Ambow Education Announces Second Quarter 2018 Financial Results

- Net Revenues Increases 19.5% to $22.7 Million -

- Net Income Increases 47.1% to $5.0 Million -

BEIJING,Aug. 30,2018 -- Ambow Education Holding Ltd. ("Ambow" or the "Company") (NYSE American: AMBO),a leading national provider of educational and career enhancement services in China,today announced its unaudited financial and operating results for the three-month and six-month periods ended June 30,2018.

Second Quarter 2018 Financial Highlights

Net revenues for the second quarter of 2018 increased by 19.5% to US$22.7 million from US$19.0 million in the same period of 2017. This increase was due primarily to recording US$2.9 million in revenue from Boston-based Bay State College (acquired by Ambow in November 2017),higher student enrollment for the 2017-2018 academic year in the Company's K-12 schools,and growth of Ambow's smart office solution business.

Gross profit for the second quarter of 2018 was US$10.8 million,compared with US$10.4 million for the same period of 2017. Gross profit margin was 47.6% for the second quarter of 2018,compared with 54.7% in the same period of 2017.

Operating expenses in the second quarter of 2018 decreased by 2.9% to US$6.8 million from US$7.0 million for the same period of 2017. Operating expenses as a percentage of net revenues for the quarter decreased to 30.0% from 36.8% in the same period of 2017,primarily due to stringent cost controls.

Net income attributable to ordinary shareholders for the second quarter of 2018 was US$5.0 million,or US$0.13 per basic and US$0.12 per diluted share,representing a 47.1% increase from a net income of US$3.4 million,or US$0.09 per basic and diluted share,in the second quarter of 2017.

As of June 30,2018,Ambow maintained strong cash resources of US$58.2 million,comprising cash and cash equivalents of US$31.5 million,short-term investments of US$26.3 million,and restricted cash of US$0.4 million.

First Six Months 2018 Financial Highlights

Net revenues for the first six months of 2018 increased by 27.1% to US$38.5 million from US$30.3 million in the first six months of 2017,due primarily to recording US$6.5 million in revenue from Boston-based Bay State College,and growth of Ambow's smart office solution business.

Gross profit for the first six months of 2018 increased by 13.4% to US$16.1 million from US$14.2 million in the first six months of 2017. Gross profit margin was 41.8%,compared with 46.9% in the same period of 2017.

Operating expenses for the first six months of 2018 was US$13.5 million,relatively flat compared with US$13.6 million in the first six months of 2017. Operating expenses as a percentage of net revenues for the period decreased to 35.1% from 44.9% in the same period of 2017,primarily due to stringent cost controls.

Net income attributable to ordinary shareholders for the first six months was US$4.0 million,or US$0.10 per basic and diluted share,representing a 263.6% increase from a net income of US$1.1 million,or US$0.03 per basic and diluted share,in the first six months of 2017.

"We are pleased with our solid financial results for the second quarter as we continue to streamline our business," said Dr. Jin Huang,Ambow's Chief Executive Officer. "Ambow's college and corporate partnerships and curriculum offerings continue to expand,allowing us to add more desirable technology programs and training courses to meet the demand fueled by China's booming IT and technology-driven economy. In addition to the robust results for this quarter,we have successfully returned to a national securities exchange with our listing on the NYSE American,which has renewed the recognition of Ambow's core value and the strength of our business model."

"As we announced earlier,we have brought a strong management team to Bay State College,and we expect our new team to accelerate the progress of our curriculum offerings,which are tailored to provide dual China and U.S. diplomas for the 2019 fall semester. We are confident that Ambow and Bay State are well-positioned to capitalize on the growing interest among the large base of Chinese students who want to obtain a U.S. university degree. Through Bay State we are establishing a new business model for expanding the cooperation between China and U.S. colleges and servicing the growing demand for studying abroad."

Ambow will participate in the upcoming BMO Capital Markets 18th Annual Back to School Conference to be held at the New York InterContinental Barclay Hotel. The Company will present at 2:30 PM ET on Thursday,September 13,2018. Management will also host one-on-one meetings with investors throughout the conference.

The Company's second quarter 2018 performance can also be found on its Form 6-K filing at www.sec.gov.

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 the first half of 2018 are based on the effective exchange rate of 6.6171 as of June 29,2018; all amounts translated from RMB to U.S. dollars for the second quarter and the first half of 2017 are based on the effective exchange rate of 6.7793 as of June 30,2017. 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.

About Ambow Education Holding Ltd.

Ambow Education Holding Ltd. is a leading national provider of educational and career enhancement services in China,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 30 out of the 31 provinces and autonomous regions within China.

