Second Quarter 2008 Highlights * Revenue increased 171% to RMB 1.24 billion (US$180.3 million), compared to RMB 457.0 million (US$66.6 million) in Q2 2007 * Total gross profit increased 162% to RMB 288.4 million (US$42.1 million), compared to RMB 110.1 million (US$16.1 million) in Q2 2007 * Gross margin of 23.3%, compared to 24.1% in Q2 2007 and 21.0% in Q1 2008 * Income from operations increased 155% to RMB 216.3 million (US$31.5 million), compared to RMB 85.0 million (US$12.4 million) in Q2 2007 * GAAP net income/loss of RMB 2.06 (US$0.30) per basic ADS and fully diluted ADS of RMB -0.04 (US$-0.01), compared to basic ADS of RMB 0.55 (US$0.08) and fully diluted ADS of RMB 0.54 (US$0.08) in Q2 2007 * Non-GAAP net income of RMB 1.04 (US$0.15) per basic ADS and fully diluted ADS of RMB 0.99 (US$0.14), adjusted for stock based compensation and change in fair value of certain non-cash derivative gain and loss (Please refer to reconciliation on page 10) * Shipped 65.7 MW of solar cells during the quarter compared to 24.0 MW in Q2 2007 * Cash and cash equivalents sequentially increased to RMB 3.57 billion (US$519.8 million), as compared to RMB 1.45 billion (US$211.5 million) in Q1 2008, as a result of concurrent closing of its senior convertible public offering of US$400 million of senior convertible notes 2008 Outlook * Reiterate full year 2008 guidance with revenue in the range of RMB 7.22 billion (US$1.05 billion) to RMB 8.02 billion (US$1.17 billion) and gross margin in excess of 20% * Update 2008 production guidance with output in the range of 340MW to 350MW and annual capacity in the range of 500MW to 600MW by the end of 2008 2009 Outlook * Establish full year 2009 guidance with revenue in the range of RMB 13.6 billion (US$2.0 billion) to RMB 15.0 billion (US$2.2 billion) and gross margin in excess of 20% * Expect 2009 production output in the range of 650MW to 750MW and annual production capacity to exceed 1GW by the end of 2009
HEBEI, China, Aug. 12, 2008 (PRIME NEWSWIRE) -- JA Solar Holdings Co., Ltd. ("JA Solar", "the Company") (Nasdaq:JASO) today reported financial results for the second quarter ended June 30, 2008.
Samuel Yang, JA Solar's Chief Executive Officer, said, "JA Solar continues to be recognized as one of the global cost leaders in the solar market. The strong second quarter operating results are a testament to the execution of our high growth business plan. Overall demand and ASP for the second half of 2008 remain strong and steady. We are confident that our diversified customer base, long term competitively priced polysilicon wafer contracts, and strategic alliances with key upstream and downstream industry players will continue to drive JA Solar's sales revenue growth as planned into 2009 with gross margin in excess of 20%."
Second Quarter 2008 Results
Summary of megawatts produced and shipped (includes cell processing
service)
--------------------------------------------------------------------
Three months ended
Megawatts June 30, 2007 March 31, 2008 June 30, 2008
Produced 22.6 MW 49.2 MW 66.1 MW
Shipped 24.0 MW 51.4 MW 65.7 MW
Cost per watt
excluding wafer
cost US$ 0.225/Wp US$ 0.204/Wp US$ 0.203/Wp
Total revenue for the second quarter 2008 was RMB 1.24 billion (US$180.3 million), an increase of 170.6% from second quarter 2007 revenue of RMB 457.0 million (US$66.6 million), and an increase of 10.2% from the first quarter 2008 revenue of RMB 1.12 billion (US$163.6 million).
Total gross profit for the second quarter 2008 was RMB 288.4 million (US$42.1 million) compared to RMB 110.1 million (US$16.1 million) in the second quarter 2007, and RMB 235.9 million (US$34.4 million) in the first quarter 2008. Gross margin was 23.3% in the second quarter 2008 compared to 24.1% in the second quarter 2007, and 21.0% in the first quarter 2008.
