SOURCE: China Commercial Credit, Inc.

CHINA COMMERCIAL CREDIT ANNOUNCES 2014 FIRST QUARTER RESULTS AND CLOSING OF SECONDARY PUBLIC FINANCING

China Commercial Credit, Inc. (NASDAQ: CCCR), a microfinance company providing financial services to small-to-medium enterprises (SMEs), farmers and individuals in Jiangsu Province, today reported that, for the three months ended March 31, 2014, the company reported net income of $1,093,633, or $.10 per share, on revenue of $2,054,009. This compares with net income of $1,569,868, or $.17 per share, on revenue of $2,670,253 in the like year-ago quarter. Total weighted average shares outstanding were 10,434,862 in the first quarter of 2014 versus 9,000,000 in the first quarter of 2013.

 

The decrease in first quarter net income was primarily the result of an increase of approximately $354,000 in the provision for financial guarantee services over the same provision in the first quarter of last year. The provision for loan losses for direct lending increased by approximately $100,000 over the provision recorded in the first quarter of 2013. During the 2014 first quarter, the company repaid bank lenders for certain defaulted loans it had guaranteed but anticipates it will recover most of the repayment amounts within the current year and that default repayments will decrease in subsequent quarters.

 

The current year first quarter was also impacted by a reduction of approximately $113,000 in commissions and fees from the company's traditional loan guarantee service, mainly the result of a transition from CCC's traditional guarantee services to an online guarantee services platform operated by the Finance Office of Jiangsu Province. The Company believes this new state-owned portal will generate commissions and fees for loan guarantees more than double those derived from CCC's traditional guarantee services.

 

In addition to the state-owned platform, CCC's wholly-owned subsidiary, Pride Lending Club, has begun operating its own P2P platform to match borrowers with lenders and guarantors. Pride Lending Club does not use its own capital to make loans on the P2P platform and therefore is not exposed to any credit risk. In certain transactions, Wujiang Luxiang may act as a guarantor for loans on the P2P platform and will make provisions for such guarantee services in accordance with the methods for its traditional guarantee services. 

 

The company also announced the closing of its recently completed secondary public offering of common shares and warrants. Net proceeds of approximately $5.5 million will be used to fund the operations of CCC's wholly-owned subsidiary, Pride Financial Leasing (PFL), which will lease machinery and equipment to government and commercial entities across China.

 

CCC chief executive Mr. Huichun Qin said that funds derived from the secondary offering are expected to be deployed by PFL by the end of the current quarter and that the subsidiary is already in discussions regarding several promising leasing opportunities. He said that CCC is permitted to further fund PFL with bank loans up to ten times the total of PFL's registered capital.

 

Mr. Qin added that he expects "significant incremental revenue" from both PFL and Pride Lending Club that will contribute to improved operating results for the balance of 2014. He noted that these two subsidiaries are not limited to operating in Jiangsu Province, but instead offer CCCR, for the first time, the opportunity to target customers nationwide.

 

Notice Regarding Secondary Public Offering

The offering of these securities is made only by means of a prospectus. A registration statement relating to the shares of common stock has been declared effective by the Securities and Exchange Commission on May 7, 2014. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state. Copies of the final prospectus relating to the offering may be obtained for free by visiting the U.S. Securities and Exchange Commission website at http://www.sec.gov.

 

About China Commercial Credit

China Commercial Credit (http://www.chinacommercialcredit.com), founded in 2008, provides business loans and loan guarantee services to more than 260 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 account for eight of ten jobs in China and comprise nearly 60 percent of the nation's GDP.

 

Utilizing proceeds of the recently completed secondary public offering, the company intends to commence its financial leasing business. It also recently launched a peer-to-peer online lending platform designed to pair SME borrowers with willing lenders.

 

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 listed under Asia Voice at http://asia-irpr.com/ and announced on Asia IR/PR's twitter account @Asia_IRPR - where readers may link directly to the post.

 

The company's 2014 first quarter report on Form 10-Q will be available online at www.sec.gov or by visiting the investor relations section of the China Commercial Credit website at http://www.ir-site.com/china-commercial-credit/default.asp .

 

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 May 9, 2014 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

 

 

 

March 31,
2014

 

 

December 31,
2013

 

 

 

 

(Unaudited

)

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

Cash

 

$

5,197,772

 

 

$

9,405,865

 

Restricted cash

 

 

7,202,559

 

 

 

10,784,960

 

Loans receivable, net of allowance for loan losses $1,948,400 and $1,375,948 for March 31, 2014 and December 31, 2013, respectively

 

 

87,350,379

 

 

 

88,827,465

 

Due from non-controlling shareholder

 

 

1,143,886

 

 

 

-

 

Interest receivable

 

 

1,706,950

 

 

 

1,124,734

 

Tax receivable, net

 

 

1,072,339

 

 

 

820,526

 

Property and equipment, net

 

 

224,941

 

 

 

254,795

 

Guarantee paid on behalf of guarantee service customers

 

 

5,447,488

 

 

 

1,082,486

 

Other assets

 

 

763,801

 

 

 

702,617

 

Total Assets

 

$

110,110,115

 

 

$

113,003,448

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Short-term bank loans

 

