Mr. Wang concluded, "We believe that we are on the right track and remain confident that the changes we are implementing will bring the Company back to high volume growth and strong profitability."
Financial Results for the First Quarter of 2013
Total net revenues were RMB401.3 million (US$64.6 million) for the first quarter of 2013, representing an increase of 18.9% from RMB337.3 million for the corresponding period in 2012, primarily due to increases in net revenues from our P&C insurance and claims adjusting business segments. The increase in the P&C business segment was mainly driven by increases in commission rates received from insurance underwriters and volume growth. The growth of the claims adjusting segment was mainly attributable to growth in the auto insurance-related claims adjusting business. Net revenues from commissions and fees derived from the P&C insurance, life insurance and claims adjusting businesses for the first quarter of 2013 contributed 70.5%, 16.5%, and 13.0% of the Company's total net revenues, respectively, compared to 67.6%, 19.4% and 13.0%, respectively, for the corresponding period in 2012.
Total operating costs and expenses were RMB399.7 million (US$64.3 million) for the first quarter of 2013, representing an increase of 33.8% from RMB298.7 million for the corresponding period in 2012.Commissions and fees expenses were RMB297.2 million (US$47.8 million) for the first quarter of 2013, representing an increase of 39.2% from RMB213.5 million for the corresponding period in 2012. The increase was primarily due to further increases in commissions paid to our P&C sales agents caused by (i) higher commission rates in the auto insurance market as a result of increased competition among P&C insurance companies, and (ii) increased per policy acquisition costs largely because of expenses incurred in competing with telemarketing channels of certain P&C insurance companies. Selling expenses were RMB20.1 million (US$3.2 million) for the first quarter of 2013, representing an increase of 7.6% from RMB18.7 million for the corresponding period in 2012, primarily due to growth in sales volume. General and administrative expenses were RMB82.4 million (US$13.3 million) for the first quarter of 2013, representing an increase of 23.8% from RMB66.5 million for the corresponding period in 2012. The increase was primarily due to the following factors: (1) an increase of 211.9% in share-based compensation expenses, from RMB4.1 million for the first quarter of 2012 to RMB12.8 million (US$2.1 million) for the first quarter of 2013. Share-based compensation expenses for the first quarter of 2013 were mainly associated with the grant of certain stock options in March, 2012;
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