Takung Art Reports Financial Results for the First Quarter of 2017...

HONG KONG, CHINA / May 15, 2017 / Takung Art Co., Ltd. (NYSE: TKAT) (“Takung” or the “Company”), an online trading platform which facilitates art collectors and art-interested investors to gain and trade shared ownerships in Asian fine arts, today announced its unaudited financial results for the first quarter ended March 31, 2017. First Quarter 2017 Highlights Revenue increased 12.7% YoY to $4.3 million from $3.8 million. Gross profit increased by 13.7% YoY to $4.0 million from $3.5 million. Gross margin increased 77 basis points YoY to 93.9% compared to 93.1%. Net income decreased YoY to $0.9 million from $1.1 million largely due to higher G&A expenses related to business development activity. Net cash provided by operating activities was $2.1 million, a 69.4% YoY increase from $1.3 million. Mr. Di Xiao, Chairman and CEO of Takung, commented, “We are pleased to report another quarter of growth during one of our seasonally slower periods due to the Chinese New Year holiday, highlighted by increases in revenue and gross profit over the prior year first quarter period. Our gross profit margin also increased slightly to 94% of sales which is a testament to the strength of our business model. Our net income was lower largely due to infrastructure and R&D investments to support Takung’s long term growth and development. We are proud that our business consistently generates net cash, including $2.1 million in the first quarter, which represents our third consecutive quarter of net cash generation. “We have been focused on several important initiatives in recent months to further enhance our trading platform and brand visibility. First, by further developing Takung’s brand awareness, we believe more artists will be inclined to list artworks of increased value on our platform and generate greater listing fees for Takung in the future. We are optimistic that our recent transition to the New York Stock Exchange will boost our profile and help to attract more valuable artwork, antiques, gemstones and jewelry for listing on our platform. In the first quarter, we made progress increasing the value of new listings. While the total number of new listings was down by 25% compared to the fourth quarter of 2016, the average new listing value increased to approximately $352,000 per listing in the first quarter of 2017 from approximately $189,000 per listing for all of 2016. “Second, we have taken meaningful steps to further enhance the trading liquidity of our platform. As a result, transactions totaled $4.7 billion in the first quarter of 2017, a 483% increase from $813 million in the first quarter of 2016. This growth is largely due to the special commission arrangements we now offer to high volume traders. This includes capping commission fees paid by large traders once certain quotas have been met. Platform liquidity not only encourages investors to buy units since they know a market exists to sell those units, but, increased liquidity in the first quarter drove commission fee revenue to its highest level since the new commission structure was introduced in early 2016. In the future, we intend to offer additional marketing programs to our high volume traders which can help generate additional liquidity and increased revenue for Takung. “To support and expand Takung’s growth, our investment in R&D for the first quarter of 2017 increased over the first quarter of 2016. We are working on a number of exciting new R&D initiatives that can help drive sales and profits for our business in the years ahead, including Takung Online,...