Chinanet Online Holdings (CNET) research, news, and more from GeoInvesting

Company description

Sun, 01 Aug 2010 04:00:00 GMT

The Company, a parent company of ChinaNet Online Media Group Ltd., incorporated in the BVI ("ChinaNet" or "Zhong Wang Zai Xian"), is a leading Internet services and media technology company providing online advertising and brand management solutions for small- and medium-sized enterprises (SMEs) in China. The Company, through its certain contractual arrangements with operating companies in the PRC, provides Internet advertising and other services for Chinese SMEs via its portal website 28.com, TV commercials and program production via China-Net TV, and in-house LCD advertising on banking kiosks targeting Chinese banking patrons.

Reverse Merger Filing

Comments & Business Outlook

Tue, 21 May 2013 04:00:00 GMT

First Quarter 2013 Financial Results

Revenues for the three months ended March 31, 2013 were $7.0 million compared to $14.9 million for the three months ended March 31, 2012, representing a 53% decrease.
Gross profit for the three months ended March 31, 2013 was $2.6 million, up 8% from $2.4 million in the same period one year ago.
Net income attributable to common stockholders for the three months ended March 31, 2013 was $0.0 million and earnings per share was $0.00, compared to -$0.4 million and -$0.02 for the three months ended March 31, 2012, respectively.

Mr. George Chu, Chief Operation Officer of the Company, stated, "Our financial results for the first quarter of 2013 reflect successful execution of our long term strategy. We continued to invest in new services such as mobile advertising and marketing, brand management and sales channel building and flying cloud during the 2012 economic downturn. We expect 2013 to be a challenging year as the overall economy has slowed further due to the economic policies set by the government. However, our expansion strategy and targeted investments in technology and new products will not be held back because these investments have already helped us win new business and enter new markets. Our strong financial position allows us to maintain these strategic investments, which will only strengthen our company for the eventual rebound in our clients' spending.

Comments & Business Outlook

Wed, 15 May 2013 04:00:00 GMT

BEIJING, May 15, 2013 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company" or "ChinaNet"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small businesses (small and medium-sized enterprises ("SMEs") in China) and entrepreneurial management and LINK services for entrepreneurs in the People's Republic of China, today announced that its preliminary unaudited revenues for the three months ended March 31, 2013 was approximately $7 million.

The Company filed a Form 12b-25 with the Securities and Exchange Commission on May 15, 2013 to extend the filing of the Company's Form 10-Q for the three months ended March 31, 2013, which is due May 15, 2013, for up to an additional five calendar days. With this extension, if the Form 10-Q is filed by May 20, 2013, the Form 10-Q will be deemed to be timely filed.

Contract Awards

Wed, 24 Apr 2013 04:00:00 GMT

BEIJING, April 24, 2013 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that the Company's subsidiary, Liansuo.com, signed an agreement with Mendale Textile Limited ("Mendale") to help expand its franchise in China and internationally.

"We are excited about working with a growing firm such as Mendale," stated Mr. George Chu, COO of ChinaNet. "Mendale has successfully expanded its owned and operated stores, as well as its franchise stores, across several provinces in China. Liansuo.com will provide online advertising and marketing to help Mendale further increase its brand recognition among consumers and entrepreneurs."

Comments & Business Outlook

Wed, 17 Apr 2013 04:00:00 GMT

Fourth Quarter 2012 Financial Results

Revenues increased by $2.1 million to $8.3 million for the three months ended December 31, 2012 compared to the three months ended December 31, 2011, representing a 34% increase.
Gross profit for the three months ended December 31, 2012 was $4.8 million, up 60% from $3.0 million in the same period one year ago. Gross margin was 57.7%, an improvement from 40.1% in the third quarter of 2012 and 49% in the fourth quarter of 2011
Non-GAAP adjusted net income attributable to common stockholders for the three months ended December 31, 2012 was $1.4 million and adjusted earnings per share was $0.06, compared to -$1.8 million and -$0.08 for the three months ended December 31, 2011, respectively.

Mr. Handong Cheng, Chairman and CEO of the Company, stated, "Our strong financial results for the second half of 2012 reflects successful execution of our long term strategy. We continued investing in new services such as brand management and sales channel building during the 2011 and 2012 economic downturn. Those investments have started to not only expand our client base but also gradually contribute to our overall revenue and profit growth."

Guidance for 2013

Management anticipates to release the revenues and net income guidance for fiscal year 2013 in May 2013.

Comments & Business Outlook

Tue, 02 Apr 2013 04:00:00 GMT

BEIJING, April 1, 2013 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company" or "ChinaNet"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small businesses (small and medium-sized enterprises ("SMEs") in China) and entrepreneurial management and LINK services for entrepreneurs in the People's Republic of China, today announced that its preliminary unaudited revenues for the twelve months ended December 31, 2012 was $46 million.

Contract Awards

Wed, 20 Feb 2013 05:00:00 GMT

BEIJING, Feb. 20, 2013 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company" or "ChinaNet"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small businesses (so-called small and medium-sized enterprises ("SMEs") in China) and entrepreneurial management and LINK services for entrepreneurs in the People's Republic of China, today announced that Super 8 International Limited ("Super 8"), a subsidiary of Wyndham Worldwide, has chosen Liansuo.com, a subsidiary of ChinaNet, to help expand its franchise outside the U.S.

Founded in 1974, Super 8 International Limited is one of the largest economy hotel operators in the world. Super 8 operates more than 2,600 hotels worldwide, representing over 56,000 rooms in total. Liansuo.com will help Super 8 franchise hotels quickly expand its franchise footprint in Tier 1 and Tier 2 cities in China.

Mr. George Chu, COO of ChinaNet explained, "We are excited to work with an industry leader. The tremendous growth in tourism in China provides an opportunity for established brands such as Super 8 to expand their presence, particularly in larger cities where economy hotels are in short supply. Liansuo.com will help Super 8 identify potential franchise operators throughout China, as well as build a strong brand through traditional and online marketing."

