HARBIN, China, April 18, 2011 /PRNewswire-Asia-FirstCall/ -- China Education Alliance, Inc. ("China Education Alliance" or the "Company") (NYSE: CEU), a China-based education resource and services company, today announced fourth quarter and fiscal 2010 results. The Company will host a conference call on Tuesday, April 19, 2011, at 8 a.m. EDT or 8 p.m. Beijing time.

Financial Highlights for the Fourth Quarter ended December 31, 2010

• Total revenue increased 19.3% year-over-year to $12.4 million.
• Gross profit rose 16.4% to $10.2 million or 82.3% of sales, compared to 84.3% of sales, or $8.78 million, in the fourth quarter of 2009.
• Operating income decreased 53.6%.
• Net income decreased 53.5% year-over-year to $2.1 million.
• EPS was $0.06 per fully diluted share, compared to EPS of $0.15 per fully diluted share in the fourth quarter of fiscal 2009.

Financial Highlights for Fiscal 2010

• Total revenue increased 25.1% year-over-year to $46.3 million.
• Gross profit rose 28.7% to $38.1 million or 82.3% of sales, up 2.2% and 220 basis points, respectively.
• Operating income totaled $16.6 million, compared to an operating income of $16.2 million in 2009.
• Net income increased 0.7% year-over-year to $15.2 million
• EPS was $0.48 per fully diluted share, a decrease of 18.6%

"We are pleased with our solid growth in online education and our training center businesses due to industry organic growth, which validates our focus on exam-oriented educational services and vocational training programs in China," said Mr. Xiqun Yu, Chairman and Chief Executive Officer of China Education Alliance. "Going forward, we will continue to develop and deliver high quality supplemental education resources and professional training programs. This will help us continue our business expansion and reaffirm our position as one of the leading education resource and service company in China."

Fiscal Year 2010 Review:

China Education Alliance reported total revenue of $46.3 million for the year ended December 31, 2010, an increase of 25.1% compared to $37.0 million for 2009. The Company's online education business generated 61.6% of its total revenue in 2010 compared to 60.2% for prior-year. Its training center business generated 34.7% of total revenue in 2010 compared to 32.7% for in 2009; its other business division generated the remaining 3.7% of total revenue in the year of 2010, compared to 7.1% for last year.

Online education revenue was $28.5 million, up 28.4% for the year of 2010 compared to $22.2 million in the in 2009 mainly due to increase of organic growth.

Training center revenue was $16.0 million in 2010, up 32.2% from $12.1 million in 2009. The increase was mainly due to organic growth.

Other revenue was $1.7 million in 2010, a decrease of 34.6% from $2.6 million last year. The significant decrease was due to our shift in focus of our two business lines – examination preparation and vocational training.

Net income for 2010 was $15.2 million, an increase of 0.7% over 2009 net income of $15.1 million. The increase was due to growth in our online education and training center businesses. Diluted earnings per share was $0.48, compared with $0.59 last year. The decrease in EPS was mainly due to the increase in number of shares outstanding with the exercise options and warrants, preferred stock converted into common stocks as well as Company's decision not to reserve their advance on the acquisition of WEI, totaling of 400,000 shares.

Operating income for the year 2010 increased to $16.6 million, from $16.2 million a year ago. Operating margin was 35.8% compared with 43.7% in 2009.

Overall cost of sales increased 10.8% to $8.2 million in 2010, compared to $7.4 million for 2009. Gross profit increased to $38.1 million in 2010, an increase of 28.7% from $29.6 million in 2009.

Selling expenses increased 84.5% to approximately $17.3 million for 2010, compared to $9.4 million in 2009, primarily due to the increase in agency fees associated with increased sales of our debit cards. Administrative expenses were approximately $3.3 million for the year 2010, an increase from $3.1 million in 2009, primarily due to renovations on the ZHLD office building and the increase of U.S. parent company expenses.

2010 Business Highlight

In February, Company incorporated a new company in the PRC, Beijing New Shifan Education & Technology ("New Shifan") who has a significant impact on the secondary education market in China, with a registered capital of RMB 1.95 million (approximately $284,962). Beijing Shifan was the sponsor and organizer of a nationwide contest for middle school and high school students, testing students' academic abilities in mathematics, physics and chemistry. There are over 100,000 students participating in the contest from 23 provinces in the PRC.

Financial Position

As of December 31, 2010, China Education Alliance had approximately $71.4 million in cash and cash equivalents, $72.6 million in working capital, and no long-term debt. Shareholders' equity at December 31, 2010 was approximately $91.8 million, an increase from approximately $75.3 million at December 31, 2009. The Company generated net cash from operating activities of $ million in the year ended December 31, 2009, up % from $18.6 million in the year-end period of 2009.

Conference Call

China Education Alliance will host a conference call and live webcast at 8 a.m. Eastern Daylight Time (EDT) (8 p.m. Harbin/Beijing time on April 19, 2011).

The dial-in details for the live conference call are as follows:

A live webcast of the conference call will be available in the investor relations section of the Company's website at: http://www.chinaeducatio...) is a fast-growing, leading, China-based company offering high-quality education resources and services to students ages 6 to 18 and adults (university students and professionals) ages 18 and over. For students ages 6 to 18, China Education Alliance offers supplemental, online exam-oriented training materials and onsite, exam-oriented training and tutoring services. The company provides online, downloadable famous-teacher resources and onsite, personalized instruction. All resources and tutoring services are provided by famous teachers within mainland China. The purpose of online exam-orientated resources and onsite tutoring is to help Chinese students (ages 6 to 18) pass the two most important and highly competitive exams in their educational career: the senior high school entrance and college entrance exams. For graduates and professionals age 18 and over, China Education Alliance provides vocational training including IT and several professional training programs.

Forward-Looking Statements

Statements contained in this press release, which are not historical facts, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, expectations of signing new customers and contracts, developing new products, projected revenues and earnings, and the success of new products. These forward-looking statements are based largely on current expectations and are subject to a number of known and unknown risks, uncertainties and other factors beyond our control that could cause actual events and results to differ materially from these statements. These statements are not guarantees of future performance, and readers are cautioned not to place undue reliance on these forward-looking statements, which are relevant as of the date of the given press release and should not be relied upon as of any subsequent date. China Education Alliance undertakes no obligation to update the forward-looking information contained in this press release.

SOURCE China Education Alliance, Inc.

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http://www.chinaeducationalliance.com

    Financial Highlights for the Three Months Ended June 30, 2010

    -- Total revenue increased 33.7% year-over-year to $10.85 million,
       compared to revenue of $8.12 million in the second quarter of fiscal
       2009.
    -- Net income increased 29.9% year-over-year to $4.26 million, compared to
       net income of $3.28 million in the second quarter of fiscal 2009.
    -- EPS was $0.14 per fully diluted share, compared to $0.13 in the second
       quarter of fiscal 2009.
    -- Operating income totalled $4.74 million, compared to $3.72 million same
       period in fiscal 2009.
    -- Gross profit rose 39.0% to $9.06 million or 83.4% of sales, compared to
       80.2% of sales or $6.51 million in the second quarter of fiscal 2009.

"We are pleased to again report solid revenue and earnings growth driven largely by strong demand for our exam-oriented educational services and our vocational training programs in China," stated Xiqun Yu, Chief Executive Officer of China Education Alliance, Inc. "We remain optimistic about the opportunities for continued growth in both our supplemental education resources and in IT and professional training programs offered through our vocational centers. We remain focused on our expansion efforts into new geographic markets, which will be supported by enhanced marketing strategies to develop our core businesses. We are confident in achieving 30 percent revenue growth for the full year 2010, based on strong enrolment for our online educational services and our vocational training services."

Financial results for the three months ended June 30, 2010

China Education Alliance reported total revenue of $10.85 million for the second quarter ended June 30, 2010, an increase of 33.7% compared to $8.12 million for the second quarter of 2009. The Company's online education business generated 68.1% of its total revenue in the second quarter of 2010 compared to 67.4% for the same prior-year period. Its training center business generated 27.0% of total revenue in the second quarter of 2010 compared to 24.7% for the same prior-year period; other business, including advertising, generated the remaining 4.9% of total revenue in the second quarter of 2010, compared to 7.9% for the same prior-year period.

Online education revenue was $7.39 million for the second quarter of 2010, an increase of 35.0% compared to $5.47 million for the second quarter of 2009.

Training center revenue in the second quarter of 2010 was $2.93 million, up 46.0% from $2.01 million in the second quarter last year.

Other revenue, including advertising, was approximately $0.53 million for the second quarter of 2010, decreased by 16.6% from $0.64 million in the second quarter last year.

Net income for the second quarter of fiscal 2010 was $4.26 million, representing an increase of 29.9% over second quarter 2009 net income of $3.28 million. The increase was largely the result of strong development in the Company's online division and training center division. Diluted earnings per share were $0.14, compared with $0.13 in the same period last year. 31.36 million shares were utilized for the calculations in the second quarter of 2010 compared to 25.09 million for the year ago period.

Operating income in the second quarter of fiscal 2010 increased to $4.74 million, from $3.72 million in the same period a year ago. Operating margin was 43.7% in the second quarter of fiscal 2010.

Overall cost of sales increased 11.9% to $1.80 million in the second quarter of fiscal 2010, compared to $1.61 million for the same period in fiscal 2009. Gross profit increased to $9.06 million in the second quarter of fiscal 2010, an increase of 39.0% from $6.51 million for the same quarter in fiscal 2009. Gross margin for the second quarter of fiscal 2010 was 83.4%, as compared to 80.2% for the same quarter a year ago. The online education gross margin increased to 84.7% in the second quarter of fiscal 2010 from 81.1% for the same period in fiscal 2009. The training center gross margin increased to 78.5% for the second quarter of fiscal 2010 from 75.0% for the same period last year. Other area gross margin was 93.1% in the second quarter of fiscal 2010, up from 89.1% of the second quarter of last year.

Selling expenses increased 82.5% to approximately $3.48 million for the second quarter of fiscal 2010, compared to $1.91 million in the second quarter of 2009, due to increased expenses in our marketing team and higher debit card agency expenses. General and administrative ("G&A") expenses were approximately $0.57 million for the second quarter of fiscal 2010, a decrease from $0.64 million in the second quarter of fiscal 2009, primarily due to prudent expense control. As a percentage of revenue, selling expenses took 32.1% of the total revenue in the second quarter 2010 compared to 23.5% the same period of last year; G&A expenses at 5.3% of total revenue in the second quarter 2010 compared to 7.9% the same period of last year.

Financial results for the six months ended June 30, 2010

Revenue for the six months ended June 30, 2010 was $19.47 million, representing an increase of 19.3% compared to the same six-month period in 2009. Online education revenue was $12.62 million for the six months ended June 30, 2010, representing an increase of 22.5% from $10.30 million for the same six-month period in 2009. Training center revenue in the six months ended June 30, 2010, was $5.79 million, representing an increase of 27.1% from $4.56 million in the same six-month period last year. The increase was largely the result of strong development in the Company's online education and onsite training centers divisions.

Other revenue was approximately $1.06 million for the six months ended June 30, 2010, representing a decrease of 27.6% from $1.47 million for the same prior-year, six-month period. As other revenue, mainly advertising, is not the focus of the business, the company does not expect to see significant changes in the current level of advertising revenue during this year.

Net income for the six months ended June 30, 2010 was $7.92 million, representing an increase of 20.8% over the same six-month period in 2009 net income of $6.56 million. Diluted earnings per share for the six months ended June 30, 2010 was $0.25, compared with $0.27 in the same period of 2009. 31.38 million shares were utilized for the calculations for the first half of 2010, compared to 24.46 million for the year-ago period.

Financial Condition

As of June 30, 2010, China Education Alliance had approximately $74.69 million in cash, $75.20 million in working capital, and no long-term debt. Shareholders' equity was approximately $83.86 million, an increase of $8.52 million from approximately $75.34 million on December 31, 2009. The Company generated $10.13 million in cash flow from operating activities in the second quarter of 2009.

Business Outlook

The management team at CEU believes the domestic education industry in China will remain a fast-growth sector. The Company has experienced rapid growth by providing online and onsite, supplemental educational training services to students ages 6 to 18 and vocational training services to adults ages 18 and up.

For students ages 6 to 18, the Company provides downloadable course material and test papers online and classroom instructions onsite. All the online course material and test papers and onsite classroom instructions are provided by famed instructors in the People's Republic of China, with the purpose of helping the students pass the two most important exams during their academic life: the high school and college entrance exams.

For adults ages 18 and up, the Company provides various vocational training including IT and other professional training programs.

    China Education Alliance has two primary business lines:

    1.  For students ages 6 to 18, the Company offers exam-oriented primary
        and secondary school supplemental education, with online educational
        resources available for students to download through the Internet, and
        is supported by highly regarded instructors who offer onsite support.
        The Company's online educational resources are provided through its
        website, http://www.edu-chn.com , which is a comprehensive education
        network platform that utilizes video-on-demand technology and houses a
        large database that includes more than 350,000 exams and test papers,
        as well as courseware for secondary and elementary schools. The
        Company has expanded its business network from Heilongjiang province
        to Jilin, Liaoning and Inner Mongolia provinces, and it is focused on
        optimizing market share in these regions, while evaluating new
        geographic areas to penetrate in the future.
    2.  For adults over the age of 18, the Company offers onsite vocational
        training through various programs at its main center in Harbin, in
        addition to online services through its strategic partnerships with
        professional organizations such as the National Association of
        Vocation Education Society of China (NAVEC). The Company is focused on
        its Heilongjiang-based, self-run vocational education market, which
        includes IT training and other professional training programs.

In addition to these primary businesses, the Company is also invested in the publishing and circulation of an educational newspaper, Scientific Discovery, which is enjoying a growing distribution, currently estimated at 60,000.

On February 4, 2010, the Company announced the acquisition of the Beijing Shifan Culture Communication Co., Ltd. and, as a consequence, the establishment of a new entity, Beijing New Shifan Education & Technology. Beijing Shifan's publication, the "Senior High School Students Mathematic, Physics, and Chemistry" magazine, which is endorsed by the China's Ministry of Education, and its popular nationwide academic contest for middle school and high school students, is expected to accelerate the marketing efforts of the Company and provide a platform to access markets nationwide.

"We continue to focus on marketing our online test-preparation materials and our vocational training efforts to new markets as we see significant growth in the areas we currently serve. We remain committed to our goals for business development, including the introduction of new materials and curriculums which will assist the students and adults we serve in meeting their education and career goals. We remain very confident in our strategy, and will utilize operating leverage in our model to generate incremental cash flow as we continue to grow our business," said Mr. Xiqun Yu.

Conference Call and Webcast Details

The Company will host a conference call to discuss financial results for the second quarter ended June 30, 2010 on Wednesday, August 11, 2010 at 10:00 a.m. Eastern Daylight Time (7:00 a.m. Pacific).

To participate in the call, please dial (877) 941-8602, or (480) 629-9811 for international calls, approximately 10 minutes prior to the scheduled start time. Interested parties may also listen via a live Internet webcast, which can be found at the Company's website at http://www.chinaeducatio... ) is a fast-growing, leading, China-based company offering high-quality education resources and services to students ages 6 to 18 and adults (university students and professionals) ages 18 and over. For students ages 6 to 18, China Education Alliance offers supplemental, online exam-oriented training materials and onsite, exam-oriented training and tutoring services. The company provides online, downloadable famous-teacher resources and onsite, personalized instruction. All resources and tutoring services are provided by famous teachers within mainland China. The purpose of online exam-orientated resources and onsite tutoring is to help Chinese students (ages 6 to 18) pass the two most important and highly competitive exams in their educational career: the senior high school entrance and college entrance exams. For graduates and professionals age 18 and over, China Education Alliance provides vocational training including IT and several professional training programs.

Safe Harbor Statement

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release, constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements include, without limitation, statements regarding our ability to prepare the company for growth, the Company's planned expansion in 2009 and predictions and guidance relating to the Company's future financial performance. We have based these forward- looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs and are not a guarantee of future performance but they involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which may include, but are not limited to, such factors as unanticipated changes in product demand especially in the education industry, pricing and demand trends for the Company's products, changes to government regulations, risk associated with operation of the Company's new facilities, risk associated with large scale implementation of the company's business plan, the ability to attract new customers, ability to increase its product's applications, cost of raw materials, downturns in the Chinese economy, the adoption by consumers of its new game business, the unproven advertising model that is dependent on attracting a large game user base, and other information detailed from time to time in the Company's filings and future filings with the United States Securities and Exchange Commission. Investors are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements made herein speak only as of the date of this press release, readers are cautioned not to place undue reliance on any of them and the Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations.

                         -- Financial tables follow --



                 China Education Alliance, Inc. and Subsidiaries
                           Consolidated Balance Sheets

                                                 June 30,        December 31,
                                                   2010              2009
                                               (Unaudited)        (Audited)
                       ASSETS
    Current Assets
      Cash and cash equivalents                $74,690,538       $65,035,332
      Accounts receivable                        1,546,937         1,274,727
      Prepaid expenses                           1,979,032         2,692,310
        Total current assets                    78,216,507        69,002,369

    Property and equipment, net                  6,038,568         6,589,982
    Intangibles and capitalized
     software, net                               1,362,027           737,761
    Advance on acquisition                         932,000           932,000
    Long-term investment                           333,512           341,686

                                               $86,882,614       $77,603,798

        LIABILITIES AND STOCKHOLDERS' EQUITY

    Current Liabilities
      Accounts payable and accrued
       expenses                                 $2,175,755        $1,255,991
      Deferred revenues                            842,908         1,008,884
        Total current liabilities                3,018,663         2,264,875

    Stockholders' Equity
      Preferred stock ($0.001 par value,
       20,000,000 shares authorized, 0
       and 4,502,142 issued and
       outstanding, respectively,
       aggregate liquidation preference
       of 0 and $1,665,793, respectively)               --         1,867,644
      Common stock ($0.001 par value,
       150,000,000 shares authorized,
       31,654,581 and 30,040,954 issued
       and outstanding, respectively)               31,655            30,041
      Additional paid-in capital                40,592,789        38,231,623
      Statutory reserve                          3,016,143         3,016,143
      Accumulated other comprehensive
       income                                    3,055,752         2,886,087
      Retained earnings                         37,964,599        30,044,687
        Stockholders' equity - China
         Education Alliance, Inc. and
         Subsidiaries                           84,660,938        76,076,225
      Noncontrolling interests in
       subsidiaries                               (796,987)         (737,302)
        Total stockholders' equity              83,863,951        75,338,923

                                               $86,882,614       $77,603,798

    The accompanying notes are an integral part of these consolidated
    financial statements.



                 China Education Alliance, Inc. and Subsidiaries
                      Consolidated Statements of Operations
                                   (Unaudited)

                                 Three months ended        Six months ended
                                       June 30,                June 30,
                                    2010       2009        2010          2009
    Revenues
     Online education revenues $7,386,469 $5,470,628 $12,617,532   $10,300,116
     Training center revenues   2,932,222  2,007,947   5,789,419     4,555,046
     Other Revenues               533,405    639,798   1,062,879     1,467,290
      Total revenue            10,852,096  8,118,373  19,469,830    16,322,452

    Cost of Goods Sold
     Online education costs     1,128,927  1,034,312   2,242,485     2,233,419
     Training center costs        630,956    501,789   1,262,925     1,366,439
     Other costs                   37,060     69,775      77,837       124,914
      Total cost of goods sold  1,796,943  1,605,876   3,583,247     3,724,772

    Gross Profit
     Online education gross
      profit                    6,257,542  4,436,316  10,375,047     8,066,697
     Training center gross
      profit                    2,301,266  1,506,158   4,526,494     3,188,607
     Other gross profit           496,345    570,023     985,042     1,342,376
      Total gross profit        9,055,153  6,512,497  15,886,583    12,597,680

    Operating Expenses
     Selling expenses           3,478,810  1,906,494   5,719,764     4,117,182
     Administrative               572,847    639,361   1,027,040       894,112
     Depreciation and
      amortization                264,663    244,898     497,474       490,351
      Total operating expenses  4,316,320  2,790,753   7,244,278     5,501,645

    Other Income (Expense)
     Other income                   2,245         --      21,138            --
     Interest income               50,842     25,783      97,535        48,539
     Investment loss               (6,076)    (3,678)     (7,606)       (4,089)
      Total other income           47,011     22,105     111,067        44,450

    Net Income Before
     Provision for Income Tax   4,785,844  3,743,849   8,753,372     7,140,485
     Provision for Income
      Taxes                       549,966    507,977     893,145       675,132

    Net Income                  4,235,878  3,235,872   7,860,227     6,465,353
     Net loss attributable to
      the noncontrolling
      interests                   (21,162)   (40,964)    (59,685)      (90,290)
    Net Income - attributable
     to CEU and Subsidiaries   $4,257,040 $3,276,836  $7,919,912    $6,555,643

    Basic Earnings Per Share        $0.14      $0.15       $0.25         $0.30
    Diluted Earnings Per Share      $0.14      $0.13       $0.25         $0.27

    Basic Weighted  Average
     Shares Outstanding        31,323,734 21,930,272  31,323,734    21,930,272
    Diluted Weighted  Average
     Shares Outstanding        31,363,255 25,085,474  31,377,877    24,459,405

    The Components of Other
     Comprehensive Income
     Net income                $4,257,040 $3,276,836  $7,919,912    $6,555,643
     Foreign currency
      translation adjustment      242,100   (148,642)    169,665      (186,726)


    Comprehensive Income       $4,499,140 $3,128,194  $8,089,577    $6,368,917

    The accompanying notes are an integral part of these consolidated
    financial statements.



