Ninetowns Reports Second Half And Full Year 2012 Financial Results

      Ninetowns Reports Second Half And Full Year 2012 Financial Results

PR Newswire

BEIJING, April 24, 2013

BEIJING, April 24, 2013 /PRNewswire/ -- Ninetowns Internet Technology Group
Company Limited (Nasdaq: NINE) ("Ninetowns" or the "Company"), one of China's
leading providers of online solutions for international trade,  today reports
its financial results for the six-month period and full year ended December
31, 2012.

Second Half 2012 Financial Highlights

  oTotal net revenues were RMB46.5 million (US$7.5 million), representing a
    7% increase compared to RMB43.3 million for the second half of 2011.
  oNet income was RMB13.2 million (US$2.1 million) compared to net loss of
    RMB1.6 million for the second half of 2011.
  oBasic and diluted net income per ADS (each ADS represents one ordinary
    share) were RMB0.35 (US$0.06) and RMB0.32 (US$0.05), respectively,
    compared to basic and diluted net loss per ADS of RMB0.04 and RMB0.04 for
    the second half of 2011.

Full Year 2012 Financial Highlights

  oTotal net revenues were RMB90.4 million (US$14.5 million), representing a
    20% increase compared to RMB75.2 million for 2011.
  oNet income was RMB68.6 million (US$11.0 million) compared to net income of
    RMB3.5 million for 2011.
  oBasic and diluted net income per ADS were RMB1.81 (US$0.29) and RMB1.67
    (US$0.27), respectively, compared to basic and diluted net income per ADS
    of RMB0.09 (US$0.01) and RMB0.09 for 2011.

Second Half and Full Year 2012 Business Highlights

Enterprise Software:

Ninetowns continued to derive a large portion of its total net revenues from
the sales and servicing of iDeclare packages, which is Ninetowns' flagship
import/export enterprise software solution. During the second half of 2012,
the Company sold 473 iDeclare software packages and 12,641 iDeclare annual
maintenance service contracts. For the full year 2012, the Company sold 1,139
iDeclare software packages and 20,824 iDeclare annual maintenance service
contracts. In 2012, sales of iDeclare software packages were impacted by the
lower level of import/export transactions as a result of slower overall
economic growth in China. However, sales of iDeclare annual maintenance
service contracts increased year-over-year in 2012 in light of the large
installed base of customers requiring ongoing support and services. In 2012,
Ninetowns renewed annual maintenance service contracts with approximately
20,800 users whose contracts were due in 2012, representing approximately 14%
of its users whose annual maintenance service contracts were due in 2012.

In addition, during the second half of 2012, Ninetowns sold 226 annual
maintenance service contracts to users who are currently using the free
software offered by the PRC Inspection Administration. For the full year 2012,
Ninetowns sold 379 such maintenance service contracts, which represents a
decrease from 646 maintenance service contracts sold in 2011. These contracts
average approximately RMB1,500 (US$250) per contract per year. The maintenance
services covered by the annual maintenance service contracts include
installation, remote technical support, automatic upgrades and user training.
Ninetowns expects to continue to promote its paid maintenance services to the
users of the free software offered by the PRC Inspection Administration.

Food Related Business:

Our food related business gained significant momentum in 2012, benefitting
from the ongoing investment and expansion of the segment since the launch in
2009. We have been offering our food and household products through our online
grocery store www.tootoo.cn which currently carries over 3,000 products in 16
different categories including fresh organic fruits and vegetables, seafood,
snacks, drinks, fresh and frozen meat, nutritional supplements and household
supplies. We focused on our "guaranteed fresh" delivery service through which
we deliver fresh produce from farms or our warehouses directly to our
customers located in a number of residential communities in Beijing. We
believe that we are able to efficiently control product storage and movement
at a low cost through the use of our proprietary product tracking system,
warehouse management system and delivery date management system, all of which
are supported by our information technology. 

Revenue generated by our food related business increased by approximately 181%
in 2012 compared to 2011, and represented 26% of our total net revenues in
2012. The increase was mainly driven by an increase in the volume of orders
placed by customers. Our food related business has benefited from growing
consumer demand for fresh and healthy organic foods coupled with consumers'
preference for the speed and convenience that online shopping offers. We plan
to continue to expand and fine-tune the offering in the year ahead, in-line
with consumer demand with a focus on improving product offering, logistics and
customer interfaces to drive continued growth.

