SOURCE: China INSonline Corp.

November 19, 2008 08:00 ET

China INSOnline Corp. Reports Strong First Quarter Growth in Revenues and Profits

Online Advertising Sales on Its Leading Insurance Portal More Than Doubled as Did Software Development Revenues

BEIJING--(Marketwire - November 19, 2008) - China INSOnline Corp. (NASDAQ: CHIO), a rapidly growing integrated licensed insurance services provider, which operates www.soobao.cn, one of China's leading insurance services web portals, reported today that revenues in its first fiscal quarter ended September 30, 2008 more than doubled compared to the same period last year, while net income in the period grew approximately 45% compared to last year's first quarter.

According to the Company, net revenues in its first fiscal quarter ended September 30, 2008 reached $5,538,639, a 136% increase over revenues in last year's first quarter of $2,346,886, while net income in this year's first quarter grew to $2,462,064 from $1,832,636 in the same period last year.

The Company attributed these sharp gains to the continued rapid growth in its online advertising revenues, which accounted for about 64% of total revenue growth, while a little more than one third of the revenue gain came from continued growth in China INSOnline's software development segment. A small (about 1%) contribution also was made by insurance agency services, its newest business sector.

The Company attributed the increase in online insurance advertising -- which grew approximately 165% in the quarter -- to substantial growth in the number of insurance agents who placed ads on the website. Specifically, 87 teams of insurance agents placed ads in the September 30, 2008 quarter, compared with 14 teams in the same period last year. Further, individual insurance agents on these teams completed 323 effective contracts in the first quarter of 2008 compared with 41 effective contracts in the first quarter last year.

At the same time, the Company said that Gross Profit in the first quarter increased 123% to $5,033,978 despite the fact that Cost of Sales in the period -- reflecting both the enlarged scale of operations and an increased Business Tax for inter-company operations -- grew from 4% of net revenues in last year's first quarter to 8% for the quarter ended September 30, 2008.

The Company also saw increases in General and Administrative Expenses and Selling Expenses, also reflecting the Company's rapid expansion and, in the latter case, increased spending for branding and promotion of the business and its www.soobao.cn insurance web portal.

Strong Balance Sheet

As of September 30, 2008, the Company reported a 27% increase in cash and cash equivalents to $8,137,156 and also said it had no debt financing with any bank or other financial institution. Consequently, all of its capital continues to be equity capital.

Outlook

Chief Executive Officer of China INSOnline Corp., Mrs. Betty Xu, commented, "These strong results reflect the growing awareness of www.soobao.cn and the value it provides to participants in China's still very young insurance industry."

She added, "Our strategy remains linked to the steady expansion of our insurance web portal throughout Greater China, by building our relationships with insurance agents and companies, coupled with the addition and development of new services that can be provided via the internet. We expect we will create a nationwide insurance supermarket which will be combined with the internet to allow us to strengthen our industry leadership and continue our growth."

Mr. Zhenyu Wang, Chairman of the Board, stated, "We continue to make the job of insurance agents an easier one, while providing them with a rapidly expanding marketing platform that is seeing higher usage in line with the general e-commerce trends throughout China."

About China INSOnline Corp.

China INSOnline Corp., incorporated in Delaware and headquartered in Beijing, is a rapidly growing licensed insurance agency in The People's Republic of China. Representing major insurance underwriting firms in China, the Company offers online automobile, property and life insurance services through its industry web portal, www.soobao.cn. The Company's online platform also provides consumers, agents and insurance companies with online transaction capabilities, advertising, online inquiry, news circulation, statistical analysis and software development services. For more information, please visit www.china-insonline.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, but not limited to, the impact of competitive products, pricing and new technology; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

                        China INSOnline Corporation
  For the Three Months Ended September 30, 2008 Compared To Three Months
                         Ended September 30, 2007

                          2008              2007            Variance
                     ---------------  ---------------  ------------------
REVENUES             $5,538,639  101%  $2,346,886 100% $3,191,753    136%
DISCOUNT ALLOWED         67,190    1%         197   0%     66,993  34007%
                     ----------        ----------      ----------
REVENUES, NET         5,471,449  100%   2,346,689 100%  3,124,760    133%
COST OF SALES           437,471    8%      93,104   4%    344,367    370%
                     ----------        ----------      ----------
GROSS PROFIT          5,033,978   92%  2,253,585   96%  2,780,393    123%
General &
 administrative
 expenses               678,333   12%     78,098    3%    600,235    769%
Selling expenses        999,364   18%     20,716    1%    978,648   4724%
                     ----------       ----------       ----------
OPERATING INCOME      3,356,281   61%  2,154,771   92%  1,201,510     56%
Financial (expense)
 income, net                (42)   0%      1,271    0%     (1,313)  (103)%
                     ----------       ----------       ----------
INCOME BEFORE TAXES   3,356,239   61%  2,156,042   92%  1,200,197     56%
Income tax              894,175   16%    323,406   14%    570,769    176%
                     ----------       ----------      ----------
NET INCOME           $2,462,064   45% $1,832,636   78% $  629,428     34%
                     ==========       ==========       ==========


Contact Information

  • Contacts:

    Ms. Liya Wu
    China InsOnline Corp.
    Tel: 646-573-7654

    Ken Donenfeld
    DGI Investor Relations
    Tel: 212-425-5700
    Email: donfgroup@aol.com