Ladies and gentlemen, thank you for standing by. Welcome to the ChinaNet Online Holdings Third Quarter 2013 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session with instructions provided. (Operator Instructions) At this time, I would now like to turn the conference over to Mr. Johnny Lai from MZ Group. Please go ahead.

Thanks, Luke and thank you everyone and welcome to today’s conference call for ChinaNet Online Holdings Inc. This call will cover ChinaNet’s financial and operating results for the third quarter of 2013. The earnings press release accompanying this conference call went to the wire yesterday, November19. On our call today is ChinaNet’s Chairman and CEO, Mr. Handong Cheng; Chief Operating Officer, Mr. George Chu; and the company’s Finance Director, Mr. (Jack Li). Mr. Cheng and Mr. Li will make prepared remarks and all three gentlemen will be available for the question-and-answer session. Before we get started, I will read a disclaimer about forward-looking statements. This conference call may contain, in addition to historical information, forward-looking statements within the meaning of the federal securities laws regarding ChinaNet Online Holdings Inc. Forward-looking statements include statements about plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are different than historical facts. These forward-looking statements are based on current management expectations and are subject to risks and uncertainties that may result in expectations not being realized and may cause actual outcomes to differ materially from expectations reflected in these forward-looking statements. Potential risks and uncertainties include change in demand for the company’s services, the impact of competition and government regulations, and other risks contained in the statements filed periodically with the SEC. All such forward-looking statements made on behalf of the company in writing are spoken, are qualified by these cautionary statements. Such forward-looking statements are subject to risks and uncertainties and we caution you not to place undue reliance on these. At this time, I’d like to turn the call over to Mr. Cheng.

Thanks John and thank you everyone for joining us today. We continue to position our company to become stronger and more resilient. And investments we have made in new products, technology and personnel, we have further increased our value add to clients and expand our revenues to more higher margin services. We are encouraged by plans to political leaders in China are committing. So in order to create the domestic economy, we firmly believe consumers and small businesses were one of the main drivers of the emerging middle-class in China for the next decades. As such, our focus on helping entrepreneurs, franchise owners and businesses is directly online with the party’s economic and political interest. Many of the initiatives we have embarked on in the past year are focused on establishing closer ties with local businesses and category leaders, while our competitors that’s primarily a large corporation and multinational firms, we have chosen to target the underserved small and medium size enterprise market. We believe our strong relationships with these key decision makers will position our company well to capture our share of the advanced advertising, marketing and branding budgets. In closing, I would like to thank our employees for their commitment to ChinaNet and our shareholders through their hard work that allow ChinaNet to generate positive cash flows and higher margins for the first nine months of 2013. We have many opportunities ahead of us and we continue to be diligent with investors’ capital. Thank you for your interest in ChinaNet and Jack Li, our Financial Director will now discuss our third quarter results.

Thank you, Mr. Cheng and good morning to investors in the U.S. and good evening to those in Asia. I am Jack Li, the Finance Director of the group. As Mr. Cheng mentioned, I will begin with discussion of our third quarter results before I highlight a few recent business developments. Please refer to the earnings press release and 10-Q we filed on Tuesday, November 19. For more details regarding our results and operations, I will close with our booklets, our outlook and guidance. Our third quarter 2013 results were a continuation of the trend we have seen over the first nine months of the year. Total revenues were down 27% to $7.5 million, a slight improvement from the 32% year-over-year revenue decline in the second quarter. However, gross profits were flat year-over-year at $4.1 million. Our biggest and most profitable business, internet advertising grew revenue 7% compared to the third quarter of 2012, an improvement from flat growth in the prior quarter. We saw the flat growth in the food and care – food and beverage sectors and women accessories industries. Compared to the third quarter last year, customer number in the segment increased by approximately 27%. Revenue from TV advertising was $0.6 million, down 83% compared to $3.2 million in the same period a year ago. The year-over-year decline in TV advertising revenues in the third quarter reflects our strategic decision to reduce the amount of TV advertisements we purchased on behalf of clients and elevated the amount of TV ads we purchased in the third quarter of 2012 to promote our TV reality show. Our second consecutive quarter, we were able to increase our margin in this business by being more selective and optimistic with our TV advertisement on behalf of our clients. Revenue from brand management…

Thank you. Ladies and gentlemen, we will now conduct the question-and-answer session. (Operator Instructions) We do have a question from the line of Gary Kirsten a private investor. Please go ahead.