                 China Education Alliance, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows
                                   (Unaudited)

                                                 Six Months Ended June 30,
                                                 2010                2009
    Cash flows from operating
     activities
      Net Income                              $7,860,227          $6,465,353
      Adjustments to reconcile net
       income to net cash provided by
       Operating activities
          Depreciation and amortization          913,654             663,830
          Stock based compensation               157,730             332,256
          Loss on equity investment                8,174               4,089
      Net change in assets and
       liabilities
        Account receivables                     (272,210)           (626,926)
        Prepaid expenses and other               713,278           1,285,913
        Advances to related parties                   --             215,308
        Accounts payable and accrued
         liabilities                             919,764             247,341
        Deferred revenue                        (165,976)           (186,509)
    Net cash provided by operating
     activities                               10,134,641           8,400,655

    Cash flows from investing activities
      Purchases of property and
       equipment                                (110,111)           (348,837)
      Acquisition of intangible asset           (876,395)                 --
      Long-term investment                            --             227,964
    Net cash used in investing activities       (986,506)           (120,873)

    Cash flows from financing activities
      Warrants exercised                         298,749                  --
      Options exercised                           38,657                  --
    Net cash provided by financing
     activities                                  337,406                  --

    Effect of exchange rate                      169,665            (188,885)

    Net increase in cash                       9,655,206           8,090,897

    Cash and cash equivalents at
     beginning period                         65,035,332          23,418,098

    Cash and cash equivalents at end
     period                                  $74,690,538         $31,508,995

    Supplemental disclosure of cash
     flow information
      Taxes paid                              $2,719,163            $329,981

    Non-cash investing and financing
     activities
      Conversion of preferred stock
       to common                              $1,867,644            $125,000

    The accompanying notes are an integral part of these consolidated
    financial statements.


    This information is intended to be reviewed in conjunction with the
    Company's filings with the Securities and Exchange Commission.


    For more information, please contact:

    At the Company:
     Zack Pan, CFO
     China Education Alliance, Inc.
     Phone: +1-405-315-9987
     Email: zackpan08@gmail.com
            zackpan08@edu-chn.com

HARBIN, China, March 19 /PRNewswire-Asia-FirstCall/ -- China Education Alliance, Inc. (NYSE:CEU - News) ("the Company"), a China-based educational resources company, speaking at their 2009 fourth quarter and year-end conference call held on March 17, 2010 gave positive forward-looking guidance for the fiscal 2010 year ending December 31, 2010. The Company stated that they expected revenue growth of approximately 30%, which would equate to revenue projection of $48 million for fiscal year 2010.

Commenting on the report, Xiqun Yu, Chairman and Chief Executive Officer of China Education Alliance, stated: "We remain confident about the health of our business model because the demand for our high-quality educational services and our vocational training programs in China continues to see very strong growth."

As previously announced, the Company acquired Beijing Shifan Culture Communication Co., Ltd. through a new subsidiary, Beijing New Shifan Education & Technology ("Beijing New Shifan"). Beijing Shifan's Senior High School Students Mathematic, Physics, and Chemistry magazine, endorsed by the China's Ministry of Education, and its popular nationwide academic contest for middle- school and high-school students in the People's Republic of China provides the Company immediate access to the national secondary education market and accelerates its marketing efforts for a strategic expansion in 2010. The Company believes that Beijing New Shifan will generate revenues of between RMB15 million to 20 million in 2010, which would translate into a top-line benefit of between US$2.2 million and US$3 million. Additionally, management expects net profit margins of 20% for the new subsidiary to be achieved. A replay of the 2009 year-end conference call will be available for two weeks from 2:00 p.m. EDT on March 17, 2010, until 11:59 p.m. EDT on March 31, 2010. The number for the replay is 303-590-3030. The pass code for the replay is 4265652.

About China Education Alliance

China Education Alliance, Inc. (

The 2009 annual Tencent China Education Industry Review is one of the most prestigious events in China's education industry. Tencent Education is a leading online platform that conducts the annual Tencent China Education Industry Review. The sponsors include some of the most reputable educational print and online media outlets in China, including China Education Television, China Education News Network, People's CPPCC News, and Modern Education News. The award winners are all leaders of the education industry within China.

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 and support for international curriculum programs.

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 has 15 long-term, exclusive contracts that generally vary from 10 to 50 years in length. ChinaEdu also performs recruiting services for 15 universities through its nationwide Learning Center Network.

    For more information, please contact:

    Company Contacts:
     Lily Liu, CFO
     ChinaEdu Corporation
     Phone: +86-10-8418-6655 x1002
     Email: ir@chinaedu.net

     S. Jimmy Xia, IR Manager
     ChinaEdu Corporation
     Phone: +86-10-8418-6655 x1150
     Email: ir@chinaedu.net

The Company's 2008 Annual Report on form 20-F can be downloaded from the Company's investor relations website at http://ir.chinaedu.net/ . Upon request, the Company will provide hard copies of these documents free of charge.

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 and support for international curriculum programs.

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 has 12 long-term, exclusive contracts that generally vary from 15 to 50 years in length. ChinaEdu also performs recruiting services for 17 universities through our nationwide learning center network

"We are honored to have Zack join our team, and we look forward to having his leadership and industry experience with us as we advance our expansion plans and manage our growth," said Mr. Xiqun Yu, chairman and chief executive officer of China Education Alliance. "Zack has proven leadership experience in managing complex financial projects for international companies, particular in Asia. His insights and perspective will prove invaluable to us."

Mr. Pan, CFO, stated: "I believe China Education Alliance is on the cusp of reaching some major corporate milestones. This is an exciting time to be part of the company. Mr. Yu's vision for China Education Alliance is broad and deep. I am looking forward to helping him achieve his vision of becoming a major player in the China education sector."

Prior to joining to the Company, Mr. Pan, 41, was an audit manager with Eide Bailly CPAs & Business Advisors in Oklahoma City. From September 2005, he served at Eide Bailly managing a team of professionals, providing audit and review services to both national and international clients. From September 1998 to September 2005, Mr. Pan was a statistical analyst and economist with the State of Oklahoma, where he provided consultation to managers and administrators to aid in the development of assessment and evaluation mechanisms for programs and services. From 1994 to 1996, Mr. Pan worked as a loan project officer for Asian Development Bank (ADB) Loan Management Office in Anhui, China, where he managed various ADB loan projects and assisted with communication and translation between ADB and the Chinese government. From 1988 to 1994, Mr. Pan was an associate professor at Anhui University, China, where he taught English language courses.

Mr. Pan is a Certified Public Accountant, certified by the Oklahoma State Board of Accountancy and a member of the American Institute of Certified Public Accountants (AICPA) and the Oklahoma Society of Certified Public Accountants (OSCPA). He graduated with a Master of Business Administration from the University of Central Oklahoma in 1999 and obtained his Bachelor of Arts from Anhui University, China, in 1988.

About China Education Alliance, Inc.

China Education Alliance, Inc. (NYSE Amex: CEU) is a fast-growing, leading China-based company offering high-quality education resources and services to students ages 6 to 18 and adults ages 18+ (University students and professionals). For students ages 6 to 18, China Education Alliance, Inc. offers supplemental, online exam-oriented training materials and on-site exam- oriented training and tutoring services. The company is providing on-line, downloadable, famous teachers resources and on-site face-to-face instructions. All resources and tutoring services are provided by famous teachers within mainland China. The purpose of online exam-orientated resources and on-site tutoring is to help Chinese students ages 6 to 18 to pass the two most important and highly competitive exams in their educational career: senior high school entrance exam and college entrance exam. For graduates and professionals age 18+, China Education Alliance provides vocational training including IT and several professional training programs. In addition, the Company is providing comprehensive English programs that are taught by North American instructors to assist graduates and professionals in learning the English language, both written and conversational in order to better able them to work for a foreign corporation or work-study abroad. At present, five English schools are operating nationwide in China. For more information about China Education Alliance, please visit http://www.RedChip.com
]]> message_3055 20 Aug 2009 09:00:00 GMT http://chinasecurities.com/ir/CEUA/messages/3055 In the news release, "ChinaEdu Reports Second Quarter 2009 Results", issued Aug. 19 by ChinaEdu Corporation (Nasdaq: CEDU - News) over PR Newswire Asia, we are advised by the company that, due to conversion and rounding differences, the company has made revisions in certain per share and per ADS amounts presented in US dollars. For future periods, the company will present all amounts in per share or per ADS presented in US dollars with three decimal places. For the periods ended June 30, 2009, please note the following revisions:

    -- Basic net income attributable to ChinaEdu per ADS in US dollars for the
       quarter ended June 30, 2009 from $0.09 to $0.081
    -- Diluted net income attributable to ChinaEdu per ADS in US dollars for
       the quarter ended June 30, 2009 from $0.09 to $0.075
    -- Basic net income attributable to ChinaEdu per ADS in US dollars for the
       six months ended June 30, 2009 from $0.15 to $0.165
    -- Diluted net income attributable to ChinaEdu per ADS in US dollars for
       the six months ended June 30, 2009 from $0.15 to $0.156

Please note each ADS (American Depository Share) represents three ordinary shares.

    Full, correct announcement follows.

                 ChinaEdu Reports Second Quarter 2009 Results

   11.0% Increase in Second Quarter Net Revenue Year-Over-Year with Second
                    Quarter Net Revenue Exceeding Guidance

    Live Conference Call to be held on Thursday, August 20, 2009 at 8 a.m.
          (Eastern) / 5 a.m. (Pacific) / 8 p.m. (Beijing/Hong Kong)

BEIJING, Aug. 19 /PRNewswire-Asia-FirstCall/ -- ChinaEdu Corporation (Nasdaq: CEDU - News; "ChinaEdu" or the "Company"), an educational services provider in China, today announced its unaudited financial results for the second quarter ended June 30, 2009.(1)

    Second Quarter 2009 Highlights



    (in thousands, unaudited)                    3 Months Ended         Period
                                             June      June      June    over
    Period Ended                          30, 2008  30, 2009  30, 2009  Period
    Currency in thousands                    RMB       RMB       USD       %
    Financial Data:
        Net revenue                         79,521    88,275    12,924    11%
        Gross profit                        56,142    55,078     8,063    -2%
        Income from operations              24,862    22,020     3,223   -11%
        Net income attributable to CEDU      9,187     8,860     1,297    -4%
        Adjusted EBITDA (Non-GAAP)          31,839    29,518     4,321    -7%
        Adjusted net income attributable
         to CEDU (Non-GAAP)                 12,956    12,097     1,771    -7%

        EPS                                   0.16      0.18     0.027    13%
        Adjusted EPS (Non-GAAP)               0.22      0.25     0.037    14%

        Net income to CEDU per ADS            0.48      0.54     0.081    13%
        Adjusted net income to CEDU per
         ADS (Non-GAAP)                       0.66      0.75     0.111    14%
    Operating Data:
        Revenue students for online
         degree program                    125,000   147,000   147,000    18%


    (in thousands, unaudited)                    Six Months Ended        Year
    Period Ended                            June      June      June     over
                                          30, 2008  30, 2009  30, 2009   Year
    Currency in thousands                    RMB       RMB       USD       %
    Financial Data:
        Net revenue                        149,176   169,445    24,809    14%
        Gross profit                       101,642   103,678    15,179     2%
        Income from operations              37,687    39,556     5,791     5%
        Net income attributable to CEDU     11,274    18,424     2,697    63%
        Adjusted EBITDA (Non-GAAP)          50,177    55,106     8,067    10%
        Adjusted net income attributable
         to CEDU (Non-GAAP)                 17,738    25,476     3,729    44%

        EPS                                   0.19      0.38     0.055   100%
        Adjusted EPS (Non-GAAP)               0.30      0.52     0.076    73%

        Net income to CEDU per ADS            0.57      1.14     0.165   100%
        Adjusted net income to CEDU per
         ADS (Non-GAAP)                       0.90      1.56     0.228    73%
    Operating Data:
        Revenue students for online
         degree program                    125,000   147,000   147,000    18%



    -- Total net revenue for the second quarter of 2009 increased by 11.0% to
       RMB88.3 million ($12.9 million) from RMB79.5 million for the
       corresponding period in 2008, exceeding our previously disclosed
       guidance for the second quarter of 2009 of RMB83 million to
       RMB87 million.
    -- Net revenue from online degree programs, the Company's major business
       segment, increased by 9.7% to RMB71.4 million ($10.5 million) for the
       second quarter of 2009 from RMB65.1 million for the corresponding
       period in 2008.
    -- The number of revenue students(2) in online degree programs during the
       second quarter of 2009 increased by approximately 18% to over 147,000
       from approximately 125,000 for the corresponding period in 2008.
    -- Income from operations decreased by 11.4% to RMB22.0 million
       ($3.2 million) in the second quarter of 2009 from RMB24.9 million for
        the corresponding period in 2008.
    -- Net income attributable to ChinaEdu Corporation, which is net income
       excluding net income attributable to noncontrolling interest decreased
       by 3.6% to RMB8.9 million ($1.3 million) in the second quarter of 2009
       from RMB9.2 million for the corresponding period in 2008.
    -- Adjusted EBITDA, which is a non-GAAP measure defined as net income
       before interest income, taxes, depreciation, amortization of intangible
       assets and land use rights, share-based compensation and goodwill and
       intangibles impairment charges, if applicable, decreased by 7.3% to
       RMB29.5 million ($4.3 million) in the second quarter of 2009 from
       RMB31.8 million for the corresponding period in 2008.
    -- Adjusted net income attributable to ChinaEdu Corporation, which is a
       non-GAAP measure defined as net income attributable to ChinaEdu
       Corporation excluding share-based compensation, amortization of
       intangible assets and land use rights and goodwill and intangibles
       impairment charges, if applicable (all amounts are attributable to
       ChinaEdu Corporation, net of noncontrolling interest), decreased by
       6.6% to RMB12.1 million ($1.8 million) in the second quarter of 2009
       from RMB13.0 million for the corresponding period in 2008.
    -- Basic net income attributable to ChinaEdu Corporation per share ("EPS")
       was RMB0.18 ($0.027) for the second quarter of 2009 compared to RMB0.16
       for the corresponding period in 2008.
    -- Basic net income attributable to ChinaEdu Corporation per American
       Depositary Share ("ADS") was RMB0.54 ($0.081) for the second quarter of
       2009 compared to RMB0.48 for the corresponding period in 2008.
    -- Basic adjusted net income attributable to ChinaEdu Corporation per
       share (non-GAAP) was RMB0.25 ($0.037) for the second quarter of 2009
       compared to RMB0.22 for the corresponding period in 2008.
    -- Basic adjusted net income attributable to ChinaEdu Corporation per ADS
       (non-GAAP) was RMB0.75 ($0.111) for the second quarter of 2009 compared
       to RMB0.66 for the corresponding period in 2008.



    (1) This announcement contains translations of certain Renminbi ("RMB")
        amounts into U.S. dollar ("$") amounts at specified rates solely for
        the convenience of the reader. Unless otherwise stated, all
        translations from RMB to U.S. dollars were made at the rate of
        RMB6.8302 to $1.00, the noon buying rate in effect on June 30, 2009 in
        the H.10 statistical release of the Federal Reserve Board. The Company
        makes no representation that the RMB or U.S. dollar amounts referred
        to 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.
    (2) "Revenue students" refers to students of university online degree
        programs who have paid tuition in the applicable period.

"We are pleased to report healthy enrollment and revenue growth for the 2009 spring semester," said Ms. Julia Huang, ChinaEdu's Chairman and Chief Executive Officer. "In the second quarter of 2009, we strived for strong revenue growth from our learning centers and continued to expand our learning center network. In addition, we are pleased to report continued progress in signing additional university partners for our online degree programs, including collaborative alliance agreements with provincial radio and television universities. Our 101 online tutoring program continued to improve with new and updated courseware, stronger sales channels and improved customer services. In addition, we have continued to invest in courseware development, technology upgrade and the learning platform for both online degree and non- degree programs, which we believe will position us for continued future growth. Although there was a decline in gross profit, operating income and net income in the second quarter of 2009 compared to the second quarter of 2008, the Company's margins for EBITDA, adjusted operating income and net income remained stable in the first half of 2009 relative to the first half of 2008, which we believe reflects improvements in the Company's operations given the expansion of the learning centers network and investments in other businesses."

Financial Results for the Second Quarter Ended June 30, 2009

Net Revenue

Total net revenue for the second quarter of 2009 was RMB88.2 million ($12.9 million), representing an 11.0% increase from the corresponding period in 2008. Net revenue from online degree programs for the second quarter of 2009 was RMB71.4 million ($10.5 million), representing a 9.7% increase from RMB65.1 million for the corresponding period in 2008. The growth in net revenue was primarily due to strong enrollment growth for the Spring semester of 2009, which registered over 147,000 revenue students compared to 125,000 revenue students for the Spring semester of 2008.

Net revenue from the Company's non-online degree programs (online tutoring program, international curriculum programs and private primary and secondary schools) for the second quarter of 2009 was RMB16.8 million ($2.5 million), representing a 17.2% increase from RMB14.4 million for the corresponding period in 2008. This increase was attributable to the increase in student enrollment at Anqing School for the academic year beginning in September 2008 as a result of the completion of Phase I of the new campus construction as well as a slight increase in net revenue for the 101 online tutoring programs.

Cost of revenue

Total cost of revenue for the second quarter of 2009 was RMB33.2 million ($4.9 million), representing an increase of 42.0% as compared to RMB23.4 million for the corresponding period of 2008. Cost of revenue for online degree programs for the second quarter of 2009 was RMB22.5 million ($3.3 million), representing an increase of 67.4% as compared to RMB13.5 million for the second quarter of 2008. In addition to increase in cost of revenue corresponding to enrollment growth, the increase in cost of revenue for online degree programs was attributable primarily to (i) enrollment growth in our university partners' online degree programs in the Spring semester of 2009 compared to the Spring semester of 2008, (ii) courseware development for selected university partners at our collaborative alliances(3) and (iii) the expansion of our learning center network. Since most of the recruiting services performed by our learning centers to our university partners are recorded as cost of revenue, our total cost of revenue will continue to increase as we continue the expansion of the learning centers network. We had 56 operational learning centers by the second quarter of 2009, of which 21 were proprietary and 35 were contracted locations, compared to 22 operational learning centers as of the end of the second quarter of 2008.

Cost of revenue for non-online degree programs for the second quarter of 2009 was RMB10.7 million ($1.6 million), representing a 7.5% increase from RMB9.9 million for the corresponding period in 2008. This increase was attributable primarily to increased cost of revenue related to Anqing School's new campus and 101 online tutoring program's investment in YoYo Bear education products, which were partially offset by a decrease in cost of revenue for the international curriculum programs.

    (3) "Collaborative alliance" or "Collaborative alliances" refer to the
        subsidiary or subsidiaries that the Company formed with certain
        university partners to provide services to their online degree
        programs, which subsidiaries are majority owned by the Company.

Gross Profit and Gross Margin

Gross profit for the second quarter of 2009 was RMB55.1 million ($8.1 million), representing a 1.9% decrease from RMB56.1 million for the corresponding period of 2008, as a result of the increase in cost of revenue, as discussed above. Total gross margin for the second quarter of 2009 was 62.4% as compared to 70.6% for the corresponding period of 2008. Since most of the recruiting services performed by our learning centers to our university partners are recorded as cost of revenue, our gross margin for the online degree programs segment decreased as a result of our continuous efforts in expanding the learning center network. Furthermore, gross margin for Anqing School and 101 online tutoring programs were negatively impacted by our investment in Anqing School's new campus and investment in YoYo Bear products, respectively, each of which are still in the early stages of development and thus are currently producing less income than expenses associated with such investments.

Operating Expenses

Total operating expenses were RMB33.1 million ($4.8 million) for the second quarter of 2009, representing a 5.7% increase from RMB31.3 million for the corresponding period in 2008. This increase was attributable primarily to increases in general and administrative and research and development expenses, partially offset by a decrease in selling and marketing expenses, each as discussed below.

    -- General and administrative expenses for the second quarter of 2009 were
       RMB19.7 million ($2.9 million), which represented a 7.1% increase from
       RMB18.4 million for the corresponding period of 2008. This increase was
       attributable primarily to an increase in performance-based employee
       compensation.
    -- Selling and marketing expenses were RMB5.4 million ($0.8 million) for
       the second quarter of 2009, which represented a 22.6% decrease from
       RMB7.0 million for the corresponding period in 2008. This decrease is
       attributable primarily to a decrease in the amount spent on general
       advertising and promotional activities for our own learning center
       operations in the second quarter in 2009.
    -- Research and development expenses for the second quarter of 2009 were
       RMB7.9 million ($1.2 million), representing a 35.2% increase from
       RMB5.8 million for the corresponding period in 2008. This increase was
       attributable primarily to increased technological support and platform
       upgrades for certain collaborative alliances in order to further
       enhance our online degree programs.
    -- Share-based compensation for the second quarter of 2009, which was
       allocated to the related cost and operating expense line items, was
       RMB2.1 million ($0.3 million) as compared to RMB1.7 million for the
       corresponding period in 2008. The increase was attributable primarily
       to costs related to the repricing of options (as previously approved by
       our shareholders) during the current quarter, which resulted in the
       recognition of incremental compensation costs.

