CNinsure Reports Third Quarter 2012 Unaudited Financial Results

CNinsure Reports Third Quarter 2012 Unaudited Financial Results

GUANGZHOU, China, Nov. 29, 2012 (GLOBE NEWSWIRE) -- 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 quarter ended September 30, 2012.^1

Financial Highlights for Third Quarter of 2012

  *Total net revenues: RMB403.0 million (US$64.1 million), representing an
    increase of 5.0% from the corresponding period in 2011, as compared to the
    previous guidance of flat growth.
    
  *Operating income: RMB2.9 million (US$0.5 million), representing a decrease
    of 96.0% from the corresponding period in 2011.
    
  *Non-GAAP operating income: RMB16.1 million (US$2.6 million), which
    excluded share-based compensation expenses for the third quarter of 2012,
    representing a decrease of 85.0% from the corresponding period in 2011.
    Non-GAAP operating income for the third quarter of 2011 excluded
    share-based compensation, professional fees relating to the privatization
    proposal that was later withdrawn, and impairment loss of goodwill and
    intangible assets.
    
  *Net income attributable to the Company's shareholders: RMB23.0 million
    (US$3.7 million), representing a decrease of 70.6% from the corresponding
    period in 2011.
    
  *Non-GAAP net income attributable to the Company's shareholders: RMB36.2
    million (US$5.8 million), which excluded share-based compensation
    expenses,representing a decrease of 67.4% from the corresponding period in
    2011.Non-GAAP net income attributable to the Company's shareholders for
    the third quarter of 2011 excluded share-based compensation, profession
    fees relating to the privatization proposal that was later withdrawn, and
    impairment loss of goodwill and intangible assets.
    
  *Basic and diluted net income per ADS: RMB0.46 (US$0.07) and RMB0.46
    (US$0.07), respectively, representing decreases of 70.6% and 70.1%,
    respectively, from the corresponding period in 2011.
    
  *Non-GAAP basic and diluted net income per ADS: RMB0.72 (US$0.11) and
    RMB0.72 (US$0.11), respectively, representing decreases of 67.4% and67.0%,
    respectively, from the corresponding period in 2011.

"We are pleased that as a result of strong execution we beat our prior
guidance with a 5% year-over-year growth in total net revenues for the third
quarter of 2012 despite a challenging market environment. While our margins
remained under pressure as we had to increase commissions paid to sales agents
in order to safeguard our market share due to intensified competition, we saw
our gross margin bottoming out in the third quarter in 2012. In addition, we
believe that our strategy execution in the past year has well prepared us for
a gradual turnaround," said Mr. Chunlin Wang, CNinsure's chief executive
officer. "2012 has been a year of transition and adjustment for CNinsure,
during which we shut down low efficiency sales outlets, reduced unproductive
sales agents and abandoned cooperation with some channels that were demanding
higher commissions and could not meet our management requirements. While these
efforts may adversely affect our financial performance initially, we believe
that they make us a more solid company and prepare us for a successful future.
In the mean time, we are glad to see significant progress in developing our
e-commerce platform and building up the sales capability of comprehensive
financial services and products. Following the launch of our insurance
comparison website (www.baoxian.com) in January 2012, we unveiled our mobile
sales support device in October 2012, which we believe will become a powerful
business growth driver for the Company and help us further strengthen our
leading market position in the Chinese insurance intermediary sector."

Financial Results for the Third Quarter of 2012

Total net revenues were RMB403.0 million (US$64.1 million) for the quarter
ended September 30, 2012, representing an increase of 5.0% from RMB383.7
million for the corresponding period in 2011, primarily due to increases in
net revenues from our property and casualty ("P&C") insurance and claims
adjusting business segments. The increase in the P&C business segment was
mainly driven by increases in commission rates received from insurance
underwriters, and the growth of the claims adjusting segment was mainly
attributable to growth in auto insurance-related claims adjusting business.
Net revenues from commissions and fees derived from the property and casualty
insurance, life insurance and claims adjusting businesses for the third
quarter of 2012 contributed 70.6%, 15.2%, and 14.2% of the Company's total net
revenues, respectively, compared to 69.3%, 16.9% and 13.8%, respectively, for
the corresponding period in 2011.

