China Finance Online Co. Limited (NASDAQ GS: JRJC), a web-based financial services company, has announced its unaudited financial results for the third quarter and first nine months ended September 30, 2019.
The company provides Chinese retail investors with fintech-powered online access to securities trading services, wealth management products, securities investment advisory services, as well as financial database and analytics services to institutional customers.
Third Quarter 2019 financial highlights include:
- Net revenues were $8.1 million in 3Q
- Revenues from advertising grew 41.4% YoY
- Gross margin was 62.3%.
- Net loss attributable to China Finance Online was $2.1 million, compared with a net loss of $6.0 million same period last year.
- China Finance’s operational metrics continued to improve and operational efficiency continued to increase.
Mr. Zhiwei Zhao, Chairman and CEO of China Finance Online, commented:
During the third quarter of 2019, our bottom-line loss was significantly reduced. The weak Hong Kong markets and the falling investor confidence in the third quarter of 2019 led to a revenue decline in our brokerage business in Hong Kong. Our gross margin was also strengthened from the same period of last year.
Similar to the transition of brokerage services in the US, Chinese financial institutions are moving away from a trading commission-oriented business model to holistic financial services encompassing wealth management, investor education, and asset allocation advisory. Our dedication to leveraging technologies to empower wealth managers and improve customer loyalty has bought us closer to many financial institutions. This paradigm shift in the financial industry also set the stage for us to change the revenue model from one-off project services to annual retainers. Our Genius Zhisheng has received such standard annual contracts from brokerage firms. Our institutional business is showing good indications.
After a weak second quarter, the Chinese stock markets continued to soften during the third quarter and the Shanghai Composite Index dropped from 2979 to 2905. However, the traffic to our flagship website, ‘JRJ.com.cn,’ continued to rise, reaching No. 150 in Alexa’s Global Ranking and No. 35 in China, respectively. We remain one of the most trusted financial news hubs with our proprietary content, fact-based journalism, breaking news coverage and analysis on market trends. Growing traffic attracted not only more readers but also more advertisers. As a result, our advertising business is growing rapidly.
Looking into 2020, we will continue to optimize and upgrade our services and products, and also remain confident to leverage our fintech capabilities to add value to our institutional customers and grow our market share and earning power,” Mr. Zhao concluded.
The company’s Robo-Advisor product, Lingxi, has shown a solid track record of balancing performance and risk management since its inception. The product aims to provide Chinese retail investors with investment combinations and personalized global asset allocations through Chinese domestic mutual funds.
During the third quarter of 2019, Lingxi produced an average return of 1.7%, once again among the best performing products in the marketplace and outperforming the Shanghai Composite Index that suffered a loss of 2.5% during the same period. All strategies of Lingxi managed to control the fluctuation under 5.37% while the volatility of Shanghai Composite Index reached 14.04% during the same period.