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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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JQW | LSE:JQW | London | Ordinary Share | JE00BGCZHC53 | ORD NPV |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 2.70 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
TIDMJQW
RNS Number : 8635Z
JQW PLC
23 September 2015
Press Release 23 September 2015
JQW plc
("JQW" or the "Company")
Interim Results
JQW, the AIM quoted Chinese B2B e-commerce operator, today announces its unaudited results for the six months ended 30 June 2015.
Highlights
-- Revenue increased by 25% to RMB 433 million (H1-2014: RMB 346 million) -- Active fee paying members increased to 243,000 as at 30 June 2015 (H1-2014: 221,000; year-end 2014: 241,000) -- 51 sales agencies at the end of June 2015, including 4 franchise agencies (44 sales agencies at the end of 2014) -- Profit before tax and profit after tax rose by c. 5% to RMB 110 million (H1-2014: RMB 105 million) and to RMB 83 million (H1-2014: RMB 78 million) respectively -- Strong cash position of RMB 460 million (H1-2014: RMB 425 million) -- Diluted earnings per share increased to RMB 0.43 per share (H1-2014: RMB 0.39 per share) -- Net assets of RMB 349 million (H1-2014: RMB 303 million)
The illustrative exchange rate as at 22 September 2015 is 1 GBP: 9.848 RMB.
* Group, below, is defined as JQW, its subsidiaries and indirect subsidiary
Cai Yongde, Chairman of JQW, commented: "The Board is pleased with the progress made in spite of the challenging economic climate. The Group has maintained the growth in contracted sales during the period and continued to increase the number of new sales agencies which management believes is instrumental in achieving sustained future growth. The Board is pleased with the progress of the e-commerce platform, which is core to the Group's competitiveness, and continues to view the future with optimism."
For further information:
JQW plc Cai Yongde, Chairman Tel: +44 (0) 20 7398 7710 Chen Daocai, Chief Executive www.jqw-ir.com Officer Francis Chan, Chief Financial Officer Cairn Financial Advisers LLP (Nomad & Broker) Sandy Jamieson / Jo Turner Tel: +44 (0) 20 7148 7900 www.cairnfin.com
Media enquiries:
Abchurch Communications Limited Quincy Allan / Viktoria Langley Tel: +44 (0) 20 7398 7710 jqw@abchurch-group.com www.abchurch-group.com
About JQW plc
JQW is a leading domestic business-to-business e-commerce provider based in the Chinese province of Jiangsu. The Group's core business is its online B2B platform, www.jqw.com, which has been developed to encourage domestic trade by connecting Chinese SMEs with potential trade partners. Founded in 2004, the platform was developed to support the marketing of Chinese SME's websites. JQW has evolved rapidly to become one of the top three B2B e-commerce websites in China in terms of traffic and operates what the Director's believe to be, the first dedicated B2B search engine, www.jqw.cn.
JQW offers a low-cost entry point for Chinese SMEs to promote themselves and their B2B products to potential buyers. In order to increase transaction opportunities, JQW offers its clients a broad range of services including website design, commercial search services and advertising.
There are approximately 50 million SMEs in China manufacturing a diverse range of products, accounting for 60% of the country's GDP. The number of mobile internet-access users in China stood at 871 million at September 2014 and investment in the country's telecommunications infrastructure continues to accelerate. These factors have driven an increased demand for domestic trade of B2B, B2C and C2C e-commerce. With the majority of these SMEs requiring the use of third party B2B e-commerce platforms to promote their businesses and access trade partners, the Board believes that JQW offers a robust and highly reputable branded platform. With exposure in over 50 industry sectors and considerable scope for future growth, JQW is in a strong position to capitalise on the development of this market.
As at 30 June 2015, the Group had:
-- 12 million Registered users -- 5 million Page views per day -- 1,199,000 Sheng-Yi-Tong members with website "shops" -- 243,000 Fee-paying members -- 700 Rated in the top 700 websites for global website traffic rankings -- 51 Sales agencies -- 3 Top 3 in Chinese B2B website traffic rankings
Chairman's statement
I am pleased to present JQW's results for the six months ended 30 June 2015.
