China Commercial Credit Third Quarter Revenue Up 35 Percent; Company Establishes New Equipment Leasing Entity to Begin Operations Early Next Year

Marketwired

WUJIANG, CHINA--(Marketwired - Nov 15, 2013) - China Commercial Credit, Inc. (NASDAQ: CCCR), a microfinance company whose major business is providing microcredit loans and loan guarantees to small-to-medium enterprises (SMEs), farmers and individuals in Jiangsu Province, today reported that, for the third quarter ended September 30, 2013, the company had net revenue of $3,508,465, a 35 percent increase on net revenue of $2,590,819 in the third quarter of last year.

Third quarter 2013 net income attributable to common stock shareholders, which included a one-time non-cash expense for conversion of preferred stock in conjunction with the company's initial public offering completed in August 2013, was $1,608,769, or $.17 per share, compared to net income attributable to common stock shareholders of $1,914,550, or $.23 per share, in the same period in 2012.

Prior to this non-cash expense, the company's net income for the third quarter of 2013 was $2,361,269, or $.24 per share, a 23 percent increase compared to net income of $1,914,550, or $.23 per share, in the third quarter last year.

Total weighted average shares outstanding were 9,692,533 and 8,285,815 for the third quarter ended September 30, 2013 and September 30, 2012, respectively.

The company's increase in 2013 third quarter net revenue compared to the same period last year was primarily the result of an increase in loan interest of $553,182. This increase, in turn, was mainly the result of an increase in loan receivables of approximately $9.0 million, to $90,512,332 in the third quarter of 2013 from $81,465,053 in the same period in 2012.

In addition to the increase in the loan interest, net income for the third quarter was impacted favorably by increases in net commissions and fees from the company's loan guarantee business, and a reversal in the provision for loan losses compared to the third quarter of last year.

For the first nine months of 2013, the company had net revenue of $9,271,899, a one percent improvement compared to the net revenue of $9,216,372 during the first nine months of last year. Nine-month 2013 net income attributable to common stock shareholders, which included the one-time non-cash expense for conversion of preferred stock, was $5,142,460, or $.56 per share, compared to net income attributable to common stock shareholders of $6,570,598, or $.86 per share, in the same period in 2012.

Prior to this non-cash expense, the company's net income for the first nine months of 2013 was $5,894,960, or $.64 per share, a ten percent decrease compared to the net income of $6,570,598, or $.86 per share, achieved in the first nine months of last year. This decrease was primarily the result of an increase in non-interest operating expenses of $333,891, comprising various financial, travel, legal and consulting costs.

Total weighted average shares outstanding were 9,233,381 and 7,611,688 for the nine months ended September 30, 2013 and September 30, 2012, respectively.

"We are very satisfied with our third quarter financial performance," said CEO and founder Mr. Huichun Qin. "Going forward, we expect our available lending capital and income from both loan interest and loan guarantees to show continuing improvements." 

Mr. Qin added that, on September 5, 2013, the company established a new entity in China, Pride Financial Leasing (Suzhon) Co. Ltd, which is designed to offer leases on machinery and equipment, transportation vehicles, and medical devices to municipal government agencies, hospitals and SMEs in Jiangsu Province and beyond.

Equipment leasing, noted Mr. Qin, is one of the fastest growing business sectors of the Chinese economy. "China Commercial Credit intends to capitalize on this growing demand by offering an early, full service entrant in Jiangsu and surrounding regions."

Additional details on the capitalization and business plan for Pride Financial Leasing will follow shortly, said Mr. Qin.

About China Commercial Credit

China Commercial Credit (http://www.chinacommercialcredit.com), founded in 2008, provides business loans and loan guarantee services to more than 360 small-to-medium enterprises (SMEs), farmers and individuals in China's Jiangsu Province. Due to recent legislation and banking reform in China, these SMEs, farmers and individuals -- which historically had been excluded from borrowing funds from State-owned and commercial banks -- are now able to borrow money at competitive rates from microfinance lenders. According to 2012 data, SMEs, farmers and individuals account for eight of ten jobs in China and comprise 60 percent of the nation's GDP.

Investors wishing to receive CCC's corporate communications as they become available may go to http://www.ir-site.com/china-commercial-credit/default.asp and register under Email Alerts. The company's blog, "From The CEO," also appears at the same site. Each new blog post will be announced on the company's Twitter account, @CCCR_update, where readers may link directly to the post.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of United States securities laws. You should not rely upon forward-looking statements as predictions of future events. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to changes in our expectations. You should review the factors described in the section entitled "Risk Factors" in our prospectus filed with the SEC on August 14, 2013 and other documents we file from time to time with the SEC. We qualify all of our forward-looking statements by these cautionary statements.

