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Concord Medical Announces Fourth Quarter and Fiscal Year 2009 Financial Results
Dr. Hongbin Cai Appointed as Independent Board Member
BEIJING, March 18, 2010 /PRNewswire via COMTEX/ -- Concord Medical Services Holdings Limited ("Concord Medical" or the "Company") (NYSE: CCM), the operator of the largest network of radiotherapy and diagnostic imaging centers in China, today announced its unaudited consolidated financial results for the fourth quarter and fiscal year ended December 31, 2009(1), and the appointment of Dr. Hongbin Cai as an independent board member.


    Fourth Quarter and Fiscal Year 2009 Highlights

    -- Total net revenues in the fourth quarter of 2009 were RMB86.8 million
       ($12.7 million), a 24.3% increase from the corresponding period in 2008.
       Total net revenues in fiscal year 2009 were RMB292.4 million ($42.8
       million), a 70.2% increase from 2008.

    -- Net income in the fourth quarter of 2009 was RMB35.9 million ($5.3
       million). Net income in fiscal year 2009 was RMB124.8 million ($18.3
       million), a 57.9% increase from the corresponding period in 2008.

    -- Both basic and diluted earnings per American Depository Share ("ADS")(2)
       in the fourth quarter of 2009 were RMB0.69 ($0.10). Both basic and
       diluted earnings per ADS in fiscal year 2009 were RMB1.86 ($0.27).

    -- Adjusted EBITDA(3) (non-GAAP) in the fourth quarter of 2009 was RMB72.1
       million ($10.6 million), a 22.3% increase from the corresponding period
       in 2008. Adjusted EBITDA in fiscal year 2009 was RMB246.6 million
       ($36.1 million), a 71.0% increase from 2008.

    -- Concord Medical opened five centers in the fourth quarter of 2009,
       bringing the total number of centers in operation to 88 across 36
       cities in China, as of December 31, 2009. To date, the Company has
       entered into agreements to establish 27 new centers in 2010.

    -- The number of treatment and diagnostic patient cases was 49,088 and
       178,658 during the fourth quarter and fiscal year 2009, representing a
       23.9% and 62.4% increase from the corresponding period in 2008,
       respectively.

    -- The Company raised $132.0 million in gross proceeds from its initial
       public offering ("IPO") of 12 million ADSs on the New York Stock
       Exchange on December 11, 2009, which are expected to be used to further
       expand its existing network of centers, establish two specialty cancer
       hospitals and for general corporate purposes.


    (1) This announcement contains translations of certain RMB amounts into
        U.S. dollars at specified rates solely for the convenience of the
        reader. Unless otherwise noted, all translations from RMB to U.S.
        dollars are made at a rate of RMB6.8259 to US$1.00, the effective noon
        buying rate as of December 31, 2009 in The City of New York for cable
        transfers of RMB as certified for customs purposes by the Federal
        Reserve Bank of New York.
    (2) Each ADS represents three ordinary shares of the Company.
    (3) Adjusted EBITDA is defined in this announcement as net (loss) income
        plus interest, taxes, depreciation and amortization, share-based
        compensation expenses and other adjustments. Other adjustments include
        change in fair value of convertible notes, foreign exchange loss and
        other income.




"We were encouraged to end 2009 with a solid quarter of financial performance and operational progress, and we are very excited by the growth opportunities we see in 2010," said Dr. Jianyu Yang, director, president and chief executive officer of Concord Medical.

"Having established our first radiotherapy center in 1997, Concord Medical's success has been driven by our outstanding ability to establish and operate these centers effectively. Looking forward, we will continue to expand our leading network by opening new centers and to improve the operational efficiency of existing centers. Our target is to operate at least 200 centers by 2012 and we are moving quickly toward that goal. In addition, the development of our two specialty cancer hospitals is well under way. We expect to open our Chang'an CMS International Cancer Center in June 2010 and our Beijing Proton Medical Center in early 2012."

