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ChinaEdu Reports Second Quarter 2013 Results

                 ChinaEdu Reports Second Quarter 2013 Results

Net Revenue Increases 21.9 Percent Year-Over-Year to $22.9 Million

Excluding Non-recurring Revenue, Net Revenue Increases 16.1 Percent
Year-Over-Year to $21.7 Million

Net Income Attributable to ChinaEdu per Diluted ADS Reaches 27.9 Cents

PR Newswire

BEIJING, Sept. 11, 2013

BEIJING, Sept. 11, 2013 /PRNewswire/ --ChinaEdu Corporation (NASDAQ: CEDU)
("ChinaEdu" or the "Company"), a leading online educational services provider
in China, today announced its unaudited financial results for the second
quarter ended June 30, 2013.[1]

Second Quarter 2013 Highlights 

  oTotal net revenue was $22.9 million for the second quarter of 2013,
    exceeding the Company's guidance range for the quarter and representing a
    21.9 percent increase from $18.7 million in the corresponding period of
    2012. Excluding non-recurring revenue of $1.2 million, total net revenue
    increased by 16.1% to $21.7 million
  oNet revenue from online degree programs was $18.5 million, an increase of
    23.6 percent from $15.0 million in the corresponding period of 2012.
  oNet income attributable to ChinaEdu was $2.8 million, an increase of 84.3
    percent from $1.5 million in the corresponding period of 2012.
  oAdjusted net income attributable to ChinaEdu[2] was $3.3 million, an
    increase of 66.8 percent from $2.0 million in the corresponding period of
    2012.
  oNet income attributable to ChinaEdu per diluted ADS[3] was $0.279, an
    increase of 210.9 percent from $0.089 in the corresponding period of 2012.
  oAdjusted net income attributable to ChinaEdu per diluted ADS[4] was
    $0.333, an increase of 183.3 percent from $0.118 in the corresponding
    period of 2012.
  oThe number of revenue students[5] enrolled in online degree programs
    during the Spring 2013 semester increased by 14.5 percent year-over-year
    to approximately 221,000 students.

    The reporting currency of the Company is RMB, but for the convenience of
    the reader, the amounts for the three months ended June 30, 2013 are
    presented in U.S. dollars. Unless otherwise stated, all translations from
    RMB to U.S. dollars were made at the rate of RMB6.1374 to $1.00, the noon
    buying rate in effect on June 30, 2013 in the H.10 statistical release of
    the Federal Reserve Board. The Company makes no representation that the
[1] RMB or U.S. dollar amounts referred could be converted into U.S. dollars
    or RMB, as the case may be, at any particular rate or at all. For
    analytical presentation, all percentages are calculated using the numbers
    presented in the financial statements contained in this earnings release.
    An explanation of the Company's non-GAAP financial measures is included in
    the section entitled "Non-GAAP Financial Measures" below, and the related
    reconciliations to GAAP financial measures are presented in the
    accompanying financial statements.
    "Adjusted net income attributable to ChinaEdu" is a non-GAAP measure
[2] defined as net income attributable to ChinaEdu excluding share-based
    compensation net of non-controlling interests' portion, amortization of
    intangible assets and land use rights, and intangible assets impairment.
[3] "ADS" is American Depositary Share. Each ADS represents three ordinary
    shares.
    "Adjusted net income attributable to ChinaEdu per diluted ADS" is a
[4] non-GAAP measure which is computed using adjusted net income attributable
    to ChinaEdu over the number of ADSs used in net income attributable to
    ChinaEdu per diluted ADS calculation.
    "Revenue students" refers to students of university online degree programs
[5] who have paid tuitions. The numbers for the three months ended June 30,
    2013 and 2012 are revenue students in Spring 2013 and Spring 2012,
    respectively.

Julia Huang, executive chairman of ChinaEdu commented, "We are pleased with
our financial performance in the second quarter of 2013. We ended the Spring
Semester of our core online degree program with growth exceeding our
expectation. Looking forward into the second half of 2013, we will continue to
execute on plans laid out by our board of directors and management team at the
beginning of the year and focus on continuously developing industry leading
interactive technology while remaining vigilant in regard to cost control to
ensure ongoing profitability. However, we maintain a conservative outlook on
the upcoming Fall enrollment and remain committed to quality of students as
well as programs."

Financial Results for the Second Quarter Ended June 30, 2013

Net Revenue

Total net revenue for the second quarter of 2013 was $22.9 million, a 21.9
percent increase from $18.7 million in the corresponding period of 2012.
Excluding non-recurring revenue of $1.2 million, the result of certain
technology services being provided to online degree programs, total net
revenue increased by 16.1% to $21.7 million.

