ChinaCast Education Corporation
Q3 2008
Quarterly Earnings
Summary
NASDAQ: CAST
www.chinacasteducation.com
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Income Statement Highlights: 2008 - 3rd Quarter
Q3- 2007 (RMB m) | Q3 2008 (RMB m) | Q3 2008 (US$ m) | YoY Change | |
Revenue | 46.0 | 72.8 | $10.7 | +58% |
Service | 38.0 | 70.9 | $10.4 | +87% |
Equipment | 8.0 | 1.9 | $0.3 | -76% |
Gross Profit | 25.9 | 42.0 | $6.2 | +62% |
Gross Margin | 56% | 58% | - | +2 pts |
Income from Operations | 15.8 | 25.1 | $3.7 | +59% |
Operating Margin | 35% | 34.2% | - | unchg |
Net Income | 16.8 | 19.7 | $2.9 | +17% |
Net Margin | 36.6% | 27% | - | -9.6 pts |
Income Per Share (Basic) * | 0.62 | 0.63 | $0.9 | - |
Income Per Share (Diluted) * | 0.61 | 0.63 | $0.9 | - |
* Weighted Average Shares Used in Computation:
1. Basic: 2007 - 27,266,564, 2008 - 31,373,482
2. Diluted: 2007 - 27,783,672; 2008 - 31,373,482
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Income Statement Highlights: 2008 - 1st 9 Months
1st 9 mos 2007 (RMB m) | 1st 9 mos 2008 (RMB m) | 1st 9 Mos 2008 (US$ m) | YoY Change | |
Revenue | 128.2 | 206.2 | $30.3 | +60% |
Service | 106.0 | 181.9 | $26.7 | +72% |
Equipment | 22.1 | 24.3 | $3.6 | 10% |
Gross Profit | 72.5 | 110.7 | $16.3 | +53% |
Gross Margin | 57% | 54% | - | -3 pts |
Income from Operations | 47.3 | 61.2 | $9.0 | +29% |
Operating Margin | 36% | 30% | - | -6 pts |
Net Income | 43.9 | 53.7 | $7.9 | +17% |
Net Margin | 34% | 26% | - | -8 pts |
Income Per Share (Basic) * | 1.67 | 1.87 | $0.28 | - |
Income Per Share (Diluted) * | 1.60 | 1.85 | $0.27 | - |
* Weighted Average Shares Used in Computation:
1. Basic: 2007 - 26,315,541, 2008 - 28,695,241
2. Diluted: 2007 - 27,491,941; 2008 - 29,026,908
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Costs & Expenses
Costs & Expenses GAAP (000s) | Q3 2008 (US$ M) | Q3 2008 (RMB M) | Q3 2007 (RMB M) | YoY Change |
Cost of Revenue | $4.5 | 30.8 | 20.1 | +53% |
Service | $4.2 | 28.9 | 12.2 | +136% |
Equipment | $0.3 | 1.9 | 8.0 | -320% |
Gross Profit | $6.2 | 42.0 | 25.9 | +62% |
Gross Margin | 58% | 58% | 56% | +2 pts |
SG&A GAAP (000s) | Q3 2008 (US$ M) | Q3 2008 (RMB M) | Q3 2007 (RMB M) | YoY Change |
Selling & Marketing Expenses | $0.3 | 2.0 | 1.7 | +18% |
General & Administrative Expenses | $2.4 | 16.6 | 12.4 | +33% |
SG&A Non-GAAP (000s) (Excludes share-based compensation) | Q3 2008 (US$ M) | Q3 2008 (RMB M) | Q3 2007 (RMB M) | YoY Change |
Selling & Marketing Expenses | 0.2 | 1.9 | 1.5 | +21% |
General & Administrative Expenses | 2.1 | 14.5 | 12.0 | +20% |
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Our Balance Sheet - Increases in Assets and Equity
Notes: (1) Calculated at RMB6.8 = 1 US$
(2) Including Cash and cash equivalents and Term deposits
(In '000 RMB ) | Sept 30, 2008 US$ (1) | Sept 30, 2008 RMB | Dec 31, 2007 RMB |
Cash and cash equivalents (2) | 73,071 | 496,884 | 735,378 |
Accounts receivable | 8,712 | 59,242 | 35,316 |
Total Current Assets | 83,850 | 570,191 | 783,084 |
Property, plant and equipment, net | 33,458 | 227,514 | 11,107 |
Total Assets | 209,007 | 1,421,251 | 950,714 |
Accounts payable | 2,882 | 19,595 | 13,027 |
Total Current Liabilities | 51,063 | 347,233 | 97,674 |
Total Liabilities | 59,941 | 407,606 | 125,566 |
Total Shareholders' Equity | 142,783 | 970,922 | 804,636 |
Total Liabilities and Shareholders’ Equity | 209,007 | 1,421,251 | 950,714 |
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Going Forward - Things to Note
• Changes in the total outstanding shares:
- Warrant exercise + 4,050,510 shares
- Shelf registration + 4,250,000 shares
- EPS calculations starting in the 4th quarter would then be:
EPS = Net Income
35,648,251 shares
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2008 Revenue and Earnings Guidance
• As stated previously, ChinaCast estimates total revenue
for 2008 to be in the range of RMB234 million to RMB256
million (US$34.4 million to US$37.6 million*),
representing a growth rate of 25% to 36% over 2007**.
• ChinaCast estimates net income (excluding share-based
compensation) for 2008 to be in the range of RMB80
million to RMB95 million (US$11.8 million to US$14.0 million).
• This forecast reflects ChinaCast's current and preliminary view,
actual results may differ materially.
* Exchange Rate US$1=RMB 6.8
** Growth rates calculated using RMB figures