Mr. Yang further commented, "Cancer is the leading cause of death in China and the cancer treatment market is one of China's fastest growing healthcare segments as Chinese people increasingly understand the importance of early-detection and high quality treatment. In addition, the Chinese government has been encouraging private investment in the healthcare sector in order to enhance the scope and quality of medical services provided in the country. With our leading expertise and solid capital position combined with increasing market demand and the Chinese government's commitment to implementing healthcare reform, we are confident that Concord Medical is well positioned to achieve our growth targets."

Mr. Boxun Zhang, Concord Medical's corporate vice president added, "Over the past three years, Concord Medical has consistently achieved strong top and bottom line growth and managing for profitable growth remains a top priority for us. In the future, while supporting our expansion strategies with positive operating cash flow, a strong cash balance and flexible bank credit, we will also continue to improve our operational efficiency and enhance financial management."

Independent Board Member Appointment

Concord Medical also announced that Dr. Hongbin Cai joined its board as an independent director and replaced Mr. Wai Hung Ku as a member of the audit committee. Mr. Ku will remain on the Company's board.

Commenting on the appointment, Dr. Yang said, "We are delighted for Dr. Cai to join Concord Medical's board and audit committee. As a nationally renowned academic leader and business advisor, Dr. Cai brings in-depth knowledge of corporate finance and economics. We also thank Mr. Ku for his valuable contributions to the Company during his tenure. This change in our board composition demonstrates our commitment to observing best practices in corporate governance as a newly listed company."

Dr. Hongbin Cai is currently a professor in economics and an associate dean at Peking University's Guanghua School of Management. Since 2006, he has been serving as a director of the Mirrlees Institute of Economic Policy Research and an associate director of the Institute of Poverty Research at Peking University. Prior to returning to Peking University as a professor, he served as an assistant professor of the economics department at the University of California, Los Angeles from 1997 to 2005. From 2000 to 2001, he served as a visiting assistant professor at the economics department and the Cowles Foundation of Yale University. Dr. Cai holds a Ph.D. in Economics and an M.A. in Statistics from Stanford University, an M.A. in Economics from Peking University and a B.A. in Mathematics from Wuhan University. He has received various national recognitions in China, including being named as a National Chang Jiang Scholar and a National Outstanding Young Researcher and his academic papers have been published in renowned journals such as the American Economic Review, the Rand Journal of Economics, the Journal of Public Economics, the Journal of Economic Theory, and the Economic Journal.

Fourth Quarter 2009 Results

Concord Medical reported total net revenues of RMB86.8 million ($12.7 million) for the fourth quarter of 2009, a 24.3% increase from the corresponding period in 2008, primarily due to an increase in patient cases from existing centers and the opening of new centers.

Cost of revenues in the fourth quarter of 2009 was RMB25.0 million (US$3.7 million), a 45.2% increase from the corresponding period in 2008, primarily due to an increase in depreciation costs related to new equipment installation in 2009.

Gross profit margin in the fourth quarter of 2009 was 71.2% as compared to 71.4% in the previous quarter and 75.3% in the corresponding period in 2008. The year-over-year decrease was primarily due to sale of equipments, which had a higher margin, accounting for a higher portion of total net revenues in the fourth quarter of 2008.

Operating expenses, consisting of selling expenses and general and administrative expenses, were RMB13.3 million ($2.0 million) in the fourth quarter of 2009 as compared to RMB9.7 million in the previous quarter and RMB8.6 million in the corresponding period in 2008. The quarter-over-quarter increase was mainly due to an increase in salary and compensation expenses related to business expansion, and RMB1.0 million in share-based compensation expenses associated with certain option grants in November 2009.

Operating income was RMB48.4 million ($7.1 million) in the fourth quarter of 2009, representing a 10.2% increase from the corresponding period in 2008. Operating income excluding share-based compensation expenses (non-GAAP) was RMB49.4 million ($7.2 million), a 12.5% increase from the corresponding period in 2008.

Income tax expense was RMB10.7 million ($1.6 million), compared to an income tax expense of RMB10.7 million in the corresponding period in 2008. The effective tax rate for the fourth quarter of 2009 was 22.9% as compared to 23.0% in the third quarter of 2009 and 21.5% for the corresponding period in 2008.