Total operating costs and expenses were RMB400.1 million (US$63.7 million) for
the third quarter of 2012, representing an increase of 28.6% from RMB311.0
million for the corresponding period in 2011.

Commissions and fees expenses were RMB294.3 million (US$46.8 million) for the
third quarter of 2012, representing an increase of 52.5% from RMB192.9 million
for the corresponding period in 2011. The increase was primarily due to an
increase in commissions paid to our sales agents within the P&C segment as
greater competition among P&C insurance companies has driven up commission
rates in the auto insurance market, and increased competition largely
resulting from telemarketing by other insurance companies has pushed up the
Company's per policy acquisition cost.

Selling expenses were RMB19.4 million (US$3.1 million) for the third quarter
of 2012, representing a decrease of 2.6% from RMB20.0 million for the
corresponding period of 2011.

General and administrative expenses were RMB86.4 million (US$13.7 million) for
the third quarter of 2012, representing a decrease of 12.0% from RMB98.1
million for the corresponding period in 2011. The decrease was primarily due
to the following factors:

1)recognition of approximately RMB10.0 million in financial advisor and
legal fees incurred in the third quarter of 2011 in relation to the
non-binding going-private proposal which the Company received on May 14, 2011
and was later withdrawn on September 15, 2011; and

2) recognition of RMB7.0 million impairment loss in respect of intangible
assets and of RMB12.9 impairment loss in respect of goodwill for the claims
adjusting segment in the third quarter of 2011.

The decrease was partially offset by a 189.1% increase in share-based
compensation expenses, from RMB4.6 million for the third quarter of 2011 to
RMB13.2 million (US$2.1 million) for the corresponding period of 2012, mainly
representing compensation expenses related to options granted to employees in
March 2012 which were recognized on an accelerated basis in the third quarter
of 2012.

As a result of the foregoing factors, operating income was RMB2.9 million
(US$0.5 million) for the third quarter in 2012, representing a decrease of
96.0% from RMB72.7 million for the corresponding period of 2011.

Non-GAAP operating income, which excluded (1) share-based compensation
expenses for the third quarter of 2012 and the corresponding period of 2011,
(2) impairment losses in respect of goodwill for the claims adjusting segment
and intangible assets for the third quarter of 2011, and (3) professional fees
relating to a non-binding going-private proposal that was later withdrawn for
the third quarter of 2011, was RMB16.1 million (US$2.6 million) for the third
quarter of 2012, representing a decrease of 85.0% from RMB107.1 million for
the corresponding period in 2011.

Operating margin was 0.7% for the third quarter of 2012, compared to 18.9% for
the corresponding period in 2011. Non-GAAP operating margin was 4.0% for the
third quarter of 2012, compared to 27.9% for the corresponding period in 2011.

Interest income was RMB25.3 million (US$4.0 million) for the third quarter of
2012, representing an increase of 85.9% from RMB13.6 million for the
corresponding period in 2011. The increase in interest income was primarily
due to (1) RMB2.0 million (US$0.3 million) in interest charged on amounts due
from related parties and (2) increases in interest-bearing bank balances and
bank interest rates from the corresponding period in 2011.

Income tax expense was RMB12.7 million (US$2.0 million) for the third quarter
of 2012, representing a decrease of 42.8% from RMB22.3 million for the
corresponding period in 2011 due to the significant decrease in operating
income. The effective income tax rate applicable to the Company was 44.7% for
the third quarter of 2012, compared to 23.3% for the corresponding period in
2011. The increase in effective tax rate was mainly due to the increase in
share-based compensation expenses which are not tax-deductible, and the
internal sales of fixed assets which incurred taxable income although such
intercompany income has been eliminated on the consolidated financial
statements.

Net income attributable to the Company's shareholders was RMB23.0 million
(US$3.7 million) for the third quarter of 2012, representing a decrease of
70.6% from RMB78.2 million for the corresponding period in 2011.