Income from Operations

As a result of the factors discussed above, income from operations for the second quarter of 2009 was RMB22.0 million ($3.2 million), which decreased by 11.4% from RMB24.9 million for the corresponding period of 2008.

Adjusted income from operations, which is a non-GAAP measure defined as income from operations excluding share-based compensation, amortization of intangible assets and land use rights and goodwill and intangibles impairment charges, if applicable, was RMB25.5 million ($3.7 million) for the second quarter of 2009, which decreased by 11.8% as compared to RMB28.9 million in the corresponding period of 2008. The decrease was attributable primarily to the increase in cost of revenue as discussed above.

Interest Income

Interest income was RMB1.2 million ($0.2 million) in the second quarter of 2009, as compared to RMB2.6 million in the corresponding quarter of 2008. This decrease was attributable primarily to (i) reduced interest-bearing cash and bank deposit balance of RMB311 million as of June 30, 2009, compared to RMB434 million as of June 30, 2008, and (ii) a lower interest rate for the second quarter of 2009 compared to the corresponding period of 2008.

Income Tax Expense

Income tax income for the second quarter was RMB6.3 million ($0.9 million), as compared to income tax expense of RMB9.4 million for the corresponding period in 2008. This was attributable primarily to the fact that, in the fourth quarter of 2008, seven of our subsidiaries and affiliate companies applied and qualified for the "new and high technology enterprises" status under the new Chinese Enterprise Income Tax Regulation, which came into effect on January 1, 2008. As a result of their qualification for the "new and high technology enterprises" status, these subsidiaries received certain tax exemptions and a preferential statutory tax rate of 15%, thereby reducing the effective tax rate for the second quarter of 2009 to 26.3% as compared to 34.9% for the corresponding period in 2008.

Noncontrolling Interest

Noncontrolling interest was RMB8.7 million ($1.3 million) in the second quarter of 2009, representing a 3.5% increase from RMB8.4 million in the corresponding period in 2008, which was attributable primarily to increased profitability of our collaborative alliances related to the online degree programs.

Net Income (loss) attributable to ChinaEdu Corporation

Net income attributable to ChinaEdu Corporation, which is net income excluding net income attributable to noncontrolling interest, was RMB8.9 million ($1.3 million) for the second quarter of 2009, representing a decrease of 3.6% from net income attributable to ChinaEdu Corporation of RMB9.2 million for the corresponding period in 2008. Adjusted net income attributable to ChinaEdu Corporation (non-GAAP) decreased by 6.6% to RMB12.1 million ($1.8 million) for the second quarter of 2009, as compared to RMB13.0 million in the corresponding period of 2008. The decrease in both net income and adjusted net income attributable to ChinaEdu Corporation (non-GAAP) was primarily due to the increase in cost of revenue in the second quarter of 2009 as compared to the corresponding period in 2008.

Due to a reduction in the number of basic and diluted shares outstanding for the second quarter of 2009 compared to the corresponding period in 2008 as a result of the Company's stock repurchase in the first quarter of 2009, basic and diluted EPS were RMB0.18 ($0.027) and RMB0.17 ($0.025), respectively, for the second quarter of 2009, compared to RMB0.16 and RMB0.15, respectively, for the second quarter of 2008. Similarly, basic and diluted adjusted EPS (non- GAAP) were RMB0.25 ($0.037) and RMB0.23 ($0.034), respectively, for the second quarter of 2009, compared to RMB0.22 and RMB0.21, respectively, for the second quarter of 2008.

In addition, basic and diluted net income attributable to CEDU per ADS were RMB0.54 ($0.081) and RMB0.51 ($0.075), respectively, for the second quarter of 2009, compared to RMB0.48 and RMB0.45, respectively, for the corresponding period in 2008. Similarly, basic and diluted adjusted net income attributable to CEDU per ADS were RMB0.75 ($0.111) and RMB0.69 ($0.102), respectively, for the second quarter of 2009, compared to RMB0.66 and RMB0.63, respectively, for the corresponding period in 2008.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA (non-GAAP) was RMB29.5 million ($4.3 million) for the second quarter of 2009, which decreased by 7.3% as compared to RMB31.8 million for the corresponding period in 2008. This decrease was attributable primarily to the increase in cost of revenue, as discussed above.

Deferred Revenue

Deferred revenue at the end of the second quarter of 2009 was RMB101.5 million ($14.9 million), with current deferred revenue of RMB95.3 million ($14.0 million) and non-current deferred revenue of RMB6.2 million ($0.9 million). Deferred revenue at the end of the second quarter of 2009 increased significantly compared to deferred revenue of RMB36.5 million at the end of the first quarter 2009 due to the seasonality of enrollments, which results in tuition being received generally during the second quarter (spring semester) and the fourth quarter (fall semester) of each year.

Cash and Cash Equivalents

As of June 30, 2009, ChinaEdu reported cash and cash equivalents of RMB231.1 million ($33.8 million), which primarily consisted of cash-on-hand, demand deposits and term deposits with maturity periods of three months or less.

Term Deposits and Amount Due from Related Parties

Term deposits and the amount due from related parties (which represents cash owed to us by our collaborative alliance partners) amounted to RMB79.5 million ($11.6 million) and RMB225.7 million ($33.0 million), respectively, on June 30, 2009.

2009 Year-to-Date Financial Results

Net Revenue

For the six months ended June 30, 2009, total net revenue was RMB169.4 million ($24.8 million), representing an increase of 13.6% from RMB149.2 million for the corresponding period in 2008. Total net revenue for the sixth months ended June 30, 2009 consisted of RMB137.2 million ($20.1 million) in net revenue from online degree programs and RMB32.3 million ($4.7 million) in net revenue from non-online degree programs. The growth in total net revenue was attributable primarily to strong enrollment growth for the online degree programs and growth in net revenue at Anqing School and 101 online tutoring programs.

Cost of Revenue

For the first six months of 2009, total cost of revenue was RMB65.8 million ($9.6 million), representing an increase of 38.4% as compared to RMB47.5 million for the corresponding period in 2008, which increase was primarily due to the expansion of our learning centers network, courseware development for selected university partners at our collaborative alliances, and the increase in cost of revenue at Anqing School and 101 online tutoring programs.

Gross Profit

Gross profit for the first six months of 2009 was RMB103.7 million ($15.2 million) as compared with RMB101.6 million for the corresponding period in 2008, representing an increase of 2.0%.

Income from Operations

Income from operations were RMB39.6 million ($5.8 million) for the first six months of 2009, representing an increase of 5.0% from RMB37.7 million for the first six months of 2008.

Net Income (loss) attributable to ChinaEdu Corporation

Net income attributable to ChinaEdu Corporation was RMB18.4 million ($2.7 million) for the first six months of 2009, representing an increase of 63.4% compared with RMB11.3 million for the corresponding period in 2008, primarily due to an increase in income from operations, as well as a decrease in income tax expenses compared to the corresponding period in 2008.

Third Quarter 2009 Total Net Revenue Guidance

For the third quarter of 2009, ChinaEdu expects its total net revenue to be in the range of RMB84 million ($12 million) to RMB88 million ($13 million). This forecast reflects ChinaEdu's current and preliminary view, which is subject to change.

Conference Call

ChinaEdu senior management will host a conference call on Thursday, August 20, 2009 at 8:00 a.m. U.S. Eastern time / 5:00 a.m. U.S. Pacific time / 8:00 p.m. Beijing/Hong Kong time.

The conference call may be accessed by calling (US) 866 383 7989/ (International) +1 617 597 5328/ (HK) +852 3002 1672/ (China) +86 10 800 152 1490, and entering the passcode: 48836701. A telephone replay of the conference call will be available shortly after the call until August 27, 2009 at (US) 888 286 8010/ (International) +1 617 801 6888 and entering passcode: 27031028. A live and archived webcast may be accessed via the Internet at http://ir.chinaedu.net .

Non-GAAP Financial Measures

To supplement the unaudited condensed consolidated financial information presented in accordance with Accounting Principles Generally Accepted in the United States of America ("GAAP"), the Company uses non-GAAP measures of income from operations and net income attributable to ChinaEdu Corporation, 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 goodwill and intangibles impairment charges, if applicable. The Company also uses adjusted EBITDA, which is also a non-GAAP measure and is adjusted from GAAP results of net income to exclude interest income, taxes, depreciation, amortization of intangible assets and land use rights, share- based compensation and goodwill and intangibles impairment charges, if applicable. 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 and support for international curriculum programs.

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 has 12 long-term, exclusive contracts that generally vary from 15 to 50 years in length. ChinaEdu also performs recruiting services for 17 universities through our nationwide learning center network.

Forward-Looking Statement

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 Form 20-F for the year ended December 31, 2008, 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.

                             ChinaEdu Corporation
                 Unaudited Condensed Consolidated Balance Sheets

                                            December
                                           31, 2008 As   June 30,    June 30,
    (in thousands, unaudited)              Adjusted(2)     2009        2009
                                              RMB          RMB         US$
    Current assets:
    Cash and cash equivalents                353,933     231,132      33,840
    Accounts receivable, net                  14,854      24,965       3,655
    Term deposits                             63,500      79,491      11,638
    Inventory                                     --       1,077         158
    Prepaid expenses and other current
     assets                                   20,251      15,937       2,333
    Amounts due from related parties         150,472     225,734      33,049
    Deferred tax assets                        3,986       1,640         240
    Total current assets                     606,996     579,976      84,913
    Cost method investment                     1,210       1,210         177
    Land use rights, net                      28,344      28,178       4,126
    Property and equipment, net              161,925     190,034      27,823
    Deposits paid for acquisition of
     property and equipment                    8,619       8,619       1,262
    Intangible assets, net                    70,377      67,884       9,939
    Deferred tax assets                        2,096       3,043         446
    Rental deposits                              958         863         126
    Goodwill                                  38,155      38,155       5,586
    Total assets                             918,680     917,962     134,398

    Liabilities and equity
    Current liabilities:
    Accounts payable                           8,530       6,988       1,023
    Deferred revenues                         96,068      95,376      13,964
    Accrued expenses and other current
     liabilities                              51,629      52,243       7,649
    Amounts due to related parties            25,769      53,872       7,887
    Income taxes payable                      27,917      23,458       3,434
    Other taxes payable                       12,008      11,724       1,716
    Total current liabilities                221,921     243,661      35,673
    Deferred revenues                          6,073       6,156         901
    Deferred tax liabilities                  11,069      10,640       1,558
    Unrecognized tax benefit                   5,473       7,454       1,091
    Total liabilities                        244,536     267,911      39,223

    Total shareholders' equity:              589,829     552,582      80,905
    Noncontrolling interest(1)                84,315      97,469      14,270
    Total equity                             674,144     650,051      95,175
    Total liabilities and equity             918,680     917,962     134,398

    (1) Effective January 1, 2009, the Company adopted SFAS 160 (Statement of
        Financial Accounting Standards No. 160, "Noncontrolling Interests in
        Consolidated Financial Statements"). SFAS 160, which was
        retrospectively applied, requires noncontrolling interests to be
        separately presented as a component of stockholders' equity on the
        unaudited condensed consolidated financial statements.

    (2) December 31, 2008 balances were extracted from the form 6-K for the
        quarters ended December 31, 2008, as adjusted to reflect the adoption
        of SFAS 160.



                               ChinaEdu Corporation
            Unaudited Condensed Consolidated Statements of Operations

                                            Three Months Ended
    (in thousands, except for     June 30,
     percentage, share, and per   2008 As      March      June 30,    June 30,
     share information)          Adjusted(3)  31, 2009      2009        2009
                                    RMB         RMB          RMB         US$
    Net Revenue:
    Online degree programs         65,124      65,764      71,447      10,460
    International curriculum
     programs                       6,587       5,583       5,213         763
    Online tutoring programs        4,078       3,592       4,704         689
    Private primary and
     secondary schools              3,732       6,231       6,911       1,012
    Total net revenue              79,521      81,170      88,275      12,924

    Cost of revenue:
    Online degree programs         13,461      22,683      22,537       3,300
    International curriculum
     programs                       5,674       2,948       2,793         409
    Online tutoring programs          995       1,441       1,624         238
    Private primary and
     secondary schools              3,249       5,498       6,243         914
    Total cost of revenue          23,379      32,570      33,197       4,861

    Gross profit:
    Online degree programs         51,663      43,081      48,910       7,160
    International curriculum
     programs                         913       2,635       2,420         354
    Online tutoring programs        3,083       2,151       3,080         451
    Private primary and
     secondary schools                483         733         668          98
    Total gross profit             56,142      48,600      55,078       8,063

    Online degree programs          79.3%       65.5%       68.5%       68.5%
    International curriculum
     programs                       13.9%       47.2%       46.4%       46.4%
    Online tutoring programs        75.6%       59.9%       65.5%       65.5%
    Private primary and
     secondary schools              12.9%       11.8%        9.7%        9.7%
    Gross margin                    70.6%       59.9%       62.4%       62.4%

    Operating expenses:
    General and administrative     18,433      19,583      19,742       2,890
    Selling and marketing           7,017       4,910       5,434         796
    Research and development        5,830       6,571       7,882       1,154
    Total operating expenses       31,280      31,064      33,058       4,840
    Income from operations         24,862      17,536      22,020       3,223
    Operating margin                31.3%       21.6%       24.9%       24.9%

    Other income                      145         626         625          92
    Interest income                 2,605       1,672       1,182         173
    Interest expense                 (585)         --          --          --
    Income before income tax
     provisions                    27,027      19,834      23,827       3,488

    Income tax expense             (9,425)     (2,708)     (6,257)       (916)
    Net income                     17,602      17,126      17,570       2,572
    Net income attributable to
     the noncontrolling
     interest                      (8,415)     (7,562)     (8,710)     (1,275)
    Net income attributable to
     ChinaEdu Corporation           9,187       9,564       8,860       1,297
    Net margin                      11.6%       11.8%       10.0%       10.0%

    Net income attributable to
     CEDU per share:
        Basic                        0.16        0.19        0.18       0.027
        Diluted                      0.15        0.18        0.17       0.025

    Net income attributable to
     CEDU per ADS:
        Basic                        0.48        0.57        0.54       0.081
        Diluted                      0.45        0.54        0.51       0.075

    Weighted average aggregate
     number of ordinary shares
     outstanding:
        Basic                  58,434,407  49,983,675  48,285,473  48,285,473
        Diluted                61,813,068  52,919,048  51,595,566  51,595,566


                                       Six Months Ended
    (in thousands, except for     June 30,
     percentage, share, and       2008 As     June 30,    June 30,
     per share information)      Adjusted(3)   2009         2009
                                     RMB        RMB          US$
    Net Revenue:
    Online degree programs        120,084     137,211      20,089
    International curriculum
     programs                      14,129      10,796       1,581
    Online tutoring programs        7,355       8,296       1,215
    Private primary and
     secondary schools              7,608      13,142       1,924
    Total net revenue             149,176     169,445      24,809

    Cost of revenue:
    Online degree programs         28,763      45,220       6,621
    International curriculum
     programs                      10,439       5,741         841
    Online tutoring programs        1,722       3,065         449
    Private primary and
     secondary schools              6,610      11,741       1,719
    Total cost of revenue          47,534      65,767       9,630

    Gross profit:
    Online degree programs         91,321      91,991      13,468
    International curriculum
     programs                       3,690       5,055         740
    Online tutoring programs        5,633       5,231         766
    Private primary and
     secondary schools                998       1,401         205
    Total gross profit            101,642     103,678      15,179

    Online degree programs          76.0%       67.0%       67.0%
    International curriculum
     programs                       26.1%       46.8%       46.8%
    Online tutoring programs        76.6%       63.1%       63.1%
    Private primary and
     secondary schools              13.1%       10.7%       10.7%
    Gross margin                    68.1%       61.2%       61.2%

    Operating expenses:
    General and administrative     39,348      39,325       5,758
    Selling and marketing          12,879      10,344       1,514
    Research and development       11,728      14,453       2,116
    Total operating expenses       63,955      64,122       9,388
    Income from operations         37,687      39,556       5,791
    Operating margin                25.3%       23.3%       23.3%

    Other income                      296       1,251         183
    Interest income                 5,353       2,854         418
    Interest expense               (1,191)         --          --
    Income before income tax
     provisions                    42,145      43,661       6,392

    Income tax expense            (14,325)     (8,965)     (1,313)
    Net income                     27,820      34,696       5,079
    Net income attributable to
     the noncontrolling
     interest                     (16,546)    (16,272)     (2,382)
    Net income attributable to
     ChinaEdu Corporation          11,274      18,424       2,697
    Net margin                       7.6%       10.9%       10.9%

    Net income attributable to
     CEDU per share:
        Basic                        0.19        0.38       0.055
        Diluted                      0.18        0.35       0.052

    Net income attributable to
     CEDU per ADS:
        Basic                        0.57        1.14       0.165
        Diluted                      0.54        1.05       0.156

    Weighted average aggregate
     number of ordinary shares
     outstanding:
        Basic                  58,434,407  49,129,883  49,129,883
        Diluted                62,298,037  52,252,616  52,252,616

    (3) Amounts were extracted from Form 6-K for the quarter ended June 30,
        2008, as adjusted resulting from the adoption of Statement of
        Financial Accounting Standards No. 160.




                               ChinaEdu Corporation
             Unaudited Condensed Consolidated Statements of Cash Flow
                                                 Three Months Ended
                                          June      March      June     June
    (in thousands)                      30, 2008  31, 2009  30, 2009  30, 2009
                                           RMB       RMB       RMB       US$
    Operating activities:
        Net income                        17,602    17,126    17,570    2,572
        Share-based compensation           1,671     2,262     2,055      301
        Depreciation                       2,903     3,941     3,983      583
        Amortization of land use rights      141       163       152       22
        Amortization of intangible
         assets                            2,262     1,686     1,308      192
        Accounts receivable write-off         --        62       347       51
        Loss from disposal of property
         and equipment                        --        78        15        2
        Deferred income taxes              1,281     1,795      (825)    (121)
        Accounts receivable              (12,324)   10,378   (20,898)  (3,060)
        Inventory                             --        --    (1,077)    (158)
        Prepaid expenses and other
         current assets                    8,093    (1,881)    6,188      906
        Amounts due from related parties (98,677)   46,384  (111,046) (16,258)
        Rental deposits                     (266)       47        48        7
        Land use right                        --      (949)   (1,040)    (152)
        Accounts payable                      91     1,084     1,772      259
        Deferred revenues                 57,371   (65,617)   65,006    9,517
        Accrued expenses and other
         current liabilities               2,283    (2,046)    2,648      388
        Amounts due to related parties    24,705     1,005    24,840    3,637
        Unrecognized tax benefit             136       348     1,633      239
        Other taxes payable                2,156    (4,533)    4,249      622
        Income tax payable                 7,970    (9,229)    4,770      698

    Net cash provided by (used in)
     operating activities                 17,398     2,104     1,698      247

    Investing activities:
        Purchase of business              (4,000)       --        --       --
        Purchase of property and
         equipment                       (11,240)  (10,605)  (29,919)  (4,380)
        Deposits paid for acquisition of
         property and equipment             (979)       --        --       --
        Purchase of term deposit         (25,000)  (31,008)   15,008    2,197
        Purchase of contractual right     (1,225)     (500)       --       --
        Proceeds from disposal of
         property and equipment               --        --        --       --
    Net cash provided by (used in)
     investing activities                (42,444)  (42,113)  (14,911)  (2,183)

    Financing activities:
        Repurchase of ordinary shares         --   (61,647)       --       --
        Repayment of long-term loan
         interest and principal           (1,091)       --        --       --
        Cash dividends paid to
         noncontrolling shareholders          --   (10,600)       --       --
        Capital contributions by
         noncontrolling shareholders       1,225       980        --       --
        Proceeds from exercise of
         options                              --       713       711      104
    Net cash provided by (used in)
     financing activities                    134   (70,554)      711      104

    Effect of foreign exchange rate
     changes                              (6,330)      340       (76)      (9)

    CASH AND CASH EQUIVALENTS, beginning
     of period                           431,979   353,933   243,710   35,681

    CASH AND CASH EQUIVALENTS, end of
     period                              400,737   243,710   231,132   33,840

    Net increase (decrease) in cash      (31,242) (110,223)  (12,578)  (1,841)


                                              Six Months Ended
    (in thousands)                         June      June      June
                                        30, 2008  30, 2009   30, 2009
                                           RMB       RMB        US$
    Operating activities:
        Net income                        27,820    34,696     5,079
        Share-based compensation           2,054     4,317       632
        Depreciation                       5,637     7,924     1,160
        Amortization of land use rights      282       315        46
        Amortization of intangible
         assets                            4,517     2,994       438
        Accounts receivable write-off         --       409        60
        Loss from disposal of property
         and equipment                        --        93        14
        Deferred income taxes              7,137       970       142
        Accounts receivable              (12,487)  (10,520)   (1,540)
        Inventory                             --    (1,077)     (158)
        Prepaid expenses and other
         current assets                      707     4,307       631
        Amounts due from related parties (63,088)  (64,662)   (9,467)
        Rental deposits                      562        95        14
        Land use right                        --    (1,989)     (291)
        Accounts payable                     (56)    2,856       418
        Deferred revenues                   (112)     (611)      (89)
        Accrued expenses and other
         current liabilities              (7,831)      602        88
        Amounts due to related parties    12,653    25,845     3,784
        Unrecognized tax benefit             269     1,981       290
        Other taxes payable               (2,151)     (284)      (42)
        Income tax payable                   788    (4,459)     (653)

