ACROFAN

Gaotu Techedu Announces Second Quarter of 2021 Unaudited Financial Results and Change to Board Composition

BEIJING, Sept. 22, 2021 /PRNewswire/ -- Gaotu Techedu Inc. (NYSE: GOTU) ("Gaotu" or the "Company"), a leading online large-class tutoring service provider in China, today announced its unaudited financial results for the second quarter ended June 30, 2021. Second Quarter 2021 Highlights[1] Net revenues was RMB2,232.3 million, a 35.3% year-over-year increase. Net revenues of online K-12 courses increased 51.0% year-over-year to RMB2,091.4 million. Gross billings[2] was RMB2,694.7 million, a 12.2% year-over-year increase. Gross billings of online K-12 courses increased 17.2% year-over-year to RMB2,574.5 million. Paid course enrollments[3] increased 4.1% year-over-year to 1,631 thousand. Paid course enrollments of online K-12 increased 4.5% year-over-year to 1,563 thousand. Net loss was RMB918.8 million, compared with net income of RMB18.6 million in the same period of 2020. Non-GAAP net loss was RMB763.9 million, compared with non-GAAP net income of RMB72.7 million in the same period of 2020. Deferred revenue was RMB1,976.4 million, compared with RMB2,733.7 million as of December 31, 2020. Second Quarter 2021 Key Financial and Operating Data (In thousands of RMB, except for paid course enrollments and percentages) Three Months Ended June 30, 2020 2021 Pct. Change Net revenues 1,650,314 2,232,254 35.3% K-12 courses 1,384,968 2,091,355 51.0% Foreign language, professional, admission and other services 265,346 140,899 (46.9%) Gross billings 2,400,996 2,694,732 12.2% K-12 courses 2,196,077 2,574,536 17.2% Foreign language, professional, admission and other services 204,919 120,196 (41.3%) Paid course enrollments (In thousands) 1,567 1,631 4.1% K-12 courses 1,496 1,563 4.5% Foreign language, professional, admission and other services 71 68 (4.2)% Net income (loss) 18,627 (918,791) NM Non-GAAP net income (loss) 72,712 (763,890) NM [1] For a reconciliation of non-GAAP numbers, please see the table captioned "Reconciliations of non-GAAP measures to the most comparable GAAP measures" at the end of this press release. Non-GAAP income (loss) from operations, non-GAAP net income (loss) exclude share-based compensation expenses. [2] Gross billings is a non-GAAP financial measure, which is defined as the total amount of cash received for the sale of course offerings in such period, net of the total amount of refunds in such period. See "About Non-GAAP Financial Measures" and "Reconciliations of non-GAAP measures to the most comparable GAAP measures" elsewhere in this press release. [3] Paid course enrollments for a certain period refer to the cumulative number of paid courses enrolled in and paid for by our students, including multiple paid courses enrolled in and paid for by the same student. Paid courses refer to our courses that are charged not less than RMB99.0 per course in fees. Six Months Ended June 30, 2021 Highlights Net revenues was RMB4,172.6 million, a 41.5% year-over-year increase. Net revenues of online K-12 courses increased 56.0% year-over-year to RMB3,907.6 million. Gross billings was RMB3,876.1 million, a 2.7% year-over-year increase. Gross billings of online K-12 courses increased 8.8% year-over-year to RMB3,577.1 million. Paid course enrollments increased 2.4% year-over-year to 2,398 thousand. Paid course enrollments of online K-12 increased 2.4% year-over-year to 2,195 thousand. Net loss was RMB2,344.7 million, compared with net income of RMB166.6 million in the same period of 2020. Non-GAAP net loss was RMB2,093.3 million, compared with non-GAAP net income of RMB263.5 million in the same period of 2020. First Six Months of 2021 Key Financial and Operating Data (In thousands of RMB, except for paid course enrollments and percentages) Six Months Ended June 30, 2020 2021 Pct. Change Net revenues 2,947,894 4,172,597 41.5% K-12 courses 2,505,057 3,907,626 56.0% Foreign language, professional, admission and other services 442,837 264,971 (40.2)% Gross billings 3,775,395 3,876,074 2.7% K-12 courses 3,286,669 3,577,148 8.8% Foreign language, professional, admission and other services 488,726 298,926 (38.8)% Paid course enrollments (In thousands) 2,341 2,398 2.4% K-12 courses 2,143 2,195 2.4% Foreign language, professional, admission and other services 198 203 2.5% Net income (loss) 166,615 (2,344,710) NM Non-GAAP net income (loss) 263,453 (2,093,310) NM Larry Xiangdong Chen, the Company's founder, Chairman and CEO, commented, "In the second quarter of 2021, our revenue has reached a record high to 2.232 billion RMB. In order to support the equality of education, ever since May, we have successively collaborated with multiple non-profit organizations such as the China Charity's Aid Foundation for Children, the China Youth Development Foundation, the China Next Generation Education Foundation, and the Henan Normal University through cash donation or free course offerings, to aid the revitalization of rural