Net revenue from online degree programs for the second quarter of 2013 was
$18.5 million, a 23.6 percent increase over $15.0 million in the corresponding
period of 2012. The increase in net revenue from online degree programs was
primarily due to organic growth in revenue students enrolled in online degree
programs, and continued expansion and optimization of the Company's learning
centers network. Enrollment for 2013 Spring semester online degree programs
was approximately 221,000 revenue students, a 14.5 percent increase from
approximately 193,000 revenue students enrolled in the Spring semester in
2012.

By the end of the second quarter of 2013, ChinaEdu's learning centers network
was providing recruiting services for 23 universities with 125 operational
learning centers, of which 61 were proprietary centers[6] and 64 were
contracted centers[7]. This compares to 113 operational learning centers as of
June 30, 2012, of which 55 were proprietary and 58 were contracted centers.

Net revenue from non-degree programs, including online tutoring programs,
private primary and secondary schools and international curriculum programs in
the second quarter of 2013 was $4.3 million, a 15.2 percent increase from $3.7
million in the second quarter of 2012. Of that, approximately $0.4 million was
attributable to enrollment growth and increased tuition at our private school
in Anqing.

    Proprietary centers refer to self-owned learning centers operated either
[6] under the Company's own brand name or the brand name of a university
    pursuant to a licensing arrangement with that university.
    Contracted centers refer to agreement with third party learning centers
    pursuant to which the Company only provides assistance applying for
[7] approval from provincial level education authorities as well as securing
    additional university online degree programs. In return, the Company
    receives a percentage of the tuition earned by these third party learning
    centers.

Cost of Revenue

Total cost of revenue for the second quarter of 2013 was $8.3 million, an
increase of 8.9 percent, from $7.7 million in the corresponding period of
2012.

Cost of revenue for online degree programs in the second quarter of 2013 was
$5.8 million, an increase of 15.4 percent compared to $5.1 million in the
corresponding period of 2012. The increase in cost of revenue was primarily
related to staff costs increasing by $0.3 million and service station fees
increasing by $0.4 million.

Cost of revenue for non-degree programs in the second quarter of 2013 was $2.5
million, a decrease of 3.9 percent from $2.6 million in the second quarter of
2012. The decrease in cost of revenue for non-degree programs was primarily
related to decreased leasing costs associated with our international
curriculum programs and online tutoring programs.

Gross Profit and Gross Margin

Gross profit for the second quarter of 2013 was $14.5 million, compared to
$11.1 million in the corresponding period of 2012. Gross margin increased to
63.5 percent, compared to 59.2 percent for the corresponding period of 2012.

Gross margin for online degree programs was 68.5 percent, an increase from
66.3 percent in the second quarter of 2012. The increase was primarily the
result of the significant increase in total net revenue as well as the
continued effect of cost control measures.

Gross margin for online tutoring programs increased significantly to 67.0
percent from 57.7 percent in the second quarter of 2012, mainly due to
increased net revenue as well as decreased lease and service costs.

Gross margin for private schools in the second quarter of 2013 increased to
30.4 percent, compared to 26.1 percent in the corresponding period of 2012.
The increase in gross margin was primarily the result of increased net revenue
at our Anqing school.

Operating Expenses

Total operating expenses were $7.7 million in the second quarter of 2013, an
increase of 4.5 percent from $7.4 million in the corresponding period of 2012.
As a percentage of net revenue, total operating expenses decreased to 33.9
percent, compared to 39.5 percent in the corresponding period in 2012. The
increase in total operating expense was the result of the following:

  oGeneral and administrative expenses for the second quarter of 2013 were
    $3.9 million, a slight decrease of 1.6 percent from $4.0 million in the
    corresponding period of 2012. As a percentage of net revenue, general and
    administrative expenses decreased to 17.0 percent from 21.1 percent in the
    same period in 2012.
  oSelling and marketing expenses were $1.9 million in the second quarter of
    2013, an increase of 3.8 percent compared to $1.8 million in the
    corresponding period of 2012. As a percentage of net revenue, selling and
    marketing expenses decreased to 8.4 percent from 9.8 percent in the same
    period in 2012. The increase in selling and marketing expense was
    primarily related to increased advertising expenses associated with our
    online tutoring programs and travel expenses associated with our online
    degree programs.
  oResearch and development expenses for the second quarter of 2013 were $1.9
    million, an increase of 20.2 percent compared to $1.6 million in the
    corresponding period of 2012. As a percentage of net revenue, the research
    and development expense decreased slightly to 8.5 percent in the second
    quarter of 2013, compared to 8.6 percent in the corresponding period of
    2012. The increase in the research and development expenses was primarily
    the result of increased staff costs associated with the company's
    investment in technology upgrades.

Income from Operations

Income from operations in the second quarter of 2013 was $6.8 million, an
increase of 83.9 percent compared to $3.7 million in the corresponding period
of 2012. Operating margin increased to 29.7 percent in the second quarter of
2013, compared to 19.7 percent in the corresponding period of 2012.