    Net cash provided by (used in)
     operating activities                (23,299)    3,802       556

    Investing activities:
        Purchase of business              (4,000)       --        --
        Purchase of property and
         equipment                       (19,725)  (40,524)   (5,933)
        Deposits paid for acquisition of
         property and equipment           (1,010)       --        --
        Purchase of term deposit         (26,958)  (16,000)   (2,343)
        Purchase of contractual right     (1,225)     (500)      (73)
        Proceeds from disposal of
         property and equipment               31        --        --
    Net cash provided by (used in)
     investing activities                (52,887)  (57,024)   (8,349)

    Financing activities:
        Repurchase of ordinary shares         --   (61,647)   (9,026)
        Repayment of long-term loan
         interest and principal           (2,156)       --        --
        Cash dividends paid to
         noncontrolling shareholders          --   (10,600)   (1,552)
        Capital contributions by
         noncontrolling shareholders       1,225       980       143
        Proceeds from exercise of
         options                              --     1,424       208
    Net cash provided by (used in)
     financing activities                   (931)  (69,843)  (10,227)

    Effect of foreign exchange rate
     changes                             (19,260)      264        41

    CASH AND CASH EQUIVALENTS, beginning
     of period                           497,114   353,933    51,819

    CASH AND CASH EQUIVALENTS, end of
     period                              400,737   231,132    33,840

    Net increase (decrease) in cash      (96,377) (122,801)  (17,979)




                               ChinaEdu Corporation
         Reconciliations of non-GAAP results of operations measures to
                                  GAAP measures

                                            Three Months Ended
                                    June       March       June         June
    (in thousands, unaudited)     30, 2008    31, 2009   30, 2009     30, 2009
                                     RMB        RMB         RMB          US$
    Income (loss) from
     operations
    GAAP Result                    24,862      17,536      22,020       3,223
    Share-based compensation        1,671       2,262       2,055         301
    Amortization                    2,403       1,849       1,460         214
    Adjusted income from
     operations (Non-GAAP)         28,936      21,647      25,535       3,738
    Adjusted operating margin       36.4%       26.7%       28.9%       28.9%

    Net income (loss)
     attributable to ChinaEdu
     Corporation
    GAAP Result                     9,187       9,564       8,860       1,297
    Share-based compensation        1,671       2,262       2,055         301
    Share-based compensation
     attributable to the
     noncontrolling interest         (305)       (296)       (278)        (41)
    Amortization                    2,403       1,849       1,460         214

    Adjusted net income
     attributable to ChinaEdu
     Corporation (Non-GAAP)        12,956      13,379      12,097       1,771
    Adjusted net margin             16.3%       16.5%       13.7%       13.7%

    Adjusted net income per
     share:
        Basic                        0.22        0.27        0.25       0.037
        Diluted                      0.21        0.25        0.23       0.034

    Weighted average aggregate
     number of ordinary shares
     outstanding:
        Basic                  58,434,407  49,983,675  48,285,473  48,285,473
        Diluted                61,813,068  52,919,048  51,595,566  51,595,566


                                        Six Months Ended
                                   June         June       June
    (in thousands, unaudited)    30, 2008     30, 2009   30, 2009
                                    RMB          RMB        US$
    Income (loss) from
     operations
    GAAP Result                    37,687      39,556       5,791
    Share-based compensation        2,054       4,317         632
    Amortization                    4,799       3,309         484
    Adjusted income from
     operations (Non-GAAP)         44,540      47,182       6,907
    Adjusted operating margin       29.9%       27.8%       27.8%

    Net income (loss)
     attributable to ChinaEdu
     Corporation
    GAAP Result                    11,274      18,424       2,697
    Share-based compensation        2,054       4,317         632
    Share-based compensation
     attributable to the
     noncontrolling interest         (389)       (574)        (84)
    Amortization                    4,799       3,309         484

    Adjusted net income
     attributable to ChinaEdu
     Corporation (Non-GAAP)        17,738      25,476       3,729
    Adjusted net margin             11.9%       15.0%       15.0%

    Adjusted net income per
     share:
        Basic                        0.30        0.52       0.076
        Diluted                      0.28        0.49       0.071

    Weighted average aggregate
     number of ordinary shares
     outstanding:
        Basic                  58,434,407  49,129,883  49,129,883
        Diluted                62,298,037  52,252,616  52,252,616

Adjusted income from operations, which is a non-GAAP measure defined as income from operations excluding share-based compensation, amortization of intangible assets and land use rights and goodwill and intangibles impairment, if applicable.

Adjusted net income attributable to ChinaEdu Corporation, which is a non- GAAP measure defined as net income attributable to the ChinaEdu Corporation excluding share-based compensation, noncontrolling interest for share-based compensation, amortization of intangible assets and land use rights and goodwill and intangibles impairment charges, if applicable.

                              ChinaEdu Corporation
             Reconciliation from net income to adjusted EBITDA (*)

                                                 Three Months Ended
                                           June    March 31,  June   June 30,
    (in thousands, unaudited)            30, 2008    2009   30, 2009   2009
                                            RMB      RMB      RMB      US$
    Net income                             17,602   17,126   17,570   2,572
        Income tax provision                9,425    2,708    6,257     916
        Interest income and other, net     (2,165)  (2,298)  (1,807)   (265)
        Depreciation                        2,903    3,941    3,983     583
        Amortization                        2,403    1,849    1,460     214
        Share-based compensation            1,671    2,262    2,055     301

    Adjusted EBITDA                        31,839   25,588   29,518   4,321
    Adjusted EBITDA margin                  40.0%    31.5%    33.4%   33.4%

                                              Six Months Ended
    (in thousands, unaudited)               June    June 30,  June
                                          30, 2008    2009   30, 2009
                                            RMB       RMB      US$
    Net income                             27,820   34,696    5,079
        Income tax provision               14,325    8,965    1,313
        Interest income and other, net     (4,458)  (4,105)    (601)
        Depreciation                        5,637    7,924    1,160
        Amortization                        4,799    3,309      484
        Share-based compensation            2,054    4,317      632

    Adjusted EBITDA                        50,177   55,106    8,067
    Adjusted EBITDA margin                  33.6%    32.5%    32.5%

Adjusted EBITDA, which is a non-GAAP measure defined as earnings before interest income, taxes, depreciation, amortization of intangible assets and land use rights, share-based compensation and goodwill and intangibles impairment charges, if applicable.

    For further information, please contact:

    ChinaEdu Corporation
     Lily Liu, CFO
     Phone: +86-10-8418-6655 x1002
     Email: ir@chinaedu.net

     S. Jimmy Xia, IR Manager
     Phone: +86-10-8418-6655 x1150
     Email: ir@chinaedu.net

    Second Quarter 2009 Highlights



    (in thousands, unaudited)                    3 Months Ended         Period
                                             June      June      June    over
    Period Ended                          30, 2008  30, 2009  30, 2009  Period
    Currency in thousands                    RMB       RMB       USD       %
    Financial Data:
        Net revenue                         79,521    88,275    12,924    11%
        Gross profit                        56,142    55,078     8,063    -2%
        Income from operations              24,862    22,020     3,223   -11%
        Net income attributable to CEDU      9,187     8,860     1,297    -4%
        Adjusted EBITDA (Non-GAAP)          31,839    29,518     4,321    -7%
        Adjusted net income attributable
         to CEDU (Non-GAAP)                 12,956    12,097     1,771    -7%

        EPS                                   0.16      0.18      0.03    13%
        Adjusted EPS (Non-GAAP)               0.22      0.25      0.04    14%

        Net income to CEDU per ADS            0.48      0.54      0.09    13%
        Adjusted net income to CEDU per
         ADS (Non-GAAP)                       0.66      0.75      0.12    14%
    Operating Data:
        Revenue students for online
         degree program                    125,000   147,000   147,000    18%


    (in thousands, unaudited)                    Six Months Ended        Year
    Period Ended                            June      June      June     over
                                          30, 2008  30, 2009  30, 2009   Year
    Currency in thousands                    RMB       RMB       USD       %
    Financial Data:
        Net revenue                        149,176   169,445    24,809    14%
        Gross profit                       101,642   103,678    15,179     2%
        Income from operations              37,687    39,556     5,791     5%
        Net income attributable to CEDU     11,274    18,424     2,697    63%
        Adjusted EBITDA (Non-GAAP)          50,177    55,106     8,067    10%
        Adjusted net income attributable
         to CEDU (Non-GAAP)                 17,738    25,476     3,729    44%

        EPS                                   0.19      0.38      0.05   100%
        Adjusted EPS (Non-GAAP)               0.30      0.52      0.08    73%

        Net income to CEDU per ADS            0.57      1.14      0.15   100%
        Adjusted net income to CEDU per
         ADS (Non-GAAP)                       0.90      1.56      0.24    73%
    Operating Data:
        Revenue students for online
         degree program                    125,000   147,000   147,000    18%


    -- Total net revenue for the second quarter of 2009 increased by 11.0% to
       RMB88.3 million ($12.9 million) from RMB79.5 million for the
       corresponding period in 2008, exceeding our previously disclosed
       guidance for the second quarter of 2009 of RMB83 million to
       RMB87 million.
    -- Net revenue from online degree programs, the Company's major business
       segment, increased by 9.7% to RMB71.4 million ($10.5 million) for the
       second quarter of 2009 from RMB65.1 million for the corresponding
       period in 2008.
    -- The number of revenue students(2) in online degree programs during the
       second quarter of 2009 increased by approximately 18% to over 147,000
       from approximately 125,000 for the corresponding period in 2008.
    -- Income from operations decreased by 11.4% to RMB22.0 million
       ($3.2 million) in the second quarter of 2009 from RMB24.9 million for
        the corresponding period in 2008.
    -- Net income attributable to ChinaEdu Corporation, which is net income
       excluding net income attributable to noncontrolling interest decreased
       by 3.6% to RMB8.9 million ($1.3 million) in the second quarter of 2009
       from RMB9.2 million for the corresponding period in 2008.
    -- Adjusted EBITDA, which is a non-GAAP measure defined as net income
       before interest income, taxes, depreciation, amortization of intangible
       assets and land use rights, share-based compensation and goodwill and
       intangibles impairment charges, if applicable, decreased by 7.3% to
       RMB29.5 million ($4.3 million) in the second quarter of 2009 from
       RMB31.8 million for the corresponding period in 2008.
    -- Adjusted net income attributable to ChinaEdu Corporation, which is a
       non-GAAP measure defined as net income attributable to ChinaEdu
       Corporation excluding share-based compensation, amortization of
       intangible assets and land use rights and goodwill and intangibles
       impairment charges, if applicable (all amounts are attributable to
       ChinaEdu Corporation, net of noncontrolling interest), decreased by
       6.6% to RMB12.1 million ($1.8 million) in the second quarter of 2009
       from RMB13.0 million for the corresponding period in 2008.
    -- Basic net income attributable to ChinaEdu Corporation per share ("EPS")
       was RMB0.18 ($0.03) for the second quarter of 2009 compared to RMB0.16
       for the corresponding period in 2008.
    -- Basic net income attributable to ChinaEdu Corporation per American
       Depositary Share ("ADS") was RMB0.54 ($0.09) for the second quarter of
       2009 compared to RMB0.48 for the corresponding period in 2008.
    -- Basic adjusted net income attributable to ChinaEdu Corporation per
       share (non-GAAP) was RMB0.25 ($0.04) for the second quarter of 2009
       compared to RMB0.22 for the corresponding period in 2008.
    -- Basic adjusted net income attributable to ChinaEdu Corporation per ADS
       (non-GAAP) was RMB0.75 ($0.12) for the second quarter of 2009 compared
       to RMB0.66 for the corresponding period in 2008.


    (1) This announcement contains translations of certain Renminbi ("RMB")
        amounts into U.S. dollar ("$") amounts at specified rates solely for
        the convenience of the reader. Unless otherwise stated, all
        translations from RMB to U.S. dollars were made at the rate of
        RMB6.8302 to $1.00, the noon buying rate in effect on June 30, 2009 in
        the H.10 statistical release of the Federal Reserve Board. The Company
        makes no representation that the RMB or U.S. dollar amounts referred
        to 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.
    (2) "Revenue students" refers to students of university online degree
        programs who have paid tuition in the applicable period.

"We are pleased to report healthy enrollment and revenue growth for the 2009 spring semester," said Ms. Julia Huang, ChinaEdu's Chairman and Chief Executive Officer. "In the second quarter of 2009, we strived for strong revenue growth from our learning centers and continued to expand our learning center network. In addition, we are pleased to report continued progress in signing additional university partners for our online degree programs, including collaborative alliance agreements with provincial radio and television universities. Our 101 online tutoring program continued to improve with new and updated courseware, stronger sales channels and improved customer services. In addition, we have continued to invest in courseware development, technology upgrade and the learning platform for both online degree and non-degree programs, which we believe will position us for continued future growth. Although there was a decline in gross profit, operating income and net income in the second quarter of 2009 compared to the second quarter of 2008, the Company's margins for EBITDA, adjusted operating income and net income remained stable in the first half of 2009 relative to the first half of 2008, which we believe reflects improvements in the Company's operations given the expansion of the learning centers network and investments in other businesses."

Financial Results for the Second Quarter Ended June 30, 2009

Net Revenue

Total net revenue for the second quarter of 2009 was RMB88.2 million ($12.9 million), representing an 11.0% increase from the corresponding period in 2008. Net revenue from online degree programs for the second quarter of 2009 was RMB71.4 million ($10.5 million), representing a 9.7% increase from RMB65.1 million for the corresponding period in 2008. The growth in net revenue was primarily due to strong enrollment growth for the Spring semester of 2009, which registered over 147,000 revenue students compared to 125,000 revenue students for the Spring semester of 2008.

Net revenue from the Company's non-online degree programs (online tutoring program, international curriculum programs and private primary and secondary schools) for the second quarter of 2009 was RMB16.8 million ($2.5 million), representing a 17.2% increase from RMB14.4 million for the corresponding period in 2008. This increase was attributable to the increase in student enrollment at Anqing School for the academic year beginning in September 2008 as a result of the completion of Phase I of the new campus construction as well as a slight increase in net revenue for the 101 online tutoring programs.

Cost of revenue

Total cost of revenue for the second quarter of 2009 was RMB33.2 million ($4.9 million), representing an increase of 42.0% as compared to RMB23.4 million for the corresponding period of 2008. Cost of revenue for online degree programs for the second quarter of 2009 was RMB22.5 million ($3.3 million), representing an increase of 67.4% as compared to RMB13.5 million for the second quarter of 2008. In addition to increase in cost of revenue corresponding to enrollment growth, the increase in cost of revenue for online degree programs was attributable primarily to (i) enrollment growth in our university partners' online degree programs in the Spring semester of 2009 compared to the Spring semester of 2008, (ii) courseware development for selected university partners at our collaborative alliances(3) and (iii) the expansion of our learning center network. Since most of the recruiting services performed by our learning centers to our university partners are recorded as cost of revenue, our total cost of revenue will continue to increase as we continue the expansion of the learning centers network. We had 56 operational learning centers by the second quarter of 2009, of which 21 were proprietary and 35 were contracted locations, compared to 22 operational learning centers as of the end of the second quarter of 2008.

Cost of revenue for non-online degree programs for the second quarter of 2009 was RMB10.7 million ($1.6 million), representing a 7.5% increase from RMB9.9 million for the corresponding period in 2008. This increase was attributable primarily to increased cost of revenue related to Anqing School's new campus and 101 online tutoring program's investment in YoYo Bear education products, which were partially offset by a decrease in cost of revenue for the international curriculum programs.

    (3) "Collaborative alliance" or "Collaborative alliances" refer to the
        subsidiary or subsidiaries that the Company formed with certain
        university partners to provide services to their online degree
        programs, which subsidiaries are majority owned by the Company.

Gross Profit and Gross Margin

Gross profit for the second quarter of 2009 was RMB55.1 million ($8.1 million), representing a 1.9% decrease from RMB56.1 million for the corresponding period of 2008, as a result of the increase in cost of revenue, as discussed above. Total gross margin for the second quarter of 2009 was 62.4% as compared to 70.6% for the corresponding period of 2008. Since most of the recruiting services performed by our learning centers to our university partners are recorded as cost of revenue, our gross margin for the online degree programs segment decreased as a result of our continuous efforts in expanding the learning center network. Furthermore, gross margin for Anqing School and 101 online tutoring programs were negatively impacted by our investment in Anqing School's new campus and investment in YoYo Bear products, respectively, each of which are still in the early stages of development and thus are currently producing less income than expenses associated with such investments.

Operating Expenses

Total operating expenses were RMB33.1 million ($4.8 million) for the second quarter of 2009, representing a 5.7% increase from RMB31.3 million for the corresponding period in 2008. This increase was attributable primarily to increases in general and administrative and research and development expenses, partially offset by a decrease in selling and marketing expenses, each as discussed below.

    -- General and administrative expenses for the second quarter of 2009 were
       RMB19.7 million ($2.9 million), which represented a 7.1% increase from
       RMB18.4 million for the corresponding period of 2008. This increase was
       attributable primarily to an increase in performance-based employee
       compensation.
    -- Selling and marketing expenses were RMB5.4 million ($0.8 million) for
       the second quarter of 2009, which represented a 22.6% decrease from
       RMB7.0 million for the corresponding period in 2008. This decrease is
       attributable primarily to a decrease in the amount spent on general
       advertising and promotional activities for our own learning center
       operations in the second quarter in 2009.
    -- Research and development expenses for the second quarter of 2009 were
       RMB7.9 million ($1.2 million), representing a 35.2% increase from
       RMB5.8 million for the corresponding period in 2008. This increase was
       attributable primarily to increased technological support and platform
       upgrades for certain collaborative alliances in order to further
       enhance our online degree programs.
    -- Share-based compensation for the second quarter of 2009, which was
       allocated to the related cost and operating expense line items, was
       RMB2.1 million ($0.3 million) as compared to RMB1.7 million for the
       corresponding period in 2008. The increase was attributable primarily
       to costs related to the repricing of options (as previously approved by
       our shareholders) during the current quarter, which resulted in the
       recognition of incremental compensation costs.

Income from Operations

As a result of the factors discussed above, income from operations for the second quarter of 2009 was RMB22.0 million ($3.2 million), which decreased by 11.4% from RMB24.9 million for the corresponding period of 2008.

Adjusted income from operations, which is a non-GAAP measure defined as income from operations excluding share-based compensation, amortization of intangible assets and land use rights and goodwill and intangibles impairment charges, if applicable, was RMB25.5 million ($3.7 million) for the second quarter of 2009, which decreased by 11.8% as compared to RMB28.9 million in the corresponding period of 2008. The decrease was attributable primarily to the increase in cost of revenue as discussed above.

Interest Income

Interest income was RMB1.2 million ($0.2 million) in the second quarter of 2009, as compared to RMB2.6 million in the corresponding quarter of 2008. This decrease was attributable primarily to (i) reduced interest-bearing cash and bank deposit balance of RMB311 million as of June 30, 2009, compared to RMB434 million as of June 30, 2008, and (ii) a lower interest rate for the second quarter of 2009 compared to the corresponding period of 2008.

Income Tax Expense

Income tax income for the second quarter was RMB6.3 million ($0.9 million), as compared to income tax expense of RMB9.4 million for the corresponding period in 2008. This was attributable primarily to the fact that, in the fourth quarter of 2008, seven of our subsidiaries and affiliate companies applied and qualified for the "new and high technology enterprises" status under the new Chinese Enterprise Income Tax Regulation, which came into effect on January 1, 2008. As a result of their qualification for the "new and high technology enterprises" status, these subsidiaries received certain tax exemptions and a preferential statutory tax rate of 15%, thereby reducing the effective tax rate for the second quarter of 2009 to 26.3% as compared to 34.9% for the corresponding period in 2008.

Noncontrolling Interest

Noncontrolling interest was RMB8.7 million ($1.3 million) in the second quarter of 2009, representing a 3.5% increase from RMB8.4 million in the corresponding period in 2008, which was attributable primarily to increased profitability of our collaborative alliances related to the online degree programs.

Net Income (loss) attributable to ChinaEdu Corporation

Net income attributable to ChinaEdu Corporation, which is net income excluding net income attributable to noncontrolling interest, was RMB8.9 million ($1.3 million) for the second quarter of 2009, representing a decrease of 3.6% from net income attributable to ChinaEdu Corporation of RMB9.2 million for the corresponding period in 2008. Adjusted net income attributable to ChinaEdu Corporation (non-GAAP) decreased by 6.6% to RMB12.1 million ($1.8 million) for the second quarter of 2009, as compared to RMB13.0 million in the corresponding period of 2008. The decrease in both net income and adjusted net income attributable to ChinaEdu Corporation (non-GAAP) was primarily due to the increase in cost of revenue in the second quarter of 2009 as compared to the corresponding period in 2008.

Due to a reduction in the number of basic and diluted shares outstanding for the second quarter of 2009 compared to the corresponding period in 2008 as a result of the Company's stock repurchase in the first quarter of 2009, basic and diluted EPS were RMB0.18 ($0.03) and RMB0.17 ($0.03), respectively, for the second quarter of 2009, compared to RMB0.16 and RMB0.15, respectively, for the second quarter of 2008. Similarly, basic and diluted adjusted EPS (non-GAAP) were RMB0.25 ($0.04) and RMB0.23 ($0.03), respectively, for the second quarter of 2009, compared to RMB0.22 and RMB0.21, respectively, for the second quarter of 2008.

