Profile: China Finance Online Co Ltd (JRJC.OQ)
1 May 2015
China Finance Online Co. Limited (CFO Hong Kong), incorporated on November 2, 1998, is a provider of vertically integrated financial information and services. The Company's two flagship portal sites are www.jrj.com and www.stockstar.com. The Company offers basic software, information services and securities investment advisory services to individual investors. Through its subsidiary, CFO Genius, the Company provides financial database and analytics to institutional customers including domestic financial, research, academic and regulatory institutions. The Company is developing financial services including securities and futures brokerage services in Hong Kong and precious metal trading services in China. Through its subsidiaries, iSTAR Securities and iSTAR Futures, the Company provides securities and futures contracts brokerage-related services in Hong Kong. The Company, through its affiliates, Zhengjin Fujian, Zhenjin Tianjin and Henghui, provides precious metals trading services. The Company operates its business in three segments: precious metals trading services, online financial information and advisory service, and other related services in People's Republic of China (PRC), and Hong Kong brokerage services.
Financial information and advisory business
The Company holds through its PRC affiliates the required licenses to provide securities investment advisory services. It provides its investment advisory services primarily through its client service center. It provides investment advice to its clients in accordance with conclusions and opinions derived from securities research reports, theoretical models and analysis. The investment advisory fee is calculated based on the term of service and the size of such client's investment. To conduct its subscription services, the Company collects and processes its Website content through its research tools and provide to its subscribers financial analysis tools, real-time and historical data, news, research reports and online forums in one integrated information platform. It offers subscription-based services on a single information platform that integrates data and information from multiple sources with features such as data and information search, retrieval, delivery, storage and analysis. It delivers these features using software tools and mobile handsets that it has developed, which it refers to as research tools. It offers subscribers a variety of research tools designed to provide information and analysis, including financial analysis, as well as the ability to search and sort out data and information, based on subscribers' needs and preferences. It offers services that permit subscribers to analyze its content using some or all of the research tools, such as categorized macro information, industry sector analysis, fundamental analysis, mutual fund analysis, technical analysis and securities market data analysis. Categorized macro information feature allows subscribers to search and sort up-to-date news and information relating to the broader financial markets or a specific financial topic or industry sector. The Company collects and processes listed company financial data and information according to classification methods set by relevant PRC regulatory authorities, and allows subscribers to view the relative standings of listed companies in the same industry sector or geographical locations based on commonly used performance parameters, including price-to-earnings ratios and profit margins. Its subscribers receive fundamental financial and trading information organized by their specifications and display these results on a graphical interface in fundamental analysis. Its mutual fund research tool focuses on categorizing information relating to the portfolio holdings of mutual funds. Technical analysis feature allows investors to perform technical analysis on listed companies. Securities market data analysis feature provides trading data and statistical information on market transactions. Its revenues derived from individual information and investment advisory business represented approximately only 16% of its total net revenues in 2013.
Financial Services Business
The Company, in order to address the market demand for alternative investment opportunities, established Zhengjin Fujian, Zhengjin Tianjin and Henghui to help clients invest and trade precious metals. As a PRC-affiliate of the Company, Zhengjin Fujian is a member of the State Administration for Industry and Commerce (SAIC)-approved Haixi, while Zhengjin Tianjin and Henghui are members of Tianjin Precious Metals Exchange (TJPME). Its precious metals trading affiliates' intended scopes of business include precious metals spot trading, silver product sales and financial investment advisory services. It is focused on online silver trading on Haixi and TJPME on behalf of their clients. It acts as one of the market makers in Haixi and TJPME.
The Company through iSTAR Securities provides certain brokerage and related services to its customers who invest in stocks listed on Hong Kong Stock Exchanges and Clearing Limited (HKEx). iSTAR Securities is regulated by HKEx and Hong Kong Securities and Futures Commission (SFC). iSTAR Finance has obtained Hong Kong SFC licenses to engage in securities trading, futures contracts trading and advising on securities. In addition to the Hong Kong market, in 2013 iSTAR Futures, another subsidiary of iSTAR Finance, began to provide brokerage services of overseas futures exchanges, such as LME (London Metal Exchange), CME Group. In 2013, brokerage and related services provided by iSTAR Securities and iSTAR Futures represented approximately 7% of its total net revenues. In August 2013, the Company launched Yinglibao, an internet-based financial platform that integrates cash management solutions and mutual fund distribution, for trial service. Yinglibao users have the option of purchasing mutual fund products directly through their accounts.
The Company’s websites www.jrj.com and www.stockstar.com are financial information websites in China. In 2013, revenues from advertising-related services represented approximately 13% of its total net revenues, and online advertising was not part of its core business.
China Finance Online Co Ltd
9th Floor Towr C, Corporate Sq
No. 35 Financial Street
BEIJING BEJ 100033