GUANGZHOU, Feb. 25 /PRNewswire-Asia/ -- CNinsure Inc., (Nasdaq: CISG), (the "Company" or "CNinsure"), a leading independent insurance intermediary company operating in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2008.
Financial Highlights：
Highlights for Fourth Quarter 2008
-- Total net revenues: RMB281.4 million (US$41.2 million), representing an
increase of 77.3% from the corresponding period of 2007, which exceeded
the previous guidance of RMB235 million to RMB250 million.
-- Income from operations: RMB50.6 million (US$7.4 million), representing
an increase of 9.4% from the corresponding period of 2007.
-- Net income: RMB43.7 million (US$6.4 million), representing a decrease
of 18.7% from the corresponding period of 2007.
-- Basic and diluted net income per ADS: RMB0.959 (US$0.141) and RMB0.954
(US$0.140), respectively. Adjusted diluted net income per ADS excluding
one-time share-based compensation expense (non-GAAP) was RMB1.601
(US$0.235).
Highlights for Fiscal Year 2008
-- Total net revenues: RMB843.9 million (US$123.7 million), representing
an increase of 88.3% from 2007.
-- Income from operations: RMB210.7 million (US$30.9 million),
representing an increase of 52.8% from the corresponding period of
2007.
-- Net income: RMB191.6 million (US$28.1 million), representing an
increase of 25.0% from 2007.
-- Basic and diluted net income per ADS: RMB4.200 (US$0.616) and RMB4.176
(US$0.612), respectively. Adjusted diluted net income per ADS excluding
one-time share-based compensation expense (non-GAAP) was RMB4.822
(US$0.707).
Commenting on the fourth quarter and full year results, Yinan Hu, Chairman and CEO of CNinsure stated: "In the fourth quarter, we faced a more challenging macroeconomic environment as the Chinese economy increasingly slowed down significantly as a result of the ongoing global economic crisis. Against this backdrop, we still achieved higher-than-expected revenue growth, with net revenues of RMB282 million for the quarter, exceeding our previous guidance."
He continued, "2008 was a tough year. The overall domestic insurance industry was negatively impacted by several events, including the severe snowstorms and the earthquake in China early in the year, and the recent global financial crisis and the ensuing slowdown in the Chinese economy. In 2008, CNinsure's board of directors and management team took various measures such as conducting organizational restructuring, enhancing risk control and recruiting talents to cope with the short-term challenges and capitalize on new opportunities. I am very proud that as a result of the efforts by all our team members, 2008 marked another harvest year for CNinsure. We continued to grow fast, with 88.3% and 25.0% growth in annual net revenues and net income. We established or acquired 25 entities in 2008, expanding our distribution network to encompass 48 operating entities in 17 provinces, covering life insurance, P&C insurance and claim adjusting. We were also named 'Best Insurance Intermediary Service Provider of the Year' by Sohu Business China.
"As the global economic crisis deepens, more uncertainties are expected in the growth prospect of the Chinese economy in 2009. However, we believe CNinsure, as a retail distributor of insurance products and after-sales service provider, will not be as impacted by the macroeconomic environment as some other sectors since the insurance industry will still be a hotspot in China's economic development for the next decade and the insurance intermediary sector, in which CNinsure has gained a leading position, is a relatively more stable part of the whole industry value chain. We believe we have the right solutions and strategies to cope with the new situations and deliver another year of success in 2009," he concluded.
Financial Results for the Fourth Quarter Ended December 31, 2008
Total net revenues for the fourth quarter ended December 31, 2008 were RMB281.4 million (US$41.2 million), representing an increase of 77.3% from RMB158.7 million for the corresponding period of 2007. The increase was primarily driven by increase in commission rates for the life insurance business, the number of sales agents and productivity of existing sales agent, as well as contributions from the claims adjusting business, which was added in 2008, and other newly acquired entities.
Total operating costs and expenses were RMB230.9 million (US$33.8 million) for the fourth quarter of 2008, representing an increase of 105.2% from RMB112.5 million for the corresponding period of 2007.
Commissions and fees expenses were RMB145.9 million (US$21.4 million) for the fourth quarter of 2008, representing an increase of 75.3% from RMB83.2 million for the corresponding period of 2007. The increase was primarily due to sales growth and largely tracked the increase in net revenues from commissions and fees.