In addition, basic and diluted net income attributable to CEDU per ADS were RMB0.54 ($0.09) and RMB0.51 ($0.09), respectively, for the second quarter of 2009, compared to RMB0.48 and RMB0.45, respectively, for the corresponding period in 2008. Similarly, basic and diluted adjusted net income attributable to CEDU per ADS were RMB0.75 ($0.12) and RMB0.69 ($0.10), respectively, for the second quarter of 2009, compared to RMB0.66 and RMB0.63, respectively, for the corresponding period in 2008.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA (non-GAAP) was RMB29.5 million ($4.3 million) for the second quarter of 2009, which decreased by 7.3% as compared to RMB31.8 million for the corresponding period in 2008. This decrease was attributable primarily to the increase in cost of revenue, as discussed above.

Deferred Revenue

Deferred revenue at the end of the second quarter of 2009 was RMB101.5 million ($14.9 million), with current deferred revenue of RMB95.3 million ($14.0 million) and non-current deferred revenue of RMB6.2 million ($0.9 million). Deferred revenue at the end of the second quarter of 2009 increased significantly compared to deferred revenue of RMB36.5 million at the end of the first quarter 2009 due to the seasonality of enrollments, which results in tuition being received generally during the second quarter (spring semester) and the fourth quarter (fall semester) of each year.

Cash and Cash Equivalents

As of June 30, 2009, ChinaEdu reported cash and cash equivalents of RMB231.1 million ($33.8 million), which primarily consisted of cash-on-hand, demand deposits and term deposits with maturity periods of three months or less.

Term Deposits and Amount Due from Related Parties

Term deposits and the amount due from related parties (which represents cash owed to us by our collaborative alliance partners) amounted to RMB79.5 million ($11.6 million) and RMB225.7 million ($33.0 million), respectively, on June 30, 2009.

2009 Year-to-Date Financial Results

Net Revenue

For the six months ended June 30, 2009, total net revenue was RMB169.4 million ($24.8 million), representing an increase of 13.6% from RMB149.2 million for the corresponding period in 2008. Total net revenue for the sixth months ended June 30, 2009 consisted of RMB137.2 million ($20.1 million) in net revenue from online degree programs and RMB32.3 million ($4.7 million) in net revenue from non-online degree programs. The growth in total net revenue was attributable primarily to strong enrollment growth for the online degree programs and growth in net revenue at Anqing School and 101 online tutoring programs.

Cost of Revenue

For the first six months of 2009, total cost of revenue was RMB65.8 million ($9.6 million), representing an increase of 38.4% as compared to RMB47.5 million for the corresponding period in 2008, which increase was primarily due to the expansion of our learning centers network, courseware development for selected university partners at our collaborative alliances, and the increase in cost of revenue at Anqing School and 101 online tutoring programs.

Gross Profit

Gross profit for the first six months of 2009 was RMB103.7 million ($15.2 million) as compared with RMB101.6 million for the corresponding period in 2008, representing an increase of 2.0%.

Income from Operations

Income from operations were RMB39.6 million ($5.8 million) for the first six months of 2009, representing an increase of 5.0% from RMB37.7 million for the first six months of 2008.

Net Income (loss) attributable to ChinaEdu Corporation

Net income attributable to ChinaEdu Corporation was RMB18.4 million ($2.7 million) for the first six months of 2009, representing an increase of 63.4% compared with RMB11.3 million for the corresponding period in 2008, primarily due to an increase in income from operations, as well as a decrease in income tax expenses compared to the corresponding period in 2008.

Third Quarter 2009 Total Net Revenue Guidance

For the third quarter of 2009, ChinaEdu expects its total net revenue to be in the range of RMB84 million ($12 million) to RMB88 million ($13 million). This forecast reflects ChinaEdu's current and preliminary view, which is subject to change.

Conference Call

ChinaEdu senior management will host a conference call on Thursday, August 20, 2009 at 8:00 a.m. U.S. Eastern time / 5:00 a.m. U.S. Pacific time / 8:00 p.m. Beijing/Hong Kong time.

The conference call may be accessed by calling (US) 866 383 7989/ (International) +1 617 597 5328/ (HK) +852 3002 1672/ (China) +86 10 800 152 1490, and entering the passcode: 48836701. A telephone replay of the conference call will be available shortly after the call until August 27, 2009 at (US) 888 286 8010/ (International) +1 617 801 6888 and entering passcode: 27031028. A live and archived webcast may be accessed via the Internet at http://ir.chinaedu.net .

Non-GAAP Financial Measures

To supplement the unaudited condensed consolidated financial information presented in accordance with Accounting Principles Generally Accepted in the United States of America ("GAAP"), the Company uses non-GAAP measures of income from operations and net income attributable to ChinaEdu Corporation, 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 goodwill and intangibles impairment charges, if applicable. The Company also uses adjusted EBITDA, which is also a non-GAAP measure and is adjusted from GAAP results of net income to exclude interest income, taxes, depreciation, amortization of intangible assets and land use rights, share-based compensation and goodwill and intangibles impairment charges, if applicable. 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 and support for international curriculum programs.

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 has 12 long-term, exclusive contracts that generally vary from 15 to 50 years in length. ChinaEdu also performs recruiting services for 17 universities through our nationwide learning center network.

Forward-Looking Statement

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 Form 20-F for the year ended December 31, 2008, 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.

                             ChinaEdu Corporation
                 Unaudited Condensed Consolidated Balance Sheets

                                            December
                                           31, 2008 As   June 30,    June 30,
    (in thousands, unaudited)              Adjusted(2)     2009        2009
                                              RMB          RMB         US$
    Current assets:
    Cash and cash equivalents                353,933     231,132      33,840
    Accounts receivable, net                  14,854      24,965       3,655
    Term deposits                             63,500      79,491      11,638
    Inventory                                     --       1,077         158
    Prepaid expenses and other current
     assets                                   20,251      15,937       2,333
    Amounts due from related parties         150,472     225,734      33,049
    Deferred tax assets                        3,986       1,640         240
    Total current assets                     606,996     579,976      84,913
    Cost method investment                     1,210       1,210         177
    Land use rights, net                      28,344      28,178       4,126
    Property and equipment, net              161,925     190,034      27,823
    Deposits paid for acquisition of
     property and equipment                    8,619       8,619       1,262
    Intangible assets, net                    70,377      67,884       9,939
    Deferred tax assets                        2,096       3,043         446
    Rental deposits                              958         863         126
    Goodwill                                  38,155      38,155       5,586
    Total assets                             918,680     917,962     134,398

    Liabilities and equity
    Current liabilities:
    Accounts payable                           8,530       6,988       1,023
    Deferred revenues                         96,068      95,376      13,964
    Accrued expenses and other current
     liabilities                              51,629      52,243       7,649
    Amounts due to related parties            25,769      53,872       7,887
    Income taxes payable                      27,917      23,458       3,434
    Other taxes payable                       12,008      11,724       1,716
    Total current liabilities                221,921     243,661      35,673
    Deferred revenues                          6,073       6,156         901
    Deferred tax liabilities                  11,069      10,640       1,558
    Unrecognized tax benefit                   5,473       7,454       1,091
    Total liabilities                        244,536     267,911      39,223

    Total shareholders' equity:              589,829     552,582      80,905
    Noncontrolling interest(1)                84,315      97,469      14,270
    Total equity                             674,144     650,051      95,175
    Total liabilities and equity             918,680     917,962     134,398

    (1) Effective January 1, 2009, the Company adopted SFAS 160 (Statement of
        Financial Accounting Standards No. 160, "Noncontrolling Interests in
        Consolidated Financial Statements"). SFAS 160, which was
        retrospectively applied, requires noncontrolling interests to be
        separately presented as a component of stockholders' equity on the
        unaudited condensed consolidated financial statements.

    (2) December 31, 2008 balances were extracted from the form 6-K for the
        quarters ended December 31, 2008, as adjusted to reflect the adoption
        of SFAS 160.



                               ChinaEdu Corporation
            Unaudited Condensed Consolidated Statements of Operations
                                            Three Months Ended
    (in thousands, except for     June 30,
     percentage, share, and per   2008 As      March      June 30,    June 30,
     share information)          Adjusted(3)  31, 2009      2009        2009
                                    RMB         RMB          RMB         US$
    Net Revenue:
    Online degree programs         65,124      65,764      71,447      10,460
    International curriculum
     programs                       6,587       5,583       5,213         763
    Online tutoring programs        4,078       3,592       4,704         689
    Private primary and
     secondary schools              3,732       6,231       6,911       1,012
    Total net revenue              79,521      81,170      88,275      12,924

    Cost of revenue:
    Online degree programs         13,461      22,683      22,537       3,300
    International curriculum
     programs                       5,674       2,948       2,793         409
    Online tutoring programs          995       1,441       1,624         238
    Private primary and
     secondary schools              3,249       5,498       6,243         914
    Total cost of revenue          23,379      32,570      33,197       4,861

    Gross profit:
    Online degree programs         51,663      43,081      48,910       7,160
    International curriculum
     programs                         913       2,635       2,420         354
    Online tutoring programs        3,083       2,151       3,080         451
    Private primary and
     secondary schools                483         733         668          98
    Total gross profit             56,142      48,600      55,078       8,063

    Online degree programs          79.3%       65.5%       68.5%       68.5%
    International curriculum
     programs                       13.9%       47.2%       46.4%       46.4%
    Online tutoring programs        75.6%       59.9%       65.5%       65.5%
    Private primary and
     secondary schools              12.9%       11.8%        9.7%        9.7%
    Gross margin                    70.6%       59.9%       62.4%       62.4%

    Operating expenses:
    General and administrative     18,433      19,583      19,742       2,890
    Selling and marketing           7,017       4,910       5,434         796
    Research and development        5,830       6,571       7,882       1,154
    Total operating expenses       31,280      31,064      33,058       4,840
    Income from operations         24,862      17,536      22,020       3,223
    Operating margin                31.3%       21.6%       24.9%       24.9%

    Other income                      145         626         625          92
    Interest income                 2,605       1,672       1,182         173
    Interest expense                 (585)         --          --          --
    Income before income tax
     provisions                    27,027      19,834      23,827       3,488

    Income tax expense             (9,425)     (2,708)     (6,257)       (916)
    Net income                     17,602      17,126      17,570       2,572
    Net income attributable to
     the noncontrolling
     interest                      (8,415)     (7,562)     (8,710)     (1,275)
    Net income attributable to
     ChinaEdu Corporation           9,187       9,564       8,860       1,297
    Net margin                      11.6%       11.8%       10.0%       10.0%

    Net income attributable to
     CEDU per share:
        Basic                        0.16        0.19        0.18        0.03
        Diluted                      0.15        0.18        0.17        0.03

    Net income attributable to
     CEDU per ADS:
        Basic                        0.48        0.57        0.54        0.09
        Diluted                      0.45        0.54        0.51        0.09

    Weighted average aggregate
     number of ordinary shares
     outstanding:
        Basic                  58,434,407  49,983,675  48,285,473  48,285,473
        Diluted                61,813,068  52,919,048  51,595,566  51,595,566


                                       Six Months Ended
    (in thousands, except for     June 30,
     percentage, share, and       2008 As     June 30,    June 30,
     per share information)      Adjusted(3)   2009         2009
                                     RMB        RMB          US$
    Net Revenue:
    Online degree programs        120,084     137,211      20,089
    International curriculum
     programs                      14,129      10,796       1,581
    Online tutoring programs        7,355       8,296       1,215
    Private primary and
     secondary schools              7,608      13,142       1,924
    Total net revenue             149,176     169,445      24,809

    Cost of revenue:
    Online degree programs         28,763      45,220       6,621
    International curriculum
     programs                      10,439       5,741         841
    Online tutoring programs        1,722       3,065         449
    Private primary and
     secondary schools              6,610      11,741       1,719
    Total cost of revenue          47,534      65,767       9,630

    Gross profit:
    Online degree programs         91,321      91,991      13,468
    International curriculum
     programs                       3,690       5,055         740
    Online tutoring programs        5,633       5,231         766
    Private primary and
     secondary schools                998       1,401         205
    Total gross profit            101,642     103,678      15,179

    Online degree programs          76.0%       67.0%       67.0%
    International curriculum
     programs                       26.1%       46.8%       46.8%
    Online tutoring programs        76.6%       63.1%       63.1%
    Private primary and
     secondary schools              13.1%       10.7%       10.7%
    Gross margin                    68.1%       61.2%       61.2%

    Operating expenses:
    General and administrative     39,348      39,325       5,758
    Selling and marketing          12,879      10,344       1,514
    Research and development       11,728      14,453       2,116
    Total operating expenses       63,955      64,122       9,388
    Income from operations         37,687      39,556       5,791
    Operating margin                25.3%       23.3%       23.3%

    Other income                      296       1,251         183
    Interest income                 5,353       2,854         418
    Interest expense               (1,191)         --          --
    Income before income tax
     provisions                    42,145      43,661       6,392

    Income tax expense            (14,325)     (8,965)     (1,313)
    Net income                     27,820      34,696       5,079
    Net income attributable to
     the noncontrolling
     interest                     (16,546)    (16,272)     (2,382)
    Net income attributable to
     ChinaEdu Corporation          11,274      18,424       2,697
    Net margin                       7.6%       10.9%       10.9%

    Net income attributable to
     CEDU per share:
        Basic                        0.19        0.38        0.05
        Diluted                      0.18        0.35        0.05

    Net income attributable to
     CEDU per ADS:
        Basic                        0.57        1.14        0.15
        Diluted                      0.54        1.05        0.15

    Weighted average aggregate
     number of ordinary shares
     outstanding:
        Basic                  58,434,407  49,129,883  49,129,883
        Diluted                62,298,037  52,252,616  52,252,616

    (3) Amounts were extracted from Form 6-K for the quarter ended June 30,
        2008, as adjusted resulting from the adoption of Statement of
        Financial Accounting Standards No. 160.




                               ChinaEdu Corporation
             Unaudited Condensed Consolidated Statements of Cash Flow
                                                 Three Months Ended
                                          June      March      June     June
    (in thousands)                      30, 2008  31, 2009  30, 2009  30, 2009
                                           RMB       RMB       RMB       US$
    Operating activities:
        Net income                        17,602    17,126    17,570    2,572
        Share-based compensation           1,671     2,262     2,055      301
        Depreciation                       2,903     3,941     3,983      583
        Amortization of land use rights      141       163       152       22
        Amortization of intangible
         assets                            2,262     1,686     1,308      192
        Accounts receivable write-off         --        62       347       51
        Loss from disposal of property
         and equipment                        --        78        15        2
        Deferred income taxes              1,281     1,795      (825)    (121)
        Accounts receivable              (12,324)   10,378   (20,898)  (3,060)
        Inventory                             --        --    (1,077)    (158)
        Prepaid expenses and other
         current assets                    8,093    (1,881)    6,188      906
        Amounts due from related parties (98,677)   46,384  (111,046) (16,258)
        Rental deposits                     (266)       47        48        7
        Land use right                        --      (949)   (1,040)    (152)
        Accounts payable                      91     1,084     1,772      259
        Deferred revenues                 57,371   (65,617)   65,006    9,517
        Accrued expenses and other
         current liabilities               2,283    (2,046)    2,648      388
        Amounts due to related parties    24,705     1,005    24,840    3,637
        Unrecognized tax benefit             136       348     1,633      239
        Other taxes payable                2,156    (4,533)    4,249      622
        Income tax payable                 7,970    (9,229)    4,770      698

    Net cash provided by (used in)
     operating activities                 17,398     2,104     1,698      247

    Investing activities:
        Purchase of business              (4,000)       --        --       --
        Purchase of property and
         equipment                       (11,240)  (10,605)  (29,919)  (4,380)
        Deposits paid for acquisition of
         property and equipment             (979)       --        --       --
        Purchase of term deposit         (25,000)  (31,008)   15,008    2,197
        Purchase of contractual right     (1,225)     (500)       --       --
        Proceeds from disposal of
         property and equipment               --        --        --       --
    Net cash provided by (used in)
     investing activities                (42,444)  (42,113)  (14,911)  (2,183)

    Financing activities:
        Repurchase of ordinary shares         --   (61,647)       --       --
        Repayment of long-term loan
         interest and principal           (1,091)       --        --       --
        Cash dividends paid to
         noncontrolling shareholders          --   (10,600)       --       --
        Capital contributions by
         noncontrolling shareholders       1,225       980        --       --
        Proceeds from exercise of
         options                              --       713       711      104
    Net cash provided by (used in)
     financing activities                    134   (70,554)      711      104

    Effect of foreign exchange rate
     changes                              (6,330)      340       (76)      (9)

    CASH AND CASH EQUIVALENTS, beginning
     of period                           431,979   353,933   243,710   35,681

    CASH AND CASH EQUIVALENTS, end of
     period                              400,737   243,710   231,132   33,840

    Net increase (decrease) in cash      (31,242) (110,223)  (12,578)  (1,841)


                                              Six Months Ended
    (in thousands)                         June      June      June
                                        30, 2008  30, 2009   30, 2009
                                           RMB       RMB        US$
    Operating activities:
        Net income                        27,820    34,696     5,079
        Share-based compensation           2,054     4,317       632
        Depreciation                       5,637     7,924     1,160
        Amortization of land use rights      282       315        46
        Amortization of intangible
         assets                            4,517     2,994       438
        Accounts receivable write-off         --       409        60
        Loss from disposal of property
         and equipment                        --        93        14
        Deferred income taxes              7,137       970       142
        Accounts receivable              (12,487)  (10,520)   (1,540)
        Inventory                             --    (1,077)     (158)
        Prepaid expenses and other
         current assets                      707     4,307       631
        Amounts due from related parties (63,088)  (64,662)   (9,467)
        Rental deposits                      562        95        14
        Land use right                        --    (1,989)     (291)
        Accounts payable                     (56)    2,856       418
        Deferred revenues                   (112)     (611)      (89)
        Accrued expenses and other
         current liabilities              (7,831)      602        88
        Amounts due to related parties    12,653    25,845     3,784
        Unrecognized tax benefit             269     1,981       290
        Other taxes payable               (2,151)     (284)      (42)
        Income tax payable                   788    (4,459)     (653)

    Net cash provided by (used in)
     operating activities                (23,299)    3,802       556

    Investing activities:
        Purchase of business              (4,000)       --        --
        Purchase of property and
         equipment                       (19,725)  (40,524)   (5,933)
        Deposits paid for acquisition of
         property and equipment           (1,010)       --        --
        Purchase of term deposit         (26,958)  (16,000)   (2,343)
        Purchase of contractual right     (1,225)     (500)      (73)
        Proceeds from disposal of
         property and equipment               31        --        --
    Net cash provided by (used in)
     investing activities                (52,887)  (57,024)   (8,349)

    Financing activities:
        Repurchase of ordinary shares         --   (61,647)   (9,026)
        Repayment of long-term loan
         interest and principal           (2,156)       --        --
        Cash dividends paid to
         noncontrolling shareholders          --   (10,600)   (1,552)
        Capital contributions by
         noncontrolling shareholders       1,225       980       143
        Proceeds from exercise of
         options                              --     1,424       208
    Net cash provided by (used in)
     financing activities                   (931)  (69,843)  (10,227)

    Effect of foreign exchange rate
     changes                             (19,260)      264        41

    CASH AND CASH EQUIVALENTS, beginning
     of period                           497,114   353,933    51,819

    CASH AND CASH EQUIVALENTS, end of
     period                              400,737   231,132    33,840

    Net increase (decrease) in cash      (96,377) (122,801)  (17,979)




                               ChinaEdu Corporation
         Reconciliations of non-GAAP results of operations measures to
                                  GAAP measures

                                            Three Months Ended
                                    June       March       June         June
    (in thousands, unaudited)     30, 2008    31, 2009   30, 2009     30, 2009
                                     RMB        RMB         RMB          US$
    Income (loss) from
     operations
    GAAP Result                    24,862      17,536      22,020       3,223
    Share-based compensation        1,671       2,262       2,055         301
    Amortization                    2,403       1,849       1,460         214
    Adjusted income from
     operations (Non-GAAP)         28,936      21,647      25,535       3,738
    Adjusted operating margin       36.4%       26.7%       28.9%       28.9%

    Net income (loss)
     attributable to ChinaEdu
     Corporation
    GAAP Result                     9,187       9,564       8,860       1,297
    Share-based compensation        1,671       2,262       2,055         301
    Share-based compensation
     attributable to the
     noncontrolling interest         (305)       (296)       (278)        (41)
    Amortization                    2,403       1,849       1,460         214

    Adjusted net income
     attributable to ChinaEdu
     Corporation (Non-GAAP)        12,956      13,379      12,097       1,771
    Adjusted net margin             16.3%       16.5%       13.7%       13.7%

    Adjusted net income per
     share:
        Basic                        0.22        0.27        0.25        0.04
        Diluted                      0.21        0.25        0.23        0.03

    Weighted average aggregate
     number of ordinary shares
     outstanding:
        Basic                  58,434,407  49,983,675  48,285,473  48,285,473
        Diluted                61,813,068  52,919,048  51,595,566  51,595,566


                                        Six Months Ended
                                   June         June       June
    (in thousands, unaudited)    30, 2008     30, 2009   30, 2009
                                    RMB          RMB        US$
    Income (loss) from
     operations
    GAAP Result                    37,687      39,556       5,791
    Share-based compensation        2,054       4,317         632
    Amortization                    4,799       3,309         484
    Adjusted income from
     operations (Non-GAAP)         44,540      47,182       6,907
    Adjusted operating margin       29.9%       27.8%       27.8%

    Net income (loss)
     attributable to ChinaEdu
     Corporation
    GAAP Result                    11,274      18,424       2,697
    Share-based compensation        2,054       4,317         632
    Share-based compensation
     attributable to the
     noncontrolling interest         (389)       (574)        (84)
    Amortization                    4,799       3,309         484

    Adjusted net income
     attributable to ChinaEdu
     Corporation (Non-GAAP)        17,738      25,476       3,729
    Adjusted net margin             11.9%       15.0%       15.0%

    Adjusted net income per
     share:
        Basic                        0.30        0.52        0.08
        Diluted                      0.28        0.49        0.07

    Weighted average aggregate
     number of ordinary shares
     outstanding:
        Basic                  58,434,407  49,129,883  49,129,883
        Diluted                62,298,037  52,252,616  52,252,616

Adjusted income from operations, which is a non-GAAP measure defined as income from operations excluding share-based compensation, amortization of intangible assets and land use rights and goodwill and intangibles impairment, if applicable.