Interest expense for the second quarter 2008 was RMB 32.9 million (US$4.8 million), compared to RMB 0.96 million (US$0.14 million) in the second quarter of 2007. This compares to RMB 0.49 million (US$0.07 million) in the first quarter 2008. The increase was attributable to amortization of expenses and interest charges related to the senior convertible notes issued in May 2008.
Net income available to ordinary shareholders for the second quarter 2008 was RMB 318.6 million (US$46.4 million) compared to net income available to ordinary shareholders of RMB 75.7 million (US$11.0 million) for the second quarter 2007, and net income available to ordinary shareholders of RMB 154.5 million (US$22.5 million) for the first quarter 2008.
For the second quarter of 2008, diluted net loss, after adjusting for the mark-to-market change in the fair value of the Company's conversion option, amortization of the issuance costs, and interest expense and exchange gain associated with the senior convertible notes, was RMB -7.0 million (US$-1.0 million).
For the second quarter of 2008, basic and diluted net income/loss per ADS were RMB 2.06 (US$0.30) and RMB -0.04 (US$-0.01), respectively. This compares to basic and diluted net income per ADS of RMB 0.55 (US$0.08) and RMB 0.54 (US$0.08), respectively, for the same period of 2007; and RMB 1.00 (US$0.15) and RMB 0.99 (US$0.14), respectively, for the first quarter 2008.
For the second quarter 2008, on a non-GAAP basis, adjusted to exclude stock based compensation and changes in fair value of the embedded derivatives underlying the senior convertible notes and capped call options, non-GAAP basic and diluted net income per ADS were RMB 1.04 (US$0.15) and RMB 0.99 (US$0.14), respectively. This compares to non-GAAP basic and diluted net income per ADS of RMB 0.63 (US$0.09) and RMB 0.63 (US$0.09), respectively, for the same period of 2007; and, RMB 1.35 (US$0.20) and RMB 1.34 (US$0.20), respectively, for the first quarter 2008. Please refer to Note 3 set forth at the end of this release.
Second Quarter 2008 Balance Sheet
As of June 30, 2008, JA Solar had cash and cash equivalents of RMB 3.57 billion (US$519.8 million), compared with RMB 1.57 billion (US$228.3 million) at the end of the second quarter 2007, and RMB 1.45 billion (US$211.5 million) at the end of the first quarter 2008.
On May 19, 2008, the Company issued US$400 million 4.50% senior convertible notes due May 15, 2013 ("Notes"). The terms of the Notes include certain conversion, early redemption option and conversion rate adjustment features. The Notes are convertible into shares of the Company's stock, cash, or a combination of stock and cash. Concurrent with this offering, the Company entered into capped call transactions with financial institutions that are affiliates of the joint book-running managers of the Notes offering. The capped call transactions are expected to reduce the potential dilution upon conversion of the Notes. Total issuance costs of the senior convertible notes were approximately US$11 million. Total consideration of the capped call options was approximately US$32 million.
The Company's functional currency is different from the denomination of the Notes and capped call options and the Company's early redemption option is contingent upon its ADS price. Therefore, in accordance with SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," the Company accounted for the conversion feature, early redemption option and conversion rate adjustment feature (together, "Embedded Derivatives") as a freestanding instrument separately in the balance sheet. The Notes were recorded with a discount equal to the value of the Embedded Derivatives at the transaction date and will be accreted to the redemption value of the Notes over the life of the Notes. The change in fair value of the Embedded Derivatives and Capped Call options are recorded in the Consolidated Statements of Operations.
13,125,520 ADS's were borrowed by affiliates of the joint book-running managers in connection with the senior convertible notes offering. The Company believes that under U.S. GAAP the borrowed ADS's are not to be considered outstanding for the purpose of computing and reporting its net income per ordinary share and per ADS.
