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 JANUARY 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) 6621-0631
(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-________.
CHINA FINANCE ONLINE CO. LIMITED
FORM 6-K
TABLE OF CONTENT
PAGE
----
Signature Page 3
Press release regarding fourth quarter and full year 2004 results, dated
January 27, 2005 Page 4
-2-
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: Chief Financial Officer
Date: January 27, 2005
-3-
CHINA FINANCE ONLINE REPORTS FOURTH QUARTER AND FULL YEAR 2004 RESULTS
(Beijing, China, January 27, 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 fourth quarter and the
full year ended December 31, 2004:
HIGHLIGHTS FOR THE FOURTH QUARTER OF 2004
* Net revenues grew by 229% year-over-year and 24%
quarter-over-quarter to US$2.07 million for the fourth quarter
of 2004.
* Net income grew by 426% year-over-year and 44% quarter-over-quarter
to US$1.85 million for the quarter. Diluted income per ADS was
US$0.09 for the quarter and diluted income per share was
US$0.02 for the quarter.
* Gross margin for the quarter was 95%, compared to 89% for the same
period in 2003 and 94% in the previous quarter. Net income
margin increased to 89% from 56% for the same period in 2003
and 77% in the previous quarter.
HIGHLIGHTS FOR THE FULL YEAR 2004
* Net revenues grew by 165% to US$6.02 million from US$2.27 million
for the full year 2003.
* Net income grew by 286% to US$4.60 million from US$1.19 million for
the full year 2003. Diluted income per ADS was US$0.26 for the
full year 2004 and diluted income per share was US$0.05 for
the full year 2004.
* Gross margin for the full year 2004 was 93%, compared to 87% for the
full year 2003. Net income margin increased to 76% for the
full year 2004 from 52% for the full year 2003.
FINANCIAL RESULTS
For the fourth quarter of 2004, China Finance Online reported net revenues of
US$2.07 million, an increase of 229% from US$631,000 for the same period in
2003, or 24% from US$1.67 million in the previous quarter, primarily due to
continued growth in average subscription fee per subscriber and an increase in
the number of subscribers. Revenue from our advertising related business for the
quarter contributed US$250,000, an increase of 28% from the previous quarter.
For the full year ended December 31, 2004, net revenues increased 165% from
US$2.27 million for the full year 2003 to US$6.02 million. This increase is
primarily the result of rapid expansion of our subscription business.
Gross profit increased by 251% to US$1.97 million for the fourth quarter of 2004
from US$562,000 for the same period in 2003 as cost of revenues decreased as a
percentage of net revenues. Gross margin was 95% in the fourth quarter of 2004
compared with 89% for the same period in 2003 and 94% in the previous quarter.
Gross profit for the full year 2004 increased by 185% to US$5.62 million from
US$1.97 million for the full year 2003. Gross margin for the full year 2004 was
93% compared with 87% for the full year 2003.
Operating expenses for the fourth quarter of 2004 totaled US$533,000, an
increase of 140% from US$222,000 reported for the same period in 2003. This
increase is primarily the result of an increase in our sales and marketing
expenses and, to a lesser extent, an increase in our general and administrative
expenses and stock-based compensation expenses. Total operating expenses were
26% of net revenues for the fourth quarter of 2004 compared to 35% for the same
period in 2003, due to the faster rate of increase in revenues relative to these
expenses.
-4-
- Sales and marketing expenses for the fourth quarter of 2004 increased by
184% to US$245,000 from US$86,000 for the same period in 2003. This
increase is largely the result of an increase in our advertising
expenditures starting in early 2004 and an increase in the number of our
customer service and sales personnel to meet the increased subscription
demand.
- General and administrative expenses for the fourth quarter of 2004 were
US$172,000, an increase of 76% from US$98,000 for the same period in 2003,
mainly due to an increase in staff compensation as a result of the
increased number of employees and, to a lesser extent, an increase in bank
service fees that banks charge on the customer payment through online
banking and wiring.
- Product development expenses for the fourth quarter of 2004 were
US$50,000, an increase of 32% from US$38,000 for the same period in 2003,
primarily due to an increase in the salary and compensation expenses of
personnel engaged in the research, development and implementation of our
new products.
For the year ended December 31, 2004, total operating expenses were US$1.70
million, an increase of 104% from US$833,000 for the full year 2003, resulting
from the rapid expansion of our business and operations.
