UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

_______________________

 

FORM 6-K

_______________________

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of August 2013

 

Commission File Number: 001-33768

 

_______________________

 

CNINSURE INC.

_______________________

 

22/F, Yinhai Building

No. 299 Yanjiang Zhong Road

Guangzhou, Guangdong 510110

People’s Republic of China

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F þ Form 40-F o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

	CNinsure Inc.
	By:	/s/ Qiuping Lai
	Name:	Qiuping Lai
	Title:	President

  

Date: August 21, 2013

 

 

Exhibit Index

 

Exhibit No.		Description
Exhibit 99.1		Press Release

 

 

 

Exhibit 99.1

 

	IR-158

CNinsure Reports Second Quarter and First Half 2013 Unaudited Financial Results

 

GUANGZHOU, August 20, 2013 (GLOBE NEWSWIRE) -- CNinsure Inc, (Nasdaq: CISG), (the "Company" or "CNinsure"), a leading independent insurance intermediary company operating in China, today announced its unaudited financial results for the second quarter and first half ended June 30, 2013¹.

 

Financial Highlights for Second Quarter of 2013

 

l

Total net revenues: RMB421.3 million (US$68.6 million), representing an increase of 2.8% from the corresponding period in 2012.

 

l

Operating income: RMB0.2 million (US$31,882) representing a decrease of 98.9% from the corresponding period in 2012.

 

l

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.

 

l

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.

 

l

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.

 

l

Basic and diluted net income per ADS: RMB0.42 (US$0.07) and RMB0.42 (US$0.07), respectively, representing decreases of 36.0% and 36.2%, respectively, from the corresponding period in 2012.

 

l

Non-GAAP basic and diluted net income per ADS: RMB0.62 (US$0.10) and RMB0.62 (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

 

l

Total net revenues: RMB822.6 million (US$134.0 million), representing an increase of 10.1% from the corresponding period in 2012.

 

l

Operating income: RMB1.8 million (US$0.3 million) representing a decrease of 96.8% from the corresponding period in 2012.

 

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 RMB6.1374 to US$1.00, the effective noon buying rate as of June 28, 2013 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.

 

 

	IR-158

l

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.

 

l

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.

 

l

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.

 

l

Basic and diluted net income per ADS: RMB0.84 (US$0.14) and RMB0.84 (US$0.14), respectively, representing decreases of 52.1% and 51.8%, respectively, from the corresponding period in 2012.

 

l

Non-GAAP basic and diluted net income per ADS: RMB1.30 (US$0.21) and RMB1.30 (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 Chunlin Wang, CNinsure's chief executive officer, stated, “Amid the industry trend towards the protection business, we adjusted our life insurance product strategy during the second quarter of 2013 by shifting our sales focus from participating policies to traditional protection policies which generally generates lower per policy premiums but have a higher imbedded value. This shift was one of the major reasons for the drastic decline of our first year life insurance premiums and the lower-than-expected growth of our total net revenues, although the number of new life insurance policies during the period remained flat year-over-year. Despite the negative impact on life insurance business volume in the near-term, we believe this move is conducive to enhancing the long-term sustainability of our life insurance business and prepares us well for capitalizing on the growth opportunities arising from the deregulation of prices for traditional life insurance products.

 

“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 June 30, 2013, and those units contributed over RMB30 million in premiums during the second quarter of 2013.

 

The roll out of our comprehensive financial services strategy is also progressing well. We sold RMB240 million worth of wealth management products during the quarter, and the total number of customers who purchased wealth management products through us increased by 460 from the previous quarter.”

 

 

	IR-158

Mr. Wang concluded, “While there remains a lot of work to do, we are optimistic that CNpad and comprehensive financial services strategy will create value for our sales agents and clients, and position us well for long-term sustainable growth.”

