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China Finance Online Reports Fourth Quarter and Full Year 2018 Unaudited Financial Results

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China Finance Online Co. Limited (“China Finance Online”, or the “Company”, “we”, “us” or “our”) (NASDAQ GS: JRJC), a leading web-based financial services company that 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, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2018.

Fourth Quarter 2018 Financial Highlights

  • Net revenues were $10.7 million, up from $8.6 million in the third quarter of 2018
  • Revenues from advertising grew 85.5% year-over-year and 109.7% quarter-over-quarter
  • Gross margin was 65.1%, up from 58.2% in the third quarter of 2018
  • Net loss attributable to China Finance Online was $4.4 million, compared with a net loss of $8.4 million in the fourth quarter of 2017

Full Year 2018 Highlights

  • Net revenues were $45.5 million, up 6.7% year-over-year
  • Revenues from the financial information and advisory business grew 45.0% year-over-year
  • Revenues from advertising increased by 103.8% year-over-year
  • According to the Company’s asset allocation system, our Robo-Advisor product, Lingxi, significantly outperformed all Chinese market key indices and most of its peer products in the Chinese market with 95% of all its strategies posting positive returns in 2018. For the full year, the defensive strategy designed by Lingxi yielded an annual return of 5.28%.

Mr. Zhiwei Zhao, Chairman and CEO of China Finance Online, commented, “Our top line further improved from the third quarter while our net loss was narrowed. Through the efforts of controlling cost and improving efficiency, for 2018, our net revenue increased year-over-year and our bottom line losses were reduced by $16.8 million. With the priority of strengthening future growth potential, we will continue to improve efficiency.

While the stock market suffered major losses in China and Hong Kong during the fourth quarter, our equity-brokerage related business maintains a strong growth momentum and our intelligent-finance driven fintech business continued to lock in contracts with leading brokerage firms in China. We are pleased that we have established strategic partnerships with influential financial institutions in China and are developing systems to empower their wealth management services.”

“Our other operations have also been making solid progress. Our website “JRJ.com.cn” remains a popular destination for news and analysis on the economy and capital markets, and its unique visitors all year in 2018 rose to 253 million from 236 million in 2017 and 169 million in 2016. The strong growth of traffic to our site was attributable to the improvement of our fact-based journalism, breaking news coverage and proprietary deep dive content,” Mr. Zhao concluded.

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Fourth Quarter 2018 Financial Results

Net revenues were $10.7 million, compared with $13.6 million during the fourth quarter of 2017 and $8.6 million during the third quarter of 2018. During the fourth quarter of 2018, revenues from financial services, the financial information and advisory business, and advertising services contributed 53%, 19% and 28% of the net revenues, respectively, compared with 66%, 21% and 12%, respectively, for the corresponding period in 2017.

Revenues from financial services were $5.7 million, compared with $8.9 million during the fourth quarter of 2017 and $4.7 million during the third quarter of 2018. Revenues from financial services consist mainly of equity brokerage services. The year-over-year decrease of revenues from financial services was mainly due to the reduced revenue from the equity brokerage business. The quarter-over-quarter increase was mainly driven by the strengthening of Rifa’s equity brokerage business.

Revenues from the financial information and advisory business were $2.0 million, compared with $2.9 million during the fourth quarter of 2017 and $2.4 million in the third quarter of 2018. Revenues from the financial information and advisory business were comprised of subscription services from individual and institutional customers and financial advisory service. During the fourth quarter, subscription revenue from individual investors decreased by 12.3% year-over-year, mainly due to the effects of streamlining sales team and upgrading business operation for long-term healthy growth during the fourth quarter.

Revenues from advertising services were $3.0 million, compared with $1.6 million in the fourth quarter of 2017 and $1.4 million in the third quarter of 2018. The increased traffic to our site also helped elevate our advertising revenues on both a year-over-year and quarter-over-quarter basis.

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Gross profit was $6.9 million, compared with $6.8 million in the fourth quarter of 2017 and $5.0 million in the third quarter of 2018. Gross margin in the fourth quarter of 2018 was 65.1%, compared with 49.7% in the fourth quarter of 2017 and 58.2% in the third quarter of 2018. The year-over-year and quarter-over-quarter increases in gross margin were mainly due to increased revenue contribution from advertising which carries a higher gross margin.