Adjusted income from operations, a non-GAAP measure defined as income from
operations excluding share-based compensation, amortization of intangible
assets, land use rights and intangible assets impairment, was $7.3 million in
the second quarter of 2013, an increase of 74.8 percent compared to $4.2
million in the corresponding period of 2012.

Adjusted operating margin, a non-GAAP measure defined as the ratio of adjusted
income from operations (non-GAAP) over net revenue, for the second quarter of
2013 increased to 32.0 percent, compared to 22.3 percent in the corresponding
period of 2012.

Interest expense

Interest expense for the second quarter of 2013 was $0.5 million, which was
primarily related to loans with The Bank of East Asia, Limited.

Income Tax Expense

In the second quarter of 2013, the income tax expense was $1.6 million and the
effective income tax rate was 23.9 percent.

Net Income Attributable to ChinaEdu

Net income attributable to ChinaEdu, which is net income, excluding net income
attributable to non-controlling interests, was $2.8 million in the second
quarter of 2013, representing an increase of 84.3 percent from $1.5 million in
the corresponding period of 2012. The increase was primarily the result of a
significant increase in gross profit, as well as effective cost and expense
control.

Net income attributable to ChinaEdu per basic and diluted ADS was $0.310 and
$0.279, respectively, for the second quarter of 2013, compared to $0.096 and
$0.089, respectively, for the corresponding period of 2012. The increase was
the result of the significant increase in net income attributable to ChinaEdu
and a significant decrease of the number of diluted ADS after a share
repurchase of 21,460,293 ordinary shares in aggregate between January and June
2013.

Adjusted net income attributable to ChinaEdu (non-GAAP) was $3.3 million in
the second quarter of 2013, compared to $2.0 million in the corresponding
period of 2012. Adjusted net margin, a non-GAAP measure defined as the ratio
of adjusted net income attributable to ChinaEdu (non-GAAP) over net revenue,
was 14.6 percent in the second quarter of 2013, compared to 10.7 percent in
the corresponding period of 2012.

Adjusted net income attributable to ChinaEdu per basic and diluted ADS
(non-GAAP) was $0.370 and $0.333 respectively, for the second quarter of 2013,
compared to $0.126 and $0.118, respectively, for the corresponding period of
2012.

Deferred Revenue

As of June 30, 2013, deferred revenue was $24.3 million, consisting of current
deferred revenue in the amount of $22.9 million and non-current deferred
revenue in the amount of $1.4 million.

In general, Spring semester tuition for online degree programs is received
during the second quarter but is recognized both in the second quarter and the
third quarter of the fiscal year.

Private school revenue is received in September, but amortized over 6 or 12
months while online tutoring program revenue is mostly received at program
enrollment and is amortized within 12 months.

Cash and Cash Equivalents and Term Deposits

As of June 30, 2013, the Company reported cash and cash equivalents and term
deposits of $57.0 million, which primarily consisted of cash and cash
equivalents, and term deposits with original maturity terms of greater than
three months but less than one year.

Amounts Due from Related Parties

Amounts due from related parties, which represents cash owed to the Company by
collaborative alliance partners, were $64.2 million as of June 30, 2013
compared to $49.2 million as of December 31, 2012.

2013 Year-to-Date Financial Results

Net Revenue

For the six months ended June 30, 2013, total net revenue was $42.3 million,
representing an increase of 13.4 percent over $37.3 million in the
corresponding period of 2012. Net revenue from online degree programs for the
first half of 2013 was $33.9 million, representing a 13.1 percent increase
from $30.0 million in the corresponding period of 2012. Net revenue from
non-online degree programs for the first half of 2013 was $8.4 million,
compared to $7.3 million in 2012, a 14.7 percent increase. Growth in total net
revenue in the first half of 2013 was the result of strong enrollment in
online degree programs in the Fall semester of 2012 as well as the Spring
semester of 2013. Net revenue at the Anqing School increased by $0.7 million
or 21.8% compared to the corresponding period in 2012, while the Company saw a
continued decrease in revenue contributed by international and elite
curriculum programs.

Cost of Revenue

For the six months ended June 30, 2013, total cost of revenue was $15.9
million, an increase from $15.1 million in the corresponding period of 2012.
Cost of revenue for online degree programs in the first half of 2013 was $11.1
million, an increase of 10.8 percent compared to $10.0 million in the
corresponding period of 2012. The increase in cost of revenue in the first
half of 2013 was primarily the result of cost increases associated with a
larger headcount and the expansion of the Company's learning centers network.

Cost of revenue for non-online degree programs in the first half of 2013 was
$4.8 million, a decrease of 4.6 percent compared to $5.1 million in the
corresponding period of 2012. The decrease in cost of revenue was primarily
related to the decrease in leasing costs and service costs associated with our
101 online tutoring programs, a decrease in leasing costs as well as a
decrease in depreciation and amortization costs associated with international
curriculum programs.