Net income was RMB35.9 million ($5.3 million), representing an 8.2% decrease from the corresponding period in 2008. This decrease was primarily due to a RMB7.7 million one-time gain recognized as other income in the fourth quarter of 2008. Both basic and diluted earnings per ADS for the fourth quarter of 2009 amounted to RMB0.69($0.10).

Net income excluding share-based compensation expenses (non-GAAP) was RMB36.9 million ($5.4 million), a 5.6% decrease from the corresponding period in 2008. Both basic and diluted earnings per ADS excluding share-based compensation expenses (non-GAAP) for the fourth quarter of 2009 amounted to RMB0.72($0.11).

Adjusted EBITDA (non-GAAP), was RMB 72.1 million ($10.6 million) for the fourth quarter of 2009, representing a 22.3% increase from the corresponding period in 2008.

As of December 31, 2009, the Company had total fixed assets valued at RMB584.9 million ($85.7 million) and cash and cash equivalents of RMB1, 037.2 million ($152.0 million).

As of December 31, 2009, the Company had bank credit lines totaling RMB2,145 million (US$314.2 million).

Accounts receivable was RMB111.3 million ($16.3 million) as of December 31, 2009, compared to RMB119.1 million as of September 30, 2009 and RMB92.8 million as of December 31, 2008. The sequential decrease was mainly due to enhanced cash flow management. Days sales outstanding decreased to approximately 120 days in the fourth quarter of 2009 from approximately 128 days in the previous quarter.

Fiscal Year 2009 Results

Total net revenues in 2009 were RMB292.4 million ($42.8 million), representing a 70.2% increase from RMB171.8 million in 2008, primarily due to (i) an increase in patient cases from existing centers and the opening of new centers, and (ii) consolidation of China Medstar's revenues for the entire fiscal year 2009 as compared to for the last five months of 2008, as a result of the acquisition of China Medstar being completed in July 2008.

Cost of revenues in 2009 was RMB87.6 million (US$12.8 million), representing a 92.0% increase from RMB45.6 million in 2008, primarily due to the an increase depreciation cost related to the opening of new centers and the resulting increase in salaries and benefits to additional personnel employed and assigned to the new centers.

Gross profit margin in 2009 was 70.1%, compared to 73.5% in 2008. This decrease was primarily due to (i) higher operating costs associated with having a bigger number of new centers in their ramp-up periods, and (ii) an increase in the number of centers that offered diagnostic imaging services, which generally have a lower margin than radiotherapy treatment services.

Selling expenses in 2009 were RMB7.7 million ($1.1 million), representing a 39.6% increase from RMB5.5 million in 2008, which was primarily due to increases in headcount and marketing and other expenses to support increased business development efforts. Selling expenses as a percentage of total net revenues decreased to 2.6% in 2009 from 3.2% in 2008 mainly due to economies of scale.

General and administrative expenses in 2009 were RMB29.8 million ($4.4 million), representing a 58.0% increase from RMB18.9 million in 2008, which was primarily due to (i) increases in headcount and travel expenses, and (ii) increases in auditing expenses and share based compensation charges. General and administrative expenses as a percentage of total net revenues decreased to 10.2% in 2009 from 11.0% in 2008 mainly due to economies of scale.

Share-based compensation expenses, which were allocated to related operating expense items, were RMB1.0 million ($0.1 million) in 2009, compared to RMB4.2 million in 2008.

Operating income in 2009 was RMB167.4 million ($24.5 million), a 64.4% increase from RMB101.8 million in 2008. Operating income excluding share-based compensation expenses (non-GAAP) in 2009 was RMB168.4 million ($24.7 million), representing a 58.8% increase from 2008.

Income tax expense was RMB36.4 million ($5.3 million), compared to an income tax expense of RMB23.3 million in 2008. The effective tax rate for 2009 was 22.6% as compared to 22.8% in 2008.

Net income in 2009 was RMB124.8 million ($18.3 million), representing a 57.9% increase from RMB79.1 million in 2008. Both basic and diluted earnings per ADS for 2009 amounted to RMB1.86($0.27).

Net income excluding share-based compensation expenses (non-GAAP) in 2009 was RMB125.8 million ($18.4 million), reflecting a 51.1% increase from RMB83.3 million in 2008. Both basic and diluted earnings per ADS excluding share-based compensation expenses (non-GAAP) in 2009 were RMB1.92($0.28).