General and administrative expenses were $4.9 million, compared with $4.1 million in the fourth quarter of 2017, and $3.1 million in the third quarter of 2018. The year-over-year and quarter-over-quarter increases were mainly attributable to increased bad debt provisions.

Sales and marketing expenses were $4.4 million, compared with $6.8 million in the fourth quarter of 2017, and $4.8 million in the third quarter of 2018. The year-over-year decrease of 35.1% was mainly attributable to the reduction of consulting fees related to commodities brokerage business and sales commissions. The quarter-over-quarter decrease of 7.4% was mainly attributable to the reduction in advertising.

Research and development expenses were $2.9 million, compared with $3.8 million in the fourth quarter of 2017 and $3.5 million in the third quarter of 2018. The year-over-year and quarter-over-quarter decreases were mainly attributable to improved efficiency after the consolidation of the R&D team throughout different business units. The Company continues to maintain a team of senior software engineers, data scientists and capital market professionals to support further development in its fintech capabilities.

Total operating expenses were $12.3 million, compared with $14.7 million in the fourth quarter of 2017, and $11.3 millionin the third quarter of 2018. The year-over-year decrease was mainly due to improved efficiency and effective cost controls. The quarter-over-quarter increase was mainly due to bad debt provisions.

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Loss from operations was $5.4 million, compared with a loss from operations of $8.0 million in the fourth quarter of 2017 and a loss from operations of $6.3 million in the third quarter of 2018.

Net loss attributable to China Finance Online was $4.4 million, compared with a net loss of $8.4 million in the fourth quarter of 2017 and a net loss of $6.0 million in the third quarter of 2018.

Fully diluted loss per American Depository Shares (“ADS”) attributable to China Finance Online was $0.19 for the fourth quarter of 2018, compared with fully diluted loss per ADS of $0.37 for the fourth quarter of 2017 and fully diluted loss per ADS of $0.26 for the third quarter of 2018. Basic and diluted weighted average numbers of ADSs for the fourth quarter of 2018 were 22.8 million, compared with basic and diluted weighted average number of ADSs of 22.7 million for the fourth quarter of 2017. Each ADS represents five ordinary shares of the Company.

Full Year 2018 Financial Results

Net revenues for full year 2018 were $45.5 million, an increase of 6.7% compared with $42.6 million for 2017.

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Revenues from financial services for the full year 2018 were $23.1 million, a decrease of 18.3% compared with $28.2 million for 2017.

Revenues from the financial information and advisory business for the full year 2018 were $14.9 million, an increase of 45.0% compared with $10.3 million for 2017.

Revenues from advertising services for the full year 2018 were $7.3 million, an increase of 103.8% compared with $3.6 million for 2017.

Gross profit for the full year 2018 was $28.6 million, an increase of 38.4% compared with $20.7 million in the full year 2017. Gross margin was 63.0% compared with 48.5% in 2017.

Net loss attributable to China Finance Online for the full year 2018 was $20.0 million, compared with $36.7 million in 2017.

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Fully diluted loss per ADS attributable to China Finance Online was $0.88 for the full year 2018, compared with $1.62 in 2017. Basic and diluted weighted average numbers of ADSs for the full year 2018 were 22.8 million.

Recent Developments

  • Lingxi Robo-Advisor recorded strong performance in the fourth quarter of 2018 and full year of 2018

According to our proprietary asset allocation system, our Robo-Advisor product, Lingxi, provides Chinese retail investors with a wide array of investment combinations and personalized global asset allocations through Chinese domestic mutual funds.

Since its inception, Lingxi significantly outperformed all Chinese market key indices and most of its peer products in the Chinese market. In 2018, the Shanghai Composite Index experienced a loss of 24.6%. However, 95% of the strategies in the Company’s Robo-Advisor product, Lingxi, posted positive returns, with a defensive strategy yielding an annual return of 5.28% in 2018. Since its inception in 2017 to the end of 2018, the accumulative returns of Lingxi’s high-risk, medium-risk and low-risk strategies were 16.94%, 13.91% and 10.79%, respectively.