Net margin was 5.7% for the third quarter of 2012 compared to 20.4% for the
corresponding period in 2011.

Non-GAAP net income attributable to the Company's shareholders, which excluded
(1) share-based compensation expense for the third quarter of 2012 and the
corresponding period of 2011, (2) impairment losses in respect of goodwill for
the claims adjusting segment and intangible assets, net of tax, for the third
quarter of 2011 and (3) professional fees relating to a non-binding
going-private proposal that was later withdrawn for the third quarter of 2011,
was RMB36.2 million (US$5.8 million) for the third quarter of 2012,
representing a decrease of 67.4% from RMB110.9 million for the corresponding
period in 2011.

Non-GAAP net margin was 9.0% for the third quarter of 2012 compared to 28.9%
for the corresponding period in 2011.

Basic net income per ADS was RMB0.46 (US$0.07) for the third quarter of 2012,
representing a decrease of 70.6% from RMB1.56 for the corresponding period in
2011. Diluted net income per ADS was RMB0.46 (US$0.07) for the third quarter
of 2012, representing a decrease of 70.1% from RMB1.53 for the corresponding
period in 2011.

Non-GAAP basic net income per ADS was RMB0.72 (US$0.11) for the third quarter
of 2012, representing a decrease of 67.4% from RMB2.21 for the corresponding
period in 2011.Non-GAAP diluted net income per ADS was RMB0.72 (US$0.11) for
the third quarter of 2012, representing a decrease of 67.0% from RMB2.18 for
the corresponding period in 2011.

As of September 30, 2012, the Company had RMB2.7 billion (US$427.5 million) in
cash and cash equivalents.

Recent developments:

  *On November 6, 2012, CNinsure's board of directors approved a share
    repurchase program authorizing the Company to repurchase up to US$30
    million of its ADSs by May 6, 2013. Purchases will be made on the open
    market or in negotiated transactions off the market from time to time as
    market conditions warrant, and will be subject to restrictions related to
    volume, price and timing.
    
  *On October 23, 2012, CNinsure officially launched CNpad, the workstation
    for its mobile sales support system, which is a key component of its
    e-commerce platform.
    
  *On October 10, 2012, CNinsure established CNinsure Sales Service Group
    Company Limited, which is the first insurance sales service group company
    in China.
    
  *As of September 30, 2012, CNinsure's distribution and service network
    consisted of 469 sales and services outlets operating in 26 provinces,
    compared to 593 sales and service outlets operating in 23 provinces as of
    September 30, 2011. CNinsure had 46,556 sales agents and 1,271
    professional claims adjustors as of September 30, 2012, compared to 43,643
    sales agents and 1,334 professional claims adjustors as of September 30,
    2011. The decrease of the number of sales outlets as of September 30, 2012
    was mainly because we shut down or combined certain less productive sales
    outlets in the third quarter of 2012.

Business Outlook

CNinsure expects its total net revenues to remain flat for the fourth quarter
of 2012 compared to the corresponding period in 2011. This forecast reflects
CNinsure's current view, which is subject to change.

Conference Call

The Company will host a conference call to discuss the third   
quarter 2012 results at
                                                              
Time: 8:00 pm Eastern Standard Time on November 29, 2012     
                                                              
or 9:00 am Beijing/Hong Kong Time on November 30, 2012The      
Dial-in numbers:
                                                              
United States                                               1-855-500-8701
United Kingdom                                               0800-015-9724
Canada                                                      1-855-757-1565
Hong Kong                                                    800-903-737
Taiwan                                                       0080-665-1951
Singapore & Other Areas                                     +65-6723-9385
China (Mainland)                                             400-120-0654
                                                              
A replay of the call will be available for 3 days as follows:  
                                                              
+61 2 8199 0299                                               
                                                              
Conference ID number: 69020340                                 
                                                              
Additionally, a live and archived web cast of this call will   
be available at:
                                                              
http://ir.cninsure.net/events.cfm                             

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, including the statements relating to the Company's future
financial and operating results, 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 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 the date hereof, and
CNinsure undertakes no obligation to update any forward-looking statements to
reflect subsequent occurring events or circumstances, or 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

