Fanhua Rises 5% on Beating Guidance
The stock in Fanhua Inc., (Nasdaq: FANH) gained nearly 5% to $18.29 per American depositary share by midday Wednesday after announcing in its latest financial report that it expects to achieve quarter-over-quarter growth in the second quarter and beat its operating income guidance.
"Based on our preliminary assessment, we remain optimistic that we will be able to outpace industry growth and achieve positive quarter-over-quarter growth in the second quarter of 2020, with APE to be no less than RMB350 million and operating income no less than RMB70 million," Chunlin Wang, the chairman, and chief executive officer of Fanhua, said in a statement Tuesday after the markets closed.
However, it was a challenging first quarter for the financial services provider. The Guangzhou-based company said in the three months through March that its revenue plummeted 26% to $102.05 million. Net income slipped by more than triple to $6.05 million, or 12 cents per share compared with $22.04 million in the same period in 2019. For its operating income, Fanhua has said it expected it to be no less than 50.0 million yuan in the quarter.
"Affected by the pandemic, a large number of enterprises at home and abroad have suffered serious losses, with many struggling to survive. Against this market backdrop, we beat expectation with operating income of RMB60.0 million and recorded net operating cash flow of RMB134.6 million during the quarter," Wang said today.
Its stock has also been impacted this year; shares are down nearly 30% year-to-date.
Through its online platforms and offline sales and service network, Fanhua provides financial products and services such as property and casualty insurance products. As of March, the company had 650,065 sales agents and 1,668 professional claims adjusters, down from the 860,550 and 1,213, respectively. in the same period of the proceeding year
Looking ahead, investors and management are hoping to ride the recent optimism.
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