Performance
Revenue for the period increased by 25% to RMB 433 million (H1-2014: RMB 346 million) and net profit after tax rose by 5% to RMB 83 million (H1-2014: RMB 78 million). The increase in recognised revenue during the period was mainly due to the significant growth in contracts signed in H2 2014 and the fact that a portion of these contracts was recognised in the current period. The slow-down in China's economy and numerous changes within the Chinese business environment, such as increasing operating costs, anti-corruption and credit tightening policies, anti-counterfeit internet efforts and other unfavourable factors have made 2015 a challenging year for the Group. Nevertheless, the Group has maintained the growth in contracted sales in H1 2015 at 3%, even with significant pressure from competitors in terms of price and diversification of services offered.
In July 2014, the Company introduced the "Gold We King" package, which includes the ability to create an online shop on the 'WeChat' platform, a popular mobile text and voice messaging communication application in China. In H1 2015, the "Gold We King" package contributed revenue RMB 22 million to the Group (H2-2014: RMB 8 million). There were 7,900 new members who subscribed to the "Gold We King" package in H1-2015, which was approximately 100 contracts less than the new subscribers for this package in H2-2014. This was mainly because of China's festival season and long New Year public holiday in H1-2015.
The Group's gross profit margin decreased to 42%, from 46% for H1 2015. JQW's client base has continued to trade up to more expensive packages, which provide them with advertorial services through other media channels. The cost for JQW to purchase advertising rights on different media channels to support the advertorial services rose significantly from RMB 10 million in H1 2014 to RMB 17 million in H1 2015, reflecting our clients' recognition of the value of this service.
As at 30 June 2015, the Group had 243,000 fee paying members which compares to 241,000 at the end of December 2014 and 221,000 at the end of June 2014. JQW continues to be cash generative, resulting in a cash position at the half year of RMB 460 million (H1 2014: RMB 425 million) and net assets of RMB 349 million (H1 2014: RMB 303 million).
Developments
Sales agencies
JQW's main focus has been and continues to be the appointment of new sales agencies and the achievement of excellent client satisfaction. In line with the Group's strategy, the number of agencies has increased from 44 as at 31 December 2014 to 51 as at 30 June 2015, including 4 franchise agencies. JQW is now represented in 13 provinces and one directly controlled municipality in China. In H1 2015, JQW focussed on the development of sales agencies in the second and third-tier cities of Shandong, Guangdong and Hubei. These cities are well developed but previously lacked a JQW sales centre. The Group also intends to continue to expand its presence into additional provinces and cities to gain greater local market share. JQW remains committed to its target to increase the number of agencies to at least 60 by the end of 2015. The management believes a strong sales agency team is crucial to achieving the Group's goal of continuous future growth.
B2B e-commerce platform
The evolution in the B2B environment in China has led to the introduction of an online trading function on the platform which was necessary to enhance our competitiveness in the market. The Chinese e-commerce platform targets the domestic market and will significantly improve functionality, allowing purchasers to place orders and make payments through the platform, using carefully selected partner firms with whom JQW has established strong working relationships. Although management does not expect this platform to have a substantial impact on the financial results for 2015, it is an important milestone for JQW because it will enable the Group to develop another commission-based revenue stream. Currently the new platform is at the testing stage but JQW has already obtained an encouraging response from hundreds of local enterprises who registered as the pioneering group of suppliers. The Company is also considering integrating mobile applications with the Chinese platform. The Board will provide further updates when this service is launched in the fourth quarter of 2015.
