ChinaNet Online Holdings Reports Second Quarter and First Half 2020 Unaudited Financial Results
Second Quarter of 2020 Financial Highlights
For the Three Months Ended |
|||||
($ millions, except per share data) | 2020 | 2019 | % Change | ||
Revenues | -32.6% | ||||
Gross profit | -18.6% | ||||
Gross margin | 2.9% | 2.4% | 0.5 pp* | ||
Loss from operations | ( |
( |
16.5% | ||
Operating loss margin | -9.8% | -7.9% | -1.9 pp | ||
Net loss attributable to CNET | ( |
( |
155.4% | ||
Loss per share | ( |
( |
100.0% | ||
*pp: percent points |
- Revenues decreased by 32.6% to
$10.42 million for the second quarter of 2020, primarily due to a decrease in revenues from Internet advertising and distribution of the right to use search engine marketing service business categories, as a result of the COVID-19 outbreak during the first quarter of 2020 and slow recovery in the second quarter of 2020. - Gross profit decreased by 18.6% to
$0.30 million while gross margin improved by 0.5 percentage points to 2.9% for the second quarter of 2020. - Loss from operations improved by 16.5% to
$1.02 million for the second quarter of 2020, primarily attributable to a decrease in operating expenses, which was partially offset by the decrease in gross profit during the second quarter of 2020. - Net loss attributable to CNET was
$0.97 million , or$0.04 per share, for the second quarter of 2020, compared to net loss of$0.38 million , or$0.02 per share, for the same period of last year.
Mr.
First Half of 2020 Financial Highlights
For the Six Months Ended |
|||||
($ millions, except per share data) | 2020 | 2019 | % Change | ||
Revenues | -38.4% | ||||
Gross profit | 48.1% | ||||
Gross margin | 8.1% | 3.4% | 4.7 pp* | ||
Loss from operations | ( |
( |
68.2% | ||
Operating loss margin | -22.3% | -8.2% | -14.1 pp | ||
Net loss attributable to CNET | ( |
( |
116.1% | ||
Loss per share | ( |
( |
77.8% | ||
*pp: percent points |
- Revenues decreased by 38.4% to
$14.80 million for the first half of 2020, primarily due to the decrease in revenues from our Internet advertising and distribution of the right to use search engine marketing service business categories, as a result of the COVID-19 outbreak during the first quarter of 2020 and slow recovery in the second quarter of 2020. - Gross profit increased by 48.1% to
$1.20 million while gross margin improved by 4.7 percentage points to 8.1% for the first half of 2020. - Loss from operations increased by 68.2%, to
$3.30 million for the first half of 2020, primarily attributable to an increase in operating expenses. - Net loss attributable to CNET was
$3.28 million , or$0.16 per share, for the first half of 2020, compared to net loss of$1.52 million , or$0.09 per share, for the same period of last year.
Second Quarter 2020 Financial Results
Revenues
For the Three Months Ended |
|||||
2020 | 2019 | % Change | |||
- Internet advertising and related data service | 2,302 | 3,598 | -36.0% | ||
- Distribution of the right to use search engine marketing service | 7,310 | 11,855 | -38.3% | ||
- Data and technical services | 300 | 0 | NM | ||
Internet advertising and related services | 9,912 | 15,453 | -35.9% | ||
Ecommerce O2O advertisement and marketing services | 504 | 0 | NM | ||
Technical solution services | 0 | 0 | NM | ||
Total revenues | 10,416 | 15,453 | -32.6% |
For the second quarter of 2020, revenues decreased by
Cost of revenues
For the Three Months Ended |
|||||
2020 | 2019 | % Change | |||
- Internet advertising and related data service | 2,072 | 3,484 | -40.5% | ||
- Distribution of the right to use search engine marketing service | 7,405 | 11,598 | -36.2% | ||
- Data and technical services | 266 | 5 | NM | ||
Internet advertising and related services | 9,743 | 15,087 | -35.4% | ||
Ecommerce O2O advertisement and marketing services | 375 | 0 | NM | ||
Technical solution services | 0 | 0 | NM | ||
Total cost of revenues | 10,118 | 15,087 | -32.9% |
For the second quarter of 2020, our total cost of revenues decreased by
Gross profit and gross margin
Total gross profit decreased by
Overall gross margin was 2.9% for second quarter of 2020, compared to 2.4% for the second quarter of 2019, primarily due to improvement in gross margin of our Internet advertising business and new revenues generated form Ecommerce O2O advertising and marketing services during the period, which have a relatively higher gross margin than our core businesses.
