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Financial Highlights for Second quarter of 2015
(RMB in thousands, except per ADS) | 2015Q2 | 2014Q2 | CHANGE % |
Total net revenues | 672,060 | 508,853 | 32.1% |
Operating income | 22,295 | 18,717 | 19.1% |
Online spending expenses (1) | 17,915 | 8,094 | 121.3% |
Non-GAAP operating income (2) | 40,210 | 26,811 | 50.0% |
Net income attributable to the Company's shareholders | 80,119 | 55,203 | 45.1% |
Adjusted EBITDA (3) | 66,953 | 53,314 | 25.6% |
Basic net income per ADS (RMB) | 1.39 | 1.10 | 26.1% |
Basic net income per ADS (US$) | 0.22 | 0.18 | |
(1) Online spending expenses is defined as expenses incurred by online and mobile initiatives such as expenses relating to the development, implementation and support of CNpad, Baoxian.com, eHuzhu and Chetong.net. | |||
(2) Non-GAAP operating income is defined as operating income excluding online spending expenses. | |||
(3) Adjusted EBITDA is defined as net income before income tax expense, investment income, interest income, depreciation, amortization, compensation expenses associated with stock options, and online spending expenses. |
Business Highlights:
"We reported strong top line growth of over 32.1% year-over-year for the second quarter of 2015, once again beating our prior guidance, which was driven by stellar growth across our various businesses," said Mr.
"Notably, we made steady progress in our online initiatives, with growing contributions from online initiatives and improvements in our operating efficiency. During the second quarter of 2015, the percentage of total revenue attributable to online businesses grew from 10.2% last year to 25.8%, beating our expectations, while our non-GAAP operating expense ratio4 dropped from 19.5% a year-ago to 16.8%, benefiting from the expanded implementation of our CNpad mobile App. As a result, despite our continued investment in online initiatives in the second quarter of 2015, our overall operating income was up 19.1% as compared to the same period last year.
"The achievements that we made online and offline in the second quarter reinforced our confidence and determination to build up our O2O platform. Looking forward to the second half of 2015, we will focus our efforts on three programs, which we call our, 'Full Coverage of Sales Network ', 'Accelerated Growth of Sales Force' and 'Platform Opening-up' programs.
"Firstly, with our Full Coverage of Sales Network program, we aim to achieve full coverage of our offline sales network in regions where we currently have no market presence, through establishing new branches, acquisitions or franchising. In addition, we will pursue horizontal alliances and make strategic investments in entrepreneurial companies that focus on internet insurance distribution and service, so as to further enhance our online presence.
"Secondly, through our Accelerated Growth of Sales Force program, we hope to take advantage of the opportunity to consolidate individual sales agent channels brought about by the recent amendment to the Chinese Insurance Law, which has removed certificate requirements on insurance sales agents and brokers. By targeting the 3 million individual insurance sales agents in the Chinese insurance market, we hope to increase our marketing resources, give them access to a wide range of insurance and financial products and use our online tools to attract more top talent to join
"Thirdly, with our Platform Opening-up program, we will open up our integrated platform to our peer companies, alliances and insurance companies, including our online tools, IT infrastructure, contractual relationship with insurance companies and offline service support.
"As we execute these three major programs, we expect our top line growth to accelerate in the second half of 2015 and we believe we are on track to achieve 30% annual top line growth and
Financial Results for the Second Quarter of 2015
Total net revenues were
Net revenues for the insurance agency business were
Net revenues for the insurance brokerage business were
Net revenues for the claims adjusting business were
Total operating costs and expenses were
Total operating costs were
Costs of insurance agency business were
Costs of insurance brokerage business were
Costs of claims adjusting business were
Selling expenses were
General and administrative expenses were
As a result of the preceding factors, operating income was
Operating margin was 3.3% for the second quarter of 2015, compared with 3.7% for the corresponding period in 2014.
Non-GAAP operating income was
Non-GAAP operating margin was 6.0% for the second quarter of 2015, as compared to 5.3% for the corresponding period in 2014.
Investment income was
Interest income was
Income tax expense was
Share of income of affiliates was
Net income attributable to the Company's shareholders was
Net margin was 11.9% for the second quarter of 2015 compared with 10.8% for the corresponding period in 2014.
Basic and diluted net income per ADS were
Adjusted EBITDA was
Adjusted EBITDA margin was 10.0% for the second quarter of 2015, compared with 10.5% for the corresponding period in 2014.
Diluted adjusted EBITDA per ADS was
As of
Recent Developments:
Business Outlook
Conference Call
The Company will host a conference call to discuss its second quarter 2015 results as per the following details.