Resolution of Legal Issues

Mon, 03 Dec 2012 05:00:00 GMT

BEIJING, Dec. 3, 2012 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that on November 30, 2012, it received a letter from The NASDAQ Stock Market LLC (the "NASDAQ") notifying the Company that it has regained compliance with the Minimum Bid Price Rule (as defined below) for continued listing set forth in NASDAQ Listing Rule 5450(a)(1), as its common stock had achieved a closing bid price of $1.00 or more for 10 consecutive business days.

On May 30, 2012, the Company received a letter from the NASDAQ Staff stating that, based upon the closing bid price for the previous 30 consecutive business days, the Company no longer met the requirement set forth in NASDAQ Listing Rule 5450(a)(1), which requires listed securities to maintain a minimum bid price of $1.00 per share (the "Minimum Bid Price Rule"). The NASDAQ Staff also notified the Company that it had been granted a grace period of 180 calendar days to regain compliance with the Minimum Bid Price Rule. In the November 30, 2012 letter, the NASDAQ Staff informed the Company that it had determined that for the last 10 consecutive business days, from November 15, 2012 to November 29, 2012, the closing bid price of the Company's common stock had been at $1.00 or greater. Accordingly, the Company has regained compliance with the NASDAQ Minimum Bid Price Rule.

Comments & Business Outlook

Tue, 27 Nov 2012 05:00:00 GMT

BEIJING, Nov. 27, 2012 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that the Company is increasing its 2012 full year revenue guidance to at least $46 million from $42 million previously provided. The Company had previously raised its net income guidance to $3.1 million on October 11, 2012.

"Our new products and services are gaining traction with small business and enterprise customers," explained Mr. George Chu, COO of ChinaNet. "The increase in our revenue guidance reflects a better than expected uptake in TV advertising and internet marketing services such as Liansuo.com and other value added internet marketing services based on cloud-based technology, as well as brand management services such as brand marketing with Weibo360 solutions and other brand managements solutions. As the economy in China continues to improve, we believe that we are well positioned to capture an increasing share of the overall growth in the economy."

Comments & Business Outlook

Tue, 20 Nov 2012 05:00:00 GMT

Third quarter 2012 Financial Results

Revenues increased by $3.9 million to $10.3 million for the three months ended September 30, 2012 compared to the three months ended September 30, 2011, representing a 60% increase.
Net income attributable to common stockholders for the three months ended September 30, 2012 was $1.2 million and earnings per share was $0.05, compared to $1.0 million and $0.06 for the three months ended September 30, 2011, respectively. The weighted average shares outstanding for the three months ended September 30, 2012 and 2011 was 22.2 million shares and 18.6 million shares, respectively.

Mr.Handong Cheng, Chairman and CEO of the Company stated, "We made further progress expanding our service offerings and diversifying our customer base. For example, brand management and sales channel building, which we introduced five quarters ago, has grown its sales by approximately 200% in the first nine months of 2012. We believe that these services provide us with a growing base of customers to whom we can sell additional value-added services once the economy in China improves. Furthermore, we will continue to make prudent acquisitions of business and technology, such as our acquisition of Sou Yi Lian Mei, that broaden our technology depth, service portfolio or client base."

Guidance for 2012

Management reiterates its full year 2012 forecasts of revenues to be at least $42 million and net income of at least $3.1 million.

Comments & Business Outlook

Wed, 17 Oct 2012 04:00:00 GMT

BEIJING, Oct. 17, 2012 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that its subsidiary - Liansuo.com (www.liansuo.com) - attended the 2012 Shanghai International Franchise Exhibition (the "Exhibition") at the Shanghai International Exhibition Center that took place in mid-September. Since the Exhibition, Liansuo.com has signed approximately 56 new clients, on a trial basis.

Mr. George Chu, COO of ChinaNet began, "This year's Shanghai International Franchise Exhibition was one of the most productive trade shows to date. We met dozens of new prospective clients and discussed ways our comprehensive set of services can help them grow their businesses. While it's still early, we believe that we will achieve our goal of increasing our conversion rate by over 30% for Liansuo.com."

More than 200 businesses and over 30,000 attendees participated in the Exhibition, which took place over three days. In addition to providing the live webcast, Liansuo.com also introduced its full line of products and services to the attendees of the Exhibition.

Notable Share Transactions

Mon, 15 Oct 2012 04:00:00 GMT

BEIJING, Oct. 15, 2012 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that the Company's board of directors has authorized the purchase of at least $1 million of the Company's stock over the next twelve months.

Repurchases are authorized to be made by the Company from time to time at the prevailing market price on the open market, and/or in negotiated transactions off the market from time to time as market conditions warrant in accordance with applicable requirements of Rule 10b5-1 and/or Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended. Shares repurchased will be held in Treasury.

"We believe buying back our stock at current valuations is in the best interest of our shareholders," stated Mr. George Chu, COO of ChinaNet. "We have sufficient capital to fund our internal growth initiatives and make acquisitions when the right opportunities arise."

Comments & Business Outlook

Fri, 12 Oct 2012 04:00:00 GMT

BEIJING, Oct. 12, 2012 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small businesses (so-called small and medium-sized enterprises ("SMEs") in China) and entrepreneurial management and LINK services for entrepreneurs in the People's Republic of China, today announced that its operating unit for medium and large franchises – Liansuo.com – introduced a new cloud-based software system that allows businesses and existing and potential sales channel partners to communicate with each other more efficiently.

Quick Connect, its new software co-developed by ChinaNet and ChinaNet's partners, allows new and existing sales channel partners to reach businesses to more efficiently communicate with one another by converting all incoming calls to a toll free telephone number starting with the "400" prefix to the party they are trying to reach. Quick Connect also keeps a detailed log of all incoming calls that businesses can port into their customer relations management ("CRM") database to track every sales lead. Management expects the new cloud-based software system to drive additional spending for value-added services on Liansuo.com.

