UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF NOVEMBER 2005
CHINA FINANCE ONLINE CO. LIMITED
(Translation of registrant's name into English)
ROOM 610B, 6/F PING'AN MANSION
NO. 23 FINANCIAL STREET
XICHENG DISTRICT, BEIJING 100032
CHINA
(86-10) 6621-4728
(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 [X] FORM 40-F [ ]
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):
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):
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
YES [ ] NO [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 2g3-2(b): 82- N.A. .
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The index of exhibits may be found at Page 2
CHINA FINANCE ONLINE CO. LIMITED
FORM 6-K
TABLE OF CONTENTS
PAGE
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Signature Page 3
Press release regarding third quarter 2005 results, dated November 3, 2005 Page 4
SIGNATURES
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.
CHINA FINANCE ONLINE CO. LIMITED
By: /s/ Sam Qian
-----------------------------------------
Name: Sam Qian
Title: President and Chief Financial Officer
Date: November 3, 2005
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CHINA FINANCE ONLINE REPORTS THIRD QUARTER 2005 RESULTS
(Beijing, China, November 3, 2005) China Finance Online Co. Limited (Nasdaq:
JRJC), a leading Chinese online financial information and listed company data
provider, today announced its financial results for the quarter ended September
30, 2005:
* Net revenues for the quarter grew by 8% compared to the same period in
2004 to $1.81 million.
* Net income was $1.27 million for the quarter, a decrease of 1% from
$1.28 million for the same period in 2004. Basic and diluted income
per ADS were US$0.06 and US$0.07, respectively, for the quarter. Basic
and diluted income per share were each US$0.01 for the quarter.
* Gross margin for the quarter was 94%, the same compared to the same
period in 2004. Net income margin was 70% for the quarter, compared to
77% for the same period in 2004.
FINANCIAL RESULTS
For the third quarter of 2005, China Finance Online reported net revenues of
$1.81 million, an increase of 8% from $1.67 million for the same period in 2004.
This increase was primarily due to increase in revenues generated from
advertising related business. Net revenues for the quarter stayed relatively
flat compared to net revenues of $1.84 million for the second quarter of 2005.
Revenues from advertising related business for the quarter contributed $449,000,
representing 25% of net revenues for the quarter.
Gross profit for the quarter increased to $1.70 million, an increase of 8% from
$1.57 million for the same period in 2004, which is in line with the increase in
net revenues. Gross margin was 94% in the third quarter, the same compared to
the same period in 2004 and to the second quarter of 2005.
Operating expenses for the third quarter totalled $1.01 million, an increase of
139% from $422,000 reported for the same period in 2004. This increase is
primarily due to increases in our general and administrative expenses, sales and
marketing expenses, and to a lesser extent, increases in product development
expenses. Operating expenses for the third quarter were the same compared to
operating expenses for the second quarter. Total operating expenses were 56% of
net revenues for the third quarter of 2005, compared with 25% for the same
period in 2004.
o General and administrative expenses for the quarter were $306,000, an
increase of 193% from $104,000 for the same period in 2004. This increase
is primarily due to reporting and other related costs associated with our
becoming a public company in the U.S. The increase to a lesser extent is
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also due to increase in staff compensation as a result of increased
headcounts.
o Sales and marketing expenses for the quarter increased by 157% from
$210,000 for the same period in 2004 to $539,000. This increase is largely
due to an online marketing campaign we conducted during the third quarter.
We have established numerous sponsorships and co-branding partnerships with
many popular Chinese portals since the second quarter of 2005 to promote
our brand name and attract greater user traffic to our website. This
marketing campaign is part of our plan to apply our IPO proceeds to help
the distribution and sales of our products.
o Product development expenses for the quarter were $66,000, an increase of
56% from $42,000 for the same period in 2004, which is primarily due to
increases in the salary and compensation expenses of personnel engaged in
the research, development and implementation of our new products.