area education and achieve the goal of equal access of education for everyone. At the same time, we have recently and rapidly adjusted the organizational structure of the group, to focus on professional education and STEAM education, and further exploring possibilities on digital products and vocational education. We say that 2014 is Gaotu's first attempt as a startup , and 2016 is our second start, then we can also say that 2021 is our third start. We should always keep the goal of education in mind, always firmly believe that education is a noble profession. It's undeniable that we have boundless faith in the bright future of the Chinese education industry." "Additionally, we are pleased to welcome Ms. Jin Cui to join our Board as the AC Chairwoman. We look forward to drawing upon Ms. Cui's extensive experience as our business continues to grow. We thank Mr. Xin Fan for his dedication for his tenure as Board Director for the past two years. Despite of the change in board, our business strategy remains unchanged." Shannon Shen, CFO of the Company, added, "In the second quarter, we have upgraded our organizational structure. We will continue to develop in the area of professional education, STEAM education, vocational education and product digitalization. In exploring professional education, the public office exam sector has maintained its relatively high level; paid users in the financial certificate sector have increased 4 times year over year. Professional education is rapidly changing and upgrading. In the future, we will focus on those areas that are strongly supported by the government, creating a multi-facet, interactive platform that encompassing all educational categories for life-long learning." Financial Results for the Second Quarter of 2021 Net Revenues Net revenues reached RMB2,232.3 million, a 35.3% increase from RMB1,650.3 million in the second quarter of 2020. The increase was mainly driven by the growth in paid course enrollments for K-12 courses during the period from the fourth quarter of 2020 to the second quarter of 2021, which was contributed by both first-time paid course enrollments and retention of existing students. The net revenues in the second quarter of 2021 was partially attributable to the paid course enrollments of the fourth quarter of 2020. Cost of Revenues Cost of revenues rose by 100.8% to RMB724.3 million from RMB360.7 million in the second quarter of 2020, mainly due to the increased recruitment of instructors and tutors, the increase in compensation for attracting and retaining high quality teaching staff, as well as the increase in learning material cost and rental expenses. Gross Profit and Gross Margin Gross profit increased 16.9% to RMB1,508.0 million from RMB1,289.7 million in the second quarter of 2020. Gross profit margin decreased to 67.6% from 78.1% in the same period of 2020. The decrease was primarily due to the increase in compensation for instructors and tutors, simultaneously resulting from the increased number of them and more competitive salaries provided, to attract excellent talents to improve teaching quality and students' learning experience. Non-GAAP gross profit increased by 18.2% to RMB1,543.5 million from RMB1,305.4 million in the same period of 2020. Non-GAAP gross profit margin decreased to 69.1% from 79.1% in the same period of 2020. Operating Expenses Operating expenses were RMB2,362.7 million, which increased from RMB1,450.4 million in the second quarter of 2020. Selling expenses increased to RMB1,641.1 million from RMB1,204.8 million in the second quarter of 2020. The increase was primarily a result of higher marketing expenses to expand user base and enhance our brands, and an increase in compensation to sales and marketing staff. Research and development expenses increased by 204.9% to RMB426.5 million, from RMB139.9 million in the second quarter of 2020. The increase was primarily due to an increase in the number of education content development professionals and technology development personnel, as well as an increase in compensation for such staff. General and administrative expenses increased to RMB242.0 million from RMB105.7 million in the second quarter of 2020. The increase in general and administrative expenses was mainly due to an increase in the number of general and administrative personnel, an increase in compensation paid to such staff. Impairment loss on intangible assets and goodwill was RMB53.1 million for the second quarter of 2021, compared to nil for the same period of 2020. The impairment loss was mainly due to the decline of fair value related to the intangible assets and goodwill in connection with the acquisition of Tianjin Puxin Online School Education Technology Co., Ltd. that was completed in December 2020. Considering recent regulatory policies concerning after-school tutoring services, the acquisition will not likely to achieve the target goals the management had estimated at the time of acquisition. Loss from Operations