Click here to close now.

SYS-CON MEDIA Authors: Elizabeth White, Pat Romanski, XebiaLabs Blog, Carmen Gonzalez, Liz McMillan

News Feed Item

Pacific Online Limited 2014 Interim Earnings Results

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

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

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

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.

Business Outlook

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.

Conference Call

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

Passcode: 687983#


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

Passcode: 213379#


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.

Hudson Wong
Company Secretary
Tel: +852 2121 0634 
Email: [email protected]

Christensen Investor Relations

Tip Fleming
Tel: +852-9212-0684
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.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
SYS-CON Events announced today that BMC will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. BMC delivers software solutions that help IT transform digital enterprises for the ultimate competitive business advantage. BMC has worked with thousands of leading companies to create and deliver powerful IT management services. From mainframe to cloud to mobile, BMC pairs high-speed digital innovation with robust...
As the Internet of Things unfolds, mobile and wearable devices are blurring the line between physical and digital, integrating ever more closely with our interests, our routines, our daily lives. Contextual computing and smart, sensor-equipped spaces bring the potential to walk through a world that recognizes us and responds accordingly. We become continuous transmitters and receivers of data. In his session at @ThingsExpo, Andrew Bolwell, Director of Innovation for HP's Printing and Personal S...
All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades. With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo, June 9-11, 2015, at the Javits Center in New York City. Learn what is going on, contribute to the discussions, and ensure that your enter...
SYS-CON Events announced today that EnterpriseDB (EDB), the leading worldwide provider of enterprise-class Postgres products and database compatibility solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. EDB is the largest provider of Postgres software and services that provides enterprise-class performance and scalability and the open source freedom to divert budget from more costly traditiona...
T-Mobile has been transforming the wireless industry with its “Uncarrier” initiatives. Today as T-Mobile’s IT organization works to transform itself in a like manner, technical foundations built over the last couple of years are now key to their drive for more Agile delivery practices. In his session at DevOps Summit, Martin Krienke, Sr Development Manager at T-Mobile, will discuss where they started their Continuous Delivery journey, where they are today, and where they are going in an effort ...
Cloud computing started a technology revolution; now DevOps is driving that revolution forward. By enabling new approaches to service delivery, cloud and DevOps together are delivering even greater speed, agility, and efficiency. No wonder leading innovators are adopting DevOps and cloud together! In his session at DevOps Summit, Andi Mann, Vice President of Strategic Solutions at CA Technologies, explored the synergies in these two approaches, with practical tips, techniques, research data, wa...
The Internet of Things is not only adding billions of sensors and billions of terabytes to the Internet. It is also forcing a fundamental change in the way we envision Information Technology. For the first time, more data is being created by devices at the edge of the Internet rather than from centralized systems. What does this mean for today's IT professional? In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will addresses this very serious issue o...
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, discussed how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.
“We are strong believers in the DevOps movement and our staff has been doing DevOps for large enterprise environments for a number of years. The solution that we build is intended to allow DevOps teams to do security at the speed of DevOps," explained Justin Lundy, Founder & CTO of Evident.io, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
There is no question that the cloud is where businesses want to host data. Until recently hypervisor virtualization was the most widely used method in cloud computing. Recently virtual containers have been gaining in popularity, and for good reason. In the debate between virtual machines and containers, the latter have been seen as the new kid on the block – and like other emerging technology have had some initial shortcomings. However, the container space has evolved drastically since coming on...
Buzzword alert: Microservices and IoT at a DevOps conference? What could possibly go wrong? In this Power Panel at DevOps Summit, moderated by Jason Bloomberg, the leading expert on architecting agility for the enterprise and president of Intellyx, panelists will peel away the buzz and discuss the important architectural principles behind implementing IoT solutions for the enterprise. As remote IoT devices and sensors become increasingly intelligent, they become part of our distributed cloud en...
Containers Expo Blog covers the world of containers, as this lightweight alternative to virtual machines enables developers to work with identical dev environments and stacks. Containers Expo Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. Bookmark Containers Expo Blog ▸ Here Follow new article posts on Twitter at @ContainersExpo
If cloud computing benefits are so clear, why have so few enterprises migrated their mission-critical apps? The answer is often inertia and FUD. No one ever got fired for not moving to the cloud - not yet. In his session at 15th Cloud Expo, Michael Hoch, SVP, Cloud Advisory Service at Virtustream, discussed the six key steps to justify and execute your MCA cloud migration.
Almost everyone sees the potential of Internet of Things but how can businesses truly unlock that potential. The key will be in the ability to discover business insight in the midst of an ocean of Big Data generated from billions of embedded devices via Systems of Discover. Businesses will also need to ensure that they can sustain that insight by leveraging the cloud for global reach, scale and elasticity.
EMC Corporation on Tuesday announced it has entered into a definitive agreement to acquire privately held Virtustream. When the transaction closes, Virtustream will form EMC’s new managed cloud services business. The acquisition represents a transformational element of EMC’s strategy to help customers move all applications to cloud-based IT environments. With the addition of Virtustream, EMC completes the industry’s most comprehensive hybrid cloud portfolio to support all applications, all workl...