  • China Finance Online Launched its Turnkey Asset Management Platform (TAMP)

In late 2018, the Company launched the i-TAMP platform (Turnkey Asset Management Platform) to provide financial advisors consultation and advice on stocks, mutual funds, wealth management products, insurance, trust and other financial products. Featuring best-in-class TAMP, this platform has already attracted hundreds of financial advisors to open their online offices to provide services to mass retail investors. The key benefits of the i-TAMP platform are the superior user experience and robust product functionalities which empower financial advisors to better serve their clients.

  • China Finance Online Forms Strategic Partnership with Leading Futures Brokerage Firm CIFCO

In January 2019, the Company signed a strategic partnership agreement with Founder CIFCO Futures Co. Ltd (“Founder CIFCO Futures”), a leading futures brokerage firm in China. Pursuant to the partnership agreement, both parties will collaborate in the development of more advanced trading system, smart market news alert, cloud-based research platform and industry forums.

  • China Finance Online Entered into Multiple Contracts from Leading Brokerage Firms

In January 2019, the Company announced it had entered into a contract from Orient Securities Co., Ltd. (“Orient Securities”), a Top 10 leading brokerage firm in China according to Securities Association of China, to construct an intelligent, contextual, pragmatic online nationwide investor education center to equip Orient Securities with industry-leading comprehensive intelligent solution for investor education. In addition to Orient Securities, the Company also entered into contracts with other leading brokerage firms such as BOCI International (China) Limited (BOCI) and Southwest Securities to develop smart and customized solutions for investor education.

  • 2018 Fintech & Leading China Annual Forum

In December 2018, the Company hosted the “2018 Fintech Forum & Leading China Annual Awards” in Beijing. The key discussions were artificial intelligence, data security, big data, risk management, IoT and blockchain. The conference is committed to promoting the long-term health of the financial industry in China and has received high recognition from financial regulators and institutions.

  • Awards and Letters of Appreciation from the China Banking Association, China Banking Regulatory Commission, China Securities Investment Association and National Internet Finance Association of China.

In 2018, the Company’s media content department received a slew of awards and letters of appreciation from the China Banking Association, China Banking Regulatory Commission, Securities Investment Association and National Internet Finance Association of China for its outstanding media coverages on the Chinese banking industry and stock markets. These accolades are government endorsements of our efforts in promoting rational and long-term investment philosophy. As the No. 2 most popular financial news website in China by Sina, the Company has 253 million unique visitors in 2018 along with a robust presence in large Chinese social media domains including 2.7 million followers on Weibo, 1 million followers on Wechat, and 1.8 million followers on TikTok. In recent months, the Company has been consistently ranked No. 1 on Baidu’s financial institutions value board for its 500,000 followers and accumulative reads of 410 million.

Conference Call Information

The management will host a conference call on April 23, 2019 at 8:00 p.m. U.S. Eastern Time (8:00 a.m. Beijing/Hong Kong time April 24, 2019). Dial-in details for the earnings conference call are as follows:

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US: 1-800-742-9301
Hong Kong: 800-906-648
Singapore: 800-616-2313
China: 800-870-0210 or 400-120-3170
Conference ID: 8985259

Please dial in 10 minutes before the call is scheduled to begin and provide the conference ID to join the call.

A recording of the call will be available on China Finance Online’s website under the investor relations section.

In addition, a live and archived webcast of the conference call will be available at https://edge.media-server.com/m6/p/mr48xpx3.

 

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SOURCE China Finance Online Co., Ltd.

Fintech

How to identify authenticity in crypto influencer channels

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Modern brands stake on influencer marketing, with 76% of users making a purchase after seeing a product on social media.The cryptocurrency industry is no exception to this trend. However, promoting crypto products through influencer marketing can be particularly challenging. Crypto influencers pose a significant risk to a brand’s reputation and ROI due to rampant scams. Approximately 80% of channels provide fake statistics, including followers counts and engagement metrics. Additionally, this niche is characterized by high CPMs, which can increase the risk of financial loss for brands.