Adjusted net income attributable to ChinaEdu Corporation, which is a non-GAAP measure defined as net income attributable to the ChinaEdu Corporation excluding share-based compensation, noncontrolling interest for share-based compensation, amortization of intangible assets and land use rights and goodwill and intangibles impairment charges, if applicable.

                              ChinaEdu Corporation
             Reconciliation from net income to adjusted EBITDA (*)

                                                 Three Months Ended
                                           June    March 31,  June   June 30,
    (in thousands, unaudited)            30, 2008    2009   30, 2009   2009
                                            RMB      RMB      RMB      US$
    Net income                             17,602   17,126   17,570   2,572
        Income tax provision                9,425    2,708    6,257     916
        Interest income and other, net     (2,165)  (2,298)  (1,807)   (265)
        Depreciation                        2,903    3,941    3,983     583
        Amortization                        2,403    1,849    1,460     214
        Share-based compensation            1,671    2,262    2,055     301

    Adjusted EBITDA                        31,839   25,588   29,518   4,321
    Adjusted EBITDA margin                  40.0%    31.5%    33.4%   33.4%

                                              Six Months Ended
    (in thousands, unaudited)               June    June 30,  June
                                          30, 2008    2009   30, 2009
                                            RMB       RMB      US$
    Net income                             27,820   34,696    5,079
        Income tax provision               14,325    8,965    1,313
        Interest income and other, net     (4,458)  (4,105)    (601)
        Depreciation                        5,637    7,924    1,160
        Amortization                        4,799    3,309      484
        Share-based compensation            2,054    4,317      632

    Adjusted EBITDA                        50,177   55,106    8,067
    Adjusted EBITDA margin                  33.6%    32.5%    32.5%

Adjusted EBITDA, which is a non-GAAP measure defined as earnings before interest income, taxes, depreciation, amortization of intangible assets and land use rights, share-based compensation and goodwill and intangibles impairment charges, if applicable.

    For further information, please contact:

    ChinaEdu Corporation
     Lily Liu, CFO
     Phone: +86-10-8418-6655 x1002
     Email: ir@chinaedu.net

     S. Jimmy Xia, IR Manager
     Phone: +86-10-8418-6655 x1150
     Email: ir@chinaedu.net

"China Education had a very strong quarter as demand for our high-quality educational services and our English language and vocational training programs in China remains strong," said Xiqun Yu, Chief Executive Officer of China Education Alliance. "Our results validate the effectiveness of our business model and support our plans for expansion. We remain focused on marketing our online test-preparation materials, developing our language-training programs, and expanding our vocational and IT training efforts to drive growth for our businesses."

    Financial Highlights for the Three Months Ended June 30, 2009

    -- Total revenue increased $3.66 million or 82.1% year-over-year to
       $8.12 million.
    -- Net income increased $1.58 million or 95.4% year-over-year to $3.24
       million, compared to net income of $1.66 million in the second
       quarter of fiscal 2008.
    -- EPS was $0.13 per fully diluted share, compared to EPS of $0.07 per
       fully diluted share in the second quarter of fiscal 2008.
    -- Operating income totalled $3.72 million, compared to an operating
       income of $1.77 million in the second quarter of 2008.
    -- Gross profit rose 75.0% to $6.51 million or 80.2% of sales, compared
       to 83.5% of sales or $3.72 million in the second quarter of 2008.

Financial results for the three months ended June 30, 2009

China Education Alliance reported revenue of $8.12 million for the second quarter ended June 30, 2009, an increase of 82.1% compared to the second quarter of 2008. The Company's online education business generated 67.4% of its total revenue in the second quarter of 2009 compared to 73.4% for the same prior-year period. Its training center business generated 24.7% of total revenue in the second quarter of 2009 compared to 13.6% for the same prior-year period; its advertising business segment generated the remaining 7.9% of total revenue in the second quarter of 2009, compared to 13.0% for the same prior-year period.

Online Education revenue was $5.47 million for the second quarter of 2009, an increase of 67.2% compared to $3.27 million for the second quarter of 2008. During 2008 and 2009, the Company added several new programs for vocational studies and certification programs, which provided new revenue sources for its online education business.

Training Center revenue in the second quarter of 2009 was $2.01 million, up 232.0% from $0.60 million in the second quarter last year.

Advertising revenue was approximately $0.64 million for the second quarter of 2009, an increase of 10.0% from $0.58 million for the second quarter in the prior year.

Net income for the second quarter of fiscal 2009 was $3.24 million, representing an increase of 95.4% over second quarter 2008 net income of $1.66 million. The increase was largely the result of strong development in the Company's three business segments. Diluted earnings per share was $0.13, compared with $0.07 in the same period last year.

Operating income in the second quarter of fiscal 2009 increased to $3.72 million, from $1.77 million in the same period a year ago. Operating margin was 45.8% in the second quarter of fiscal 2009.

Overall cost of sales increased 117.7% to $1.61 million in the second quarter of fiscal 2009, compared to $0.74 million for the same period in fiscal 2008. Gross profit increased to $6.51 million in the second quarter of fiscal 2009, an increase of 75.0% from approximately $3.72 million for the same quarter in fiscal 2008. Gross margin for the second quarter of fiscal 2009 was 80.2%, as compared to a record 83.5% for the same quarter a year ago. The online education gross margin decreased to 81.1% in the second quarter of fiscal 2009 from 86.7% for the same period in fiscal 2008. The training center gross margin increased to 75.0% for the second quarter of fiscal 2009 from 57.9% for the same period last year. Advertising gross margin decreased to 89.1% in the second quarter of fiscal 2009 from 91.8% for the same period in 2008.

Selling expenses increased 34.7% to approximately $1.91 million for the second quarter of fiscal 2009, compared to approximately $1.42 million in the second quarter of 2008, due to increased expenses in building our marketing team and higher debit card agency expenses. General and administrative ("G&A") expenses were approximately $0.64 million for the second quarter of fiscal 2009, an increase from approximately $0.32 million in the second quarter of fiscal 2008, primarily due to an increase in salaries and decrease in travel and telephone expenses in the second quarter of fiscal 2009 compared to the prior year. As a percentage of revenue, G&A expenses increased to 7.9% in the second quarter of fiscal 2009, down from 7.1% in the same period of last year.

Financial results for the six months ended June 30, 2009

Revenue for the six months ended June 30, 2009 was $16.32 million, representing an increase of 91.4% compared to the same six-month period in 2008. Online education revenue was $10.30 million for the six months ended June 30, 2009, representing an increase of 74.0% from $5.92 million for the same six-month period in 2008. Training center revenue in the six months ended June 30, 2009, was $4.56 million, representing an increase of 186.8% from $1.59 million in the same six-month period last year. The increase was largely the result of strong development in the Company's three business segments.

Advertising revenue was approximately $1.47 million for the six months ended June 30, 2009, representing an increase of 43.8% from $1.02 million for the same prior-year, six-month period.

Net income for the six-months ended June 30, 2009 was $6.47 million, representing an increase of 81.1% over the same six-month period in 2008 net income of $3.57 million. Diluted earnings per share for the six months ended June 30, 2009 was $0.26, compared with $0.14 in the same period of 2008.

Financial Condition

As of June 30, 2009, China Education Alliance had approximately $31.51 million in cash and cash equivalents, $32.62 million in working capital, and no long-term debt. Shareholders' equity was approximately $40.32 million, an increase from approximately $36.91 million on March 31, 2009. The Company generated $8.40 million in cash flow from operating activities in the second quarter of 2009.

Business Outlook

China Education believes the education industry in China will remain a fast-growth sector. The Company has experienced rapid growth by providing online and onsite, supplemental educational training services to students aged 6 to 18 and vocational and language training services to adults aged 18 and over.

For student's ages 6 to 18, CEU provides downloadable course material and test papers online and classroom instructions onsite. All the online course material and test papers and onsite classroom instructions are provided by the famed instructors in P. R. China, with the purpose of helping the students pass the two most important exams during their academic life: the high school and college entrance exams.

For those age 18 and over CEU provides various vocational training including IT and other professional training programs. In addition, the English training program aims to help college graduates and other professionals improve their written and spoken English as needed to pursue an overseas education or an international business environment.

China Education Alliance has three primary businesses:

1. Exam-Oriented Primary and Secondary School Supplemental Education: China Education Alliance provides famed instructors educational resources online for primary and secondary students to download through the Internet, and also offers onsite training by the same famed instructors as well. Currently, the Company has expanded its business network from Heilongjiang province to Jilin, Liaoning and Inner Mongolia. While the Company plans to penetrate into news areas it will continue to explore and increase online market shares in these four provinces. The Company's online educational resources are provided through its website, http://www.edu-chn.com . This website is a comprehensive education network platform that utilizes video-on-demand technology and houses a large database that includes more than 350,000 exams and test papers and courseware for college, secondary and elementary schools.

2. Vocational Training: China Education operates various vocational training programs both through online services and onsite training at its main center in Beijing, as well as through its strategic partnerships with professional organizations, including the National Association of Vocation Education Society of China (NAVEC), whose focus is on vocation and certification training. The Company will focus on its Heilongjiang-based, self-run vocational education market, which includes IT training and other profession training programs, such as secretarial training and other professions with standard exam trainings. The vocational training area is expected to have further improvement in 2009.

3. English Training: The Company actively carries out high-end foreign language services, primarily focused on teaching English. At present, the Company has entered foreign language training contracts with a number of large enterprises and enterprise groups, including a recently announced strategic alliance with Peking University to develop their "Practical Oral English Training Project." Since the embarking in the field of teaching foreign languages, China Education Alliance, as a leading provider of educational resources, has insisted on practical English education by hiring North American teachers, using original English materials, providing an English-only teaching environment and setting "practicalness" as its goal.

In addition to these primary businesses, the Company's is also invested in the publishing and circulation of an educational newspaper, Scientific Discovery, which is enjoying a growing distribution, currently estimated at 60,000.

"We continue to enjoy comprehensive growth in each of our business segments, primarily due to our strategic decision-making and partnerships that enhance our outreach efforts. We will continue to adhere to our goals for development. We are confident in the future growth and development of the Company," said Mr. Xiqun Yu.

Conference Call and Webcast Details

The Company will host a conference call to discuss its second quarter 2009 results at 10:00 a.m. Eastern Time on Wednesday, August 12, 2009. To participate in the call please dial (877) 407-0789, or (201) 689-8562 for international calls, approximately 10 minutes prior to the scheduled start time. Interested parties may also listen via a live Internet webcast, which can be found at the Company's website at http://www.chinaeducatio... .

Safe Harbor Statement

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release, constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements include, without limitation, statements regarding our ability to prepare the company for growth, the Company's planned expansion in 2008 and predictions and guidance relating to the Company's future financial performance. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs and are not a guarantee of future performance but they involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which may include, but are not limited to, such factors as unanticipated changes in product demand especially in the education industry, pricing and demand trends for the Company's products, changes to government regulations, risk associated with operation of the Company's new facilities, risk associated with large scale implementation of the company's business plan, the ability to attract new customers, ability to increase its product's applications, cost of raw materials, downturns in the Chinese economy, the adoption by consumers of its new game business, the unproven advertising model that is dependent on attracting a large game user base, and other information detailed from time to time in the Company's filings and future filings with the United States Securities and Exchange Commission. Investors are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements made herein speak only as of the date of this press release, readers are cautioned not to place undue reliance on any of them and the Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations.

                         -- Financial tables follow --



    Item 1. Financial Statements (Unaudited)

                 China Education Alliance, Inc. and Subsidiaries
                           Consolidated Balance Sheets

                                            June 30,      December 31,
                                              2009            2008
                   ASSETS                 (Unaudited)
    Current Assets
      Cash and cash equivalents           $31,508,995     $23,418,098
      Advances to related parties                  --         142,006
      Accounts receivables                  1,099,072         469,607
      Prepaid expenses                      2,157,767       3,437,506
          Total current assets             34,765,834      27,467,217

    Property and equipment, net             6,104,710       6,136,252
    Intangibles and capitalized
     software, net                            592,412         864,089
    Goodwill                                  431,825              --
    Advance on acquisition                    233,000         932,000
    Long term investment                      338,268         342,357
                                          $42,466,049     $35,741,915

              LIABILITIES AND STOCKHOLDERS' EQUITY

    Current Liabilities
      Accounts payable and accrued
       expenses                            $1,048,033        $800,692
      Deferred revenues                     1,041,297       1,227,806
      Advances from related parties            52,414              --
          Total current liabilities         2,141,744       2,028,498

    Stockholders' Equity
    Preferred stock ($0.001 par value,
     20,000,000 shares authorized,
     7,252,143 and 7,597,645 issued
     and outstanding, respectively,
     aggregate liquidation preference
     of $2,683,293 and $2,811,129,
     respectively)                          2,885,144       3,010,144
    Common stock ($0.001 par value,
     150,000,000 shares authorized,
     22,059,626 and 21,892,631,
     issued and outstanding,
     respectively)                             22,060          21,893
    Additional paid-in capital             11,208,821      10,751,732
    Statutory reserve                       1,990,238       1,990,238
    Accumulated other comprehensive
      income                                2,501,359       2,688,080
    Retained earnings                      21,716,683      15,251,330
    Total stockholders' equity             40,324,305      33,713,417
                                          $42,466,049     $35,741,915

    The accompanying notes in the Company's filings with the Securities and
    Exchange Commission are an integral part of these unaudited consolidated
    financial statements.



                 China Education Alliance, Inc. and Subsidiaries
                      Consolidated Statements of Operations
                                   (Unaudited)

                         Three months ended June 30, Six months ended June 30,
                                2009        2008         2009       2008

    Revenues
    Online education
     revenues               $5,470,628  $3,272,441  $10,300,116 $5,920,555
    Training center
     revenues                2,007,947     604,752    4,555,046  1,588,384
    Advertising revenues       639,798     581,501    1,467,290  1,020,172
    Total revenue            8,118,373   4,458,694   16,322,452  8,529,111

    Cost of Goods Sold
    Online education
     costs                   1,034,312     435,408    2,233,419    822,280
    Training center costs      501,789     254,867    1,366,439    654,457
    Advertising costs           69,775      47,417      124,914     85,587
    Total cost of goods
     sold                    1,605,876     737,692    3,724,772  1,562,324

    Gross Profit
    Online education
     gross profit            4,436,316   2,837,033    8,066,697  5,098,275
    Training center
     gross profit            1,506,158     349,885    3,188,607    933,927
    Advertising
     gross profit              570,023     534,084    1,342,376    934,585
    Total gross profit       6,512,497   3,721,002   12,597,680  6,966,787

    Operating Expenses
    Selling expenses         1,906,494   1,415,683    4,117,182  2,613,018
    Administrative             639,361     318,543      894,112    625,905
    Depreciation and
     amortization              244,898     218,173      490,351    415,831
    Total operating
     expenses                2,790,753   1,952,399    5,501,645  3,654,754

    Other Income
    Other Income                    --       6,668           --    528,497
    Interest income             25,783      31,528       48,539     56,436
    Investment loss             (3,678)    (21,842)      (4,089)   (21,842)
    Total other income          22,105      16,354       44,450    563,091

    Net Income Before
     Provision for
     Income Tax              3,743,849   1,784,957    7,140,485  3,875,124

    Provision For
     Income Taxes              507,977     128,964      675,132    305,208

    Net Income              $3,235,872  $1,655,993   $6,465,353 $3,569,916
    Basic Earnings
     Per Share                   $0.15       $0.08        $0.29      $0.17

    Basic Weighted Average
     Shares Outstanding     21,930,272  21,202,359   21,930,272 21,202,359

    Diluted Earnings
     Per Share                   $0.13       $0.07        $0.26      $0.14

    Diluted Weighted
     Average Shares
     Outstanding            25,085,474  24,818,668   24,459,405 24,818,668

    The Components of Other
     Comprehensive Income
    Net Income              $3,235,872  $1,655,993   $6,465,353 $3,569,916
    Foreign currency
     translation
     adjustment               (148,642)     55,303     (186,726) 1,331,841

    Comprehensive
     Income                 $3,087,230  $1,711,296   $6,278,627 $4,901,757



                 China Education Alliance, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows
                                   (Unaudited)

                                                   Six Months Ended June 30,
                                                      2009            2008
    Cash flows from operating activities
    Net Income                                     $6,465,353     $3,569,916
    Adjustments to reconcile net income to net
     cash provided by operating activities
      Depreciation and amortization                   663,830        673,059
      Stock based compensation                        332,256             --
      Loss on equity investment                         4,089             --

    Net change in assets and liabilities
      Account receivables                            (626,926)      (477,094)
      Prepaid expenses and other                    1,285,913        484,128
      Advances to related parties                     162,894        108,536
      Accounts payable and accrued liabilities        247,341         33,786
      Deferred revenue                               (186,509)        52,772
      Advances from related parties                    52,414             --
    Net cash provided by operating activities       8,400,655      4,445,103

    Cash flows from investing activities
      Purchases of fixed assets                      (348,837)      (409,378)
      Cash of WEI on date of acquisition              227,964             --
      Long-term investment                                 --       (436,567)
    Net Cash used in investing activities            (120,873)      (845,945)
    Cash flows from financing activities
      Warrants exercised                                   --      2,667,559
    Net Cash Provided by Financing Activity                --      2,667,559
    Effect of exchange rate on cash                  (188,885)     1,331,841
    Net increase in cash                            8,090,897      7,598,558
    Cash and cash equivalents at beginning
     of period                                     23,418,098     11,778,954
    Cash and cash equivalents at end of period     31,508,995     19,377,514
    Supplemental disclosure of cash flow
     information:
      Value of equity granted and issued              332,257         94,737
    Non-cash investing and financing activities
      Conversion of preferred stock to common         125,000        667,800

    This information is intended to be reviewed in conjunction with the
    Company's filings with the Securities and Exchange Commission.



    For more information, please contact:

    At the Company:

     Ms. Susan Liu, CFO
     China Education Alliance, Inc.
     Tel:   +1-778-388-8513
     Email: susan@edu-chn.com

    Investor Relations:

     RedChip Companies, Inc.
     Jon Cunningham, Investor Relations
     Tel:   1-800-733-2447, Ext. 107
     Email: jon@redchip.comwww.RedChip.com

To participate in the call please dial (877) 407-0789, or (201) 689-8562 for international calls, approximately 10 minutes prior to the scheduled start time. Interested parties may also listen via a live Internet webcast, which can be found at the Company's website at http://www.chinaeducationalliance.com or alternately at http://viavid.net.

A replay of the call will be available for two weeks from 1:00 p.m. August 12, 2009, EDT until 11:59 p.m. EDT on August 26, 2009. The number for the replay is (877) 660-6853, or (201) 612-7415 for international calls. The passcode for the replay is 330198, and the account number is 3055. You will need both the passcode and the account number to listen to the replay. In addition, a recording of the call will be available via the company's website at http://www.chinaeducationalliance.com for one year.

About China Education Alliance, Inc.

China Education Alliance, Inc. (NYSE Amex: CEU) is a fast-growing, leading China-based company offering high-quality education resources and services to students ages 6 to 18 and adults ages 18+ (University students and professionals). For students ages 6 to 18, China Education Alliance, Inc. offers supplemental, online exam-oriented training materials and on-site exam-oriented training and tutoring services. The company is providing on-line, downloadable, famous teachers resources and on-site face-to-face instructions. All resources and tutoring services are provided by famous teachers within mainland China. The purpose of online exam-orientated resources and on-site tutoring is to help Chinese students ages 6 to 18 to pass the two most important and highly competitive exams in their educational career: senior high school entrance exam and college entrance exam. For graduates and professionals age 18+, China Education Alliance provides vocational training including IT and several professional training programs. In addition, the Company is providing comprehensive English programs that are taught by North American instructors to assist graduates and professionals in learning the English language, both written and conversational in order to better able them to work for a foreign corporation or work-study abroad. For more information about China Education Alliance, please visit http://www.chinaeducationalliance.com.

    Investor Relations:

    RedChip Companies, Inc.
    Jon Cunningham, Investor Relations
    1-800-733-2447, Ext. 107
    jon@redchip.com

"We are very pleased that our steadfast commitment to increasing our growth and profitability, as well as our efforts to improve corporate governance to meet the requirements of a senior exchange, have led to our listing on NYSE Amex," said Mr. Xiqun Yu, Chief Executive Officer of China Education Alliance, Inc. "We are honored to be approved for trading on this senior exchange, and we expect our listing will provide substantial leverage for us to broaden our visibility in the U.S. capital markets and to strengthen and grow our investor base."

