SHANGHAI, CHINA -- (Marketwired) -- 06/11/13 -- Dragon Capital Group Corp. (OTC Pink: DRGV), a leading holding company of emerging high-tech companies in China, announced today our financial results for the first quarter of 2013 ended March 31, 2013.
For the first quarter of 2013, total revenues were $4.3 million compared to revenues of $5.2 million recorded in the first quarter of 2012. The decline in revenue was mainly attributable to a shift in our business mix away from sales of low margin office equipment at our Shanghai Zhaoli Technology Development Co., Ltd. ("Zhaoli") and toward our higher margin software subsidiaries. This shift in our business mix resulted in gross margins improving to 9%, an increase of 114% compared to gross margins of 4.2% in the first quarter of 2012. Net income attributable to Dragon Capital Group in the first quarter of 2013 increased more than tenfold to $94,000 compared to net income of $9,200 recorded in the first quarter of 2012. Earnings per basic and diluted share rounded to$0.00 in both periods on 492.7 million weighted average shares.
Management continues to see improving performance trends for the remainder of 2013 through a rebound in sales at Zhaoli as uncertainties associated with China's governmental succession which took place in November of 2012 begins to abate as well as new business coming from our software related subsidiaries. Our 2013 year will include the full marketing launch of the Gas GIS system from our Shanghai Yazheng Information Technology Company ("Yazheng") subsidiary as well as the first full year of operations from our Shanghai Zhiye Software Development Company ("Zhiye") subsidiary which the Company acquired in December of 2012. Zhiye offers mobile solutions for Android, Windows Mobile and Apple's iOS. Zhiye has been working to develop a mobile programming solutions platform to enable application developers in China to easily and efficiently develop and modify applications to work across the most popular mobile operating systems in China.
At March 31, 2013, total assets were $9.3 million and shareholder equity was $7.2 million with 492,735,578 common shares outstanding. At December 31, 2012, total assets were $9.1 million and shareholder equity was $7.0 million with 492,735,578 common shares outstanding. Working capital was $7.5 million at March 31, 2013 compared to $7.5 million at December 31, 2012.
Commenting on our results for the first quarter of 2013, Mr. Lawrence Wang, Chairman and CEO of Dragon Capital Group, "We are very pleased with our overall performance for the first quarter of 2013 as our efforts to increase margins and profitability have begun to surface. In 2012 we returned to profitability and with our new acquisitions and pending software launches we see further gains in our performance in 2013 paving the way for a bright future ahead for our company. While sales declined sharply at Zhaoli, in the first quarter we anticipate a rebound in the coming quarters. With the addition of our new higher margin software subsidiaries we believe our performance in 2013 will build upon 2012 and set us up for consistent improvement in the coming years as we grow our company for the benefit of our stockholders."
About Dragon Capital Group Corporation
Dragon Capital Group Corp. (OTC Pink: DRGV) is doing business in China through its subsidiaries. Dragon was established to serve as a conduit between Chinese high-growth companies and Western investors. DRGV functions as an incubator of high-tech companies in China, offering support in the critical functions of general business consulting, formation of joint ventures, access to capital, merger & acquisition, business valuation, and revenue growth strategies. DRGV has developed a portfolio of high-tech companies operating in China. For more information about DRGV, please visit http://www.dragoncapital.us
Safe Harbor Statement
Certain statements set forth in this press release constitute "forward-looking statements." Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance or achievements, and may contain the word expressions of similar meaning. Such statements are not guarantees of future performance and are subject to risks and uncertainties that could cause the company's actual results and financial position to differ materially from those included within the forward-looking statements. Forward-looking statements involve risks and uncertainties, including those relating to the Company's ability to grow its business. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance.
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