The international trading platform was launched in July 2014 and has generated approximately RMB 1 million commission income for the Group in H1 2015. As with the Chinese platform, the international platform is not expected to make a significant contribution to our consolidated financial results for the period, but it was also an important milestone for JQW in terms of developing commission-based sales models. However, the requirements of some local regulatory bodies, such as the customs authorities, have become a major constraint to smaller size suppliers trying to access international markets which has in turn affected the growth of JQW's international platform. In an effort to find more effective ways to encourage our members to trade internationally, JQW's international trading platform team is therefore now providing our members with information on international trade matters and assisting them in complying with the authorities' requirements.
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Financial services
In the fourth quarter of 2014, JQW has been working with CreditEase Group, a financial institution which provides wealth management, credit management, microfinance investment, and microcredit loan origination and services in China. This relationship provides a platform and a direct link to a financial institution that provides SMEs with microloan services. CreditEase Group will provide microloan financing services to JQW's members with a lower interest rate so they can fulfil certain criteria, such as becoming a subscribed member of JQW for a defined period of time. Up to the end of June 2015, approximately 2,500 of JQW's members have obtained microloan facilities from CreditEase Group with total drawdowns of more than RMB 60 million. JQW will continue to explore similar opportunities with other financial institutions in China in order to offer more value added services to members to support future growth.
Outlook and Strategy
In 2015, the Chinese market is experiencing weaker growth. JQW therefore has carefully planned its future development to identify the most effective ways to secure sustainable growth. The management team will remain vigilant with regards to the challenges and opportunities that arise within the changing business environment. The team also intends to use the Company's resources capital to diversify into new products, which will generate more value for both stakeholders and shareholders, while continuing to benefit from the slower but more stable growth in e-commerce industry of China.
The Company will keep the outlook under careful review in light of the one month suspension of trading, as announced on 21 September.
Cai Yongde
Chairman
23 September 2015
Condensed Consolidated Statement of Comprehensive Income
Six months Six months Year ended 30 ended 30 ended June June 31 December 2015 2014 2014 Unaudited Unaudited Audited Notes RMB'000 RMB'000 RMB'000 Revenue 2 432,665 346,119 783,847 Cost of sales (251,825) (185,664) (470,161) ============== ============== ============== Gross pro t 180,840 160,455 313,686 Other income 424 196 8,443 Selling and distribution costs (55,984) (45,009) (88,714) Administrative expenses (12,855) (10,433) (20,190) Finance costs (1,627) (25) (34) Pro t before tax 110,798 105,184 213,191 Income tax expense 3 (28,225) (26,896) (66,466) ============== ============== ============== Profit for the year, attributable to equity holders of the parent 82,573 78,288 146,725 Other comprehensive income (currency translation on differences) 1,188 2,272 260 ============== ============== ============== Total comprehensive income for the financial periods/year 83,761 80,560 146,985 ============== ============== ============== Profit after tax attributable to: - Owners of the Group 82,725 78,334 147,927 * Interests under contractual arrangements (152) (46) (1,202) ============== ============== ============== 82,573 78,288 146,725 ============== ============== ============== Total comprehensive income attributable to: - Owners of the Group 83,913 80,606 148,187 - Interests under contractual arrangements (152) (46) (1,202) ============== ============== ============== 83,761 80,560 146,985 ============== ============== ============== Earnings per share attributable to owners of the Group 6 - Basic, RMB 0.43 0.40 0.76 ============== ============== ============== - Diluted, RMB 0.43 0.39 0.76 ============== ============== ==============
Consolidated Statement of Changes in Equity
For the six month period ended 30 June 2015 (Unaudited)
