WEB NEWS Comments & Business Outlook
BEIJING, March 23, 2020 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq: CNET) ("ChinaNet" or the "Company"), an integrated online advertising, precision marketing, and data analysis and management platform company, today announced that it has filed with the Securities and Exchange Commission (the “SEC”) on March 20, 2020, to extend its 2019 Form 10-K filing deadline by 45 days to May 14, 2020.
The Company applied for the extension due to the outbreak of the COVID-19 novel coronavirus, which has caused a delay in its auditor’s ability to perform the required audit work as well as a delay in the Company’s ability to consolidate and analyze its financial statements for the preparation of its annual report on Form 10-K.
Importantly, the Company conducts its business operations in China, primarily in two cities, Beijing and Xiaogan, Hubei Province. Xiaogan is located close to Wuhan in Hubei Province, which was the epicenter of the COVID-19 outbreak. In accordance with the epidemic control measures imposed by the local governments, the Company’s business entities in Xiaogan and Beijing have been closed since the Chinese New Year holiday. As a result, the Company’s accounting and other staffs have not been able to complete the annual closing and audit process in accordance with the original schedule. While the Company has partially re-opened its office in Beijing on March 10, 2020, its office in Xiaogan is not expected to be re-opened until April 1, 2020.
The Company has taken all possible measures to overcome the adverse impacts derived from the COVID-19 outbreak related to the annual audit and filing of the Form 10-K. Based upon the currently available information, the Company expects to be able to complete the annual audit and file the Form 10-K within the extension period granted by the SEC.
Comments & Business Outlook
BEIJING, March 10, 2020 (GLOBE NEWSWIR E) -- ChinaNet Online Holdings, Inc. (Nasdaq: CNET) ("ChinaNet" or the "Company"), an integrated online advertising, precision marketing, and data analysis and management platform company, today provided an update on the relief measures that it is currently implementing in support of those companies impacted by the COVID-19 outbreak in China. These relief measures are expected to help those companies to combat the negative impacts of the COVID-19 outbreak on their businesses and support small and medium enterprises (“SMEs”) throughout the country to stabilize their workforce.
The Company's relief measures include the following:
1. Special service discounts
2. Online streaming tools
3. Blockchain technology solutions
4. AI-powered matching system solutions
5. Exploration of cooperative financing for SMEs with verification system on the blockchain
6. Donation of medical supplies to Xiaogan, Hubei province
Comments & Business Outlook
Third Quarter 2019 Financial Results
Total revenues for the third quarter of 2019 were $15.5 million compared to $17.0 million in the corresponding period of 2018. This decrease was primarily caused by reduced revenues generated from the distribution of search engine marketing services for key search engines in the third quarter of 2019.
Net loss attributable to ChinaNet Online Holdings, Inc. was $0.39 million in the third quarter of 2019, compared to $3.0 million in the corresponding period of 2018.
“Despite the challenging macro headwinds and evolving industry landscape, we continued to stay the course and maintain alignment with our long-term growth strategies,” commented Mr. Handong Cheng, Chairman, President, and Chief Executive Officer of ChinaNet. “During the quarter, we actively adjusted our search engine marketing business by refining our customer payment requirements, bolstering our management process for accounts receivables, and actively engaging with our key partners in dialogues, we made significant headway towards improving our access to search engine resources. We also stepped up investments to enhance the effectiveness of our sales lead generation capabilities. Notably, these investments enabled us to improve both the accuracy of ads on the Company’s ad portals and boost customer satisfaction. Going forward, we will continue to prudently manage and refine our search engine marketing services business and advertising business, both of which we believe will continue to serve as meaningful growth drivers going forward.
In addition, the successful execution of the private placement from strategic investors has provided ChinaNet with the necessary components to execute its growth strategies and fully capitalize on the coming opportunities for expansion. The combination of our strategic investors’ commercial and technological resources will further enable us to penetrate both domestic and international markets while cultivating synergies across business lines. In addition, this capital injection will also shore up our position against the current macro challenges and bolster our investment capabilities in turn, further enabling us to develop new revenue streams through prudent investment. Looking ahead, we are confident that our ability to integrate our industry leadership with strategic partner resources will supercharge our ability to capture the emerging growth opportunities in both domestic and international markets.”
Notable Share Transactions
BEIJING, Oct. 28, 2019 (GLOBE NEWSWIRE
In connection with the closing, the Company issued 1,608,430 shares of common stock (the “Shares”) in consideration for approximately $2.4 million, representing half of the total $4.8 million worth of Shares to be disbursed under the aforementioned Securities Purchase Agreement. Pursuant to the Securities Purchase Agreement, the Company totally issued 3,216,860 shares of its common stock in consideration for approximately $4.8 million. The Company sold each Share to Investors at $1.4927 per Share and conducted the private placement pursuant to Section 4(2) of the Securities Act of 1933, as amended, and Regulation S promulgated thereunder.
The descriptions of the Securities Purchase Agreement contained in this announcement do not purport to be complete and are qualified in their entirety by reference to the complete text of the Securities Purchase Agreement. A copy of the Securities Purchase Agreement has been filed with the U.S. Securities and Exchange Commission.
“The completion of the private placement from our strategic investors marks a major milestone in our efforts to unlock ChinaNet’s future growth potential,” commented Mr. Handong Cheng, Chairman, President, and Chief Executive Officer of ChinaNet. “As we continue to work towards expanding our business both at home and abroad, the integration of our strategic investors’ commercial and technological resources will help to fuel our growth engine. Additionally, our strengthened capital position will bolster our ability to weather current macro headwinds and enable us to prudently invest in the development of new revenue streams outside of the domestic market. Going forward, we are confident that the combination of our strategic partners’ resources and experience as a leading online advertising and data-analysis service provider will position us well to seize the tremendous growth opportunities both in China and on a global scale.”
Auditor trail
BEIJING, Oct. 14, 2019 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (CNET ) ("ChinaNet" or the "Company"), an integrated online advertising, precision marketing and data analysis and management platform company, today announced that, effective as of October 7, 2019, the Company has appointed Centurion ZD CPA & Co. (“CZD”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2019.
CZD will replace the Company’s previous independent registered public accounting firm Marcum Bernstein & Pinchuk LLP (“MarcumBP”), which the Company dismissed on October 7, 2019. The change of the Company’s independent registered public accounting firm was approved by the Audit Committee of ChinaNet’s Board of Directors.
MarcumBP had served as the Company’s independent registered public accounting firm since 2011. MarcumBP’s audit report on the financial statements of the Company for each of the two most recent fiscal years ended December 31, 2017 and 2018 did not contain any adverse opinion or disclaimer of opinion, and such audit report was not qualified or modified as to uncertainty, audit scope or accounting principles, except that MarcumBP’s report contained an explanatory paragraph regarding the Company’s ability to continue as a going concern. The financial statements did not include any adjustments that might have resulted from the outcome of this uncertainty.
During the Company’s two most recent fiscal years ended December 31, 2017 and 2018, and any subsequent interim period through the date of MarcumBP’s dismissal, there were no: (1) disagreements between the Company and MarcumBP on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements that, if not resolved to MarcumBP’s satisfaction, would have caused MarcumBP to make reference to the subject matter of the disagreement in connection with its report issued in connection with the audits of the Company’s financial statements, or (2) “reportable events” as described under Item 304(a)(1)(v)(A), (B) and (D) of Regulation S-K of the rules and regulations of the Securities and Exchange Commission, during the two fiscal years of the Company ended December 31, 2017 and 2018 or in any subsequent period up to the date of dismissal.
Notable Share Transactions
BEIJING, Sept. 25, 2019 (GLOBE NEWSWIRE) -CNET ) ("ChinaNet" or the "Company"), an integrated online advertising, precision marketing, and data analysis and management platform company, today announced the closing of the first half of a private placement with a select group of investors (the “Investors”) in accordance with the Securities Purchase Agreement, originally entered into by the Company and Investors on August 7, 2019.
In connection with the closing, the Company issued 1,608,430 shares of common stock (the “Shares”) in consideration for approximately $2.4 million, representing half of the total $4.8 million worth of Shares to be disbursed under the aforementioned Securities Purchase Agreement. The Company sold each Share to Investors at $1.4927 per Share and conducted the private placement pursuant to Section 4(2) of the Securities Act of 1933, as amended, and Regulation S promulgated thereunder.
The descriptions of the Securities Purchase Agreement contained in this announcement do not purport to be complete and are qualified in their entirety by reference to the complete text of the Securities Purchase Agreement. A copy of the Securities Purchase Agreement has been filed with the U.S. Securities and Exchange Commission.
Comments & Business Outlook
Second Quarter 2019 Financial Results
Total revenues for the second quarter of 2019 were $15.5 million compared to $22.5 million in the corresponding period of 2018. This decrease was primarily caused by reduced revenues generated from the distribution of search engine marketing services for key search engines in the second quarter of 2019.
Net loss attributable to ChinaNet Online Holdings, Inc. was $0.4 million in the second quarter of 2019, compared to $9.5 million in the corresponding period of 2018.
Recent Developments
On July 8, 2019, the Company announced the appointment of Mr. Mark Li to the position of the Company’s Chief Financial Officer, effective immediately. Mr. Zhige Zhang has resigned from the role of Chief Financial Officer due to personal reasons. Mr. Mark Li has 20 years of experience working in financial roles. Most recently, Mr. Li served as Chief Financial Officer for DMG Entertainment & Media, a global entertainment and media company with operations in North America and Asia. Prior to this role, Mr. Li served as Financial Director at China Digital Culture and in other senior financial management positions. Mr. Li holds a bachelor’s degree in Economics from Chongqing Institute of Industry Management and a master’s degree in Finance from Central University of Finance and Economics. Mr. Li is a member of both the China Institute of Certified Public Accounts (CICPA) and Association of Chartered Certified Accounts (ACCA).
Mr. Handong Cheng, Chairman, President and Chief Executive Officer of CNET, stated, “Our previously announced private placement agreement with strategic investors will help to shore up our capital position going forward and provide us with future growth opportunities. We plan to leverage the commercial and technological resources of strategic investors to supercharge our business development initiatives and, in doing so, propel our launch into a new growth cycle. We are excited to explore the synergies between both parties’ resources and optimistic regarding our potential to grow new, profitable lines of businesses through these collaborations both in China and on a global scale. Such international expansion will help to reduce our exposure to the current risks throughout the domestic market as well as enable us to better support small and medium-sized companies in China to meet and overcome this same macroeconomic uncertainty through our products and services.
We will continue to integrate blockchain and AI technology within our products and services for advertising, marketing, and data analytics. Such integration will take the scope of our business to the next level, improve our margin, and increase our revenue streams over the long-term. Within China and throughout Asia, there are many opportunities to support small and medium-sized companies in an increasingly uncertain economic environment. Going forward, we will continue leveraging our deep industry experience and close business relationships to serve these organizations and address their pain points.
Furthermore, we remain committed to bolstering our management and refining our cost structure. In July, we appointed Mr. Mark Li as our new Chief Financial Officer. With extensive leadership and operational experience in financial management, we are confident that Mr. Li will be a great asset for us as we continue to optimize our current operations and expand our data and blockchain businesses.”
Notable Share Transactions
BEIJING, Aug. 12, 2019 (GLOBE NEWSWIRE ) -- ChinaNet-Online Holdings, Inc. (CNET) ("ChinaNet" or the "Company"), an integrated online advertising, precision marketing, and data analysis and management platform company, today announced that it entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with selected investors related to the purchase and sale of the Company’s common stock on August 7, 2019.
Under the Securities Purchase Agreement, the Company agreed to issue an aggregate of 3,216,860 shares of common stock for US$4.8 million. Each Share will be sold to investors at $1.4927 per Share. This private placement was conducted pursuant to Section 4(2) of the Securities Act of 1933, as amended, and Regulation S promulgated thereunder. The descriptions of the Securities Purchase Agreement contained in this announcement does not purport to be complete and is qualified in its entirety by reference to the complete text of the Securities Purchase Agreement. A copy of the Securities Purchase Agreement has been filed to the U.S. Securities and Exchange Commission.
“The private placement from our strategic investors will not only strengthen our capital position, but also enable us to leverage our strategic investors’ commercial and technological resources to accelerate the expansion of our company both in China and on a global scale,” commented Mr. Handong Cheng, Chairman, President, and Chief Executive Officer of ChinaNet. “In addition, by expanding into international markets we will effectively mitigate the current risks of macroeconomic uncertainties in China. Going forward, as we continue to refine the cost structure of our existing business, we are confident that the integration of both parties’ resources will galvanize the growth of our new business initiatives and promote future growth opportunities."
Comments & Business Outlook
BEIJING, April 16, 2019 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (CNET) ("ChinaNet" or the "Company"), an integrated online advertising, precision marketing and data-analysis and management services platform, today announced its audited financial results for the full year of 2018.
Mr. Handong Cheng, Chairman, President, and Chief Executive Officer of CNET, stated, “In January 2019, the Cyberspace Administration of China introduced a series of new regulations for blockchain companies operating in China. After such regulations became effective in February 2019, and in consideration of the broader slowdown of the global blockchain industry, we have decided to decelerate the development of our blockchain platform as well as other related products and services. At the same time, we are evaluating other opportunities to transform our business and rejuvenate growth. However, the company is increasingly constrained by its lack of resources.
“Our original business model has limited profitability, while our plans for AI development and blockchain expansion lack the necessary capital resources required in the current period of uncertain regulatory conditions, both in and outside of China. Due to our weakened cash position, we must limit our expenses and investment in human resources. In the long run, we believe both AI and blockchain will change the whole industry. Due to our limited cash flow and on-going concerns, we plan to engage in a 30% to 45% reduction in our total employee headcount by the end of 2019. This will allow us to sustain and develop both blockchain and AI partnerships at a minimum level of commitment with our existing negative cash flow. We are actively meeting investors in order to secure additional capital investment and will keep our shareholders abreast of our continual progress.”
Fiscal 2018 Financial Results
NET REVENUES
Search engine marketing and data service revenue for the full year of 2018 increased by 27.0% to $47.4 million from $37.4 million in 2017. The growth was primarily attributable to the expansion of the Company’s search engine marketing client base as ChinaNet continued to leverage both its extensive network in the domestic advertising industry and strong partnerships with key search engines. The company offers lower-cost search engine resources to its customers that provide a high return on investment.
COST OF REVENUES AND GROSS PROFIT
Gross profit in the full year of 2018 as a result of increased cost of revenues was $2.4 million, compared to $4.6 million in 2017.
OPERATING LOSS
Sales and marketing expenses in the full year of 2018 decreased by 27.9% to $2.0 million from $2.7 million in 2017. As a percentage of total revenues, sales and marketing expenses decreased to 3.4% from 5.9% in 2017. The decrease was primarily attributable to the Company’s successful execution of cost control initiatives which resulted in a reduction to the headcount and staff salaries of the Company’s sales and marketing department as well as lower advertising expenses in the full year of 2018.
General and administrative expenses in the full year of 2018 decreased by 26.5% to $5.5 million from $7.5 million in 2017. The reduction in general and administrative expenses was primarily due to decreases in the Company’s staff salaries, share-based compensation expenses, professional fees, and other administrative expenses. As a percentage of total revenues, general and administrative expenses decreased to 9.6% from 16.0% in 2017.
Research and development expenses in the full year of 2018 decreased by 26.0% to $0.9 million from $1.3 million in 2017. As a percentage of total revenues, research and development expenses decreased to 1.6% from 2.7% in 2017. The decrease was due to reduced headcount in the Company’s research and development department and its efforts to further optimize its cost and expense structures in the full year of 2018.
Impairment on intangible assets in the full year of 2018 was $3.3 million, compared to $2.6 in 2017. Impairment on intangible assets in the full year of 2018 mostly consisted of impairment loss associated with intangible assets of the Company’s internet advertising and data service business.
Impairment on goodwill in the full year of 2018 was $5.2 million, which was the result of an interim goodwill impairment test that the Company performed on June 30, 2018, due to the decrease in its overall gross profit margin and continued operating losses incurred from its internet advertising and data service business.
Operating loss in the full year of 2018 was $14.5 million, compared to $9.4 million in 2017.
NET LOSS
BALANCE SHEET
Comments & Business Outlook
Third Quarter 2018 Financial Results
Total revenues increased by 26.2% to $17.0 million from $13.5 million in the corresponding period of 2017.
Net loss attributable to ChinaNet Online Holdings, Inc. was $3.0 million in the third quarter of 2018, compared to $2.1 million in the corresponding period of 2017.
Mr. Handong Cheng, Chairman, President and Chief Executive Officer of CNET, stated, “During the third quarter of 2018, we continued to grow our revenue in our core online marketing business, optimize our cost structure, and develop our blockchain-powered ecosystem. In August 2018, we officially launched our blockchain-powered mobile application, BO!News. Since then, its registered user count has reached over 200,000, while its user participation rate continues to improve as we integrate more functionalities into the application. BO!News serves as a cornerstone of our user acquisition strategy as we build out our Business Opportunity Social Ecosystem (BOSE). We aim to create a trustworthy and transparent transaction environment for our users through BOSE. We also seek to help our business customers improve their operational efficiency by providing them with traceable and verifiable sales leads. Through our relentless innovation in AI and blockchain applications and the steady development of our new business initiatives, we should be able to generate continuous shareholder value.”
Mr. George Chu, Chief Operating Officer of CNET stated, “During the third quarter we maintained our growth momentum as our total revenues increased by 26.2% year-over-year, mainly due to a 29.0% increase in revenue from our search engine marketing and data service. At the same time, we continue to improve our operating efficiency. Our total operating expenses as a percentage of total revenues decreased to 22.0% from 24.9% in the same period of 2017, primarily driven by a 67.7% reduction in selling and marketing expenses and a 26.1% reduction in general and administrative expenses during the third quarter of 2018. Going forward, we seek to maintain our revenue growth, shrink our cost structure, and monetize our blockchain applications and ecosystem.”
Comments & Business Outlook
BEIJING, Aug. 27, 2018 (GLOBE NEWSWIRE ) -- ChinaNet-Online Holdings, Inc. (CNET) ("ChinaNet" or the "Company"), an integrated online advertising, precision marketing, and data analysis and management platform company, today announced a breakthrough upgrade of its blockchain-powered marketing and advertising mobile application called BO!News (商机头条).
In addition to its previously released functionalities, the upgraded BO!News app has introduced three brand new features: social networking, crowd funding, and a revamped landing page. The latest version of BO!News has added BO!Social, a blockchain based social networking feature to empower high quality content producers to directly interact with their followers. Such interaction is augmented with the expanded functionalities of Martingale Bonus Points (MBP) to support crowd-funding of new business initiatives across all BO!News-powered online communities. To improve user stickiness and enhance user experience, the Company has also revamped BO!News’ landing page to segment user navigation into three vertical channels including Entrepreneurship, Investment Projects, and Discoveries.
BO!News now forms the cornerstone of a distributed business opportunity transaction platform to encourage and enable all business participants, including aspiring entrepreneurs and established businesspeople, to share industry developments and discuss innovative ideas on a real-time basis. Leveraging blockchain’s decentralized systems, distributed ledgers, immutable data, and provenance of asset, BO!News improves the transparency and effectiveness of advertising services.