In addition to the Company's consolidated financial results under GAAP, the
Company also provides non-GAAP financial measures, excluding share-based
compensation expenses for the third quarter of 2012 and the corresponding
periods in 2011, professional fees relating to the non-binding going-private
proposal that was later withdrawn and intangible asset and goodwill impairment
losses for the third quarter of 2011. 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. One limitation of using these non-GAAP financial
measures is that these non-GAAP measures exclude the items that were
significant in the third quarter of 2012 and the corresponding period of 2011.
Another is that items such as share-based compensation expenses have been, and
will continue to be, a significant recurring factor in our business.

In light of the limitations, 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. We
encourage investors and other interested persons to review our financial
information in its entirety and not rely on a single financial measure.For
more information on these non-GAAP financial measures, please see the tables
captioned "Reconciliations of GAAP Financial Measures to Non-GAAP Financial
Measures" set forth at the end of this release.

^1This announcement contains translations of certain Renminbi (RMB) amounts
into U.S. dollars (US$) 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 RMB6.2848 to US$1.00, the effective noon buying rate as of
September 28, 2012 in The City of New York for cable transfers of RMB as set
forth in H.10 weekly statistical release of the Federal Reserve Board.

                                                              
CNINSURE INC.
Unaudited Condensed Consolidated Balance Sheets
(In thousands)
                                                              
                                   As of December As of         As of
                                    31,            September 30, September 30,
                                   2011           2012          2012
                                   RMB            RMB           US$
ASSETS:                                                        
Current assets:                                                
Cash and cash equivalents          2,222,160      2,686,572     427,471
Restricted cash                    10,076         11,787        1,876
Short term investment              31,230         600           95
Accounts receivable, net           166,363        189,625       30,172
Insurance premium receivables      3              9             1
Other receivables                  82,736         86,595        13,779
Deferred tax assets                7,369          5,317         846
Amounts due from related parties   365,636        49,346        7,852
Other current assets               12,841         17,515        2,787
Total current assets                2,898,414      3,047,366     484,879
                                                              
Non-current assets:                                            
Property, plant, and equipment,     84,712         70,592        11,232
net
Goodwill                           78,553         78,553        12,499
Intangible assets, net             58,054         46,505        7,400
Deferred tax assets                1,892          3,584         570
Investment in affiliates           153,962        168,010       26,733
Other non-current assets           5,409          7,457         1,186
Total non-current assets            382,582        374,701       59,620
Total assets                        3,280,996      3,422,067     544,499
                                                              
                                                              
                                   As of December As of         As of
                                    31,            September 30, September 30,
                                   2011           2012          2012
                                   RMB            RMB           US$
LIABILITIES AND EQUITY:                                        
Current liabilities:                                           
Accounts payable (including
accounts payable of the
consolidated variable interest
entities ("VIEs") without recourse  107,042        121,632       19,353
to CNinsure Inc. of RMB99,776 and
RMB66,925 (US$10,649) as of
December 31, 2011 and September 30,
2012, respectively)
Insurance premium payables
(including insurance premium
payables of the consolidated VIEs
without recourse to CNinsure Inc.   2,684          3,347         533
of RMB2,684 and RMB3,365 (US$535)
as of December 31, 2011 and
September 30, 2012, respectively)
Other payables and accrued expenses
(including other payables and
accrued expenses of the
consolidated VIEs without recourse  92,682         80,870        12,868
to CNinsure Inc. of RMB49,645 and
RMB18,068 (US$2,875) as of December
31, 2011 and September 30, 2012,
respectively)
Accrued payroll (including accrued
payroll of the consolidated VIEs
without recourse to CNinsure Inc.   35,219         36,905        5,872
of RMB30,989 and RMB6,282 (US$999)
as of December 31, 2011 and
September 30, 2012, respectively)
Income tax payable (including
income tax payable of the
consolidated of VIEs without
recourse to CNinsure Inc. of        70,377         54,114        8,610
RMB22,502 and RMB4,950 (US$788) as
of December 31, 2011 and September
30, 2012, respectively)
Amounts due to related parties
(including amounts due to related
parties of the consolidated of VIEs
without recourse to CNinsure Inc.   20,305         —             —
of RMB20,305 and Nil as of December
31, 2011 and September 30, 2012,
respectively)
Total current liabilities           328,309        296,868       47,236
                                                              