Time:
or
The toll free 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 | 800-906-606 |
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+81 345036013 |
The toll dial-in numbers: | |
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400-120-0654 |
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+65-6723-9385 |
Conference ID #:2392084 |
Additionally, a live and archived web cast of this call will be available at: http://ir.cninsure.net/events.cfm
About
Our online platforms include (1) Baoxian.com, an online entry portal for comparing and purchasing health, accident, travel and homeowner insurance products; (2) CNpad, a mobile sales support application; (3) Chetong.net, a public service platform for the insurance industry and (4) eHuzhu (www.ehuzhu.com), a non-profit online mutual aid platform in
For more information 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, 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 operating income, non-GAAP operating income margin, non-GAAP expense ratio, adjusted EBITDA, adjusted EBITDA margin and diluted adjusted EBITDA per ADS, which are non-GAAP financial measures. Non-GAAP operating income is defined as operating income before expenses associated with the Company's online and mobile initiatives including expenses relating to the development, implementation and support of CNpad, Baoxian.com, eHuzhu and Chetong.net. Non-GAAP operating income margin is defined as non-GAAP operating income divided by total net revenues. Non-GAAP expense ratio is defined as selling expenses and general and administration expenses excluding expenses associated with the Company's online and mobile initiatives and share-based compensation expenses divided by total net revenues. Adjusted EBITDA is defined as net income before income tax expense, investment income, interest income, depreciation, amortization, compensation expenses associated with stock option and expenses incurred on online and mobile initiatives. Adjusted EBITDA margin is defined as adjusted EBITDA divided by total net revenues. Diluted adjusted EBITDA per ADS is defined as adjusted EBITDA divided by total number of ADS on a diluted basis. 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 such measures exclude items that were significant in the second quarter of 2015 and the corresponding period of 2014, and these items have been, and will continue to be, significant recurring factors in our business.
In light of these 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 Non-GAAP Operating Income and Non-GAAP Operating Income Margin", "Reconciliation of Non-GAAP Expenses Ratio" and "Reconciliations of Net Income to Adjusted EBITDA and Adjusted EBITDA Margin" set forth at the end of this release.
CNINSURE INC. | |||
Unaudited Condensed Consolidated Balance Sheets | |||
(In thousands) | |||
As of |
As of |
As of |
|
2014 | 2015 | 2015 | |
RMB | RMB | US$ | |
ASSETS: | |||
Current assets: | |||
Cash and cash equivalents | 2,103,068 | 1,835,519 | 296,051 |
Restricted cash | 7,478 | 13,563 | 2,187 |
Short term investments | 688,900 | 990,000 | 159,678 |
Accounts receivable, net | 186,150 | 224,888 | 36,272 |
Insurance premium receivables | 472 | 2,323 | 375 |
Other receivables | 88,149 | 89,581 | 14,449 |
Amounts due from related parties | 209,601 | 131,377 | 21,190 |
Other current assets | 17,908 | 18,767 | 3,027 |
Total current assets | 3,301,726 | 3,306,018 | 533,229 |
Non-current assets: | |||
Property, plant, and equipment, net | 47,171 | 38,502 | 6,210 |
Goodwill and intangible assets, net | 165,072 | 158,072 | 25,495 |
Deferred tax assets | 2,638 | 3,588 | 579 |
Investment in affiliates | 219,703 | 240,060 | 38,719 |
Other non-current assets | 12,176 | 15,228 | 2,456 |
Total non-current assets | 446,760 | 455,450 | 73,459 |
Total assets | 3,748,486 | 3,761,468 | 606,688 |
LIABILITIES AND EQUITY: | |||
Current liabilities: | |||
Accounts payable (including accounts payable of the consolidated variable interest entities ("VIEs") without recourse to |