Interests under Share Other Retained contractual Total capital reserves earnings Total arrangements equity RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 At 1 January 2014 57,912 18,332 155,130 231,374 1,000 232,374 Profit for the period - - 78,288 78,288 - 78,288 Other comprehensive income - 2,272 - 2,272 - 2,272 ========= ========== ========== ====================== ================= ========== Total comprehensive income - 2,272 78,288 80,560 - 80,560 Transaction with owners, dividend paid - - (10,159) (10,159) - (10,159) At 30 June 2014 57,912 20,604 223,259 301,775 1,000 302,775 ========= ========== ========== ====================== ================= ========== At 1 January 2015 57,912 6,532 199,535 263,979 1,000 264,979 Profit for the period - - 82,573 82,573 - 82,573 Other comprehensive income - 1,188 - 1,188 - 1,188 Total comprehensive income - 1,188 82,573 83,761 - 83,761 --------- ---------- ---------- ---------------------- ----------------- ---------- At 30 June 2015 57,912 7,720 282,108 347,740 1,000 348,740 ========= ========== ========== ====================== ================= ========== At 1 January 2014 57,912 18,332 155,130 231,374 1,000 232,374 Profit for the period - - 146,725 146,725 - 146,725 Other comprehensive income - 260 - 260 - 260 ========= ========== ========== ====================== ================= ========== Total comprehensive income - 260 146,725 146,985 - 146,985 Transfer from statutory reserve - (12,060) 12,060 - - - Transaction with owners, dividend paid - - (114,380) (114,380) - (114,380) At 31 December 2014 57,912 6,532 199,535 263,979 1,000 264,979 ========= ========== ========== ====================== ================= ==========
Condensed Consolidated Statement of Financial Position
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As at 30 June 2015
As at As at As at 31 30 June 30 June December 2015 2014 2014 Unaudited Unaudited Audited Notes RMB'000 RMB'000 RMB'000 Assets Non-current asset Property, plant and equipment 4 17,542 10,107 14,201 ---------- ---------------- ------------ Current assets Trade and other receivables 5 42,522 46,737 24,797 Deferred tax asset 43,784 42,392 46,270 Cash and cash equivalents 459,930 425,172 394,698 ---------- 546,236 514,301 465,765 ---------- ---------------- ------------ Total assets 563,778 524,408 479,966 ========== ================ ============ Equity and liabilities Stated capital account 57,912 57,912 57,912 Statutory reserve 6,252 18,312 6,252 Foreign exchange translation reserve 1,468 2,292 280 Retained profits 282,108 223,259 199,535 ---------- 347,740 301,775 263,979 ---------- Interests under contractual arrangements 1,000 1,000 1,000 ---------- ---------------- ------------ Total equity attributable to owners 348,740 302,775 264,979 ---------- ---------------- ------------ Current Liabilities Trade and other payables 21,830 27,418 20,606 Deferred revenue 175,136 169,569 186,870 Income tax payables 18,072 24,646 7,511 ---------- 215,038 221,633 214,987 ---------- ---------------- ------------ Total equity and liabilities 563,778 524,408 479,966 ========== ================ ============
Condensed Consolidated Statement of Cash Flows
For the six month period ended 30 June 2015
Six months Six months Year ended ended ended 31 30 June 30 June December 2015 2014 2014 Unaudited Unaudited Audited RMB'000 RMB'000 RMB'000 Cash flows from operating activities Profit before taxation 110,798 105,184 213,191 Adjustments for: Depreciation 3,105 311 3,012 Loss on disposal of property, plant and equipment - - 174 Interest Income (424) (196) (4,576) ----------- ----------- Operating cash flows before working capital changes 113,479 105,299 211,801 Increase in trade and other receivables (16,537) (26,876) (4,676) Decrease/(increase) in deferred tax asset 2,486 (8,985) (12,863) (Decrease)/increase in deferred revenue (11,734) 34,150 51,451 Increase/(decrease) in trade and other payables 1,224 (290) 785 ----------- ----------- ----------- Cash flow from operations 88,918 103,298 246,498 Income tax paid (17,664) (14,040) (70,745) Net cash flow from operating activities 71,254 89,258 175,753 Cash flows used in investing activities Acquisition of property, plant and equipment (6,446) (8,337) (15,315) Proceeds from disposal of property, plant and Equipment - - 9 Interest received 424 196 4,576 ----------- ----------- ----------- Net cash used in investing activities (6,022) (8,141) (10,730) ----------- ----------- ----------- Cash flows used in financing activities Dividend paid - - (114,380) ----------- Net cash used in financing activities - - (114,380) ----------- ----------- ----------- NET INCREASE IN CASH AND CASH EQUIVALENTS 65,232 81,117 50,643 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD/YEAR 394,698 344,055 344,055 ----------- ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD/YEAR 459,930 425,172 394,698 =========== =========== ===========
Basis of Presentation and Summary of Significant Accounting Policies
1. General information and principal activities
The interim consolidated financial statements have been prepared in accordance with International Financial Report Standards ("IFRS") as adopted by the European Union. The principal accounting policies used in preparing the interim results are those the Group expects to apply in its financial statements for the year ending 31 December 2015 and are unchanged from those disclosed in the Financial Statements for the year ended 31 December 2014.