Capital expenditures were RMB168.8 million ($24.7 million) in 2009, compared to RMB31.6 million in 2008. The increase was primarily due to the opening of new centers.

Adjusted EBITDA (non-GAAP) was RMB246.6 million ($36.1 million) in 2009, representing a 71.0% increase from RMB144.2 million in 2008.

Outlook for Fiscal Year 2010

Concord Medical expects to generate total net revenues in an estimated range of RMB360 million to RMB390 million in 2010, which would represent a 23.1% to 33.4% increase from 2009.

The Company intends to open 30 to 35 new radiotherapy and diagnostic imaging centers in 2010. The Company expects total capital expenditures related to these new centers to be in the range of RMB350 million to RMB400 million.

This forecast reflects Concord Medical's current and preliminary view, which is subject to change.

Conference Call Information

Concord Medical's management will hold an earnings conference call at 8:00 AM on March 18, 2010 U.S. Eastern Time (8:00 PM on March 18, 2010Beijing/Hong Kong time).



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

    US:                + 1.866.700.7477
    China:             + 10.800.152.1490 (North) / 10.800.130.0399 (South)
    Hong Kong:         + 800.96.3844
    International:     + 1.617.213.8840

    Passcode: 27971809



A replay of the conference call may be accessed by phone at the following number until March 25, 2010:



    US:                + 1.888.286.8010
    International:     + 1.617.801.6888

    Passcode: 36785545



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

About Concord Medical

Concord Medical operates the largest network of radiotherapy and diagnostic imaging centers in China in terms of revenues and the total number of centers in operation per available statistics. The Company currently operates a network of more than 80 centers spanning 36 cities and 21 provinces and administrative regions in China. Under long-term arrangements with top-tier hospitals in China, the Company provides radiotherapy and diagnostic imaging equipments and manages the daily operations of these centers located on its hospital partners' premises. The Company also provides ongoing training to doctors and other medical personnel in its network of centers to ensure a high level of clinical care for patients.

Safe Harbor Statement

This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "should" and "will" and similar expressions. In particular, many of the statements from management in this press release and the section under "Outlook for First Quarter 2010" are forward-looking in nature. These forward looking statements are based upon management's current views and expectations with respect to future events and are not a guarantee of future performance. Furthermore, these statements are, by their nature, subject to a number of risks and uncertainties that could cause actual performance and results to differ materially from those discussed in the forward-looking statements as a result of a number of factors. Such factors include: the number of new radiotherapy and diagnostic imaging centers opened; the increase in the number of patients in existing centers; the establishment of specialty cancer hospitals; changes in the healthcare industry in China, including changes in the healthcare policies and regulations of the PRC government; and technological or therapeutic changes affecting the field of cancer treatment and diagnostic imaging. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission at www.sec.gov. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Statement Regarding Unaudited Financial Information

The Company's independent auditors are in the process of completing an audit of the Company's U.S. GAAP financial statements for 2009. These unaudited 2009 numbers disclosed in this announcement are, therefore, subject to change.

About Non-GAAP Financial Measures

To supplement the consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles (GAAP), Concord Medical uses certain non-GAAP measures. The Company presents certain of its financial information that is adjusted from results based on GAAP to exclude the impact of share-based compensation expense. The Company believes excluding share-based compensation expense from its non-GAAP financial measures is useful for its management and investors to assess and analyze the Company's core operating results as such expense is not directly attributable to the underlying performance of the Company's business operations and do not impact its cash earnings. Concord Medical also believes these non-GAAP measures excluding share-based compensation expense are important in helping investors to understand the Company's current financial performance and future prospects and to compare business trends among different reporting periods on a consistent basis. In addition, Concord Medical also presents the non-GAAP measure of Adjusted EBITDA, which is defined in this announcement as net (loss) income plus interest, taxes, depreciation and amortization, share-based compensation expenses and other adjustments. Other adjustments include change in fair value of convertible notes, foreign exchange loss and other income. Furthermore, Adjusted EBITDA eliminates the impact of items that the Company does not consider indicative of the performance of its network of centers. The Company believes investors will similarly use Adjusted EBITDA as one of the key metrics to evaluate its financial performance and to compare its current operating results with corresponding historical periods and with other companies in the healthcare services industry. The presentation of these additional measures should not be considered a substitute for or superior to GAAP results or as being comparable to results reported or forecasted by other companies. The non-GAAP measures have been reconciled to GAAP measures in the attached financial statements.