128,765 | 132,682 | 21,400 |
Insurance premium payables (including insurance premium payables of the consolidated VIEs without recourse to |
2,942 | 5,307 | 856 |
Other payables and accrued expenses (including other payables and accrued expense of the consolidated VIEs without recourse to |
109,412 | 153,772 | 24,802 |
Accrued payroll (including accrued payroll of the consolidated VIEs without recourse to |
40,096 | 38,401 | 6,194 |
Income tax payable (including income tax payable of the consolidated of VIEs without recourse to |
54,225 | 59,615 | 9,615 |
Total current liabilities | 335,440 | 389,777 | 62,867 |
Non-current liabilities: | |||
Other tax liabilities | 53,855 | 61,463 | 9,913 |
Deferred tax liabilities | 24,931 | 23,269 | 3,753 |
Total non-current liabilities | 78,786 | 84,732 | 13,666 |
Total liabilities | 414,226 | 474,509 | 76,533 |
Ordinary shares | 8,563 | 8,572 | 1,383 |
Additional paid-in capital | 2,601,401 | 2,478,971 | 399,834 |
Statutory reserves | 198,422 | 197,702 | 31,887 |
Retained earnings | 764,963 | 878,804 | 141,743 |
Accumulated other comprehensive loss | (105,106) | (105,472) | (17,012) |
Subscription receivables | (257,491) | (257,300) | (41,500) |
Total |
3,210,752 | 3,201,277 | 516,335 |
Non-controlling interests | 123,508 | 85,682 | 13,820 |
Total equity | 3,334,260 | 3,286,959 | 530,155 |
Total liabilities and equity | 3,748,486 | 3,761,468 | 606,688 |
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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 | For The Six Months Ended | |||||
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|||||
2014 | 2015 | 2015 | 2014 | 2015 | 2015 | |
RMB | RMB | US$ | RMB | RMB | US$ | |
Net revenues: | ||||||
Agency | 379,405 | 509,530 | 82,182 | 731,003 | 943,062 | 152,107 |
Brokerage | 55,124 | 97,129 | 15,666 | 106,187 | 183,195 | 29,548 |
Claims adjusting | 74,324 | 65,401 | 10,549 | 137,867 | 125,304 | 20,210 |
Total net revenues | 508,853 | 672,060 | 108,397 | 975,057 | 1,251,561 | 201,865 |
Operating costs and expenses: | ||||||
Agency | (291,744) | (397,583) | (64,126) | (556,933) | (736,863) | (118,849) |
Brokerage | (44,346) | (77,370) | (12,479) | (84,136) | (145,840) | (23,522) |
Claims adjusting | (40,013) | (39,751) | (6,412) | (77,533) | (81,058) | (13,074) |
Total operating costs | (376,103) | (514,704) | (83,017) | (718,602) | (963,761) | (155,445) |
Selling expenses | (24,362) | (30,255) | (4,880) | (48,568) | (57,439) | (9,264) |
General and administrative expenses | (89,671) | (104,806) | (16,904) | (175,960) | (207,214) | (33,422) |
Total operating costs and expenses | (490,136) | (649,765) | (104,801) | (943,130) | (1,228,414) | (198,131) |
Income from operations | 18,717 | 22,295 | 3,596 | 31,927 | 23,147 | 3,734 |
Other income, net: | ||||||
Investment income | 17,078 | 31,473 | 5,076 | 24,251 | 34,380 | 5,545 |
Interest income | 21,791 | 16,519 | 2,665 | 44,016 | 35,081 | 5,658 |
Others, net | 466 | 2,896 | 467 | 660 | 4,947 | 798 |
Income before income taxes and income of affiliates | 58,052 | 73,183 | 11,804 | 100,854 | 97,555 | 15,735 |
Income tax expense | (7,268) | (9,930) | (1,602) | (14,536) | (13,039) | (2,103) |
Share of income of affiliates | 8,050 | 12,511 | 2,018 | 14,469 | 20,357 | 3,283 |
Net income | 58,834 | 75,764 | 12,220 | 100,787 | 104,873 | 16,915 |
Less: net gain (loss) attributable to noncontrolling interests | 3,631 | (4,355) | (702) | 883 | (8,248) | (1,330) |
Net income attributable to the Company's shareholders | 55,203 | 80,119 | 12,922 | 99,904 | 113,121 | 18,245 |
Net income per share: | ||||||
Basic | 0.06 | 0.07 | 0.01 | 0.10 | 0.10 | 0.02 |
Diluted | 0.05 | 0.07 | 0.01 | 0.10 | 0.09 | 0.02 |
Net income per ADS: | ||||||
Basic | 1.10 | 1.39 | 0.22 | 2.00 | 1.97 | 0.32 |
Diluted | 1.10 | 1.33 | 0.21 | 1.99 | 1.88 | 0.30 |
Shares used in calculating net income per share: | ||||||
Basic | 1,000,294,943 | 1,151,455,352 | 1,151,455,352 | 999,603,760 | 1,151,013,086 | 1,151,013,086 |