Mr. George Chu, COO of ChinaNet, said, "We developed a simple, cost effective way for small business customers to increase their client conversion rates. Most small businesses cannot afford to buy expensive CRM software. As a result of not maintaining an updated log of communications with potential clients and business partners, many small businesses lose sales they otherwise would have captured. A few Liansuo.com clients that have implemented Quick Connect have seen their conversion rates increased by 11% to 17% within a month. We plan to roll this product out to four million small and franchise business owners nationwide over the next few months. This new product will help augment the growth rate of Liansuo.com in the months ahead."

Comments & Business Outlook

Thu, 11 Oct 2012 04:00:00 GMT

BEIJING, Oct. 11, 2012 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that the Company is raising its 2012 full year net income guidance to $3.1 million from $2.8 million previously provided. The revised net income guidance does not include any benefits from the proposed acquisition of the remaining 49% equity interest in Sou Yi Lian Mei Network Technology ("SouYi") announced on September 17, 2012.

"We have taken aggressive actions to improve our margins," stated Mr. George Chu, COO of ChinaNet. "The increase in our net income guidance reflects both improved expense management as well as a better than expected recovery from 28.com, and growth from Liansuo.com and brand management services and solutions based on our cloud-based marketing platform. As we introduce these services to a wider audience, our new web portals are gaining more and more recognition from larger sized small businesses. With the integration of SouYi, we are able to clearly divide existing and potential clients into segments for better services and higher revenue. In addition, since we initiated a cost management plan at the beginning of the year, we have started to see some rewards from this plan. However, we will not slow our talent recruitment or technology development as they will further differentiate ChinaNet from other competitors. Overall, we expect the gradual recovery in China's economy to benefit our core small business customers."

Acquisition Activity

Mon, 17 Sep 2012 04:00:00 GMT

BEIJING, Sept. 17, 2012 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that it will purchase the remaining 49% of the equity interest in Sou Yi Lian Mei Network Technology (Beijing) Co. Ltd. ("SouYi") for approximately $6.5 million in cash.

Mr. George Chu, COO of ChinaNet, explained, "This acquisition further broadens our client base to smaller startup businesses that are growing quickly and generate higher profit margins for ChinaNet. After working with SouYi's talented team over the past nine months, we became even more convinced that both companies could accelerate our growth by being fully integrated into one entity. This move will help ChinaNet to address all segments of over 40 million small businesses in China and satisfy their business expansion needs."

Founded in 2007, SouYi provides online advertising and marketing services to small startup businesses. SouYi generated approximately $6.8 million in revenue and approximately $2.2 million in profit in 2011 and is estimated to generate approximately $7.8 million in revenue and approximately $2.4 million in profit in 2012. ChinaNet will integrate SouYi into ChinaNet's advertising and marketing platform and join 28.com and Liansuo.com to serve the full range of small business clients over the next six months.

The Company will fund the acquisition through cash on hand and operating cash flows. ChinaNet expects the transaction to close by the end of the fourth quarter of 2012. Upon closing, SouYi will become a wholly-owned subsidiary of the Company.

Comments & Business Outlook

Tue, 21 Aug 2012 04:00:00 GMT

Second Quarter 2012 Financial Results

Revenues increased by $4.0 million to $13.1 million for the three months ended June 30, 2012 compared to the three months ended June 30, 2011, representing a 45% increase.
Gross profit for the three months ended June 30, 2012 was $3.8 million compared to $5.6 million in the same period a year ago. Gross margin decreased to 28.7% from 62.2% for the same period in 2011 as a result of the significant increase of the low margin TV advertising revenue, which accounted for approximately 47% of total revenues for the three months ended June 30, 2012 compared to 23% for the same period of 2011.
Net income attributable to common stockholders for the three months ended June 30, 2012 was $0.9 million and earnings per share was $0.04, compared to $2.8 million and $0.15 for the three months ended June 30, 2011, respectively. The weighted average shares outstanding for the three months ended June 30, 2012 and 2011 was 22.2 million shares and 20.0 million shares, respectively.

"Our diverse portfolio of services helped us generated higher sales and positive cash flows," explained Mr. Handong Cheng, Chairman and CEO of the Company. "Even though small business customers remain extremely cautious with their spending, we are working hard to offer essential and value added services to new and existing clients. We are optimistic that small businesses will be a driving force behind China's economic rebound. ChinaNet is well positioned to capture our share of that growing opportunity when SMEs resume their growth."

Guidance for 2012

Management forecasts full year 2012 revenues to be at least $42 million and net income of at least $2.8 million.

Comments & Business Outlook

Fri, 17 Aug 2012 04:00:00 GMT

BEIJING, Aug. 17, 2012 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today provided clarification to the press release distributed on August 13, 2012 titled "ChinaNet Online Holdings Adds New Strategic Investor".

The original release stated that one of the Company's founding shareholders entered into a stock purchase agreement with the founder and Chairman of Ever Bright Investment Capital (the "EBI") and another accredited investor, pursuant to which the founding shareholder sold 1,279,080 shares of common stock of the Company for $3 million, or approximately $2.35 per share. To clarify, Star (China) Holdings Limited ("Star Holdings") entered into a stock purchase agreement with the founder and Chairman of Ever Bright Investment Capital (the "EBI") and another accredited investor, pursuant to which Star Holdings sold 1,279,080 shares of common stock of the Company for $3 million, or approximately $2.35 per share. Please note that Management and founding shareholders of ChinaNet are not affiliated with Star Holdings and did not sell any share in this transaction.