$

16,225,337

 

 

$

16,360,721

 

Deposits payable

 

 

6,893,294

 

 

 

9,659,362

 

Unearned income from financial guarantee services

 

 

208,400

 

 

 

482,029

 

Accrual for financial guarantee services

 

 

891,434

 

 

 

588,740

 

Other current liabilities

 

 

205,512

 

 

 

629,073

 

Deferred tax liability

 

 

330,856

 

 

 

333,617

 

Total Liabilities

 

 

24,754,833

 

 

 

28,053,542

 

 

 

 

 

 

 

 

 

 

Shareholders' Equity

 

 

 

 

 

 

 

 

Series A Preferred Stock (par value $0.001 per share, 1,000,000 shares authorized at March 31, 2014 and December 31, 2013, respectively; nil and nil shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively)

 

$

-

 

 

$

-

 

Series B Preferred Stock (par value $0.001 per share, 5,000,000 shares authorized at March 31, 2014 and December 31, 2013, respectively; nil and nil shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively)

 

 

-

 

 

 

-

 

Common stock (par value $0.001 per share, 100,000,000 shares authorized; 10,446,426 and 10,430,657 shares issued and outstanding at March 31, 2014 and December 31, 2013, respectively)

 

 

10,446

 

 

 

10,431

 

Subscription receivable

 

 

(1,062

)

 

 

(1,062

)

Additional paid-in capital

 

 

52,823,462

 

 

 

52,704,107

 

Statutory reserve

 

 

5,628,451

 

 

 

5,442,150

 

Retained earnings

 

 

21,208,021

 

 

 

20,300,689

 

Accumulated other comprehensive income

 

 

5,677,523

 

 

 

6,493,591

 

Total Shareholders' Equity

 

 

85,355,282

 

 

 

84,949,906

 

Total Liabilities and Shareholders' Equity

 

$

110,110,115

 

 

$

113,003,448

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CHINA COMMERCIAL CREDIT, INC

 

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

 

 

 

 

 

For the Three Months Ended
March 31,

 

 

 

2014
(Unaudited)

 

 

2013
(Unaudited)

 

Interest income

 

 

 

 

 

 

 

 

Interests and fees on loans

 

$

2,856,474

 

 

$

2,912,078

 

Interests on deposits with banks

 

 

42,448

 

 

 

97,167

 

Total interest and fees income

 

 

2,898,922

 

 

 

3,009,245

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

 

Interest expense on short-term bank loans

 

 

(245,190

)

 

 

(306,155

)

Net interest income

 

 

2,653,732

 

 

 

2,703,090

 

 

 

 

 

 

 

 

 

 

Provision for loan losses

 

 

(588,180

)

 

 

(488,216

)

Net interest income after provision for loan losses

 

 

2,065,552

 

 

 

2,214,874

 

 

 

 

 

 

 

 

 

 

Commissions and fees on financial guarantee services

 

 

298,310

 

 

 

411,209

 

Under/(over) provision on financial guarantee services

 

 

(309,853

)

 

 

44,170

 

Commission (loss)/income and fees on guarantee services, net

 

 

(11,543

)

 

 

455,379

 

 

 

 

 

 

 

 

 

 

Net Revenue

 

 

2,054,009

 

 

 

2,670,253

 

 

 

 

 

 

 

 

 

 

Non-interest income

 

 

 

 

 

 

 

 

Government incentive

 

 

-

 

 

 

25,775

 

Other non-interest income

 

 

120,960

 

 

 

-

 

Total non-interest income

 

 

120,960

 

 

 

25,775

 

 

 

 

 

 

 

 

 

 

Non-interest expense

 

 

 

 

 

 

 

 

Salaries and employee surcharge

 

 

(186,135

)

 

 

(197,944

)

Rental expenses

 

 

(65,750

)

 

 

(64,037

)

Business taxes and surcharge

 

 

(112,612

)

 

 

(114,447

)

Other operating expenses

 

 

(532,114

)

 

 

(450,864

)

Total non-interest expense

 

 

(896,611

)

 

 

(827,292

)

 

 

 

 

 

 

 

 

 

Income Before Taxes

 

 

1,278,358

 

 

 

1,868,736

 

Income tax expense

 

 

(184,725

)

 

 

(298,868

)

Net Income

 

 

1,093,633

 

 

 

1,569,868

 

 

 

 

 

 

 

 

 

 

Earnings per Share- Basic and Diluted

 

$

0.105

 

 

$

0.174

 

 

 

 

 

 

 

 

 

 

Weighted Average Shares Outstanding-Basic and Diluted

 

 

10,434,862

 

 

 

9,000,000

 

 

 

 

 

 

 

 

 

 

Net Income

 

 

1,093,633

 

 

 

1,569,868

 

Other comprehensive income

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(807,627

)

 

 

371,361

 

Comprehensive Income

 

$

286,006

 

 

$

1,941,229

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contacts:

Investors
Jimmy Caplan
Asia IR/PR
512-329-9505
jimmy@asia-irpr.com

Media
Rick Eisenberg
Asia IR/PR
212-496-6828
rick@asia-irpr.com

 

 

SOURCE: China Commercial Credit, Inc.