“The release of our upgraded BO!News marks a milestone in our development of blockchain-powered marketing applications,” commented Mr. George Chu, Chief Operating Officer of CNET. “Since its initial beta release, BO!News has surpassed the momentous mark of 300,000 user downloads. In addition, BO!News has started generating revenues from subscribers to data and blockchain based advertising and marketing in the last two months consecutively. Although the amount of revenues from BO!News is still immaterial, it nonetheless validates the economic viability of our blockchain initiatives. We are convinced that our investment in blockchain technologies will transform our business and generate satisfactory returns for our shareholders.”
Comments & Business Outlook
Second Quarter 2018 Financial Results
Total revenues increased by 114.5% to $22.5 million from $10.5 million in the corresponding period of 2017.
Net loss attributable to ChinaNet Online Holdings, Inc. was $9.5 million in the second quarter of 2018, compared to $0.8 million in the corresponding period of 2017.
Mr. Handong Cheng, Chairman, President and Chief Executive Officer of CNET, stated, “We continued to grow our existing search engine marketing and data service business while developing a new growth engine in blockchain. During the quarter, we initially launched the beta, and later the official version of BO!News, the first blockchain-powered mobile application to improve the efficiency and transparency of marketing and advertising activities. We also formed Business Opportunity Social Ecosystem (BOSE), a blockchain-based transaction system to improve distribution fairness, enhance transaction credibility, and increase monetization opportunities for the marketing and advertising business community. Going forward, we will remain committed to introducing and integrating additional blockchain applications into our ecosystem, pave our path back to profitable growth, and solidify our leadership position in China’s rapidly expanding blockchain industry.”
Mr. George Chu, Chief Operating Officer of CNET, stated, “In the second quarter of 2018, we continued our strong topline growth momentum and achieved a 114.5% year-over-year growth in total revenues. At the same time, we continued to execute our cost control initiatives. As a result, our sales and marketing, general and administrative, and research and development expenses as a percentage of total revenues decreased by 661 basis points (bps), 288 bps, and 184 bps, respectively, compared to the prior year period. As we sustain the growth trajectory of our search engine marketing and data service business, we will also increase our investments in the future development of blockchain applications.”
Comments & Business Outlook
First Quarter 2018 Financial Results
Net revenues increased by 13.7% to $8.3 million from $7.3 million in the corresponding period of 2017.
Net loss attributable to ChinaNet Online Holdings, Inc. narrowed to $0.6 million in the first quarter of 2018 from $1.1 million in the corresponding period of 2017.
Mr. Handong Cheng, Chairman, President, and Chief Executive Officer of CNET, stated, “We are pleased to enter 2018 with a capital infusion from our equity offering in January. As we make progress in developing a blockchain-powered marketing solution combined with artificial intelligence (AI) for our small-to-medium enterprise customers, we continue to leverage our existing business for cash flow and customer acquisition. We are currently in discussion with a number of B2B commerce platforms who are interested in utilizing our unique blockchain solutions to help improve their merchant credibility and asset traceability. We will provide our shareholders with relevant updates in due course.”
“Looking ahead, we remain committed to building our end-to-end B2B2C ecosystem with our blockchain technology as its foundation. We are confident that we have the right strategy and team in place to secure a leading position in the arena of blockchain applications in China,” Mr. Cheng concluded.
Mr. George Chu, Chief Operating Officer of CNET, stated, “We continue to grow our existing business at a measured pace while allocating the majority of our resources to blockchain technology. During the quarter, our net revenues increased by 13.7% to $8.3 million from $7.3 million in the same period of 2017. With a leaner cost structure and with the capital injection from our equity offering in January this year, we are confident that we will be able to make meaningful progress in the development of our blockchain technology and marketing AI in the coming quarters.”
Comments & Business Outlook
BEIJING, Jan. 23, 2018 (GLOBE NEWSWIRE ) -- ChinaNet-Online Holdings, Inc. (CNET) ("ChinaNet" or the "Company"), an integrated online advertising, precision marketing and data-analysis and management services platform, today announced it has entered into an agreement (“Agreement”) with Wuxi Jingtum Network Technology (“Jingtum” or “Jingtum Technology”) and Ford tree Beijing）Blockchain Technology Co., Ltd. (“Ford Tree”) to establish a new joint venture company (“new JV”) to research and develop blockchain technology and its applications for ChinaNet’s blockchain technical and business units. ChinaNet will act as the controlling shareholder leading all aspects of the project. The new JV will be registered in the territory of the People’s Republic of China and will be established in early February of 2018.
According to the Agreement, Jingtum’s Chief Technology Officer and other leading experts will be involved in the establishment of the new JV. The R&D team under the new JV will help ChinaNet design the underlying foundation of unique layered blockchain architecture, develop the cross-chain functionality between the principal and subordinate chains, realize the circulation of certain assets between different chains, design intelligent contract mechanisms to support complex logic, and complete the cloud service model and other important underlying technology. The framework of this platform will have an on-line beta test in February.
Ford Tree will be responsible for creating and reviewing the operating model for blockchain applications. Ford Tree has a proven track record in developing and operating blockchain applications, especially in the area of digital assets.
“The establishment of the new JV is an important and significant step for ChinaNet to further extend and develop our blockchain technical strategy,” stated Mr. Handong Cheng, CEO of ChinaNet. “We now have set up a clear timetable for the development and implementation of blockchain technology. Our existing platform will further integrate new technologies and applications developed by the new JV into our CloudX artificial intelligence and core business ecosystem. The new JV will provide strong technical support for the ultimate purpose of creating a value sharing ecological environment for ChinaNet.”
Notable Share Transactions
BEIJING, Jan. 12, 2018 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (CNET) ("ChinaNet" or the "Company"), an integrated online advertising, precision marketing and data-analysis and management services platform, today announced that it has entered into a securities purchase agreement with three institutional investors for a registered direct placement of approximately $11 million of shares of common stock of the Company at a price of $5.15 per share. The Company will issue a total of 2,150,001 shares of common stock to the institutional investors. As part of the transaction, the Company will also issue to the investors warrants to purchase up to 645,000 shares of common stock at an exercise price of $6.60 per share, which warrants will have a term of 30 months from the date of issuance.
The net proceeds from this offering are expected to be $10,296,005 and will be used for general working capital purposes. If the warrants are exercised in full, the Company will receive additional proceeds of approximately $4.3 million. The completion of the placement is expected to occur on or about January 17, 2018, subject to the satisfaction of customary closing conditions.
FT Global Capital, Inc. acted as the exclusive placement agent in connection with the offering.
These securities are being offered through a prospectus supplement pursuant to the Company's effective shelf registration statement and base prospectus contained therein. A shelf registration statement relating to these securities has been filed with and declared effective by the Securities and Exchange Commission (the "SEC"). A prospectus supplement related to the offering will be filed with the SEC.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities, in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
For further details of this transaction, please see the Form 8-K to be filed with the SEC.
Comments & Business Outlook
BEIJING, Jan. 11, 2018 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (CNET) ("ChinaNet" or the "Company"), an integrated online advertising, precision marketing and data-analysis and management services platform, today announced that it has appointed Mr. Zhongyi Liu as Chief Strategy Officer to head the Company’s blockchain strategy plan and related business development.
Mr. Zhongyi Liu, the co-founder of a BitCoin company, FuDeShu.com, graduated from Huazhong Agricultural University. He began his career in Xinhua News and attained the role of Chairman of the Hong Kong Xinhua News Agency from 1992 to 1994. Since 1996, he transitioned to the internet industry and became one of the earliest internet entrepreneurs in China. In 1996, Mr. Liu built an Internet community called Student Global Village. In 1999, he founded SOHO Network Technology Co., Ltd. and published a book “How to become a SOHO”. In 2001, he set up Email Post Net, the earliest O2O business model in China. Mr. Liu was also the one of the co-founders of TsingDa Education Corp., known as one of the most successful O2O educational models in China.
In 2013 Mr. Liu entered the mobile internet industry and innovated a personalized mobile network, known as Golden Banyan, an early version of FuDeShu with a technical concept similar to blockchain. In 2015, Golden Banyan revolutionized into FuDeShu, the blockchain service provider and in 2016 he issued an ICO whitepaper, called FuDeCoin (FDB), making it one of the earliest blockchain based ICO adopters in China. In 2017, he originated “Blockchain+” a model that solved the puzzle of operating blockchain in large-scale businesses hoping to create a dynamic business ecosystem.
Mr. Liu has extensive connections and experience in the internet industry as well as in the government sector due to his personal experience in Hong Kong XinHua Press. He knows the need of SMEs in China and has built up a superb reputation in the blockchain industry in China. Mr. Liu will utilize his personal relationships and resources in the mobile internet and blockchain fields, sharing his experience with FuDeShu’s mature blockchain service framework and product cycle to help ChinaNet integrate blockchain into its core intelligent system CloudX. He will assist the Company in building a global business blockchain ecosystem for SMEs around the world and help ChinaNet combine AI and blockchain for marketing and advertising applications and extend our services into transaction related areas.
ChinaNet has been exploring the potential of blockchain for over a year and Mr. Liu has been advising the Company on blockchain for the past four months. Mr. Liu has brought great synergies in our partnership with Jingtum Technology. “Our engagement in blockchain is not impulsive, but rather a strategic decision to explore and trial blockchain applications with our CloudX platform,” stated Mr. Handong Cheng, CEO of ChinaNet. “We believe in blockchain and its ability to change the internet. Within a reasonable period of time, we plan to present our first application utilizing blockchain technology with an updated version our CloudX Ai. We believe once we complete all sectors of blockchain as we have designed, we will create a new era for business applications using blockchain and artificial intelligence for marketing and advertising, as well as multi-dimensional transaction services.
Comments & Business Outlook
BEIJING, Jan. 04, 2018 (GLOBE NEWSWIRE ) -- ChinaNet-Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), an integrated online advertising, precision marketing and data-analysis and management services platform, today announced a strategic partnership with Wuxi Jingtum Network Technology ("Jingtum" or "Jingtum Technology"), the credible blockchain ecology builder and announced the expansion into the blockchain industry and its related technology. Both companies will utilize their respective advantages and exchange each other's work together to jointly develop blockchain applications.
Through the contribution of underlying technologies in the blockchain, Jingtum Technology aims to develop a new generation of value-based internet technologies in China helping to upgrade from an information-based network to a value-based exchange network, establishing a credible ecology and promoting preparation as Chinese enterprises enter a new era of digital assets.
Jingtum’s system is a decentralized and ecologically interactive internet trading network based on blockchain technology. The system addresses data trust issues through cryptography and distributed coherency mechanisms while maintaining rich transactional and contractual features.
This strategic partnership between ChinaNet and Jingtum is focused on blockchain technology to build a credible, fair and transparent platform for business opportunities and transactions. Both companies will aim to develop credible, traceable, and highly secured blockchain applications for business entities. Both companies agree that blockchain technology enjoys extremely large demand in applications for small and medium-sized enterprises including product traceability, product certification, disintermediation, customer identification, and brand communication. The most fundamental value and significance is that the enterprise brand and reputation can be converted into digital form and enter the global digital asset trading market for transactions and circulation. It is believed that the application of blockchain in the field of business development and marketing can help SMEs across the world to build a new business ecosystem based on algorithmic trust.
Mr. Handong Cheng, CEO of ChinaNet-Online, stated, "With the introduction of blockchain technology, the platform-centric services in the past will gradually shift towards decentralization, solving trust issues in business cooperation and services and enhancing user vitality and stickiness.” Mr. Cheng continued, “ChinaNet-Online will also gradually shift from information services to transaction services for business opportunities to create a multi-industry cross-chain value-based internet sharing entity. This partnership will help ChinaNet to further integrate blockchain technology into our CloudX artificial intelligence and simultaneously create the public chain of marketing and advertising for small and medium enterprises, eventually branching out from these areas to gradually cover other applications such as business transactions payments, education and training to create a healthy and sustainable business ecosystem and entrepreneurial environment."
Mr. Yuanwen Wu, CEO of Jingtum Technology, Dean of the Blockchain Research Institute of WOGC of the United Nations and Deputy Secretary-general of Zhongguancun Big Data Industry Alliance said "The application of blockchain technology specifically tailored for SMEs will create a brand-new world of value business opportunities."
Comments & Business Outlook
Third Quarter 2017 Financial Results
Revenues of $13.5 million in the third quarter of 2017, up 13.6% from prior year's $11.9 million.
EPS from continuing operations (Basic & Diluted) was ($ 0.17) vs. last years same quarterly loss of ($0.13) a decrease of -33.4 %.
Comments & Business Outlook
Second Quarter 2017 Financial Results
Revenues of $10.5 million in the second quarter of 2017, up 24.5% from prior year's $8.4 million
Net loss attributable to ChinaNet for the three months ended June 30, 2017 was $0.8 million and loss per share from continuing operations was $0.07, compared to a net loss of $1.3 million and loss per share from continuing operations of $0.11 in the second quarter of 2016.
Comments & Business Outlook
First Quarter 2017 Financial Results
Revenues from internet advertising and data services was $2.3 million, which decreased 36.8% from $3.6 million in the first quarter of 2016.
Net loss attributable to ChinaNet for the three months ended March 31, 2017 was $1.1 million and loss per share from continuing operations was $0.09, compared to a net loss of $1.4 million and loss per share from continuing operations of $0.12 in the first quarter of 2016.
Comments & Business Outlook
BEIJING, April 03, 2017 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (CNET) ("ChinaNet" or the "Company"),"), an integrated online advertising, precision marketing and data-analysis and management services platform, announced today financial results for the fiscal year 2016.
Revenues of $34.8 million in 2016, up 7.7% from prior year's $32.3 million.
EPS from continuing operations* (Basic & Diluted) was ($0.57) vs last years loss of ($0.71).
Comments & Business Outlook
Third Quarter 2016 Financial Results
Revenues of $11.9 million in the third fiscal quarter of 2016, up 40.1% from prior year’s quarter of $8.5 million.
Net loss attributable to ChinaNet for the three months ended September 30, 2016 was $1.5 million and loss per share from continuing operations was $0.13, compared to a net loss of $2.1 million and loss per share from continuing operations of $0.18 in the third quarter of 2015.
Chairman and CEO of ChinaNet, Mr. Handong Cheng commented, "ChinaNet’s evolution has continued to gain traction in 2016, leaving behind our low-margin television advertising business and instead focusing on the business value created from the massive amount of transaction data generated from our customers as an internet and data service. The ongoing development of this data service platform is the foundation for the ecosystem of products and services that will serve any business at important early stages of their business cycle with a one-stop solution. Called the Business Intelligent Marketing Data Services System - CloudX, it is officially in use for our existing clients and will soon launch to our newer cloud service client base. It is driving revenue and growth for us, along with our full suite of digital marketing products and services which is also seeing year over year growth.
“We also remain committed to our shareholders and investors, reflected in our commitment to remain listed on the NASDAQ Capital Markets, which we accomplished in the third quarter. We look forward to further updates on our transition and future developments.”
Comments & Business Outlook
BEIJING, Sept. 06, 2016 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (CNET) ("ChinaNet" or the "Company") announced receipt of a letter from the NASDAQ Stock Market stating that the Company has regained compliance with the $1.00 minimum closing bid price listing requirement and that, accordingly, it has determined to continue the listing of the Company's common stock on the NASDAQ Capital Market.
Previously, ChinaNet had been notified by the NASDAQ Stock Market of non-compliance with the minimum bid price rule because its common stock failed to meet the closing bid price of $1.00 or more for 30 consecutive business days. In order to regain compliance with the rule, the Company was required to maintain a minimum closing bid price of $1.00 or more for at least 10 consecutive trading days. This requirement was met on September 1, 2016, the tenth consecutive trading day when the closing bid price of the Company's common stock traded over $1.00.
Notable Share Transactions
BEIJING, Aug. 18, 2016 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion, business strategies and marketing solutions for small and medium-sized enterprises (SMEs) by utilizing data analysis and cloud computing technologies in the People's Republic of China, today announced a 1-for-2.5 reverse stock split of its issued and outstanding shares of common stock, which will be effective for trading purposes as of the commencement of trading on Friday, August 19, 2016.
The reverse stock split is intended to increase the per share trading price of the Company’s common stock to satisfy the $1.00 minimum bid price requirement for continued listing on The NASDAQ Capital Market. Trading of the Company’s common stock on The NASDAQ Capital Market will continue, on a post-split basis, with the opening of the markets on Friday, August 19, 2016, under the existing trading symbol “CNET” under the new CUSIP # 16949H 201. The reverse stock split reduces the number of shares of the Company’s common stock outstanding from approximately 30.4 million shares of common stock pre-reverse split to approximately 12.2 million shares of common stock post-reverse split.
The number of authorized shares of common stock and the par value per share will remain unchanged. As a result of the reverse stock split, every 2.5 shares of the Company’s pre-reverse split common stock will be combined and reclassified into 1 share of common stock. The number of outstanding options will be adjusted accordingly, with outstanding options being reduced from approximately 2.1 million to approximately 835,000. No fractional shares will be issued in connection with the reverse stock split. Stockholders who would otherwise hold a fractional share of common stock will receive an increase to their common stock as the common stock will be rounded up to a full share.
“Management and the Board of Directors agree that it is favorable for investors that ChinaNet’s shares continue to trade on the NASDAQ Capital Market stock exchange and this reverse split will fulfill the minimum share price requirement for continued listing,” said Handong Cheng, Founder, Chairman and Chief Executive Officer of ChinaNet. “The Company has undergone a major transformation to an internet and data service focused entity and we expect the benefits of that shift to be represented in our top line growth in the second half of 2016 and beyond. This transition will further strengthen our relationships with major internet companies in China and empower our ability to cooperate with other US based internet companies. We plan to provide a comprehensive update to our shareholders and investors within the next 30 days.”
Comments & Business Outlook
Second Quarter 2016 Financial Results
Revenues for the three months ended June 30, 2016 were $8.4 million compared to $9.6 million for the three months ended June 30, 2015, representing an 11.9% decrease.
Net loss attributable to ChinaNet for the three months ended June 30, 2016 was $1.3 million and loss per share was $0.04, compared to a net loss of $1.2 million and loss per share of $0.04 in the second quarter of 2015.
Chairman and CEO of ChinaNet, Mr. Handong Cheng commented, �During the first half of 2016 we have continued our successful path to restructuring our business to reduce low-margin television advertising business, and instead focus on the research and development of our data service system. This effort has begun to payoff, with the internet advertisement and data services segment improving 56.1% from the first quarter of this year to the second. We believe new partnerships like that with Dark Horse Club, and products like our Business Intelligent Marketing Data Services System -- CloudX, now officially launched and with copyright approval, will continue to drive revenue and growth for us in the second half of 2016 and beyond.�
Comments & Business Outlook
BEIJING, Aug. 01, 2016 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company") announced today it has partnered with the restaurant division of Dark Horse Club to provide data-driven marketing services for the fast growing restaurant industry in China.
Established in 2008, Dark Horse Club is an entrepreneurs network connecting industry veterans with newcomers in China. The restaurant division of Dark Horse Club was co-founded by leading restaurant entrepreneurs in China including Zhang Yong, the founder of HaiDiLao Hotpot, Zhang Xuhao, the founder of Ele.me, and Gong Zhenbing, the founder of Baidu Takeout. The restaurant division leverages the expertise and connection of industry veterans to help new entrepreneurs grow their restaurant franchise.
Mr. Cheng Handong, Chairman and CEO of ChinaNet commented, “The restaurant industry in China has regained its growth momentum, achieving annual sales of over 3 trillion Yuan in 2015 and year-over-year growth rate of 12%. An upbeat business prospect is attracting the entry and expansion of many SMEs, which are ideal customers for our Intelligent Marketing Data Services. We are partnering with a leading industry network to help entrepreneurs grow their restaurant businesses.”