About China Education Alliance, Inc.

China Education Alliance, Inc. (NYSE Amex: CEU) is a fast growing, leading China-based company offering high-quality education resources and services to students ages 6 to 18 and adults ages 18+ (University students and professionals). For students ages 6 to 18, China Education Alliance, Inc. offers supplemental, online exam-oriented training materials and on-site exam-oriented training and tutoring services. The company is providing on-line, downloadable, famous teachers resources and on-site face-to-face instructions. All resources and tutoring services are provided by famous teachers within mainland China. The purpose of online exam-orientated resources and on-site tutoring is to help Chinese students ages 6 to 18 to pass the two most important and highly competitive exams in their educational career: senior high school entrance exam and college entrance exam. For graduates and professionals age 18+, China Education Alliance provides vocational training including IT and several professional training programs. In addition, the Company is providing comprehensive English programs that are taught by North American instructors to assist graduates and professionals in learning the English language, both written and conversational in order to better able them to work for a foreign corporation or work-study abroad. At present, five English schools are operating nationwide in China. For more information about CEUA, please visit

    For more information, please contact:

    At the Company:
     Ms. Susan Liu, CFO
     China Education Alliance, Inc.
     Tel:   +1-778-388-8513
     Email: susan@edu-chn.com

    Investor Relations:
     RedChip Companies, Inc.
     Jon Cunningham, Investor Relations
     Tel:   +1-800-733-2447 x107
     Email: jon@redchip.com

Mr. Xiqun Yu, Chief Executive Officer of China Education Alliance, Inc. commented: "Listing on the NYSE Amex is a significant milestone for our company, and it validates the success of our growth plan as we aim to be a major player in China's education industry. We are very excited and honored as we believe this NYSE Amex listing will raise our profile in the U.S. investment community, increase the marketability and liquidity of our stock, and further expand our investor base. We will continue to work diligently to create more value for our shareholders, increase our profitability, and continue our efforts to expand our educational service offerings."

About China Education Alliance, Inc.

China Education Alliance, Inc. is a fast growing, leading China-based company offering high-quality education resources and services to students ages 6 to 18 and adults ages 18+ (University students and professionals). For students ages 6 to 18, China Education Alliance, Inc. offers supplemental, online exam-oriented training materials and on-site exam-oriented training and tutoring services. The company is providing on-line, downloadable, famous teachers resources and on-site face-to-face instructions. All resources and tutoring services are provided by famous teachers within mainland China. The purpose of online exam-orientated resources and on-site tutoring is to help Chinese students ages 6 to 18 to pass the two most important and highly competitive exams in their educational career: senior high school entrance exam and college entrance exam. For graduates and professionals age 18+, China Education Alliance provides vocational training including IT and several professional training programs. In addition, the Company is providing comprehensive English programs that are taught by North American instructors to assist graduates and professionals in learning the English language, both written and conversational in order to better able them to work for a foreign corporation or work-study abroad. At present, five English schools are operating nationwide in China. For more information about CEUA, please visit

    For more information, please contact:

    At the Company:
     Ms. Susan Liu, CFO
     China Education Alliance, Inc.
     Tel:   +1-778-388-8513
     Email: susan@edu-chn.com

    Investor Relations:
     RedChip Companies, Inc.
     Jon Cunningham, Investor Relations
     Tel:   +1-800-733-2447 x107
     Email: jon@redchip.com

"We are very happy to have attracted the talent and financial experience of Yizhao Zhang to our board, particularly his work with Chinese companies listed on foreign exchanges. As we head into our next phase of growth, his service on the Audit Committee will prove invaluable to us; and his experience and insight will help us manage our rapid growth as we work to expand our product offerings and services to other provinces in China," said China Education Alliance's chief executive officer, Mr. Xiqun Yu.

Mr. Zhang brings to China Education's board an extensive background in corporate finance and governance. From August 2008 to January 2009, he served as chief financial officer at Energroup Holdings Corporation; and, from May 2007 through May 2008, he served as chief financial officer at Shengtai Pharmaceutical Inc. From April 2006 through December 2006, he was the deputy chief financial officer of China Natural Resources, Inc., and from April 2005 through April 2006, he was the vice president and senior manager in Chinawe Asset Management Consultancy Limited, a U.S. public company which mainly manages non-performing loan assets in China. He was a financial consultant with Hendrickson Asset Management LLP from January 2004 through November 2004. Prior to that he worked as a portfolio manager and foreign exchange and common stock trader with the South Financial Service Corporation from 1993 to 1999.

Mr. Zhang is a Certified Public Accountant, certified by the Delaware State Board of Accountancy and member of American Institute of Certified Public Accountant (AICPA). Mr. Zhang earned a Bachelor of Economic Science from Fudan University in 1992. In 2003, he graduated with a Master of Business Administration with two concentrations, financial analysis and accounting, from the State University of New York at Buffalo.

About China Education Alliance, Inc.

China Education Alliance, Inc. is a fast growing, leading China-based company offering high-quality education resources and services to students ages 6 to 18 and adults ages 18+ (University students and professionals). For students ages 6 to 18, China Education Alliance, Inc. offers supplemental, online exam-oriented training materials and on-site exam-oriented training and tutoring services. The company is providing on-line, downloadable, famous teachers resources and on-site face-to-face instructions. All resources and tutoring services are provided by famous teachers within mainland China. The purpose of online exam-orientated resources and on-site tutoring is to help Chinese students ages 6 to 18 to pass the two most important and highly competitive exams in their educational career: senior high school entrance exam and college entrance exam. For graduates and professionals age 18+, China Education Alliance provides vocational training including IT and several professional training programs. In addition, the Company is providing comprehensive English programs that are taught by North American instructors to assist graduates and professionals in learning the English language, both written and conversational in order to better able them to work for a foreign corporation or work-study abroad. At present, five English schools are operating nationwide in China. For more information about CEUA, please visit

    For more information, please contact:

    At the Company:
     Ms. Susan Liu, CFO
     China Education Alliance, Inc.
     Tel:   +1-778-388-8513
     Email: susan@edu-chn.com

    Investor Relations:
     RedChip Companies, Inc.
     Jon Cunningham, Investor Relations
     Tel:   1-800-733-2447 x107
     Email: jon@redchip.com

ORLANDO, Fla., June 11, 2009 (GLOBE NEWSWIRE) -- RedChip Companies, Inc. today announced that the CEOs and executive teams of 12 emerging small-cap and healthcare technology companies will deliver financial presentations during the 2009 RedChip Small-Cap Investor Conference being held June 16, 2009 in Fort Lauderdale, Florida. Company presentations will be webcast live via http://www.RedChip.com. The event is being held in conjunction with Collaborative Communications Summit's Health Information Technology conference and will feature a dedicated presentation track for healthcare technology companies and a second track for financial presentations by emerging growth companies from a wide range of sectors including Technology, Biotechnology, Energy, Consumer Goods, Telecommunications, and more.

The event will also feature two days of keynote presentations and panel discussions held June 16th and 17th by healthcare industry leaders and regulators focused on healthcare information technology topics. The RedChip investor conference will take place one day only -- on Tuesday, June 16th from 8 a.m. to 5 p.m. -- at the Hilton Fort Lauderdale Marina (1881 SE 17th Street Causeway).

Participating investors will have the opportunity to meet one-on-one with the CEOs of presenting companies, while thousands of investors from across the world can view the conference online, watching the presentations live at RedChip.com on the day of the conference. In addition, RedChip TV will be on-site conducting interviews with CEOs. These executive interviews as well as the company presentations will be archived for later viewing at RedChip.com.

RedChip investor conferences are a nationally known forum for emerging small-cap companies to present their stories before hundreds of retail brokers, institutional brokers, fund managers, portfolio managers, accredited investors, and research analysts whose disciplined focus towards the small-cap markets represents their core investment strategies. Sponsors for RedChip's program include NASDAQ OMX (Nasdaq:NDAQ - News); EquiSolve LLC; and National SEC Filing, Inc.

Presenting companies include the following:

RXi Pharmaceuticals Corporation (Nasdaq:RXII - News); The Quantum Group, Inc. (NYSE Amex:QGP); Bioheart, Inc. (OTCBB:BHRT - News); ZAGG Inc. (OTCBB:ZAGG - News); Elephant Talk Communications, Inc. (OTCBB:ETAK - News); INVO Bioscience Inc. (OTCBB:IVOB - News); Celsius Holdings, Inc. (OTCBB:CSUH - News); China Education Alliance, Inc. (OTCBB:CEUA - News); Aethlon Medical, Inc. (OTCBB:AEMD - News); Dolphin Digital Media, Inc. (OTCBB:DPDM - News); Nanostart AG (Frankfurt:NNS.F - News); PrivacyHarbor.com (Private); and Murdoch Security & Investigations, Inc. (Private).

Preregistration is required and seating is limited. To register online, please visit http://www.ccsexpo.com/s...) is a two-day conference that will provide an opportunity for investors and healthcare leaders to discover the latest trends and investment opportunities. The Collaborative Communications Summit is designed to help top-level executives, legislators, physicians, regulators and technologists come to grips with the swirling forces of health information technology change, policy development and changing business models. The CCS HIT provides an intimate, high level forum that facilitates open avenues of communication amongst executives and stakeholders in healthcare fostering the growth and adoption of HIT resulting in safer, more efficient and cost effective healthcare.

About RedChip Companies, Inc.

RedChip Companies is an international, small-cap research and financial public relations firm headquartered in Orlando, Florida; with affiliate offices in Qingdao, China; Paris, London, Atlanta, Los Angeles and San Diego. RedChip delivers concrete, measurable results for its clients through its extensive national and international network of small-cap institutional and retail investors. RedChip has developed the most comprehensive platform of products and services for small-cap companies, including: RedChip Research, Traditional Investor Relations, Digital Investor Relations, Institutional and Retail Conferences, RedChip Small-Cap TV, and RedChip Radio. To learn more about RedChip's products and services please visit: http://www.redchip.com
]]> photo_623 28 May 2009 16:09:42 GMT http://chinasecurities.com/ir/CEUA/photos ]]> message_2318 28 May 2009 13:29:00 GMT http://chinasecurities.com/ir/CEUA/messages/2318 HARBIN, China, May 28 /PRNewswire-Asia-FirstCall/ -- China Education Alliance, Inc. (OTC Bulletin Board: CEUA - News), a leading distributor of educational resources, offering high-quality programs and training both through online networks and an on-site training center in the People's Republic of China, announced today that it has retained RedChip Companies, Inc. to lead its public and investor relations programs.

"RedChip has an impressive track record in broadening visibility for China-based, emerging growth companies among investors. They also have one of the most comprehensive platforms of media and investor relations services developed for growing companies," said China Education Alliance's chief executive officer, Mr. Xiqun Yu. "We look forward to working with RedChip's team as they endeavor to build and strengthen relationships with our investor base," he added.

"We are very pleased with the opportunity to represent China Education Alliance," said Dave Gentry, president of RedChip. "There are an estimated 130 million students in China between the ages of 6 and 18, providing a strong market for English programs and college entrance training. They are a leader in their field and continue to report strong sales and earnings growth. We look forward to leveraging a comprehensive investor relations program and introducing them to RedChip's network of international retail and institutional investors," added Mr. Gentry.

About China Education Alliance, Inc.

China Education Alliance, Inc. is a fast growing, leading China-based company offering high-quality education resources and services to students ages 6 to 18 and adults ages 18+ (University students and professionals). For students ages 6 to 18, China Education Alliance, Inc. offers supplemental, online exam-oriented training materials and on-site exam-oriented training and tutoring services. The company is providing on-line, downloadable, famous teachers resources and on-site face-to-face instructions. All resources and tutoring services are provided by famous teachers within mainland China. The purpose of online exam-orientated resources and on-site tutoring is to help Chinese students ages 6 to 18 to pass the two most important and highly competitive exams in their educational career: senior high school entrance exam and college entrance exam. For graduates and professionals age 18+, China Education Alliance provides vocational training including IT and several professional training programs. In addition, the Company is providing comprehensive English programs that are taught by North American instructors to assist graduates and professionals in learning the English language, both written and conversational in order to better able them to work for a foreign corporation or work-study abroad. At present, five English schools are operating nationwide in China. For more information about CEUA, please visit

    First Quarter 2009 Highlights

    -- Total Revenue increased 101.6% year over year to approximately
       $8.2 million
    -- Gross profit rose 87.5% to approximately $6.1 million or 74.2% of
       sales, compared to 79.7% of sales in the first quarter of fiscal 2008
    -- Operating income totalled approximately $3.4 million, versus an
       operating income of approximately $1.5 million in the first quarter of
       fiscal 2008
    -- Net income was approximately $3.2 million, versus net income of
       approximately $1.9 million in the first quarter of fiscal 2008
    -- Net income grew to a record $0.13 per fully diluted share, versus net
       income of $0.08 per fully diluted share in the first quarter of fiscal
       2008

First Quarter 2009 Results China Education Alliance's on-line business generated 58.9% of its total revenue for the first quarter of fiscal 2009 versus 65.1% for the same period the prior year. Its training center business generated 31.0% of its total revenue for the first quarter of fiscal 2009 versus 24.2% for the same period the prior year, and its advertising business generated the remaining 10.1% of its total revenue for the first quarter of fiscal 2009 versus 10.8% for the same period the prior year.

Online education revenue was approximately $4.8 million for the first quarter of fiscal 2009, an increase of 82.4% from approximately $2.6 million for the first quarter of fiscal 2008. Training center revenue for the first quarter of fiscal 2009 was approximately $2.5 million, up 158.9% from $1.0 million in the first quarter last year. Advertising revenue was approximately $0.8 million for the first quarter of fiscal 2009, an increase of 88.6% from approximately $0.4 million for the first quarter the prior year. During 2008 and 2009, we added several new programs for vocational studies and certification programs, which provided new sources of income for our online education business.

Overall cost of sales increased 157.0% to approximately $2.1 million in the first quarter of fiscal 2009, compared to approximately $0.8 million for the same period in fiscal 2008. Gross profit increased to approximately $6.1 million in the first quarter of fiscal 2009, an increase of 87.5% from approximately $3.2 million for the same quarter in fiscal 2008. Gross margin for the first quarter of fiscal 2009 was 74.2%, as compared to a record 79.7% for the same quarter a year ago. The online education gross margin decreased to 75.2% in the first quarter of fiscal 2009 from 85.4% for the same period in fiscal 2008. The training center gross margin increased to 66.1% for the first quarter of fiscal 2009 from 59.4% for the same period last year. Advertising gross margin increased to 93.3% in the first quarter of fiscal 2009 from 91.3% for the same period in 2008.

Selling expenses increased 84.6% to approximately $2.2 million for the first quarter of fiscal 2009, compared to approximately $1.2 million in the first quarter of 2008, due to increased expenses in building our marketing team and higher debit card agency expenses. General and administrative ("G&A") expenses were approximately $0.25 million for the first quarter of fiscal 2009, a decrease from approximately $0.31 million in the first quarter of fiscal 2008, primarily due to a decline salaries, travel and telephone expenses in the first quarter of fiscal 2009 compared to the prior year. As a percentage of revenue, G&A expenses decreased to 3.1% in the first quarter of fiscal 2009, down from 7.6% in the same period of last year.

Operating income in the first quarter of fiscal 2009 increased to approximately $3.4 million, from approximately $1.5 million in the same period a year ago. Operating margin was 41.1% in the first quarter of fiscal 2009.

Net income for the first quarter of fiscal 2009 was approximately $3.2 million, as a result of strong development in our three business segments, compared to a net income of approximately $1.9 million for the first quarter of fiscal 2008. The first quarter of fiscal 2009 net income was $0.13 per fully diluted share, compared with $0.08 in the same period last year.

Financial Condition

As of March 31, 2009, China Education Alliance had approximately $27.6 million in cash and cash equivalents, $29.3 million in working capital, and no long-term debt. Shareholders' equity was approximately $36.9 million, an increase from approximately $33.7 million on December 31, 2008. We generated $3.9 million in cash flow from operating activities in the first quarter of fiscal 2009.

Business Outlook

China Education Alliance has three main business components:

1. The Company provides downloadable teaching resources to primary and secondary school students. At the same time, to carry out on-site trainings. At present, the Company's well-developed Internet business is conducted primarily in the province of Heilongjiang and is expanding to the provinces Jilin, Liaoning and Inner Mongolia. The business is gaining more and more recognition of students and parents. Regarding on-site training, the company is stepping up efforts to carry out the designation in more geographical areas. In addition, Scientific Discovery is enjoying a growing distribution, and the Company plans to achieve a circulation of 100,000 sets by the end of 2009. Through Scientific Discovery, the Company's brand awareness has been spread and strengthens and established close relationship with the students and parents. In addition, the Company plans to cooperate with third-party companies in the future to create an exclusive access personal self-learning platform for students to to set up learning groups online. The group will be comprised of three modules: instructors, on-line Q & A teachers, and students self-helping groups. Online real-time Q & A teachers, 24-hour help students overcome their learning difficulties, can provide students with a full range of outstanding educational resources and services. The establishment of the platform will help us develop our business to other cities nationwide.

2. In the field of vocational education, our vocational education program, "the employment of millions of college students overpass project," developed in cooperation with the Chinese Vocational Education Society (NAVEC) and aimed at addressing the high unemployment rate among college students, is developing well and has begun to receive governmental and societal recognition. On the one hand, the program has increased corporate visibility; on the other hand, it has enhanced our influence in universities nationwide to set up a solid base for future multi-party cooperation in the future. In addition, the Millions of Managers Training Program has been recognized and supported by the community and government. This program is operating well in the Beijing area and year-round training contracts have been signed with many well-known companies. The Company is planning to develop the program to 10 cities across the country. Its target is to become a leader in the field of management in China within two years.

NAVEC has entered a comprehensive strategic cooperation agreement with one of the world's largest professional certification, the City of London Association of the United Kingdom -- (City & Guilds). NAVEC has authorized the Company to operate several programs: International Training Program, International Automotive Engineers, International English Teacher Qualifications, Foreign-Related Secretary and Administrative Qualifications, and International Management Manager Qualifications as a discretionary exclusive operator in China. The Company plans to set up examination and training centers by the end of 2009 in 20 cities nationwide.

3. In the field of foreign language training, the company maintains the normal development of the Company's business and actively carries out high-end foreign language services. At present, the Company has entered foreign language training contracts with a number of large enterprises and enterprise groups. In addition, the company has entered into an exclusive agreement with the world's largest professional certification, the City of London Association of the United Kingdom -- (City & Guilds) to begin in China to develop International and Spoken English Test program.

"In the first quarter of 2009, the Company has enjoyed a comprehensive business growth, mainly due to our strategic decision-making and a solid infrastructure platform. We will continue to adhere to our goals for development. We are confident in the future development of the Company," said China Education Alliance's CEO, Mr. Xiqun Yu.

Investor Conference Call / Webcast Details

The Company will host a conference call to discuss its first quarter 2009 results at 9:00 a.m. Eastern Time on Wednesday, May 20, 2009. The management team will be on the call to discuss quarterly results and highlights and to answer questions. The toll-free number for U.S. participants is +1-877-407- 0789. International participants can dial +1-201-689-8562. Please ask for the Chinese Education Alliance Earnings Results Conference Call, confirmation code 323319.

The playback will be available beginning two hours after the conclusion of the conference call and will be accessible by dialling + 1-201-612-7415 (international) and +1-877-660-6853 (U.S. domestic). The conference ID to access the replay is 323319. The account number is 3055.

About China Education Alliance, Inc.