Selling expenses were RMB6.2 million (US$0.9 million) for the fourth quarter of 2008, representing an increase of 118.8% from RMB2.8 million for the corresponding period of 2007. The increase was primarily due to sales growth and the increase in expenses incurred by newly acquired entities.
General and administrative expenses were RMB78.8 million (US$11.5 million) for the fourth quarter of 2008, representing an increase of 198.0% from RMB26.4 million for the corresponding period of 2007. The increase was primarily due to increases in share-based compensation expenses, salaries for administrative staff as a result of increased headcount, ongoing legal and professional fees, and Sarbanes-Oxley Act (SOX) compliance-related expenses. The share-based compensation expenses recorded in the fourth quarter of 2008 mainly included a one-time charge of RMB29.6 million (US$4.3 million) incurred in connection with the surrender and cancellation of previously granted options to purchase an aggregate of 30,804,500 ordinary shares by various directors, officers and employees in December 2008 and RMB0.3 million (US$0.05 million) in connection with options to purchase an aggregate of 32,000,000 ordinary shares granted to certain directors, officers and employees in November 2008. In accordance with paragraph 57 of SFAS123R, a cancellation of an award that is not accompanied by the concurrent grant of (or offer to grant) a replacement award or other valuable consideration shall be accounted for as a repurchase for no consideration. Accordingly, any previously unrecognized compensation cost shall be recognized at the cancellation date. As of December 2008, there were outstanding options to purchase an aggregate of 39,492,631 ordinary shares.
As a result of the foregoing factors, income from operations was RMB50.6 million (US$7.4 million) for the fourth quarter of 2008, representing an increase of 9.4% from RMB46.2 million for the corresponding period of 2007. Operating margin was 18.0% for the fourth quarter of 2008 as compared with 29.1% for the corresponding period of 2007. Non-GAAP operating margin excluding one-time share-based compensation expense was 28.5% for the quarter of 2008.
Interest income for the fourth quarter of 2008 was RMB11.4 million (US$1.7 million), representing an increase of 4.5% from RMB10.9 million for the corresponding period of 2007, primarily attributable to the amount of cash generated from operations.
Income tax expense for the fourth quarter of 2008 was RMB17.6 million (US$2.6 million), representing an increase of 444.3% from RMB3.2 million for the corresponding period of 2007. The increase was primarily attributable to the expiration of income tax exemptions for some subsidiaries starting from January 1, 2008. Effective income tax rate was 28.3% for the fourth quarter of 2008 compared to 5.7% for the corresponding period of 2007. Apart from the foregoing factor, the increase in the effective income tax rate was due to the fact that share-based compensation expenses, legal and audit fees and other expenses incurred outside China were excluded from the tax-deductible items for PRC tax purposes.
Net income was RMB43.7 million (US$6.4 million) for the fourth quarter of 2008, representing a decrease of 18.7% from RMB53.8 million for the corresponding period of 2007.
Net margin was 15.6% for the fourth quarter of 2008 as compared with 33.9% for the corresponding period of 2007. Non-GAAP net margin excluding one-time share-based compensation expense was 26.1% for the fourth quarter of 2008.
Fully diluted net income per ADS was RMB0.954 (US$0.140) for the fourth quarter of 2008, as compared with RMB1.275 for the corresponding period of 2007. Adjusted diluted net income per ADS excluding one-time share-based compensation expense (non-GAAP) was RMB1.601 (US$0.235) for the fourth quarter of 2008.
As of December 31, 2008, the Company had RMB1,508.4 million (US$221.1 million) in cash and cash equivalents.
Financial Results for the Year Ended December 31, 2008
Total net revenues for fiscal year 2008 were RMB843.9 million (US$123.7 million), representing an 88.3% increase from RMB448.1 million for fiscal year 2007, primarily driven by the growth in the number of sales agents, an increase in commission rates and higher productivity of sales agents in the distribution of life insurance products as well as revenues contributed by the claims adjusting companies acquired in the first half of 2008.
For fiscal year 2008, total operating costs and expenses were RMB633.1 million (US$92.8 million), representing an increase of 104.1% from RMB310.2 million in fiscal year 2007.
Commissions and fees expenses for fiscal year 2008 were RMB436.6 million (US$64.0 million), representing an increase of 87.7% from RMB232.6 million in fiscal year 2007. The increase was primarily reflected sales growth and largely tracked the increase in net revenues from commissions and fees.
