Dragon Capital Group, a holding company of emerging high-tech companies in China, today reported its financial results for the second quarter and first six months of 2013 ended June 30, 2013.
Q2 2013 revenues totaled $5.0 million compared to $4.7 million recorded for the same quarter a year earlier. The company attributed the majority of the increase to a rebound in sales of office equipment at its Shanghai Zhaoli Technology Development Co., Ltd. ("Zhaoli") as uncertainties associated with China's governmental succession in 2012 abated. Gross margins were reported at 3.2%, approximately a percentage point lower compared to Q2 2012, as a result of a challenging pricing environment and efforts associated with the launch of the Gas GIS system as well as the launch of mobile applications. Net income attributable to Dragon Capital Group in Q2 2013 was $25,000 compared to net income of $37,000 recorded in Q2 2012. Earnings per basic and diluted share for the second quarter rounded to $0.00 in both periods.
For the first six months of 2013, revenues decreased year over year, but net income attributable to Dragon Capital Group increased more than twofold to $119,000 compared to net income of $46,000 recorded in the first six months of 2012. Earnings per basic and diluted share rounded to $0.00 in both 1H 2012 and 1H 2013.
Dragon Capital gave the following insight in regards to future outlook, "Management continues to see improving performance trends for the remainder of 2013. Sales at Zhaoli have rebounded as anticipated and new business coming from planned second half software launches at our Yazheng and Zhiye subsidiaries are expected to bolster results. Yazheng offers gas line monitoring software to maximize the efficiency and repair of utility gas lines while Zhiye offers mobile solutions for Android, Windows Mobile and Apple's iOS. Zhiye has been working to develop a mobile programming solutions platform to enable application developers in China to easily and efficiently develop and modify applications to work across the most popular mobile operating systems in China."
At June 30, 2013, total assets were $9.5 million and shareholder equity was $7.3 million with 492,735,578 common shares outstanding. At December 31, 2012, total assets were $9.1 million and shareholder equity was $7.0 million with 492,735,578 common shares outstanding. Working capital was $7.9 million at June 30, 2013, compared to $7.5 million at December 31, 2012.
Mr. Lawrence Wang, Chairman and CEO of Dragon Capital Group, commented, "We are very pleased with our overall performance for the first half of 2013 as sales at Zhaoli have rebounded as anticipated and our higher margin software businesses are poised to gain momentum with planned launches. We are confident in our belief that revenues from our gas monitoring contracts and success in current contracts up for bid will lead to a substantial increase in performance in the second half of the year. Additionally we see application launches at Zhiye driving further top and bottom line growth. We have consistently maintained our profitability while creating a springboard for sustainable top and bottom line growth in the coming years for the benefit of our stockholders."
For more information, visit www.dragoncapital.us
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