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The last two NASDAQ-listed Chinese Internet-related companies to release their financial results for 2004 did so in the past two days, but the market reaction was fairly indifferent or even negative.
Beijing-based wireless Internet operator Tom Online said yesterday its revenues in the fourth quarter grew by 10 percent quarter-on-quarter to US$34.5 million.
Net profits reached US$8.2 million with a 13 percent growth over the previous quarter.
Its full year revenues in 2004 more than doubled to US$112.88 million and profits stood at US$33.90 million, over 70 percent higher than those in 2003.
Its diluted earnings per American depository share (ADS) were 17 US cents in the fourth quarter, one US cent higher than the third quarter.
Tom Online, listed on the Growth Enterprise Market in Hong Kong and the NASDAQ in New York, saw its stocks in Hong Kong close flatly at HK$1.2 (15 US cents) yesterday, while its ADS fell by almost a half percentage point at US$12.45.
"The company has demonstrated that wireless Internet services are a sustained and viable business despite facing unexpected regulatory challenges during the year," said Wang Leilei, Tom Online CEO, in a statement.
The Chinese Government and operators started regulating the mobile messaging business in mid-2003, which has led to a sharp decline in the short messaging service (SMS) business and the punishment of almost every wireless Internet operator listed on the NASDAQ.
Wang said yesterday that different from many other competitors, Tom Online has successfully diversified the company's revenues and moved to higher-end solutions like 2.5G services such as multimedia messaging service (MMS) and wireless application protocol and interactive voice response (IVR).
Tom Online earned more than 90 percent of its revenues in the fourth quarter from wireless services, with 2.5G and IVR services contributing 65 percent of its total wireless revenues, while the proportion accounted for by its SMS business fell from 49 percent in the third quarter to 35 percent in the past quarter.
Another NASDAQ-listed Internet company 51job Inc, which is currently plagued by lawsuits, also announced its financial results late Monday for the past quarter and 2004.
Its total revenues in the fourth quarter stood at US$14.5 million, in the range of its revised guidance of US$14.13 million to US$14.6 million.
The Shanghai-based online human resources (HR) service provider said in January that its revenues in the second half of December saw a sharp decline due HR managers tapping out their budgets and therefore revised its guidance for the quarter from a previous estimate of US$16.9 million.
The revision aroused a fierce reaction from investors, and added to its woes are the approximately 10 US law firms preparing to sue the firm.
(China Daily March 16, 2005)
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