Selling expenses for fiscal year 2008 were RMB17.3 million (US$2.5 million), representing an increase of 82.1% from RMB9.5 million in fiscal year 2007. The increase was primarily due to the sales growth and the increase in expenses incurred by newly acquired entities.
General and administrative expenses for fiscal year 2008 were RMB179.2 million (US$26.3 million), representing an increase of 162.9% from RMB68.2 million in fiscal year 2007, primarily as the result of the following factors: 1) recognition of share-based compensation expenses for options granted in October of 2007, including recognition of the remaining un-amortized expenses for the October 2007 grants in the fourth quarter of 2008 for the surrender and cancellation of options; 2) increase in salaries for administrative staff as a result of increased headcount; 3) increase in expenses for ongoing professional services, and 4) SOX compliance-related expenses.
As a result of the foregoing factors, income from operations for fiscal year 2008 was RMB210.7 million (US$30.9 million), representing an increase of 52.8% from RMB137.9 million for fiscal year 2007. Operating margin was 25.0% as compared with 30.8% for fiscal year 2007. Non-GAAP operating margin excluding one-time share-based compensation expense was 28.5% for the fiscal year 2008.
For fiscal year 2008, total interest income was RMB48.0 million (US$7.0 million), representing an increase of 195.4% from RMB16.2 million in fiscal year 2007, primarily attributable to an increase in cash as a result of our initial public offering in October 2007.
For the fiscal year 2008, income tax expense was RMB64.4 million (US$9.4 million), representing an increase of 1,926.5% from RMB3.2 million for the fiscal year 2007. The increase was primarily attributable to the expiration of income tax exemptions for some subsidiaries starting from January 1, 2008. Effective income tax rate was 24.8% for the fiscal year 2008 compared to 2.1% for the fiscal year 2007. Apart from the expiration of income tax exemptions, the increase in the effective income tax rate was also due to the exclusion of share-based compensation expense, legal and audit fees and other expenses incurred outside China as tax-deductible items for PRC tax purpose.
For the fiscal year 2008, net income was RMB191.6 million (US$28.1 million), representing an increase of 24.9% from RMB153.4 million for the fiscal year 2007. Net margin was 22.7% for the fiscal year 2008, as compared with 34.2% for the fiscal year 2007. Non-GAAP net margin excluding one-time share-based compensation expense recorded in the fourth quarter was 26.2% for the fiscal year 2008.
Fully diluted net income per ADS was RMB4.176 (US$0.612) for the fiscal year 2008, as compared with RMB4.286 for the fiscal year 2007. Adjusted diluted net income per ADS excluding one-time share-based compensation expense (non-GAAP) was RMB4.822 (US$0.707) for the fiscal year 2008.
Recent developments:
-- At the Company's annual general meeting of shareholders held on
December 18, 2008, the shareholders approved a share repurchase program
proposed by the board of directors of the Company. Pursuant to the
program, CNinsure is authorized but not obligated to repurchase up to
US$20 million worth of its outstanding American Depositary Shares
("ADS") by December 31, 2009. Subject to market conditions, the trading
price of its ADSs and other factors, the Company plans to make
repurchases from time to time on the open market or in negotiated
transactions in accordance with Rule 10b-18 under the Securities
Exchange Act of 1934.
-- Feng (Fred) Jin, CNinsure's Chief Information Officer, has assumed the
additional responsibilities of Chief Operating Officer of the Company.
In his expanded role, Mr. Jin is responsible for the strategic and
operational leadership of CNinsure, overseeing corporate operations, IT
management and risk control.
-- As of December 31, 2008, CNinsure had 28,886 sales professionals as
compared with approximately 13,830 sales professionals as of December
31, 2007. Its distribution network consisted of 40 insurance agencies,
5 insurance brokerages and 3 claims adjusting firms with 352 sales and
services outlets operating in 17 provinces as of the end of December 31
2008, as compared with 19 insurance agencies and 4 insurance brokerages
with 195 sales and service outlets operating in 11 provinces as of the
end of 2007. In addition, CNinsure's insurance claims adjusting
business had 834 professional adjusters as of December 31, 2008.