Capital expenditures were RMB 264.1 million (US$38.5 million) in the second quarter 2008, as compared to RMB 47.4 million (US$6.9 million) in the second quarter 2007, and RMB 69.5 million (US$10.1 million) in the first quarter 2008. Depreciation and amortization expenses in the second quarter 2008 were RMB 16.4 million (US$2.4 million), as compared to RMB 6.3 million (US$0.9 million) in the second quarter 2007, and RMB 13.5 million (US$2.0 million) in the first quarter 2008.
Daniel Lui, JA Solar's CFO, said, "Steady wafer supply coupled with fast ramp up of new solar cell manufacturing lines and continued production process improvement helped drive second quarter revenue and profit growth. For the second quarter, margins fluctuated from the prior quarter due to a higher percentage of solar processing revenue that was partly due to faster than scheduled ramp up of our production facilities in Hebei, and partly due to solar cells sale back to certain strategic long term wafer suppliers. Operating profit sequentially increased to RMB 216.3 million in the second quarter from RMB 163.6 million in first quarter as a result of our scheduled capacity expansion and tight control of operating costs. As we head into the second half of 2008, the Company has a high level of cash on hand. The Company is preparing to commence operations at our Yangzhou production facility that is scheduled to open in the fourth quarter and plans to deploy a company-wide state-of-the-art enterprise resource planning system by the year end or early next year."
The conversion of Renminbi into U.S. dollars in this release, made solely for the convenience of the reader, is based on the noon buying rate in The City of New York for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve Bank of New York as of June 30, 2008, which was RMB 6.8591 to US$1.0000. No representation is intended to imply that the Renminbi amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate on June 30, 2008, or at any other date. The percentages stated in this press release are calculated based on Renminbi.
2008 Outlook
Based on current customer demand and market forecasts, the Company reiterated its expectations for revenue for the full year 2008 in the range of RMB 7.22 billion (US$1.05 billion) to RMB 8.02 billion (US$1.17 billion). The revenue guidance in RMB remains unchanged from the first quarter of 2008. The higher amount in USD is due to a lower USD/RMB exchange rate used in the second quarter 2008 than in the first quarter 2008. Gross margin for 2008 is expected to remain above 20%.
Our target for total production output has been updated to the range of 340MW to 350MW for 2008, with total annual production capacity in the range of 500MW to 600MW by year-end 2008. Ten new solar cell manufacturing lines are scheduled to go on line in Ningjin, Hebei province, where four of these lines were installed as of July 31, 2008 and the remaining six will be installed by October 31, 2008. At the new Yangzhou production facility, the Company plans to install three 25 MW lines by the end of the fourth quarter 2008, totaling 75 MW of new capacity at this facility. Total capital expenditures for 2008 are expected to be RMB 966.8 million (US$141.0 million), primarily for capacity expansion. R&D expense is expected to be RMB 34.3 million (US$5.0 million).
2009 Outlook
The Company has established 2009 guidance based on market forecasts. For the full year 2009, revenue is expected to increase by over 85% as compared to 2008 and to be in the range of RMB 13.6 billion (US$2.0 billion) to RMB 15.0 billion (US$2.2 billion). Gross margin is projected to exceed 20%.
Total production output is expected to be in the range of 650 MW to 750 MW, with total production capacity projected to exceed 1 GW by the end of 2009.
Investor Conference Call / Webcast Details
A conference call has been scheduled for 8:00 p.m. on Tuesday, August 12, 2008 (in Hebei), which will be 8:00 a.m. on Tuesday, August 12 in New York. During the call, time will be set aside for analysts and interested investors to ask questions of executive officers.
The call may be accessed by dialing 1-877-407-0784 or 1-201-689-8560 (international). A live webcast of the conference call will be available on the Company's website at www.jasolar.com. The playback will be available beginning two hours after the live call and will be accessible by dialing 1-877-660-6853 or 1-201-612-7415 (international). The account number to access the replay is 3055 and the passcode is 292253.
About JA Solar Holdings Co., Ltd.
Based in Hebei, China, JA Solar Holdings Co., Ltd. is an emerging and fast-growing manufacturer of high-performance solar cells. The Company sells its products to solar module manufacturers who assemble and integrate its solar cells into modules and systems that convert sunlight into electricity. For more information, please visit http://www.jasolar.com.
