Tianhong cuts its losses

Tianhong Asset Management's annual losses fell more than 84 percent from 2012 to reach 2.44 million yuan ($393,548) last year, mostly because of revenues created by online fund Yu'ebao, the Beijing News reported Wednesday.

China's largest fund company in terms of the number of clients, Tianhong made 310 million yuan revenue in 2013, up 173 percent from 2012, according to a private placement plan issued by Zhejiang Materials Development Co on Tuesday, in which Tianhong is one of the investors.

A total 200 million yuan of Tianhong's 2013 revenue came from Yu'ebao, co-launched by the fund company and e-commerce giant Alibaba Group in June last year, the Beijing News reported.

Tianhong released a statement Tuesday saying that the figures provided by Zhejiang Materials were unaudited, and the company will release its audited annual financial statement later.

Users of Yu'ebao profit higher than commercial banks' deposit interest rates by transferring their money from online payment service Alipay and bank cards to Yu'ebao, which invests in a money market fund product provided by Tianhong.

Tianhong profited 8.53 million yuan in the first half of 2013 before Yu'ebao was launched, but made a loss in the next six months, Beijing News reported.

Wang Qunhang, director of the fund assessment center of Beijing-based Jian Financial Information, told the paper that Tianhong might have invested heavily last year to improve its information technology maintenance facilities to meet the needs of rapidly increasing numbers of Yu'ebao users. .