Real Estate Development Business:

Launched in the first half of 2011, the Company's property development
business seeks to leverage Ninetowns' substantial experience in the technology
field, including the Internet of Things ("IOT") industry and to capitalize on
the emerging niche real estate market in China that integrates IOT related
technology with community life and urban operations. The Company plans to
focus its real estate development projects on three product models: (i)
intelligent residential communities, (ii) smarter senior living communities
and (iii) e-commerce bio-system industrial parks, primarily in third- and
fourth-tier cities in China.

The Company currently has four development projects located in Dalian,
Binzhou, Yizhuang and Huainan under planning or construction. Throughout 2012,
the Company has worked to advance these projects from a planning, design,
financing and legal standpoint. The Company expects to continue to focus
management and financial resources in support of these development projects
which it believes may provide a stable source of long-term growth.

Management Discussion

Mr. Shuang Wang, Chief Executive Officer of Ninetowns, commented: "We are
pleased to report an increase in revenue and net income for the second half
and full year 2012. Decreased sales of our iDeclare software package and
services we provided to our pay per transaction users resulting from the lower
level of import/export activity in China throughout 2012 was partially offset
by an increase in sales of iDeclare service contracts as well as continued
growth in our B2C e-commerce business. We have continued to effectively manage
our enterprise software segment in the face of macroeconomic headwinds, with a
focus on maintaining existing customers while seeking to attract new
customers. We believe that the growth in iDeclare service contracts sold
during the year demonstrates our commitment to providing best-in-class
solutions and services to our customers. However, we expect to face continued
challenges in our enterprise software segment in the year ahead in light of
the tepid economic and trade outlook for China."

"Despite the challenges we face in our enterprise software segment, we are
encouraged by the continued progress in our newer business initiatives. In
terms of our B2C e-commerce business, we are pleased to report the fourth
consecutive year of growth for this business segment, driven by steady
customer demand for our fresh foods and household products backed by our
'guaranteed fresh' delivery service. Our B2C e-commerce business has benefited
from increasing awareness of and interest in healthy, organic and local food
products by consumers throughout our target market areas in Beijing. The
growth in demand has resulted in this segment accounting for approximately 26%
of our total net revenues for the full year, a considerable achievement in a
relatively short period of time. We plan to continue to focus on expanding the
product offering with the goal of increasing our customer base and driving
continued revenue growth. Finally, we expect to continue to focus our time and
resources on the advancement of our property development initiatives. As
previously reported, we currently have four projects in the development
pipeline, and we are working to move these projects through the development
process. Together, we believe these two new business initiatives provide us
with a platform for future growth, supported by the continued contribution
from our core enterprise software segment."

Mr. Tommy Fork, Chief Financial Officer of Ninetowns, commented, "Our improved
financial performance in 2012 positions us well to continue investing in and
growing our newer business initiatives while maintaining a stable performance
within our core enterprise software segment. We plan to continue to invest
prudently in our new initiatives while maintaining a focus on cost controls in
an effort to build a sustainable platform for profitable growth."

Second Half 2012 Financial Results

Total Net Revenues. Total net revenues increased by 7% to RMB46.5 million
(US$7.5 million) for the second half of 2012, from RMB43.3 million for the
second half of 2011.

Net revenues from sales of enterprise software for the second half of 2012
were RMB30.4 million (US$4.9 million), representing 66% of total net revenues,
as compared to RMB35.5 million for the second half of 2011. Net revenues from
software development services were RMB3.8 million (US$0.6 million) for the
second half of 2012, representing 8% of total net revenues, as compared to
RMB3.9 million for the second half of 2011. Net revenues from the B2C
e-commerce business were RMB12.3 million (US$2.0 million) for the second half
of 2012, representing 26% of total net revenues in the second half of 2012, as
compared to RMB3.9 million for the second half of 2011.

Gross Profit and Gross Margin. Gross profit was RMB36.4 million (US$5.8
million) for the second half of 2012, representing a decrease of 4% compared
to RMB38.1 million for the second half of 2011. Gross margin for the second
half of 2012 was 78%, compared to 88% in the second half of 2011.

Operating Expenses. Total operating expenses were RMB51.8 million (US$8.3
million) for the second half of 2012, representing a decrease of 17% from
RMB62.7 million in the second half of 2011 primarily due to decreases in (i)
sales and marketing expenses and (ii) general and administrative expenses in
the second half of 2012.

Sales and marketing ("S&M") expenses were RMB9.9 million (US$1.6 million) for
the second half of 2012, representing a decrease of 26% from RMB13.2 million
for the second half of 2011. This decrease was mainly attributable to a
decrease in (i) overall compensation as a result of a decrease in the number
of sales and marketing personnel and (ii) advertising and exhibition expenses.

