Jeff Wang - CFO David Tan - VP Finance and Strategy Ying Zhu - IR Zhiwei Zhao - CEO

Thank you for joining us today and welcome to China Finance Online's 2014 fourth quarter financial results conference call and webcast. Before we begin, I'll remind all listeners that throughout this call we may make statements that may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

The words believe, estimate, plan, expect, anticipate, project, target, optimistic, intend, aim, future, will or similar expressions are intended to identify forward-looking statements. All statements other than historical facts may be deemed forward-looking statements.

These forward-looking statements are based on current expectations or beliefs including but not limited to statements concerning China Finance Online’s operation, financial performance and condition. China Finance Online 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 those discussed in China Finance Online’s reports filed with the Securities Exchange Commission from time to time.

China Finance Online specifically disclaims any obligation to update the forward-looking information in the future. I will first read prepared remarks on behalf of Mr.

Zhiwei Zhao Chairman and CEO of China Finance Online. In 2014, we continued to strengthen our core competence by optimizing our operations and developing new products and services.

We launched our new and applauded Investment Masters iTougu application facilitating communication between securities investment advisors and their respective clients and followers in real-time and for 24 hours a day and enabling a vast number of Chinese individual investors to obtain previously private advice from thousands of securities investment advisors. We continued to expand our partnerships with more securities firms on our web-based trading platform, Securities Master Zhengquantong and continued to diversify our product offerings on our wealth management platform, Yinglibao.

With the policy of promoting the healthy development of Internet finance and improving financial supervision and coordination mechanism, in 2015 we will continue to remain confident in the long-term prospect of becoming a one-stop financial products and service provider in China, and making investment easier for our clients and users. I will now turn the call over to our Director and CFO, Mr.

Jeff Wang for an overview of our financials. Mr.

Wang, please go ahead.

Thank you, Ying. Let's briefly review our fourth quarter and full year 2014 financial results.

All financial numbers presented today are in U.S. dollars and rounded to one decimal point for approximation.

Our net revenues for the fourth quarter were $18.8 million, a decrease of 29% from $26.5 million for the corresponding period in 2013. Our net revenues are categorized under: (a) revenues from financial services, which include brokerage-related and precious metals trading services, (b) revenues from financial information and advisory business, which include subscription services from individual and institutional customer, and (c) revenues from advertising services.

During the fourth quarter of 2014, revenues from financial services, financial information and advisory business and advertising services contributed 71%, 13% and 15% of our net revenues respectively compared with 77%, 11%, and 9% respectively for the corresponding period in 2013. Revenues from financial services were $13.3 million, a decrease of 35% from $20.4 million in the fourth quarter of 2013 and a decrease of 22% from $17.1 million in the third quarter of 2014.

Revenues from financial information and advisory business were $2.5 million, a decrease of 16% from $2.9 million in the fourth quarter of 2013 and an increase of 8% from $2.3 million in the third quarter of 2014. Revenues from advertising were $2.9 million, an increase of 17% from $2.5 million in the fourth quarter of 2013 and an increase of 63% from $1.8 million in the third quarter of 2014.

Our gross profit was $14.4 million, a decrease of 35% from $22 million in the fourth quarter of 2013 and a decrease of 10% from $16 million in the third quarter of 2014. Gross margin in the fourth quarter for 2014 was 77% compared with 83% in the fourth quarter of 2013 and 76% in the third quarter for 2014.

General and administrative expenses were $3.3 million, a decrease of 36% from $5.3 million in the fourth quarter of 2013, primarily due to a decrease of share-based compensation expenses, and a decrease of 48% from $6.4 million in the third quarter of 2014. Sales and marketing expenses were $9.7 million, a decrease of 38% from $15.5 million in the fourth quarter of 2013, primarily due to lower marketing expenses and the sales commissions, and an increase of 6% from $9.1 million in the third quarter for 2014.

Research and development expenses were $3.4 million, an increase of 52% from $2.2 million in the fourth quarter of 2013 and an increase of 29% from $2.6 million in the third quarter for 2014. We expect to continue to invest in its data, product and technical capabilities to achieve our long term strategic plan.

Loss from operations was $1.8 million, compared with $1 million in the fourth quarter of 2013 and $1.9 million from third quarter of 2014. Net income attributable to China Finance Online was $3.6 million, an increase of 95% from $1.9 million in the fourth quarter of 2013, compared to a net loss of $2.4 million in the third quarter of 2014.

Fully diluted earnings per ADS was $0.14 for the fourth quarter of 2014, compared with $0.08 for the fourth quarter of 2013. Basic and diluted weighted average number of ADS for the fourth quarter of 2014 were 21.9 million and 25 million, respectively.

Each ADS represents five ordinary shares of the Company. On an annual basis total revenues were $83.7 million, an increase of 59% from $52.7 million for 2013.

Gross profit was $63.3 million, an increase of 50% from $42.2 million for 2013. Gross margin in 2014 was 76% compared with 80% for 2013.

Net loss attributable to China Finance Online was $7.2 million, compared with $8.6 million for 2013. Now let me walk you through our financial position.

Total shareholders' equity of China Finance Online was $64.6 million as of December 31, 2014. As of December 31, 2014, total cash and cash equivalents were $32.5 million, compared with $25.3 million as of September 30, 2014, and $36.4 million as of December 31, 2013.

With that operator we’re ready to begin the Q&A session.

Thank you to all for participating in this earnings call and Web cast. We look forward to speaking with you again.