In this article Nadia Bubennnikova, Head of agency Famesters, will explore the most important things to look for in crypto channels to find the perfect match for influencer marketing collaborations.

 

  1. Comments 

There are several levels related to this point.

 

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LEVEL 1

Analyze approximately 10 of the channel’s latest videos, looking through the comments to ensure they are not purchased from dubious sources. For example, such comments as “Yes sir, great video!”; “Thanks!”; “Love you man!”; “Quality content”, and others most certainly are bot-generated and should be avoided.

Just to compare: 

LEVEL 2

Don’t rush to conclude that you’ve discovered the perfect crypto channel just because you’ve come across some logical comments that align with the video’s topic. This may seem controversial, but it’s important to dive deeper. When you encounter a channel with logical comments, ensure that they are unique and not duplicated under the description box. Some creators are smarter than just buying comments from the first link that Google shows you when you search “buy YouTube comments”. They generate topics, provide multiple examples, or upload lists of examples, all produced by AI. You can either manually review the comments or use a script to parse all the YouTube comments into an Excel file. Then, add a formula to highlight any duplicates.

LEVEL 3

It is also a must to check the names of the profiles that leave the comments: most of the bot-generated comments are easy to track: they will all have the usernames made of random symbols and numbers, random first and last name combinations, “Habibi”, etc. No profile pictures on all comments is also a red flag.

 

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LEVEL 4

Another important factor to consider when assessing comment authenticity is the posting date. If all the comments were posted on the same day, it’s likely that the traffic was purchased.

 

2. Average views number per video

This is indeed one of the key metrics to consider when selecting an influencer for collaboration, regardless of the product type. What specific factors should we focus on?

First & foremost: the views dynamics on the channel. The most desirable type of YouTube channel in terms of views is one that maintains stable viewership across all of its videos. This stability serves as proof of an active and loyal audience genuinely interested in the creator’s content, unlike channels where views vary significantly from one video to another.

Many unauthentic crypto channels not only buy YouTube comments but also invest in increasing video views to create the impression of stability. So, what exactly should we look at in terms of views? Firstly, calculate the average number of views based on the ten latest videos. Then, compare this figure to the views of the most recent videos posted within the past week. If you notice that these new videos have nearly the same number of views as those posted a month or two ago, it’s a clear red flag. Typically, a YouTube channel experiences lower views on new videos, with the number increasing organically each day as the audience engages with the content. If you see a video posted just three days ago already garnering 30k views, matching the total views of older videos, it’s a sign of fraudulent traffic purchased to create the illusion of view stability.

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3. Influencer’s channel statistics

The primary statistics of interest are region and demographic split, and sometimes the device types of the viewers.

LEVEL 1

When reviewing the shared statistics, the first step is to request a video screencast instead of a simple screenshot. This is because it takes more time to organically edit a video than a screenshot, making it harder to manipulate the statistics. If the creator refuses, step two (if only screenshots are provided) is to download them and check the file’s properties on your computer. Look for details such as whether it was created with Adobe Photoshop or the color profile, typically Adobe RGB, to determine if the screenshot has been edited.

LEVEL 2

After confirming the authenticity of the stats screenshot, it’s crucial to analyze the data. For instance, if you’re examining a channel conducted in Spanish with all videos filmed in the same language, it would raise concerns to find a significant audience from countries like India or Turkey. This discrepancy, where the audience doesn’t align with regions known for speaking the language, is a red flag.

If we’re considering an English-language crypto channel, it typically suggests an international audience, as English’s global use for quality educational content on niche topics like crypto. However, certain considerations apply. For instance, if an English-speaking channel shows a significant percentage of Polish viewers (15% to 30%) without any mention of the Polish language, it could indicate fake followers and views. However, if the channel’s creator is Polish, occasionally posts videos in Polish alongside English, and receives Polish comments, it’s important not to rush to conclusions.

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Example of statistics

 

Wrapping up

These are the main factors to consider when selecting an influencer to promote your crypto product. Once you’ve launched the campaign, there are also some markers to show which creators did bring the authentic traffic and which used some tools to create the illusion of an active and engaged audience. While this may seem obvious, it’s still worth mentioning. After the video is posted, allow 5-7 days for it to accumulate a basic number of views, then check performance metrics such as views, clicks, click-through rate (CTR), signups, and conversion rate (CR) from clicks to signups.