-- Net revenues from commissions and fees derived from P&C insurance and
life insurance business for the fiscal year 2008 grew 57.6% and 164.4%,
respectively, from 2007 while net revenues from its claims adjusting
business grew 36.4% from the previous quarter. The three business lines
each contributed 75.0%, 14.4% and 10.6% of its total commissions and
fees revenues in 2008 while its P&C insurance and life insurance
business accounted for 89.7% and 10.3%, respectively, in 2007.
-- CNinsure added 9 affiliated subsidiaries in total in the fourth quarter
including Beijing Fanhua Datong Investment Management Co., Ltd.
("Datong") in which it acquired 55% interests on November 1, 2008, and
Datong's 6 affiliated life insurance agencies. With the addition of
Datong, CNinsure's footprint expanded to Yunnan, Shanxi and Hainan
provinces. In addition, CNinsure completed the acquisition of 55%
interests in Shenzhen Huameng Insurance Brokerage Company Co., Ltd. and
established a life insurance agency named Suining Fanhua Dezhong
Insurance Agency Co., Ltd., in which it holds 55% interests.
-- Progress has been made in upgrading its IT system, which is a core part
of its operating platform: 1) the life insurance unit of its Core
Business System has been put into use in six selected affiliated
agencies on trial basis; 2) the claims adjusting unit of its Core
Business System has been pilot-launched in one of its claims adjusting
firms; 3) it has initiated User Acceptance Testing (UAT) of its
ERP-based financial and accounting system; 4) a nationwide Wide Area
Network has been put into place at most of its affiliated entities,
with its first datacenter based in Beijing; 5) other key applications,
such as Office Automation system and human resource system are expected
to be put into pilot-launching in the first quarter.
-- CNinsure was awarded "Best Insurance Intermediary Service Provider in
China of the Year 2008" at the SOHU Finance & Wealth Management Network
Ceremony 2008 organized by SOHU Business China.
-- On November 21, 2008, the Company's board of directors approved the
grant under the 2007 Share Incentive Plan to various directors,
officers and employees of options to purchase an aggregate of
32,000,000 ordinary shares of the Company at an exercise price of
US$0.278 per ordinary share, equal to the closing price of the
Company's ADS on the Nasdaq Global Market at the grant date (after
adjusting for the 20 ordinary shares to 1 ADS ratio). Options granted
to senior management and key employees will be vested according to
their Key Performance Indicator (KPI）results for the fiscal year of
2009. The options will vest over a four-year period starting from March
31, 2010.
-- In late December 2008, various directors, officers and employees
voluntarily surrendered certain previously granted options to purchase
an aggregate of 30,804,500 ordinary shares of the Company. Those
options, which were due to vest over a three-year period starting from
March 31, 2009, had been granted to them in October 2007 at an exercise
price of US$0.8 per share. The surrendered options were cancelled
immediately.
Business Outlook
For the first quarter 2009, CNinsure expects its total net revenues to be between RMB195 million (US$28.6 million) and RMB215 million (US$31.5 million), which reflects the seasonality of its business as the result of the Chinese New Year. This forecast reflects CNinsure's current and preliminary view, which is subject to change, particularly in light of the uncertainties in the global economic and financial climate.
Conference Call
The Company will host a conference call to discuss the fourth quarter and fiscal year 2008 results at
Time: 8:00 pm Eastern Standard Time on February 24, 2009
or 9:00 am Beijing/Hong Kong Time on February 25, 2009
The Toll Free dial-in numbers:
United States: 1-866-549-1292
United Kingdom: 0808-234-6305
Canada: 1-866-8691-825
Singapore: 800-188-5233
Taiwan: 0080-165-1918
China (Mainland): 800-701-1223
Hong Kong & Other Areas: +852-3005-2050
China (Mainland) local dial-in number: 400-681-6949
Password: 885507#
A replay of the call will be available for three days as follows:
Hong Kong & Other Areas +852-3005-2020
PIN number: 136443#
Additionally, a live and archived web cast of this call will be available at: http://www.corpasia.net/us/CISG/irwebsite/index.php?mod=event .
About CNinsure Inc.
CNinsure is a leading independent intermediary company operating in China. CNinsure's distribution network reaches many of China's most economically developed regions and affluent cities. The Company distributes a wide variety of property and casualty and life insurance products underwritten by domestic and foreign insurance companies operating in China, and provides insurance claims adjusting as well as other insurance-related services.