Gross Profit

Gross profit for the six months ended June 30, 2013 was $26.4 million, an
increase of 18.7 percent compared with $22.2 million for the corresponding
period in 2012.

Income from Operations

Income from operations was $11.1 million for the six months ended June 30,
2013, representing an increase of 51.3 percent from $7.3 million for the
corresponding period of 2012. Operating margin was 26.2 percent for the six
months ended June 30, 2013 compared to 19.6 percent for the corresponding
period of 2012.

Adjusted income from operations (non-GAAP) was $12.2 million for the first
half of 2013, representing an increase of 45.4 percent, compared to $8.4
million in the corresponding period of 2012. Adjusted operating margin
(non-GAAP) for the six months ended June 30, 2013 was 28.8 percent, compared
to 22.5 percent for the corresponding period in 2012.

Interest expense

Interest expense for the first half of 2013 was $0.8 million, which was
primarily related to loans with The Bank of East Asia, Limited.

Income Tax Expense

Income tax expense for the first half of 2013 was $2.6 million, as compared
with $1.8 million for the corresponding period of in 2012.

Net Income Attributable to Non-controlling Interests

Net income attributable to non-controlling interests was $4.1 million in first
half of 2013, an increase of 10.9 percent compared to $3.7 million in the
first half of 2012. The increase was primarily attributable to the
non-controlling interest impact related to the increase in net income from
online degree programs in the first half of 2013.

Net Income attributable to ChinaEdu

Net income attributable to ChinaEdu was $4.7 million for the six months ended
June 30, 2013. This represents an increase of 46.0 percent from $3.2 million
for the corresponding period of 2012. Net margin was 11.0 percent for the six
months ended June 30, 2013, compared to 8.6 percent for the corresponding
period of 2012.

Adjusted net margin was 13.6 percent for the six months ended June 30, 2013,
compared to 11.3 percent for the corresponding period of 2012.The increase was
primarily due to increased net income in the first half of 2013.

Third Quarter 2013 Guidance

ChinaEdu management expects total net revenue in the third quarter of 2013 to
range from RMB132 million to RMB137 million or $21.5 million to $22.3 million,
representing a 6 percent to 10 percent increase from RMB124 million or $20.2
million compared to the corresponding period of 2012.

Conference Call

ChinaEdu's management will hold an earnings conference call at 8:00 a.m. U.S.
Eastern Time on September 12, 2013 (8:00 p.m. Beijing/Hong Kong Time on
September 12, 2013).

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

China               400 120 0539
Hong Kong            800 905 927
United Kingdom       0800 015 9725
United States        1 855 298 3404
New York City (Toll) 1 631 514 2526
Conference Title:    ChinaEdu Q2 2013 Earnings Conference Call
Conference Passcode: ChinaEdu

A live and archived webcast of the conference call will be available on the
investor relations page of ChinaEdu's website at http://ir.chinaedu.net and a
replay of the conference call may be accessed by phone until September 18,
2013.

Dial-in numbers for the replay are as follows:

China             4001842240
Hong Kong         800 966 697
United Kingdom   0800 169 7301
United States    1 866 846 0868
Conference Title: ChinaEdu Q2 2013 Earnings Conference Call
Replay Passcode:  2286813

Non-GAAP Financial Measures

To supplement the unaudited condensed consolidated financial information
presented in accordance with Generally Accepted Accounting Principles in the
United States of America ("GAAP"), the Company uses non-GAAP measures of
income from operations and net income attributable to ChinaEdu, which are
adjusted from results based on GAAP to exclude certain non-cash items of
share-based compensation, amortization of intangible assets and land use
rights and intangible assets impairment. Adjusted operating margin defined as
the ratio of adjusted operating income from operation over net revenue.
Adjusted net income attributable to ChinaEdu per basic and diluted ADS are a
non-GAAP measure which are computed using adjusted net income attributable to
ChinaEdu over the number of ADSs used in net income attributable to ChinaEdu
per basic and diluted ADS calculation.

These non-GAAP financial measures are provided to enhance the investors'
overall understanding of the Company's current and past financial performance
in on-going core operations as well as prospects for the future. These
measures should be considered in addition to results prepared and presented in
accordance with GAAP, but should not be considered a substitute for or
superior to GAAP results. Management considers the non-GAAP information as
important measures internally and therefore deems it important to provide all
of this information to investors.

About ChinaEdu

ChinaEdu Corporation is an educational services provider in China,
incorporated as an exempted limited liability company in the Cayman Islands.
Established in 1999, the Company's primary business is to provide
comprehensive services to the online degree programs of leading Chinese
universities. These services include academic program development, technology
services, enrollment marketing, student support services and finance
operations. The Company's other lines of businesses include the operation of
private primary and secondary schools, online interactive tutoring services
and providing marketing, support for international curriculum programs and
online learning community for adult students.

