|By PR Newswire||
|August 25, 2014 07:22 AM EDT||
HONG KONG, Aug. 25, 2014 /PRNewswire/ -- Pacific Online Ltd. (HKSE: 543) ("Pacific Online," the "Company," or the "Group"), a leading internet content provider in China, today announced its 2014 interim results for the six months ended June 30, 2014. The Group will host a conference call to discuss these results at 9:00AM Hong Kong time on August 26, 2014. Dial-in details are provided at the bottom of this release.
2014 Interim Financial Highlights
- Total revenues increased 18.4% year-over-year to RMB403.6 million
- Net profit increased 5.9% year-over-year to RMB94.6 million
"I am pleased to report an 18.4% year-over-year increase in revenues and a rise of 5.9% in net profit during the first half of 2014" commented Mr. Lam Wai Yan, Chairman and Chief Executive Officer of Pacific Online Limited. "Despite the economic uncertainty in China and increasingly intense market competition, we remain optimistic about the future of our business model which continues to generate both viewership and revenue growth. We believe that a greater focus on resource allocation will allow us to meet users' demand and allow us to seize new opportunities in China's vibrant e-commerce industry by leveraging our strength in different consumer verticals."
"PCauto continued to generate strong growth with revenue increasing 29.5%. The portal remains our most important revenue contributor accounting for 56.4% of total revenue during the first half of 2014. Growth was mainly driven by increased spending from both our automaker and dealership customers. Advertisements for car accessory products also showed signs of strong growth."
"Revenue from our IT-focused PConline portal declined 9.4%. PConline remains one of the leading verticals in the market and continued to see a stable increase in smart phone and tablet advertising spending. Revenue from software brands and e-commerce vendors also increased. The increases were offset however by a broader decline in demand for laptops and desktops in China."
"PClady's revenue increased 14.5% thanks to increasing demand for cosmetics and other fashion products, as well as a modest increase in skin-care products. We anticipate stronger growth during the second half of the year once strengthening of the portal's organizational structure and re-focusing on its product mix is complete."
"Revenue from other operations including PCgames, PCbaby, and PChouse increased 77.4% during the six months ended June 30, 2014. PCbaby, in particular, continued to attract increased online marketing spending from baby formula producers and diaper brands."
"We continue to develop strategic products that will contribute to the sustainable growth of the Group. These include our mobile websites and applications which facilitate traffic growth and closer relationships between our clients and users. Our three downloadable magazines maintained their top positions on Apple's iTunes recommendation list with more than 4 million downloads during the first half of this year. They are beginning to make meaningful revenue contribution to the Group.
"We recently made a strategic investment in a Silicon Valley-based venture capital fund which focuses primarily on the consumer and mobile technology sectors. The fund is expected to benefit us by offering opportunities to acquire knowledge of the latest technologies and business models from its portfolio companies."
"We remain optimistic in our outlook for the second half of 2014. While we have always taken a cautious approach, we are confident in our ability to maintain growth amidst challenges in the market."
2014 Interim Financial Results
Revenue increased 18.4% from RMB RMB341.0 million for the six months ended June 30, 2013 to RMB403.6 million for the six months ended June 30, 2014.
Revenue for PCauto, the Group's automobile portal, increased 29.5% from RMB175.8 million for the six months ended June 30, 2013 to RMB227.5 million during the six months ended June 30, 2014. The increase in revenue for PCauto was primarily due to increased advertising spending from automobile producers and dealerships. As a percentage of revenue, PCauto accounted for 51.5% during the six months ended June 30, 2013 and 56.4% during the six months ended June 30, 2014.
Revenue for PConline, the Group's IT and consumer electronics portal, decreased 9.4% from RMB 110.9 million during the six months ended June 30, 2013 to RMB100.4 million during the six months ended June 30, 2014. Advertising spending from smart phones and tablet manufacturers remained strong, but was offset by a decrease in demand from desktop and laptop computers. As a percentage of revenue, PConline accounted for 32.5 % during the six months ended June 30, 2013 and 24.9% during the six months ended June 30, 2014.
Revenue for PClady, the Group's lady and fashion portal, increased 14.5% from RMB 33.0 million during the six months ended June 30, 2013 to RMB37.8 million during the six months ended June 30, 2014. The increase reflected the strong demand in the women's segment, especially for cosmetics and fashion goods. As a percentage of revenue, PClady accounted for 9.7% during the six months ended June 30, 2013 and 9.3% during the six months ended June 30, 2014.