Notable Share Transactions

Mon, 13 Aug 2012 04:00:00 GMT

BEIJING, Aug. 13, 2012 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that one of the Company's founding shareholders entered into a stock purchase agreement with the founder and Chairman of Ever Bright Investment Capital (the "EBI") and another accredited investor, pursuant to which the founding shareholder sold 1,279,080 shares of common stock of the Company for $3 million, or approximately $2.35 per share.

"We are delighted to add new strategic investors," stated George Chu, Chief Operating Officer of ChinaNet Online Holdings, Inc. "As a high growth company focusing on expanding its product suite and customer base, the Company will benefit from Mr. Qiu's expertise and resources in helping high growth companies attract talent, upgrade management systems, and find strategic partners. We will also benefit from his network of political and industry contacts that will further enhance our growth initiatives, especially in the south and south east regions in China."

Investor Alert

Wed, 06 Jun 2012 04:00:00 GMT

BEIJING, June 5, 2012 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that on May 30, 2012, it received a letter from the Nasdaq Stock Market stating that, based upon the closing bid price for the previous 30 consecutive business days, the Company no longer meets the requirement set forth in Nasdaq Rule 5550(a)(2), which requires listed securities to maintain a minimum bid price of $1.00 per share (the "Minimum Bid Price Rule") . The Nasdaq letter has no immediate effect on the listing of the Company's ordinary shares.

In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has been provided with a period of 180 calendar days, or until November 26, 2012, to regain compliance with the Minimum Bid Price Rule. The Company may regain compliance with the Minimum Bid Price Rule if the bid price of its common stock closes at $1.00 per share or more for a minimum of ten consecutive business days at any time prior to November 26, 2012.

The Company intends to evaluate available options to resolve the deficiency and regain compliance with the Minimum Bid Price Rule.

Comments & Business Outlook

Wed, 06 Jun 2012 04:00:00 GMT

BEIJING, June 6, 2012 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises ("SMEs") and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that its website for entrepreneurial social networking services, www.chuangye.com, became the most searched entrepreneurship term on both Baidu.com and Sina Corporation's popular social networking website, Weibo.com, for the month of May 2012.

Baidu.com is China's leading online search engine, accounting for more than 70% of all internet searches conducted in China. Since launching chuangye.com in August 2011, ChinaNet has refined its search engine marketing, optimization and social networking strategies to promote its website and related services. The Company believes that becoming the most searched entrepreneurship term on both Baidu.com and Weibo.com in May 2012 is a direct result of diversifying and creating content for potential entrepreneurs who are seeking a social community to share and find resources that can help them succeed in new or existing business ventures.

Mr. George Chu, COO of ChinaNet added, "This is an extraordinary accomplishment for our company. We constantly strive to make improvements to each of our websites and services in order to better serve our target audience – the millions of business owners and entrepreneurs in China. This latest achievement gives all of us even more encouragement to achieve similar milestones for our other websites, such as Liansuo.com and 28.com. With ongoing improvements to our four major product and service platforms, we believe that we have the opportunity to increase our market share in China and further extend our market base to the 40 million potential clients. "

Comments & Business Outlook

Tue, 22 May 2012 04:00:00 GMT

First Quarter 2012 Results

Revenues for the first quarter of 2012 increased by 113% to $14.9 million from $7.0 million in the first quarter of 2011
Net loss attributable to common stockholders for the first quarter of 2012 was $0.4 million and loss per share was $0.02 compared to $2.6 million net income attributable to common stockholders and $0.14 earnings per share in the first quarter of 2011

Business Updates

ChinaNet is focused on strategically expanding its client base of over 6,000 current customers by continuing to grow its internet advertising and marketing services business. Currently, 28.com, which connects SME franchisors with new franchisees, generates the majority of revenues. ChinaNet will continue to invest in new technology and expects to increase its market share to over 55% by the end of the third quarter 2012.

Guidance for 2012

Management forecasts full year 2012 revenues to be at least $42 million and net income of at least $2.8 million.

Investor Presentations

Tue, 22 May 2012 04:00:00 GMT

First Quarter 2012 Presentation

Joint Venture

Thu, 26 Apr 2012 04:00:00 GMT

BEIJING, April 26, 2012 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading B2B (business to business) Internet technology company focusing on providing O2O (online to offline) sales channel expansion service for small and medium-sized enterprises (SMEs) and entrepreneurial networking and management service for entrepreneurs in the People's Republic of China, announced that it has entered a strategic partnership with China Business Journal ("CBJ"). The two firms will cross-promote each other's services across their networks of online and offline assets.

China Business Journal, in publication since 1985, is one of the most widely distributed Mandarin and English-language weekly print publications focused on business issues in Greater China. China Business Journal has over 920,000 weekly subscribers to its magazine and over 3 millions of online readers. The strategic partnership focuses primarily on ChinaNet's liansuo.com services for large, medium and small-medium businesses and entrepreneurs. Starting this month, ChinaNet will begin to run weekly advertisements in China Business Journal's print and online magazines. In exchange, the Company will share its internet resources to help CBJ further expand its existing subscription rate with the potential to obtain more advertisements requests from SMEs.

Mr. Handong Cheng, Chairman of ChinaNet Online Holdings explained, "This is an important strategic partnership that will provide significant benefits to ChinaNet and China Business Journal. Gaining access to approximately 200,000 business owners or business decision makers, we have an opportunity to generate significant incremental revenues over the next 9 to 24 months. Our joint collaboration will allow both companies to further expand our brands and provide valuable information and services to a wider audience and bring more businesses to each other based on the synergy that this partnership will create."

In addition, the two companies will conduct joint marketing campaigns to highlight key developments in the franchise industry and SMEs in Greater China. The first campaign, scheduled to occur in the third quarter of 2012, will cover the analysis of SMEs, brand development and marketing, business management of chain stores, sales channel expansion, and establishing franchises in 3^rd and 4^th tier cities in China.