                   Concord Medical Services Holdings Co., Ltd.
                 Unaudited Condensed Consolidated Balance Sheets
                                  (in thousand)

                                      December   September
                                      31, 2008*  30, 2009   December 31, 2009
                                         RMB        RMB       RMB       US$
    ASSETS
    Current assets
    Cash                               353,991    285,703  1,037,239  151,956
    Restricted cash, current portion                2,012        293       43
    Accounts receivable                 92,772    119,127    111,328   16,310
    Prepayment and other current
     assets                             43,566     56,869     83,926   12,295
    Deferred tax assets, current
     portion                             2,649      2,776      3,168      464
    Total current assets               492,978    466,487  1,235,954  181,068

    Non-current assets
    Property, plant and equipment,
     net                               349,121    557,433    584,869   85,684
    Goodwill                           300,163    300,163    300,163   43,974
    Acquired intangible assets, net    181,838    161,450    155,345   22,758
    Deposits for non-current assets    167,200    147,851    131,881   19,321
    Deferred tax assets, non-current
     portion                            12,650     12,648     19,700    2,886
    Other non-current assets            10,445     10,782     11,532    1,689
    Deferred initial public offering
     expense                                --     11,207         --       --
    Restricted cash, non-current
     portion                                --      5,233      4,421      648
    Total non-current assets         1,021,417  1,206,767  1,207,911  176,960

    Total assets                     1,514,395  1,673,254  2,443,865  358,028


    LIABILITIES AND SHAREHOLDERS'
     EQUITY
    Current liabilities
    Short-term bank borrowing           20,800     30,000     11,500    1,685
    Long-term bank borrowings,
     current portion                    39,840     44,880     35,647    5,222
    Accounts payable                     9,741      9,744      9,759    1,430
    Accrual for purchase of
     property, plant and equipment       1,881     25,839     12,043    1,764
    Obligations under capital
     leases, current portion             3,719      3,582      3,582      525
    Accrued expenses and other
     liabilities                        42,444     44,221     48,663    7,128
    Income tax payable                  17,041     22,864     14,642    2,145
    Deferred revenue, current
     portion                            12,656     13,395     10,401    1,524
    Payable for acquisition of a
     subsidiary and business
     components                         28,016      6,500         --       --
    Dividends payable                   10,788     35,428         --       --
    Amounts due to related parties       3,607      1,607      1,546      226

    Total current liabilities          190,533    238,060    147,783   21,649

    Non-current liabilities
    Long-term bank borrowings, non-
     current portion                    52,120    104,912    102,755   15,054
    Deferred revenue, non-current
     portion                             6,314      5,470      5,188      760
    Obligations under capitalized
     leases, non-current portion        11,656      8,719      8,074    1,183
    Lease deposit                        3,215      3,269      1,000      147
    Deferred tax liabilities, non-
     current portion                    20,078     18,189     25,317    3,709

    Total non-current liabilities       93,383    140,559    142,334   20,853

    Total liabilities                  283,916    378,619    290,117   42,502

    Commitments and contingencies

    Mezzanine equity
    Series A contingently redeemable
     convertible preferred shares      254,358    269,017         --       --
    Series B contingently redeemable
     convertible preferred shares      411,101    434,036         --       --

    Shareholders' equity
    Ordinary shares                         55         55        108       16
    Additional paid-in capital       1,113,150  1,113,204  2,671,910  391,437
    Accumulated other comprehensive
     (loss) income                      (3,822)    (4,037)    (3,987)    (584)
    Accumulated deficit               (544,363)  (517,640)  (514,283) (75,343)

    Total shareholders' equity         565,020    591,582  2,153,748  315,526

    Total liabilities, preferred
     shares and shareholders' equity 1,514,395  1,673,254  2,443,865  358,028

    *Amounts for the year ended December 31, 2008 were derived from the
    December 31, 2008 audited consolidated financial statements.