Forward-looking Statements
This press release contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward- looking statements by terminology such as "will," "expects," "believes," "anticipates," "intends," "estimates" and similar statements. Among other things, the management's quotations and the Business Outlook section contain forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about CNinsure and the industry. Potential risks and uncertainties include, but are not limited to, those relating to CNinsure's limited operating history, especially its limited experience in selling life insurance products, its ability to attract and retain productive agents, especially entrepreneurial agents, its ability to maintain existing and develop new business relationships with insurance companies, its ability to execute its growth strategy, its ability to adapt to the evolving regulatory environment in the Chinese insurance industry, its ability to compete effectively against its competitors, quarterly variations in its operating results caused by factors beyond its control and macroeconomic conditions in China and their potential impact on the sales of insurance products. All information provided in this press release is as of February 24, 2009, and CNinsure undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although CNinsure believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Further information regarding risks and uncertainties faced by CNinsure is included in CNinsure's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F.
About Non-GAAP Financial Measures
To supplement CNinsure's consolidated financial results presented in accordance with GAAP, CNinsure uses in this release the following measures defined as non-GAAP financial measures by the SEC: operating income excluding one-time share-based compensation expense, operating margin excluding one-time share-based compensation expense, net income excluding one-time share-based compensation expense, net margin excluding one-time share-based compensation expense, and diluted net income per ADS excluding one-time share-based compensation expense. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of non-GAAP financial measures to comparable GAAP measures" set forth at the end of this release.
CNinsure believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance by excluding the one-time charge of RMB 29.6 million (US$4.3 million) recognized as share-based compensation expenses in the fourth quarter of 2008, as a result of the surrender and cancellation of options to purchase an aggregate of 30,804,500 ordinary shares by various option holders in December 2008. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company's performance and when planning and forecasting future periods. A limitation of using operating income excluding one-time share-based compensation expense, operating margin excluding one-time share-based compensation expense, net income excluding one-time share-based compensation expense, net margin excluding one-time share-based compensation expense, and diluted net income per ADS excluding one-time share-based compensation expense is that these non-GAAP measures exclude the one-time share-based compensation charge that was a significant expense in the fourth quarter of 2008. Management compensates for this limitation by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are comparable to non-GAAP financial measures.
CNinsure Inc.
Unaudited Condensed Consolidated Balance Sheets
As of As of As of
December December December
31, 2007 31, 2008 31, 2008
RMB RMB USD
(In thousands, except for shares and
per share data)
ASSETS:
Current assets：
Cash and cash equivalents 1,544,817 1,508,431 221,096
Restricted cash 12,748 4,200 616
Accounts receivable 18,150 90,424 13,254
Insurance premium receivable 541 21 3
Other receivables, net 30,703 57,151 8,377
Amounts due from related parties -- 209,595 30,721
Other current assets 1,297 5,224 766
Total current assets 1,608,256 1,875,046 274,833
Non-current assets：
Property, plant, and equipment, net 11,148 67,886 9,950
Goodwill 9,165 38,736 5,678
Intangibles assets 4,325 53,157 7,791
Deferred tax assets 1,936 4,517 662
Other 5,334 853 125
Total assets 1,640,164 2,040,195 299,039
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable 10,138 59,709 8,752
Insurance premium payable 12,748 4,200 616
Other payables and accrued expenses 20,945 71,079 10,418
Accrued payroll 6,949 15,336 2,248
Income tax payable 2,085 26,242 3,846
Amounts due to related parties 369 8,048 1,180
Current portion of long-term
borrowings 103 -- --
Total current liabilities 53,337 184,614 27,060
Non-current liabilities:
Long-term borrowings 57 -- --
Other tax liabilities 1,160 1,871 274
Deferred tax liabilities 374 8,661 1,270
Total liabilities 54,928 195,146 28,604
Commitments and contingencies
Minority interests 18,324 93,525 13,708
Common stock 7,036 7,036 1,031
Additional paid-in capital 1,621,064 1,666,723 244,298
Statutory reserves 47,903 48,379 7,091
Accumulated deficit (87,941) 103,196 15,126
Accumulated other comprehensive Loss (21,150) (73,810) (10,819)
Total shareholders' equity 1,566,912 1,751,524 256,727
Total liabilities and owners' equity 1,640,164 2,040,195 299,039
CNinsure Inc.