Comments & Business Outlook

Mon, 16 Apr 2012 04:00:00 GMT

Fourth Quarter 2011 Results

Revenues for the fourth quarter of 2011 decreased by 40% to $6.2 million from $10.4 million in the fourth quarter of 2010
Non-GAAP adjusted net loss attributable to common stockholders and loss per share for the fourth quarter of 2011 were $1.8 million and $0.08, respectively vs adjusted net income of $4.5 million and $0.23 in fourth quarter 2010

"Our results during the year were significantly affected by the overall downturn in the SME sector," explained Mr. Handong Cheng, Chairman and CEO of the Company. "Credit was significantly constrained for most of the year, which hit our core small business customers the hardest. We took aggressive measures, which included the launch of new portals such as liansuo.com and chuangye.com to counter these trends. While we believe these investments will add new sources of high margin sales over the next several years, it will take time for these businesses to become a meaningful contributor to our overall performance."

Share Structure

Mon, 09 Jan 2012 05:00:00 GMT

BEIJING, Jan. 6, 2012 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. (Nasdaq:CNET) (the "Company"), a leading full-service media development, advertising and communications company for small and medium-sized enterprises in the People's Republic of China, announced today the final results of its exchange offer (the "Offer"), pursuant to which holders of all 4,121,600 of the Company's outstanding warrants (the "Warrants") had the opportunity to acquire the Company's shares of common stock (the "Shares") through a warrant for share exchange in accordance with the following exchange ratios: (A) with respect to any Series A-1 Warrant, one (1) Share in exchange for every twenty (20) Shares for which such Series A-1 Warrant is exercisable, and (B) with respect to any Series A-2 Warrant, one (1) Share in exchange for every 10 (ten) Shares for which such Series A-2 Warrant is exercisable; provided that each holder must have exchanged all its Series A-1 Warrants and/or all its Series A-2 Warrants pursuant to the terms and conditions thereof.

The Offer expired on Friday, December 30, 2011 at 5:00 p.m., Eastern Time. Warrants exercisable for 4,121,600 Shares were eligible to be exchanged.

Based on the final count by the depositary for the Offer, 1,418,800 Series A-1 Warrants were tendered in exchange for approximately 70,940 Shares and 356,800 Series A-2 Warrants were tendered in exchange for approximately 35,680 Shares, for a total of 1,775,600 Warrants (approximately 43% of the outstanding Warrants) exchanged for approximately 106,620 Shares. Following the completion of the Offer, the Company has approximately 22,146,540 Shares outstanding, 642,000 Series A-1 Warrants outstanding exercisable for one Share at an exercise price of $3.00 and 1,704,000 Series A-2 Warrants outstanding exercisable for one Share at an exercise price of $3.75. The depositary for the Offer expects to deliver the Shares to be issued in exchange for tendered Warrants on or about January 11, 2012.

All of the terms of the Warrants remain in effect. The Series A-1 Warrants will expire on August 20, 2012 and the Series A-2 Warrants will expire on August 20, 2014.

Acquisition Activity

Fri, 16 Dec 2011 05:00:00 GMT

On December 15, 2011, ChinaNet Online Holdings, Inc. (the "Company"), through its subsidiary Business Opportunity Online (Hubei) Network Technology Co., Ltd., a People's Republic of China company (the " Business Opportunity Online Hubei"), entered into an equity transfer agreement (the "Agreement") with Sou Yi Lian Mei Network Technology (Beijing) Co. Ltd., a People's Republic of China company (the "SouYi"), and Liu Yihong and Wei Yanmin, citizens of the People's Republic of China (Liu and Wei collectively being the "Shareholders"), to acquire 51% of the equity interests (the "Equity") of SouYi. SouYi is based in Beijing, China, and its primary business relates to online advertising and marketing.

Pursuant to this Agreement, the Company will acquire the Equity from the Shareholders for total consideration in the amount of RMB 51.6 million (approximately US$ 8 million) in cash (the "Purchase Price"). The Company will pay RMB 5 million (approximately $0.78 million) of the Purchase Price in cash within five business days of signing of the Agreement as a deposit, and the remaining RMB 46.6 million (approximately $7.22 million) of the Purchase Price will be paid upon closing (as discussed below).

The Agreement contains certain "make good" provisions, under which Mr. Liu will pledge to the Company the 49% of the equity interests of SouYi he owns to secure Shareholders' make good obligation under the Agreement. The Agreement established minimum audited after tax net profit threshold of RMB 15.8 million (approximately $2.45 million) for SouYi for fiscal year 2012 ("2012 Performance Threshold"). In the event that the 2012 Performance Threshold is achieved less than 95% by SouYi, Mr. Liu will compensate the Company in cash in the amount equal to the shortfall between the 95% of 2012 Performance Threshold and actual audited after tax net profit for fiscal year 2012 of SouYi. In the event that Mr. Liu is not required to compensate the Company in cash under Shareholders' make good obligation, the Company will then cancel the pledge over the 49% of equity interests of Mr. Liu.

The closing of the transaction contemplated by this Agreement shall take place within 15 business days following the satisfaction or waiver of conditions precedent to closing as set forth in the Agreement, including, but not limited to completion of the formalities of amendment of registration and equity pledge registration with administration for industry and commerce. The board of directors of SouYi will consist of two directors to be appointed by the Company and one director to be appointed by Mr. Liu upon closing.

Financial Target Agreements

Fri, 16 Dec 2011 05:00:00 GMT

"Make good" provisions in connection with recent acquisition:

Mr. Liu (acquiree) will pledge to the Company the 49% of the equity interests of SouYi he owns to secure Shareholders’ make good obligation under the Agreement. The Agreement established minimum audited after tax net profit threshold of

RMB 15.8 million (approximately $2.45 million) for SouYi for fiscal year 2012 ("2012 Performance Threshold").