At the center of the ChinaNet-Dark Horse Club Partnership is the Super Harbor app, which interfaces the Company’s CloudX ecosystem with consumers. Super Harbor is a membership and point system invested in and technologically supported by ChinaNet. The app constitutes a key component of the Company’s strategic expansion from B2B to the new and differentiated B2B2C business model.
Customers receive points upon dining at restaurants that have signed up to the CloudX system. These points are centrally managed by ChinaNet, and can be used on the Super Harbor online store for products provided by ChinaNet clients. Alternatively, the points can be redeemed at restaurants. The new model generates cross-selling opportunities for restaurants by providing additional benefits to consumers on a unified bonus platform.
“Through this partnership, we look forward to gaining access to members of the Dark Horse Club Restaurant Division including nationwide popular restaurant chains such as HaiDiLao Hotpot, New Spicy Way, Ajisen Ramen and Meizhou Dongpo. We believe the partnership will also help promote the strengths of the CloudX platform and demonstrate the scalability of our new data services,” said Mr. Cheng.
Comments & Business Outlook
BEIJING, May 11, 2016 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion, business strategies and marketing solutions for small and medium-sized enterprises (SMEs) by utilizing data analysis and cloud computing technologies in the People's Republic of China, today announced that its self-developed business intelligent marketing data services system, CloudX, was installed and tested at 13 food and beverage stores for field testing during the Beijing Sakura Festival (the �Festival�) in April with improvements in weekly sales of up to six times average.
The new CloudX system, set to launch officially in late May, collects and analyzes product sale numbers from stores and is analyzed by ChinaNet for suggested adjustments to product stock and inventory to improve customer sales. By utilizing CloudX in stores, ChinaNet can provide owners with sales analysis reports, including each single item�s sales amount and period of time. In addition, by utilizing the combination of We-chat, customized mobile applications, on-line shopping platform and other mobile terminal channels, CloudX can help store owners effectively manage subordinate stores and simultaneously provide accurate marketing strategies to meet the demands of individual customers.
Results from the month long trial showed that the new CloudX system successfully helped all 13 stores increase their average weekly sales revenues, with the highest store achieving six times revenues compared to its first week of sales during the Festival. The Beijing Sakura Festival lasts for one month. After the first week of data collecting and analyzing, ChinaNet instructed store owners how to adjust their inventory and products accordingly. In the second week and third weeks, all 13 shops� sales were up at least 2 to 3 times higher than the first week, with one store achieving six times higher sales. During the last week, the Festival suffered from poor weather, however sales were still higher than the first week.
�The main purpose of this test was to analyze the capability of our CloudX system in helping stores increase their sales revenues, and we were very pleased with the results,� said Mr. Handong Cheng, Chairman and CEO of ChinaNet. �Although these stores sell their single product at an average price of 20 RMB, they achieved total sales of 800,000 RMB during the Festival. We were especially excited to see one individual store increase its weekly sales by 6 times after using CloudX. The system was judged highly by store owners during the Festival. With these results, and after debugging and optimizing, CloudX will be officially launched at the end of May, adding to our growing ecosystem of SME products and services.�
Comments & Business Outlook
BEIJING, April 15, 2016 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today financial results for the fiscal year 2015.
Summary Financials
Fiscal Year 2015 Results (USD)
Previously, ChinaNet had four reportable operating segments, which included Internet Advertisement, TV Advertisement, Bank Kiosk, and Brand Management & Sales Channel Building. ChinaNet exited the Bank Kiosk and Brand Management & Sale Channel Building segments in order to concentrate all resources on its core business, which is internet advertising and online to offline (O2O) sales channel expansion, precision marketing and the related data services. The Brand Management & Sales Channel Building segment qualifies for presentation as a discontinued operation, which results of operations was presented as loss from discontinued operations as a separate component in the statements of operations and comprehensive loss for the years ended December 31, 2015 and 2014, respectively. Since the revenue generated from the Bank Kiosk segment was immaterial, the Company combined the performance of its Bank Kiosk segment with the TV Advertising segment for the years ended December 31, 2015 and 2014 as presented below.
Operating expenses decreased by 12% to $16.9 million for the fiscal year ended December 31, 2015. Sales and marketing expenses decreased by 34% to $4.6 million. General and administrative expenses increased by 30% to $7.5 million. Impairment on fixed assets, intangible assets and goodwill for continued operations decreased by 56% from $4.2 million to $1.8 million. Loss from operations was $9.3 million in 2015, compared to $13.0 million in 2014.
Net loss attributable to ChinaNet common stockholders and net loss per share from continued operations and discontinued operations were $9.1 million, $0.29 per common share and $0.05 per common share for the fiscal year ended December 31, 2015. The weighted average diluted shares outstanding was 26.8 million shares in 2015 versus 22.4 million in 2014.
Balance Sheet and Cash Flow
The Company had $5.5 million in cash and cash equivalents as of December 31, 2015, compared to $5.0 million as of December 31, 2014, working capital of $13.7 million, compared to $17.3 million as of December 31, 2014, and a current ratio of 2.9 to 1, compared to 2.7 to 1 as of December 31, 2014. Total shareholders' equity of ChinaNet was $27.3 million at December 31, 2015 compared to $36.2 million at December 31, 2014.
The Company generated approximately $5.7 million of cash flows from operations for the year ended December 31, 2015 compared to a $2.0 million of cash flows for the year ended December 31, 2014.
Business Updates
ChinaNet has been increasingly focused on integrating small and medium business data and related data analysis services over the last several years. As this project nears completion, this updated business data service will soon serve the Company’s customers with a more convenient and intelligent offering. SMEs will now be able to utilize ChinaNet for their entire business by utilizing all its available internet and mobile tools in one platform, enhancing customer loyalty and sales conversion rates in a convenient and cost-efficient manner. The service will include, but is not limited to, outputting coupons, cash vouchers, and other value-added offerings in the Company’s customized mobile application.
As a result, ChinaNet will now be able to expand the Company’s business coverage to not only SMEs, but to their respective individual customers and their customers’ customers, by incorporating big data analysis and cloud computing technologies.
ChinaNet expects to officially and incrementally launch this business intelligence and data service to its SME clients in the first half of 2016. Revenue is expected to be recognized by deposits, monthly fees and annual fees. As the Company continues to evolve and improve its product and service offerings in response to market demand and new technology, management believes the financial results from the service will improve overall revenues and bottom line performance for ChinaNet as it matures throughout 2016 and beyond.
Comments & Business Outlook
Item 8.01. Other Events.
On September 8, 2015, ChinaNet Online Holdings, Inc. (the “Company”) received a letter from The NASDAQ Stock Market LLC (“NASDAQ”) notifying the Company that, based on the previous 30 consecutive business days, the Company’s listed security no longer met the minimum $1.0 bid price per share requirement. Therefore, in accordance with NASDAQ Listing Rules (the “Rules”), the Company was provided 180 calendar days, or until March 7, 2016, to regain compliance.
The Company’s stock has not regained compliance with the minimum $1.0 bid price per share requirement. However, NASDAQ has determined that the Company is eligible for an additional 180 calendar day period, or until September 6, 2016, to regain compliance. NASDAQ’s determination was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the NASDAQ Capital Market with the exception of the bid price requirement, and the Company’s written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. If at any time during this additional time period the closing bid price of the Company’s security is at least $1.0 per share for a minimum of ten (10) consecutive business days, NASDAQ will provide written confirmation of compliance and the matter will be closed.
Comments & Business Outlook
Third Quarter 2015 Financial Results
Revenues for the three months ended September 30, 2015 were $8.5 million compared to $12.1 million for the three months ended September 30, 2014, representing a 29.2% decrease.
Non-GAAP adjusted net loss attributable to ChinaNet common stockholders and net loss per share were $1.5 million and $0.06, respectively.
Deal Flow
CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities to be Registered
Amount
to be
Registered(1)
Proposed
Maximum
Offering Price
Per Share (2)
Proposed
Maximum
Aggregate
Offering Price (2)
Amount of
Registration Fee
Common Stock, par value $0.001 per share - - -
Preferred Stock, par value $0.001 per share - - -
Warrants - - -
Units - - -
Total
$50,000,000 $5,035(3)(4)
Joint Venture
BEIJING, Sept. 14, 2015 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today that it has signed a strategic partnership agreement with Korean based Genesis BBQ Global Co., Ltd. to help expand its "BBQ Chicken" restaurant chain in China.
BBQ Chicken, founded in 1995, is a well-known franchise restaurant chain in Korea for fried chicken, and "Best of the Best Quality (BBQ)". Today, the company has locations in 59 countries with more than 7,000 outlets in the regions of Asia Pacific, the Middle East, Africa, North America, South America and Europe. BBQ Chicken plans to open over 500 of its restaurants in China in 2015.
Genesis BBQ Chicken and ChinaNet have signed a partnership agreement to expand the Chinese market, create a one-stop purchasing service platform and plan an active online to offline marketing program that includes traditional and online digital advertising, trade shows and referrals. In the next six years, ChinaNet plans to help Genesis BBQ Chicken open 10,000 franchisees in a mix of restaurants and stall shops in 3rd to 5th tier cities across China. Upon the success of opening 10,000 franchisees, franchise fees and revenues will be shared. These franchisees will all be equipped with Business Direct 3.0 solutions for further big data analysis and operation optimization.
The fried chicken market in China has evolved significantly, with an increasing sophistication of Chinese diners looking for new, popular brands, and the need for new healthier options for patrons. BBQ Chicken uses 100% olive oil for frying, giving the brand an extra edge over other competing names by providing customers a tasty yet healthy variety of food. As well, Korean pop culture is a top export to China, accounting for 23.9% of total exports, or about 123 billion RMB. Last year a Korean movie drama, "My Love from the Star", showcased fried chicken and beer culture with its unique glamour, winning a large audience in China.
"This is the second major Korean brand which ChinaNet will now be introducing to China," said George Chu, Chief Operating Officer of ChinaNet Online Holdings. "We are rapidly expanding on our plan to bring unique overseas businesses into China in the form of franchises or chains. We will also help guide and nurture these new businesses to profitability using our brand management and Business Direct 3.0 solutions. Through the future success of these brands, we will demonstrate our capability as a major big data player in China and around the world."
Investor Alert
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
On September 8, 2015, ChinaNet Online Holdings, Inc. (the "Company") received a letter from The NASDAQ Stock Market LLC ("NASDAQ”). NASDAQ indicated in its letter that, based upon the closing bid price for the last 30 consecutive business days, the Company no longer meets the requirement set forth in Listing Rule 5550, which requires listed securities to maintain a minimum bid price of $1 per share.
According to the Listing Rule 5810, the Company now has a period of 180 calendar days from such letter, or until March 7, 2016, to regain compliance. Compliance can be achieved by meeting the standard of a minimum bid price of $1 per share for a minimum of 10 consecutive business days at any time during the 180 day period. The Company is currently looking at all of the options available with respect to regaining such compliance.
Joint Venture
BEIJING, Aug. 19, 2015 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced it has launched a new service, "The GOOD Business of China", along with Baidu and its Tieba division, the largest forum posting platform in China owned by Baidu, Inc. (BIDU), to connect domestic and global businesses with potential and qualified entrepreneurs in China.
"The GOOD Business of China" is the first O2O (online-to-offline) brand and sales lead generation service in the industry and provides online marketing and data exchange and search and roadshow features, as well as other valuable combined O2O entrepreneurial services such as business advisory, due diligence trips and angel investor networking to selected vendors. It is also part of the implementation of ChinaNet's Business Direct 3.0 service with Baidu, as the Company continues to extend its data exchange service through various Baidu portals. With the new service, ChinaNet's served businesses will have more live sales leads information to help expand sales more effectively.
Within a week after launch in early August, forty-five businesses had been carefully selected by ChinaNet out of thousands of domestic and global franchising brands which cater to Chinese consumer growing demands for food, entertainment and services, with over 100 businesses waiting to be added. These selected businesses have collectively pledged up to RMB100 million (US$16 million) funding support to qualified entrepreneurs via fee rebates and O20 marketing budgets through Baidu Direct.
The 45 businesses include a number of well-known brands, including Ice Monster (www.ice-monster.com), selected in 2013 by CNN as one of the best dessert places around the world, and bbq Chicken (www.bbq.co.kr), the largest quick service restaurant chain in Korea. With the new service, business clients such as these can now monitor their brand image and popularity scale using comprehensive analytical information through ChinaNet's big data service combined with Baidu traffic monitoring. They will also receive more live sales leads to help build sales more effectively and efficiently throughout China.
As a key partner of the new service, Baidu, China's largest search engine company, will initially promote the program on Baidu Tieba on a number of selected business forums focusing on start-up business topics and business sectors. Internet users can also learn and research detailed information about the featured business opportunities via other powerful Baidu offerings such as keyword search, Baidu Encyclopedia, Baidu Know and Baidu Library, to discover the best businesses in the hope of finding the next Chinese premiere business.
"Our partnership with Baidu continues to strengthen with this new service offering the first O2O brand and sales lead generation service in the industry," said George Chu, Chief Operating Officer of ChinaNet Online Holdings. "Through the initial three month period, we anticipate potential revenues of up to $0.5 million generated from the 45 selected businesses, with more businesses potentially being added. If successful, we plan to launch the service to all of our existing and potential customers to further drive revenue growth. In the future, we plan to expand the service with various online payment systems so that our business customers can monitor O2O (online to offline) sales results in real time."
The new service was launched on August 8, 2015, at a live ceremony in Zhongguancun along with Baidu, ChinaNet, and the most popular entrepreneurial community, Heima (www.iheima.com). More information about The GOOD Business of China can be viewed at www.hxm888.com.
Comments & Business Outlook
Second Quarter 2015 Financial Results
Revenues for the three months ended June 30, 2015 were $9.6 million compared to $10.4 million
Net loss attributable to ChinaNet for the three months ended June 30, 2015 was $1.2 million and loss per share was $0.05, compared to a net loss of $1.3 million and loss per share of $0.06 in the second quarter of 2014. Excluding the share-based compensation expense as discussed above, the Non-GAAP adjusted net loss attributable to ChinaNet common stockholders and net loss per share were $0.8 million and $0.03, respectively.
Comments & Business Outlook
BEIJING, May 28, 2015 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today that it entered into a definitive securities purchase agreement (the "Agreement") with Dongsys Innovation (Beijing) Technology Development Co., Ltd. (Shenzhen Stock Exchange, Stock Code: 430362) (the "Purchaser" or " Dongsys Innovation ") to raise US$1,250,000 (the "Purchase Price"), pursuant to which the Purchaser has agreed to purchase 1,000,000 shares of common stock of the Company (the "Shares").
In accordance with the Agreement, the Purchaser made a ten percent (10%) non-refundable guarantee payment to the Company in an amount equal to US$125,000 on May 27, 2015. The Purchaser shall pay an additional fifteen percent (15%) of the Purchase Price by June 25, 2015. The Purchaser shall pay the remaining seventy-five percent (75%) of the Purchase Price at the closing which shall take place on the date mutually agreed by the parties, subject to the closing conditions contained in the Agreement. On the date the Agreement was signed, the Purchaser also entered into a Lock-Up Agreement with the Company, whereby the Purchaser agreed not to transfer the Shares until May 26, 2017. Upon the Company's prior written approval, the lock-up restriction may be waived after May 26, 2016.
The proceeds from the offering, net of certain fees and expenses, will be used for working capital to fund technology research and development, marketing for new services and product launches, and potential mergers and acquisitions.
"The Dongsys Innovation capital infusion, along with our diverse set of strategic investors and partners, will be extremely positive in our expansion of Business Direct 3.0 with other new services to be launched in the next three years," said George Chu, Chief Operating Officer of ChinaNet Online Holdings. "The investment is also very positive for us to help increase our market penetration in the SME segment. Dongsys Innovation is committed to providing remote and mobile video conferencing systems and HD video conferencing systems for its customers. Dongsys innovation entered the household application market in 2012, launching its 'Miles Eye' brand series of hardware and software products. 'Miles Eye' is extremely popular with home and small business users because of its stability, ease of install, clear picture quality and low bandwidth capabilities. ChinaNet has thousands of SME customers in China which can use 'Miles Eye' products and services to monitor daily operations of shops and to increase the transparency and security of business operations. It is the exact type of collaboration that we would anticipate from a strategic investor like Dongsys Innovation, and we believe it will lead to a new revenue stream for us in the future."
Deal Flow
1.01 Entry into a Material Definitive Agreement.
Comments & Business Outlook
First Quarter 2015 Financial Results
Revenues for the three months ended March 31, 2015 were $5.8 million compared to $5.2 million for the three months ended March 31, 2014, representing a 12.8% increase
Net loss attributable to ChinaNet for the three months ended March 31, 2015 was $1.8 million and loss per share was $0.07, compared to a net loss of $0.7 million in the first quarter of 2014. Excluding the share-based compensation expense as discussed above, the Non-GAAP adjusted net loss attributable to ChinaNet common stockholders and net loss per share were 1.4 million and 0.05, respectively.
Comments & Business Outlook
Three Months Ended March 31,
2015
2014
(US $)
(US $)
(Unaudited)
(Unaudited)
Sales
From unrelated parties
$ 5,785 $ 5,182
From related parties
63 1
5,848 5,183
Cost of sales
4,946 3,822
Gross margin
902 1,361
Operating expenses
Sales and marketing expenses
1,203 589
General and administrative expenses
1,302 987
Research and development expenses
490 450
2,995 2,026
Loss from operations
(2,093 ) (665 )
Other income (expenses)
Interest income
29 31
Interest expense
(17 ) (16 )
Other income/(expenses)
32 (1 )
44 14
Loss before income tax expense, equity method investments and noncontrolling interests
(2,049 ) (651 )
Income tax benefit/(expense)
226 (48 )
Loss before equity method investments and noncontrolling interests
(1,823 ) (699 )
Share of income/(losses) in equity investment affiliates
1 (15 )
Net loss
(1,822 ) (714 )
Net loss attributable to noncontrolling interests
34 46
Net loss attributable to ChinaNet Online Holdings, Inc.
(1,788 ) (668 )
CHINANET ONLINE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS（ CONTINUED）
(In thousands, except for number of shares and per share data)
Three Months Ended March 31,
2015
2014
(US $)
(US $)
(Unaudited)
(Unaudited)
Net loss
(1,822 ) (714 )
Foreign currency translation loss
(120 ) (324 )
Comprehensive loss
$ (1,942 ) $ (1,038 )
Comprehensive loss attributable to noncontrolling interests
33 45
Comprehensive loss attributable to ChinaNet Online Holdings, Inc.
$ (1,909 ) $ (993 )
Loss per share
Loss per common share
Basic and diluted
$ (0.07 ) $ (0.03 )
Weighted average number of common shares outstanding:
Basic and diluted
26,366,797 22,376,540
Management Discussion and Analysis
Total Revenues: Our total revenues increased to US$5.85 million for the three months ended March 31, 2015 from US$5.18 million for the three months ended March 31, 2014, which represents a 13% increase. This increase was primarily due to the increase in revenues from search engine marketing service, which increase was partially offset by the decrease in revenues from internet adverting and TV adverting services during the period.
Net loss attributable to ChinaNet Online Holdings, Inc.: Total net loss as adjusted by the net loss attributable to the noncontrolling interest shareholders as discussed above yields the net loss attributable to ChinaNet Online Holdings, Inc. Our net loss attributable to ChinaNet Online Holdigs, Inc. was approximately US$1.79 million and US$0.67 million for the three months ended March 31, 2015 and 2014, respectively.