Forward-looking Statement
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by words such as "will," "may," "expect," "anticipate," "aim," "intend," "plan," "believe," "estimate," "potential," "continue," and other similar statements. Statements other than statements of historical facts in this announcement are forward-looking statements, including but not limited to, our expectations regarding the expansion of our manufacturing capacities, our future business development, and our beliefs regarding our production output and production outlook. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the Company and the industry. Further information regarding these and other risks is included in our registration statement on Form F-1 and other documents filed with the Securities and Exchange Commission. The Company undertakes no obligation to update forward-looking statements, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.
About Non-GAAP Financial Measures
To supplement its consolidated financial results presented in accordance with GAAP, JA Solar uses the following non-GAAP measures which are adjusted from the most directly comparable GAAP results to exclude items related to share-based compensation, change in fair value of the embedded derivatives underlying the senior convertible notes and capped call options which arose from the company's stock price movement. JA Solar believes that non-GAAP information is useful for analysts and investors to evaluate JA Solar's future on-going performance because they enable a more meaningful comparison of JA Solar's projected cash earnings and performance with its peers and historical results from prior periods. This information is not intended to represent funds available for JA Solar's discretionary use and not intended to represent or to be used as a substitute for gross profit/margin, operating expenses, operating income or net income as measured under GAAP. This non-GAAP measure is not in accordance with or an alternative for GAAP financial data, the non-GAAP results should be reviewed together with the GAAP results and are not intended to serve as a substitute for results under GAAP, and may be different from non-GAAP measures used by other companies. For more information on this non-GAAP financial measure, please see the tables captioned "Note 3. Reconciliation of non-GAAP results of operations measure to the nearest comparable GAAP measures" set forth at the end of this release and which shall be read together with the preceding financial statements prepared under GAAP.
JA Solar Holdings Co., Ltd.
Condensed Consolidated Statements of Operations
(Unaudited)
Three months ended
----------------------------------------------------
June 30, 2007 March 31, 2008
RMB USD RMB USD
----------- ----------- ------------- -----------
Net revenues
Solar products
to third
parties 429,872,021 62,671,782 999,077,180 145,657,183
Solar products
to related
parties 909,229 132,558 112,106,838 16,344,249
Solar cells
processing 26,202,654 3,820,130 10,848,601 1,581,636
------------ ----------- ------------- ------------
Total revenues 456,983,904 66,624,470 1,122,032,619 163,583,068
------------ ----------- ------------- ------------
Cost of revenues
Solar products (340,498,142) (49,641,810) (882,422,154) (128,649,846)
Solar cells
processing (6,360,581) (927,320) (3,752,782) (547,124)
------------ ----------- ------------- ------------
Total cost of
revenues (346,858,723) (50,569,130) (886,174,936) (129,196,970)
------------ ----------- ------------- ------------
Gross profit 110,125,181 16,055,340 235,857,683 34,386,098