In the event that the 2012 Performance Threshold is achieved less than 95% by SouYi, Mr. Liu will compensate the Company in cash in the amount equal to the shortfall between the 95% of 2012 Performance Threshold and actual audited after tax net profit for fiscal year 2012 of SouYi. In the event that Mr. Liu is not required to compensate the Company in cash under Shareholders’ make good obligation, the Company will then cancel the pledge over the 49% of equity interests of Mr. Liu.

Joint Venture

Wed, 14 Dec 2011 05:00:00 GMT

BEIJING, Dec. 14, 2011 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. ("ChinaNet"), (Nasdaq:CNET), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion service for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking service for entrepreneurs in the People's Republic of China, today announced that it has entered into a strategic partnership agreement with All Chinese Internet Inc. ("1111") to help business owners and entrepreneurs in Taiwan launch operations in mainland China. The partnership started from the beginning of November 2011.

"This is another important component of our Taiwan growth strategy," explained Mr. Handong Cheng, Chairman and CEO of ChinaNet. "Due to increasing cultural, economic and political integration between mainland China and Taiwan, businesses and entrepreneurs in Taiwan are looking for opportunities to establish a presence in mainland China. Our agreement with an established organization with thousands of high-quality franchisors positions our Company well to capture this exciting opportunity."

Investor Presentations

Sun, 11 Dec 2011 05:00:00 GMT

Attached is a slideshow presentation presented by ChinaNet Online Holdings, Inc. (the “Company”) at meetings with various investors, which includes information about the Company’s business and financial information, which the Registrant has made available.

Acquisitions

Tue, 29 Nov 2011 05:00:00 GMT

BEIJING, Nov. 28, 2011 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. ("ChinaNet" or "Company"), (Nasdaq:CNET), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today announced that the Company has signed a non-binding letter of intent ("LOI") to acquire a 51% stake in an online advertising and marketing company based in Beijing, China for approximately $7-8 million.

The target company generated approximately $7 million in unaudited net sales revenue during the twelve month period ended September 30, 2011, supported by its innovative web portal that boasts a three month average Alex global ranking of 5500 and average daily IP of 136,000.

"We are in discussions to acquire an established leader in the small office/home office ("SOHO") space, a fast-growth sector that will help us further diversify our revenues" explained Mr. Handong Cheng, Chairman and CEO of ChinaNet. "If we are successful in completing this acquisition, we will have distinct brands in each customer segment: 28.com for SMEs; Liansuo.com for medium-large franchises; and the target for SOHO and emerging businesses. With approximately $21 million in cash at September 30, 2011 and positive cash flows from operations, we have sufficient funds to fund acquisitions and support organic growth."

The Company is currently in the process of conducting due diligence on the target and is negotiating a definitive agreement containing all material terms for this transaction, including the purchase price to be paid. While there is no guarantee a transaction will be consummated, ChinaNet hopes to close the transaction no later than the first quarter of 2012.

Notable Share Transactions

Fri, 25 Nov 2011 05:00:00 GMT

BEIJING, Nov. 23, 2011 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. ("ChinaNet" or the "Company"), (Nasdaq:CNET), a leading B2B (business to business) Internet technology company providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking services for entrepreneurs in the People's Republic of China, today issued a statement regarding the conversion of the final 2,367,792 shares of the outstanding Series A preferred shares into common shares which occurred as of August 21, 2011 and the notice of the final dividend payment with respect to its Series A preferred shares.

The statement is to advise that, pursuant to the Certificate of Designations, Preferences and Rights of the 10% Series A Convertible Preferred Stock of the Company, all outstanding shares of Preferred Stock were automatically converted into shares of the Company's common stock (the "Common Stock") as of August 21, 2011.

This conversion represents the remaining outstanding Series A preferred shares, bringing ChinaNet's common shares outstanding to approximately 20.04 million as of September 30 2011.

"This conversion will additionally reinforce ChinaNet's financial position and will greatly enhance shareholder value, as well as increase the availability of CNET common shares in the open market," said Mr. Handong Cheng, Chairman and CEO of the Company. "The conversion will result in a simpler and more transparent equity structure and will reduce our quarterly dilution and preferred dividend costs."

Comments & Business Outlook

Tue, 15 Nov 2011 05:00:00 GMT

Third Quarter 2011 Results

Revenues for the third quarter of 2011 decreased 28% to $6.4 million from the third quarter of 2010 due to a significant slowdown in small business formation and lower spending by existing companies, resulting from a lack of available credit.
Net income attributable to common stockholders for the third quarter was $1.0 million and $3.7 million in the third quarter of 2011 and 2010, respectively. Diluted net income per share was $0.06 in the third quarter of 2011 compared to $0.19 in the same period in 2010, based on 18.6 million and 20.9 million outstanding shares, respectively.

"The significant slowdown in the SME market overshadowed the underlying progress we continue to make in our efforts to gain further market share which includes adding clients based outside the mainland PRC," began Mr. Handong Cheng, Chairman and CEO of the Company. "We believe our decision to diversify our customer base and expand our service offerings will allow us to navigate this downturn better than our competitors. With more than $21 million in cash and no debt, we are able to maintain investments in attractive opportunities such as our social networking services information platform, Chuangye.com, and advertising and marketing platform, Liansuo.com. Regardless of the depth and duration of the slowdown, we remain confident we will emerge as a more resilient and competitive company."

Guidance for 2011

The Company recently adjusted its full year 2011 revenue forecast to between $26.5 million and $28.5 million.

Comments & Business Outlook

Fri, 11 Nov 2011 05:00:00 GMT

Financial Update

Three months ended September 30, 2011.:

The Company expects to report

net revenue of at least $6.2 million
adjusted net income of $1.0 million,

full year 2011:

revenues of $26.5 to $28.5 million.