                   Concord Medical Services Holdings Co., Ltd.
              Unaudited Condensed Consolidated Statements of Income
                       (in thousand, except per  ADS data)

                                         For the Three Months Ended
                                 December   September
                                 31, 2008    30, 2009      December 31, 2009
                                    RMB         RMB         RMB         US$
    Revenue, net of business
     tax, value-added tax and
     related surcharges
    Lease and management
     services                      60,765      70,892      75,225      11,021
    Management services             5,158       6,689       8,643       1,266
    Other, net                      3,873         408       2,911         426
    Total net revenues             69,796      77,989      86,779      12,713

    Cost of revenues
    Lease and management
     services                     (10,375)    (15,703)    (18,793)     (2,753)
    Amortisation of acquired
     intangibles                   (6,826)     (6,624)     (6,105)       (894)
    Management services               (35)         (2)       (122)        (18)
    Total cost of revenues        (17,236)    (22,329)    (25,020)     (3,665)

    Gross profit                   52,560      55,660      61,759       9,048

    Operating expenses

    Selling expenses               (2,222)     (1,476)     (3,212)       (470)
    General and administrative
     expenses                      (6,401)     (8,211)    (10,134)     (1,485)

    Operating income               43,937      45,973      48,413       7,094
    Interest expense               (2,162)     (1,671)     (2,011)       (295)
    Foreign exchange (loss)
     income                          (312)        (97)          5           1
    Gain from disposal of
     equipment                        266          --          --          --
    Interest income                   314         176         125          18
    Other income                    7,734          --          --          --

    Income before income taxes     49,777      44,381      46,532       6,818
    Income tax expense            (10,724)    (10,199)    (10,662)     (1,562)
    Net income                     39,053      34,182      35,870       5,256

    Accretion of Series A
     contingently redeemable
     convertible preferred
     shares                        (8,057)     (7,948)     (6,199)       (908)
    Accretion of Series B
     contingently redeemable
     convertible preferred
     shares                      (304,763)    (12,791)     (9,976)     (1,461)

    Net (loss) income
     attributable to ordinary
     shareholders                (273,767)     13,443      19,695       2,886

    (Loss) income per ADS
    Basic /Diluted                 (11.66)       0.57        0.69        0.10

    Weighted average number of
     ADS outstanding:
    Basic /Diluted             23,476,033  23,476,033  29,057,729  29,057,729



                   Concord Medical Services Holdings Co., Ltd.
              Unaudited Condensed Consolidated Statements of Income
                       (in thousand, except per  ADS data)

                                              Twelve
                                           months ended
                                             December     Twelve months ended
                                             31, 2008      December 31, 2009
                                                RMB         RMB         US$
    Revenue, net of business tax, value-
     added tax and related surcharges
    Lease and management services             155,061     260,162      38,114
    Management services                        12,677      28,739       4,210
    Other, net                                  4,051       3,535         518
    Total net revenues                        171,789     292,436      42,842

    Cost of revenues
    Lease and management services             (25,046)    (60,937)     (8,927)
    Amortisation of acquired intangibles      (20,497)    (26,493)     (3,881)
    Management services                           (54)       (131)        (19)
    Total cost of revenues                    (45,597)    (87,561)    (12,828)

    Gross profit                              126,192     204,875      30,014

    Operating expenses:

    Selling expenses                           (5,497)     (7,675)     (1,124)
    General and administrative expenses       (18,869)    (29,821)     (4,369)

    Operating income                          101,826     167,379      24,521
    Interest expense                           (7,455)     (6,891)     (1,010)
    Change in fair value of convertible
     notes                                       (464)         --          --
    Foreign exchange loss                        (325)       (213)        (31)
    Gain from disposal of equipment               658          --          --
    Interest income                               430         948         139
    Other income                                7,734          --          --

    Income before income taxes                102,404     161,223      23,619
    Income tax expense                        (23,335)    (36,396)     (5,332)
    Net income                                 79,069     124,827      18,287