As a result of the foregoing, income from operations for the third quarter of
2005 was $693,000, a decrease of 40% from $1.1 million for the same period in
2004 and a decrease of 4% from $722,000 for the second quarter of 2005. Net
income for the third quarter of 2005 was $1.27 million, a decrease of 1% from
$1.28 million for the same period in 2004 and an increase of 26% from $1.01
million for the previous quarter. As part of the net income for the third
quarter, we recorded a net exchange gain of $327,000 due to the recent change in
the exchange rates between U.S. dollar and RMB.
Net income margin for the third quarter of 2005 was 70%, compared to 77% for the
same period in 2004 and 55% for the previous quarter. The total income tax
expense for the quarter was $115,000 compared to an income tax benefit of
$102,000 for the same period in 2004. The difference is attributable primarily
to the fact that CFO Beijing was exempted from enterprise income tax in 2004 but
are subject to 12% enterprise income tax rate in 2005. Basic income per ADS was
$0.07, and basic income per share was $0.01 for the third quarter of 2005.
Diluted income per ADS was $0.06, and diluted income per share was $0.01 for the
quarter.
The number of new subscribers for the third quarter of 2005 was 2,626,
representing a decrease of 35% from 4,069 for the same period in 2004. Repeat
subscribers for the third quarter of 2005 totalled 1,910, representing a
decrease of 19% from 2,372 for the same period in 2004. Decreases in number of
new subscribers and in number of repeat subscribers from the same period last
year were primarily due to the fact that Chinese stock markets during the third
quarter of this year was weaker compared to the same period last year.
Average subscription fee per subscriber, or ASF, for new subscribers decreased
by 24% to $166 for the third quarter of 2005 from $219 for the same period in
2004 but increased by 1% from $165 for the previous quarter. ASF for repeat
subscribers decreased by 6% to $253 for the third quarter of 2005 from $268 for
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the same period in 2004 but increased by 3% from $246 for the previous quarter.
We believe that the increase in our ASFs quarter over quarter is primarily
attributable to the fact that stock markets in China were more volatile during
the second quarter of 2005 than they were during the third quarter, which
resulted in greater subscriber interests in our more sophisticated service
packages during the third quarter.
UPDATES OF OUR NEW PRODUCT
We launched our new product, Tao of Wealth, in August this year. Tao of Wealth
is our new proprietary financial service package which combines personal finance
tools such as book keeping, financial report and payment alert with
comprehensive real time personal wealth management product information and news.
As of October 31, we recorded over 160,000 downloads for Tao of Wealth.
CONFERENCE CALL
China Finance Online's management team will host a conference call at 8:00PM
Eastern Standard Time on November 3, 2005 (or 9:00AM on November 4, 2005 in the
Beijing/HK time zone) following the announcement.
The conference call will be available on Webcast live and for replay at:
http://www.chinafinanceonline.com/investor/earning_releases.asp. The call will
be archived for 12 months at this website.
The dial-in details for the live conference call: U.S. toll free number
+1-877-847-0047, Hong Kong toll free number +852-3006-8101, Singapore toll free
number +800-852-3396 and France Toll Free Number 0800-918-066; Password for all
regions: 2223.
A replay of the call will be available from approximately 9:00PM Eastern Time on
November 3, 2005 (or 10:00AM November 4, 2005 in the Beijing/HK time zone) to
9:00PM Eastern Time on November 10, 2005(or 10:00AM November 11, 2005 in the
Beijing/HK time zone). The dial-in details for the replay: U.S. Toll Free Number
+1-877-847-0047, HK Toll Free Number +852- 3006-8101, Singapore Toll Free Number
800-852-3396 and France Toll Free Number 0800-918-066, Passcode: 617366.
ABOUT CHINA FINANCE ONLINE CO. LIMITED
China Finance Online Co. Limited specializes in providing online financial and
listed company data and information in China. Through its website, www.jrj.com,
the company offers subscription-based service packages that integrate financial
and listed company data and information from multiple sources with features and
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functions such as data and information search, retrieval, delivery, storage and
analysis. These features and functions are delivered through proprietary
software that is available by download.