Diluted | 1,006,066,521 | 1,204,537,067 | 1,204,537,067 | 1,004,712,385 | 1,203,037,444 | 1,203,037,444 |
Net income | 58,834 | 75,764 | 12,220 | 100,787 | 104,873 | 16,915 |
Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments | (468) | 640 | 103 | 5,637 | (175) | (28) |
Comprehensive income | 58,366 | 76,404 | 12,323 | 106,424 | 104,698 | 16,887 |
Less: Comprehensive income attributable to the noncontrolling interests | 3,631 | (4,355) | (702) | 883 | (8,248) | (1,330) |
Comprehensive income attributable to the |
54,735 | 80,759 | 13,025 | 105,541 | 112,946 | 18,217 |
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Unaudited Condensed Consolidated Statements of Cash Flow | ||||||
(In thousands) | ||||||
For The Three Months Ended | For The Six Months Ended | |||||
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2014 | 2015 | 2015 | 2014 | 2015 | 2015 | |
RMB | RMB | US$ | RMB | RMB | US$ | |
OPERATING ACTIVITIES | ||||||
Net income | 58,834 | 75,764 | 12,220 | 100,787 | 104,873 | 16,915 |
Adjustments to reconcile net income to net cash generated from operating activities: | ||||||
Depreciation | 7,447 | 4,216 | 680 | 15,139 | 10,839 | 1,748 |
Amortization of intangible assets | 3,818 | 3,127 | 504 | 7,234 | 6,681 | 1,077 |
Allowance for doubtful receivables | 1,419 | 213 | 35 | 3,128 | 612 | 99 |
Compensation expenses associated with stock options | 6,722 | 3,993 | 644 | 14,326 | 8,634 | 1,393 |
Investment income | (10,670) | (17,479) | (2,819) | (10,670) | (19,587) | (3,159) |
(Gain) loss on disposal of property, plant and equipment | (54) | 24 | 4 | (85) | (5) | (1) |
Share of income of affiliates | (8,050) | (12,511) | (2,018) | (14,469) | (20,357) | (3,283) |
Changes in operating assets and liabilities | 24,195 | (2,108) | (340) | 17,368 | (40,099) | (6,468) |
Net cash generated from operating activities | 83,661 | 55,239 | 8,910 | 132,758 | 51,591 | 8,321 |
Cash flows used in investing activities: | ||||||
Purchase of property, plant and equipment | (1,493) | (828) | (134) | (2,945) | (2,164) | (349) |
Proceeds from disposal of property and equipment | 307 | 69 | 11 | 358 | 317 | 51 |
Proceeds from disposal of short term investment | 16,859 | 246,379 | 39,739 | 16,859 | 268,487 | 43,304 |
Disposal of subsidiaries, net of cash | — | (3,416) | (551) | — | (3,416) | (551) |
Purchase of short term investments | (310,000) | (550,000) | (88,710) | (360,000) | (550,000) | (88,710) |
Acquisition of subsidiaries, net of cash | 1,015 | — | — | 1,015 | — | — |
Decrease (increase) in restricted cash | 8,167 | (4,410) | (711) | 482 | (6,085) | (981) |
Decrease in other receivables | 35,700 | — | — | (5,055) | — | — |
Purchase of intangible assets | (118) | — | — | (118) | — | — |
Return of investment in non-current assets | — | — | — | 400 | — | — |
Addition in investment in non-current assets | — | (1,000) | (161) | — | (1,000) | (161) |
(Increase) decrease in amounts due from related parties | (43,488) | 120,000 | 19,355 | (72,589) | 84,227 | 13,585 |
Net cash used in investing activities | (293,051) | (193,206) | (31,162) | (421,593) | (209,634) | (33,812) |
Cash flows generated from (used in) financing activities: | ||||||
Acquisition of additional interests in subsidiaries | — | — | — | — | (108,000) | (17,419) |
Dividend distributed to noncontrolling interests | — | — | — | — | (2,450) | (395) |
Proceeds on exercise of stock options | 837 | 1,119 | 180 | 3,183 | 1,119 | 180 |
Net cash generated from (used in) financing activities | 837 | 1,119 | 180 | 3,183 | (109,331) | (17,634) |
Net decrease in cash and cash equivalents | (208,553) | (136,848) | (22,072) | (285,652) | (267,374) | (43,125) |
Cash and cash equivalents at beginning of period | 2,217,629 | 1,971,727 | 318,020 | 2,288,623 | 2,103,068 | 339,204 |
Effect of exchange rate changes on cash and cash equivalents | (468) | 640 | 103 | 5,637 | (175) | (28) |
Cash and cash equivalents at end of period | 2,008,608 | 1,835,519 | 296,051 | 2,008,608 | 1,835,519 | 296,051 |