The interim financial information has not been reviewed nor audited by the Company's auditors. The comparatives for the period ended 31 December 2014 are not the Company's full statutory accounts but have been extracted from the audited consolidated financial information of JQW plc. A copy of the audited consolidated financial statements for the period ended 31 December 2014, which was prepared under IFRS, is available on the Company's website.
The interim consolidated financial statements for the six months ended 30 June 2015 have been prepared in accordance with IAS 34, Interim Financial Reporting.
The operations of JQW plc are not affected by seasonal variations.
The interim report for the six months ended 30 June 2015 was approved by the Directors on 21 September 2015.
2. Operating segments
Operating segments are based on internal reports about components of the Group which are regularly reviewed by the Board of Directors by the Chief Operating Decision Maker ("CODM") for strategic decision making and resource allocation, in order to allocate resources to the segment and to assess its performance.
The Group reporting segments are direct sales and distribution sales. Only segmental revenues are considered by the CODM for strategic decision making purposes. The activities of the Group took place solely in the PRC and as such no geographical segment information is stated during the financial periods/year.
The segment information provided to management for the reportable segments for the interim results is as follows:
Six months ended 30 June 2014
Distribution Direct sales Total sales RMB'000 RMB'000 RMB'000 Revenue and results: Revenue from external customers 55,763 290,356 346,119 Segment profit 160,455 Unallocated other income and expenses (55,271) ---------- Profit before taxation 105,184 ========== Assets and liabilities Assets 524,408 Liabilities 221,633
The segment information provided to management for the reportable segments for the six months ended 30 June 2015 is as follows:
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Six months ended 30 June 2015
Distribution Direct sales Total sales RMB'000 RMB'000 RMB'000 Revenue and results: Revenue from external customers 69,168 363,497 432,665 Segment profit 180,840 Unallocated other income and expenses (70,042) ---------- Profit before taxation 110,798 ========== Assets and liabilities Assets 563,778 Liabilities 215,038
Segmental information is only presented to the CODM on a revenue basis and as such segmental information is only shown for revenue items.
3. Taxation
The major components of the income tax expense are as follows:
Six months Six months ended ended Year ended 30 June 30 June 31 December 2015 2014 2014 RMB'000 RMB'000 RMB'000 Current income tax 25,739 35,881 79,329 Deferred income tax 2,486 (8,985) (12,863) Income tax expense recognised in the income statement 28,225 26,896 66,466 =========== =========== ============
The tax rate used for the reconciliations below is the effective weighted average rate of tax applicable in the jurisdiction concerned.