Comments & Business Outlook
BEIJING, May 13, 2015 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today that it has entered into a partnership with Shanghai Pudong Development Bank Co., Ltd (SPD Bank) for a cooperation framework to launch a credit card and loan microcredit product for small enterprises and individual entrepreneurs including franchisees and chain store investors.
A nationwide commercial bank with total assets of over RMB 3.9566 trillion as of September, 2014, SPD Bank and ChinaNet will cooperate to provide a safe, convenient, and transparent service for franchise businesses and entrepreneurs to help solve the difficulties of micro-lending for those often excluded from financial services. The new product is now in the design and finalization process, and will be officially launched by the third quarter of 2015.
ChinaNet will analyze its large data set of customers to help SPD Bank locate and market to target customers. Small enterprises and entrepreneurs will apply online from the convenience of home or office to receive their credit card and micro-loan, without the need to visit a bank location. The product will be intended to offer, under the authorization of ChinaNet, an "unsecured and free mortgage" according to the size of business, with SPD Bank approved terms and no additional threshold requirements. Recipients will receive a credit card that must be used in merchant shops for business related operating costs, and which does not have permission to be used at other point-of-service (POS) machines. The credit card and micro-loan is repaid through its own online banking account at any time to maximize savings on loan interest and reduce borrowing costs, and can be recycled at the end of the period. Other details of the product will be released upon official launch.
"We are excited to be partnering with SPD Bank and hope this new cooperation will help SME business owners and entrepreneurs create their own paths to success with more means of financial support," said George Chu, Chief Operating Officer of ChinaNet Online Holdings. "ChinaNet has served a large number of SMEs, and every year there are at least 100,000 franchisee or chains stores created by our SME clients based on our estimation. ChinaNet recently launched our Business Direct 3.0 solutions with Baidu to help businesses expand their franchise or chain stores through mobile services and marketing. With this new partnership, we now have the ability to add microcredit to our growing list of services to help businesses reach their potential."
Joint Venture
BEIJING, May 13, 2015 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today that it has entered into a partnership with Shanghai Pudong Development Bank Co., Ltd (SPD Bank) for a cooperation framework to launch a credit card and loan microcredit product for small enterprises and individual entrepreneurs including franchisees and chain store investors.
A nationwide commercial bank with total assets of over RMB 3.9566 trillion as of September, 2014, SPD Bank and ChinaNet will cooperate to provide a safe, convenient, and transparent service for franchise businesses and entrepreneurs to help solve the difficulties of micro-lending for those often excluded from financial services. The new product is now in the design and finalization process, and will be officially launched by the third quarter of 2015.
ChinaNet will analyze its large data set of customers to help SPD Bank locate and market to target customers. Small enterprises and entrepreneurs will apply online from the convenience of home or office to receive their credit card and micro-loan, without the need to visit a bank location. The product will be intended to offer, under the authorization of ChinaNet, an "unsecured and free mortgage" according to the size of business, with SPD Bank approved terms and no additional threshold requirements. Recipients will receive a credit card that must be used in merchant shops for business related operating costs, and which does not have permission to be used at other point-of-service (POS) machines. The credit card and micro-loan is repaid through its own online banking account at any time to maximize savings on loan interest and reduce borrowing costs, and can be recycled at the end of the period. Other details of the product will be released upon official launch.
"We are excited to be partnering with SPD Bank and hope this new cooperation will help SME business owners and entrepreneurs create their own paths to success with more means of financial support," said George Chu, Chief Operating Officer of ChinaNet Online Holdings. "ChinaNet has served a large number of SMEs, and every year there are at least 100,000 franchisee or chains stores created by our SME clients based on our estimation. ChinaNet recently launched our Business Direct 3.0 solutions with Baidu to help businesses expand their franchise or chain stores through mobile services and marketing. With this new partnership, we now have the ability to add microcredit to our growing list of services to help businesses reach their potential."
Comments & Business Outlook
BEIJING, May 7, 2015 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today that it entered into a definitive securities purchase agreement (the "Agreement") with Beijing Jinrun Fangzhou Science & Technology Co., Ltd. (Shenzhen Stock Exchange, Stock Code: 430120) (the "Purchaser" or "Jinrun Technology") to raise US$3,500,000 (the "Purchase Price"), pursuant to which the Purchaser has agreed to purchase 2,800,000 shares of common stock of the Company (the "Shares").
In accordance with the Agreement, the Purchaser made a ten percent (10%) non-refundable guarantee payment to the Company in an amount equal to US$350,000 on May 7, 2015. The Purchaser shall pay an additional fifteen percent (15%) of the Purchase Price by June 4, 2015. The Purchaser shall pay the remaining seventy-five percent (75%) of the Purchase Price at the closing which shall take place on the date mutually agreed to by the parties, subject to the closing conditions contained in the Agreement. On the date the Agreement was signed, the Purchaser also entered into a Lock-Up Agreement with the Company, whereby the Purchaser agreed not to transfer the Shares until May 5, 2017. Upon the Company's prior written approval, the lock-up restriction may be waived after May 5, 2016.
The proceeds from the offering, net of certain fees and expenses, will be used for working capital to fund technology research and development, marketing for new services and product launches, and potential mergers and acquisitions.
"This capital investment from Jinrun Technology is an important development for ChinaNet," said George Chu, Chief Operating Officer of ChinaNet Online Holdings. "We think this capital infusion will be extremely positive in our expansion of Business Direct 3.0 with other new services to be launched in the next three years. It is also very positive for us to help increase our market penetration in the SME segment. Furthermore, we have found a great synergy with Jinrun Technology for a new business revenue model. In the same way that city governments use Jinrun Technology's technology to monitor the costs of a public construction project and maintain a fair and transparent bidding and selection process, Chinese SME business owners can also utilize Jinrun Technology's product and services. SME business owners can monitor costs, increase the transparency of their business sourcing and purchasing process and find the best price to quality supply or service needed on an e-commerce platform through internet or mobile. It is the exact type of collaboration that we would anticipate from a strategic investor like Jinrun Technology, and we believe it will lead to a new revenue stream for us in the future."
Comments & Business Outlook
BEIJING, May 7, 2015 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today that it entered into a definitive securities purchase agreement (the "Agreement") with Beijing Jinrun Fangzhou Science & Technology Co., Ltd. (Shenzhen Stock Exchange, Stock Code: 430120) (the "Purchaser" or "Jinrun Technology") to raise US$3,500,000 (the "Purchase Price"), pursuant to which the Purchaser has agreed to purchase 2,800,000 shares of common stock of the Company (the "Shares").
In accordance with the Agreement, the Purchaser made a ten percent (10%) non-refundable guarantee payment to the Company in an amount equal to US$350,000 on May 7, 2015. The Purchaser shall pay an additional fifteen percent (15%) of the Purchase Price by June 4, 2015. The Purchaser shall pay the remaining seventy-five percent (75%) of the Purchase Price at the closing which shall take place on the date mutually agreed to by the parties, subject to the closing conditions contained in the Agreement. On the date the Agreement was signed, the Purchaser also entered into a Lock-Up Agreement with the Company, whereby the Purchaser agreed not to transfer the Shares until May 5, 2017. Upon the Company's prior written approval, the lock-up restriction may be waived after May 5, 2016.
The proceeds from the offering, net of certain fees and expenses, will be used for working capital to fund technology research and development, marketing for new services and product launches, and potential mergers and acquisitions.
"This capital investment from Jinrun Technology is an important development for ChinaNet," said George Chu, Chief Operating Officer of ChinaNet Online Holdings. "We think this capital infusion will be extremely positive in our expansion of Business Direct 3.0 with other new services to be launched in the next three years. It is also very positive for us to help increase our market penetration in the SME segment. Furthermore, we have found a great synergy with Jinrun Technology for a new business revenue model. In the same way that city governments use Jinrun Technology's technology to monitor the costs of a public construction project and maintain a fair and transparent bidding and selection process, Chinese SME business owners can also utilize Jinrun Technology's product and services. SME business owners can monitor costs, increase the transparency of their business sourcing and purchasing process and find the best price to quality supply or service needed on an e-commerce platform through internet or mobile. It is the exact type of collaboration that we would anticipate from a strategic investor like Jinrun Technology, and we believe it will lead to a new revenue stream for us in the future."
Contract Awards
BEIJING, April 23, 2015 (GLOBE NEWSWI RE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today that its subsidiary Liansuo.com has signed an agreement with Haoxiangni Jujube Co., Ltd to create a one-stop purchasing service platform and expand Haoxiangni Jujube's online stores.
"Haoxiangni Jujube is the first China-listed company in the jujube (red date) industry, and an important client for Liansuo.com," said George Chu, Chief Operating Officer of ChinaNet Online Holdings. "Haoxiangni is the largest jujube enterprise in China and has the most types of Jujube products of its competitors. The company has nearly 2,000 stores across more than 280 cities. Liansuo.com will help Haoxiangni create a one-stop purchasing service platform and expand the online stores through its active marketing program that includes traditional and online advertising, trade shows and referrals."
Liansuo.com expected to sign nearly 220 new brand customers, for a total of 520 customers, or 42% increase over the 298 reported at the end of 2014. The number of larger customers served by Liansuo.com has seen steady growth because of the Company's premium advertising efforts and effective marketing web portal. In 2014, Liansuo.com signed several high quality and well-known brands including Pure Fishing Inc., a leading provider of fishing equipment; Sesame St. English, affiliated with the Sesame Workshop in the US; and Rongshida, a household appliances brand, with 4,500 stores and 12,000 online stores across the country. These well-known clients helped to prove the value of Liansuo.com, and positioned the Company for success in attracting larger and high quality customers like Haoxiangni Jujube Co. for its services.
Comments & Business Outlook
BEIJING, April 21, 2015 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today that it successfully proven a new revenue model with customers that includes a cash investment in addition to offering its total solution of products and services with pilot SME Beijing Saturday Educational Technology Co., Ltd.
Founded in 2000, "Saturday Children's" theme park (Saturday Children's) is one of the country's first indoor children's theme parks and is owned and operated by Beijing Saturday Educational Technology Co., Ltd. (Beijing Saturday). Saturday Children's integrated portfolio of children's brands include clothing, theme parks, games, cartoons, 3D photography, cartoon animation, children's education and more. Saturday Children's brand is a vertically integrated operation including R&D, design, manufacturing, and sales aligned to promote its more than 700 indoor children's theme parks. More information about the company is available at http://www.xql520.com.cn/.
In the third quarter of 2014 ChinaNet committed a cash investment for an approximately 10% ownership stake in Beijing Saturday. It would be ChinaNet's first investment based on the profitability and market circumstances analysis from our big data analysis system. ChinaNet cooperated with the company to expand Saturday Children's theme parks in China. ChinaNet provided Beijing Saturday full support to enhance Saturday Children's with brand management, brand channel expansion, marketing and advanced marketing chain management systems. The Company helped to properly manage each franchise store through its management system and used Baidu Wallet to facilitate online payment. ChinaNet is also currently implementing its new "Business Direct 3.0" service with Beijing Saturday. The service will use Baidu Direct Reach mobile platform to attract customers online through mobile search, accounts, maps, personalized recommendations and other ways to direct these online attentions to offline stores and create revenue. More information can be referred to http://msh.baidu.com/6fHYx1pHm72d. ChinaNet will charge on the using of the system, O2O advertising fee and transaction fee for online payment.
Beijing Saturday was chosen as the pilot company to prove the new revenue model because of its effective management team and potential. China's theme park industry has exhibited strong growth, with a 40 percent growth rate in visitor numbers since third quarter 2014. Chinese children and their families are embracing theme parks like Saturday Children's with their story telling, exciting rides, educational programs and branded merchandise. Saturday Children's focus on third and fourth-tier cities has helped to create strong demand and it expects to open 600 new parks in 2015 with the help of ChinaNet.
"More and more high-quality brands are expanding in the Chinese market through the ChinaNet platform," said George Chu, Chief Operating Officer of ChinaNet Online Holdings. "Since its collaboration with ChinaNet, Saturday Children's has opened 300 stores, and the turnover has grown 45%. In partnering with these types of strong companies, we have also sought opportunities where our experience and capital strength can assist the business to expand its market share. With a strategic investment, ChinaNet can share in the revenue growth to achieve a win-win outcome. After this initial success, we will continue to focus on the industry's premier franchise brands and seek investment opportunities with quality brands that will further enhance ChinaNet's investment income."
Comments & Business Outlook
Fourth Quarter 2014 Financial Results
Revenues for the fourth quarter was $11.3 million.
EPS was (0.02).
Comments & Business Outlook
BEIJING, April 10, 2015 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today that the Company's brand consulting subsidiary, Quanzhou Zhilang Company ("Zhilang"), has partnered with a real estate developer to initiate an O2O business zone near Huaqiao University in Quanzhou, Fujian Province, China to help establish and grow new commercial occupants by using "Business Direct 3.0" solutions in connection with brand management and developing solution, iMAP.
At present, the pre-sold properties in the new commercial zone being developed around Huaqiao University is approximately 60% of the 52 available locations, an increase from 10% before the engagement of Zhilang. This trend of low commercial occupancy is prevalent across China and currently stands at below 40% based on research from Baidu.
ChinaNet's ZhiLang is a brand consulting subsidiary based in Quanzhou, and has successfully helped companies measure and refine their core marketing and branding model with the help of internet tools.
ZhiLang is cooperating with developers to help plan a comprehensive investment solution in the commercial zone, including positioning packaging, store planning and the introduction of high-quality brand chains. ZhiLang will leverage ChinaNet's SME customer base and Business Direct 3.0 solution with Baidu to determine what type of stores and restaurants are most suitable to operate in the zone and introduce them to local potential franchisee and merchandisee investors and partners. Once the new businesses are established, Zhilang will help direct internet traffic for more offline consumption and visitation to the zone. This pilot project will demonstrate the power of a combining big data, O2O online and mobile marketing (combined with LBS), and management services to efficiently create a healthy and sustainable business ecosystem for both business and consumers. ChinaNet will additionally have a revenue sharing model with the business zone.
"We are pleased to be contributing to this unique pilot project to boost commercial occupancy rates in Chinese real estate," said George Chu, Chief Operating Officer of ChinaNet Online Holdings. "With our expertise and branded services, we will also help guide and nurture these new businesses to profitability using our Business Direct 3.0 solutions. If the project is successful, we plan to duplicate this same model with other real-estate developers in China."
Zhilang will also leverage Huaqiao University for selecting student entrepreneurs to build, market and run a portion of the franchise businesses in the zone. Zhilang will give entrepreneurial guidance to Huaqiao's students with this first-of-a-kind project, such as brand planning, brand management and brand channel expansion. Zhilang and Huaqiao University are in discussion to jointly conduct an open recruitment to employ the student run management teams. ChinaNet will also inject a certain percentage of funds to support the student-run establishments and ongoing operations.
The project can be viewed through WeChat with an ID number: HuadaNumber 1 Street.
Joint Venture
BEIJING, April 2, 2015 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today that it has entered into an exclusive partnership with Gridsum Technology Co., Ltd. ("Gridsum") to develop an all-around O2O internet and mobile search engine marketing and search engine optimization solution for SMEs in People's Republic of China.
Gridsum is one of the leading corporate software solution providers specialized in cloud computing and big data analysis technology. It has attracted investments from Disney Group and Nokia and has established a strategic partnership with the Chinese State Information Centre to serve over 3,000 government websites. It has provided services to over 600 clients, which include multi-national corporations in different industries such as Coca-Cola, P&G, Hilton Hotel & Resorts, Microsoft, HP, Paypal and AIG.
The exclusive strategic alliance represents the collaboration between ChinaNet and Gridsum in 5 areas for serving SMEs. These include (1) the mutual development of search engine optimizing and analytical tools and products for SMEs; (2) establishing an internet and mobile development O2O solution; (3) provision of service and the architecture of a new value added service through Baidu Branding Zone and Baidu Forum; (4) a 360 search engine marketing service and extended value added service, and (5) potential joint funding of an internet and mobile marketing and advertising technology research centre for SMEs in China. In addition, the two companies will also collaborate on using ChinaNet's cost per lead (CPL) and cost per sales (CPS) technologies to serve Gridsum's clientele. With this alliance, ChinaNet can share Gridsum's cutting edge technology on cloud computing and big data analysis to develop one-on-one precision marketing for each of its clients, while Gridsum aims to improve its penetration into the SMEs market through ChinaNet's data, influence and experience on the SMEs market.
"The strategic alliance with Gridsum is an important part of ChinaNet's development plan," said George Kai Chu, Chief Operating Officer of ChinaNet Online Holdings. "Gridsum is concentrating on cost per click (CPC) and cost per impression (CPI), while we are more focused on CPL and CPS, so our alliance makes a great complement to each other. This partnership will also help our clients to expand their business more easily and at a lower cost. It is a very good example of the 'Internet Plus' concept mentioned by Mr. Li KeQiang, the Premier of the State Council, in the 2015 Report on the Work of the Government, in which he discusses using big data, knowledge and user innovation to shape a better form to our traditional industry. This partnership will be a perfect complement to ChinaNet's newly launched 'Business Direct 3.0' solution which helps our clients to expand their franchise and chain stores in a more effective way through mobile service and marketing."
Comments & Business Outlook
BEIJING, April 1, 2015 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that its preliminary unaudited revenues for the twelve months ended December 31, 2014 was $38.9 million.
The Company will be filing a Form 12b-25 with the Securities and Exchange Commission on April 1, 2015 to extend the filing of the Company's Form 10-K for the twelve months ended December 31, 2014 for up to an additional fifteen calendar days.
Joint Venture
BEIJING, March 30, 2015 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today it has entered a service partner agreement with Baidu, Inc., the leading Chinese language online search provider, to cross-sell branded services and products in conjunction with the Company's "Business Direct 3.0" and Baidu's Baidu Direct Reach.
The service partner agreement, with power of attorney authorized by Baidu, allows ChinaNet to resell any relatedBaidu Direct Reach service with the Baidu name and conversely allows Baidu to leverage the ChinaNet brand and Business Direct 3.0 name, products and services. ChinaNet will now be positioned within Baidu's service provider ecosystem of internet and mobile products.
ChinaNet will utilize the agreement with its Business Direct 3.0, a technically marked-up service based on the Baidu Direct Reach mobile platform for traditional service enterprises, which is centered on mobile search, accounts, maps, personalized recommendations and other ways for customers to direct Reach Marketing services.
"The service partner agreement with Baidu signifies the quick success of Business Direct 3.0 launched earlier this year in cooperation with Baidu Direct Reach of Baidu ," said George Chu, Chief Operating Officer of ChinaNet Online Holdings. "We have demonstrated our ability to introduce a compelling new service with Baidu, and have earned their trust to use their brand name. Additionally, our influence on the SME industry with franchises and chain stores will create opportunities for Baidu to leverage the ChinaNet brand. We believe this is another step forward in our two company's increasing levels of cooperation."
Acquisition Activity
BEIJING, March 17, 2015 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today it has committed a cash investment for an approximately 10% ownership stake in O'Yummy Investment Management (Beijing) Co., Ltd. (O'Yummy), a food brand management company and exclusive partner of South Korea ice cream restaurant chain "Snow Hill". In connection with its investment, ChinaNet will cooperate with the company to expand the Snow Hill chain in China.