Unaudited Condensed Consolidated
Statements of Operations
For The Three Months Ended
December 31,
2007 2008 2008
RMB RMB USD
(In thousands, except for shares and
per share data)
Net revenues:
Commissions and fees 158,480 281,266 41,226
Other service fees 251 155 23
Total net revenues 158,731 281,421 41,249
Operating costs and expenses:
Commissions and fees (83,224) (145,861) (21,379)
Selling expenses (2,844) (6,222) (912)
General and administrative expenses (26,434) (78,768) (11,546)
Total operating costs and expenses (112,502) (230,851) (33,837)
Income from operations 46,229 50,570 7,412
Other income (expense), net:
Investment income -- 661 97
Interest income 10,920 11,414 1,673
Interest expense (5) (29) (4)
Others, net 9 (156) (23)
Income before income taxes 57,153 62,460 9,155
Income tax benefit (expense) (3,242) (17,648) (2,587)
Net income before minority interest 53,911 44,812 6,568
Minority interest (104) (1,076) (157)
Net income 53,807 43,736 6,411
Net Income per share:
Basic 0.064 0.048 0.007
Diluted 0.064 0.048 0.007
Net Income per ADS:
Basic 1.284 0.959 0.141
Diluted 1.275 0.954 0.140
Shares used in calculating Net
income per share
Basic 838,056,274 912,497,726 912,497,726
Diluted 843,711,077 916,705,322 916,705,322
For The Twelve Months Ended
December 31,
2007 2008 2008
RMB RMB USD
(In thousands, except for shares and
per share data)
Net revenues:
Commissions and fees 446,929 843,023 123,565
Other service fees 1,216 855 125
Total net revenues 448,145 843,878 123,690
Operating costs and expenses:
Commissions and fees (232,550) (436,588) (63,992)
Selling expenses (9,514) (17,328) (2,540)
General and administrative expenses (68,177) (179,217) (26,268)
Total operating costs and expenses (310,241) (633,133) (92,800)
Income from operations 137,904 210,745 30,890
Other income (expense), net:
Investment income -- 660 97
Interest income 16,235 47,967 7,031
Interest expense (25) (95) (14)
Others, net (2) (29) (5)
Income before income taxes 154,112 259,248 37,999
Income tax benefit (expense) (3,178) (64,404) (9,440)
Net income before minority interest 150,934 194,844 28,559
Minority interest 2,424 (3,231) (474)
Net income 153,358 191,613 28,085
Net Income per share:
Basic 0.218 0.210 0.031
Diluted 0.214 0.209 0.031
Net Income per ADS:
Basic 4.355 4.200 0.616
Diluted 4.286 4.176 0.612
Shares used in calculating Net
income per share
Basic 704,273,232 912,497,726 912,497,726
Diluted 715,649,950 917,776,532 917,776,532
CNinsure Inc.
Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Measures
(In RMB in thousands, except per share data and percentages)
3 months ended Dec. 31, 2008
GAAP Adjustment Non-GAAP
Net income 43,736 29,634 73,371
Net margin 15.6% 10.5% 26.1%
Operating income 50,570 29,634 80,204
Operating margin 18.0% 10.5% 28.5%
Diluted shares 916,705,322 -- 916,705,322
Diluted net income per ADS 0.954 0.647 1.601
12 months ended Dec. 31, 2008
GAAP Adjustment Non-GAAP
Net income 191,613 29,634 221,247
Net margin 22.7% 3.5% 26.2%
Operating income 210,745 29,634 240,379
Operating margin 25.0% 3.5% 28.5%
Diluted shares 917,776,532 -- 917,776,532
Diluted net income per ADS 4.176 0.646 4.822
3 months ended Dec. 31, 2007
GAAP Adjustment Non-GAAP
Net income 53,807 -- 53,807
Net margin 34.0% -- 34.0%
Operating income 46,288 -- 46,288
Operating margin 29.1% -- 29.1%
Diluted shares 843,711,077 -- 843,711,077
Diluted net income per ADS 1.275 -- 1.275
12 months ended Dec. 31, 2007
GAAP Adjustment Non-GAAP
Net income 153,358 -- 153,358
Net margin 34.2% -- 34.2%
Operating income 137,904 -- 137,904
Operating margin 30.8% -- 30.8%
Diluted shares 715,649,950 -- 715,649,950
Diluted net income per ADS 4.286 -- 4.286