Revenue from other operations, including the PCgames, PCbaby and PChouse portals, increased by 77.4% from RMB 21.4 million during the six months ended June 30, 2013 to RMB37.9 million during the six months ended June 30, 2014. Revenue from these segments increased as advertisers allocated more of their marketing budgets towards online advertising. As a percentage of revenue, revenue from other operations accounted for 6.3 % during the six months ended June 30, 2013 and 9.4% during the six months ended June 30, 2014.
Cost of Revenue
Cost of revenue increased 22.6% from RMB 102.3 million during the six months ended June 30, 2013 to RMB125.4 million during the six months ended June 30, 2014. Gross profit margin was 70.0% during the six months ended June 30, 2013 and 68.9% during the six months ended June 30, 2014.
The increase in cost of revenue was due to a rise in personnel-related expenses in content production, as well as higher costs related to offline marketing activities.
Selling and Marketing Costs
Selling and marketing costs increased 25.9% from RMB 74.8 million during the six months ended June 30, 2013 to RMB94.2 million during the six months ended June 30, 2014. The increase was mainly due to increases in staff costs and marketing expenses related to brand development.
Administrative expenses increased by 12.3% from RMB33.6 million during the six months ended June 30, 2013 to RMB37.8 million during the six months ended June 30, 2014, due to an increase in headcount in support of the Group's growth during the year.
Product Development Expenses
Product development expenses increased by 22.7% from RMB22.5 million during the period ended June 30, 2013 to RMB27.7 million during the period ended June 30, 2014. The increase was primarily due to increases in the number of staff in the Group's research and development team.
Operating Profit before Share-based Compensation Expenses (non-GAAP)
Operating profit before share-based compensation expenses (non-GAAP) was RMB121.3 million during the six months ended June 30, 2014, representing a 10.8% increase from RMB109.5 million during the six months ended June 30, 2013.
Finance Income and Cost
Net finance income was RMB6.3 million during the six months ended June 30, 2013 and RMB4.2 million during the six months ended June 30, 2014.
Income Tax Expense
Income tax expenses increased 14.6% from RMB 24.5 million during the six months ended June 30, 2013 to RMB28.1 million during the six months ended June 30, 2014.
Net profit increased 5.9% from RMB89.4 million during the six months ended June 30, 2013 to RMB94.6 million during the six months ended June 30, 2014.
Liquidity and Financial Resources
As of June 30, 2014, the Group had short-term deposits and cash totaling RMB283.8 million, compared with RMB450.5 million as of June 30, 2013. The decline in cash was primarily due to the payment of a cash dividend totaling RMB 180.3 million during the six months ended 30 June 2014.
The Company had no external debt as of December 31, 2013 and June 30, 2014.
The Group believes that online advertising spending will continue to account for a higher share of overall marketing budgets in China. PCauto is expected to benefit from the continuous growth of new car retail sales in China. PClady and PCbaby are also expected to perform well. The Group remains well positioned to meet demand from a rapidly changing Chinese internet industry.
Management will host a conference call to discuss the results at 9:00 AM Hong Kong time on Tuesday, August 26, 2014 (8:00 PM Eastern Daylight Time on Monday, August 25, 2014). Mr. Lam Wai Yan, Chairman and Chief Executive Officer and, Mr. Ma Man Ho, Chief Financial Officer, will discuss the results and take questions following the prepared remarks.
The dial-in details for the live conference call are as follows:
- Hong Kong Number:
+852 3056 2688
- Mainland China Toll Free Number:
800 803 6152
- U.S. Toll Free Number:
+1 877 679 2987
- International dial-in number:
+852 3056 2688
A telephone replay of the call will be available for seven days after the conclusion of the conference call. The dial-in details for the replay are as follows:
- Hong Kong Number:
+852 3060 0238
- U.S. Toll Free Number:
+1 866 345 5132
About Pacific Online Ltd. (corp.pconline.com.cn)
Pacific Online is one of the leading Internet content providers in the PRC in terms of total advertising revenue. The Company operates six vertically-integrated portals, which, according to industry practice, are portals that focus on specific content. Among the Company's portals are PConline, one of the largest portals in the PRC specializing in IT product-related content, and PCauto, one of the largest portals in the PRC specializing in automobile-related content.
Safe Harbor Statement
This press release contains forward-looking statements which are subject to risks and uncertainties. Actual results may differ from those discussed in the press release. In addition, any projections about the Company's future performance represent management's estimates as of today August 25, 2014. The Company assumes no obligation to update these projections in the future as business and market conditions change.
For further information, please contact:
Pacific Online Ltd.
Tel: +852 2121 0634
Email: [email protected]
Christensen Investor Relations
Email: [email protected]
For a detailed look at the Group's financial statements, please visit its website at corp.pconline.com.cn
SOURCE Pacific Online Ltd.
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