O'Yummy Investment Management is a leading management company in China offering brand management services to international food brands and restaurants seeking to introduce products and locations into China. O'Yummy's current portfolio includes numerous famous local brands in the second and third-tier cities in China and now is expanding overseas to bring unique businesses into China in the form of franchises or chains.
O'Yummy has signed an exclusive partnership with Snow Hill and has exclusive franchise rights for the China market. Snow Hill ice cream restaurants offer a variety of ice-cream and easy fast food in its locations. More information about the company is available at www.xzq777.com. O'Yummy expects to open more than 500 Snow Hill ice cream locations in the next two years.
ChinaNet will provide O2O online and mobile marketing services to O'Yummy so it can quickly identify potential business partners everywhere in China. In addition, ChinaNet intends to help O'Yummy properly manage each franchise store through its management system. The partnership will enable ChinaNet to further understand its clients' needs and enable it to monetize additional revenue opportunities through the expansion and success of a franchise chain in the long term.
Snow Hill ice cream is especially popular with Korea's youth demographic, and the brand has hired a popular South Korean movie star, Ms. Kim, as a spokesperson. Korean pop culture is one of the country's top exports to China, accounting for 23.9% of total exports, or about 123 billion RMB. ChinaNet believes Snow Hill's popular youth oriented branding will help to create strong demand for the product and fit ChinaNet's core competencies in online branding and marketing.
"We are delighted to have acquired a minority interest in O'Yummy to introduce Snow Hill ice cream to China," said George Chu, Chief Operating Officer of ChinaNet Online Holdings. "This strategic investment into a food brand management company will further enhance our product and service penetration with our clients in SMEs as we have more and more services to be launched to meet the needs of small and medium franchise and chained business in 2015, for example our O2O service with Baidu. The market for ice cream in China continues to increase by more than 10% year, and is expected to increase by more than 13% in 2015. Development of China's ice cream industry has gradually matured, and the future growth will rely on capturing market share through advertising and marketing. ChinaNet has a wealth of experience in the marketing and expansion of brands, making us an ideal partner as well as service provider for O'Yummy and Snow Hill."
Joint Venture
BEIJING, Jan. 26, 2015 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced the launch of "Business Direct 3.0" in cooperation with Baidu Direct Reach of Baidu , the leading Chinese language online search provider.
Business Direct 3.0 is a technically marked-up service based on the Baidu Direct Reach mobile platform for traditional service enterprises, which is centered on mobile search, accounts, maps, personalized recommendations and other ways for customers to direct Reach Marketing services. The introduction of Business Direct 3.0 provides an opportunity for the traditional service industry to transit to the mobile Internet, helping companies and their sublets attain new users, and providing users with a better service experience.
The service will also provide mobile enterprise solutions, allowing users direct access to businesses in the mobile terminal service, making online users into offline customers. ChinaNet expects this underdeveloped market will reach a potential market size of USD $12 billion or more. Additionally, very few competitors are engaged in this market, and the Company believes none have the penetration that ChinaNet holds in SME sectors. Business Direct 3.0 will complete a full information cycle from B2b2c, making businesses marketing more direct, effective and easier.
"ChinaNet is growing from a business opportunities platform to a comprehensive 1:1 digital advertising and marketing service provider with a total solution for the B2b2c ecosystem, helping businesses expand sales and customers through mobile and Internet," explained George Chu, ChinaNet Online's Chief Operating Officer. "With the advent of the mobile Internet era, the innovation of user needs and applications have become the main trend of the Internet, including online payments, location-based services, online and offline interaction and more. ChinaNet, together with Baidu, have embraced this trend by jointly launching Baidu Direct Reach with Business Direct 3.0 to open the mobile Internet's 'direct era' for business. With this joint product and service, we will be able to attract more SMEs to utilize mobile and Internet advertising as SMEs have limited budgets and often find this limitation does not give enough or any visible result by advertising and marketing on mobile and Internet. As a result, our cooperation should bring additional sizeable revenue streams to both companies as this market grows and expands in the future. Through Q3 2015 we will be launching with selected clients to ensure faster penetration in the future."
The new service was announced January 25th , 2015 at a ChinaNet New Product Release Conference & SMEs Industry Developments & Trends Forum in Beijing at the Xiangshan Yihe Hotel. Representatives of Baidu and ChinaNet were in attendance, along with several hundred of the two company's top enterprise customers.
Joint Venture
BEIJING, Dec. 22, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today that the Company has signed a long-term strategic partnership agreement with MediaFun Creative Co. (MediaFun), a total solution service platform for cloud print services company based in Taiwan.
MediaFun's creative printing services platform allows non-professional users to complete the professional design process in a few minutes, and independently modify and print work by customers. The Company's main products include school graduation memento books, photobooks and personalized photo gifts such as photo albums, cards and other merchandise.
MediaFun's growth is being fueled by the substantial graduate market in Taiwan, which accounts for approximately 5% of the total population every year. Cloud printing is also being supported by the Taiwan government in an effort to update the traditional print industry. MediaFun sees this partnership opportunity as the beginning of a long-term growth strategy into the expanding China market. MediaFun currently has approximately 250 customers in Taiwan.
Under the terms of the agreement, ChinaNet will leverage its experience and advantages in the SME industry in China to help MediaFun expand its B2b2c market sales marketing to multiple of cities through mobile and internet. MediaFun will in turn share its cloud printing technology to help individuals utilize their print services throughout the China market. The two companies intend to share in profits and commissions under a joint venture agreement.
On December 22, 2014, a signing ceremony was held for the two companies at the Taiwan Trade Center of Beijing.
"We are excited to undertake this new strategic partnership with MediaFun, who is revolutionizing the field of print services," said George Chu, ChinaNet Online's Chief Operating Officer. "This cooperative agreement continues our ongoing efforts to expand our marketing and related value-added services for our clients. We in turn look forward to utilizing our deep experience in franchising and the China market to help MediaFun expand its business opportunities. This is a milestone for our company to help an overseas SME to efficiently expand its sales channel in China through ChinaNet services and technology."
Comments & Business Outlook
BEIJING, Dec. 8, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today the launch of a new value-added service for SMEs, Wisdom Eye, a two-way online to offline (O2O) Customer Relationship Management (CRM) system individually customized for the SME industry.
SMEs using Wisdom Eye can now seamlessly and efficiently manage their marketing, advertising and sales resources, improve digital advertising effectiveness and monitor work efficiency. In addition, Wisdom Eye can automatically generate extensive reports and conduct intelligent data analysis, providing a strong basis for business decisions to support their sales growth. Wisdom Eye includes modern authentication, access controls and encryption to create a completely secure platform.
The Wisdom Eye O2O CRM is optimized for three crucial areas to support SMEs:
1. O2O Customer Relationship Management
Wisdom Eye enhances the competitiveness of enterprises by bringing together both online and offline customer information management, advanced filtering, intelligent distribution and other useful features to efficiently standardize customer resources for the sales teams of SMEs.
2. O2O Media Management
Wisdom Eye analyses the efficiency of all media delivery, including both digital and paper media, and provides real-time monitoring of the effects of media outreach. The system offers comprehensive data analysis reports, including media input-output ratio rankings to better orchestrate customer experiences across media channels.
3. Sales Management
Wisdom Eye helps sales managers optimize sales performance with powerful tools and analytics to monitor and improve work efficiency. With micro to macro views of pipeline opportunities and sales numbers, managers are able to supervise the complete sales process, with timely guidance to optimize sales flow.
"We are excited to begin offering the Wisdom Eye platform to the SME industry after beta testing on 10 different industry clients with a resulting 20% average improvement in sales and advertising costs," said George Chu, ChinaNet's Chief Operating Officer. "We continue to develop and expand our portfolio of services for our clients to meet their demands for additional products to improve their businesses. We expect the system to improve our profit margin by more than 20% next year and generate at least $10 million in annual sales for customers once it is deployed to our existing client base at its full functionality. As our client base continues to expand, we anticipate even further growth. In addition, we are also looking for opportunities to expand the system overseas after linking up with major internet advertising players outside of China such as Facebook, Google and others."
Comments & Business Outlook
BEIJING, Dec. 1, 2014 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today that its subsidiary Liansuo.com has signed 6 new customers in October of 2014, for a total of 244 customers, or 59% increase over the 153 reported at the end of 2013.
Through its active marketing program that includes traditional and online advertising, trade shows and referrals, Liansuo.com has successfully added recent new clients including Rongshida, a household appliances brand, now has 4500 stores and 12,000 online stores across the country; Kam Tai Cheung Jewelry, a gold chain shop from Hong Kong, as well as 2700 stores in China; Peepul Aroma Cosmetics, a well-known brand in China and Korea; and CDE Fashion Jewelry, a retail jewelry outlet.
"Liansuo.com has achieved remarkable growth in the mid-size to large segment of the market," said George Chu, ChinaNet's Chief Operating Officer. "We continue to focus our efforts on this large and growing market by offering cost effective advertising and value-added services to franchisors, and we are pleased with the number of new customers and growth we have accomplished since last year. We will offer our comprehensive suite of fully integrated advertising, marketing and management solutions for the clients, and help them continue to expand and increase their customer base. Our success in adding new clients stems from the quick results our franchisors are experiencing using Liansuo.com. New client Peepul Aroma Cosmetics signed a franchise shop in just nine days after listing on Liansuo.com, and CDE Fashion Jewelry signed a franchise shop immediately after listing as well. In addition, Rongshida's market share will reach 55% in 2018 with Liansuo.com's marketing services."
Comments & Business Outlook
Third Quarter 2014 Financial Results
Revenues for the three months ended September 30, 2014 were $12.1 million compared to $7.5 million for the three months ended September 30, 2013, representing a 61% increase.
Net loss attributable to ChinaNet for the three months ended September 30, 2014 was $0.9 million and loss per share was $0.04, compared to a net income attributable to ChinaNet of $1.2 million and earnings per share of $0.05 in the third quarter of 2013.
Comments & Business Outlook
BEIJING, Nov. 7, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today its expanded efforts to attract new SME's in the Fujian province in conjunction with the Provincial Government's redevelopment plan promoting more service-based industries in the region.
The Fujian Provincial Government's "2014-2015 Action Plan" focuses on redevelopment and upgrading the Province's industrial economy with a modern service industry. By 2015 the government estimates the service economy's added value will reach 1 trillion RMB, accounting for more than 42 percent of GDP in the Fujian Province. Most of these new service industry brands are utilizing a franchise development model.
ChinaNet intends to capitalize on the region's redevelopment plans with a strategic increase in its local presence, including attendance at regional events. ChinaNet subsidiary Liansuo.com will participate in the Chinese Franchise Exhibition, organized by Chinese Chain Store & Franchise Association, to be held in the Fuzhou Strait International Conference & Exhibition Center, November 6th- 8th. In addition, the Company will utilize its B2B/B2C online and offline marketing model, similar to Taobao and Alibaba, to broaden investment channels and provide opportunities to franchise brands who intend to enter the Fujian coast.
COO of ChinaNet George Chu commented, "We recognized a key opportunity for our services with the Fujian Provincial Government's plan to bring more franchise and service brands to the region. The government recognizes that franchising is bringing growth throughout China, having experienced 50% to 60% growth and according to data from the Ministry of Finance. We intend to be an important player in this transition, offering our comprehensive suite of fully integrated advertising, marketing and management solutions for small to mid-size franchise businesses."
Comments & Business Outlook
BEIJING, Oct. 14, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced the launch of Zero Down Payment Loans . The product, targeted toward entrepreneurs, is being offered with Chinese financial services companies Haodai, which offers a credit product search engine, and Yooli China's leading crowdfunding services Web site.
ChinaNet is taking a leading role in the Zero Down Payment Loans offering. The product integrates banks, P2P, and security companies with reputable enterprise franchising resources. The service will significantly lower the hurdles that many entrepreneurs face and help them to realize their business objectives.
Neither Haodai nor Yooli provide loans, but focus on helping individuals and small-to-medium sized businesses screen loan opportunities in the financial markets. The new Zero Down Payment Loans product will facilitate communications between potential borrowers and lenders. ChinaNet customers will benefit significantly as many are in need of capital for expansion hundreds of thousands of entrepreneurs who need capital will benefit from ChinaNet's cooperation with other financial service providers, and will be able to achieve their business goals more quickly.
ChinaNet COO George Chu says, "In 2014, the number of mobile Internet users in China exceeded 600 million, while there are approximately 200,000 physical outlets of traditional banks. These 600 million smart phones will become the new point of contact in the financial services sector. Everyone is jumping on the P2P bandwagon: private equity firms, venture capitalists, companies like Lenovo, Xiaomi and other Internet giants as well as traditional companies with physical capital and even Hong Kong developer SHK. With the advent of the big data era, personal credit information systems will gradually improve, and with these information sharing systems freely accessible, P2P will continue to grow. Such cooperation will bring an additional revenue stream to the company as P2P markets grow and expand. The beauty of this cooperation is the ability to leverage ChinaNet's existing resources, which produce daily sales leads that yield potential borrowers."
Resolution of Legal Issues
BEIJING, October 1, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "ChinaNet" or "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that on September 30, 2014, it received a letter from The NASDAQ Stock Market LLC (the "NASDAQ") notifying the Company that it has regained compliance with the Minimum Bid Price Rule (as defined below) for continued listing set forth in NASDAQ Listing Rule 5450(a)(1), as its common stock had achieved a closing bid price of $1.00 or more for 10 consecutive business days.
On June 11, 2014, the Company received a letter from the NASDAQ Staff stating that, the Company's common stock failed to maintain a minimum bid price of $1.00 over the previous 30 consecutive business days as required by NASDAQ Listing Rules. The Staff also notified the Company that it had been granted a grace period of 180 calendar days in which to regain compliance with respect to its bid price. In the letter dated September 30, 2014, the Staff informed the Company that it had determined that the closing bid price of the Company's common stock had been at $1.00 per share or greater for 10 consecutive business days from September 16, 2014 to September 29, 2014. Accordingly, the Company has regained compliance with NASDAQ Listing Rule 5450(a)(1) and this matter was closed.
Investor Alert
Item 8.01. Other Events.
has regained compliance with the minimum bid price requirement for continued listing set forth in NASDAQ Listing Rule 5450(a)(1), as its common stock had achieved a closing bid price of $1.00 or more for 10 consecutive business days.
On June 11, 2014, NASDAQ Staff notified the Company that its common stock failed to maintain a minimum bid price of $1.00 over the previous 30 consecutive business days as required by NASDAQ Listing Rules. The Staff also notified the Company that it had been granted a grace period of 180 calendar days in which to regain compliance with respect to its bid price. In the letter dated September 30, 2014, the Staff informed the Company that it had determined that the closing bid price of the Company's common stock had been at $1.00 per share or greater for 10 consecutive business days from September 16, 2014 to September 29, 2014. Accordingly, the Company has regained compliance with NASDAQ Listing Rule 5450(a)(1) and this matter was closed.
On October 1, 2014, the Company issued a press release with respect to regaining compliance with the NASDAQ listing requirement, a copy of which is attached as Exhibit 99.1 and is incorporated herein by reference.
Comments & Business Outlook
BEIJING, Sept. 30, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today that Liansuo signed a number of new clients, including Sesame St. English, after participating in the 29th Guangzhou Franchise Exhibition. The event was held in Guangzhou from September 19-21.
The Company signed 12 new clients and re-signed 55 existing clients for Liansuo.com, its integrated advertising and marketing services platform. Liansuo offers fully integrated advertising, marketing and management solutions for mid-size to large franchise businesses in China. Among the new clients are included Sesame St. English, affiliated with the Sesame Workshop in the US; October Mammy (http://www.octmami.com/), a retailer for expectant mothers with 800 stores across China; Origus (http://www.origus.com/), a pioneer of the pizza buffet concept in China, which currently operates 80 locations in Beijing; and Thankyou99 Hotel (http://www.thankyou99.com/), a franchised hotel chain with 1001 hotels around China.
"The Guangzhou Franchise Exhibition was very successful for ChinaNet and allowed us to reach a wide range of potential clients over three days. Signing new clients, building a pipeline of prospects and building our brand identity were the three primary goals for this event," said ChinaNet COO George Chu. "The franchise industry in China has experienced 50% to 60% growth and according to data from the Ministry of Finance, China has become the world's largest franchise market. We continue to focus our efforts on this large and growing market by offering cost effective advertising and value-added services to franchisors. Franchise is only one of the sectors upon which ChinaNet is focusing and our business extends to many other SME sectors in China as well. One client, for example, is Mendale, a leading textile company that produces and distributes bed linens. Mendale is listed in China and has a market cap of approximately USD 300 million, as well as 2700 stores across the country. They've been working with us for almost two years and over this period they've continued to expand and increase their customer base despite a downturn in the market. The value that we bring to SMEs is tangible and quantifiable. As a result, Liansuo.com has achieved remarkable growth in the mid-size to large segment of the market. In September 2014, the company had 238 clients, a 56% increase over the 153 reported at the end of 2013. The company is expected to break even this year. ChinaNet has experienced a transition, moving to a digital, tracking and results-oriented more in tune with the coming personalized, mobile and digital Internet advertising and marketing era, in which precision will be the key to success. I am very proud of my employees and what they were able to achieve at this event."
The Guangzhou Franchise Exhibition is one of the oldest, largest, and most prestigious franchise exhibitions in China, attracting attendees and exhibitors from more than 46 countries around the world.
Comments & Business Outlook
BEIJING, Sept. 19, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline (O2O) sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today that the Company's new growth strategy will focus on offering digital advertising services coupled with a range of consumer analytics expected to add significant value for its small and medium-sized enterprise (SMEs) customers. The Company is also continuing to build on its analytics offerings, which will make it possible to serve much larger digital advertising clients in the People's Republic of China in 2015 and 2016.
According to Mr. Val Kaplin, a China-based marketing executive, "China outspends every other country in the Asia Pacific region on digital advertising, which in 2013 reached US$13.23 billion, or approximately 11% of worldwide ad spending. Banner ads remain the most popular type of ads, and constitute 30.2% of digital display ads. Keyword search ads are next at 28.5%, which is still behind the US share of 47.1%. Baidu and Taoabao are the largest online advertisers in China by revenue, reporting RMB22.25 billion and RMB17.22 billion respectively, and together represent over half the entire market. The largest spenders on online advertising are Chinese insurance giant Pingan, followed by Volkswagen, P&G and Shanghai GM. The four top sectors for online display ads are transportation, online services, real estate and food & drink."
Based on the Company's new cooperative relationship with Baidu, ChinaNet Online is experiencing an improved sell-through on digital advertising products. Should this trend continue, the Company will be in a position to offer digital advertising services to much larger China-based advertisers.
"We are very excited about our new focus on digital advertising and our cooperation with Baidu. We are also in discussions with Taobao of Alibaba to provide "Micro-Sell 360", which is one of our new product solutions geared towards precision marketing for clients," said George Chu, ChinaNet Online's Chief Operating Officer.
Comments & Business Outlook
BEIJING, Sept. 5, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) ("ChinaNet" or the "Company"), a leading B2B (business to business) Internet technology company providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, announced today that its 28.com website has received a V3 ranking from Baidu, which is its top credit rating.
"We are very excited to achieve this prestigious rating," said George Chu, the Chief Operating Officer of ChinaNet. "It shows that there is high user trust from the industry and is a great platform for 28.com to expand its notoriety in the China franchise industry. Baidu is big in China and since the population of China is more than a billion, if you rank well with Baidu, this can make your site more reliable and sustainable. On the Chinese market, the share of Baidu is around 60% and it is the most popular Chinese language search engine."