 

Financial Results for the Second Quarter of 2013

 

Total net revenues were RMB421.3 million (US$68.6 million) for the second quarter of 2013, representing an increase of 2.8% from RMB409.9 million for the corresponding period in 2012, primarily due to increases in net revenues from our P&C insurance and claims adjusting business segments. The increase in the P&C business segment was mainly driven by slight increases in commission rates received from insurance underwriters, while the growth of the claims adjusting segment was mainly attributable to growth in the auto insurance-related claims adjusting business. Net revenues from commissions and fees derived from the P&C insurance, life insurance and claims adjusting businesses for the second quarter of 2013 contributed 71.4%, 14.2%, and 14.4% of the Company’s total net revenues, respectively, compared to 66.1%, 21.0% and 12.9%, respectively, for the corresponding period in 2012.

 

Total operating costs and expenses were RMB421.1 million (US$68.6 million) for the second quarter of 2013, representing an increase of 7.4% from RMB392.1 million for the corresponding period in 2012.

 

Commissions and fees expenses were RMB313.0 million (US$51.0 million) for the second quarter of 2013, representing an increase of 17.6% from RMB266.3 million for the corresponding period in 2012. The increase was primarily due to further increases in commissions paid to our P&C sales agents driven by (1) increased competition in the auto insurance market, and (2) nationwide rising labor costs.

 

Selling expenses were RMB24.4 million (US$4.0 million) for the second quarter of 2013, representing an increase of 16.1% from RMB21.0 million for the corresponding period in 2012, primarily due to increases in travel, gasoline and office expenses mostly incurred by the claims adjusting business segment.

 

General and administrative expenses were RMB83.7 million (US$13.6 million) for the second quarter of 2013, representing a decrease of 20.2% from RMB104.8 million for the corresponding period in 2012. The decrease was primarily due to the net effect of the following factors:

 

(1) a decrease of 72.2% in share-based compensation expenses, from RMB36.7 million for the second quarter of 2012 to RMB10.2 million (US$1.7 million) for the second quarter of 2013. Share-based compensation expenses for the second quarter of 2013 were mainly associated with stock options granted to certain employees in March 2012, which were recognized on an accelerated basis and such expenses are expected to decrease each year after the grant; offset by

 

(2) an increase of 39.2% in depreciation expense from RMB4.4 million for the second quarter of 2012 to RMB6.1 million (US$1.0 million) for the second quarter of 2013 due to the purchase of more fixed assets for our e-commerce operations during 2012.

 

 

	IR-158

As a result of the foregoing factors, operating income was RMB0.2 million (US$31,882) for the second quarter of 2013, representing a decrease of 98.9% from RMB17.8 million for the corresponding period in 2012.

 

Non-GAAP operating income, which excludes share-based compensation expenses was RMB10.4 million (US$1.7 million) for the second quarter of 2013, representing a decrease of 80.9% from RMB54.5 million for the corresponding period in 2012.

 

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 RMB20.3 million (US$3.3 million) for the second quarter of 2013, representing a decrease of 9.5% from RMB22.5 million for the corresponding period in 2012. The decrease in interest income was primarily due to (1) a decrease in the bank deposits as we increased short-term investments and (2) a decrease in interest rates from the corresponding period in 2012.

 

Income tax expense was RMB5.8 million (US$0.9 million) for the second quarter of 2013, representing a decrease of 59.7% from RMB14.4 million for the corresponding period in 2012 due to the decrease in operating income. The effective tax rate for the second quarter of 2013 was 24.8% compared with 33.8% for the corresponding period in 2012. The decrease in effective tax rate was mainly due to the decrease in share-based compensation expenses which are non tax-deductible.

 

Net income attributable to the Company’s shareholders was RMB20.9 million (US$3.4 million) for the second quarter of 2013, representing a decrease of 36.3% from RMB32.8 million for the corresponding period in 2012.

 

Non-GAAP net income attributable to the Company’s shareholders, which excludes share-based compensation expenses was RMB31.1 million (US$5.1 million) for the second quarter of 2013, representing a decrease of 55.2% from RMB69.5 million for the corresponding period in 2012.