Loss from operations was RMB854.7 million, compared with the loss from operations of RMB160.8 million in the second quarter of 2020. The decrease was primarily due to higher spending in sales and marketing activities to extend volume growth and strengthen brand perception and an increase in the number of personnel, as well as an increase in compensation for our staff. Non-GAAP loss from operations was RMB699.8 million, compared with non-GAAP loss from operations of RMB106.7 million in the second quarter of 2020. Interest Income and Realized Gains from Investment Interest income and realized gains from investments, on aggregate, was RMB23.5 million, compared with RMB24.2 million in the second quarter of 2020. Interest income and realized gains from investments was primarily the interest income of cash, cash equivalents and short-term wealth management investments, as well as the realization of gains generated from short-term and long-term wealth management investments. Other Income (Expense) Other expense was RMB36.5 million, compared with other income of RMB87.7 million in the second quarter of 2020. Other expense in the second quarter of 2021 primarily consisted of related cost of the value-added tax exemption offered by the government during the COVID-19 outbreak, which amounted to RMB56.7 million, net of other income of RMB20.2 million. Net Income (Loss) Net loss was RMB918.8 million, compared with net income of RMB18.6 million in the second quarter of 2020. Non-GAAP net loss was RMB763.9 million, compared with non-GAAP net income of RMB72.7 million in the second quarter of 2020. Cash Flow Net operating cash outflow for the second quarter of 2021 was RMB318.6 million. The outflow of net operating cash this quarter was primarily due to higher marketing expenses paid to improve our market share and brand awareness, and an increase in compensation. Cash used in capital expenditures was RMB107.0 million. Basic and Diluted Net Loss per ADS Basic and diluted net loss per ADS were RMB3.59, in the second quarter of 2021. Non-GAAP basic and diluted net loss per ADS, were RMB2.99, in the second quarter of 2021. Share Outstanding As of June 30, 2021, the Company had 170,935,557 ordinary shares outstanding. Cash and Cash Equivalents, Restricted Cash, Short-term Investments and Long-term Investments As of June 30, 2021, the Company had cash and cash equivalents, restricted cash, short-term investments and long-term investments of RMB5,486.9 million in the aggregate, compared with a total of RMB8,217.2 million of cash and cash equivalents, short-term investments and long-term investments as of December 31, 2020. Deferred Revenue As of June 30, 2021, the Company's deferred revenue balance was RMB1,976.4 million, compared with RMB2,733.7 million as of December 31, 2020. Deferred revenue primarily consisted of tuition collected in advance. Other Payables As of June 30, 2021, other payables in non-current liabilities totaled RMB26.6 million, all of which were payables related to the purchase of the Zhengzhou properties. Update on PRC Regulatory Policy As previously disclosed, Gaotu's business, financial condition and corporate structure are expected to be materially affected in future periods by the changing regulatory environment primarily in China's after school tutoring industry, although the magnitude of the impact remains uncertain at this time. Business Outlook Due to the uncertainty related to the recent regulatory and operating environment, the Company has decided not to issue guidance in the near term in order to give the management more flexibility to focus on the Company's operations. Board Change Mr. Xin Fan has resigned from the board of directors of the Company, for personal reasons, effective on September 22, 2021. The Company has appointed Ms. Jin Cui as an independent director of the Company, effective on the same day. Ms. Cui will also become the chairwoman of the audit committee of the board of directors, as well as a member of the compensation committee and the nominating and corporate governance committee. Conference Call The Company will hold an earnings conference call on Wednesday, September 22, 2021, at 8:00 AM U.S. Eastern Time (8:00 PM on the same day, Beijing/Hong Kong Time). Dial-in details for the earnings conference call are as follows: International: 1-412-317-6061 US: 1-888-317-6003 Hong Kong: 800-963976 Mainland China: 4001-206115 Passcode: 4155009 A telephone replay will be available two hours after the conclusion of the conference call through September 29, 2021. The dial-in details are: International: 1-412-317-0088 US: 1-877-344-7529 Passcode: 10160189 Additionally, a live and archived webcast of this conference call will be available at http://ir.gaotu.cn/home. Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the Company's strategic and operational plans, contain forward-looking statements. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company's ability to continue to attract students to enroll in its courses; the Company's ability to continue to recruit, train and retain qualified teachers; the Company's ability to improve the content of its existing course offerings and to develop new courses; the Company's ability to maintain and enhance its brand; the Company's ability to maintain and continue to improve its teaching results; and the Company's ability to compete effectively against its competitors. Further information regarding these and other risks is included in the Company's reports filed with, or furnished to the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no duty to update such information or any forward-looking statement, except as required under applicable law. About Gaotu Techedu Inc. Gaotu is a technology-driven education company and online large-class tutoring service provider in China. The Company offers foreign language, vocational, professional and admission courses, STEAM courses, as well as K-12 courses. Gaotu adopts an online live large-class format to deliver its courses, which the Company believes is the most effective and scalable model to disseminate scarce, high-quality teaching resources to aspiring students in China. The Company leverages big data analytics and the latest technologies in multiple aspects of its business to improve teaching delivery, student learning experience, and operational efficiency. About Non-GAAP Financial Measures The Company uses gross billings, non-GAAP gross profit, non-GAAP income (loss) from operations and non-GAAP net income (loss), each a non-GAAP financial measure, in evaluating its operating results and for financial and operational decision-making purposes. The Company defines gross billings for a specific period as the total amount of cash received for the sale of course offerings in such period, net of the total amount of refunds in such period. The Company's management uses gross billings as a performance measurement because the Company generally bills its students for the entire course fee at the time of sale of its course offerings and recognizes revenue proportionally as the classes are delivered over usually no more than 60 classes for K-12 courses. For some courses, the Company continues to provide students with 12 months to 36 months access to the pre-recorded audio-video courses after the online live courses are delivered. The Company believes that gross billings provides valuable insight into the sales of its course packages and the performance of its business. As gross billings have material limitations as an analytical metrics and may not be calculated in the same manner by all companies, it may not be comparable to other similarly titled measures used by other companies. Non-GAAP gross profit, non-GAAP income (loss) from operations and non-GAAP net income (loss) exclude share-based compensation expenses, and such adjustment excludes the impact on income tax. The Company believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance and liquidity by excluding share-based expenses that may not be indicative of its operating performance from a cash perspective. The Company believes that both management and investors benefit from these non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management's internal comparisons to the Company's historical performance. A limitation of using non-GAAP measures is that these non-GAAP measures exclude share-based compensation charges that have been and will continue to be for the foreseeable future a significant recurring expense in the Company's business. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of non-GAAP measures to the most comparable GAAP measures" set forth at the end of this release. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures. Exchange Rate The Company's business is primarily conducted in China and the significant majority of revenues generated are denominated in Renminbi ("RMB"). This announcement contains currency conversions of RMB amounts into U.S. dollars ("USD") solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to USD are made at a rate of RMB6.4566 to USD1.0000, the effective noon buying rate for June 30, 2021 as set forth in the H.10 statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into USD at that rate on June 30, 2021, or at any other rate. For further information, please contact: Gaotu Techedu Inc.Ms. Sandy Qin, CFAE-mail: ir@gaotu.cn Christensen In ChinaMs. Vivian WangPhone: +852 2232 3978E-mail: gotu@christensenir.com In USMs. Linda BergkampPhone: +1-480-614-3004Email: lbergkamp@christensenir.com Gaotu Techedu Inc. Unaudited condensed consolidated balance sheets (In thousands of RMB and USD, except for share, per share and per ADS data) As of December 31, As of June 30, 2020 2021 2021 RMB RMB USD ASSETS Current assets Cash and cash equivalents 355,224 1,005,328 155,705 Restricted cash - 13,453 2,084 Short-term investments 7,331,268 3,949,619 611,718 Inventory 48,074 62,722 9,714 Prepaid expenses and other current