Comments & Business Outlook
Second Quarter 2014 Financial Results
Revenues for the three months ended June 30, 2014 were $10.4 million compared to $8.9 million for the three months ended June 30, 2013, representing a 17% increase.
Net loss attributable to ChinaNet for the three months ended June 30, 2014 was $1.3 million and loss per share was $0.06, compared to a net income of $0.4 million and earnings per share of $0.02 in the second quarter of 2013.
Comments & Business Outlook
Six Months Ended June 30,
Three Months Ended June 30,
2014
2013
2014
2013
(US $)
(US $)
(US $)
(US $)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Sales
From unrelated parties
$ 15,361
$ 15,767
$ 10,179
$ 8,777
From related parties
183
174
182
115
15,544
15,941
10,361
8,892
Cost of sales
12,487
9,757
8,665
5,290
Gross margin
3,057
6,184
1,696
3,602
Operating expenses
Selling expenses
2,095
1,390
1,506
602
General and administrative expenses
2,009
3,146
1,022
1,744
Research and development expenses
892
912
442
463
4,996
5,448
2,970
2,809
(Loss)/income from operations
(1,939 )
736
(1,274 )
793
Other income (expenses)
Interest income
60
64
29
32
Interest expense
(32 )
-
(16 )
-
Other expenses
(3 )
(2 )
(2 )
(1 )
25
62
11
31
(Loss)/income before income tax expense, equity method investments and noncontrolling interests
(1,914 )
798
(1,263 )
824
Income tax expense
(120 )
(268 )
(72 )
(354 )
(Loss)/income before equity method investments and noncontrolling interests
(2,034 )
530
(1,335 )
470
Share of losses in equity investment affiliates
(58 )
(125 )
(43 )
(54 )
Net (loss)/income
(2,092 )
405
(1,378 )
416
Net loss attributable to noncontrolling interests
93
59
47
18
Net (loss)/income attributable to ChinaNet Online Holdings, Inc.
(1,999 )
464
(1,331 )
434
Management Discussion and Analysis
Total Revenues: Our total revenues were US$15.54 million and US$15.94 million for the six months ended June 30, 2014 and 2013, respectively. For the three months ended June 30, 2014, our total revenues increased to US$10.36 million from US$8.89 million for the three months ended June 30, 2013. The increase in our total revenues for the three months ended June 30, 2014 was primarily due to the increase in our search engine marketing service revenue during the period, which is discussed in detail in our revenue analysis section below.
Net (loss)/income attributable to ChinaNet Online Holdings, Inc.: Total net (loss)/income as adjusted by the net loss attributable to the noncontrolling interest as discussed above yields the net (loss)/income attributable to ChinaNet Online Holdings, Inc. Net loss attributable to ChinaNet Online Holdings, Inc. was approximately US$2.0 million and US$1.33 million for the six and three months ended June 30, 2014, respectively. For the six and three months ended June 30, 2013, net income attributable to ChinaNet Online Holdings, Inc. was approximately US$0.46 million and US$0.43 million, respectively.
Joint Venture
BEIJING, Aug. 12, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "ChinaNet" or "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that it has signed a collaboration agreement with Baidu, Inc. ("Baidu"), China's largest online search engine.
ChinaNet cooperates with the major search engines to perform search engine marketing and related value-added services for its clients. In order to secure and further enhance the business relationship with Baidu, the Company has signed a two- year agreement with Baidu for approximately $26 million to optimize the search advertising campaigns run on behalf of ChinaNet's clients through Baidu's search engine.
"ChinaNet has built a strong relationship with Baidu," said George Chu, Chief Operating Officer of ChinaNet. "We are excited to enhance this business relationship further with Baidu through this agreement. It will allow ChinaNet to have stable access to the traffic directed from Baidu's search engines and more resources shared from Baidu to enhance the effectiveness of ChinaNet's search advertising performed on behalf of ChinaNet's clients. With this agreement, the Company will be able to provide additional value-added services for its SME clients, which should translate into incremental revenues over time."
Baidu, Inc. is the leading Chinese language online search provider. As a technology-based media company, Baidu aims to provide the best way for people to find information and connect users with services. In addition to serving individual online search users, Baidu provides an effective platform for business to reach potential customers. Baidu's ADSs trade on NASDAQ Global Select Market under the symbol "BIDU".
Resolution of Legal Issues
BEIJING, July 28, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "ChinaNet" or "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that it received a letter on July 24, 2014 notifying the Company that it has regained compliance with NASDAQ's filing requirements set forth in Listing Rule 5250(c)(1) (the "Rule"). The Company filed its Form 10-Q for the period ended March 31, 2014 on July 17, 2014.
Investor Alert
Item 8.01. Other Events.
Comments & Business Outlook
First Quarter 2014 Financial Results
Revenues for the three months ended March 31, 2014 were $5.2 million compared to $7.0 million for the three months ended March 31, 2013, representing a 26% decrease.
Net loss attributable to ChinaNet for the three months ended March 31, 2014 was $0.7 million and loss per share was $0.03, compared to a net income of $0.03 million in the first quarter of 2013.
Guidance for 2014
The Company is forecasting revenues of approximately $39 million for the fiscal year 2014.
Resolution of Legal Issues
BEIJING, July 2, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "ChinaNet" or "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that on June 30, 2014, NASDAQ granted an exception to enable the Company to regain compliance with NASDAQ's filing requirements set forth in Listing Rules 5250(c)(1) (the "Rule"). The Company must file the Form 10-Q for the period ended March 31, 2014 (the "Form 10-Q') as required by the Rule on or before July 31, 2014.
By another letter dated June 30, 2014, NASDAQ advised the Company that as a result of the filing of its Form 10-K with the Securities and Exchange Commission (the "SEC") for the year ended December 31, 2013, the Company is no longer non-compliant with the filing of the Form 10-K. However, since NASDAQ has not received the Form 10-Q, the Company remains non-compliant with the Rule.
The Company is continuing to work diligently to complete the Form 10-Q on or before July 31, 2014. These notifications have no immediate effect on the listing of the Company's common stock on NASDAQ. There can be no assurance, however, that the Company will be able to regain compliance with the listing requirements discussed above or otherwise satisfy the other NASDAQ listing criteria.
Investor Alert
Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
NASDAQ has determined to grant an exception to enable the Company to regain compliance with NASDAQ's filing requirements as set forth in Listing Rules 5250(c)(1) (the "Rule"). On April 16, 2014 and May 22, 2014, NASDAQ notified the Company that it did not comply with the Rule because it had not filed its Form 10-K for the period ended December 31, 2013 (the "Form 10-K") and its Form 10-Q for the period ended March 31, 2014 (the "Form 10-Q"), respectively. However, on June 16, 2014, the Company filed the Form 10-K with the Securities and Exchange Commission (the "SEC"), therefore, it is no longer non-compliant with this filing. In this June 30, 2014 letter, NASDAQ notified that the Company must file the Form 10-Q as required by the Rule on or before July 31, 2014. In the event the Company does not satisfy the terms of the exception, NASDAQ will provide written notification that its securities will be delisted. At that time, the Company may appeal NASDAQ's determination to a Hearings Panel.
Comments & Business Outlook
Full Year 2013 Results
Revenue for the fiscal year ended December 31, 2013 was $30.3 million compared to $46.6 million for the fiscal year ended December 31, 2012.
Full year loss per share of $0.01 vs EPS of $0.14 in prior year period.
Fourth Quarter 2013 results
Revenue for Q4 2013 $6.9 million vs $6.3 million in the prior year
Q4 2013 loss of $0.08 vs EPS of $0.06 in the prior year
Guidance for 2014
Management anticipates releasing the revenues and net income guidance for fiscal year 2014 in July 2014.
Comments & Business Outlook
Year Ended December 31,
2013
2012
(US $)
(US $)
Sales
From unrelated parties
$ 29,932 $ 46,403
From related parties
361 197
30,293 46,600
Cost of sales
16,563 31,558
Gross margin
13,730 15,042
Operating expenses
Selling expenses
2,574 2,683
General and administrative expenses
7,691 6,030
Research and development expenses
1,995 1,819
12,260 10,532
Income from operations
1,470 4,510
Other income (expenses)
Interest income
125 186
Interest expense
(26 ) -
Change in fair value of contingent consideration receivables
- (160 )
Loss on disposal of intangible asset
(315 ) -
Loss on disposal of subsidiaries
(543 ) -
Other income (expenses)
5 (150 )
(754 ) (124 )
Income before income tax expense, equity method investments and noncontrolling interests
716 4,386
Income tax expense
(816 ) (529 )
Loss/income before equity method investments and noncontrolling interests
(100 ) 3,857
Share of losses in equity investment affiliates
(183 ) (449 )
Net loss/income
(283 ) 3,408
Net loss/(income) attributable to noncontrolling interests
49 (412 )
Net loss/income attributable to ChinaNet Online Holdings, Inc.
$ (234 ) $ 2,996
Management Discussion and Analysis
Total Revenues
Our total revenues decreased to US$30.29 million for the year ended December 31, 2013 from US$46.60 million for the year ended December 31, 2012. Excluding the business tax expenses included in revenue for the year ended December 31, 2012 of approximately US$1.22 million before the launching of the Pilot Program commencing on September 1, 2012 in Beijing, November 1, 2012 in Fujian province and December 1, 2012 in Hubei province, we achieved approximately US$30.29 million and US$45.38 million of revenue for the years ended December 31, 2013 and 2012, respectively, which representing a 33% decrease. The decrease was primarily due to the significant decrease in low margin TV advertising revenue for the year ended December 31, 2013 as compared to that achieved in last year.
Total net loss/income as adjusted by the net loss/income attributable to the noncontrolling interest shareholders as discussed above yields the net loss/income attributable to ChinaNet Online Holdings, Inc. Net loss attributable to ChinaNet Online Holdings, Inc. was US$0.23 million for the year ended December 31, 2013 as compared to a net income attributable to ChinaNet Online Holdings, Inc. of US$3.00 million for the year ended December 31, 2012.
Investor Alert
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing
According to the Listing Rule 5810, the Company now has a period of 180 calendar days from such letter , or until December 8, 2014, to regain compliance. Compliance can be achieved by meeting the standard of a minimum bid price of $1 per share for a minimum of 10 consecutive business days at any time during the 180 day period. The Company is currently looking at all of the options available with respect to regaining such compliance.
Investor Alert
BEIJING, May 27, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "ChinaNet" or "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that on May 22, 2014, it received a letter from the Listing Qualifications Department of the NASDAQ Stock Market LLC ("NASDAQ") advising the Company that the Company does not comply with NASDAQ Listing Rule 5250(c)(1) for continued listing because NASDAQ has not received the Company's Form 10-Q for the period ended March 31, 2014, and the Company remains delinquent in filing its annual report on Form 10-K for the fiscal year ended December 31, 2013. NASDAQ has informed the Company that it has until June 16, 2014 to submit a plan to regain compliance with respect to these delinquent reports in accordance with a delinquency letter the Company received from NASDAQ dated April 16, 2014. If NASDAQ approves the Company's plan, it has the discretion to grant the Company an extension of up to 180 calendar days from the due date of the Form 10-K (or until October 13, 2014) to regain compliance.
The Company is continuing to work diligently to complete the Form 10-K and the Form 10-Q. If the Company is unable to file these two reports by June 16, 2014, it intends to file a plan to regain compliance with NASDAQ. This notification has no immediate effect on the listing of the Company's common stock on NASDAQ. There can be no assurance, however, that the Company will be able to regain compliance with the listing requirements discussed above or otherwise satisfy the other NASDAQ listing criteria.
Investor Alert
BEIJING, April 21, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "ChinaNet" or "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that on April 16, 2014, it received a letter from the Listing Qualifications Department of the NASDAQ Stock Market LLC ("NASDAQ") advising the Company that, due to its inability to file with the Securities and Exchange Commission its annual report on Form 10-K for the fiscal year ended December 31, 2013 on a timely basis, the Company no longer complies with NASDAQ Listing Rule 5250(c)(1) for continued listing, and that the Company has 60 calendar days (or until June 16, 2014) to submit a plan explaining how it expects to regain compliance. If NASDAQ approves the Company's plan, it can grant the Company an extension of up to 180 calendar days from the due date of the Form 10-K (or until October 13, 2014) to regain compliance.
The Company anticipates that it will be able to file the Form 10-K substantially prior to the expiration of such 60-day period and regain compliance with the NASDAQ Listing Rules. If the Company is unable to file its Form 10-K within the 60-day period, it intends to file with the NASDAQ a plan to regain compliance within the Listing Rules of the NASDAQ. Acceptance of such plan is discretionary with the NASDAQ. This notification has no immediate effect on the listing of the Company's common stock on the NASDAQ. There can be no assurance, however, that the Company will be able to regain compliance with the listing requirement discussed above or otherwise satisfy the other NASDAQ listing criteria.
Investor Alert
Item 8.01. Other Events. On March 31, 2014, ChinaNet Online Holdings, Inc. (the “Company”) filed a Form 12b-25,
Notification of Late Filing, with the Securities and Exchange Commission (the “SEC”) with regard to its Annual Report on Form 10-K for the fiscal year ended December 31, 2013 (the “2013 Form 10-K”), indicating that the Company would not be able to file the 2013 Form 10-K within the prescribed time period, and that the 2013 Form 10-K would be filed on or before the fifteenth calendar day following the prescribed due date.
On April 15, 2014, the Company determined that it would not be able to file the 2013 Form 10-K by April 15, 2014 due to the fact that management of the Company was unable to timely finalize the Company's financial statements, footnotes and related disclosures without assistance and supervision of Mr. George Chu, the Company’s Chief Operating Officer who has been hospitalized. The Company is working diligently to complete the 2013 Form 10-K and will file it as soon as practicable.
Comments & Business Outlook
BEIJING, April 10, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "ChinaNet" or "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that the Company filed a Form 12b-25 with the Securities and Exchange Commission on March 31, 2014 to extend the filing of the Company's Form 10-K for the twelve months ended December 31, 2013. It has up to an additional fifteen calendar days to complete the 10-K filing. With this extension, if the Form 10-K is filed by April 15, 2014, the Form 10-K will be deemed to be timely filed.
Contract Awards
BEIJING, March 24, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "ChinaNet" or "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that the Company's brand consulting subsidiary, Quanzhou Zhilang Company ("Zhilang"), signed a brand promotion agreement with Beijing Daisy Corporation Ltd. ("Daisy").
Daisy is a China-based company focused on every aspects of maternal and child supplies and services. The company is dedicated in providing solutions and recommendations to parents on child caring problems and has established a high reputation among Chinese consumers. It owns multiple brands and sells a variety of products and services including clothing, postpartum recovery center, baby haircut, toys, baby shampoo and baby photography.
"We are excited to cooperate with Daisy," said George Chu, Chief Operating Officer of ChinaNet. "This new agreement is an example of how ChinaNet continues to capture new business opportunities by offering comprehensive advertising, branding and marketing services. We look forward to helping Daisy grow their businesses and brands."
Resolution of Legal Issues
BEIJING, March 10, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "ChinaNet" or "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that on March 6 2014, it received a letter from The NASDAQ Stock Market LLC (the "NASDAQ") notifying the Company that it has regained compliance with the Minimum Bid Price Rule (as defined below) for continued listing set forth in NASDAQ Listing Rule 5450(a)(1), as the common stock had achieved a closing bid price of $1.00 or more for 10 consecutive business days.
On April 30, 2013, the Company received a letter from the NASDAQ Staff stating that, based upon the closing bid price for the previous 30 consecutive business days, the Company no longer met the requirement set forth in NASDAQ Listing Rule 5450(a)(1), which requires listed securities to maintain a minimum bid price of $1.00 per share.
Comments & Business Outlook
BEIJING, Feb. 26, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "ChinaNet" or "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that it has been co-nominated as a candidate for the "2013 Preferred Service Provider for China Small and Medium-sized Enterprises" award by China Center for Promotion of SME Development and China International Cooperation Association of Small and Medium Enterprises.
"We are proud to be selected as one of the premier service provider to SMEs," said Mr. George Chu, Chief Operating Officer of ChinaNet. "It validates our work in creating an excellent sales and marketing platform for SMEs. We will continue to introduce new products on our service platform to help franchise owners and SMEs become more successful."
China Center for Promotion of SME Development is a state-owned entity under the Ministry of Industry and Information Technology of the People's Republic of China to promote business development of domestic SMEs. China International Cooperation Association of Small and Medium Enterprises is a non-profit making entity established by various SMEs, entrepreneurs and scholars in 1990 to coordinate government-SMEs relationship and enhance oversea communications and activities of China SMEs.
Comments & Business Outlook
BEIJING, Feb. 24, 2014 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "ChinaNet" or "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that it has launched the new customer service platform that delivers professional and comprehensive marketing services to major clients.
"Our new customer service platform offers clients the ability to plan, execute and measure their promotional activities from start to finish," explained George Chu, Chief Operating Officer of ChinaNet. "It builds a comprehensive marketing cycle which includes preliminary planning, webpage design, highlighting competitive advantages, online soft promotion and customer feedback and evaluation. Clients will be able to optimize their allocation of resources and experience better marketing services, We believe this is an extremely innovative tool that no other competitors provide."
The new platform has commenced with three projects in the food and beverage industry. Management expects the platform to generate up to $5 million in annual sales for its customers once it's fully deployed.
Comments & Business Outlook
Third quarter 2013 Financial Results
Revenues for the three months ended September 30, 2013 were $7.5 million compared to $10.3 million for the three months ended September 30, 2012, representing a 27% decrease
EPS (Diluted) remained unchanged from the year before at $0.05
Mr. George Chu, Chief Operating Officer of the Company stated, "We generated solid growth in our operating cash flows so far this year. While our customers remain cautious with their spending, we were able to increase our internet advertising revenues 7% in the third quarter. We continue to invest in new services and technologies that will further improve our competitive position."
Guidance for 2013
The Company provides the following guidance for fiscal year 2013.
Revenues: $30 million $1.2 million
Contract Awards
BEIJING, Nov. 5, 2013 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET ) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that the Company's subsidiary, Liansuo.com, signed an agreement with Beijing Origus Food Co., Ltd.("Origus") to help expand Origus' franchise in China and internationally.
"This is an important new client for Liansuo.com," explained George Chu, Chief Operating Officer of ChinaNet. "Origus established a strong brand name in China and expanded to over 100 franchised stores domestically. We will help them further accelerate their franchise expansion in China and abroad."
Origus, a pioneer of the pizza buffet concept in China, was founded in 1998. It has grown from its original location in Pittsburgh, Pennsylvania to hundreds of locations in more than 20 provinces in China. Separate from the buffet, Origus also provides other dining options, including corporate catering and take-out. Origus was a designated caterer of the 2008 Beijing Olympic Press Center. Liansuo.com will provide online advertising and marketing to help Origus further increase its brand recognition among consumers and entrepreneurs and open more franchise restaurants in second and third tier cities in China.
Investor Alert
On April 30, 2013, ChinaNet Online Holdings, Inc. (the "Company") received a letter from The NASDAQ Stock Market LLC ("NASDAQ") stating that for 30 consecutive business days immediately preceding the date of the letter the Company's common stock did not maintain a minimum closing bid price of $1.00 per share ("Minimum Bid Price Requirement") as required by NASDAQ Listing Rule 5450(a)(1). The Company was provided 180 calendar days to regain compliance.