                                                              
                                   As of December As of         As of
                                    31,            September 30, September 30,
                                   2011           2012          2012
                                   RMB            RMB           US$
                                                              
Non-current liabilities:                                       
Other tax liabilities              43,586         47,965        7,632
Deferred tax liabilities           30,106         27,569        4,386
Total non-current liabilities       73,692         75,534        12,018
Total liabilities                   402,001        372,402       59,254
                                                              
Ordinary shares                    7,646          7,646         1,217
Additional paid-in capital         2,272,580      2,326,587     370,193
Statutory reserves                 167,147        167,147       26,595
Retained earnings                  408,325        518,779       82,545
Accumulated other comprehensive     (101,651)      (102,022)     (16,233)
loss
Total CNinsure Inc. shareholders'   2,754,047      2,918,137     464,317
equity
Noncontrolling interests           124,948        131,528       20,928
Total equity                        2,878,995      3,049,665     485,245
Total liabilities and equity        3,280,996      3,422,067     544,499

                                                                               
CNINSURE INC.
                                                                               
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except for shares and per share data)
                                                                               
              For The Three Months Ended                For The Nine Months Ended
              September 30,                             September 30,
              2011          2012          2012          2011          2012          2012
              RMB           RMB           US$           RMB           RMB           US$
Net revenues:                                                                   
Commissions    381,449       402,989       64,121        1,095,385     1,150,097     182,996
and fees
Other service  2,224         28            5             2,688         193           31
fees
Total net      383,673       403,017       64,126        1,098,073     1,150,290     183,027
revenues
Operating
costs and                                                                       
expenses:
Commissions    (192,902)     (294,254)     (46,820)      (551,578)     (773,988)     (123,152)
and fees
Selling        (19,963)      (19,442)      (3,094)       (57,918)      (59,117)      (9,406)
expenses
General and
administrative (98,124)      (86,390)      (13,746)      (223,387)     (257,753)     (41,012)
expenses
Total
operating      (310,989)     (400,086)     (63,660)      (832,883)     (1,090,858)   (173,570)
costs and
expenses
Income from    72,684        2,931         466           265,190       59,432        9,457
operations
Other income,                                                                   
net:
Interest       13,635        25,346        4,033         35,450        70,268        11,181
income
Others, net   9,301         215           34            10,432        3,346         532
Income from
continuing
operations
before income
taxes and      95,620        28,492        4,533         311,072       133,046       21,170
income of
affiliates and
discontinued
operations
Income tax     (22,272)      (12,735)      (2,026)       (65,447)      (40,832)      (6,497)
expense
Share of
income of      2,989         4,629         737           8,316         14,048        2,235
affiliates
Net income
from           76,337        20,386        3,244         253,941       106,262       16,908
continuing
operations
Net income
from
discontinued   —             —             —             157,253       —             —
operations,
net of tax
Net income     76,337        20,386        3,244         411,194       106,262       16,908
Less: net loss
attributable
to             (1,834)       (2,614)       (416)         (8,066)       (4,192)       (667)
noncontrolling
interests
Net income
attributable
to the         78,171        23,000        3,660         419,260       110,454       17,575
Company's
shareholders
                                                                               
                                                       
              For The Three Months Ended                For The Nine Months Ended
              September 30,                             September 30,
              2011          2012          2012          2011          2012          2012
              RMB           RMB           US$           RMB           RMB           US$
Net income per                                                                  
share:
                                                                               
Basic:
Net income
from           0.08          0.02          —             0.26          0.11          0.02
continuing
operations
Net income
from           —             —             —             0.16          —             —
discontinued
operations
Net income    0.08          0.02          —             0.42          0.11          0.02
                                                                               