Due to lack of credit available to new and existing SMEs in China as a result of restrictive monetary policies, management is focusing on several new growth initiatives to help offset short-term challenges in 28.com. These include:

ChinaNet's management tool platform, Flying Cloud, which leverages the Company's existing portfolio of technologies and services to accelerate the adoption of cloud-based services among franchisees and franchisors. The website is scheduled to launch by the end of 2011, currently with approximately 40 SMEs on a beta trial.
The Company plans to launch a reality show for entrepreneurs. Based on the same premise as the hit TV game show "Shark Tank" in the U.S., each episode of this show will feature eight prominent or rising enterprises, such as Peak, Fornet and Rongchan, who will evaluate the potential success of 5 finalist entrepreneurs who will be selected from an initial group of hundreds of entrepreneurs. The winner will receive sponsorship from the participating enterprises to start and operate his/her own business.
ChinaNet will open its first franchise expo centre in Beijing for small to medium sized business owners to showcase their franchise ideas to prospective business partners. The center, which is 17,222 square feet, provides shared space for franchise owners to conduct training, meetings and other business activities in a professional setting in exchange for a monthly fee. Management expects to attract new franchisees and entrepreneurs for its online marketing and brand management services over time while generating incremental fees from monthly service fees.

Comments & Business Outlook

Tue, 01 Nov 2011 04:00:00 GMT

BEIJING, Nov. 1, 2011 (GLOBE NEWSWIRE) -- ChinaNet Online Holdings, Inc. ("ChinaNet") (Nasdaq:CNET), a leading B2B (business to business) Internet technology company focusing on providing online-to-offline ("O2O") sales channel expansion services for small and medium-sized enterprises (SMEs) and entrepreneurial management and networking service for entrepreneurs in the People's Republic of China, today announced the Company has launched www.expand2china.com to support and assist global franchisors who are interested in expanding their franchises to China.

Beginning in November, ChinaNet is launching additional tailored services targeting American franchise business owners who are considering expanding into China. These services cover the full scope of a franchisor's development in China, from preparation to set-up to expansion. Preparation services include feasibility studies and key statistical information on addressable markets, and reviews of the franchisors' China supply chain and business strategy. During the set-up period, ChinaNet supports with office and facility siting, nationwide franchise permits, product packaging needs and advertising and marketing for the Chinese market. During the expansion phase, the Company assists with public relations and advertising through its premier advertising and marketing web portal, Liansuo.com. Liansuo was officially launched in May, with a current average IP of 82000 per day.

"This new website marks a further step in our strategic global expansion, and is part of our overall strategy to attract U.S. and foreign franchises to China," stated Mr. Handong Cheng, Chairman and CEO of the Company. "With our successful expansion into the Taiwan market, we are now ready to offer our services to English speaking countries. With over 8 years' experience working with 1500+ small-to-medium sized franchise and distribution companies, we know what takes for a global franchise enterprise to expand its business in China."

Comments & Business Outlook

Mon, 22 Aug 2011 04:00:00 GMT

Second Quarter 2011 Results

Revenues for the second quarter of 2011 decreased 25% to $9.1 million from the second quarter of 2010
Net income attributable to common shareholders for the second quarter was $2.8 million and $4.0 million in the second quarter of 2011 and 2010, respectively. Diluted net income per share was $0.15 in the second quarter of 2011 compared to $0.20 in the same period in 2010

"The significant slowdown in the SME market overshadowed the underlying progress we continue make in our strategic vision," began Mr. Handong Cheng, Chairman and CEO of the Company. "We believe our decision to diversify our customer base and expand our service offerings will allow us to navigate this downturn better than our competitors. With more than $16 million in cash and no debt, we are able to maintain investments in attractive opportunities such as our social networking services information platform, chuanye.com, and advertising and marketing platform, Liansuo.com. Regardless of the depth and duration of the slowdown, we remain confident we will emerge as a more resilient and competitive company."

Guidance for 2011

Due to uncertainties surrounding the economic environment and monetary policies in China and its impact on small business customers, ChinaNet will no longer provide financial guidance. The Company will continue to communicate relevant news to investors as they occur.

Investor Presentations

Thu, 30 Jun 2011 04:00:00 GMT

Attached is a slideshow presentation presented by ChinaNet Online Holdings, Inc. (the “Company”) at the Brean Murray Carret & Co. Beijing China Growth Conference, which includes information about the Company’s business and financial information, which the Company has made available.

Comments & Business Outlook

Tue, 17 May 2011 04:00:00 GMT

ChinaNet Online Holdings Reports First Quarter 2011 Earnings

Internet Advertising revenue jumped 30% to $6.1 million; representing 87% of total revenue
Q1 gross margin expanded by 3,690 basis points year-over-year to 71.1%
Adjusted net income attributable to common shareholders grew 42% to $2.4 million with diluted EPS of $0.12 vs. $0.09
$3.8 million operating cash flows in Q1 2011
Launched premium branded portal www.liansuo.com
Reaffirms 2011 net income guidance of $17.5 to $18.2 million

"Our first quarter results demonstrate further execution on our fully integrated service oriented growth strategy and the inherent operating leverage in our business model," stated Mr. Handong Cheng, Chairman and CEO of the Company. "The decision to allocate resources toward 28.com enabled us to successfully deliver new services to existing clients. This contributed to a doubling of gross margins to over 70%, and respective increases in both earnings and cash flow. As we grow our base of franchise customers, including larger branded clients and introduce new services to monetize this existing base, we see substantial opportunities to further expand our market share. In addition, the opportunity to introduce business services to a much larger client base of non-franchised SME (Small to Medium Enterprise) customers offers us another avenue for growth."

Guidance for 2011

Management reaffirms its full year 2011 forecast for

revenues to be between $50 and $54 million for 2011
net income of $17.5 to $18.2 million.

This guidance represents 20%-30% and 19%-24% growth in revenues and net income, respectively.

