Message #3 From:
NewsBot Date: September 14, 2007 08:26:31 PM
China Finance Online to Acquire Hong Kong Securities Brokerage Firm
China Finance Online Co., Limited
(Nasdaq: JRJC) ('CFO'), a leading Chinese online financial information, data,
and analytics provider, today announced that it has entered into definitive
agreements with the existing shareholders of Daily Growth Investment Company
Limited ('Daily Growth Investment'), on September 7th, 2007 to acquire 85%
equity interest in Daily Growth Investment, a licensed securities brokerage
firm incorporated in Hong Kong with a history of over 35 years.
Under the definitive agreements, CFO will pay approximately US$3 million
in exchange for 85% of the equity of Daily Growth Investment, and the exact
payment will be determined on the basis of the net asset value as at the date
of completion. CFO has the right to acquire the remaining 15% of equity of
Daily Growth Investment within 5 years from the completion date.
The completion of this transaction is conditional upon (1) Daily Growth
Investment remaining a licensed corporation to engage in securities brokerage
activities up to the completion date; (2) Securities and Futures Commission
('SFC') of Hong Kong approving CFO to become a substantial shareholder of
Daily Growth Investment; and (3) other customary closing conditions. In
addition, if the aggregate shares acquired by CFO upon the completion date are
less than 75% of the entire issued share capital of Daily Growth Investment,
CFO may unilaterally terminate the transaction. It is expected that the
transaction will be completed by the end of 2007.
'Under the pilot program announced in August 2007, the Chinese government
will allow individual investors to directly trade Hong Kong-listed securities
by opening accounts at Bank of China's branch in Tianjin, a northern city near
Beijing, and the bank's Hong Kong brokerage arm, BOCI Securities Ltd. We
believe that this trial investment program may signal a new stage of financial
liberalizing for local retail investors by allowing them to access Hong Kong-
listed securities as well as access to other international stock markets in
the long term. By acquiring and fully integrating Daily Growth Investment
with our existing resources, particularly the vast investor base of our
premium websites jrj.com and stockstar.com, our goal in the long run is to
provide a diversified portfolio of brokerage and informational services to our
users and improve the monetization rate of our website user base by
capitalizing our users' growing interest in investing in Hong Kong-listed
securities, thereby transforming our current business model and significantly
increase our stockholders values,' Mr. Zhiwei Zhao, CEO of China Finance
Online, said. 'With over 35 years of history and highly respected reputation,
Daily Growth Investment can add tremendous value to us as we continue to
realize our full potential to become a leading financial services provider in
greater China.'
About China Finance Online Co. Limited: JRJC Investors Forum
China Finance Online Co. Limited specializes in providing online financial
and listed company data, information and analytics in China. Through its
websites, http://www.jrj.com and http://www.stockstar.com , the company
provides individual users with subscription-based service packages that
integrate financial and listed company data and information from multiple
sources with features and functions such as data and information search,
retrieval, delivery, storage and analysis. These features and functions are
delivered through proprietary software available by download, through internet
or through mobile handsets. Through its subsidiary, Shenzhen Genius
Information Technology Co. Ltd, the Company provides financial information
database and analytics to institutional customers including domestic
securities and investment firms.
Safe Harbor Statements
This announcement contains forward-looking statements. These statements
are made under the 'safe harbor' provisions of the U.S. Private Securities
Litigation Reform Act of 1995.
Statements that are not historical facts, including statements about our
beliefs and expectations concerning (i) the ability of the acquisition of
Daily Growth Investment to strengthen our position in the industry, and
provide opportunities to expand our subscriber base and develop database
products; and (ii) our expectation about the Chinese government further
opening up individual investors' access to international stock markets, are
forward-looking statements. These statements are based on current plans,
estimates and projections, and therefore you should not place undue reliance
on them. Forward-looking statements involve inherent risks and uncertainties.
We caution you that a number of important factors could cause actual results
to differ materially from those contained in such forward-looking statements
including failure of our products to gain further recognition in the
marketplace, increased competition, our ability to consummate the acquisition
transactions, the conditions to the completion of the acquisition transactions
may not be satisfied or other regulatory approvals required for the
transactions may not be obtained according to the terms expected or the
anticipated schedule, the possibility that the parties may be unable to
achieve all of the benefits of the business combination within the expected
timeframe or at all or to successfully integrate Daily Growth Investment
operations into ours, customer loss and business disruption (including
difficulties in maintaining relationships with employees, customers, partners
or suppliers) may be greater than expected following the transactions and the
inability to retain certain key employees at Daily Growth Investment. Other
potential risks and uncertainties include, but are not limited to, China
Finance Online's historical and possible future losses, limited operating
history, uncertain regulatory landscape in the People's Republic of China,
fluctuations in quarterly operating results, failure to successfully compete
against new and existing competitors, and China Finance Online's reliance on
relationships with Chinese stock exchanges and raw data providers. Further
information regarding these and other risks is included in China Finance
Online's annual report on Form 20-F for the year ended December 31, 2006, and
other filings with the Securities and Exchange Commission. China Finance
Online does not undertake any obligation to update any forward-looking
statement, except as required under applicable law.