General and administrative ("G&A") expenses were RMB37.7 million (US$6.1
million) for the second half of 2012, representing a decrease of 21% from
RMB47.5 million for the same period of 2011, primarily due to decreases in
fixed assets depreciation expense, amortization of intangible assets, legal
and professional fees and share-based compensation expenses relating to share
options and non-vested shares granted to our directors, executive officers and
certain employees in prior years, partially offset by increases in salaries.

Research and product development ("R&D") expenses were RMB8.0 million (US$1.3
million) for the second half of 2012, representing an increase of 39% from
RMB5.7 million for the same period of 2011. This increase was mainly
attributable to an increase in the compensation of research and development
personnel as a result of a general increase in research and development
personnel headcount.

Bad debts recovered were RMB3.7 million (US$0.6 million) in the second half of
2012, compared to RMB3.7 million for the same period of 2011. This was due to
payments received for accounts receivable from our three franchisees that had
previously been included in our bad debt provision. The repayment results are
similar between the second half of 2012 and 2011.

Operating Loss. Operating loss was RMB15.4 million (US$2.5 million) for the
second half of 2012, compared to an operating loss of RMB24.6 million for the
second half of 2011. The decrease in operating loss was primarily due to
decreases in operating expenses in the second half of 2012.

Other Income. Other income, which primarily consists of interest income, gains
on sales of short-term investments, changes in the fair value of marketable
options, losses on investments under cost method and income (loss) from equity
method investments, increased to RMB28.7 million (US$4.6 million) for the
second half of 2012, compared to other income of RMB23.5 million for the same
period in 2011. This increase was primarily due to the higher gains on sales
of short-term investments.

(Loss) Income before Income Tax and Non-controlling Interest. Income before
income tax and non-controlling interest was RMB13.3 million (US$2.1 million)
for the second half of 2012, compared to loss before income tax and
non-controlling interest of RMB1.1 million for the same period in 2011.

Income Tax Expense. Income tax expense was RMB0.02 million (US$4,000) for the
second half of 2012, compared to income tax expense of RMB0.6 million for the
second half of 2011. This decrease was due primarily to deferred tax benefits
resulting from timing differences between the accounting and tax treatment of
deferred service revenue.

Net (Loss) Income. Net income was RMB13.2 million (US$2.1 million) for the
second half of 2012, as compared to a net loss of RMB1.6 million for the
second half of 2011. Basic and diluted net income per ADS for the second half
of 2012 were RMB0.35 (US$0.06) and RMB0.32 (US$0.05), respectively, compared
to basic and diluted net loss per ADS of RMB0.04 and RMB0.04 for the same
period in 2011.

Full Year 2012 Financial Results

Total Net Revenues. Total net revenues for the full year 2012 were RMB90.4
million (US$14.5 million), representing an increase of 20% compared to RMB75.2
million for the full year 2011. This revenue increase was primarily due to the
increase of net revenue from our B2C e-commerce business in 2012.

Net revenues from enterprise software sales for the full year 2012 were
RMB59.8 million (US$9.6 million), representing 66% of total net revenues in
2012, as compared to RMB61.0 million for the full year 2011. Net revenues from
software development services for the full year 2012 were RMB7.5 million
(US$1.2 million), representing 8% of total net revenues in 2012, compared to
RMB6.0 million for the full year 2011. Net revenues from the food related
business for the full year 2012 were RMB23.1 million (US$3.7 million),
representing 26% of total net revenues in 2012, compared to RMB8.2 million for
the full year 2011.

Gross Profit and Gross Margin. Gross profit was RMB69.7 million (US$11.2
million) for the full year 2012, compared to RMB64.5 million for the full year
2011. Gross margin for the full year 2012 was 77%, compared to 86% for the
full year 2011.

Operating Expenses. Total operating expenses increased by 4% to RMB110.6
million (US$17.7 million) for the full year 2012 from RMB106.0 million for the
full year 2011.

S&M expenses decreased by 4% to RMB21.6 million (US$3.5 million) for the full
year 2012, from RMB22.5 million for the full year 2011. The decrease was
caused by decreases in office expenses and lower travelling and transportation
expenses, partially offset by increases in advertising and exhibition expenses
in the B2C e-commerce business in 2012.