After the first quarter conference call you discussed on the program for buying back stock, my question is has it began and if not why not?

I am – it’s George of ChinaNet. Gary I didn’t quite catch the last line you just said.

It’s regarding the…

Buyback program, yes.

The buyback, yes, has begun and if it has not begun, why hasn’t it begun?

It’s not complete yet and we have to spend about $250,000 to $300,000 during the buyback already, but since the market right now we don’t see like huge momentum. Every time, we went in there, the prices just went up really dramatically. That’s not the in fact our input that we want to see on our stocks. And in addition, we want to attract more interest on the individual investor like you and others to pay much more attention each on that. So to answer your question, yes, the program is still continuing, but it’s not going like not one-time 1 million volumes.

I also have a question regarding contingency plans for the potential delisting of the stock because of this trading under $1?

Okay. No, actually, we have a full completed (indiscernible) to fulfill the request of NASDAQ continuous leasing rules. What we did, because basically the cap size of the company is not huge enough and to be on the radar to many investor on the global market. So the first step that we did is that we move our stock from the global markets to small cap that’s the nature and the cap size of the company. And then by the end of six months and then we will if the price is now back to $1, we will do a stock consolidation.

Regarding the earnings update, we had a great quarter and it appears that your nine-month earnings now has matched your guidance for the full year. Is it possible for raising guidance in terms of earnings in net income?

Not really, like Jack said, the earning has been lower down on $36 million to $30 million, while the profit still remained the same. The one key reason, because the TV segmentations has dropped really dramatically because on the price, but we do remain optimistic for the TV sectors for next year, because what we just experienced we just had the 10 seconds commercial bidding of CCTV won which can be considered as indication of all the TV advertisement in the sectors. On the price, the price is not as high as last year, which is very good indications. So that is why we do think by the next year the price averages much more acceptable to the clients.

But net income has matched - has the net income matched your guidance for the full year?

Yes. The net income has no change or our internet business is still growing strong and even though per customer spending has been lower, our number of client has grown 27% year-over-year and we have reached the highest number of clients in history of ChinaNet. And we do see that momentum continues, but due to the overall economy situations, the customer spending has been lower, but we don’t see that could be a problem once the company returns. So right now, we just want to increase our market penetration and really fulfill the sectors.

You are essentially an internet marketing company and what are you doing to better market this company to invest in public?

Well, to be honest, that is something we are still trying or we are struggling to figure out. We have been doing a number of active things, finding the IR firms, doing number of road shows, but we don’t see that much attention. I mean, we welcome all the advice or comments that you can give to us, because our company is very unique and the business we are doing is no one is paying much attention, but if you see our profit rates, our profit rates is still very exciting. And of course, the management will ascribe to maintain the profit rate and also increase the profit rate. So that’s why like Jack said, we have been continuous, introduce the new products on serving the internet marketing and advertising segmentations and also our joint product development with Baidu and 360.

And my last question is can you just provide some color on the software technology purchase you have listed in your cash flow statement?

Well, that part is a very exciting part. It’s something comparable in the states like salesforce.com, but salesforce.com, it’s completely very comprehensive products. Its way complicated – it’s maybe a little bit too complicated for the existing small business sectors in China, but the product we are launching is exactly similar to salesforce.com and we are in combination with the mobile sectors. So what we have been doing these for over 1.5 years and until recently we have really – we start to launch the new products and we in our 10-year (thanks to TV) conferences to our customers and we have received a very good feedback. So that is why we will be doing very aggressive marketing next year once we complete the full suite of technology acquisitions. And this technology, including the Mobile Post point of sales, the mobile custom like not need the customer membership management system, the customer information platform etcetera. And we are launching these on a very low price strategy on account of the volume that will bring to us. As we are now focusing on like top 100 enterprises in the states, I mean, in China, but more than that, we are focusing on these 30,000 customer base that we have.

Thank you very much.

Yes.

(Operator Instructions) And Mr. Li, there are no further questions at this time. Please continue.

Great. Just wanted to say thank you everyone for participating on today’s call and we apologize for the delay at the beginning, but if you have any questions, please forward them to either myself or to Ted Haberfield a MZ Group and you can find the contact information in the press release. Thanks again and have a good day.

And thank you. Ladies and gentlemen, this does conclude the conference call for today. Again, we thank you for your participation and you may now disconnect your lines.