As a result of the foregoing, income from operations for the fourth quarter of
2004 was US$1.44 million, an increase of 323% from US$340,000 for the same
period in 2003 and an increase of 25% from US$1.15 million for the previous
quarter. Net income for the fourth quarter of 2004 was US$1.85 million,
representing an increase of 426% from US$352,000 for the same period in 2003, or
44% from US$1.28 million in the previous quarter.
For the full year 2004, income from operations was US$3.92 million, an increase
of 244% from US$1.14 million for the full year 2003. Net income for the full
year 2004 was US$4.60 million, an increase of 286% from US$1.19 million for the
full year 2003.
Net income margin for the fourth quarter in 2004 was 89%, compared to 56% for
the same period in 2003 and 77% in the previous quarter. Our net income for the
fourth quarter includes an income tax benefit of US$199,000, which is mainly due
to the temporary difference arising from deferred revenue. Basic income per ADS
was US$0.11, and basic income per share was US$0.02 for the fourth quarter of
2004. Diluted income per ADS was US$0.09 and diluted income per share was
US$0.02 for the fourth quarter of 2004.
For the full year 2004, net income margin was 76% compared to 52% for the full
year 2003. Net income for the full year 2004 includes an income tax benefit of
US$384,000, which is mainly due to the temporary difference arising from
deferred revenue. Basic income per ADS was US$0.59 and basic income per share
was US$0.12 for the full year 2004. Diluted income per ADS was US$0.26 and
diluted income per share was US$0.05 for the full year 2004.
The number of new subscribers for the fourth quarter of 2004 was 3,977, a 21%
increase from 3,298 for the same period in 2003, primarily attributable to
increased visitors' traffic to our website, which increased our user base, and
our enhanced marketing efforts, which resulted in a higher number of new
subscribers being converted from users of our website. The number of new
subscribers for the third quarter and the fourth quarter of 2004 remained
relatively flat, primarily due to the continued weakness of China's stock
markets during the fourth quarter of 2004, partially offsetting our enhanced
marketing efforts during the same period. Repeat subscribers for the fourth
quarter of 2004 were 3,115, an increase of 54% from 2,029 for the same period in
2003, or an increase of 31% from 2,372 during the previous quarter. This
increase is primarily due to the strong customer loyalty to our products, which
was partially offset by the continued weak Chinese stock markets.
-5-
Average subscription fee per subscriber, or ASF, for new subscribers increased
by 105% to US$285 for the fourth quarter of 2004 from US$139 for the same period
in 2003, or by 30% from US$219 in the previous quarter. ASF for repeat
subscribers increased by 134% to US$297 for the fourth quarter of 2004 from
US$127 for the same period in 2003, or by 11% from US$268 in the previous
quarter. The increase in our ASF for both new and repeat subscribers reflects
the company's continued efforts in migrating its subscribers to more
comprehensive and higher priced service packages.
CONFERENCE CALL
China Finance Online's management team will host a conference call at 8:00PM
Eastern Standard Time on January 31, 2005 (or 9:00AM on February 1, 2005 in the
Beijing/HK time zone).
The conference call will be available on Webcast live and for replay at:
http://www.jrj.com.cn/englishver3/index.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 +852-3006-8191, Singapore toll free
number +800-852-3396; Password for all regions: CFO12.
A replay of the call will be available from approximately 9:00PM Eastern Time on
January 31, 2005 (or 10:00AM on February 1, 2005 in the Beijing/HK time zone) to
9:00 PM Eastern Time on February 14, 2005 (or 10:00 AM on February 15, 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 852-3006-8191, Singapore toll free
number 800-852-3396; Passcode for all regions: 818189.
SAFE HARBOR STATEMENT
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. These forward-looking statements can be identified by
terminology such as "will," "expects," "anticipates," "future," "intends,"
"plans," "believes," "estimates" and similar statements. Among other things, the
Business Highlights section and quotations from management in this press
release, as well as China Finance Online's strategic and operational plans,
contain forward looking statements. China Finance Online may also make written
or oral forward-looking statements in its periodic reports to the U.S.
Securities and Exchange Commission on forms 20-F and 6-K, etc., in its annual
report to shareholders, in press releases and other written materials and in
oral statements made by its officers, directors or employees to third parties.