Diluted:                                                                        
Net income
from           0.08          0.02          —             0.26          0.11          0.02
continuing
operations
Net income
from           —             —             —             0.15          —             —
discontinued
operations
Net income    0.08          0.02          —             0.41          0.11          0.02
Net income per                                                                  
ADS:
                                                                               
Basic:
Net income
from           1.56          0.46          0.07          5.22          2.20          0.35
continuing
operations
Net income
from           —             —             —             3.14          —             —
discontinued
operations
Net income    1.56          0.46          0.07          8.36          2.20          0.35
                                                                               
Diluted:                                                                        
Net income
from           1.53          0.46          0.07          5.12          2.20          0.35
continuing
operations
Net income
from           —             —             —             3.08          —             —
discontinued
operations
Net income    1.53          0.46          0.07          8.2           2.20          0.35
                                                                               
Shares used in
calculating                                                                     
net income per
share:
                                                                               
Basic         1,002,365,585 1,002,564,246 1,002,564,246 1,002,905,439 1,002,559,919 1,002,559,919
Diluted       1,019,042,812 1,003,504,594 1,003,504,594 1,022,752,642 1,005,250,696 1,005,250,696

                                                                 
CNINSURE INC.
Unaudited Condensed Consolidated Statements of Cash Flow
(In thousands)
                                                                 
                      For the Three Months Ended For The Nine Months Ended
                      September 30,               September 30,
                      2011      2012      2012    2011      2012      2012
                      RMB       RMB       US$     RMB       RMB       US$
OPERATING ACTIVITIES                                              
Net income             76,337    20,386    3,244   411,194   106,262   16,908
Adjustments to
reconcile net income
to net cash generated                                             
from operating
activities:
Depreciation          6,704     6,473     1,030   20,658    19,810    3,152
Amortization of
acquired intangible    6,719     3,726     593     19,971    11,560    1,839
assets
Impairment loss for
acquired intangible    7,000     —         —       7,000     —         —
assets
Impairment loss for    12,865    —         —       12,865    —         —
goodwill
Allowance for doubtful 1,315     687       109     568       3,200     509
receivables
Compensation expenses
associated with stock  4,552     13,159    2,094   7,502     53,958    8,585
options
Loss (gain) on
disposal of property,  (42)      1,335     213     165       1,299     207
plant and equipment
Gain on disposal of    —         —         —       (157,253) —         —
subsidiaries
Share of income of     (2,989)   (4,629)   (737)   (8,316)   (14,048)  (2,235)
affiliates
Changes in operating
assets and             (32,941)  20,368    3,241   12,926    (46,572)  (7,410)
liabilities
Net cash generated
from operating         79,520    61,505    9,787   327,280   135,469   21,555
activities
Cash flows from                                                   
investing activities:
Purchase of property,  (2,252)   (1,375)   (219)   (18,114)  (7,570)   (1,205)
plant and equipment
Proceeds from disposal
of property and        90        3         —       802       580       92
equipment
Purchase of short term (25,000)  —         —       (70,242)  (40,600)  (6,460)
investments
Proceeds from disposal
of short term          6,550     —         —       36,892    71,080    11,310
investments
Acquisition of
subsidiaries, net of   (49,996)  —         —       (49,996)  —         —
cash
Disposal of
subsidiaries, net of   (75)      2,000     318     394,388   1,967     313
cash
Purchase of intangible (758)     —         —       (758)     —         —
asset
Decrease (increase) in (1,018)   212       34      1,975     (1,711)   (272)
restricted cash
Increase in other      —         —         —       —         (3,400)   (541)
receivables
Addition in investment (1,000)   —         —       (1,000)   (1,948)   (310)
in non-current assets
Addition in investment (600)     —         —       (600)     —         —
in affiliates
Return of investment   —         —         —       —         1,300     207
in non-current assets
Refund of contingent   —         —         —       —         12,500    1,989
consideration
Decrease (increase) in
amounts due from       (2,000)   141,587   22,528  (2,000)   304,955   48,523
related parties
Net cash (used in)
generated              (76,059)  142,427   22,661  291,347   337,153   53,646
frominvesting
activities …
                                                                 