 

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 RMB0.42 (US$0.07) and RMB0.42 (US$0.07) for the second quarter of 2013, respectively, representing decreases of 36.0% and 36.2% from RMB0.66 and RMB0.65 for the corresponding period in 2012, respectively.

 

Non-GAAP basic and diluted net income per ADS were RMB0.62 (US$0.10) and RMB0.62 (US$0.10) for the second quarter of 2013, respectively, representing decreases of 55.1% and 55.2% from RMB1.39 and RMB1.38 for the corresponding period in 2012, respectively.

 

 

	IR-158

Financial Results for the First Half of 2013

 

Total net revenues were RMB822.6 million (US$134.0 million) for the first half of 2013, representing an increase of 10.1% from RMB747.3 million for the corresponding period in 2012, primarily due to increases in net revenues from our P&C insurance and claims adjusting business segments. The increase in the P&C business segment was mainly driven by slight increases in commission rates received from insurance underwriters and sales volume growth. The growth of the claims adjusting segment was mainly attributable to growth in the auto insurance-related claims adjusting business. Net revenues from commissions and fees derived from the P&C insurance, life insurance and claims adjusting businesses for the first half of 2013 contributed 71.0%, 15.3%, and 13.7% of the Company’s total net revenues, respectively, compared to 66.8%, 20.3% and 12.9%, respectively, for the corresponding period in 2012.

 

Total operating costs and expenses were RMB820.7 million (US$133.7 million) for the first half of 2013, representing an increase of 18.8% from RMB690.8 million for the corresponding period in 2012.

 

Commissions and fees expenses were RMB610.2 million (US$99.4 million) for the first half of 2013, representing an increase of 27.2% from RMB479.7 million for the corresponding period in 2012. The increase was primarily due to further increases in commissions paid to our P&C sales agents driven by (1) increased competition in the auto insurance market, and (2) nationwide rising labor costs.

 

Selling expenses were RMB44.5 million (US$7.2 million) for the first half of 2013, representing an increase of 12.1% from RMB39.7 million for the corresponding period in 2012, primarily due to growth in sales volume.

 

General and administrative expenses were RMB166.1 million (US$27.1 million) for the first half of 2013, representing a decrease of 3.1% from RMB171.4 million for the corresponding period in 2012. The decrease was primarily due to the net effect of the following factors:

 

(1) a decrease of 43.7% in share-based compensation expenses, from RMB40.8 million for the first half of 2012 to RMB23.0 million (US$3.7 million) for the first half of 2013. Share-based compensation expenses for the first half of 2013 were mainly associated with the grant of stock options in March, 2012 which were recognized on an accelerated basis and such expenses are expected to decrease each year after the grant; offset by

 

(2) an increase of 6.1% in payroll and social insurance expenses from RMB63.3 million for the first half of 2012 to RMB67.1 million (US$10.9 million) for the first half of 2013 primarily due to pay raises for our administrative staff; and

 

(3) an increase of 40.4% in depreciation expenses, from RMB8.8 million for the first half of 2012 to RMB12.3 million (US$2.0 million) for the first half of 2013, due to the purchase of more fixed assets for our e-commerce operations during 2012.

 

 

	IR-158

As a result of the foregoing factors, operating income was RMB1.8 million (US$0.3 million) for the first half of 2013, representing a decrease of 96.8% from RMB56.5 million for the corresponding period in 2012.

 

Non-GAAP operating income, which excludes share-based compensation expenses was RMB24.8 million (US$4.0 million) for the first half of 2013, representing a decrease of 74.5% from RMB97.3 million for the corresponding period in 2012.

 

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 with 13.1% for the corresponding period in 2012.