assets 722,682 690,698 106,976 Total current assets 8,457,248 5,721,820 886,197 Non-current assets Operating lease right-of-use assets 806,591 856,626 132,674 Property, equipment and software, net 704,338 857,780 132,853 Land use rights, net 28,983 28,580 4,426 Long-term investments 530,729 518,549 80,313 Deferred tax assets 48,324 - - Rental deposit 51,499 53,530 8,291 Other non-current assets 58,080 2,507 388 TOTAL ASSETS 10,685,792 8,039,392 1,245,142 LIABILITIES Current liabilities Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated VIE without recourse to the Group of RMB623,002 and RMB1,104,191 as of December 31, 2020 and June 30, 2021, respectively) 1,315,502 1,513,739 234,447 Deferred revenue, current portion of the consolidated VIE without recourse to the Group 2,724,614 1,968,608 304,899 Current portion of operating lease liabilities (including current portion of operating lease liabilities of the consolidated VIE without recourse to the Group of RMB125,986 and RMB210,496 as of December 31, 2020 and June 30, 2021, respectively) 152,622 241,515 37,406 Income tax payable of the consolidated VIE without recourse to the Group 4,654 - - Total Current liabilities 4,197,392 3,723,862 576,752 Gaotu Techedu Inc. Unaudited condensed consolidated balance sheets (In thousands of RMB and USD, except for share, per share and per ADS data) As of December 31, As of June 30, 2020 2021 2021 RMB RMB USD Non-current liabilities Deferred revenue, non-current portion of the consolidated VIE without recourse to the Group 9,125 7,761 1,202 Non-current portion of operating lease liabilities (including non-current portion of operating lease liabilities of the consolidated VIE without recourse to the Group of RMB527,692 and RMB534,172 as of December 31, 2020 and June 30, 2021, respectively) 644,143 615,227 95,287 Deferred tax liabilitie

Ambow Education Announces Second Quarter 2021 Financial Results

BEIJING, Sept. 20, 2021 /PRNewswire/ -- Ambow Education Holding Ltd. ("Ambow" or the "Company") (NYSE American: AMBO), a leading cross-border career educational and technology service provider, today announced its unaudited financial and operating results for the three-month and six-month periods ended June 30, 2021. "In the second quarter of 2021, we remained focused on technology-driven educational and career enhancement services, embracing the national strategy of improving collaborative and coordinated development across education, talents and industry and promoting high-quality economic growth," noted Dr. Jin Huang, Ambow's President and Chief Executive Officer. "We're pleased to report solid financial performance and further improved operating efficiency in the second quarter, highlighted by a 10.8% year-over-year growth in net revenues and an increase in gross margin of 530 basis points year-over-year to 44.1%." "Additionally, during the quarter, we made a number of strides that helped to expand our role as a leading innovator in the Chinese career education market. Building on our 20-year proven track record in the vocational and technical education sector, in June we cooperated with Nanchang Vocational University, one of the 15 first batch of undergraduate vocational education pilot schools in China, to co-found the Smart Manufacturing Modern Industrial College, underscoring China's pilot program for the integration between industry and education. Meanwhile, we formed a strategic cooperation with the Talent Exchange Center of the Ministry of Industry and Information Technology to strengthen international communication in various information technology-related disciplines. More excitingly, in July we launched an open education platform, OOOK, which incorporates our in-house developed technologies, enabling teachers to provide high-quality, cross-device live and recorded courses with immersive and interactive learning experiences. Notably, with its groundbreaking technology and solutions, OOOK won the '2021 Best Product Technology Innovation' award at the 10th Annual China Finance Summit." "Moving into the second half of 2021, we remain committed to delivering innovative educational products and services that will be at the forefront of the industry by continuingly capitalizing on technology trends. We are confident that our strategic efforts will continue to drive the long-term growth of our overall business," concluded Dr. Huang. Second Quarter 2021 Financial Highlights Net revenues for the second quarter of 2021 increased by 10.8% to RMB 172.3 million (US$ 26.7 million) from RMB 155.5 million (US$ 22.0 million) in the same period of 2020. The increase was primarily due to the full business recovery from the impact of the COVID-19 pandemic. Gross profit for the second quarter of 2021 increased by 25.7% to RMB 75.9 million (US$ 11.8 million) from RMB 60.4 million (US$ 8.5 million) in the same period of 2020. Gross profit margin was 44.1%, compared with 38.8% for the first second quarter of 2020. The increases in gross