------------ ----------- ------------- ------------
Selling, general
and adminis-
trative
expenses (24,447,478) (3,564,240) (69,605,065) (10,147,843)
Research and
development
expenses (709,269) (103,406) (2,696,640) (393,148)
------------ ----------- ------------- ------------
Total operating
expenses (25,156,747) (3,667,646) (72,301,705) (10,540,991)
------------ ----------- ------------- ------------
Income from
operations 84,968,434 12,387,694 163,555,978 23,845,107
Interest expense (961,102) (140,121) (492,443) (71,794)
Interest income 19,901,549 2,901,481 11,930,713 1,739,399
Foreign exchange
gain/(loss) (30,310,479) (4,419,017) (38,605,360) (5,628,342)
Other income 2,068,353 301,549 3,196,752 466,060
Loss from sale
of investments -- -- (16,823,898) (2,452,785)
Change in fair
value of
derivatives
(see note 1) -- -- 40,722,690 5,937,031
------------ ----------- ------------- ------------
Income before
income taxes 75,666,755 11,031,586 163,484,432 23,834,676
Income tax
benefit/
(expense) -- -- (9,016,857) (1,314,583)
------------ ----------- ------------- ------------
Net income avail-
able to ordinary
shareholders 75,666,755 11,031,586 154,467,575 22,520,093
============ =========== ============= ============
Net income per
ordinary shares
(see note 2)
Basic 0.55 0.08 1.00 0.15
Diluted 0.54 0.08 0.99 0.14
Weighted average
number of
ordinary shares
outstanding:
Basic 138,270,000 138,270,000 154,058,500 154,058,500
Diluted 139,496,802 139,496,802 155,773,928 155,773,928
Net income per ADS
(see note 2)
Basic 0.55 0.08 1.00 0.15
Diluted 0.54 0.08 0.99 0.14
Weighted average
number of ADS
outstanding:
Basic 138,270,000 138,270,000 154,058,500 154,058,500
Diluted 139,496,802 139,496,802 155,773,928 155,773,928
Three months ended
-------------------------------
June 30, 2008
RMB USD
------------- -----------
Net revenues
Solar products to third parties 992,414,128 144,685,765
Solar products to related parties 181,649,316 26,482,967
Solar cells processing 62,613,837 9,128,579
------------- ------------
Total revenues 1,236,677,281 180,297,311
------------- ------------
Cost of revenues
Solar products (925,093,577) (134,870,986)
Solar cells processing (23,134,255) (3,372,783)
------------- ------------
Total cost of revenues (948,227,832) (138,243,769)
------------- ------------
Gross profit 288,449,449 42,053,542
------------- ------------
Selling, general and
administrative expenses (66,587,857) (9,707,958)
Research and development expenses (5,545,808) (808,533)
------------- ------------
Total operating expenses (72,133,665) (10,516,491)
------------- ------------
Income from operations 216,315,784 31,537,051
Interest expense (32,948,109) (4,803,562)
Interest income 14,219,824 2,073,133
Foreign exchange gain/(loss) (35,985,949) (5,246,453)
Other income 151,348 22,065
Loss from sale of investments (13,667,739) (1,992,643)
Change in fair value of
derivatives (see note 1) 175,661,767 25,610,031
------------- ------------
Income before income taxes 323,746,926 47,199,622
Income tax benefit/(expense) (5,186,955) (756,215)
------------- ------------
Net income available to ordinary
shareholders 318,559,971 46,443,407
============= ============
Net income per ordinary shares
(see note 2)
Basic 2.06 0.30
Diluted (0.04) (0.01)
Weighted average number of
ordinary shares outstanding:
Basic 154,519,808 154,519,808
Diluted 163,688,037 163,688,037
Net income per ADS (see note 2)
Basic 2.06 0.30
Diluted (0.04) (0.01)
Weighted average number of ADS
outstanding:
Basic 154,519,808 154,519,808
Diluted 163,688,037 163,688,037
Each ADS represents 1 ordinary share
JA Solar Holdings Co., Ltd.
