UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934

CONCORD MEDICAL SERVICES HOLDINGS LIMITED

18/F, Tower A, Global Trade Center
36 North Third Ring Road East, Dongcheng District
Beijing 100013
People’s Republic of China
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F þ  Form 40-F o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):   N/A  

 

 

TABLE OF CONTENTS

Exhibit 99.1 – Press release

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: March 28, 2011

Exhibit 99.1

Concord Medical Announces Fourth Quarter and Fiscal Year 2010 Financial Results Full Year Revenues
up 33%, Company Opens 33 New Centers in 2010

BEIJING, March 28, 2011 — Concord Medical Services Holdings Limited (“Concord Medical” or the “Company”) (NYSE: CCM), the operator of the largest network of radiotherapy and diagnostic imaging centers in China, today announced its unaudited consolidated financial results for the fourth quarter and fiscal year ended December 31, 2010⁽¹⁾, the Company’s first full year of operations since completing its IPO in December 2009, underwritten by Morgan Stanley, J.P. Morgan and CICC.

Fourth Quarter and Fiscal Year 2010 Highlights

	•		Total net revenues in the fourth quarter of 2010 were RMB112.9 million ($17.1 million), a 30.1% increase from the corresponding period in 2009. Total net revenues in fiscal year 2010 were RMB389.5 million ($59.0 million), a 33.2% increase from 2009.
	•		Gross profit in the fourth quarter of 2010 was RMB81.5 million ($12.4 million), a 32.0% increase from the corresponding period in 2009. Gross profit in fiscal year 2010 was RMB266.8 million ($40.4 million), a 30.2% increase from 2009.
	•		Net income in the fourth quarter of 2010 was RMB43.7 million ($6.6 million), a 21.8% increase from the corresponding period in 2009. Net income in fiscal year 2010 was RMB130.9 million ($19.8 million), a 4.9% increase from 2009.
	•		Non-GAAP net income(2) in the fourth quarter of 2010 was RMB45.5 million ($6.9 million), a 23.3% increase from the corresponding period in 2009. Non-GAAP net income in fiscal year 2010 was RMB140.5 million ($21.3 million), an 11.6% increase from 2009.
	•		Both basic and diluted earnings per American depositary share (“ADS”)(3) in the fourth quarter of 2010 were RMB0.87 ($0.13). Both basic and diluted earnings per ADS in fiscal year 2010 were RMB2.66 ($0.40).
	•		Both Non-GAAP basic and diluted earnings per American depositary share (“ADS”)(3) in the fourth quarter of 2010 were RMB0.91 ($0.14). Both basic and diluted earnings per ADS in fiscal year 2010 were RMB2.86 ($0.43).
	•		Adjusted EBITDA(4) (non-GAAP) in the fourth quarter of 2010 was RMB80.6 million ($12.2 million), an 11.8% increase from the corresponding period in 2009. Adjusted EBITDA in fiscal year 2010 was RMB295.4 million ($44.8 million), a 19.8 % increase from 2009.
	•		Concord Medical added 10 centers and closed 2 centers in the fourth quarter of 2010, bringing the total number of centers in operation to 119 across 44 cities in China, as of December 31, 2010. To date, the Company has entered into agreements to establish 29 new centers.
	•		The number of treatment and diagnostic patient cases was 8,309 and 34,646 during the fourth quarter and fiscal year 2010, representing a 13.0% and 37.0% increase from the fourth quarter and fiscal year 2009, respectively.

“We are pleased to report a year of solid financial and operational growth in 2010, the first full year of operations since our IPO and listing on the NYSE in December 2009, underwritten by Morgan Stanley, J.P. Morgan and CICC,” said Dr. Jianyu Yang, director, president and chief executive officer of Concord Medical. “In 2010, revenues grew 33% year-over-year to RMB389.5 million while we brought the total number of centers in our network to 119 by adding 33 centers in the year. In 2011, we will continue to grow our already established center network and are committed to meeting our target of operating 200 centers by the end of 2012. In addition, Concord Medical will focus more resources on expanding our network of standalone facilities such as our Chang’An CMS International Cancer Center and our Beijing Proton Medical Center.”