Interest paid | — | — | — | — | — | — |
Income taxes paid | 6,419 | 551 | 89 | 14,390 | 2,745 | 443 |
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Reconciliations of Non-GAAP Operating Income and Non-GAAP Operating income Margin | ||||||
(In thousands, unaudited) | ||||||
For The Three Months Ended | For The Six Months Ended | |||||
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2014 | 2015 | 2015 | 2014 | 2015 | 2015 | |
RMB | RMB | US$ | RMB | RMB | US$ | |
Operating income | 18,717 | 22,295 | 3,596 | 31,927 | 23,147 | 3,734 |
Online spending expenses | 8,094 | 17,915 | 2,890 | 14,995 | 42,052 | 6,783 |
Non-GAAP Operating Income | 26,811 | 40,210 | 6,486 | 46,922 | 65,199 | 10,517 |
Total net revenues | 508,853 | 672,060 | 108,397 | 975,057 | 1,251,561 | 201,865 |
Non-GAAP Operating Income Margin | 5.3% | 6.0% | 6.0% | 4.8% | 5.2% | 5.2% |
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Reconciliation of Non-GAAP Expenses Ratio | ||||||
(In thousands, unaudited) | ||||||
For The Three Months Ended | For The Six Months Ended | |||||
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|
|||||
2014 | 2015 | 2015 | 2014 | 2015 | 2015 | |
RMB | RMB | US$ | RMB | RMB | US$ | |
Selling expenses | 24,362 | 30,255 | 4,880 | 48,568 | 57,439 | 9,264 |
General and administrative expenses | 89,671 | 104,806 | 16,904 | 175,960 | 207,214 | 33,422 |
Total expenses | 114,033 | 135,061 | 21,784 | 224,528 | 264,653 | 42,686 |
Online spending expenses | (8,094) | (17,915) | (2,890) | (14,995) | (42,052) | (6,783) |
Compensation expenses associated with stock options | (6,722) | (3,993) | (644) | (14,326) | (8,634) | (1,393) |
Non-GAAP expenses | 99,217 | 113,153 | 18,250 | 195,207 | 213,967 | 34,510 |
Total net revenues | 508,853 | 672,060 | 108,397 | 975,057 | 1,251,561 | 201,865 |
Non-GAAP Operating expenses ratio | 19.5% | 16.8% | 16.8% | 20.0% | 17.1% | 17.1% |
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Reconciliations of Net Income to Adjusted EBITDA and Adjusted EBITDA Margin | ||||||
(In thousands, unaudited) | ||||||
For The Three Months Ended | For The Six Months Ended | |||||
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2014 | 2015 | 2015 | 2014 | 2015 | 2015 | |
RMB | RMB | US$ | RMB | RMB | US$ | |
Net income | 58,834 | 75,764 | 12,220 | 100,787 | 104,873 | 16,915 |
Income tax expense | 7,268 | 9,930 | 1,602 | 14,536 | 13,039 | 2,103 |
Investment income | (17,078) | (31,473) | (5,076) | (24,251) | (34,380) | (5,545) |
Interest income | (21,791) | (16,519) | (2,665) | (44,016) | (35,081) | (5,658) |
Depreciation | 7,447 | 4,216 | 680 | 15,139 | 10,839 | 1,748 |
Amortization of intangible assets | 3,818 | 3,127 | 504 | 7,234 | 6,681 | 1,077 |
Compensation expenses associated with stock options | 6,722 | 3,993 | 644 | 14,326 | 8,634 | 1,393 |
Online spending expenses | 8,094 | 17,915 | 2,890 | 14,995 | 42,052 | 6,783 |
Adjusted EBITDA | 53,314 | 66,953 | 10,799 | 98,750 | 116,657 | 18,816 |
Total net revenues | 508,853 | 672,060 | 108,397 | 975,057 | 1,251,561 | 201,865 |
Adjusted EBITDA Margin | 10.5% | 10.0% | 10.0% | 10.1% | 9.3% | 9.3% |
1This announcement contains currency conversions 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
2Active users are defined as users who made at least one purchase through CNpad App during the specified period.
3Active customer accounts are defined as customer accounts that made at least one purchase directly through www.baoxian.com or its mobile application during the specified period.
4Non-GAAP expense ratio is defined as selling expenses and general and administration expenses excluding expenses associated with the Company's online and mobile initiatives and share-based compensation expenses divided by total net revenues.
CONTACT: For more information, please contact: Oasis Qiu Investor Relations Manager Tel: +86 (20) 6122-2731 Email: qiusr@cninsure.netSource:
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