Condensed Consolidated Balance Sheets
December 31, 2007 June 30, 2008
RMB USD RMB USD
------------- ----------- ------------- -------------
(Audited) (Conversion) (Unaudited) (Conversion)
------------- ----------- ------------- -------------
ASSETS
Current assets
Cash and cash
equivalents 1,145,032,918 166,936,321 3,565,606,702 519,835,941
Available-
for-sale
securities 803,121,383 117,088,449 -- --
Accounts
receivables
from third
party cus-
tomers 28,819,554 4,201,652 84,763,266 12,357,783
Accounts
receivables
from related
party customers 24,730,689 3,605,530 89,004,141 12,976,067
Inventories 157,334,310 22,938,040 158,297,970 23,078,534
Advances to
related party
suppliers 389,871,684 56,840,064 313,777,325 45,746,137
Advances to
third party
suppliers 898,722,659 131,026,324 1,011,811,514 147,513,743
Other current
assets 42,315,074 6,169,188 60,919,931 8,881,622
Deferred tax
assets 1,214,246 177,027 -- --
------------- ----------- ------------- -------------
Total current
assets 3,491,162,517 508,982,595 5,284,180,849 770,389,827
------------- ----------- ------------- -------------
Property and
equipment,
net 532,011,999 77,562,945 889,163,260 129,632,643
Intangible
asset, net 6,687,677 975,008 6,410,799 934,641
Deferred tax
assets 4,355,369 634,977 7,179,972 1,046,780
Advances to
third party
suppliers 536,332,174 78,192,791 1,033,594,077 150,689,460
Derivative
assets-capped
call options -- -- 100,832,714 14,700,575
Deferred
issuance cost -- -- 77,673,002 11,324,081
------------- ----------- ------------- -------------
Total assets 4,570,549,736 666,348,316 7,399,034,673 1,078,718,007
============= =========== ============= =============
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current
liabilities:
Short-term bank
borrowings 200,000,000 29,158,344 -- --
Accounts payable
to third
parties 10,119,234 1,475,301 21,860,102 3,187,022
Tax payables 342,025 49,864 17,814,751 2,597,243
Advances from
third parties
customers 70,285,896 10,247,102 85,941,661 12,529,583
Other payables
to third
parties 16,841,500 2,455,351 52,212,099 7,612,091
Payroll and
welfare
payable 6,364,403 927,877 7,077,498 1,031,841
Accrued expenses 15,279,750 2,227,661 12,167,840 1,773,970
Amounts due to
related
parties 113,890,220 16,604,251 3,136,592 457,289
Interest
payable -- -- 15,432,975 2,250,000
------------- ----------- ------------- -------------
Total current
liabilities 433,123,028 63,145,751 215,643,518 31,439,039
------------- ----------- ------------- -------------
Accrued
warranty cost 929,170 135,465 1,398,499 203,890
Convertible
bonds payable -- -- 1,846,480,609 269,201,588
Embedded
derivatives -- -- 602,777,708 87,880,000
------------- ----------- ------------- -------------
Total
liabilities 434,052,198 63,281,216 2,666,300,334 388,724,517
------------- ----------- ------------- -------------
Commitment and
Contingencies -- -- -- --
------------- ----------- ------------- -------------
Shareholders'
equity:
Ordinary shares
(US$0.0001
par value;
493,480,000
shares
authorized
154,058,000 and
167,888,020
shares issued
and outstanding
as of December
31, 2007 and
June 30, 2008) 123,307 17,977 123,799 18,049
Additional
paid-in
capital 3,655,194,120 532,897,045 3,770,866,393 549,761,105
Statutory
reserve 71,617,912 10,441,299 71,617,912 10,441,299
Accumulated
earnings 417,203,191 60,824,772 890,230,736 129,788,272
Accumulated
other compre-
hensive income (7,640,992) (1,113,993) (104,501) (15,235)
------------- ----------- ------------- -------------
Total share-
holders'
equity 4,136,497,538 603,067,100 4,732,734,339 689,993,490
------------- ----------- ------------- -------------
Total liabil-
ities and
shareholders'
equity 4,570,549,736 666,348,316 7,399,034,673 1,078,718,007
============= =========== ============= =============
Note 1. Change in fair value of derivatives
---------------------------------------------------------------------
Three Three Three Three
months months months months
ended, ended, ended, ended,
June 30, June 30, March 31, March 31,
2007 2007 2008 2008
---------------------------------------------------------------------
In RMB In USD In RMB In USD
---------------------------------------------------------------------
Change in fair
value of
embedded foreign
currency
derivatives -- -- 40,722,690 5,937,031
---------------------------------------------------------------------
Change in fair
value of capped
call options -- -- -- --
---------------------------------------------------------------------
Change in fair
value of
embedded
derivatives
underlying
senior
convertible notes -- -- -- --
---------------------------------------------------------------------
Total -- -- 40,722,690 5,937,031
---------------------------------------------------------------------
--------------------------------------------------------------------
Three Three
months months
ended, ended,
June 30, June 30,
2008 2008
--------------------------------------------------------------------
In RMB In USD
--------------------------------------------------------------------