G&A expenses decreased by 2% to RMB77.8 million (US$12.5 million) for the full
year 2012 from RMB79.4 million for the full year 2011. This decrease resulted
primarily from decreases in fixed assets depreciation expense, amortization of
intangible assets, legal and professional fees and share-based compensation
expenses relating to share options and non-vested shares granted to our
directors, executive officers and certain employees in prior years, partially
offset by increases in salaries and office expenses.

R&D expenses increased by 35% to RMB14.9 million (US$2.4 million) for the full
year 2012 from RMB11.0 million for the full year 2011. This increase was
mainly attributable to an increase in overall compensation of research and
development personnel as a result of the increase in headcount and average
compensation per person.

Recovery of doubtful accounts was RMB3.8 million (US$0.6 million) in 2012,
compared to RMB6.8 million in 2011. This was due to collections of accounts
receivable from our three franchisees that were previously included in our bad
debt provisions.

Operating Loss. As a result, operating loss for the full year 2012 was RMB40.9
million (US$6.6 million), compared to an operating loss of RMB41.6 million for
the full year 2011.

Other Income. Other income, which primarily consists of interest income, gains
on sales of short-term investments, changes in fair value of marketable
options, losses oninvestments under cost method and income (loss) from equity
method investments, amounted to RMB110.1 million (US$17.7 million) for the
full year 2012, as compared to other income of RMB46.1 million for the full
year 2011. This increase was due to the better performance of the securities
products that we purchased in 2012.

Income before Income Tax and Non-controlling Interest. Income before income
tax and non-controlling interest was RMB69.2 million (US$11.1 million) for the
full year 2012, compared to income before income tax and non-controlling
interest of RMB4.6 million for the full year 2011.

Income Tax Expense. Income tax expense decreased to RMB0.7 million (US$0.1
million) for the full year 2012, from RMB1.0 million in 2011, which was due
primarily to a deferred tax benefit resulting from timing differences between
the accounting and tax treatment of deferred service revenue.

Net Income. Net income was RMB68.6 million (US$11.0 million) for the full year
2012, compared to net income of RMB3.5 million for the full year 2011. Basic
and diluted net income per ADS for the full year 2012 were RMB1.81 (US$0.29)
and RMB1.67 (US$0.27), respectively, compared to basic and diluted net income
per ADS of RMB0.09 and RMB0.09, respectively, for the full year 2011.

Deferred Revenue. Deferred revenue as of December 31, 2012 was RMB13.5 million
(US$2.2 million), compared to RMB14.3 million as of December 31, 2011.

Deferred Subsidies. Deferred subsidies, representing grants from the
government of China in relation to certain software development projects,
amounted to RMB276.2 million (US$44.3 million) as of December 31, 2012. Upon
the completion of the projects, the government grants will be recognized as
either other income or as an offset to relevant research and development
expenses.

Cash, Cash Equivalents and Term Deposits. Cash, cash equivalents and term
deposits amounted to RMB255.2 million (US$41.0 million) as of December 31,
2012, compared to RMB262.4 million as of December 31, 2011.

Currency Convenience Translation

Our business is primarily conducted in China and a substantial majority of our
revenues are denominated in Renminbi. This announcement contains translations
of certain Renminbi amounts into U.S. dollar amounts at specified rates solely
for the convenience of readers. Unless otherwise noted, all translations from
Renminbi amounts into U.S. dollar amounts as of and for the six months /
twelve months ended December 31, 2012, were made at an exchange rate of
RMB6.2301 to US$1.00, representing the rate as certified by the H.10 weekly
statistical release of the Federal Reserve Board on December 31, 2012. 

Investor Conference Call / Webcast Details

A conference call has been scheduled for 8:00 a.m. in Beijing on April 25,
2013. This will be 8:00 p.m. on April 24, 2013 in New York. During the call,
Ninetowns' management will be available to discuss the second half and full
year 2012 financial results and recent business activities.

The call may be accessed by dialing +1-866-519-4004 and the passcode is
40342337. A live webcast of the conference call will be available on
Ninetowns' website at ir.ninetowns.com. A replay of the call will be available
from 11:00 a.m. Beijing time on April 25, 2013 (11:00 p.m. in New York on
April 24, 2013) through 11:00 a.m. on May 2, 2013 in Beijing (11:00 p.m. in
New York on May 1, 2013) by telephone at +1-855-452-5696 and through
ir.ninetowns.com. The passcode to access the replay is 40342337.  

