News and Research on China Finance Online Co. Ltd. (JRJC)
Business Description
China Finance Online Co. Limited provides online financial and listed company data and information in the People’s Republic of China. The company offers subscription-based services based on a single information platform that integrates data and information from multiple sources with features and functions such as data and information search, retrieval, delivery, storage and analysis. It delivers features and functions using software tools that it has developed, which are referred to as research tools.
As of December 31, 2006, with the acquisition of CFO Stockstar, the company had a total of approximately 6.05 million registered user accounts, and approximately 28,316 fee-based active subscribers. The company draws content from the Shanghai and Shenzhen Stock Exchanges, which provide it with real-time stock, bond and mutual fund pricing and other information, and the data providers.
The company’s service offerings to users are used by and targeted at a range of investors in China, including individual investors managing their own money, professional investors, such as institutional investors managing sums of money on behalf of their clients and net worth individuals, other financial professionals, such as investment bankers, stock analysts and financial reporters, and middle class individuals.
Services
The company collects, processes, and, through research tools and Web site content, provides to its subscribers financial analysis tools, real-time and historical data, news, research reports and online forums in one integrated information platform, allowing them to make informed investment decisions with respect to China’s listed company stocks, bonds and mutual funds according to specifications and analyses determined by them. In August, 2006, the company launched a new subscription service offering, Value Engine, which is designed for investors who primarily use fundamental analysis in selecting stocks or who use fundamental analysis to supplement technical analysis. This new subscription package aggregates research reports, live financial news, market commentaries, up-to-date Chinese listed companies’ financial information and database.
Features
Through its integrated information platform, the company’s subscribers have access to and would make use of each of its main content features: financial analysis tools, real-time and historical data, news, research reports and online forums.
Financial analysis tools: The company’s financial analysis tools are research tools that provide subscribers with the ability to quantitatively calculate and analyze financial data, which include: fundamental analysis tools, which are designed to enable investors to analyze data based on company fundamentals; and technical analysis tools, which are designed to enable investors to analyze data based on trends formulated by historical trading data. The tools allow subscribers to perform fundamental and technical analysis on companies, bonds and mutual funds listed on the Shanghai and Shenzhen Stock Exchanges, based on historical financial data and information, trading volumes and other user specifications.
Real-time and historical data: The company’s integrated information platform offers subscriber’s interactive charts, quotes, reports and indicators on approximately 2,000 securities, including company stocks, bonds, warrants and mutual funds, listed on China’s Shanghai and Shenzhen Stock Exchanges. Users would search by company name or ticker symbol for real-time stock quotes of the securities. Trading data is provided to the company on a real-time basis by each of the Shanghai and Shenzhen Stock Exchanges. The company collects, categorizes, organizes and index trading data provided to it to allow searches, sorting and analysis by user specification and allow the subscribers to access and analyze the data, using financial analysis tools and other research tools. The company also offers its subscribers detailed historical data and information on listed companies, mutual funds and bonds. This information is available for subscribers to download from its Web site and is available on diskettes but are not accessible to general viewers. The company collects historical data and information, process this information and, through its research tools, allow the subscribers to retrieve critical data and information they select.
News: The company’s news feature allows users to search and view breaking economic and financial news and information from China and around the world. Subscribers would access financial information and reports, categorized and integrated into topics and sub-topics that they select, based on their investment and analysis needs. The financial data and information presented on website or through research tools is gathered from other financial information content providers and intermediaries with whom the company has contractual arrangements.
Research reports: Through its integrated information platform, the company’s users would view financial news letters and analytical reports from a number of China’s securities professionals. The company draws market research reports and commentaries from securities advisory companies, futures companies and securities brokerage companies licensed to provide securities advisory services, commentaries from licensed individual securities advisors. For its subscribers, the company categorizes the reports and commentaries based on topics, industry sector and other customary categorizations.
Online forums: The company hosts various online bulletin boards on its website by which Chinese licensed securities advisors offer their views on a variety of topics ranging from macroeconomic conditions to performance of individual stocks, bonds and mutual funds. The online forums are moderated by third party moderators approved by the company.
Website
The company’s website content and research tools are the main components of its information platform. Its website has four primary functions: to attract visitors and market subscription based service offerings; to store content and serve as an integral part of information platform; to serve as a download platform for service offerings; and to display online advertisements.
Through the company’s Web site, users would also participate in online forum discussions and bulletin boards. It provides examples to visitors on its website of the various premiums content and features they would access and receive by becoming a subscriber to service offerings.
The company’s premium content and features are accessible through research tools, some of which are web-based and others are computer-based. Subscribers to web-based research tools are required to register and maintain personal accounts with the company’s Web site. The subscribers would store important information they viewed and analytical results they obtained in their personal accounts maintained at Web site, and later review that information and results using the same screen layouts and menu options that the Web site provides. Subscribers to computer-based research tools would download from the company’s website the packages they selected to their computers.