Change in fair value of embedded
foreign currency derivatives (25,845,420) (3,768,048)
--------------------------------------------------------------------
Change in fair value of capped
call options (125,254,486) (18,261,067)
--------------------------------------------------------------------
Change in fair value of embedded
derivatives underlying senior
convertible notes 326,761,673 47,639,147
--------------------------------------------------------------------
Total 175,661,767 25,610,032
--------------------------------------------------------------------
Note 2. Net income per ADS on a fully diluted basis
---------------------------------------------------------------------
Three Three Three Three
months months months months
ended, ended, ended, ended,
June 30, June 30, March 31, March 31,
2007 2007 2008 2008
---------------------------------------------------------------------
In RMB In USD In RMB In USD
---------------------------------------------------------------------
Net income,
Basic 75,666,755 11,031,586 154,467,575 22,520,093
---------------------------------------------------------------------
Change in fair
value of
embedded
derivatives
underlying
senior
convertible
notes -- -- -- --
---------------------------------------------------------------------
Foreign exchange
gain on senior
convertible
notes -- -- -- --
---------------------------------------------------------------------
Accretion of
non-cash
interest
charge on
senior
convertible
notes -- -- -- --
---------------------------------------------------------------------
Amortization
of deferred
issuance cost
in relation to
senior conver-
tible notes -- -- -- --
---------------------------------------------------------------------
4.5% interest
expenses of
senior
convertible
notes -- -- -- --
---------------------------------------------------------------------
Net income,
Diluted 75,666,755 11,031,586 154,467,575 22,520,093
---------------------------------------------------------------------
Weighted average
number of
ordinary
shares and
ADS outstanding:
---------------------------------------------------------------------
Basic 138,270,000 138,270,000 154,058,500 154,058,500
---------------------------------------------------------------------
Diluted 139,496,802 139,496,802 155,773,928 155,773,928
---------------------------------------------------------------------
Net income per
ordinary
shares and
per ADS:
---------------------------------------------------------------------
Basic 0.55 0.08 1.00 0.15
---------------------------------------------------------------------
Diluted 0.54 0.08 0.99 0.14
---------------------------------------------------------------------
--------------------------------------------------------------------
Three Three
months months
ended, ended,
June 30, June 30,
2008 2008
--------------------------------------------------------------------
In RMB In USD
--------------------------------------------------------------------
Net income, Basic 318,559,971 46,443,407
--------------------------------------------------------------------
Change in fair value of embedded
derivatives underlying senior
convertible notes (326,761,672) (47,639,147)
--------------------------------------------------------------------
Foreign exchange gain on senior
convertible notes (31,721,331) (4,624,707)
--------------------------------------------------------------------
Accretion of non-cash interest charge
on senior convertible notes 16,541,320 2,411,588
--------------------------------------------------------------------
Amortization of deferred issuance cost
in relation to senior convertible
notes 973,815 141,974
--------------------------------------------------------------------
4.5% interest expenses of senior
convertible notes 15,432,975 2,250,000
--------------------------------------------------------------------
Net income, Diluted (6,974,922) (1,016,885)
--------------------------------------------------------------------
Weighted average number of ordinary
shares and ADS outstanding:
--------------------------------------------------------------------
Basic 154,519,808 154,519,808
--------------------------------------------------------------------
Diluted 163,688,037 163,688,037
--------------------------------------------------------------------
Net income per ordinary shares
and per ADS:
--------------------------------------------------------------------
Basic 2.06 0.30
--------------------------------------------------------------------
Diluted (0.04) (0.01)
--------------------------------------------------------------------
Weighted average ordinary shares and ADS excludes 13,125,520 ADSs
borrowed by affiliates of the joint book-running managers in
connection with the May 2008 senior convertible notes offering. The
Company believes that under U.S. GAAP the ADSs borrowed are not to be
considered outstanding for the purpose of computing and reporting our
net income per ordinary share and per ADS.