   
CHINA COMMERCIAL CREDIT, INC.  
CONSOLIDATED BALANCE SHEETS  
             
    September 30, 2013     December 31, 2012  
    (Unaudited)        
             
ASSETS                
Cash   $ 6,972,155     $ 1,588,061  
Restricted cash     12,676,190       11,595,489  
Loans receivable, net of allowance for loan losses $1,386,907 and $857,813 for September 30, 2013 and December 31, 2012, respectively     89,125,425       84,923,480  
Interest receivable     866,502       905,454  
Tax receivable, net     1,012,954       -  
Property and equipment, net     279,981       302,626  
Other assets     707,369       689,709  
Total Assets   $ 111,640,576     $ 100,004,819  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
Liabilities                
Short-term bank loans   $ 15,462,491     $ 20,606,791  
Deposits payable     11,323,937       9,428,061  
Unearned income from financial guarantee services     610,021       773,402  
Accrual for financial guarantee services     699,556       880,725  
Tax payable, net     -       20,449  
Other current liabilities     402,527       742,745  
Deferred tax liability     323,549       303,567  
Total Liabilities     28,822,081       32,755,740  
Shareholders' Equity                
Series A Preferred Stock (par value $0.001 per share, nil and 1,000,000 shares authorized; nil and 645 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively)   $ -     $ 1  
Series B Preferred Stock (par value $0.001 per share, nil and 5,000,000 shares authorized; nil and 640 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively)     -       1  
Common stock (par value $0.001 per share, 100,000,000 shares authorized; 10,430,657 and 9,000,000 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively)     10,431       9,000  
Subscription receivable     (1,062 )     (11,062 )
Additional paid-in capital     52,782,321       44,247,397  
Statutory reserve     5,147,828       4,232,164  
Retained earnings     18,785,001       14,558,205  
Accumulated other comprehensive income     6,093,976       4,213,373  
Total Shareholders' Equity     82,818,495       67,249,079  
Total Liabilities and Shareholders' Equity   $ 111,640,576     $ 100,004,819  
                 
                 
                 
CHINA COMMERCIAL CREDIT, INC.  
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME  
   
    For the Three Months Ended
September 30,
    For the Nine Months Ended
September 30,
 
    2013
(Unaudited)
    2012
(Unaudited)
    2013
(Unaudited)
    2012
(Unaudited)
 
Interest income                                
Interests and fees on loans   $ 2,969,422     $ 2,416,240     $ 9,156,526     $ 8,774,766  
Interests and fees on loans-related party     -       -       -       13,125  
Interests on deposits with banks     16,922       56,906       135,416       238,372  
Total interest and fees income     2,986,344       2,473,146       9,291,942       9,026,263  
                                 
Interest expense                                
Interest expense on short-term bank loans     (274,489 )     (247,272 )     (897,341 )     (1,069,990 )
Net interest income     2,711,855       2,225,874       8,394,601       7,956,273  
                                 
Reversal (provision) for loan losses     340,965       (624 )     (500,123 )     (37,276 )
Net interest income after provision for loan losses     3,052,820       2,225,250       7,894,478       7,918,997  
                                 
Commissions and fees on financial guarantee services     401,984       311,351       1,175,060       1,261,145  
Over provision on financial guarantee services     53,661       54,218       202,361       36,230  
Commission and fees on guarantee services, net     455,645       365,569       1,377,421       1,297,375  
                                 
Net Revenue     3,508,465       2,590,819       9,271,899       9,216,372  
                                 
Non-interest income                                
Government incentive     57,460       58,578       83,235       175,557  
Other non-interest income     99,337       25,368       99,337       135,896  
Total non-interest income     156,797       83,946       182,572       311,453  
                                 
Non-interest expense                                
Salaries and employee surcharge     (167,078 )     (203,496 )     (511,953 )     (508,900 )
Rental expenses     (65,244 )     (63,874 )     (194,091 )     (191,285 )
Business taxes and surcharge     (103,877 )     (97,275 )     (361,466 )     (367,862 )
Other operating expenses     (580,233 )     (246,342 )     (1,450,603 )     (768,874 )
Total non-interest expense     (916,432 )     (610,987 )     (2,518,113 )     (1,836,921 )
                                 