Statements that are not historical facts, including statements about China
Finance Online's beliefs and expectations, are forward-looking statements.
Forward-looking statements involve inherent risks and uncertainties. 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 losses, its
limited operating history, declines or disruptions in the online financial
industry, the recurrence of SARS, China Finance Online's reliance on
relationships with Chinese stock exchanges and raw data providers, fluctuations
in quarterly operating results, failure to successfully compete against new and
existing competitors, and other risks outlined in China Finance Online's filings
with the U.S. Securities and Exchange Commission, including its registration
statement on Form F-1, as amended. China Finance Online does not undertake any
obligation to update any forward-looking statement, except as required under
applicable law.
ABOUT CHINA FINANCE ONLINE CO. LIMITED
-6-
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
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.
For further information please contact:
Junling Cai
China Finance Online Co. Limited
Tel: (+86-10) 6621-0425
Email: ir@jrj.com
-7-
China Finance Online Co. Limited
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands of U.S. dollars, except per share data)
For the three months ended Year ended Dec. 31
----------------------------------------------- ------------------------------
Dec. 31 2003 Dec. 31 2004 Sept. 30 2004 2003 2004
(unaudited) (unaudited) (unaudited) (note) (unaudited)
------------ ------------- ------------ ----------- ------------
Gross revenues 645 2,097 1,682 2,354 6,064
Business tax (14) (23) (9) (83) (48)
----------- ------------ ----------- ----------- -----------
Net revenues 631 2,074 1,673 2,271 6,016
Cost of revenues (69) (103) (102) (298) (393)
----------- ------------ ----------- ----------- -----------
Gross profit 562 1,971 1,571 1,973 5,623
Operating expenses:
General and administrative (98) (172) (104) (304) (441)
Product development (38) (50) (42) (149) (172)
Sales and marketing (86) (245) (210) (284) (800)
Stock-based compensation -- (66) (66) (96) (289)
----------- ------------ ----------- ----------- -----------
Total operating expenses (222) (533) (422) (833) (1,702)
Income from operations 340 1,438 1,149 1,140 3,921
Interest income 12 217 33 51 293
Other expense -- (1) -- (1) (1)
Income before income taxes 352 1,654 1,182 1,190 4,213
----------- ------------ ----------- ----------- -----------
Income tax benefit -- 199 102 -- 384
----------- ------------ ----------- ----------- -----------
Net income 352 1,853 1,284 1,190 4,597
Dividends on preference shares -- -- -- (352) --
Income attributable to
ordinary shareholders 352 1,853 1,284 838 4,597
Income per share
Basic 0.02 0.02 0.06 0.04 0.12
Diluted 0.01 0.02 0.01 0.01 0.05
Income per ADS
Basic 0.08 0.11 0.28 0.21 0.59
Diluted 0.02 0.09 0.07 0.06 0.26
Weighted average ordinary shares
Basic 22,123,600 87,940,639 22,853,600 20,124,153 38,912,491
Diluted 73,599,933 107,832,969 85,960,343 72,562,516 90,092,668
Weighed average ADSs
Basic 4,424,720 17,588,128 4,570,720 4,024,831 7,782,498
Diluted 14,719,987 21,566,594 17,192,069 14,512,503 18,018,534
-8-
China Finance Online Co. Limited
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands of U.S. dollars)
Dec. 31 2004 Dec. 31 2003
(unaudited) (note)
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents 70,596 5,806
Accounts receivable 34 --
Income tax recoverable 14 283
Prepaid expenses and other current assets 332 92
Total current assets 70,976 6,181
Property and equipment, net 417 351
Rental deposit 31 24
Goodwill, net 51 51
Deferred tax assets 386 --
Total assets 71,861 6,606
------- ------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Deferred revenue 3,487 1,278
Accrued expenses and other current liabilities 286 94
Dividend payable -- 503
Total current liabilities 3,773 1,875
Shareholders' equity
Ordinary shares 13 9
Additional paid-in-capital 64,175 5,094
Retained earnings 4,225 (372)
Deferred stock compensation (325) --
Total shareholders' equity 68,088 4,731
Total liabilities and shareholders' equity 71,861 6,606
Note: the information for the year ended December 31, 2003 is derived from the
audited financial statements contained in the Company's registration statement.
-9-