China Education Alliance, Inc. is a fast growing, leading China-based company offering high-quality education resources and services to students ages 6 to 18 and adults ages 18+ (University students and professionals). For students ages 6 to 18, China Education Alliance, Inc. offers supplemental online exam-oriented training materials and on-site exam-oriented training and tutoring services. The company is providing on-line downloadable famous teachers resources and on-site face to face instructions. All resources and tutoring services are provided by famous teachers within mainland China. The purpose of online exam orientated resources and on-site tutoring is to help Chinese students ages 6 to 18 to pass the two most important, and highly competitive exams in their educational career: senior high school entrance exam and college entrance exam. For graduates and professionals age 18+, China Education Alliance provides vocational training including IT and several professional training programs. In addition, the Company is providing comprehensive English programs that are taught by the North American instructors and to assist graduates and professionals in learning the English language, both written and conversational in order to better able them to work for a foreign corporation or work-study abroad. At present, five English schools are operating nationwide in China. For more information about CEUA, please visit
Current Liabilities
Accounts payable and accrued expenses $922,431 $800,692
Deferred revenues 1,142,615 1,227,806
Total current liabilities 2,065,046 2,028,498

Stockholders' Equity
Preferred stock ($0.001 par value,
20,000,000 shares authorized, of
7,597,645 and 9,397,645 issued
and outstanding, respectively,
aggregate liquidation preference
of $2,811,129 and $3,383,152,
respectively) 3,010,144 3,010,144
Common stock ($0.001 par value,
150,000,000 shares authorized,
21,892,631 and 21,892,631, issued
and outstanding, respectively) 21,893 21,893

Additional paid-in capital 10,753,250 10,751,732
Statutory reserve 1,990,238 1,990,238
Accumulated other comprehensive income 2,649,996 2,688,080
Retained earnings 18,480,811 15,251,330
Total stockholders' equity 36,906,332 33,713,417
$38,971,378 $35,741,915



China Education Alliance, Inc. and Subsidiaries
Consolidated Statements of Cash Flows

Three Months Ended March 31,
2009 2008
Cash flows from operating activities

Net Income $ 3,229,481 $ 1,913,923
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 287,338 304,081
Stock based compensation 1,518 --
Loss on equity investment 411 --
Net change in assets and liabilities
Account receivables (862,796) --
Prepaid expenses and other 1,088,961 508,985
Advances to related parties 162,894 108,536
Accounts payable and accrued
liabilities 121,739 (16,239)

Deferred revenue (85,191) (122,168)
Net cash provided by operating
activities 3,944,355 2,697,118

Cash flows from investing activities
Purchases of fixed assets 82,584 (249,653)
Cash of WEI on date of acquisition 227,964 --
Net Cash provided by investing
activities 310,548 (249,653)

Cash flows from financing activities
Warrants exercised -- 2,667,559
Net Cash Provided by Financing Activity -- 2,667,559

Effect of exchange rate on cash (38,084) 839,971

Net increase in cash 4,216,819 5,954,995

Cash and cash equivalents at beginning
Of period 23,418,098 11,778,954

Cash and cash equivalents at end of
period $ 27,634,917 $ 17,733,949

Supplemental disclosure of cash flow
information:
Value of equity granted and issued $ -- $ 94,737

Non-cash investing and financing
activities
Conversion of preferred stock to
common $ -- $ 667,800



For more information, please contact:

Company Contact:
Ms. Susan Liu
CFO
China Education Alliance, Inc.
Tel: +1-778-388-8513
Email: susan@edu-chn.com
]]> message_1429 01 Apr 2009 13:45:00 GMT http://chinasecurities.com/ir/CEUA/messages/1429 HARBIN, China, April 1 /PRNewswire-Asia-FirstCall/ -- China Education Alliance, Inc. (OTC Bulletin Board: CEUA; "China Education Alliance" or "the Company"), a leading distributor of educational resources, offering high-quality programs and training both through online networks and an on-site training center in the People's Republic of China, today reported strong financial results for the fourth quarter and fiscal year ended December 31, 2008.

    Fourth Quarter 2008 Highlights
    -- Total Revenue increased 91.2% year over year to $9.2 million
    -- Gross profit rose 80.6% to $7.2 million or 85.3% of sales, compared to
       92.7% of sales in the fourth quarter of 2007
    -- Operating income totaled $3.9 million, versus an operating income of
       $1.1 million in the fourth quarter of 2007
    -- Net income was $3.6 million, versus net loss of $1.4 million in the
       fourth quarter of 2007
    -- Net income grew to a record $0.15 per fully diluted share, versus net
       loss of $0.06 per fully diluted share in the fourth quarter of 2007

    Fiscal Year 2008 Highlights
    -- Total revenue increased 43.5% in 2008 to $24.9 million
    -- Gross profit increased 44.3% to $20 million; gross margin was 80.%
       versus 79.6% in fiscal year 2007
    -- Operating income increased 59.7% in fiscal year 2008 to $10 million
    -- Net income was $9.9 million, or $0.40 per fully diluted share
    -- In 2008, the Company signed a series of acquisition agreements:
       - On April 18, 2008, our subsidiary, Harbin Zhong He Li Da Education
         Technology, Inc. entered into an agreement and supplementary
         agreement with Harbin Daily Newspaper Group to establish a joint
         venture, Harbin New Discovery Media Co., Ltd ("New Discovery"). New
         Discovery publishes a newspaper, "Scientific Discovery," which
         promotes primary and secondary education resources.
       - On April 27, 2008, the Company entered into an agreement with Mr.
         Yuli Guo and World Exchanges, Inc ("WEI") to acquire 70% of WEI. On
         December 23, 2008, WEI incorporated Beijing Wei Shi Yi Tong Education
         Technology Co., Inc in the PRC to be involved in the English language
         training business.

Fourth Quarter 2008 Results

China Education Alliance's on-line business generated 70.3% of its total revenue for the fourth quarter of 2008 versus 65.4% for the same period the prior year. Its training center business generated 21.2% of its total revenue for the fourth quarter of 2008 versus 23.6% for the same period the prior year and its advertising business generated the remaining 8.5% of its total revenue for the fourth quarter of 2008 versus 10.9% for the same period the prior year.

"Our online education, training center, and advertising businesses have experienced rapid growth during the fourth quarter of 2008; the training center business generated particularly dramatic growth due to our rapid expansion of our vocational education business," commented Mr. Xiqun Yu, Chairman and CEO of China Education Alliance. "The strong growth of our online education business was mainly driven by our success in replicating our online business model in the other provinces of the PRC from our dominant position in the Heilongjiang province."

Online education revenue was $6.4 million for the fourth quarter of fiscal 2008, an increase of 105.3% from $3.1 million for the fourth quarter of fiscal 2007, reflecting the strong demand for our downloadable education materials on the Internet. Training center revenue for the fourth quarter of fiscal 2008 was $1.9 million, up 71.6% from $1.1 million in the fourth quarter last year, mainly driven by more extensive face-to-face tutoring courses for middle and high school students, as well as strong demand for our on-site vocational education services. Advertising revenue was $0.8 million for the fourth quarter of fiscal 2008, an increase of 49.3% from $0.5 million for the fourth quarter the prior year, due to the rapid development of the Internet as an important media for advertising. The favorable exchange rate between US$ and RMB has also contributed to our net income and increase in our advertising revenue.

Overall cost of sales increased 141.4% to $2.0 million in the fourth quarter of fiscal 2008, compared to $0.8 million for the same period in fiscal 2007. Gross profit increased to $7.2 million in the fourth quarter of fiscal 2008, an increase of 80.6% from $4.0 million for the same quarter in fiscal 2007. Gross margin for the fourth quarter of fiscal 2008 was 78%, as compared to a record 82.6% for the same quarter a year ago. The online education gross margin decreased to 78.8% in fourth quarter of fiscal 2008 from 84.2% for the same period in fiscal 2007. The training center gross margin decreased to 69.1% for the fourth quarter of fiscal 2008 from 73.6% for the same period last year. Advertising gross margin increased to 93.7% in the fourth quarter of fiscal 2008 from 91.9% for the same period in 2007.

Selling expenses increased 40.2% to $2.5 million for the fourth quarter in fiscal 2008, compared to $1.8 million in the fourth quarter of 2007, due to increased expenses in building our marketing team and higher debit card agency expenses. General and administrative ("G&A") expenses were $0.6 million for the fourth quarter in fiscal 2008, a decrease from $0.9 million in the fourth quarter of fiscal 2007, primarily due to a decline in bonuses paid in the fourth quarter of 2008 compared to the prior year. As a percentage of revenue, G&A expenses decreased to 6.2% in the fourth quarter of fiscal 2008, down from 19% in the same period of last year.

Operating income in the fourth quarter of fiscal 2008 increased to $3.9 million, from $1.1 million in the same period a year ago. Operating margin was 42.2% in the fourth quarter of fiscal 2008.

Net income for the fourth quarter of fiscal 2008 was $3.6 million, as a result of strong development in our three business segments and $0.11 million in warrants and stock option compensation for services as well as $0.13 million in non-cash liquidation damages related to the May 2007 private placement financing, compared to a loss of $1.4 million for the fourth quarter of fiscal 2007. Adjusting for non-cash expenses, fourth quarter of fiscal 2008 non-GAAP net income was $0.24 million, or $0.01 per fully diluted share.

Fiscal Year 2008 Financial Results

For the fiscal year 2008, total revenue was $24.9 million, an increase of 43.5% from the prior year. Online education revenue was $16.7 million, an increase of 45.2% from $11.5 million, which represented 67.2% of our total revenue. The training center business contributed 22.3% of revenue or $5.6 million, an increase of 50.1% from $3.7 million in fiscal 2007. Our advertising business contributed 10.4% of revenue or $2.6 million, an increase of 22.3% from $2.1 million in fiscal 2007.

Gross profit for fiscal year 2008 was $20 million, an increase of 44.3% from gross profit of $13.8 million in fiscal 2007. Gross margin was 80% for fiscal 2008 compared to 79.6% for fiscal 2007. Income from operations was $10 million for fiscal 2008, an increase of 59.7% from $6.3 million in fiscal 2007. Net income for the fiscal 2008 was $9.9 million, or $0.40 per fully diluted share, compared to $3.1 million, or $0.14 per fully diluted share in fiscal 2007.

Financial Condition

As of December 31, 2008, China Education Alliance had $23.4 million in cash and cash equivalents, $25.4 million in working capital, and no long-term debt. Shareholders' equity was $33.7 million, an increase from $18.6 million on December 31, 2007. We generated $9.8 million in cash flow from operating activities in fiscal 2008.

    Business Outlook

    China Education Alliance has three main business components:
    1) The Company provides downloadable resources to primary and secondary
       students via the Internet and also provides on-site teaching services.
       At present, the Company has expanded its Internet business to Jilin,
       Liaoning and Inner Mongolia. In 2009, the Company will try to develop
       its online business in Beijing, Hebei, Henan and other places as well
       as maintain its existing market share. We will endeavor to expand
       our on-site training services to more areas to allow more students
       receive instruction from our teachers. In addition, we will strongly
       expand circulation of our newspaper, "Scientific Discovery," to
       strengthen our brand name recognition.
    2) In the field of vocational education, on the one hand, we plan to
       expand our vocational education in the Heilongjiang province by
       providing IT and clerical training.
       On the other hand, the Company, through a strategic cooperation with
       the Chinese Vocational Education Society (NAVEC), aims to address the
       high unemployment rate among college students. We introduced the
       "Millions of College Students Employment Crossroad" program, which
       received positive support from the public and universities. We plan to
       promote the program, which comprises nine modules: the living
       environment, business analysis and business strategy, marketing
       management, enterprise management, enterprise management philosophy,
       human resources management, corporate culture construction, finance and
       capital management, supply chain and production management,
       entrepreneurs, self-cultivation arts and so on. This program runs for
       60 days and well known management gurus such as Wen Yuankai, Chen Fang,
       Ai Feng, Qu Min Li, and Wang Zhongqiu are invited to lecture. This
       program is carried out in Beijing and we have year-round training
       contracts with a lot of well-known domestic Chinese companies.
       In the first quarter of 2009, China Education Alliance will help
       the Chinese Vocational Education Society (NAVEC) and the world's
       largest professional certification, the United Kingdom's City & Guilds
       London Association, achieve strategic and cooperative relations. In
       addition, NAVEC will obtain the exclusive right in the People's
       Republic of China to conduct the International Trainer, Automotive
       Engineers, International English Teacher Qualification, Foreign-related
       Clerical and Administrative Qualifications and Qualifications of the
       International Institute for Management Level examinations.
    3) In the field of foreign language training, we plan to set up new WEI
       operations centers nationwide to carry out high-end English language
       training. In addition, we have reached a verbal agreement with the
       world's largest professional certification authority, the United
       Kingdom's City & Guilds London Association (formal agreement will be
       signed in the first quarter of 2009). WEI is expected to promote
       International Professional English and Oral English Level Examinations
       beginning the second quarter of 2009. The program aims to help
       university students and professional people obtain professional
       knowledge and professional skills certificates.

"In 2009, we will maintain and expand our market, because we have three educational business segments that are complementary of each other. We will continue our development and are very optimistic about the prospects in 2009," said China Education Alliance's CEO, Mr. Xiqun Yu.

Investor Conference Call / Webcast Details

The Company will host a conference call to discuss its fourth quarter and fiscal year 2008 results at 9:00 a.m. Eastern Time on Thursday, April 02, 2009. The management team will be on the call to discuss quarterly results and highlights and to answer questions. The toll-free number for U.S. participants is +1-888-686-9685. International participants can dial +1-913-312-1523. Please ask for the Chinese Education Alliance Earnings Results Conference Call, confirmation code 4914130.

The playback will be available beginning two hours after the conclusion of the conference call and will be accessible by dialling +1-719-457-0820 (international) and +1-888-203-1112 (U.S. domestic). The passcode number to access the replay is 4914130.

About China Education Alliance, Inc.

China Education Alliance, Inc. is a fast growing, leading China-based company offering high-quality education resources and services to students ages 7 to 18 and adults ages 18+. For students ages 7 to 18, China Education Alliance, Inc. offers supplemental online exam-oriented training materials and on-site exam-oriented training and tutoring services. The Company is providing on-line downloadable famous teachers resources and on-site face to face instructions. All resources and tutoring services are provided by famous teachers within mainland China. The purpose of online exam orientated resources and on-site tutoring is to help Chinese students ages 7 to 18 to pass the two most important, and highly competitive exams in their educational career: senior high school entrance exam and college entrance exam. For graduates and professionals age 18+, China Education Alliance provides vocational training including IT and several professional training programs. In addition, as of April 2008, the Company has acquired 70% of the "World Exchange College of Language" English training business, headquartered in Toronto with sites expanding across China. Their comprehensive English programs are designed to assist graduates and professionals in learning the English language, both written and conversational in order to better able them to work for a foreign corporation or work-study abroad. For more information about CEUA, please visit http://www.chinaeducationalliance.com .

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995:

Certain statements in this press release, constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. These statements include, without limitation, statements regarding our ability to prepare the Company for growth, the Company's planned expansion in 2008 and predictions and guidance relating to the Company's future financial performance. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs and are not a guarantee of future performance but they involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which may include, but are not limited to, such factors as unanticipated changes in product demand especially in the education industry, pricing and demand trends for the Company's products, changes to government regulations, risk associated with operation of the Company's new facilities, risk associated with large scale implementation of the Company's business plan, the ability to attract new customers, ability to increase its product's applications, cost of raw materials, downturns in the Chinese economy, the adoption by consumers of its new game business, the unproven advertising model that is dependent on attracting a large game user base, and other information detailed from time to time in the Company's filings and future filings with the United States Securities and Exchange Commission. Investors are urged to consider these factors carefully in evaluating the forward-looking statements herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by this cautionary statement. The forward-looking statements made herein speak only as of the date of this press release, readers are cautioned not to place undue reliance on any of them and the Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations.

                 China Education Alliance, Inc. and Subsidiaries
                      Consolidated Statements of Operations

                 Three months ended December 31,   Year Ended December 31,
                     2008           2007            2008            2007
    Revenues
    Online
     education
     revenues      $6,447,243      $3,140,590     $16,706,917     $11,505,336
    Training
     center
     revenues       1,944,652       1,133,529       5,552,969       3,699,827
    Advertising
     revenues         783,622         524,914       2,591,131       2,118,371
    Total
     revenue        9,175,517       4,799,033      24,851,017      17,323,534

    Cost of
     Goods Sold
    Online
     education
     costs          1,369,940         495,702       2,859,593       2,227,196
    Training
     center
     costs            601,318         299,050       1,922,841       1,147,364
    Advertising
     costs             49,296          42,292         182,505         166,749
    Total cost
     of goods
     sold           2,020,554         837,044       4,964,939       3,541,309

    Gross Profit
    Online
     education
     gross
     profit         5,077,303       2,644,888      13,847,324       9,278,140
    Training
     center
     gross
     profit         1,343,334         834,479       3,630,128       2,552,463
    Advertising
     gross
     profit           734,326         482,622       2,408,626       1,951,622
    Total gross
     profit         7,154,963       3,961,989      19,886,078      13,782,225

    Operating
     Expenses
    Selling
     expenses       2,502,082       1,785,213       7,467,118       5,198,011
    Administrative    570,581         912,191       1,506,411       1,825,264
    Depreciation
     and
     amortization     213,293         143,342         894,112         484,643
    Total
     operating
     expenses       3,285,956       2,840,746       9,867,641       7,507,918

    Other Income
     (Expense)
    Other Income        2,809         561,387         536,876         860,037
    Interest
     income            33,324          20,592         127,751          54,931
    Interest
     expense               --      (3,060,924)             --      (3,603,097)
    Investment
     loss             (95,331)             --         (95,331)             --
    Total other
     income
     (expense)        (59,198)     (2,478,945)        569,296      (2,688,129)

    Net Income
     Before
     Provision
     for Income
     Tax            3,809,809      (1,357,702)     10,587,733       3,586,178

    Provision
     For Income
     Taxes            218,100          86,057         669,197         481,271

    Net Income     $3,591,709     $(1,443,759)     $9,918,536      $3,104,907

    Basic
     Earnings
     Per Share          $0.17          $(0.07)          $0.46           $0.16

    Basic
     Weighted
     Average
     Shares
     Outstanding   21,549,381      19,345,543      21,549,381      19,325,872

    Diluted
     Earnings
     Per Share          $0.15          $(0.06)          $0.40           $0.14

    Diluted
     Weighted
     Average
     Shares
     Outstanding   24,099,330      25,642,543      24,662,830      22,549,837

    The
     Components
     of Other
     Comprehensive
     Income
    Net Income     $3,591,709     $(1,443,759)     $9,918,536      $3,104,907
    Foreign
     currency
     translation
     adjustment        31,975         917,112       1,444,539         965,708

    Comprehensive
     Income        $3,623,684       $(526,647)    $11,363,075      $4,070,615



                  China Education Alliance, Inc. and Subsidiaries
                           Consolidated Balance Sheets

                                                          December 31,
                                                      2008            2007
    ASSETS
    Current Assets
      Cash and cash equivalents                    $23,418,098    $11,778,954
      Advances to related parties                      142,006        108,536
      Accounts receivables                             469,607             --
      Prepaid expenses                               3,437,506      1,612,779
          Total current assets                      27,467,217     13,500,269

    Property and equipment, net                      6,136,252      6,186,824
    Intangibles and capitalized software,
     net                                               864,089        623,560
    Advance on acquisition                             932,000             --
    Long term investment                               342,357             --

                                                   $35,741,915    $20,310,653

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current Liabilities
      Accounts payable and accrued
       expenses                                       $800,692       $423,109
      Deferred revenues                              1,227,806      1,245,507
          Total current liabilities                  2,028,498      1,668,616

    Stockholders' Equity
    Preferred stock ($0.001 par value,
     20,000,000 shares authorized, of
        7,597,645 and 9,397,645 issued
         and outstanding, respectively,
        aggregate liquidation preference
         of $2,811,129 and $3,383,152,
        respectively)                                3,010,144      3,677,944
    Common stock ($0.001 par value,
     150,000,000 shares authorized,                     21,893         19,410
         21,892,631 and 19,409,830,
          issued and outstanding,
         respectively)
    Additional paid-in capital                      10,751,732      6,378,110
    Statutory reserve                                1,990,238      1,151,885
    Accumulated other comprehensive
     income                                          2,688,080      1,243,541
    Retained earnings                               15,251,330      6,171,147
    Total stockholders' equity                      33,713,417     18,642,037

                                                   $35,741,915    $20,310,653



                 China Education Alliance, Inc. and Subsidiaries
                      Consolidated Statements of Cash Flows

                                                     Year Ended December 31,
                                                      2008            2007
    Cash flows from operating activities
    Net Income                                     $9,918,536      $3,104,907
    Adjustments to reconcile net income to
     net cash provided by operating
     activities
              Depreciation and
               amortization                         1,598,624         975,470
              Amortization of loan
               discount - warrants
               attached to loans                           --       1,969,163
              Beneficial conversion
               feature                                     --       1,512,400
              Warrants issued for services            103,420         264,401
              Stock issued for services                    --          15,900
              Preferred stock issued for
               liquidation damages                         --         277,944
              Interest on convertible note
               accounted for as capital
               contribution                                --          40,427
              Stock based compensation                  5,326              --
              Loss on equity investment                95,331              --
    Net change in assets and liabilities
              Account receivables                    (469,607)             --
              Other receivables                            --          54,723
              Prepaid expenses and other           (1,824,727)       (291,331)
              Advances to related parties             (33,470)       (244,480)
              Accounts payable and accrued
               liabilities                            377,583         211,960
              Deferred revenue                        (17,701)        936,141
              Net cash provided by
               operating activities                 9,753,315       8,827,625

    Cash flows from investing activities
              Purchases of fixed assets              (996,434)     (1,722,718)
              Acquisition of intangibles
               and capitalized software              (792,147)             --
              Long-term investment                   (437,688)             --
    Net Cash used in investing activities          (2,226,269)     (1,722,718)

    Cash flows from financing activities
              Warrants exercised                    2,667,559              --
              Proceeds from loans                          --       3,400,000
              Payments on loans                            --      (1,530,000)
    Net cash provided by financing
     activities                                     2,667,559       1,870,000


    Effect of exchange rate                         1,444,539         965,708

    Net increase in cash                           11,639,144       9,940,615

    Cash and cash equivalents at beginning
     of year                                       11,778,954       1,838,339

    Cash and cash equivalents at end of
     year                                         $23,418,098     $11,778,954

    Supplemental disclosure of cash flow
     information:
              Interest paid                               $--        $297,838
              Taxes paid                             $550,938        $408,749
              Value of equity granted and
               issued                                $108,436        $280,301
              Value of preferred stock
               issued for liquidation
               damages                                    $--         277,944

    Non-cash investing and financing
     activities:
              Conversion of preferred
               stock to common                       $667,800             $--
              Conversion of notes payable
               to preferred stock                         $--      $3,400,000
              Cashless exercise of
               warrants                                   $--             $88
              Common stock issued for
               advance of acquisition                $932,000             $--


    For more information, please contact:

    China Education Alliance, Inc.
     Ms. Susan Liu
     CFO
     Tel:   +1-778-388-8513
     Email: susan@edu-chn.com

SOURCE China Education Alliance, Inc.