Research Tools
Subscribers to the company’s service would elect to use various research tools that the company has developed to access and utilize its premium content and features. The company offers different service packages incorporating some or all of research tools to its users. Through research tools, the company’s subscribers would access and analyze its content, including real-time and historical data, news and research reports, in one integrated platform, allowing subscribers to make informed investment decisions with respect to all of China’s listed company stocks, bonds and mutual funds according to specifications and analyses determined by them. Some of the company’s research tools are web-based and others require download from its website and are computer-based.
Categorized macro information: This feature allows subscribers to search and sort up-to-date and news and information relating to the broader financial markets or a specific financial topic or industry sector. The company has a team of professional editors who collect, organize, categorize and index macro-economic and financial market information on a daily basis, according to user feedback and classification methods in securities markets in China.
Industry sector analysis: The company collects and processes listed company financial data and information according to classification methods set by relevant PRC regulatory authorities, and allow subscribers to view the relative standings of listed companies in the same industry sector or geographical locations based on market accepted performance parameters such as price-to-earnings ratios and profit margins.
Fundamental analysis: This research tool integrates the historical and real-time trading information that the company maintains in its database, and fundamental financial information such as earnings-per-share, shareholdings and other related data and information. Its subscribers would receive fundamental financial and trading information organized by their specifications and display the results on a graphical interface.
Mutual fund analysis: The company’s mutual fund research tool focuses on categorizing information relating to the portfolio holdings of mutual funds. This feature allows subscribers to study the collective effect of market players on individual stocks. This feature also offers information relating to the performance of individual mutual funds, allowing subscribers to assess the risks and rewards of investing in mutual funds.
Technical analysis: This feature allows investors interested in trends formulated by historical trading data to perform technical analysis on listed companies. With approximately 60 markets accepted technical indicators and a database of historical data and information on China’s listed company stocks, the company’s subscribers would perform chart analysis and pattern recognition on stock listed on China’s stock exchanges. In August 2006, the company launched a new subscription-based service package which is specially designed for investors who primarily use fundamental analysis in selecting stocks or who use fundamental analysis to supplement technical analysis. The company expects to provide additional research tools as its services expand.
Securities Service Packages
Securities Market Information: The company’s Securities Market Information service packages, called Mega Trend series, are developed on the basis of Level II quotes. In June 2006, the company entered into an agreement with Shanghai Stock Exchange Information Network Co., Ltd., which is associated with the Shanghai Stock Exchange (SSE). Under the definitive agreement, China Finance Online is certified by SSE to develop service packages based on Level II quotes, and upgrade the features and functions of its products. SSE through its affiliate officially published its Level II quotes in July 2006.
Technical Analysis: Technical Analysis involves researching historical price and volume data, patterns and trends to predict the performance of a given stock. This type of analysis focuses on chart formations and formulas to identify major and minor trends to recognize buying opportunities and exit points. The Grand Reference series is the primary product featuring the company’s technical analysis service offerings.
Fundamental Analysis: Fundamental Analysis involves examining the company’s financials and operations, especially sales, earnings, growth potential, assets, debt, management, products, and competition. Fundamental Analysis takes into consideration those variables that are directly related to the company itself, rather than the overall state of the market or technical analysis data. In August 2006, the company formally launched the version of Value Engine, which is specially designed for investors who primarily use fundamental analysis in selecting stocks or who use fundamental analysis to supplement technical analysis. In September 2006, the company formally rolled out lower-end versions of Value Engine to capitalize on investors’ demand for fundamental analysis tools.
Subsidiaries
The company’s subsidiaries include - Fortune Software (Beijing) Co., Ltd.; China Finance Online (Beijing) Co., Ltd.; Beijing Fuhua Innovation Technology Development Co., Ltd.; Stockstar Information Technology (Shanghai) Co., Ltd.; Shanghai Meining Computer Software Co., Ltd.; Zhengning Information & Technology (Shanghai) Co., Ltd.; Shenzhen Genius Information Technology Co., Ltd.; and Jujin software (Shenzhen) Co., Ltd.
Sales and Marketing
The company markets its service offerings through Web sites, and through 146 customer support personnel at the customer service centers. The company also markets its service offerings through banks, mutual funds and stock brokerage firms.
Competition
The company competes with publishers and distributors of traditional media, including print, radio and television, such as China Securities News, Shanghai Securities News, International Financial Times, 21st Century Economic Reports; Internet portals providing information on business, finance and investing, such as sina.com.cn and sohu.com; financial information web pages offered by Web sites, such as hexun.com; personal stock research software vendors, such as Shanghai Qian Long High Tech Corporation, that develop and market stock research software through stock brokerage companies; and stock brokerage companies, especially stock brokerage companies with online trading capabilities, such as Haitong Securities.
History
China Finance Online Co. Limited was founded in 1998.