“The government continues to encourage private investment into the healthcare system in China,” continued Dr. Yang. “In December 2010, we saw more specific guidelines such as prioritizing private investment in new projects, extending medical insurance coverage to treatment through private providers and allowing talent transfer between private and public hospitals. Combining the increasingly favorable macroeconomic conditions with our effective marketing and execution efforts, we are confident that Concord Medical is well on its way to achieving greater success.”

Dr. Yang added, “In the fourth quarter of 2010, we had healthy top line growth despite a drop in patient volume in the first week of October caused in part by the Golden Week holiday. Our operating and net margins for year 2010 were also affected by costs and expenses associated with being a public company. We expect this impact to diminish over time as our business increases in scale. Looking forward, we will focus on continuing to enhance operational and financial efficiency while further expanding our network.”

Recent Developments

On July 12, 2010, Concord Medical announced it entered into a joint venture agreement with Chang’An Hospital and commenced preliminary operations of Chang’An CMS International Cancer Center (“CCICC”) in anticipation of obtaining a clinical license for CCICC. As of this announcement, CCICC had not received such license. On January 6, 2011, Concord Medical announced that it entered into agreements to acquire a total of 52% of the equity interest in Chang’An Hospital from certain shareholders of the Hospital for an aggregate consideration of approximately RMB200 million, subject to satisfactory due diligence and relevant government approval. The acquisition is intended to expand the development of CCICC by consolidating the full capacity of the Hospital into CCICC, a cancer specialty hospital with a focus on cancer diagnosis and treatment services.

Concord Medical completed its share repurchase program in the fourth quarter 2010. During the fourth quarter of 2010, the Company repurchased 719,626 ADSs, representing 2,158,878 ordinary shares, for an aggregate consideration of $5.274 million, inclusive of fees. Since the inception of the share repurchase program in July 2010, the Company has repurchased a total of 1,700,656 ADSs, representing 5,101,968 ordinary shares, for an aggregate consideration of $11.552 million, inclusive of fees. As of December 31, 2010, the Company had a total of 17.4 million ADSs outstanding, representing 52.2 million ordinary shares, or 37% of its outstanding ordinary shares.

Fourth Quarter 2010 Results

Concord Medical reported total net revenues of RMB112.9 million ($17.1 million) for the fourth quarter of 2010, a 30.1% increase from the corresponding period in 2009, primarily due to an increase in patient cases from existing centers and the opening of new centers, as well as income from the preliminary operation of CCICC.

Cost of revenues in the fourth quarter of 2010 was RMB31.3 million (US$4.7 million), a 25.2% increase from the corresponding period in 2009, primarily due to an increase in depreciation costs related to new equipment added in 2010.

Gross profit margin in the fourth quarter of 2010 was 72.2% as compared to 66.2% in the third quarter of 2010 and 71.2% in the corresponding period in 2009. The lower gross profit margin in the third quarter of 2010 was mostly due to depreciation and amortization from business expansion.

Operating expenses, consisting of selling expenses and general and administrative expenses, were RMB30.1 million ($4.6 million) in the fourth quarter of 2010 as compared to RMB17.3 million in the previous quarter and RMB13.3 million in the corresponding period in 2009. The quarter-over-quarter increase was primarily due to a government grant in the previous quarter, increases in office and travel expenses, and operating expenses related to the preliminary operation of CCICC. The year-over-year increase was primarily due to increases in professional expenses associated with being a public company, increases in headcount, office and travel expenses, share-based compensation charges, and operating expenses related to the preliminary operation of CCICC.

Operating income was RMB51.4 million ($7.8 million) in the fourth quarter of 2010, representing a 6.3% increase from the corresponding period in 2009. Operating income excluding share-based compensation expenses (non-GAAP) was RMB53.2 million ($8.1 million), a 7.7% increase from the corresponding period in 2009.