SAFE HARBOR STATEMENTS
This announcement contains forward-looking statements. These statements are made
under the "safe harbor" provisions of the U.S. Private Securities Litigation
Reform Act of 1995.
Statements that are not historical facts, including statements about our beliefs
and expectations, are forward-looking statements. These statements are based on
current plans, estimates and projections, and therefore you should not place
undue reliance on them. Forward-looking statements involve inherent risks and
uncertainties. We caution you that a number of important factors could cause
actual results to differ materially from those contained in any forward-looking
statement. Potential risks and uncertainties include, but are not limited to,
China Finance Online's historical and possible future losses, limited operating
history, uncertain regulatory landscape in the People's Republic of China,
fluctuations in quarterly operating results, failure to successfully compete
against new and existing competitors, and the company's reliance on China
Finance Online's reliance on relationships with Chinese stock exchanges and raw
data providers. Further information regarding these and other risks is included
in China Finance Online's annual report on Form 20-F for the year ended December
31, 2004, and other filings with the Securities and Exchange Commission. China
Finance Online does not undertake any obligation to update any forward-looking
statement, except as required under applicable law.
For further information please contact:
Jing Wu
China Finance Online Co. Limited
Tel: (86-10) 6621-0425
Email: ir@jrj.com
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China Finance Online Co. Limited
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands of U.S. dollars, except per share data)
Three months ended
Sept. 30, 2005 Sept. 30, 2004 Jun. 30, 2005
(unaudited) (unaudited) (unaudited)
Gross revenues $ 1,850 $ 1,682 $ 1,875
Business tax (38) (9) (33)
------------- ------------- -------------
Net revenues 1,812 1,673 1,842
Cost of revenues (109) (102) (111)
------------- ------------- -------------
Gross profit 1,703 1,571 1,731
Operating expenses
General and administrative (306) (104) (373)
Product development (66) (42) (54)
Sales and marketing (539) (210) (486)
Stock-based compensation (99) (66) (96)
------------- ------------- -------------
Total operating expenses (1,010) (422) (1,009)
Income from operations 693 1,149 722
Interest income 369 33 388
Exchange gain (net) 327 - -
------------- ------------- -------------
Income before income taxes 1,389 1,182 1,110
Income tax benefit (expenses) (115) 102 (101)
------------- ------------- -------------
Net income $ 1,274 $ 1,284 $ 1,009
Income attributable to
ordinary shareholders 1,274 1,284 1,009
Income per share
Basic 0.01 0.06 0.01
Diluted 0.01 0.01 0.01
Income per ADS
Basic 0.07 0.28 0.05
Diluted 0.06 0.07 0.05
Weighted average ordinary shares
Basic 91,137,056 22,853,600 95,534,474
Diluted 101,496,896 85,960,343 106,128,111
Weighed average ADSs
Basic 18,227,411 4,570,720 19,106,895
Diluted 20,299,379 17,192,069 21,225,622
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China Finance Online Co. Limited
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands of U.S. dollars)
Sept. 30 2005 Dec. 31 2004
(unaudited) (note)
ASSETS
Current assets:
Cash and cash equivalents 63,337 70,596
Account receivable 12 34
Income tax recoverable - 14
Prepaid expenses and other current assets 1,374 332
Deferred tax assets 130 386
Total current assets 64,853 71,362
Property and equipment, net 441 417
Rental deposit 40 31
Goodwill, net 51 51
Total assets 65,385 71,861
------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Deferred revenue 2,655 3,487
Accrued expenses and other current liabilities 146 286
Dividend payable - -
Income tax payable 34 -
Total current liabilities 2,835 3,773
Shareholders' equity
Ordinary shares 13 13
Additional paid in capital 64,288 64,175
Treasury stock (10,000) -
Retained earnings 7,786 4,225
Deferred stock compensation (130) (325)
Accumulated other comprehensive income (loss) 593 -
Total shareholders' equity 62,550 68,088
Total liabilities and shareholders' equity 65,385 71,861
Note: the information for the year ended December 31, 2004, is derived from the
audited financial statements.
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