                                                                 
                      For the Three Months Ended  For the Nine Months Ended
                       September 30,               September 30,
                      2011      2012      2012    2011      2012      2012
                      RMB       RMB       US$     RMB       RMB       US$
                                                                 
Cash flows from                                                   
financing activities:
Payment for contingent —         —         —       (100,000) —         —
consideration
Acquisition of
additional interest in —         —         —       —         (20,455)  (3,255)
subsidiaries
Increase in capital
injection by           (4,547)   1,295     206     1,940     12,655    2,013
noncontrolling
interests
Repayments from        —         —         —       20,000    —         —
related parties
Proceeds on exercise   470       —         —       5,242     48        8
of stock options
Repurchase of ordinary —         —         —       (13,722)  —         —
shares
Net cash (used in)
generated from         (4,077)   1,295     206     (86,540)  (7,752)   (1,234)
financing activities
                                                                 
Net increase in cash   (616)     205,227   32,654  532,087   464,870   73,967
and cash equivalents
Cash and cash
equivalents at         2,449,849 2,483,896 395,223 1,924,884 2,222,160 353,577
beginning of period
Effect of exchange
rate changes on cash   (5,745)   (2,551)   (406)   (13,483)  (458)     (73)
and cash equivalents
Cash and cash
equivalents at end of  2,443,488 2,686,572 427,471 2,443,488 2,686,572 427,471
period
                                                                 
Interest paid         —         —         —       —         —         —
Income taxes paid     17,820    10,194    1,622   81,009    55,079    8,764

                                                                  
CNinsure Inc.
Reconciliations of GAAP Financial Measures to Non-GAAP Financial Measures
(In RMB in thousands, except shares and per share data)
                                                                  
               
               For The Three Months Ended September 30, 2011
               GAAP          <1>    <2>           <3>    <4>    Non-GAAP
                                                           
Operating       72,684        4,552  10,045        19,865 —     107,146
income
Operating       18.9%         1.2%   2.6%          5.2%   —      27.9%
margin
Net income
attributable to 78,171        4,552  10,045        —      18,115 110,883
the Company's
shareholders
Net margin     20.4%         1.2%   2.6%          —      4.7%   28.9%
Shares used in
calculating
basic net       1,002,365,585 —      —             —      —      1,002,365,585
income per
share
Basic net       1.56          0.09   0.20          —      0.36   2.21
income per ADS
Shares used in
calculating
diluted net     1,019,042,812 —      —             —      —      1,019,042,812
income per
share
Diluted net     1.53          0.09   0.20          —      0.36   2.18
income per ADS
                                                                  
                                                                  
                                                                    
               For The Three Months Ended                            
                September 30, 2012
               GAAP          <1>    Non-GAAP                         
Operating       2,931         13,159 16,090                           
income
Operating       0.7%          3.3%   4.0%                             
margin
Net income
attributable to 23,000        13,159 36,159                           
the Company's
shareholders
Net margin     5.7%          3.3%   9.0%                             
Shares used in
calculating
basic net       1,002,564,246 —      1,002,564,246                    
income per
share
Basic net       0.46          0.26   0.72                             
income per ADS
Shares used in
calculating
diluted net     1,003,504,594 —      1,003,504,594                    
income per
share
Diluted net     0.46          0.26   0.72                             
income per ADS
                                                                  
<1> share-based
compensation                                                       
expenses;
<2>one-off
professional
fees related to                                                    
the non-binding
going-private
proposal;
<3> a
recognition of
impairment loss
in respect of                                                      
intangible
assets and
goodwill;
<4> a
recognition of
impairment loss
in respect of                                                      
intangible
assets and
goodwill, net
of tax.

CONTACT: For more information, please contact:
         Oasis Qiu
         Investor Relations Manager
         Tel: +86 (20) 6122-2731
         Email: qiusr@cninsure.net
 
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