The Company believes it is the largest service provider to online degree
programs in China in terms of the number of higher education institutions that
are served and the number of student enrollments supported. The Company
currently provides technical, recruiting and other services to 27 universities
with online degree programs and provides services and support to 11 additional
universities that are awaiting regulatory approval to launch their online
programs. Of these 38 universities, 13 of them have entered into collaborative
alliances with ChinaEdu, ranging from 15 to 50 years in length. Eight of them
have entered into technology service agreements, ranging from 3 to 20 years in
length. ChinaEdu also performs recruiting services through its nationwide
learning center network for 23 universities, including 6 with which the
Company has either established collaborative alliances or entered into
technology service agreements.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995, including certain plans,
expectations, goals, and projections, which are subject to numerous
assumptions, risks, and uncertainties. Forward-looking statements involve
known and unknown risks, uncertainties and contingencies, many of which are
beyond our control which may cause actual results, levels of activity,
performance or achievements to differ materially from any future results,
levels of activity, performance or achievements expressed or implied by such
forward-looking statements. The Company's actual results could differ
materially from those contained in the forward-looking statements due to a
number of factors, including those described under the heading "Risk Factors"
in the Company's Annual Report on Form20-F for the year ended December31,
2012, and in documents subsequently filed by the Company from time to time
with the Securities and Exchange Commission. Unless required by law, the
Company undertakes no obligation to (and expressly disclaim any such
obligation to) update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.

For investor and media inquiries, please contact:

Helen Plummer
Senior Investor Relations Coordinator
ChinaEdu Corporation
Phone: +1 908-442-9395
E-mail: helen@chinaedu.net

Simon Mei
Chief Financial Officer
ChinaEdu Corporation
Phone: +86 (10) 84187301
E-mail: simon@chinaedu.net

ChinaEdu Corporation
Unaudited Condensed Consolidated Balance Sheets
(in thousands, unaudited)
                                               December31, June30,  June30,
                                               2012         2013      2013
                                               RMB          RMB       US$
Current assets:
 Cash and cash equivalents                     385,922      230,341   37,531
 Term deposits                                92,028       119,746   19,511
 Short-term investments                        23,575       9,310     1,517
 Accounts receivable                           34,917       38,465    6,267
 Prepaid expenses and other current assets    23,455       26,673    4,346
 Amounts due from related parties-current      260,184      352,077   57,366
 Deferred tax assets-current                   9,571        4,029     656
Total current assets                          829,652      780,641   127,194
 Term deposits -non current                    -            95,850    15,617
 Property and equipment, net                  238,563      233,113   37,982
 Amounts due from a related party-non-current  41,979       41,979    6,840
 Land use rights                               26,049       25,745    4,195
 Deposits paid for acquisition of property and 3,873        3,873     631
 equipment
 Deferred tax assets-non-current               2,085        1,977     322
 Long-term investments                         801          824       134
 Rental deposits                               1,497        1,384     226
 Acquired intangible assets, net              54,499       52,906    8,620
 Goodwill                                     43,255       43,255    7,048
Total assets                                  1,242,253    1,281,547 208,809
Liabilities and equity
Current liabilities:
 Short-term loan                               -            67,395    10,981
 Accounts payable (including accounts payable
 of the consolidatedVIE without recourse to
 the                                          2,401        8,493     1,384
  Group of RMB2,007 and RMB8,120asof
 December 31, 2012 and June 30, 2013,
 respectively)
 Deferred revenues-current (including deferred
 revenues of theconsolidated VIE without
 recourse to                                   134,175      140,349   22,868
 the Group of RMB23,518and RMB24,376 as of
 December 31, 2012 and June 30,
 2013,respectively)
 Accrued expenses and other current
 liabilities (includingaccruedexpenses and
 other current
  liabilities of theconsolidated VIEwithout 113,558      111,423   18,155
 recourse to the Group of RMB22,113and
 RMB24,523
  as of December 31, 2012 and June 30,
 2013,respectively)
 Amounts due to related parties-current
 (including amounts due torelated parties of
 the consolidated
  VIE without recourse to the Group of        35,507       54,967    8,956
 RMB1,926 and RMB1,865 as of December 31,
 2012and June
  30, 2013, respectively)
 Income taxes payable (including income taxes
 payable of theconsolidated VIE without
 recourse to the                              49,294       41,117    6,699
  Group of RMB10,004and RMB9,749 as of
 December 31, 2012 and June 30,
 2013,respectively)
 Other taxes payable (including other taxes
 payable of theconsolidated VIE without
 recourse to the                               27,294       29,404    4,791
 Group of RMB4,442and RMB4,532 as of
 December 31, 2012 and June 30,
 2013,respectively)
Total current liabilities                     362,229      453,148   73,834
 Long-term loan                                -            156,735   25,538
 Deferred revenues-non-current (including
 deferred revenuesofthe consolidated VIE
 without recourse                             10,654       8,564     1,395
  to the Group of RMB29 and RMB29 as of
 December 31, 2012 and June 30,
 2013,respectively)
 Deferred tax liabilities-non-current
 (including deferred taxliabilities of the
 consolidated VIE without                     13,473       13,369    2,178
  recourse to the Groupof RMB978 and RMB958
 as of December 31, 2012 and June 30,2013,
 respectively)
 Unrecognized tax benefit (including
 unrecognized tax benefit ofthe consolidated
 VIE without                                  8,795        9,986     1,627
  recourse to the Group of RMB3,555 and
 RMB4,187 as of December 31, 2012 and June 30,
 2013, respectively)
Total liabilities                             395,151      641,802   104,572
 Total ChinaEdu Corporation shareholders' 650,191      430,086   70,076
equity
 Noncontrolling interests                      196,911      209,659   34,161
Total equity                                 847,102      639,745   104,237
Total liabilities and equity                  1,242,253    1,281,547 208,809