About Ninetowns Internet Technology Group Company Limited

Ninetowns (Nasdaq: NINE) is a leading provider of online solutions for
international trade, with its key services in automating import/export
e-filing. Ninetowns has been listed on the NASDAQ Stock Exchange
sinceDecember 2004under the symbol "NINE." More information can be found
atir.ninetowns.com.

Forward-Looking Statements

Certain statements in this press release include forward-looking statements
within the meaning of the U.S. Private Securities Litigation Reform Act of
1995. Forward-looking statements generally can be identified by the use of
forward-looking terminology, such as "may," "will," "plan," "expect,"
"intend," "estimate," "anticipate," "believe," "project" or "continue" or the
negative thereof or other similar words. These statements are based upon the
current beliefs and expectations of the Company's management and involve risks
and uncertainties that are subject to changes based on various factors (many
of which are beyond the Company's control), including, but not limited to,
customer acceptance and market share gains; competition from companies that
have greater financial resources; introduction of new products into the
marketplace by competitors; successful product development; dependence on
significant customers; the ability to recruit and retain quality employees as
the Company grows; and economic and political conditions globally as well as
those detailed in the Company's filings with the Securities and Exchange
Commission. Actual results may differ materially from those discussed in, or
implied by, the forward-looking statements. The forward-looking statements
speak only as of the date of this release and the Company assumes no duty to
update them to reflect new, changing or unanticipated events or circumstances.

Contacts:

Investor Relations (Beijing)

Daisy Wang, IR Manager
Ninetowns Internet Technology Group Company Limited
Phone: +86 (10) 6589 9904
Email: daisywang@ninetowns.com

Investor Relations (U.S.)

Mahmoud Siddig, Managing Director
Taylor Rafferty
Phone: +1 (212) 889 4350
Email: ninetowns@taylor-rafferty.com





NINETOWNS INTERNET TECHNOLOGY GROUP COMPANY LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2011, JUNE 30, 2012 AND DECEMBER 31, 2012
(In thousands, except share-related data)
                 For the six months ended
                Dec. 31,    Dec. 31,    June 30,    June 30,    Dec. 31,    Dec. 31,
                2011        2011        2012        2012        2012        2012
                RMB         US$         RMB         US$         RMB         US$
                (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Total net       43,307      6,881       43,890      6,909       46,497      7,463
revenues
Total cost of   (5,190)     (825)       (10,674)    (1,680)     (10,054)    (1,614)
revenues
                ______      ______      _______     _______     ______      ______
Gross profit    38,117      6,056       33,216      5,229       36,443      5,849
Selling and
marketing       (13,244)    (2,104)     (11,789)    (1,856)     (9,858)     (1,582)
expenses
General and
administrative  (47,466)    (7,542)     (40,129)    (6,317)     (37,712)    (6,053)
expenses
Research and
development     (5,723)     (909)       (6,920)     (1,089)     (7,952)     (1,276)
expenses
Allowance for
doubtful        3,729       592         130         20          3,677       590
accounts, net
                ______      ______      ______      ______      ______      ______
Loss from       (24,587)    (3,907)     (25,492)    (4,013)     (15,402)    (2,472)
operations
Interest income 786         125         1,813       285         3,905       627
Gain on sales
of short-term   5,520       877         75,850      11,939      37,794      6,066
investments
Change in fair
value of        14,422      2,291       845         133         (16,939)    (2,719)
marketable
options
Loss on
investment      (3,373)     (536)       -           -           -           -
under cost
method
Income (loss)
from equity     1,639       260         (271)       (43)        (586)       (94)
method
investments
Other income    4,486       713         3,204       504         4,502       723
                ______      ______      ______      ______      ______      ______
(Loss) income
before income
tax and         (1,107)     (177)       55,949      8,805       13,274      2,131
non-controlling
interest
Income tax      (552)       (88)        (647)       (102)       (24)        (4)
expense
                ______      _____       ______      ______      ______      _____
(Loss) income
before          (1,659)     (265)       55,302      8,703       13,250      2,127
non-controlling
interest
Net loss
(income)
attributable to 15          2           38          6           (41)        (7)
non-controlling
interest
                ______      ______      ______      ______      ______      ______
Net (loss)      (1,644)     (263)       55,340      8,709       13,209      2,120
income
                ______      ______      ______      ______      ______      ______
Net (loss)
income per
share:
 Basic         (RMB0.04)   (US$0.01)   RMB1.47     US$0.24     RMB0.35     US$0.06
 Diluted       (RMB0.04)   (US$0.01)   RMB1.35     US$0.21     RMB0.32     US$0.05
                ______      ______      ______      ______      ______      ______
Weighted
average number
of shares used
in computation:
Basic           37,536,885  37,536,885  37,745,880  37,745,880  37,814,016  37,814,016
Diluted         40,558,677  40,558,677  41,080,558  41,080,558  41,126,582  41,126,582
                ______      ______      ______      ______      ______      ______



