjustments to reconcile net income to net cash generated from operating activities: | ||||||
Depreciation | 6,704 | 6,473 | 1,030 | 20,658 | 19,810 | 3,152 |
Amortization of acquired intangible assets | 6,719 | 3,726 | 593 | 19,971 | 11,560 | 1,839 |
Impairment loss for acquired intangible assets | 7,000 | — | — | 7,000 | — | — |
Impairment loss for goodwill | 12,865 | — | — | 12,865 | — | — |
Allowance for doubtful receivables | 1,315 | 687 | 109 | 568 | 3,200 | 509 |
Compensation expenses associated with stock options | 4,552 | 13,159 | 2,094 | 7,502 | 53,958 | 8,585 |
Loss (gain) on disposal of property, plant and equipment | (42) | 1,335 | 213 | 165 | 1,299 | 207 |
Gain on disposal of subsidiaries | — | — | — | (157,253) | — | — |
Share of income of affiliates | (2,989) | (4,629) | (737) | (8,316) | (14,048) | (2,235) |
Changes in operating assets and liabilities | (32,941) | 20,368 | 3,241 | 12,926 | (46,572) | (7,410) |
Net cash generated from operating activities | 79,520 | 61,505 | 9,787 | 327,280 | 135,469 | 21,555 |
Cash flows from investing activities: | ||||||
Purchase of property, plant and equipment | (2,252) | (1,375) | (219) | (18,114) | (7,570) | (1,205) |
Proceeds from disposal of property and equipment | 90 | 3 | — | 802 | 580 | 92 |
Purchase of short term investments | (25,000) | — | — | (70,242) | (40,600) | (6,460) |
Proceeds from disposal of short term investments | 6,550 | — | — | 36,892 | 71,080 | 11,310 |
Acquisition of subsidiaries, net of cash | (49,996) | — | — | (49,996) | — | — |
Disposal of subsidiaries, net of cash | (75) | 2,000 | 318 | 394,388 | 1,967 | 313 |
Purchase of intangible asset | (758) | — | — | (758) | — | — |
Decrease (increase) in restricted cash | (1,018) | 212 | 34 | 1,975 | (1,711) | (272) |
Increase in other receivables | — | — | — | — | (3,400) | (541) |
Addition in investment in non-current assets | (1,000) | — | — | (1,000) | (1,948) | (310) |
Addition in investment in affiliates | (600) | — | — | (600) | — | — |
Return of investment in non-current assets | — | — | — | — | 1,300 | 207 |
Refund of contingent consideration | — | — | — | — | 12,500 | 1,989 |
Decrease (increase) in amounts due from related parties | (2,000) | 141,587 | 22,528 | (2,000) | 304,955 | 48,523 |
Net cash (used in) generated from investing activities … | (76,059) | 142,427 | 22,661 | 291,347 | 337,153 | 53,646 |
For the Three Months Ended |
For the Nine Months Ended |
|||||
2011 | 2012 | 2012 | 2011 | 2012 | 2012 | |
RMB | RMB | US$ | RMB | RMB | US$ | |
Cash flows from financing activities: | ||||||
Payment for contingent consideration | — | — | — | (100,000) | — | — |
Acquisition of additional interest in subsidiaries | — | — | — | — | (20,455) | (3,255) |
Increase in capital injection by noncontrolling interests | (4,547) | 1,295 | 206 | 1,940 | 12,655 | 2,013 |
Repayments from related parties | — | — | — | 20,000 | — | — |
Proceeds on exercise of stock options | 470 | — | — | 5,242 | 48 | 8 |
Repurchase of ordinary shares | — | — | — | (13,722) | — | — |
Net cash (used in) generated from financing activities | (4,077) | 1,295 | 206 | (86,540) | (7,752) | (1,234) |
Net increase in cash and cash equivalents | (616) | 205,227 | 32,654 | 532,087 | 464,870 | 73,967 |
Cash and cash equivalents at beginning of period | 2,449,849 | 2,483,896 | 395,223 | 1,924,884 | 2,222,160 | 353,577 |
Effect of exchange rate changes on cash and cash equivalents | (5,745) | (2,551) | (406) | (13,483) | (458) | (73) |
Cash and cash equivalents at end of period | 2,443,488 | 2,686,572 | 427,471 | 2,443,488 | 2,686,572 | 427,471 |
Interest paid | — | — | — | — | — | — |
Income taxes paid | 17,820 | 10,194 | 1,622 | 81,009 | 55,079 | 8,764 |
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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 > | < 2 > | < 3 > | < 4 > | Non-GAAP | ||
Operating income | 72,684 | 4,552 | 10,045 | 19,865 | — | 107,146 | |
Operating margin | 18.9% | 1.2% | 2.6% | 5.2% | — | 27.9% | |
Net income attributable to the Company's shareholders | 78,171 | 4,552 | 10,045 | — | 18,115 | 110,883 | |
Net margin | 20.4% | 1.2% | 2.6% | — | 4.7% | 28.9% | |
Shares used in calculating basic net income per share | 1,002,365,585 | — | — | — | — | 1,002,365,585 | |
Basic net income per ADS | 1.56 | 0.09 | 0.20 | — | 0.36 | 2.21 | |
Shares used in calculating diluted net income per share | 1,019,042,812 | — | — | — | — | 1,019,042,812 | |
Diluted net income per ADS | 1.53 | 0.09 | 0.20 | — | 0.36 | 2.18 | |
For The Three Months Ended |
|||||||
GAAP | < 1 > | Non-GAAP | |||||
Operating income | 2,931 | 13,159 | 16,090 | ||||
Operating margin | 0.7% | 3.3% | 4.0% | ||||
Net income attributable to the Company's shareholders | 23,000 | 13,159 | 36,159 | ||||
Net margin | 5.7% | 3.3% | 9.0% | ||||
Shares used in calculating basic net income per share | 1,002,564,246 | — | 1,002,564,246 | ||||
Basic net income per ADS | 0.46 | 0.26 | 0.72 | ||||
Shares used in calculating diluted net income per share | 1,003,504,594 | — | 1,003,504,594 | ||||
Diluted net income per ADS | 0.46 | 0.26 | 0.72 | ||||
< 1 > share-based compensation expenses; | |||||||
< 2 > one-off professional fees related to the non-binding going-private proposal; | |||||||
< 3 > a recognition of impairment loss in respect of intangible assets and goodwill; | |||||||
< 4 > a recognition of impairment loss in respect of intangible assets and goodwill, net of tax. |
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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