profit and margin were mainly attributable to faster growth of net revenues in the period. Operating expenses for the second quarter of 2021 decreased by 7.8% to RMB 55.6 million (US$ 8.6 million) from RMB 60.3 million (US$ 8.5 million) in the same period of 2020. The decrease was primarily attributable to stringent expense controls to improve operating efficiency. Operating income for the second quarter of 2021 was RMB 20.3 million (US$ 3.1 million), compared to operating income of RMB 0.1 million (US$ 0.02 million) in the same period of 2020. Net income attributable to ordinary shareholders was RMB 22.4 million (US$ 3.5 million), or RMB 0.48 (US$ 0.07) per basic and diluted share, compared with a net income of RMB 4.8 million (US$ 0.7 million), or RMB 0.11 (US$ 0.02) per basic and diluted share, in the same period of 2020. As of June 30, 2021, Ambow maintained strong cash resources of RMB 257.7 million (US$ 39.9 million), comprised of cash and cash equivalents of RMB 168.4 million (US$ 26.1 million), short-term investments of RMB 87.6 million (US$ 13.5 million) and restricted cash of RMB 1.7 million (US$ 0.3 million). First Six Months 2021 Financial Highlights Net revenues for the first six months of 2021 increased by 22.9% to RMB 301.9 million (US$ 46.8 million) from RMB 245.7 million (US$ 34.8 million) in the same period of 2020. The increase was primarily due to the full business recovery from the impact of the COVID-19 pandemic and higher revenue contribution from our new U.S. business. Gross profit for the first six months of 2021 increased by 67.5% to RMB 120.6 million (US$ 18.7 million) from RMB 72.0 million (US$ 10.2 million) in the same period of 2020. Gross profit margin was 39.9%, compared with 29.3% in the same period of 2020. The increases in gross profit and margin were mainly attributable to faster growth of net revenues in the period. Operating expenses for the first six months of 2021 slightly increased by 3.9% to RMB 115.4 million (US$ 17.9 million) from RMB 111.1 million (US$ 15.7 million) in the same period of 2020. Operating income for the six months of 2021 was RMB 5.2 million (US$ 0.8 million), compared to operating loss of RMB 39.2 million (US$ 5.5 million) in the same period of 2020. Net income attributable to ordinary shareholders was RMB 8.1 million (US$ 1.3 million), or RMB 0.17 (US$ 0.03) per basic and diluted share, compared with a net income of RMB 10.8 million (US$ 1.5 million), or RMB 0.25 (US$ 0.04) per basic and diluted share, in the same period of 2020. Excluding the one-time gain from bargain purchase of NewSchool of Architecture and Design, LLC of RMB 40.3 million (US$ 5.7 million), net loss for the first six months of 2020 was RMB 29.5 million (US$ 4.2 million) or RMB 0.68 (US$ 0.10) per basic and diluted share. The Company's financial and operating results for the second quarter and first half of 2021 can also be found on its Current Report on Form 6-K to be furnished with the U.S. Securities and Exchange Commission at www.sec.gov. Regulatory Policy Update The Standing Committee of the National People's Congress promulgated an amendment to the Implementation Rules of the Law for Promoting Private Education on April 7, 2021, which has been effective since September 1, 2021 (the "Implementation Rules"). The Implementation Rules stipulated, among other provisions, that (1) sponsors of private schools may choose to establish schools as either non-profit or for-profit schools, but nine-year compulsory education schools cannot be operated as for-profit schools; (2) foreign-invested enterprises established in China and social organizations whose actual controllers are foreign parties shall not sponsor, participate in or actually control private schools that provide compulsory education; (3) group-based education organizations shall not control non-profit private schools through mergers and acquisitions, franchise agreements and contractual arrangements; and (4) related party transactions entered into by private schools shall be open, fair and just, and shall not harm national interests, school interests, or student or teacher interests. The Company is assessing the impact of the Implementation Rules and formulating different scenarios as compliance measures. Exchange Rate Information This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all amounts translated from RMB to U.S. dollars for the second quarter and first half of 2021 are based on the effective exchange rate of 6.4566 as of June 30, 2021; all amounts translated from RMB to U.S. dollars for the second quarter and first half of 2020 are based on the effective exchange rate of 7.0651 as of June 30, 2020; all amounts translated from RMB to U.S. dollars as of December 31, 2020 are based on the effective exchange rate of 6.5250 as of December 31, 2020. The exchange rates were according to the middle rate as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. Fluctuations in financial highlights are based on RMB amounts. About