In a letter dated October 28, 2013, NASDAQ notified the Company that it is eligible for an additional 180-day period, or until April 28, 2014, to regain compliance with the Minimum Bid Price Requirement. In connection with the grant of the additional 180-day period, the listing of the Company’s common stock was transferred, at the Company’s request, to the NASDAQ Capital Market under the existing ticker symbol (CNET) at the opening of business on October 29, 2013. If compliance cannot be demonstrated by April 28, 2014, NASDAQ will provide written notification to the Company and its securities will be delisted. There can be no assurances that the Company will be able to regain compliance with the Minimum Bid Price Requirement.
Investor Presentations
Comments & Business Outlook
Second Quarter 2013 Financial Results
Revenues for the three months ended June 30, 2013 were $8.9 million compared to $13.1 million for the three months ended June 30, 2012, representing a 32% decrease.
Gross profit for the three months ended June 30, 2013 was $3.6 million, down 4% from $3.8 million in the same period one year ago. Gross margin was 40.5%, up significantly from 28.7% in the second quarter of 2012.
Net income attributable to common stockholders for the three months ended June 30, 2013 was $0.4 million and earnings per share was $0.02, compared to $0.9 million and $0.04 for the three months ended June 30, 2012, respectively.
Mr. George Chu, Chief Operating Officer of the Company stated, "Despite ongoing challenges in China's economy, we remained profitable during the first half of 2013. Equally important, we started to see some gradual improvement in small business activity toward the end of the quarter as the Chinese government took steps to reinvigorate the economy. While we are encouraged by the increase in the number of customers of our internet advertising segment in the second quarter, which has continued so far in the third quarter, we are investing judiciously in new services such as mobile advertising and marketing and Flying Cloud to position ourselves for a more robust upturn we anticipate occurring in 2014."
Guidance for 2013
The Company provides the following guidance for fiscal year 2013.
Revenues: $36 million
Net Income: $1.2 million
Contract Awards
BEIJING, July 26, 2013 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. ("ChinaNet" or the "Company"), (Nasdaq:CNET), a leading B2B (business to business) Internet technology company providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that Wahaha Commercial Co., Ltd.("Wahaha"), a subsidiary of Hangzhou Wahaha Group, has chosen ChinaNet, to host a franchise related conference to be held from July 25th to July 28th, 2013.
Wahaha is a real estate development company with plans to expand throughout key areas in China via shopping malls, supermarkets and hypermarket chains, brand discount stores, kids and convenience stores.
Wahaha plans to open its first shopping center, WAMW PLAZA, this October in Hangzhou. ChinaNet has been asked to assemble a grand scale national franchise conference which will include shopping mall executives and other key constituents. Wahaha has introduced more than 100 foreign brands through
Comments & Business Outlook
First Quarter 2013 Financial Results
Revenues for the three months ended March 31, 2013 were $7.0 million compared to $14.9 million for the three months ended March 31, 2012, representing a 53% decrease.
Gross profit for the three months ended March 31, 2013 was $2.6 million, up 8% from $2.4 million in the same period one year ago.
Net income attributable to common stockholders for the three months ended March 31, 2013 was $0.0 million and earnings per share was $0.00, compared to -$0.4 million and -$0.02 for the three months ended March 31, 2012, respectively.
Mr. George Chu, Chief Operation Officer of the Company, stated, "Our financial results for the first quarter of 2013 reflect successful execution of our long term strategy. We continued to invest in new services such as mobile advertising and marketing, brand management and sales channel building and flying cloud during the 2012 economic downturn. We expect 2013 to be a challenging year as the overall economy has slowed further due to the economic policies set by the government. However, our expansion strategy and targeted investments in technology and new products will not be held back because these investments have already helped us win new business and enter new markets. Our strong financial position allows us to maintain these strategic investments, which will only strengthen our company for the eventual rebound in our clients' spending.
Comments & Business Outlook
BEIJING, May 15, 2013 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company" or "ChinaNet"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small businesses (small and medium-sized enterprises ("SMEs") in China) and entrepreneurial management and LINK services for entrepreneurs in the People's Republic of China, today announced that its preliminary unaudited revenues for the three months ended March 31, 2013 was approximately $7 million.
The Company filed a Form 12b-25 with the Securities and Exchange Commission on May 15, 2013 to extend the filing of the Company's Form 10-Q for the three months ended March 31, 2013, which is due May 15, 2013, for up to an additional five calendar days. With this extension, if the Form 10-Q is filed by May 20, 2013, the Form 10-Q will be deemed to be timely filed.
Contract Awards
BEIJING, April 24, 2013 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that the Company's subsidiary, Liansuo.com, signed an agreement with Mendale Textile Limited ("Mendale") to help expand its franchise in China and internationally.
"We are excited about working with a growing firm such as Mendale," stated Mr. George Chu, COO of ChinaNet. "Mendale has successfully expanded its owned and operated stores, as well as its franchise stores, across several provinces in China. Liansuo.com will provide online advertising and marketing to help Mendale further increase its brand recognition among consumers and entrepreneurs."
Comments & Business Outlook
BEIJING, Oct. 17, 2012 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that its subsidiary - Liansuo.com (www.liansuo.com) - attended the 2012 Shanghai International Franchise Exhibition (the "Exhibition") at the Shanghai International Exhibition Center that took place in mid-September. Since the Exhibition, Liansuo.com has signed approximately 56 new clients, on a trial basis.
Mr. George Chu, COO of ChinaNet began, "This year's Shanghai International Franchise Exhibition was one of the most productive trade shows to date. We met dozens of new prospective clients and discussed ways our comprehensive set of services can help them grow their businesses. While it's still early, we believe that we will achieve our goal of increasing our conversion rate by over 30% for Liansuo.com."
More than 200 businesses and over 30,000 attendees participated in the Exhibition, which took place over three days. In addition to providing the live webcast, Liansuo.com also introduced its full line of products and services to the attendees of the Exhibition.
Notable Share Transactions
BEIJING, Oct. 15, 2012 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that the Company's board of directors has authorized the purchase of at least $1 million of the Company's stock over the next twelve months.
Repurchases are authorized to be made by the Company from time to time at the prevailing market price on the open market, and/or in negotiated transactions off the market from time to time as market conditions warrant in accordance with applicable requirements of Rule 10b5-1 and/or Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended. Shares repurchased will be held in Treasury.
"We believe buying back our stock at current valuations is in the best interest of our shareholders," stated Mr. George Chu, COO of ChinaNet. "We have sufficient capital to fund our internal growth initiatives and make acquisitions when the right opportunities arise."
Comments & Business Outlook
BEIJING, Oct. 12, 2012 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small businesses (so-called small and medium-sized enterprises ("SMEs") in China) and entrepreneurial management and LINK services for entrepreneurs in the People's Republic of China, today announced that its operating unit for medium and large franchises – Liansuo.com – introduced a new cloud-based software system that allows businesses and existing and potential sales channel partners to communicate with each other more efficiently.
Quick Connect, its new software co-developed by ChinaNet and ChinaNet's partners, allows new and existing sales channel partners to reach businesses to more efficiently communicate with one another by converting all incoming calls to a toll free telephone number starting with the "400" prefix to the party they are trying to reach. Quick Connect also keeps a detailed log of all incoming calls that businesses can port into their customer relations management ("CRM") database to track every sales lead. Management expects the new cloud-based software system to drive additional spending for value-added services on Liansuo.com.
Mr. George Chu, COO of ChinaNet, said, "We developed a simple, cost effective way for small business customers to increase their client conversion rates. Most small businesses cannot afford to buy expensive CRM software. As a result of not maintaining an updated log of communications with potential clients and business partners, many small businesses lose sales they otherwise would have captured. A few Liansuo.com clients that have implemented Quick Connect have seen their conversion rates increased by 11% to 17% within a month. We plan to roll this product out to four million small and franchise business owners nationwide over the next few months. This new product will help augment the growth rate of Liansuo.com in the months ahead."
Comments & Business Outlook
BEIJING, Oct. 11, 2012 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that the Company is raising its 2012 full year net income guidance to $3.1 million from $2.8 million previously provided. The revised net income guidance does not include any benefits from the proposed acquisition of the remaining 49% equity interest in Sou Yi Lian Mei Network Technology ("SouYi") announced on September 17, 2012.
"We have taken aggressive actions to improve our margins," stated Mr. George Chu, COO of ChinaNet. "The increase in our net income guidance reflects both improved expense management as well as a better than expected recovery from 28.com, and growth from Liansuo.com and brand management services and solutions based on our cloud-based marketing platform. As we introduce these services to a wider audience, our new web portals are gaining more and more recognition from larger sized small businesses. With the integration of SouYi, we are able to clearly divide existing and potential clients into segments for better services and higher revenue. In addition, since we initiated a cost management plan at the beginning of the year, we have started to see some rewards from this plan. However, we will not slow our talent recruitment or technology development as they will further differentiate ChinaNet from other competitors. Overall, we expect the gradual recovery in China's economy to benefit our core small business customers."
Acquisition Activity
BEIJING, Sept. 17, 2012 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that it will purchase the remaining 49% of the equity interest in Sou Yi Lian Mei Network Technology (Beijing) Co. Ltd. ("SouYi") for approximately $6.5 million in cash.
Mr. George Chu, COO of ChinaNet, explained, "This acquisition further broadens our client base to smaller startup businesses that are growing quickly and generate higher profit margins for ChinaNet. After working with SouYi's talented team over the past nine months, we became even more convinced that both companies could accelerate our growth by being fully integrated into one entity. This move will help ChinaNet to address all segments of over 40 million small businesses in China and satisfy their business expansion needs."
Founded in 2007, SouYi provides online advertising and marketing services to small startup businesses. SouYi generated approximately $6.8 million in revenue and approximately $2.2 million in profit in 2011 and is estimated to generate approximately $7.8 million in revenue and approximately $2.4 million in profit in 2012. ChinaNet will integrate SouYi into ChinaNet's advertising and marketing platform and join 28.com and Liansuo.com to serve the full range of small business clients over the next six months.
The Company will fund the acquisition through cash on hand and operating cash flows. ChinaNet expects the transaction to close by the end of the fourth quarter of 2012. Upon closing, SouYi will become a wholly-owned subsidiary of the Company.
Comments & Business Outlook
Second Quarter 2012 Financial Results
Revenues increased by $4.0 million to $13.1 million for the three months ended June 30, 2012 compared to the three months ended June 30, 2011, representing a 45% increase.
Gross profit for the three months ended June 30, 2012 was $3.8 million compared to $5.6 million in the same period a year ago. Gross margin decreased to 28.7% from 62.2% for the same period in 2011 as a result of the significant increase of the low margin TV advertising revenue, which accounted for approximately 47% of total revenues for the three months ended June 30, 2012 compared to 23% for the same period of 2011.
Net income attributable to common stockholders for the three months ended June 30, 2012 was $0.9 million and earnings per share was $0.04, compared to $2.8 million and $0.15 for the three months ended June 30, 2011, respectively. The weighted average shares outstanding for the three months ended June 30, 2012 and 2011 was 22.2 million shares and 20.0 million shares, respectively.
"Our diverse portfolio of services helped us generated higher sales and positive cash flows," explained Mr. Handong Cheng, Chairman and CEO of the Company. "Even though small business customers remain extremely cautious with their spending, we are working hard to offer essential and value added services to new and existing clients. We are optimistic that small businesses will be a driving force behind China's economic rebound. ChinaNet is well positioned to capture our share of that growing opportunity when SMEs resume their growth."
Guidance for 2012
Management forecasts full year 2012 revenues to be at least $42 million and net income of at least $2.8 million.
Comments & Business Outlook
BEIJING, Aug. 17, 2012 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today provided clarification to the press release distributed on August 13, 2012 titled "ChinaNet Online Holdings Adds New Strategic Investor".
The original release stated that one of the Company's founding shareholders entered into a stock purchase agreement with the founder and Chairman of Ever Bright Investment Capital (the "EBI") and another accredited investor, pursuant to which the founding shareholder sold 1,279,080 shares of common stock of the Company for $3 million, or approximately $2.35 per share. To clarify, Star (China) Holdings Limited ("Star Holdings") entered into a stock purchase agreement with the founder and Chairman of Ever Bright Investment Capital (the "EBI") and another accredited investor, pursuant to which Star Holdings sold 1,279,080 shares of common stock of the Company for $3 million, or approximately $2.35 per share. Please note that Management and founding shareholders of ChinaNet are not affiliated with Star Holdings and did not sell any share in this transaction.
Notable Share Transactions
BEIJING, Aug. 13, 2012 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that one of the Company's founding shareholders entered into a stock purchase agreement with the founder and Chairman of Ever Bright Investment Capital (the "EBI") and another accredited investor, pursuant to which the founding shareholder sold 1,279,080 shares of common stock of the Company for $3 million, or approximately $2.35 per share.
"We are delighted to add new strategic investors," stated George Chu, Chief Operating Officer of ChinaNet Online Holdings, Inc. "As a high growth company focusing on expanding its product suite and customer base, the Company will benefit from Mr. Qiu's expertise and resources in helping high growth companies attract talent, upgrade management systems, and find strategic partners. We will also benefit from his network of political and industry contacts that will further enhance our growth initiatives, especially in the south and south east regions in China."
Investor Alert
BEIJING, June 5, 2012 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that on May 30, 2012, it received a letter from the Nasdaq Stock Market stating that, based upon the closing bid price for the previous 30 consecutive business days, the Company no longer meets the requirement set forth in Nasdaq Rule 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1.00 per share (the "Minimum Bid Price Rule") . The Nasdaq letter has no immediate effect on the listing of the Company's ordinary shares.
In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has been provided with a period of 180 calendar days, or until November 26, 2012, to regain compliance with the Minimum Bid Price Rule. The Company may regain compliance with the Minimum Bid Price Rule if the bid price of its common stock closes at $1.00 per share or more for a minimum of ten consecutive business days at any time prior to November 26, 2012.
The Company intends to evaluate available options to resolve the deficiency and regain compliance with the Minimum Bid Price Rule.
Comments & Business Outlook
BEIJING, June 6, 2012 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that its website for entrepreneurial social networking services, www.chuangye.com, became the most searched entrepreneurship term on both Baidu.com and Sina Corporation's popular social networking website, Weibo.com, for the month of May 2012.
Baidu.com is China's leading online search engine, accounting for more than 70% of all internet searches conducted in China. Since launching chuangye.com in August 2011, ChinaNet has refined its search engine marketing, optimization and social networking strategies to promote its website and related services. The Company believes that becoming the most searched entrepreneurship term on both Baidu.com and Weibo.com in May 2012 is a direct result of diversifying and creating content for potential entrepreneurs who are seeking a social community to share and find resources that can help them succeed in new or existing business ventures.
Mr. George Chu, COO of ChinaNet added, "This is an extraordinary accomplishment for our company. We constantly strive to make improvements to each of our websites and services in order to better serve our target audience – the millions of business owners and entrepreneurs in China. This latest achievement gives all of us even more encouragement to achieve similar milestones for our other websites, such as Liansuo.com and 28.com. With ongoing improvements to our four major product and service platforms, we believe that we have the opportunity to increase our market share in China and further extend our market base to the 40 million potential clients. "
Investor Presentations
Comments & Business Outlook
First Quarter 2012 Results
Revenues for the first quarter of 2012 increased by 113% to $14.9 million from $7.0 million in the first quarter of 2011
Net loss attributable to common stockholders for the first quarter of 2012 was $0.4 million and loss per share was $0.02 compared to $2.6 million net income attributable to common stockholders and $0.14 earnings per share in the first quarter of 2011
Business Updates
ChinaNet is focused on strategically expanding its client base of over 6,000 current customers by continuing to grow its internet advertising and marketing services business. Currently, 28.com, which connects SME franchisors with new franchisees, generates the majority of revenues. ChinaNet will continue to invest in new technology and expects to increase its market share to over 55% by the end of the third quarter 2012.
Guidance for 2012
Management forecasts full year 2012 revenues to be at least $42 million and net income of at least $2.8 million.
Joint Venture
BEIJING, April 26, 2012 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing O2O (online to offline) sales channel expansion service for small and medium-sized enterprises (SMEs) and entrepreneurial networking and management service for entrepreneurs in the People's Republic of China, announced that it has entered a strategic partnership with China Business Journal ("CBJ"). The two firms will cross-promote each other's services across their networks of online and offline assets.
China Business Journal, in publication since 1985, is one of the most widely distributed Mandarin and English-language weekly print publications focused on business issues in Greater China. China Business Journal has over 920,000 weekly subscribers to its magazine and over 3 millions of online readers. The strategic partnership focuses primarily on ChinaNet's liansuo.com services for large, medium and small-medium businesses and entrepreneurs. Starting this month, ChinaNet will begin to run weekly advertisements in China Business Journal's print and online magazines. In exchange, the Company will share its internet resources to help CBJ further expand its existing subscription rate with the potential to obtain more advertisements requests from SMEs.
Mr. Handong Cheng, Chairman of ChinaNet Online Holdings explained, "This is an important strategic partnership that will provide significant benefits to ChinaNet and China Business Journal. Gaining access to approximately 200,000 business owners or business decision makers, we have an opportunity to generate significant incremental revenues over the next 9 to 24 months. Our joint collaboration will allow both companies to further expand our brands and provide valuable information and services to a wider audience and bring more businesses to each other based on the synergy that this partnership will create."
In addition, the two companies will conduct joint marketing campaigns to highlight key developments in the franchise industry and SMEs in Greater China. The first campaign, scheduled to occur in the third quarter of 2012, will cover the analysis of SMEs, brand development and marketing, business management of chain stores, sales channel expansion, and establishing franchises in 3rd and 4th tier cities in China.
Comments & Business Outlook
Fourth Quarter 2011 Results
Revenues for the fourth quarter of 2011 decreased by 40% to $6.2 million from $10.4 million in the fourth quarter of 2010
Non-GAAP adjusted net loss attributable to common stockholders and loss per share for the fourth quarter of 2011 were $1.8 million and $0.08, respectively vs adjusted net income of $4.5 million and $0.23 in fourth quarter 2010
"Our results during the year were significantly affected by the overall downturn in the SME sector," explained Mr. Handong Cheng, Chairman and CEO of the Company. "Credit was significantly constrained for most of the year, which hit our core small business customers the hardest. We took aggressive measures, which included the launch of new portals such as liansuo.com and chuangye.com to counter these trends. While we believe these investments will add new sources of high margin sales over the next several years, it will take time for these businesses to become a meaningful contributor to our overall performance."
Share Structure
BEIJING, Jan. 6, 2012 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading full-service media development, advertising and communications company for small and medium-sized enterprises in the People's Republic of China, announced today the final results of its exchange offer (the "Offer"), pursuant to which holders of all 4,121,600 of the Company's outstanding warrants (the "Warrants") had the opportunity to acquire the Company's shares of common stock (the "Shares") through a warrant for share exchange in accordance with the following exchange ratios: (A) with respect to any Series A-1 Warrant, one (1) Share in exchange for every twenty (20) Shares for which such Series A-1 Warrant is exercisable, and (B) with respect to any Series A-2 Warrant, one (1) Share in exchange for every 10 (ten) Shares for which such Series A-2 Warrant is exercisable; provided that each holder must have exchanged all its Series A-1 Warrants and/or all its Series A-2 Warrants pursuant to the terms and conditions thereof.
The Offer expired on Friday, December 30, 2011 at 5:00 p.m., Eastern Time. Warrants exercisable for 4,121,600 Shares were eligible to be exchanged.