Operating expenses
Sales and marketing expenses decreased by
General and administrative expenses decreased by
Research and development expenses decreased by
Operating loss
Loss from operations decreased by
Other income (expense), net
Total other income decreased to
Net loss attributable to CNET and loss per share
Net loss attributable to CNET was
First Half 2020 Financial Results
Revenues
For the Six Months Ended |
|||||
2020 | 2019 | % Change | |||
- Internet advertising and related data service | 3,250 | 5,435 | -40.2% | ||
- Distribution of the right to use search engine marketing service | 9,298 | 18,580 | -50.0% | ||
- Data and technical services | 600 | 5 | NM | ||
Internet advertising and related services | 13,148 | 24,020 | -45.3% | ||
Ecommerce O2O advertisement and marketing services | 1,007 | 0 | NM | ||
Technical solution services | 645 | 0 | NM | ||
Total revenues | 14,800 | 24,020 | -38.4% |
For the first half year of 2020, revenues decreased by
Cost of revenues
For the Six Months Ended |
|||||
2020 | 2019 | % Change | |||
- Internet advertising and related data service | 2,906 | 5,218 | -44.3% | ||
- Distribution of the right to use search engine marketing service | 9,416 | 17,989 | -47.7% | ||
- Data and technical services | 531 | 5 | NM | ||
Internet advertising and related services | 12,853 | 23,212 | -44.6% | ||
Ecommerce O2O advertisement and marketing services | 750 | 0 | NM | ||
Technical solution services | 0 | 0 | NM | ||
Total cost of revenues | 13,603 | 23,212 | -41.4% |
For the first half year of 2020, cost of revenues decreased by
Gross profit and gross margin
Total gross profit increased by
Overall gross margin was 8.1% for first half of 2020, compared to 3.4% for the first half of 2019.
Operating expenses
Sales and marketing expenses decreased by
General and administrative expenses increased by
Research and development expenses decreased by
Operating loss
Loss from operations increased by
Other income (expense), net
Total other income decreased to
Net loss attributable to CNET and loss per share
As a result of the foregoing, net loss attributable to CNET was
Financial Condition
As of
Net cash provided by operating activities was
Recent Developments
On
On
About
Established in 2003 and headquartered in
Safe Harbor Statement
This release contains certain "forward-looking statements" relating to the business of
For more information, please contact:
Email: ttian@weitianco.com
Phone: +1 732-910-9692
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for number of shares and per share data)
|
2020 |
2019 |
|||||
(US $) | (US $) | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,055 | $ | 1,603 | |||
Accounts receivable, net of allowance for doubtful accounts of |
2,520 | 3,260 | |||||
Prepayment and deposit to suppliers | 5,078 | 6,980 | |||||
Due from related parties, net | 52 | 81 | |||||
Other current assets, net | 959 | 11 | |||||
Total current assets | 9,664 | 11,935 | |||||
Long-term investments | 61 | 35 | |||||
Operating lease right-of-use assets | 7 | 12 | |||||
Property and equipment, net | 73 | 78 | |||||
Intangible assets, net | 1,493 | 1,899 | |||||
Blockchain platform applications development costs | 4,176 | 3,879 | |||||
Long-term prepayments | 909 | - | |||||
Deferred tax assets, net | 691 | 713 | |||||
Total Assets | $ | 17,074 | $ | 18,551 | |||
Liabilities and Equity | |||||||
Current liabilities: | |||||||
Short-term bank loan * | $ | - | $ | 430 | |||
Accounts payable * | 395 | 408 | |||||
Advance from customers * | 1,619 | 2,006 | |||||
Accrued payroll and other accruals * | 431 | 491 | |||||
Taxes payable * | 3,258 | 3,214 | |||||
Lease payment liability related to short-term leases * | 177 | 136 | |||||
Other current liabilities * | 446 | 221 | |||||
Warrant liabilities | 39 | 107 | |||||
Total current liabilities | 6,365 | 7,013 |
Long-term liabilities: | |||||||
Long-term borrowing from a director | 124 | 125 | |||||
Total Liabilities | 6,489 | 7,138 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Common stock ( |
22 | 20 | |||||
Additional paid-in capital | 45,493 | 43,111 | |||||
Statutory reserves | 2,607 | 2,607 | |||||
Accumulated deficit | (39,051 | ) | (35,773 | ) | |||
Accumulated other comprehensive income | 1,572 | 1,505 | |||||
Total |
10,643 | 11,470 | |||||
Noncontrolling interests | (58 | ) | (57 | ) | |||
Total equity | 10,585 | 11,413 | |||||
Total Liabilities and Equity | $ | 17,074 | $ | 18,551 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except for number of shares and per share data)
Six Months Ended |
Three Months Ended |