The deferred tax is derived from the deferred revenue stated in the following table:
Six months Six months ended ended Year ended 30 June 30 June 31 December 2015 2014 2014 RMB'000 RMB'000 RMB'000 Deferred revenue balance for prior period/year (186,870) (135,419) (135,419) Deferred revenue balance for the period/year 175,136 169,569 186,870 -------------- ----------- ------------ Temporary difference derived from deferred revenue (11,734) 34,150 51,451 Other temporary differences 1,790 1,790 - -------------- ----------- ------------ (9,944) 35,940 51,451 ============== =========== ============ Profit multiplied by standard rate of 25% (2,486) 8,985 12,863 Deferred tax asset opening balance 46,270 33,407 33,407 -------------- ----------- ------------ 43,784 42,392 46,270 ============== =========== ============ Deferred tax assets are recognised to the extent that it is probable that the future taxable profits will allow the deferred tax assets to be recovered. The charge for each year can be reconciled to the profit per the consolidated statements of comprehensive income as follows: Six months Six months ended ended Year ended 30 June 30 June 31 December 2015 2014 2014 RMB'000 RMB'000 RMB'000 Profit before taxation 110,798 105,184 213,191 Profit multiplied by standard rate of 25% 27,700 26,296 53,298 Effect of: Tax impact on different statutory rate 297 599 777 Deferred taxes on temporary differences not recognised 228 1 3 Withholding tax derived from dividends declared - - 12,604 Tax effect on non-deductible expenses - - 456 Tax effect on non-taxable income - - (672) -------------- ----------- ------------ 28,225 26,896 66,466 ============== =========== ============ 4. Property, plant and equipment Furniture Motor Office and fittings vehicles equipment Total RMB'000 RMB'000 RMB'000 RMB'000 As at 30 June 2014 Cost At 1 January 2014 3,308 490 2,926 6,724 Additions - - 8,337 8,337 ------------- --------- ---------- At 30 June 2014 3,308 490 11,263 15,061 ------------- --------- ---------- Accumulated depreciation At 1 January 2014 2,685 263 1,695 4,643 Charge for the period 152 45 114 311 ------------- --------- ---------- At 30 June 2014 2,837 308 1,809 4,954 ------------- --------- ---------- Net book value At 30 June 2014 471 182 9,454 10,107 As at 31 December 2014 Cost At 1 July 2014 3,308 490 11,263 15,061 Additions 4,454 - 2,524 6,978 Disposal - - (1,621) (1,621) ------------- --------- ---------- ------- At 31 December 2014 7,762 490 12,166 20,418 ------------- --------- ---------- Accumulated depreciation At 1 July 2014 2,837 308 1,809 4,954 Charge for the period 652 45 2,004 2,701 Disposal - - (1,438) (1,438) ------------- --------- ---------- ------- At 31 December 2014 3,489 353 2,375 6,217 ------------- --------- ---------- Net book value At 31 December 2014 4,273 137 9,791 14,201 ============= ========= ========== ======= As at 30 June 2015 Cost At 1 January 2015 7,762 490 12,166 20,418 Additions - - 6,446 6,446 ------------- --------- ---------- ------- At 30 June 2015 7,762 490 18,612 26,864 ------------- --------- ---------- Accumulated depreciation At 1 January 2015 3,489 353 2,375 6,217 Charge for the period 1,027 45 2,033 3,105 ------------- --------- ---------- ------- At 30 June 2015 4,516 398 4,408 9,322 ------------- --------- ---------- Net book value At 30 June 2015 3,246 92 14,204 17,542 ============= ========= ========== ======= 5. Trade and other receivables As at As at As at 30 June 30 June 31 December 2015 2014 2014 RMB'000 RMB'000 RMB'000 Trade receivables 41,743 40,645 24,098 Other receivables 779 6,092 699 42,522 46,737 24,797 ========= ========= ============
The carrying amounts of trade and other receivables approximates to their fair value.
6. Earnings per share
The calculation of loss per share is based on the following loss and number of shares:
Six months Six months ended ended Year ended 30 June 30 June 31 December 2015 2014 2014 RMB'000 RMB'000 RMB'000 Profit after tax attributable to owners of the Group (RMB'000) 82,725 78,334 147,927 Weighted average number of shares ('000) - Basic 193,550 193,550 193,550 - Diluted 193,550 198,631 193,550 Earnings per share (RMB) - Basic 0.43 0.40 0.76 - Diluted 0.43 0.39 0.76
- Ends-
This information is provided by RNS
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