Note 3. Reconciliation of non-GAAP results of operations measures to
the nearest comparable GAAP measures
---------------------------------------------------------------------
Three Three Three
months months months
ended, ended, ended,
June 30, June 30, March 31,
2007 2007 2008
---------------------------------------------------------------------
In RMB In USD In RMB
---------------------------------------------------------------------
GAAP Net Income 75,666,755 11,031,586 154,467,575
---------------------------------------------------------------------
Stock based compensation 12,001,551 1,749,727 53,897,525
---------------------------------------------------------------------
Change in fair value of capped
call options -- -- --
---------------------------------------------------------------------
Change in fair value of
embedded derivatives
underlying senior convertible
notes -- -- --
---------------------------------------------------------------------
---------------------------------------------------------------------
Non-GAAP Net income 87,668,306 12,781,313 208,365,100
---------------------------------------------------------------------
---------------------------------------------------------------------
Non-GAAP Net income Basic 87,668,306 12,781,313 208,365,100
---------------------------------------------------------------------
Foreign exchange gain on
senior convertible notes -- -- --
---------------------------------------------------------------------
Amortization of deferred
issuance cost -- -- --
---------------------------------------------------------------------
Accretion on senior
convertible notes -- -- --
---------------------------------------------------------------------
4.5% interest expenses of
senior convertible notes -- -- --
---------------------------------------------------------------------
---------------------------------------------------------------------
Non-GAAP Net income Diluted 87,668,306 12,781,313 208,365,100
---------------------------------------------------------------------
---------------------------------------------------------------------
Weighted average number of
ordinary shares and ADS
outstanding:
---------------------------------------------------------------------
Basic 138,270,000 138,270,000 154,058,500
---------------------------------------------------------------------
Diluted 139,496,802 139,496,802 155,773,928
---------------------------------------------------------------------
---------------------------------------------------------------------
Non-GAAP Net income per
ordinary shares and per ADS:
---------------------------------------------------------------------
Basic 0.63 0.09 1.35
---------------------------------------------------------------------
Diluted 0.63 0.09 1.34
---------------------------------------------------------------------
---------------------------------------------------------------------
Three Three Three
months months months
ended, ended, ended,
March 31, June 30, June 30,
2008 2008 2008
---------------------------------------------------------------------
In USD In RMB In USD
---------------------------------------------------------------------
GAAP Net Income 22,520,093 318,559,971 46,443,407
---------------------------------------------------------------------
Stock based compensation 7,857,813 44,268,934 6,454,044
---------------------------------------------------------------------
Change in fair value of capped
call options -- 125,254,486 18,261,067
---------------------------------------------------------------------
Change in fair value of
embedded derivatives
underlying senior convertible
notes -- (326,761,672) (47,639,147)
---------------------------------------------------------------------
---------------------------------------------------------------------
Non-GAAP Net income 30,377,906 161,321,719 23,519,371
---------------------------------------------------------------------
---------------------------------------------------------------------
Non-GAAP Net income Basic 30,377,906 161,321,719 23,519,371
---------------------------------------------------------------------
Foreign exchange gain on
senior convertible notes -- (31,721,331) (4,624,707)
---------------------------------------------------------------------
Amortization of deferred
issuance cost -- 973,815 141,974
---------------------------------------------------------------------
Accretion on senior
convertible notes -- 16,541,320 2,411,588
---------------------------------------------------------------------
4.5% interest expenses of
senior convertible notes -- 15,432,975 2,250,000
---------------------------------------------------------------------
---------------------------------------------------------------------
Non-GAAP Net income Diluted 30,377,906 162,548,498 23,698,226
---------------------------------------------------------------------
---------------------------------------------------------------------
Weighted average number of
ordinary shares and ADS
outstanding:
---------------------------------------------------------------------
Basic 154,058,500 154,519,808 154,519,808
---------------------------------------------------------------------
Diluted 155,773,928 163,688,037 163,688,037
---------------------------------------------------------------------
---------------------------------------------------------------------
Non-GAAP Net income per
ordinary shares and per ADS:
---------------------------------------------------------------------
Basic 0.20 1.04 0.15
---------------------------------------------------------------------
Diluted 0.20 0.99 0.14
---------------------------------------------------------------------