||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(US $) | (US $) | (US $) | (US $) | ||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||
Revenues | |||||||||||||||
From unrelated parties | $ | 14,786 | $ | 23,912 | $ | 10,415 | $ | 15,352 | |||||||
From a related party | 14 | 108 | 1 | 101 | |||||||||||
Total revenues | 14,800 | 24,020 | 10,416 | 15,453 | |||||||||||
Cost of revenues | 13,603 | 23,212 | 10,118 | 15,087 | |||||||||||
Gross profit | 1,197 | 808 | 298 | 366 | |||||||||||
Operating expenses | |||||||||||||||
Sales and marketing expenses | 235 | 350 | 70 | 181 | |||||||||||
General and administrative expenses | 3,928 | 2,058 | 1,132 | 1,248 | |||||||||||
Research and development expenses | 330 | 360 | 116 | 159 | |||||||||||
Total operating expenses | 4,493 | 2,768 | 1,318 | 1,588 | |||||||||||
Loss from operations | (3,296 | ) | (1,960 | ) | (1,020 | ) | (1,222 | ) | |||||||
Other income (expenses) | |||||||||||||||
Interest expense, net | (1 | ) | (23 | ) | - | (12 | ) | ||||||||
Other income/(expenses) | 17 | (4 | ) | 18 | (2 | ) | |||||||||
Change in fair value of warrant liabilities | 68 | 471 | 22 | 821 | |||||||||||
Total other income | 84 | 444 | 40 | 807 | |||||||||||
Loss before income tax (expense)/benefit and noncontrolling interests | (3,212 | ) | (1,516 | ) | (980 | ) | (415 | ) | |||||||
Income tax (expense)/benefit | (68 | ) | (6 | ) | 10 | 33 | |||||||||
Net loss | (3,280 | ) | (1,522 | ) | (970 | ) | (382 | ) | |||||||
Net loss attributable to noncontrolling interests | 2 | 5 | 2 | 3 | |||||||||||
Net loss attributable to |
$ | (3,278 | ) | $ | (1,517 | ) | $ | (968 | ) | $ | (379 | ) |
Net loss | $ | (3,280 | ) | $ | (1,522 | ) | $ | (970 | ) | $ | (382 | ) | |||
Foreign currency translation gain/(loss) | 68 | 24 | (4 | ) | 60 | ||||||||||
Comprehensive loss | $ | (3,212 | ) | $ | (1,498 | ) | $ | (974 | ) | $ | (322 | ) | |||
Comprehensive loss attributable to noncontrolling interests | 1 | 5 | 2 | 2 | |||||||||||
Comprehensive loss attributable to |
$ | (3,211 | ) | $ | (1,493 | ) | $ | (972 | ) | $ | (320 | ) | |||
Loss per share | |||||||||||||||
Loss per common share | |||||||||||||||
Basic and diluted | $ | (0.16 | ) | $ | (0.09 | ) | $ | (0.04 | ) | $ | (0.02 | ) | |||
Weighted average number of common shares outstanding: | |||||||||||||||
Basic and diluted | 21,044,666 | 16,411,548 | 21,691,926 | 16,412,543 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Six Months Ended |
|||||||
2020 | 2019 | ||||||
(US $) | (US $) | ||||||
(Unaudited) | (Unaudited) | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | (3,280 | ) | $ | (1,522 | ) | |
Adjustments to reconcile net loss to net cash provided by/(used in) operating activities | |||||||
Depreciation and amortization | 415 | 52 | |||||
Amortization of operating lease right-of-use assets | 5 | 87 | |||||
Share-based compensation expenses | 1,987 | 203 | |||||
Provision for allowances for doubtful accounts | 747 | 460 | |||||
Deferred taxes | 11 | 6 | |||||
Change in fair value of warrant liabilities | (68 | ) | (471 | ) | |||
Changes in operating assets and liabilities | |||||||
Accounts receivable | (38 | ) | (866 | ) | |||
Prepayment and deposit to suppliers | 2,090 | (76 | ) | ||||
Due from related parties | 28 | 227 | |||||
Other current assets | (3 | ) | 11 | ||||
Long-term prepayments | (750 | ) | - | ||||
Accounts payable | (9 | ) | (2,153 | ) | |||
Advance from customers | (362 | ) | 1,787 | ||||
Accrued payroll and other accruals | (57 | ) | (232 | ) | |||
Lease payment liability related to short-term leases | 43 | 120 | |||||
Other current liabilities | 326 | (39 | ) | ||||
Taxes payable | 89 | 91 | |||||
Prepaid lease payment | (9 | ) | (10 | ) | |||
Net cash provided by/(used in) operating activities | 1,165 | (2,325 | ) | ||||
Cash flows from investing activities | |||||||
Investment to investee entities | (27 | ) | (36 | ) | |||
Short-term loan to an unrelated party | (944 | ) | - | ||||
Payment for blockchain platform applications development costs | (302 | ) | - | ||||
Net cash used in investing activities | (1,273 | ) | (36 | ) |
Cash flows from financing activities | |||||||
Proceeds from short-term bank loan | - | 442 | |||||
Repayment of short-term bank loan | (427 | ) | (442 | ) | |||
Net cash used in financing activities | (427 | ) | - | ||||
Effect of exchange rate fluctuation | (13 | ) | 23 | ||||
Net decrease in cash and cash equivalents | (548 | ) | (2,338 | ) | |||
Cash and cash equivalents at beginning of the period | 1,603 | 3,742 | |||||
Cash and cash equivalents at end of the period | $ | 1,055 | $ | 1,404 | |||
Source: ChinaNet Online Holdings, Inc.