Based on the final count by the depositary for the Offer, 1,418,800 Series A-1 Warrants were tendered in exchange for approximately 70,940 Shares and 356,800 Series A-2 Warrants were tendered in exchange for approximately 35,680 Shares, for a total of 1,775,600 Warrants (approximately 43% of the outstanding Warrants) exchanged for approximately 106,620 Shares. Following the completion of the Offer, the Company has approximately 22,146,540 Shares outstanding, 642,000 Series A-1 Warrants outstanding exercisable for one Share at an exercise price of $3.00 and 1,704,000 Series A-2 Warrants outstanding exercisable for one Share at an exercise price of $3.75 . The depositary for the Offer expects to deliver the Shares to be issued in exchange for tendered Warrants on or about January 11, 2012.
All of the terms of the Warrants remain in effect. The Series A-1 Warrants will expire on August 20, 2012 and the Series A-2 Warrants will expire on August 20, 2014.
Financial Target Agreements
"Make good" provisions in connection with recent acquisition :
Mr. Liu (acquiree) will pledge to the Company the 49% of the equity interests of SouYi he owns to secure Shareholders’ make good obligation under the Agreement. The Agreement established minimum audited after tax net profit threshold of
RMB 15.8 million (approximately $2.45 million) for SouYi for fiscal year 2012 ("2012 Performance Threshold").
In the event that the 2012 Performance Threshold is achieved less than 95% by SouYi, Mr. Liu will compensate the Company in cash in the amount equal to the shortfall between the 95% of 2012 Performance Threshold and actual audited after tax net profit for fiscal year 2012 of SouYi. In the event that Mr. Liu is not required to compensate the Company in cash under Shareholders’ make good obligation, the Company will then cancel the pledge over the 49% of equity interests of Mr. Liu.
Acquisition Activity
On December 15, 2011 , ChinaNet Online Holdings, Inc. (the "Company"), through its subsidiary Business Opportunity Online (Hubei) Network Technology Co., Ltd., a People's Republic of China company (the " Business Opportunity Online Hubei"), entered into an equity transfer agreement (the "Agreement") with Sou Yi Lian Mei Network Technology (Beijing) Co. Ltd., a People's Republic of China company (the "SouYi"), and Liu Yihong and Wei Yanmin, citizens of the People's Republic of China (Liu and Wei collectively being the "Shareholders"), to acquire 51% of the equity interests (the "Equity") of SouYi. SouYi is based in Beijing, China, and its primary business relates to online advertising and marketing.
Pursuant to this Agreement, the Company will acquire the Equity from the Shareholders for total consideration in the amount of RMB 51.6 million (approximately US$ 8 million) in cash (the "Purchase Price"). The Company will pay RMB 5 million (approximately $0.78 million) of the Purchase Price in cash within five business days of signing of the Agreement as a deposit, and the remaining RMB 46.6 million (approximately $7.22 million ) of the Purchase Price will be paid upon closing (as discussed below).
The Agreement contains certain "make good" provisions, under which Mr. Liu will pledge to the Company the 49% of the equity interests of SouYi he owns to secure Shareholders' make good obligation under the Agreement. The Agreement established minimum audited after tax net profit threshold of RMB 15.8 million (approximately $2.45 million) for SouYi for fiscal year 2012 ("2012 Performance Threshold"). In the event that the 2012 Performance Threshold is achieved less than 95% by SouYi, Mr. Liu will compensate the Company in cash in the amount equal to the shortfall between the 95% of 2012 Performance Threshold and actual audited after tax net profit for fiscal year 2012 of SouYi. In the event that Mr. Liu is not required to compensate the Company in cash under Shareholders' make good obligation, the Company will then cancel the pledge over the 49% of equity interests of Mr. Liu.
The closing of the transaction contemplated by this Agreement shall take place within 15 business days following the satisfaction or waiver of conditions precedent to closing as set forth in the Agreement, including, but not limited to completion of the formalities of amendment of registration and equity pledge registration with administration for industry and commerce. The board of directors of SouYi will consist of two directors to be appointed by the Company and one director to be appointed by Mr. Liu upon closing.
Joint Venture
BEIJING, Dec. 14, 2011 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. ("ChinaNet"), (Nasdaq:CNET), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion service for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking service for entrepreneurs in the People's Republic of China, today announced that it has entered into a strategic partnership agreement with All Chinese Internet Inc. ("1111") to help business owners and entrepreneurs in Taiwan launch operations in mainland China. The partnership started from the beginning of November 2011.
"This is another important component of our Taiwan growth strategy," explained Mr. Handong Cheng, Chairman and CEO of ChinaNet. "Due to increasing cultural, economic and political integration between mainland China and Taiwan, businesses and entrepreneurs in Taiwan are looking for opportunities to establish a presence in mainland China. Our agreement with an established organization with thousands of high-quality franchisors positions our Company well to capture this exciting opportunity."
Investor Presentations
Attached is a
slideshow presentation presented by ChinaNet Online Holdings, Inc. (the “Company”) at meetings with various investors, which includes information about the Company’s
business and financial information, which the Registrant has made available.
Acquisitions
BEIJING, Nov. 28, 2011 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. ("ChinaNet" or "Company"), (Nasdaq:CNET), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that the Company has signed a non-binding letter of intent ("LOI") to acquire a 51% stake in an online advertising and marketing company based in Beijing, China for approximately $7-8 million.
The target company generated approximately $7 million in unaudited net sales revenue during the twelve month period ended September 30, 2011, supported by its innovative web portal that boasts a three month average Alex global ranking of 5500 and average daily IP of 136,000.
"We are in discussions to acquire an established leader in the small office/home office ("SOHO") space, a fast-growth sector that will help us further diversify our revenues" explained Mr. Handong Cheng, Chairman and CEO of ChinaNet. "If we are successful in completing this acquisition, we will have distinct brands in each customer segment: 28.com for SMEs; Liansuo.com for medium-large franchises; and the target for SOHO and emerging businesses. With approximately $21 million in cash at September 30, 2011 and positive cash flows from operations, we have sufficient funds to fund acquisitions and support organic growth."
The Company is currently in the process of conducting due diligence on the target and is negotiating a definitive agreement containing all material terms for this transaction, including the purchase price to be paid. While there is no guarantee a transaction will be consummated, ChinaNet hopes to close the transaction no later than the first quarter of 2012.
Notable Share Transactions
BEIJING, Nov. 23, 2011 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. ("ChinaNet" or the "Company"), (Nasdaq:CNET), a leading B2B (business to business) Internet technology company providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today issued a statement regarding the conversion of the final 2,367,792 shares of the outstanding Series A preferred shares into common shares which occurred as of August 21, 2011 and the notice of the final dividend payment with respect to its Series A preferred shares.
The statement is to advise that, pursuant to the Certificate of Designations, Preferences and Rights of the 10% Series A Convertible Preferred Stock of the Company, all outstanding shares of Preferred Stock were automatically converted into shares of the Company's common stock (the "Common Stock") as of August 21, 2011.
This conversion represents the remaining outstanding Series A preferred shares, bringing ChinaNet's common shares outstanding to approximately 20.04 million as of September 30 2011.
"This conversion will additionally reinforce ChinaNet's financial position and will greatly enhance shareholder value, as well as increase the availability of CNET common shares in the open market," said Mr. Handong Cheng, Chairman and CEO of the Company. "The conversion will result in a simpler and more transparent equity structure and will reduce our quarterly dilution and preferred dividend costs."
Comments & Business Outlook
Third Quarter 2011 Results
Revenues for the third quarter of 2011 decreased 28% to $6.4 million from the third quarter of 2010 due to a significant slowdown in small business formation and lower spending by existing companies, resulting from a lack of available credit.
Net income attributable to common stockholders for the third quarter was $1.0 million and $3.7 million in the third quarter of 2011 and 2010, respectively. Diluted net income per share was $0.06 in the third quarter of 2011 compared to $0.19 in the same period in 2010, based on 18.6 million and 20.9 million outstanding shares, respectively. "The significant slowdown in the SME market overshadowed the underlying progress we continue to make in our efforts to gain further market share which includes adding clients based outside the mainland PRC," began Mr. Handong Cheng, Chairman and CEO of the Company. "We believe our decision to diversify our customer base and expand our service offerings will allow us to navigate this downturn better than our competitors. With more than $21 million in cash and no debt, we are able to maintain investments in attractive opportunities such as our social networking services information platform, Chuangye.com, and advertising and marketing platform, Liansuo.com. Regardless of the depth and duration of the slowdown, we remain confident we will emerge as a more resilient and competitive company."
Guidance for 2011
The Company recently adjusted its full year 2011 revenue forecast to between $26.5 million and $28.5 million.
Comments & Business Outlook
Financial Update
Three months ended September 30, 2011.:
The Company expects to report
net revenue of at least $6.2 million
adjusted net income of $1.0 million ,
full year 2011:
revenues of $26.5 to $28.5 million.
Due to lack of credit available to new and existing SMEs in China as a result of restrictive monetary policies, management is focusing on several new growth initiatives to help offset short-term challenges in 28.com. These include:
ChinaNet's management tool platform, Flying Cloud, which leverages the Company's existing portfolio of technologies and services to accelerate the adoption of cloud-based services among franchisees and franchisors. The website is scheduled to launch by the end of 2011, currently with approximately 40 SMEs on a beta trial.
The Company plans to launch a reality show for entrepreneurs. Based on the same premise as the hit TV game show "Shark Tank" in the U.S., each episode of this show will feature eight prominent or rising enterprises, such as Peak, Fornet and Rongchan, who will evaluate the potential success of 5 finalist entrepreneurs who will be selected from an initial group of hundreds of entrepreneurs. The winner will receive sponsorship from the participating enterprises to start and operate his/her own business.
ChinaNet will open its first franchise expo centre in Beijing for small to medium sized business owners to showcase their franchise ideas to prospective business partners. The center, which is 17,222 square feet, provides shared space for franchise owners to conduct training, meetings and other business activities in a professional setting in exchange for a monthly fee. Management expects to attract new franchisees and entrepreneurs for its online marketing and brand management services over time while generating incremental fees from monthly service fees.
Comments & Business Outlook
BEIJING, Nov. 1, 2011 (GLOBE NEWSWIRE ) -- ChinaNet Online Holdings, Inc. ("ChinaNet") (Nasdaq:CNET), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking service for entrepreneurs in the People's Republic of China, today announced the Company has launched www.expand2china.com to support and assist global franchisors who are interested in expanding their franchises to China.
Beginning in November, ChinaNet is launching additional tailored services targeting American franchise business owners who are considering expanding into China. These services cover the full scope of a franchisor's development in China, from preparation to set-up to expansion. Preparation services include feasibility studies and key statistical information on addressable markets, and reviews of the franchisors' China supply chain and business strategy. During the set-up period, ChinaNet supports with office and facility siting, nationwide franchise permits, product packaging needs and advertising and marketing for the Chinese market. During the expansion phase, the Company assists with public relations and advertising through its premier advertising and marketing web portal, Liansuo.com. Liansuo was officially launched in May, with a current average IP of 82000 per day.
"This new website marks a further step in our strategic global expansion, and is part of our overall strategy to attract U.S. and foreign franchises to China," stated Mr. Handong Cheng, Chairman and CEO of the Company. "With our successful expansion into the Taiwan market, we are now ready to offer our services to English speaking countries. With over 8 years' experience working with 1500+ small-to-medium sized franchise and distribution companies, we know what takes for a global franchise enterprise to expand its business in China."
Comments & Business Outlook
Second Quarter 2011 Results
Revenues for the second quarter of 2011 decreased 25% to $9.1 million from the second quarter of 2010
Net income attributable to common shareholders for the second quarter was $2.8 million and $4.0 million in the second quarter of 2011 and 2010, respectively. Diluted net income per share was $0.15 in the second quarter of 2011 compared to $0.20 in the same period in 2010
"The significant slowdown in the SME market overshadowed the underlying progress we continue make in our strategic vision," began Mr. Handong Cheng, Chairman and CEO of the Company. "We believe our decision to diversify our customer base and expand our service offerings will allow us to navigate this downturn better than our competitors. With more than $16 million in cash and no debt, we are able to maintain investments in attractive opportunities such as our social networking services information platform, chuanye.com, and advertising and marketing platform, Liansuo.com. Regardless of the depth and duration of the slowdown, we remain confident we will emerge as a more resilient and competitive company."
Guidance for 2011
Due to uncertainties surrounding the economic environment and monetary policies in China and its impact on small business customers, ChinaNet will no longer provide financial guidance. The Company will continue to communicate relevant news to investors as they occur.
Investor Presentations
Attached is a
slideshow presentation presented by ChinaNet Online Holdings, Inc. (the “Company”) at the Brean Murray Carret & Co. Beijing China Growth Conference, which includes information about the Company’s business and financial information, which the Company has made available.
Comments & Business Outlook
ChinaNet Online Holdings Reports First Quarter 2011 Earnings
Internet Advertising revenue jumped 30% to $6.1 million; representing 87% of total revenue
Q1 gross margin expanded by 3,690 basis points year-over-year to 71.1%
Adjusted net income attributable to common shareholders grew 42% to $2.4 million with diluted EPS of $0.12 vs. $0.09
$3.8 million operating cash flows in Q1 2011
Launched premium branded portal www.liansuo.com
Reaffirms 2011 net income guidance of $17.5 to $18.2 million
"Our first quarter results demonstrate further execution on our fully integrated service oriented growth strategy and the inherent operating leverage in our business model," stated Mr. Handong Cheng, Chairman and CEO of the Company. "The decision to allocate resources toward 28.com enabled us to successfully deliver new services to existing clients. This contributed to a doubling of gross margins to over 70%, and respective increases in both earnings and cash flow. As we grow our base of franchise customers, including larger branded clients and introduce new services to monetize this existing base, we see substantial opportunities to further expand our market share. In addition, the opportunity to introduce business services to a much larger client base of non-franchised SME (Small to Medium Enterprise) customers offers us another avenue for growth."
Guidance for 2011
Management reaffirms its full year 2011 forecast for
revenues to be between $50 and $54 million for 2011
net income of $17.5 to $18.2 million.
This guidance represents 20%-30% and 19%-24% growth in revenues and net income, respectively.
Investor Presentations
Comments & Business Outlook
Fourth Quarter Results :
"Our fourth quarter results demonstrate further execution of our internet advertising based growth strategy and the inherent operating leverage in our business model ," stated Mr. Handong Cheng, Chairman and CEO of the Company. "The decision to allocate resources toward growing our 28.com customer base helped us expand margins and grow both earnings and cash flows. As we introduce new services to monetize our installed base of advertising customers, we see substantial opportunities to further expand our market share in the rapidly growing SME franchise market ."
Gross profit for the fourth quarter of 2010 was $7.2 million, representing gross margin of 69.5%, compared to $5.1 million in gross profit and a gross margin of 49% in the fourth quarter of 2009.
adjusted diluted earnings per share was $0.23 in the fourth quarter of 2010 compared to $0.18 in the same period in 2009
Management expects revenues to be between $50 and $54 million for 2011, and net income guidance of $17.5 million to $18.2 million , which represents year-over-year growth of 20%-30% and 19%-24%, respectively. The Company's strategy is aimed at gaining market share by exclusively targeting the SME market. The Company expects branded customers to drive higher revenue per customer across its advertising platform while value added services generate incremental higher margin revenue from the installed customer base.
Liquidity Requirements
Our liquidity needs include : (i) net cash used in operating activities that consists of (a) cash required to fund the initial build-out and continued expansion of our network and (b) our working capital needs, which include advance payments for advertising time purchased from TV stations and for internet resources providers, payment of our operating expenses and financing of our accounts receivable; and (ii) net cash used in investing activities that consists of investments in computers and other office equipment. To date, we have financed our liquidity needs
primarily through proceeds from our operating activities.
Comments & Business Outlook
Third Quarter 2010 Financial Results
Revenues for the third quarter of 2010 increased 9.5% to $8.9 million compared to $8.1 million for the third quarter of 2009.
GAAP net income for the third quarter was $3.8 million, an increase of 498.3% compared to $0.6 million reported in the same period of the prior year.
Adjusted net income was $3.9 million and $1.9 million in each corresponding period. Adjusted diluted net income per share was $0.19 in the third quarter of 2010 compared to $0.11 in the same period in 2009, based on 20.9 million and 17.6 million outstanding shares, respectively.
"Our strong third quarter results demonstrate solid execution of our growth strategy and the inherent operating leverage in our business model," stated Mr. Handong Cheng, Chairman and CEO of the Company. "The strategic decision to focus more resources on 28.com is bearing fruit, and is responsible for expanding margins and accelerating earnings and cash flows. As we build our brand and introduce new services to monetize our installed customer base, we see substantial opportunities to further expand our footprint in the rapidly growing SME franchise market."
Guidance for 2010
Management reaffirmed 2010 net income guidance of $14.1 million , which represents 67.9% year-over-year growth, respectively. The Company is ahead of its target to decrease its television advertising and as such expects revenues to be between $41 and $43 million for 2010, compared to previous guidance of $45 million.
Financial Target Agreements
In connection with a previous private placement, CHNT entered into a securities escrow agreement with the Investors, pursuant to which Rise King Investment Limited, a British Virgin Islands company (the “Principal Stockholder”), initially placed 2,558,160 shares of our common stock into an escrow account. Of the Escrow Shares, 1,279,080 shares (equivalent to 50% of the Escrow Shares) were held as security for the achievement of audited net income equal to or greater than $7.7 million for the fiscal year 2009 (the “2009 Performance Threshold”) and the remaining 1,279,080 of the Escrow Shares are being held as security for the achievement of audited net income equal to or greater than $14 million for the fiscal year 2010 (the “2010 Performance Threshold”).
Comments & Business Outlook
Summary Financials
Second Quarter 2010 Results (USD) (unaudited)
(three months ended June 30,) Q2 2010 Q2 2009 CHANGE
Sales $12.0 million $9.4 million +28.3%
Gross Profit $6.1 million $3.8 million +61.9%
Gross Margin 50.7% 40.2% +26.1%
Net Income $4.2 million $1.3 million +222.8%
Fully diluted EPS $0.20 $0.09 +122.2%
"We delivered an exceptionally strong second quarter, led by increased market share and an increased brand image in our flagship franchise gateway business, 28.com, which enabled us to achieve record earnings," stated Mr. Handong Cheng , Chairman and CEO of the Company. "We are building positive momentum in all facets of our business and have allocated the necessary resources to enhance our position as the leading Internet advertising resource for small and medium sized businesses, especially franchise businesses. During the quarter, we added notable franchise customers, including Yiwu XinGuang Holdings Inc., Shanghai Meili Hua Ltd. and Shenzhen Excellent Energy Light Technology Ltd., which are engaged in accessory, stationery and energy saving lights industries, respectively. Our clients have embraced the new value-added services we have added to our product portfolio, including brand management and search engine marketing. These unique solutions provide significant value to franchisors by allowing them to target a larger universe of potential franchisees in a very cost-effective manner, while enabling us to monetize our customer base with high margin revenues. In addition to our normal market channels, we will continue to work with local and federal government agencies, communities and universities to promote entrepreneurship and job creation in China to ensure that we continue to be a dominant player servicing the franchise market."
Guidance for 2010
Management reaffirmed 2010 revenue guidance of $45 million and net income guidance of $14.1 million , which represents 19% and 67.9% year-over-year growth, respectively.