 

Interest income was RMB41.9 million (US$6.8 million) for the first half of 2013, representing a decrease of 6.8% from RMB44.9 million for the corresponding period in 2012. The slight decrease in interest income was primarily due to (1) a decrease in the bank interest rate from the corresponding period in 2012 and (2) a decrease in the bank deposits as we increased short-term investments.

 

Income tax expense was RMB12.0 million (US$2.0 million) for the first half of 2013, representing a decrease of 57.2% from RMB28.1 million for the corresponding period in 2012 due to the significant decrease in operating income. The effective tax rate for the first half of 2013 was 25.8% compared with 26.9% for the corresponding period in 2012. The decrease in effective tax rate was mainly due to the decrease in share-based compensation expenses, which are non tax-deductible.

 

Net income attributable to the Company’s shareholders was RMB42.0 million (US$6.9 million) for the first half of 2013, representing a decrease of 52.0% from RMB87.5 million for the corresponding period in 2012.

 

Non-GAAP net income attributable to the Company’s shareholders, which excludes share-based compensation expenses, was RMB64.9 million (US$10.6 million) for the first half of 2013, representing a decrease of 49.4% from RMB128.3 million for the corresponding period in 2012.

 

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 RMB0.84 (US$0.14) and RMB0.84 (US$0.14) for the first half of 2013, respectively, representing decreases of 52.1% and 51.8% from RMB1.75 and RMB1.74 for the corresponding period in 2012, respectively.

 

Non-GAAP basic and diluted net income per ADS were RMB1.30 (US$0.21) and RMB1.30 (US$0.21) for the first half of 2013, respectively, representing decreases of 49.2% and 49.0% from RMB2.56 and RMB2.55 for the corresponding period in 2012, respectively.

 

 

	IR-158

As of June 30, 2013, the Company had RMB2.3 billion (US$377.3 million) in cash and cash equivalents.

 

Business Highlights:

 

l

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 of June 30, 2012. CNinsure had 47,554 sales agents and representatives and 1,344 professional claims adjustors as of June 30, 2013, compared with 47,162 sales agents and representatives, and 1,341 professional claims adjustors as of June 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

 

CNinsure expects its total net revenues to grow by approximately 5% for the third quarter of 2013 compared with the corresponding period in 2012. This forecast reflects CNinsure’s current view, which is subject to change.

 

Conference Call

 

The Company will host a conference call to discuss the second quarter and first half 2013 results at

 

Time:	9:00 PM Eastern Daylight Time on August 20, 2013
	or 9:00 AM Beijing/Hong Kong Time on August 21, 2013

  

The dial-in numbers:

 

United States	1-845-675-0438
United Kingdom	0800-015-9724
Canada	1-855-757-1565
Taiwan	0080-665-1951
Hong Kong	852-3051-2745
China (Mainland)	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

 

 

	IR-158

 

Additionally, a live and archived web cast of this call will be available at:

http://ir.cninsure.net/events.cfm

  

About CNinsure Inc.

 

CNinsure is a leading independent intermediary company operating in China. CNinsure's distribution network reaches many of China’s most economically developed regions and affluent cities. The Company distributes a wide variety of property and casualty and life insurance products underwritten by domestic and foreign insurance companies operating in China, and provides insurance claims adjusting as well as other insurance-related services.

 

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 CNinsure and the industry. Potential risks and uncertainties include, but are not limited to, those relating to CNinsure's limited operating history, especially its limited experience in selling life insurance products, its ability to attract and retain productive agents, especially entrepreneurial agents, its ability to maintain existing and develop new business relationships with insurance companies, its ability to execute its growth strategy, its ability to adapt to the evolving regulatory environment in the Chinese insurance industry, its ability to compete effectively against its competitors, quarterly variations in its operating results caused by factors beyond its control and macroeconomic conditions in China and their potential impact on the sales of insurance products. All information provided in this press release is as of August 20, 2013, and CNinsure undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although CNinsure believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Further information regarding risks and uncertainties faced by CNinsure is included in CNinsure's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F.