Investor Presentations

Tue, 10 May 2011 04:00:00 GMT

Corporate presentation presented by ChinaNet Online Holdings, Inc. (the “Company”) at a virtual road show

Comments & Business Outlook

Thu, 31 Mar 2011 04:00:00 GMT

Fourth Quarter Results:

Revenues for the fourth quarter of 2010 were $10.4 million compared to $10.4 million for the fourth quarter of 2009

"Our fourth quarter results demonstrate further execution of our internet advertising based growth strategy and the inherent operating leverage in our business model," stated Mr. Handong Cheng, Chairman and CEO of the Company. "The decision to allocate resources toward growing our 28.com customer base helped us expand margins and grow both earnings and cash flows. As we introduce new services to monetize our installed base of advertising customers, we see substantial opportunities to further expand our market share in the rapidly growing SME franchise market."

Gross profit for the fourth quarter of 2010 was $7.2 million, representing gross margin of 69.5%, compared to $5.1 million in gross profit and a gross margin of 49% in the fourth quarter of 2009.
adjusted diluted earnings per share was $0.23 in the fourth quarter of 2010 compared to $0.18 in the same period in 2009

Management expects revenues to be between $50 and $54 million for 2011, and net income guidance of $17.5 million to $18.2 million, which represents year-over-year growth of 20%-30% and 19%-24%, respectively. The Company's strategy is aimed at gaining market share by exclusively targeting the SME market. The Company expects branded customers to drive higher revenue per customer across its advertising platform while value added services generate incremental higher margin revenue from the installed customer base.

Liquidity Requirements

Tue, 16 Nov 2010 05:00:00 GMT

Our liquidity needs include: (i) net cash used in operating activities that consists of (a) cash required to fund the initial build-out and continued expansion of our network and (b) our working capital needs, which include advance payments for advertising time purchased from TV stations and for internet resources providers, payment of our operating expenses and financing of our accounts receivable; and (ii) net cash used in investing activities that consists of investments in computers and other office equipment. To date, we have financed our liquidity needs primarily through proceeds from our operating activities.

Comments & Business Outlook

Tue, 16 Nov 2010 05:00:00 GMT

Third Quarter 2010 Financial Results

Revenues for the third quarter of 2010 increased 9.5% to $8.9 million compared to $8.1 million for the third quarter of 2009.

GAAP net income for the third quarter was $3.8 million, an increase of 498.3% compared to $0.6 million reported in the same period of the prior year.

Adjusted net income was $3.9 million and $1.9 million in each corresponding period. Adjusted diluted net income per share was $0.19 in the third quarter of 2010 compared to $0.11 in the same period in 2009, based on 20.9 million and 17.6 million outstanding shares, respectively.

"Our strong third quarter results demonstrate solid execution of our growth strategy and the inherent operating leverage in our business model," stated Mr. Handong Cheng, Chairman and CEO of the Company. "The strategic decision to focus more resources on 28.com is bearing fruit, and is responsible for expanding margins and accelerating earnings and cash flows. As we build our brand and introduce new services to monetize our installed customer base, we see substantial opportunities to further expand our footprint in the rapidly growing SME franchise market."

Guidance for 2010

Management reaffirmed 2010 net income guidance of $14.1 million, which represents 67.9% year-over-year growth, respectively. The Company is ahead of its target to decrease its television advertising and as such expects revenues to be between $41 and $43 million for 2010, compared to previous guidance of $45 million.

Financial Target Agreements

Tue, 16 Nov 2010 05:00:00 GMT

In connection with a previous private placement, CHNT entered into a securities escrow agreement with the Investors, pursuant to which Rise King Investment Limited, a British Virgin Islands company (the “Principal Stockholder”), initially placed 2,558,160 shares of our common stock into an escrow account. Of the Escrow Shares, 1,279,080 shares (equivalent to 50% of the Escrow Shares) were held as security for the achievement of audited net income equal to or greater than $7.7 million for the fiscal year 2009 (the “2009 Performance Threshold”) and the remaining 1,279,080 of the Escrow Shares are being held as security for the achievement of audited net income equal to or greater than $14 million for the fiscal year 2010 (the “2010 Performance Threshold”).

Comments & Business Outlook

Thu, 19 Aug 2010 04:00:00 GMT

    Summary Financials
    Second Quarter 2010 Results (USD) (unaudited)
    (three months ended June 30,)   Q2 2010         Q2 2009            CHANGE

    Sales                       $12.0 million     $9.4 million         +28.3%
    Gross Profit                 $6.1 million     $3.8 million         +61.9%
    Gross Margin                         50.7%            40.2%        +26.1%
    Net Income                   $4.2 million     $1.3 million        +222.8%
    Fully diluted EPS                   $0.20            $0.09        +122.2%

"We delivered an exceptionally strong second quarter, led by increased market share and an increased brand image in our flagship franchise gateway business, 28.com, which enabled us to achieve record earnings," stated Mr. Handong Cheng, Chairman and CEO of the Company. "We are building positive momentum in all facets of our business and have allocated the necessary resources to enhance our position as the leading Internet advertising resource for small and medium sized businesses, especially franchise businesses. During the quarter, we added notable franchise customers, including Yiwu XinGuang Holdings Inc., Shanghai Meili Hua Ltd. and Shenzhen Excellent Energy Light Technology Ltd., which are engaged in accessory, stationery and energy saving lights industries, respectively. Our clients have embraced the new value-added services we have added to our product portfolio, including brand management and search engine marketing. These unique solutions provide significant value to franchisors by allowing them to target a larger universe of potential franchisees in a very cost-effective manner, while enabling us to monetize our customer base with high margin revenues. In addition to our normal market channels, we will continue to work with local and federal government agencies, communities and universities to promote entrepreneurship and job creation in China to ensure that we continue to be a dominant player servicing the franchise market."

Guidance for 2010

Management reaffirmed 2010 revenue guidance of $45 million and net income guidance of $14.1 million, which represents 19% and 67.9% year-over-year growth, respectively.