ChinaEdu Corporation
Unaudited Condensed Consolidated Statements of Operations
(in thousands,except for percentage, share, and per share information)
                Three Months Ended                Six Months Ended
                June 30,   June 30,    June 30,    June 30,    June 30,    June 30,
                2012       2013        2013        2012        2013        2013
                RMB        RMB         US$         RMB         RMB         US$
Gross Revenue   119,519    143,591     23,396      239,151     265,764     43,303
^*
Business Tax    4,486      3,353       546         10,191      6,067       990
Net Revenue:
Online degree   92,089     113,816     18,545      184,016     208,131     33,912
programs
Online
tutoring        6,389      7,647       1,246       12,398      14,378      2,343
programs
Private
primary and     13,815     16,574      2,700       27,351      32,429      5,283
secondary
schools
International
curriculum      2,740      2,201       359         5,195       4,759       775
programs
Total net       115,033    140,238     22,850      228,960     259,697     42,313
revenue
Cost of
revenue:
Online degree   31,035     35,828      5,838       61,354      67,990      11,078
programs
Online
tutoring        2,700      2,523       411         5,421       4,923       802
programs
Private
primary and     10,205     11,538      1,880       20,011      22,202      3,617
secondary
schools
International
curriculum      3,020      1,241       202         5,683       2,550       415
programs
Total cost of   46,960     51,130      8,331       92,469      97,665      15,912
revenue
Gross profit:
Online degree   61,054     77,988      12,707      122,662     140,141     22,834
programs
Online
tutoring        3,689      5,124       835         6,977       9,455       1,541
programs
Private
primary and     3,610      5,036       820         7,340       10,227      1,666
secondary
schools
International
curriculum      (280)      960         157         (488)       2,209       360
programs
Total gross     68,073     89,108      14,519      136,491     162,032     26,401
profit
Online degree   66.3%      68.5%       68.5%       66.7%       67.3%       67.3%
programs
Online
tutoring        57.7%      67.0%       67.0%       56.3%       65.8%       65.8%
programs
Private
primary and     26.1%      30.4%       30.4%       26.8%       31.5%       31.5%
secondary
schools
International
curriculum      (10.2%)    43.6%       43.6%       (9.4%)      46.4%       46.4%
programs
Gross margin    59.2%      63.5%       63.5%       59.6%       62.4%       62.4%
Operating
expenses:
General and     24,251     23,875      3,890       50,061      49,102      8,000
administrative
Selling and     11,316     11,746      1,914       21,779      21,957      3,578
marketing
Research and    9,894      11,894      1,938       19,671      22,940      3,738
development
Total
operating       45,461     47,515      7,742       91,511      93,999      15,316
expenses
Income from     22,612     41,593      6,777       44,980      68,033      11,085
operations
Operating       19.7%      29.7%       29.7%       19.6%       26.2%       26.2%
margin
Interest        3,583      3,685       600         6,571       6,591       1,074
income
Interest        -          (2,912)     (474)       -           (4,679)     (762)
expense
Investment      786        -           -           1,460       368         60
income
Other income    266        440         72          513         863         141
Foreign         -          (1,887)     (307)       -           (2,136)     (348)
exchange loss
Income before
income tax and  27,247     40,919      6,668       53,524      69,040      11,250
equity method
investments
Income tax      (5,831)    (9,890)     (1,611)     (11,314)    (15,843)    (2,581)
expense
Net income
before income
from equity     21,416     31,029      5,057       42,210      53,197      8,669
method
investments
Income from
equity method   -          546         89          -           503         82
investments,
net of taxes
Net income      21,416     31,575      5,146       42,210      53,700      8,751
Net income
attributable
to the          (12,124)   (14,447)    (2,354)     (22,593)    (25,053)    (4,082)
noncontrolling
interests
Net income
attributable    9,292      17,128      2,792       19,617      28,647      4,669
to ChinaEdu
Net margin      8.1%       12.2%       12.2%       8.6%        11.0%       11.0%
Net income
attributable
to ChinaEdu
per ADS:
 Basic    0.59       1.90        0.310       1.24        2.75        0.448
 Diluted  0.55       1.71        0.279       1.16        2.50        0.408
Weighted
average
aggregate
number of ADSs
outstanding:
 Basic    15,852,495 9,009,390   9,009,390   15,799,250  10,420,408  10,420,408
 Diluted  16,927,279 10,006,833  10,006,833  16,844,208  11,441,855  11,441,855
* Gross
revenue are
detailed as
follows
Online degree   96,268     116,964     19,058      193,586     213,759     34,829
programs
Online
tutoring        6,511      7,776       1,267       12,668      14,648      2,387
programs
Private
primary and     13,837     16,608      2,706       27,395      32,490      5,294
secondary
schools
International
curriculum      2,903      2,243       365         5,502       4,867       793
programs