    Accretion of Series A contingently
     redeemable convertible preferred
     shares                                  (270,343)    (30,050)     (4,402)
    Accretion of Series B contingently
     redeemable convertible preferred
     shares                                  (304,763)    (48,359)     (7,085)

    Net (loss) income attributable to
     ordinary shareholders                   (496,037)     46,418       6,800

    (Loss) income per ADS
    Basic/Diluted                              (25.89)       1.86        0.27

    Weighted average number of ADS
     outstanding:
    Basic/Diluted                          19,160,467  24,882,926  24,882,926



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

                                         Three months ended December 31, 2008
                                                                     Non-GAAP
                                          GAAP Result   Adjustment    Results
    Operating profit                           43,937         --       43,937
    Net income                                 39,053         --       39,053
    Net income attributable to
     ordinary shareholders                         --         --           --

    Basic (Loss) earning per ADS               (11.66)        --       (11.66)
    Diluted (Loss) earning per ADS             (11.66)        --       (11.66)


                                        Three months ended September 30, 2009
                                                                     Non-GAAP
                                          GAAP Result   Adjustment    Results
    Operating profit                           45,973         --       45,973
    Net income                                 34,182         --       34,182
    Net income attributable to
     ordinary shareholders                         --         --           --

    Basic (Loss) earning per ADS                 0.57         --         0.57
    Diluted (Loss) earning per ADS               0.57         --         0.57


                                         Three months ended December 31, 2009
                                                                     Non-GAAP
                                          GAAP Result   Adjustment    Results
    Operating profit                           48,413      1,007       49,420
    Net income                                 35,870      1,007       36,877
    Net income attributable to
     ordinary shareholders                         --         --           --

    Basic (Loss) earning per ADS                 0.69       0.03         0.72
    Diluted (Loss) earning per ADS               0.69       0.03         0.72


                                        Twelve months ended December 31, 2008
                                                                     Non-GAAP
                                          GAAP Result   Adjustment    Results
    Operating profit                          101,826      4,215      106,041
    Net income                                 79,067      4,215       83,282
    Net income attributable to
     ordinary shareholders                         --         --           --

    Basic (Loss) earning per ADS               (25.89)      0.22       (25.67)
    Diluted (Loss) earning per ADS             (25.89)      0.22       (25.67)


                                        Twelve months ended December 31, 2009
                                                                     Non-GAAP
                                          GAAP Result   Adjustment    Results
    Operating profit                          167,379      1,007      168,386
    Net income                                124,827      1,007      125,834
    Net income attributable to
     ordinary shareholders                         --         --           --

    Basic (Loss) earning per ADS                 1.86       0.06         1.92
    Diluted (Loss) earning per ADS               1.86       0.06         1.92

    (*) The adjustment is only for share-based compensation.



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

                              Three     Three     Three      Twelve    Twelve
                              months    months    months     months    months
                              ended     ended     ended      ended     ended
                             December September  December   December  December
                             31, 2008 30, 2009   31, 2009   31, 2009  31, 2008

    Net income                 39,053    34,182    35,870    124,827    79,069
      Interest expense, net     1,848     1,495     1,886      5,943     7,025
      Income taxes expense
       (benefit)               10,724    10,199    10,662     36,396    23,335
      Depreciation and
       amortization            15,042    19,132    22,685     78,174    38,126
      Share-based
       compensation                --        --     1,007      1,007     4,215
      Other adjustments        (7,688)       97        (5)       213    (7,603)

    Adjusted EBITDA            58,979    65,105    72,105    246,560   144,167

    (*) Definition of adjusted EBITDA: Adjusted EBITDA is defined as net
        (loss) income plus interest, taxes, depreciation and amortization,
        share-based compensation expenses and other adjustments. Other
        adjustments include change in fair value of convertible notes, foreign
        exchange loss and other income.


    For investor and media inquiries please contact:

    China

     Stephanie Song
     Concord Medical Services
     Phone: +86-10-5957-5287
     Email: stephanie.song@cmsholdings.com

     Lilian Wong
     Brunswick Group, LLC
     Phone: +86-10-6566-2256
     Email: lwong@brunswickgroup.com

    U.S.

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




SOURCE Concord Medical Services Holdings Limited