Ambow Education Holding Ltd. Ambow Education Holding Ltd. is a leading cross-border career educational and technology service provider, offering high-quality, individualized services and products. With its extensive network of regional service hubs complemented by a dynamic proprietary learning platform and distributors, Ambow provides its services and products to students in China and United States of America. Follow us on Twitter: @Ambow_Education Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the outlook and quotations from management in this announcement, as well as Ambow's strategic and operational plans, contain forward-looking statements. Ambow may also make written or oral forward-looking statements in its reports filed or furnished to the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statements, including but not limited to the following: the Company's goals and strategies, expansion plans, the expected growth of the content and application delivery services market, the Company's expectations regarding keeping and strengthening its relationships with its customers, and the general economic and business conditions in the regions where the Company provides its solutions and services. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and Ambow undertakes no duty to update such information, except as required under applicable law. For investor and media inquiries please contact: Ambow Education Holding Ltd.Tel: +86-10-6206-8000 The Piacente Group | Investor RelationsTel: +1-212-481-2050 or +86-10-6508-0677E-mail: ambow@tpg-ir.com AMBOW EDUCATION HOLDING LTD. UNAUDITED CONSOLIDATED BALANCE SHEETS (All amounts in thousands, except for share and per share data) As of June 30, As of December 31, 2021 2020 US$ RMB RMB ASSETS Current assets: Cash and cash equivalents 26,086 168,424 118,821 Restricted cash 256 1,650 824 Short-term investments, available for sale 13,266 85,652 117,854 Short-term investments, held to maturity 310 2,000 45,000 Accounts receivable, net 3,289 21,234 20,972 Amounts due from related parties 501 3,235 3,024 Prepaid and other current assets, net 18,858 121,757 117,634 Total current assets 62,566 403,952 424,129 Non-current assets: Property and equipment, net 21,989 141,972 144,492 Land use rights, net 262 1,693 1,715 Intangible assets, net 8,403 54,252 54,808 Goodwill 3,982 25,710 25,710 Deferred tax assets, net 883 5,704 6,338 Operating lease right-of-use asset 35,522 229,353 247,608 Finance lease right-of-use asset 860 5,550 5,850 Other non-current assets 21,805 140,786 139,067 Total non-current assets 93,706 605,020 625,588 Total assets 156,272 1,008,972 1,049,717 LIABILITIES Current liabilities: Short-term borrowings * 3,020 19,498 10,000 Deferred revenue * 21,106 136,274 163,699 Accounts payable * 3,320 21,425 19,423 Accrued and other liabilities * 31,473 203,207 209,590 Income taxes payable, current * 28,669 185,105 184,638 Amounts due to related parties * 429 2,771 2,543 Operating lease liability, current * 7,620 49,198 53,702 Total current liabilities 95,637 617,478 643,595 Non-current liabilities: Long-term borrowing - - 9,594 Other non-current liabilities * 47 304 292 Income taxes payable, non-current * 5,316 34,322 34,763 Operating lease liability, non-current * 32,196 207,877 220,319 Total non-current liabilities 37,559 242,503 264,968 Total liabilities 133,196 859,981 908,563 EQUITY Preferred shares (US$ 0.003 par value;1,666,667 shares authorized, nil issued and outstanding as of June 30, 2021 and December 31, 2020) - - - Class A Ordinary shares (US$0.003 par value; 66,666,667 and 66,666,667 shares authorized, 41,948,276 and 41,923,276 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively) 123 794 794 Class C Ordinary shares (US$0.003 par value; 8,333,333 and 8,333,333 shares authorized, 4,708,415 and 4,708,415 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively) 14 90 90 Additional paid-in capital 549,130 3,545,512 3,545,073 Statutory reserve 652 4,210 4,210 Accumulated deficit (528,302) (3,411,035) (3,419,146) Accumulated other comprehensive income 1,844 11,907 12,101 Total Ambow Education Holding Ltd.'s equity 23,461 151,478 143,122 Non-controlling interests (385) (2,487) (1,968) Total equity 23,076 148,991 141,154 Total liabilities and equity 156,272 1,008,972 1,049,717 * All of the VIE's assets can be used to settle obligations of their primary beneficiary. Liabilities recognized as a result of consolidating these VIEs do not represent additional claims on the Company's general assets. AMBOW EDUCATION HOLDING LTD. UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (All amounts in thousands, except for share and per share data) For the six months ended June 30, For the three months ended June 30, 2021 2021 2020 2021 2021 2020 US$ RMB RMB US$ RMB RMB NET REVENUES Educational program and services 46,635 301,104 245,659 26,576 171,590 155,392 Intelligent program and services 116 752 83 102 661 71

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