ChinaEdu Corporation
Unaudited Condensed Consolidated Statements of Cash Flow
(in thousands, unaudited)
                  Three Months Ended            Six Months Ended
                  June 30,   June 30,  June 30,  June 30,  June 30,   June 30,
                  2012       2013      2013      2012      2013       2013
                  RMB      RMB       US$       RMB       RMB        US$
Operating
activities:
 Net        21,416     31,575    5,146     42,210    53,700     8,751
income

Adjustments to
reconcile net
income to net
cash provided by
(used in)
operating
activities:

Share-based       1,892      2,383     388       4,111     4,846      790
compensation

Depreciation and
amortization of   6,304      6,383     1,040     12,608    12,756     2,078
property and
equipment

Amortization of   152        152       25        304       304        50
land use rights

Amortization of
acquired          1,036      794       129       2,021     1,593      260
intangible
assets

Investment        (158)      -         -         (227)     (368)      (60)
income

Amortization of   -          353       58        -         587        96
debt discount
 Loss
from equity       -          (66)      (11)      -         (23)       (4)
method
investment

Foreign exchange  -          1,887     307       -         2,136      348
loss

Provision for     -          117       19        340       261        43
accounts
receivables

Loss(gain) from
disposal of       16         (53)      (9)       828       (44)       (7)
property and
equipment
 Changes
in assets and
liabilities

Accounts          (24,932)   (22,373)  (3,645)   (16,093)  (3,809)    (621)
receivable

Prepaid expenses  (377)      (7,222)   (1,176)   (2,590)   (3,078)    (502)
and other
current assets

Amounts due from  (65,981)   (98,031)  (15,972)  (64,143)  (91,935)   (14,978)
related parties
        (34)       (18)      (3)       437       113        18
Rental deposits

Accounts          2,324      2,813     458       4,838     6,092      993
payable

Deferred          79,370     82,937    13,513    379       4,116      671
revenues

Accrued expenses
and other         3,167      (2,621)   (427)     9,141     (2,253)    (368)
current
liabilities

Amounts due to    (6,596)    (7,219)   (1,176)   3,356     (21,672)   (3,531)
related parties

Income taxes      4,021      8,696     1,417     (6,581)   (8,177)    (1,332)
payable
 Other  1,558      10,741    1,750     (3,402)   2,110      344
taxes payable

Deferred income   608        (474)     (77)      2,964     5,546      904
taxes

Unrecognized tax  586        603       98        1,226     1,191      194
benefit
Net cash
provided by
(used in)         24,372     11,357    1,852     (8,273)   (36,008)   (5,863)
operating
activities
Investing
activities:

Purchase of       (2,071)    (5,438)   (886)     (2,874)   (7,399)    (1,206)
property and
equipment

(Purchase)        (122,000)  4,500     733       (97,865)  (123,619)  (20,142)
maturity of term
deposits

Purchase of       (12,571)   -         -         (12,571)  -          -
investments

Proceeds from     14,634     -         -         24,952    5,482      893
sale of
investments

Proceeds from
disposal of       (980)      -         -         (980)     -          -
exclusive
partnership with
universities

Proceeds from
disposal of       1          138       22        1         138        22
property and
equipment

Proceeds from
disposal of       -          8,000     1,303     -         8,000      1,303
equity method
investments
Net cash (used
in) provided by   (122,987)  7,200     1,172     (89,337)  (117,398)  (19,130)
investing
activities
Financing
activities:
 Cash
dividends paid
to                (4,642)    -         -         (4,642)   -          -
noncontrolling
shareholders

Capital
contributions by  980        -         -         980       -          -
noncontrolling
shareholders

Proceeds from     2,777      266       43        3,722     266        43
exercise of
share options

Financing cost    -          -         -         -         (3,751)    (611)
in connection
with loans