Income tax expense in the fourth quarter of 2010 was RMB10.1 million ($1.5 million), compared to an income tax expense of RMB10.7 million in the corresponding period in 2009. The effective tax rate for the fourth quarter of 2010 was 18.8% as compared to 27.0% in the third quarter of 2010 and 22.9% for the corresponding period in 2009. The decrease in effective tax rate was mainly due to the resolution of a previously accrued uncertain tax position amounting to RMB6.2 million.

Net income in the fourth quarter of 2010 was RMB43.7 million ($6.6 million), representing an 21.8% increase from the corresponding period in 2009. Both basic and diluted earnings per ADS for the fourth quarter of 2010 amounted to RMB0.87 ($0.13).

Non-GAAP net income in the fourth quarter of 2010 was RMB45.5 million ($6.9 million), a 23.3% increase from the corresponding period in 2009. Both non-GAAP basic and diluted earnings per ADS in the fourth quarter of 2010 amounted to RMB0.91 ($0.14).

Adjusted EBITDA (non-GAAP), was RMB80.6 million ($12.2 million) for the fourth quarter of 2010, representing an 11.8% increase from the corresponding period in 2009.

As of December 31, 2010, the Company had total fixed assets valued at RMB925.3 million ($140.2 million), cash and cash equivalents of RMB535.8 million ($81.2 million), and restricted cash of RMB 117.7 million ($17.8 million).

As of December 31, 2010, the Company had bank credit lines totaling RMB2.2 billion (US$335 million), of which RMB241.1 million ($36.5) were utilized.

Accounts receivable was RMB169.4 million ($25.7 million) as of December 31, 2010, compared to RMB149.5 million as of September 30, 2010 and RMB111.3 million as of December 31, 2009. Days sales outstanding was approximately 127 days in the fourth quarter of 2010, unchanged from 127 days in the third quarter of 2010.

Fiscal Year 2010 Results

Total net revenues in 2010 were RMB389.5 million ($59.0 million), representing a 33.2% increase from RMB292.4 million in 2009, primarily due to an increase in patient cases from existing centers and the opening of new centers, as well as income from the preliminary operation of CCICC.

Cost of revenues in 2010 was RMB122.7 million (US$18.6 million), representing a 40.1% increase from RMB87.6 million in 2009, primarily due to the increased depreciation cost related to the opening of new centers and the resulting increase in salaries and benefits to additional personnel employed and assigned to the new centers.

Gross profit margin in 2010 was 68.5%, compared to 70.1% in 2009. This decrease was primarily due to higher operating costs associated with having a larger number of new centers in their ramp-up periods.

Selling expenses in 2010 were RMB17.2 million ($2.6 million), representing a 123.5% increase from RMB7.7 million in 2009. Selling expenses as a percentage of total net revenues increased to 4.4% in 2010 from 2.6% in 2009. The increase was primarily due to increases in headcount and marketing and other expenses to support increased business development efforts.

General and administrative expenses in 2010 were RMB70.0 million ($10.6 million), representing a 134.8% increase from RMB29.8 million in 2009. General and administrative expenses as a percentage of total net revenues increased to 18.0% in 2010 from 10.2% in 2009. The increase was primarily due to increases in professional expenses associated with being a public company, share-based compensation charges, headcount, office and travel expenses, and operating expenses related to the preliminary operation of CCICC.

Share-based compensation expenses, which were allocated to related operating expense items, were RMB9.6 million ($1.5 million) in 2010, compared to RMB1.0 million in 2009.

Operating income in 2010 was RMB179.7 million ($27.2 million), a 7.3% increase from RMB167.4 million in 2009. Operating income excluding share-based compensation expenses (non-GAAP) in 2010 was RMB189.3 million ($28.7 million), representing a 12% increase from 2009.

Income tax expense in 2010 was RMB43.9 million ($6.6 million), compared to an income tax expense of RMB36.4 million in 2009. The effective tax rate for 2010 was 25.1% as compared to 22.6% in 2009.