NINETOWNS INTERNET TECHNOLOGY GROUP COMPANY LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2012
(In thousands, except share-related data)
                                           For the years ended
                               Dec. 31,    Dec. 31,    Dec. 31,    Dec. 31,
                               2011        2011        2012        2012
                               RMB         US$         RMB         US$
                               (unaudited) (unaudited) (unaudited) (unaudited)
Total net revenues             75,216      11,950      90,387      14,509
Total cost of revenues         (10,733)    (1,705)     (20,728)    (3,327)
                               ______      ______      ______      ______
Gross profit                   64,483      10,245      69,659      11,182
Selling and marketing expenses (22,493)    (3,574)     (21,647)    (3,475)
General and administrative     (79,354)    (12,608)    (77,841)    (12,494)
expenses
Research and development       (11,042)    (1,754)     (14,872)    (2,387)
expenses
Allowance for doubtful         6,841       1,087       3,807       611
accounts, net
                               ______      ______      ______      ______
Loss from operations           (41,565)    (6,604)     (40,894)    (6,563)
Interest income                1,922       305         5,718       917
Gain on sales of short term    32,689      5,194       113,644     18,241
investments
Change in fair value of        7,252       1,152       (16,094)    (2,583)
marketable options
Loss on investment under cost  (3,373)     (536)       -           -
method
Income (loss) from equity      1,639       260         (857)       (138)
method investments
Other income                   5,994       952         7,706       1,237
                               ______      ______      ______      ______
Income before income tax and                                    
non-controlling
interest                       4,558       723         69,223      11,111
Income tax expense             (1,048)     (167)       (671)       (108)
                               ______      _____       ______      _____
Income before non-controlling  3,510       556         68,552      11,003
interest
Not loss (income) attributable
to non-controlling             15          2           (3)         -
interest
                               ______      ______      ______      ______
Net income                     3,525       558         68,549      11,003
                               ______      ______      ______      ______
Net income per share:
 Basic                        RMB0.09     US$0.01     RMB1.81     US$0.29
 Diluted                      RMB0.09     US$0.01     RMB1.67     US$0.27
                               ______      ______      ______      ______
Weighted average number of
shares used in computation:
Basic                          37,443,657  37,443,657  37,780,134  37,780,134
Diluted                        40,465,449  40,465,449  41,092,700  41,092,700
                               ______      ______      ______      ______



NINETOWNS INTERNET TECHNOLOGY GROUP COMPANY LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2011 AND 2012
(In thousands)
                             Dec. 31,                Dec. 31,
                             2011        2011        2012        2012
                             RMB         US$         RMB         US$
                             (unaudited) (unaudited) (unaudited) (unaudited)
ASSETS
Current assets:
 Cash, cash equivalents and 262,433     41,696      255,178     40,959
term deposits
 Restricted cash            88          14          84          13
Short-term investments       245,798     39,053      290,513     46,630
 Inventories                3,146       500         3,527       566
 Trade receivables, net     3,921       623         2,327       373
 Other current assets       10,120      1,608       46,591      7,480
                             _______     _______     _______     _______
Total current assets         525,506     83,494      598,220     96,021
Non-current assets           756,618     120,215     797,836     128,061
                             _______     _______     _______     _______
TOTAL ASSETS                 1,282,124   203,709     1,396,056   224,082
                             _______     _______     _______     _______
LIABILITIES AND EQUITY
Current liabilities:
 Deferred revenue           14,332      2,277       13,472      2,162
 Other current liabilities  37,331      5,931       62,622      10,053
                             _______     _______     _______     _______
Total current liabilities    51,663      8,208       76,094      12,215
Non-current liabilities:
 Deferred subsidies         240,240     38,170      276,200     44,333
 Tax liabilities            4,817       765         4,766       765
                             _______     _______     _______     _______
Total liabilities            296,720     47,143      357,060     57,313
Total equity                 985,404     156,566     1,038,996   166,769
                             _______     _______     _______     _______
TOTAL LIABILITIES AND EQUITY 1,282,124   203,709     1,396,056   224,082

SOURCE Ninetowns Internet Technology Group Company Limited

Website: http://www.ninetowns.com
Website: http://ir.ninetowns.com