If you overlooked some red flags when selecting crypto channels for your launch, you might find the following outcomes: channels with high views numbers and high CTRs, demonstrating the real interest of the audience, yet with remarkably low conversion rates. In the worst-case scenario, you might witness thousands of clicks resulting in zero to just a few signups. While this might suggest technical issues in other industries, in crypto campaigns it indicates that the creator engaged in the campaign not only bought fake views and comments but also link clicks. And this happens more often than you may realize.

Summing up, choosing the right crypto creator to promote your product is indeed a tricky job that requires a lot of resources to be put into the search process. 

Author Nadia Bubennikova, Head of agency  at Famesters

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Nadia Bubennikova, Head of agency at Famesters

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Fintech

Central banks and the FinTech sector unite to change global payments space

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The BIS, along with seven leading central banks and a cohort of private financial firms, has embarked on an ambitious venture known as Project Agorá.

Named after the Greek word for “marketplace,” this initiative stands at the forefront of exploring the potential of tokenisation to significantly enhance the operational efficiency of the monetary system worldwide.

Central to this pioneering project are the Bank of France (on behalf of the Eurosystem), the Bank of Japan, the Bank of Korea, the Bank of Mexico, the Swiss National Bank, the Bank of England, and the Federal Reserve Bank of New York. These institutions have joined forces under the banner of Project Agorá, in partnership with an extensive assembly of private financial entities convened by the Institute of International Finance (IIF).

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At the heart of Project Agorá is the pursuit of integrating tokenised commercial bank deposits with tokenised wholesale central bank money within a unified, public-private programmable financial platform. By harnessing the advanced capabilities of smart contracts and programmability, the project aspires to unlock new transactional possibilities that were previously infeasible or impractical, thereby fostering novel opportunities that could benefit businesses and consumers alike.

The collaborative effort seeks to address and surmount a variety of structural inefficiencies that currently plague cross-border payments. These challenges include disparate legal, regulatory, and technical standards; varying operating hours and time zones; and the heightened complexity associated with conducting financial integrity checks (such as anti-money laundering and customer verification procedures), which are often redundantly executed across multiple stages of a single transaction due to the involvement of several intermediaries.

As a beacon of experimental and exploratory projects, the BIS Innovation Hub is committed to delivering public goods to the global central banking community through initiatives like Project Agorá. In line with this mission, the BIS will soon issue a call for expressions of interest from private financial institutions eager to contribute to this ground-breaking project. The IIF will facilitate the involvement of private sector participants, extending an invitation to regulated financial institutions representing each of the seven aforementioned currencies to partake in this transformative endeavour.

Source: fintech.globa

The post Central banks and the FinTech sector unite to change global payments space appeared first on HIPTHER Alerts.

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TD Bank inks multi-year strategic partnership with Google Cloud

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TD Bank has inked a multi-year deal with Google Cloud as it looks to streamline the development and deployment of new products and services.

The deal will see the Canadian banking group integrate the vendor’s cloud services into a wider portion of its technology solutions portfolio, a move which TD expects will enable it “to respond quickly to changing customer expectations by rolling out new features, updates, or entirely new financial products at an accelerated pace”.

This marks an expansion of the already established relationship between TD Bank and Google Cloud after the group previously adopted the vendor’s Google Kubernetes Engine (GKE) for TD Securities Automated Trading (TDSAT), the Chicago-based subsidiary of its investment banking unit, TD Securities.

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TDSAT uses GKE for process automation and quantitative modelling across fixed income markets, resulting in the development of a “data-driven research platform” capable of processing large research workloads in trading.

Dan Bosman, SVP and CIO of TD Securities, claims the infrastructure has so far supported TDSAT with “compute-intensive quantitative analysis” while expanding the subsidiary’s “trading volumes and portfolio size”.

TD’s new partnership with Google Cloud will see the group attempt to replicate the same level of success across its entire portfolio.

Source: fintechfutures.com

The post TD Bank inks multi-year strategic partnership with Google Cloud appeared first on HIPTHER Alerts.

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