Net income in 2010 was RMB130.9 million ($19.8 million), representing a 4.9% increase from RMB124.8 million in 2009. Both basic and diluted earnings per ADS for 2010 amounted to RMB2.66 ($0.40).

Net income excluding share-based compensation expenses (non-GAAP) in 2010 was RMB140.5 million ($21.3 million), reflecting a 11.7% increase from RMB125.8 million in 2009. Both basic and diluted earnings per ADS excluding share-based compensation expenses (non-GAAP) in 2010 were RMB2.86 ($0.43).

Capital expenditures were RMB345.2 million ($52.3 million) in 2010, compared to RMB228.7 million in 2009. The increase was primarily due to the opening of new centers.

Adjusted EBITDA (non-GAAP) was RMB295.4 million ($44.8 million) in 2010, representing a 19.8% increase from RMB246.6 million in 2009.

Outlook for Fiscal Year 2011

Based on current market and operating conditions, estimated business expansion and forecasted patient volume, Concord Medical expects to generate total net revenues in an estimated range of RMB480 million to RMB520 million in 2011, which would represent a 23% to 33% increase from 2010. This estimated range excludes any potential future revenue as a result of the currently pending acquisition of Chang’An Hospital but includes income from CCICC’s preliminary operations. The Company notes that unanticipated delays in the closing of Chang’An Hospital’s acquisition, any failure to obtain CCICC’s clinical license and other uncertainties may result in CCICC not achieving its anticipated benefits to the Company, which in turn could have a material adverse effect on the Company’s business, financial condition and results of operations in 2011 and future periods.

The Company intends to open 25 to 30 new radiotherapy and diagnostic imaging centers, excluding any potential major acquisitions, in 2011. The Company expects total capital expenditures related to these new centers to be in the range of RMB300 million to RMB360 million.

The foregoing reflects Concord Medical’s current and preliminary views, which are subject to change.

Conference Call Information

Concord Medical’s management will hold an earnings conference call at 8:00 a.m. Eastern Daylight Time on March 28, 2011 (8:00 p.m. Beijing/Hong Kong time on March 28, 2010).

Dial-in details for the earnings conference call are as follows:

US:		+1.866.202.3048
China:		+10-800-852-1490 China Netcom (South China) +10-800-152-1490 China Telecom (North China) +10-800-130-0399 China Telecom (South China)
Hong Kong:		+800 96 3844
UK:		+44 2073658425
International:		+1.617.213.8843
Passcode:		97544973

A replay of the conference call may be accessed by phone at the following number until April 4, 2011:

US:		+1-888-286-8010
International:		+1-617-801-6888
Passcode:		93821317

Additionally, a live and archived webcast of this conference call will be available at http://ir.cmsholdings.com/.

About Concord Medical

Concord Medical operates the largest network of radiotherapy and diagnostic imaging centers in China in terms of revenues and the total number of centers in operation per available statistics. As of December 31, 2010, the Company operated a network of 119 centers with 66 hospital partners, spanning 44 cities and 24 provinces and administrative regions in China. Under long-term arrangements with top-tier hospitals in China, the Company provides radiotherapy and diagnostic imaging equipments and manages the daily operations of these centers located on its hospital partners’ premises. The Company also provides ongoing training to doctors and other medical personnel in its network of centers to ensure a high level of clinical care for patients.

Safe Harbor Statement

This press release contains forward-looking statements. These statements constitute “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” and similar expressions. In particular, many of the statements from management in this press release and the section under “Outlook for Fiscal Year 2011” are forward-looking in nature. These forward looking statements are based upon management’s current views and expectations with respect to future events and are not a guarantee of future performance. Furthermore, these statements are, by their nature, subject to a number of risks and uncertainties that could cause actual performance and results to differ materially from those discussed in the forward-looking statements as a result of a number of factors. Such factors include: the number of new radiotherapy and diagnostic imaging centers opened; the increase in the number of patients in existing centers; the establishment of specialty cancer hospitals; changes in the healthcare industry in China, including changes in the healthcare policies and regulations of the PRC government; and technological or therapeutic changes affecting the field of cancer treatment and diagnostic imaging. Further information regarding these and other risks is included in the Company’s filings with the U.S. Securities and Exchange Commission at www.sec.gov. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Statement Regarding Unaudited Financial Information

The Company’s independent auditors are in the process of completing an audit of the Company’s U.S. GAAP financial statements for 2010. These unaudited 2010 numbers disclosed in this announcement are, therefore, subject to change.

About Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles (GAAP), Concord Medical uses certain non-GAAP measures. The Company presents certain of its financial information that is adjusted from results based on GAAP to exclude the impact of share-based compensation expense. The Company believes excluding share-based compensation expense from its non-GAAP financial measures is useful for its management and investors to assess and analyze the Company’s core operating results as such expense is not directly attributable to the underlying performance of the Company’s business operations and do not impact its cash earnings. Concord Medical also believes these non-GAAP measures excluding share-based compensation expense are important

in helping investors to understand the Company’s current financial performance and future prospects and to compare business trends among different reporting periods on a consistent basis. In addition, Concord Medical also presents the non-GAAP measure of Adjusted EBITDA, which is defined in this announcement as net (loss) income plus interest, taxes, depreciation and amortization, share-based compensation expenses and other adjustments. Other adjustments include change in fair value of convertible notes, foreign exchange loss and other income. Furthermore, Adjusted EBITDA eliminates the impact of items that the Company does not consider indicative of the performance of its network of centers. The Company believes investors will similarly use Adjusted EBITDA as one of the key metrics to evaluate its financial performance and to compare its current operating results with corresponding historical periods and with other companies in the healthcare services industry. The presentation of these additional measures should not be considered a substitute for or superior to GAAP results or as being comparable to results reported or forecasted by other companies. The non-GAAP measures have been reconciled to GAAP measures in the attached financial statements.

(1) This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.600 to US$1.00, the effective noon buying rate as of December 31, 2010 in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York.

(2) Non-GAAP net income is defined in this announcement as net income excluding share-based compensation expenses. Share-based compensation was RMB 1.8 million ($0.27 million) in the fourth quarter of 2010 and RMB9.57 million ($1.45 million in fiscal year 2010.

(3) Each ADS represents three ordinary shares of the Company.

(4) Adjusted EBITDA is defined in this announcement as net (loss) income plus interest, taxes, depreciation and amortization, share-based compensation expenses and other adjustments. Other adjustments include foreign exchange loss and other income.

For investor and media inquiries please contact:

China

Tony Tian
Concord Medical Services
+86-10-5957-5287
tony.tian@cmsholdings.com

Lilian Wong
Brunswick Group, LLC
+86-10-5960-8600
lwong@brunswickgroup.com

U.S.

Nicki Kahner Brunswick Group, LLC
+1-212-333-3810
nkahner@brunswickgroup.com

Concord Medical Services Holdings Limited
Unaudited Condensed Consolidated Balance Sheets
(in thousands)

