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China Finance Online (ticker: JRJC) reported Q2 2005 results that missed consensus earnings per ADS estimates by $0.01. Key stats from the quarter:


Q2 Results:
(all percentage changes and comparisons are year on year, unless stated otherwise)

  • Net revenue rose 38.0% to $1.84 million versus consensus of $1.8 million.
  • Advertising revenue was $335,000 versus $179,000 in 1Q05.
  • Advertising revenue represented 18% of net revenue versus 9% of net revenue in 1Q05.
  • Gross margin was 94.0% versus 93.2%.
  • Operating expenses rose 138.0% to $1.0 million.
  • G&A expenses rose 301.1% to $373,000.
  • Product development expenses rose 25.6% to $54,000.
  • Sales and marketing expenses rose 120.0% to $486,000.
  • Operating income fell 12.0% to $722,000.
  • Operating margin was 39.2% versus 61.4%.
  • Net income rose 7.1% to $1.0 million.
  • Net income margin was 54.8% versus 70.6%.
  • Diluted earnings per ADS of $0.05 versus consensus of $0.06.

Subscriber Stats

  • New subscribers in 2Q05 were 2,567, a decrease of 63% from 7,032 in 2Q04.
  • Repeat subscribers in 2Q05 were 2,515, a decrease of 22% from 3,218 in 2Q04.
  • Average subscription fee per subscriber (ASF) for new subscribers
    rose 6% to $165 in 2Q05 from $156 in 2Q04, but fell 21% from $208 in
    1Q05.
  • ASF for repeat subscribers rose 32% to $246 from $186 in 2Q04. and rose 3% from 1Q05.
  • Note: The company claims that the weak Chinese stock market
    has dampened investor interest in more expensive and more comprehensive
    products.

Q3 Guidance

  • None provided.

Balance Sheet

  • Cash and equivalents of $61.8 million as of June 30, 2005.

JRJC chart.

Jrjc82

Source: China Finance Online misses, subscriber growth slows on continued Chinese stock market weakness (JRJC 2Q05 earnings results)