Income Before Taxes     2,748,830       2,063,778       6,936,358       7,690,904  
Income tax expense     (387,561 )     (149,228 )     (1,041,398 )     (1,120,306 )
Net Income     2,361,269       1,914,550       5,894,960       6,570,598  
                                 
Amortization of beneficial conversion feature relating to convertible Series A Preferred Shares     (372,500 )     -       (372,500 )     -  
Amortization of beneficial conversion feature relating to convertible Series B Preferred Shares     (380,000 )     -       (380,000 )     -  
Net income attributable to common stock shareholders   $ 1,608,769     $ 1,914,550     $ 5,142,460     $ 6,570,598  
                                 
Earnings per Share- Basic and Diluted   $ 0.17     $ 0.23     $ 0.56     $ 0.86  
                                 
Weighted Average Shares Outstanding-Basic and Diluted     9,692,533       8,285,815       9,233,381       7,611,688  
                                 
Net Income     2,361,269       1,914,550       5,894,960       6,570,598  
Other comprehensive income                                
Foreign currency translation adjustment     452,537       (54,195 )     1,880,603       359,867  
Comprehensive Income   $ 2,813,806     $ 1,860,355     $ 7,775,563     $ 6,930,465  
                                 
                                 
                                 
CHINA COMMERCIAL CREDIT, INC.  
CONSOLIDATED STATEMENTS OF CASH FLOWS  
   
    For The Nine Months Ended
September 30,
 
    2013     2012  
    (Unaudited)     (Unaudited)  
Cash Flows from Operating Activities:                
Net income   $ 5,894,960     $ 6,570,598  
Adjustments to reconcile net income to net cash provided by operating activities:                
Depreciation and amortization     83,926       50,233  
Provision for loan losses     500,123       37,276  
Over provision on financial guarantee services     (202,361 )     (36,230 )
Deferred tax expense     11,705       25,168  
Changes in operating assets and liabilities:                
  Interest receivable     62,478       (90,273 )
  Tax receivable/tax payable, net     (1,021,744 )     8,930  
  Other assets     436,288       6,047  
  Unearned income from guarantee services     (181,941 )     (62,873 )
  Other current liabilities     (161,387 )     (28,057 )
Net Cash Provided by Operating Activities     5,422,047       6,480,819  
                 
Cash Flows from Investing Activities:                
Originated loans disbursement to third parties     (186,874,447 )     (145,961,798 )
Loans collection from third parties     184,319,796       141,759,435  
Loans collection from related parties     -       237,564  
Payment of loans on behalf of guarantees     (435,468 )     -  
Collection from guarantees for loan paid on behalf of customers     -       526,653  
Deposit released from banks for financial guarantee services     5,447,398       4,052,733  
Deposit paid to banks for financial guarantee services     (4,584,430 )     (1,388,553 )
Purchases of property and equipment     (58,758 )     (166,592 )
Net Cash Used in Investing Activities     (2,185,909 )     (940,558 )
                 
Cash Flows From Financing Activities:                
Proceeds from short-term bank borrowings     4,881,859       5,536,573  
Repayment of short-term bank borrowings     (10,563,457 )     (11,879,175 )
Issuance of Series A Preferred stocks     50,000       272,500  
Issuance of Series B Preferred stocks     70,000       -  
Issuance cost of preferred stocks     (12,744 )     (19,229 )
Proceeds from initial public offering, net of offering costs     7,473,528       -  
Proceeds from exercise of underwriter over-allotment, net of offering costs     255,992       -  
Common stock issuance cost     (80,019 )     -  
Cash payment in reverse acquisition     -       (245,401 )
Payments of dividends     -       (842,554 )
Net Cash Provided by/(Used in) Financing Activities     2,075,159       (7,177,286 )
                 
Effect of Exchange Rate Changes on Cash and Cash Equivalents     72,797       27,908  
                 
Net Increase/(Decrease) In Cash and Cash Equivalents     5,384,094       (1,609,117 )
Cash and Cash Equivalents at Beginning of Period     1,588,061       3,549,644  
Cash and Cash Equivalents at End of Period   $ 6,972,155     $ 1,940,527  
                 
Supplemental Cash Flow Information                
Cash paid for interest expense   $ 909,190     $ 1,088,318  
Cash paid for income tax   $ 2,057,841     $ 1,091,816  
                 
Contact:


Investors
Jimmy Caplan
Market Makers
512-329-9505
jimmycaplan@me.com

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Rick Eisenberg
Eisenberg Communications
212-496-6828
eiscom@msn.com
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