 

 

	IR-158

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.

 

 

	IR-158

 

CNINSURE INC.

Unaudited Condensed Consolidated Balance Sheets

(In thousands)

 

		As of December 31,				As of June 30,				As of June 30,
		2012				2013				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

 

 

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CNINSURE INC.

Unaudited Condensed Consolidated Balance Sheets-(Continued)

 

(In thousands)

 

		As of December 31,				As of June 30,				As of June 30,
		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 CNinsure Inc. of RMB30,689 and  RMB24,384 (US$3,973) as of December 31, 2012 and June 30, 2013, respectively)			98,124				81,078				13,210
Insurance premium payables (including insurance premium payables of the consolidated VIEs without recourse to CNinsure Inc. of RMB202 and RMB502 (US$82) as of December 31, 2012 and June 30, 2013, respectively)			2,941				4,160				678
Other payables and accrued expenses (including other payables and accrued expense of the consolidated VIEs without recourse to CNinsure Inc. of RMB35,000 and RMB20,850 (US$3,397) as of December 31, 2012 and June 30, 2013, respectively)			116,124				75,275				12,265
Accrued payroll (including accrued payroll of the consolidated VIEs without recourse to CNinsure Inc. of RMB4,382 and RMB3,758 (US$612) as of December 31, 2012 and June 30, 2013, respectively)			42,317				35,508				5,785
Income tax payable (including income tax payable of the consolidated of VIEs without recourse to CNinsure Inc. of RMB2,037 and RMB2,042 (US$333) as of December 31, 2012 and June 30, 2013, respectively)			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 CNinsure Inc. of RMB3,030 and RMB3,030 (US$494) as of December 31, 2012 and June 30, 2013, respectively)			3,030				3,030				494
Total current liabilities			318,539				253,500				41,304

 

 

	IR-158

 

CNINSURE INC.

Unaudited Condensed Consolidated Balance Sheets-(Continued)

(In thousands)

 

		As of December 31,				As of June 30,				As of June 30,
		2012				2013				2013
		RMB				RMB				US$
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 CNinsure Inc. shareholders’ equity			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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CNINSURE INC.

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
		June 30,												June 30,
		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

 

 

	IR-158

 

CNINSURE INC.

Unaudited Condensed Consolidated Statements of Income and Comprehensive Income-(Continued)

(In thousands, except for shares and per share data)

 

		For The Three Months Ended												For The Six Months Ended
		June 30,												June 30,
		2012				2013				2013				2012				2013				2013
		RMB				RMB				US$				RMB				RMB				US$
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 CNinsure Inc’s shareholders			34,717				17,995				2,932				89,547				38,268				6,235

 

  

	IR-158

 

CNINSURE INC.

Unaudited Condensed Consolidated Statements of Cash Flow

(In thousands)

 

		For The Three Months Ended												For The Six Months Ended
		June 30,												June 30,
		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	)

 

 

	IR-158

 

CNINSURE INC.

Unaudited Condensed Consolidated Statements of Cash Flow-(Continued)

(In thousands)

 

		For the Three Months Ended June 30,												For the Six Months Ended  June 30,
		2012				2013				2013				2012				2013				2013
		RMB				RMB				US$				RMB				RMB				US$
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 optionsres			—				—				—				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

 

 

	IR-158

 

CNINSURE INC.

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 June 30, 2012
		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 June 30, 2013
		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.

 

 

	IR-158

 

CNINSURE INC.

Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures-(Continued)

(In RMB in thousands, except shares and per share data)

 

		For The Six Months Ended June 30, 2012
		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

 

		For The Six Months Ended June 30, 2013
		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.

 

 

 

	IR-158

For more information, please contact:

 

Oasis Qiu

 

Investor Relations Manager

 

Tel: +86 (20) 6122-2731

 

Email: qiusr@cninsure.net

 

Source: CNinsure Inc.