Prepayment for    (886)      -         -         (886)     -          -
shares
repurchase

Proceeds from     -          -         -         -         68,410     11,146
borrowings of
short-term debt

Proceeds from     -          -         -         -         159,750    26,029
borrowings of
long-term debt

Repurchase and    (385)      (21,929)  (3,573)   (385)     (253,287)  (41,269)
cancellation of
ordinary shares
 Loan
from related      5,500      26,000    4,236     5,500     26,000     4,236
party
Net cash
provided by
(used in)         3,344      4,337     706       4,289     (2,612)    (426)
financing
activities
Effect of
foreign exchange  (6)        (1)       -         (11)      437        70
rate changes
Cash and cash
equivalents,      275,691    207,448   33,801    273,746   385,922    62,880
beginning of
period
Cash and cash
equivalents, end  180,414    230,341   37,531    180,414   230,341    37,531
of period
Net (decrease)
increase in cash  (95,277)   22,893    3,730     (93,332)  (155,581)  (25,349)
and cash
equivalents



ChinaEdu Corporation
Unaudited Condensed Consolidated Statements of Comprehensive Income
(in thousands, unaudited)
                    Three Months Ended            Six Months Ended
                    June30,  June30,  June30,  June30,  June30,  June30,
                    2012      2013      2013      2012      2013      2013
                    RMB       RMB       US$       RMB       RMB       US$
Net income          21,416    31,575    5,146     42,210    53,700    8,751
Other
comprehensive
income, net of
taxes
 Foreign currency
translation         120       2,581     421       127       3,330     543
adjustments
 Change in fair
value of available  205       (665)     (108)     442       (1,002)   (163)
for sale
investments
Comprehensive       21,741    33,491    5,459     42,779    56,028    9,131
income
Less:
comprehensive
income              11,106    16,908    2,755     21,552    28,081    4,575
attributable to
the noncontrollng
interest
Comprehensive
income              10,635    16,583    2,704     21,227    27,947    4,556
attributable to
ChinaEdu



ChinaEdu Corporation
Unaudited reconciliations from income from operations to adjusted income from operations
(non-GAAP) and adjusted operating margin (non-GAAP)
(in thousands, unaudited)
                Three Months Ended                 Six Months Ended
                June 30,    June 30,    June 30,    June 30,    June 30,    June 30,
                2012        2013        2013        2012        2013        2013
                RMB       RMB         US$         RMB         RMB         US$
Net revenue     115,033     140,238     22,850      228,960     259,697     42,313
Income from     22,612      41,593      6,777       44,980      68,033      11,085
operations
Adjustments:
 Share-based   1,892       2,383       388         4,111       4,846       790
compensation
 Amortization
of intangible
assets and      1,188       946         154         2,325       1,897       309
land use
rights
Adjusted
income from     25,692      44,922      7,319       51,416      74,776      12,184
operations
(non-GAAP)
Adjusted
operating       22.3%       32.0%       32.0%       22.5%       28.8%       28.8%
margin
(non-GAAP)
ChinaEdu Corporation
Unaudited reconciliations from net income attributable to ChinaEdu to adjusted net
income attributable to ChinaEdu (non-GAAP),
adjusted net margin (non-GAAP) and adjusted net income per ADS (non-GAAP)
(in thousands, unaudited)
                Three Months Ended                 Six Months Ended
                June 30,    June 30,    June 30,    June 30,    June 30,    June 30,
                2012        2013        2013        2012        2013        2013
                RMB       RMB         US$         RMB         RMB         US$
Net revenue     115,033     140,238     22,850      228,960     259,697     42,313
Net
income(loss)    9,292       17,128      2,792       19,617      28,647      4,668
attributable
to ChinaEdu
Adjustments:
 Share-based   1,892       2,383       388         4,111       4,846       790
compensation
 Share-based
compensation
attributable    (110)       -           -           (287)       -           -
to the
noncontrolling
interest
 Amortization
of intangible
assets and      1,188       946         154         2,325       1,897       309
land use
rights
Adjusted net
income
attributable    12,262      20,457      3,334       25,766      35,390      5,767
to ChinaEdu
(non-GAAP)
Adjusted net
margin          10.7%       14.6%       14.6%       11.3%       13.6%       13.6%
(non-GAAP)
Adjusted net
income
attributable
to ChinaEdu
per ADS
(non-GAAP):
 Basic    0.77        2.27        0.370       1.63        3.40        0.553
 Diluted  0.72        2.04        0.333       1.53        3.09        0.504
Weighted
average
aggregate
number of ADSs
outstanding:
 Basic    15,852,495  9,009,390   9,009,390   15,799,250  10,420,408  10,420,408
 Diluted  16,927,279  10,006,833  10,006,833  16,844,208  11,441,855  11,441,855





SOURCE ChinaEdu Corporation

Website: http://ir.chinaedu.net