		December 31, 2009*				September 30, 2010				December 31, 2010
		RMB				RMB				RMB				US$
ASSETS
Current assets
Cash			1,037,239				515,190				537,783				81,179
Restricted cash, current portion			293				101,657				102,873				15,587
Notes receivable											900				136
Accounts receivable			111,328				149,520				167,389				25,665
Prepayments and other current assets			100,484				69,724				74,469				11,283
Due from a related party			—				4,000				—				—
Deferred tax assets, current portion			3,168				2,027				1,504				228
Total current assets			1,252,512				842,118				884,918				134,078
Non-current assets
Property, plant and equipment, net			573,042				863,854				925,336				140,202
Goodwill			300,163				300,163				300,163				45,479
Acquired intangible assets, net			155,345				185,939				146,113				22,138
Deposits for non-current assets			127,150				236,575				208,019				31,518
Net investments in financing leases			—				84,444				85,854				13,008
Deferred tax assets, non-current portion			19,700				21,271				21,869				3,313
Other non-current assets			11,532				51,210				51,867				7,859
Restricted cash, non-current portion			4,421				6,134				14,792				2,241
Prepaid land use right			—				—				28,113				4,260
Total non-current assets			1,191,353				1,749,590				1,782,126				270,018
Total assets			2,443,865				2,591,708				2,667,044				404,096
LIABILITIES
Current liabilities
Short-term bank borrowings			11,500				8,000				83,000				12,576
Long-term bank borrowings, current portion			57,487				65,826				60,906				9,228
Accounts payable			9,759				14,407				10,332				1,565
Accrual for acquisitions of property, plant and equipment			12,043				7,377				14,404				2,182
Obligations under capital leases, current portion			3,582				3,582				3,582				543
Accrued expenses and other liabilities			48,663				44,040				49,935				7,566
Income tax payable			14,642				24,396				25,401				3,849
Deferred revenue, current portion			10,401				12,020				11,520				1,745
Contingent business acquisition consideration			—				13,495				14,072				2,132
Amounts due to related parties			1,546				—				—				—
Total current liabilities			169,623				193,143				273,152				41,386
Non-current liabilities
Long-term bank borrowings, non-current portion			80,915				55,395				45,089				6,832

		December 31, 2009*				September 30, 2010				December 31, 2010
		RMB				RMB				RMB				US$
Deferred revenue, non-current portion			5,188				10,342				9,081				1,376
Obligations under capitalized leases, non-current portion			8,074				6,038				5,325				807
Lease deposits			1,000				3,814				5,110				774
Deferred tax liabilities, non-current portion			25,317				28,888				27,452				4,159
Total non-current liabilities			120,494				104,477				92,057				13,948
Total liabilities			290,117				297,620				365,209				55,334
Commitments and contingencies
Equity
Ordinary shares			108				106				105				16
Additional paid-in capital			2,671,910				2,679,673				2,604,704				394,652
Accumulated other comprehensive loss			(3,987	)			(12,286	)			(14,835	)			(2,248	)
Accumulated deficit			(514,283	)			(468,628	)			(384,883	)			(58,316	)
Total parent shareholders’ equity			2,153,748				2,198,865				2,205,091				334,104
Non-controlling interests			—				95,223				96,744				14,658
Total equity			2,153,748				2,294,088				2,301,835				348,762
Total liabilities and equity			2,443,865				2,591,708				2,667,044				404,096

Concord Medical Services Holdings Limited
Unaudited Condensed Consolidated Statements of Income
(in thousands, except for number of ADS and per ADS data)

		For The Three Months Ended																For The Twelve Months Ended
		December 31,				September 30,				December 31,								December 31,				December 31,
		2009				2010				2010								2009				2010
		RMB				RMB				RMB				US$				RMB				RMB				US$
Revenue, net
Lease and management services			75,225				92,046				92,815				14,063				260,162				349,248				52,916
Management services			8,643				5,737				9,992				1,514				28,739				22,805				3,455
Others			2,911				3,255				10,056				1,524				3,535				17,471				2,647
Total net revenues			86,779				101,038				112,863				17,101				292,436				389,524				59,018
Cost of revenues
Lease and management services			(18,793	)			(25,415	)			(24,636	)			(3,733	)			(60,937	)			(93,771	)			(14,208	)
Amortization of acquired intangibles			(6,105	)			(7,870	)			(5,210	)			(789	)			(26,493	)			(26,488	)			(4,013	)
Management services			(122	)			(860	)			(1,489	)			(226	)			(131	)			(2,441	)			(370	)
Total cost of revenues			(25,020	)			(34,145	)			(31,335	)			(4,748	)			(87,561	)			(122,700	)			(18,591	)
Gross profit			61,759				66,893				81,528				12,353				204,875				266,824				40,427

		For The Three Months Ended																For The Twelve Months Ended
		December 31,				September 30,				December 31,								December 31,				December 31,
		2009				2010				2010								2009				2010
		RMB				RMB				RMB				US$				RMB				RMB				US$
Operating expenses
Selling expenses			(3,212	)			(3,517	)			(8,555	)			(1,296	)			(7,675	)			(17,150	)			(2,598	)
General and administrative expenses			(10,134	)			(13,777	)			(21,534	)			(3,263	)			(29,821	)			(70,008	)			(10,607	)
Operating income			48,413				49,599				51,439				7,794				167,379				179,666				27,222
Interest expense			(2,011	)			(2,188	)			(1,226	)			(186	)			(6,891	)			(7,448	)			(1,128	)
Foreign exchange income(loss)			5				(3,018	)			(671	)			(102	)			(213	)			(5,436	)			(824	)
Interest income			125				1,283				4,672				708				948				7,865				1,192
Other income (expense)			—				118				(399	)			(60	)			—				144				22
Income before income taxes			46,532				45,794				53,815				8,154				161,223				174,791				26,484
Income tax expense			(10,662	)			(12,376	)			(10,137	)			(1,536	)			(36,396	)			(43,873	)			(6,647	)
Net income			35,870				33,418				43,678				6,618				124,827				130,918				19,837
Net income attributable to non-controlling interests			—				3				(1,521	)			(230	)			—				(1,518	)			(230	)
Accretion of Series A contingently redeemable convertible preferred shares			(6,199	)							—				—				(30,050	)			—				—
Accretion of Series B contingently redeemable convertible preferred shares			(9,976	)							—				—				(48,359	)			—				—
Net income attributable to ordinary shareholders			19,695				33,421				42,157				6,388				46,418				129,400				19,607
Earnings per ADS
Basic /Diluted			0.69				0.69				0.87				0.13				1.86				2.66				0.40
Weighted average number of ADS outstanding:
Basic /Diluted			29,057,729				48,700,469				48,628,990				48,628,990				24,882,926				48,680,198				48,680,198

Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures (*) (in RMB thousands, except for per ADS data, unaudited)

		Three months ended																																				Twelve months ended
		December 31, 2009												September 30, 2010												December 31, 2010												December 31, 2009												December 31, 2010
										Non-												Non-												Non-												Non-												Non-
		GAAP				Adjust				GAAP				GAAP				Adjust				GAAP				GAAP				Adjust				GAAP				GAAP				Adjust				GAAP				GAAP				Adjust				GAAP
		Result				ment				Results				Result				ment				Results				Result				ment				Results				Result				ment				Results				Result				ment				Results
Operating profit			48,413				1,007				49,420				49,599				2,577				52,176				51,439				1,807				53,246				167,379				1,007				168,386				179,666				9,570				189,236
Net income			35,870				1,007				36,877				33,418				2,577				35,995				43,678				1,807				45,485				124,827				1,007				125,834				130,918				9,570				140,488
Basic earning per ADS			0.69				0.03				0.72				0.69				0.05				0.74				0.87				0.04				0.91				1.86				0.06				1.92				2.66				0.20				2.86
Diluted earning per ADS			0.69				0.03				0.72				0.69				0.05				0.74				0.87				0.04				0.91				1.86				0.06				1.92				2.66				0.20				2.86

Reconciliation from net income to adjusted EBITDA(*) (in RMB thousands, unaudited)

		Three months ended												Twelve months ended
		December 31, 2009				September 30, 2010				December 31, 2010				December 31, 2009				December 31, 2010
Net income			35,870				33,418				43,678				124,827				130,918
Interest expense, net			1,886				905				(3,446	)			5,943				(417	)
Income taxes expense			10,662				12,376				10,137				36,396				43,873
Depreciation and amortization			22,685				29,121				27,400				78,174				106,138
Share-based compensation			1,007				2,577				1,807				1,007				9,570
Other adjustments			(5	)			2,900				1,070				213				5,292
Adjusted EBITDA			72,105				81,297				80,646				246,560				295,374