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 Relations

Tel: +1 212-481-2050 or +86 10-5730-6200

Email: 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,

2018

2017

US$

RMB

RMB

ASSETS

Current assets:

Cash and cash equivalents

31,464

208,201

195,303

Restricted cash

355

2,350

2,350

Short term investments,available for sale

2,602

17,219

128,042

Short term investments,held to maturity

23,726

157,000

93,000

Accounts receivable,net

3,238

21,424

24,511

Prepaid and other current assets,net

21,454

141,960

129,517

Loan receivable,current

6,450

42,677

-

Total current assets

89,289

590,831

572,723

Non-current assets:

Property and equipment,net

24,652

163,127

168,423

Land use rights,net

276

1,826

1,848

Intangible assets,net

14,279

94,486

96,769

Goodwill

11,057

73,166

73,166

Deferred tax assets,net

1,850

12,242

8,222

Long-term loan receivables

-

-

42,677

Other non-current assets,879

12,432

13,592

Total non-current assets

53,993

357,279

404,697

Total assets

143,282

948,110

977,420

LIABILITIES

Current liabilities:

Deferred revenue *

15,660

103,623

114,396

Accounts payable *

2,383

15,779

23,414

Accrued and other liabilities *

50,562

334,576

418,998

Borrow from third party,current *

6,000

39,700

-

Income taxes payable *

31,078

205,643

202,314

Amounts due to related parties *

518

3,430

3,430

Total current liabilities

106,201

702,751

762,552

Non-current liabilities:

Long-term borrowings from third party

-

-

39,205

Consideration payable for acquisitions

1,023

6,766

6,766

Other non-current liabilities

263

1,741

2,938

Total non-current liabilities

1,286

8,507

48,909

Total liabilities

107,487

711,258

811,461

EQUITY

Preferred shares

(US$0.003 par value;1,666,667 shares authorized,

nil issued and outstanding as of June30,2018 and

December31,2017)

-

-

-

Class A Ordinary shares

(US$0.003 par value; 66,667 and

66,34,206,939

and 38,407,313 shares issued and

outstanding as of December31,2017 and

June30,respectively)

109

721

640

Class C Ordinary shares

(US$0.003 par value; 8,333,333 and 8,333

shares authorized,4,708,415 and 4,415

shares issued and outstanding as of

December31,2017 and June30,

respectively)

14

90

90

Additional paid-in capital

529,079

3,500,968

3,456,307

Statutory reserve

3,028

20,036

20,036

Accumulated deficit

(497,267)

(3,290,465)

(3,316,715)

Accumulated other comprehensive income

1,324

8,762

6,876

Total Ambow Education Holding Ltd.'s equity

36,287

240,112

167,234

Non-controlling interests

(492)

(3,260)

(1,275)

Total equity

35,795

236,852

165,959

Total liabilities and equity

143,420

* 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

(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,

2018

2018

2017

2018

2018

2017

US$

RMB

RMB

US$

RMB

RMB

NET REVENUES

Educational program and

services

37,660

249,202

205,379

22,335

147,791

128,629

Intelligent program and

services

874

5,783

-

365

2,415

-

Total net revenues

38,534

254,985

205,700

150,206

128,629

COST OF REVENUES

Educational program and

services

(21,802)

(144,268)

(109,120)

(11,514)

(76,192)

(58,325)

Intelligent program and

services

(593)

(3,922)

-

(377)

(2,496)

-

Total cost of revenues

(22,395)

(148,190)

(109,891)

(78,688)

(58,325)

GROSS PROFIT

16,139

106,795

96,259

10,809

71,518

70,304

Operating expenses:

Selling and marketing

(2,906)

(19,227)

(19,190)

(1,363)

(9,022)

(8,973)

General and administrative

(10,451)

(69,155)

(70,341)

(5,420)

(35,863)

(36,695)

Research and development

(125)

(827)

(2,712)

(58)

(384)

(1,453)

Total operating expenses

(13,482)

(89,209)

(92,243)

(6,841)

(45,269)

(47,121)

OPERATING INCOME

2,657

17,586

4,016

3,968

26,249

23,183

OTHER INCOME (EXPENSES)

Interest income

556

3,676

2,743

240

1,586

1,711

Foreign exchange gain,net

20

135

1

18

121

4

Other income (loss),net

140

925

(909)

107

711

(920)

Gain on cancellationof

subsidiaries

487

3,220

-

64

423

-

Gain on sale of investment

available for sale

73

484

4,569

28

186

463

Total other income

1,276

8,440

6,404

457

3,027

1,258

INCOME BEFORE INCOME

TAX AND NON-

CONTROLLING

INTEREST

3,933

26,026

10,420

4,425

29,276

24,441

Income tax benefit (expense)

26

174

(4,009)

588

3,893

(2,042)

NET INCOME

3,959

26,200

6,411

5,013

33,169

22,399

Less: Net (loss) attributable to

non-controlling interest

(8)

(50)

(1,112)

(22)

(143)

(544)

NET INCOME

ATTRIBUTABLE TO

ORDINARY

SHAREHOLDERS

3,967

26,250

7,523

5,035

33,312

22,943

NET INCOME

3,399

OTHER

COMPREHENSIVE

INCOME,NET OF TAX

Foreign currency translation

adjustments

265

1,753

296

(230)

(1,523)

483

Unrealized gainson short term

investments

Unrealized holding gains

arising during period

57

380

751

26

173

396

Less: reclassification

adjustment for gains

included in net income

37

247

2,640

16

104

141

Other comprehensive income

(loss)

285

1,886

(1,593)

(220)

(1,454)

738

TOTAL

COMPREHENSIVE

INCOME

4,244

28,086

4,818

4,793

31,715

23,137

Net income per share - basic

0.10

0.67

0.19

0.13

0.83

0.59

Net income per share - diluted

0.10

0.66

0.19

0.12

0.83

0.58

Weighted average shares used

in calculating basic net

income per share

39,464,021

39,021

38,772,667

39,996,374

39,374

38,815,802

Weighted average shares used

in calculating diluted net

income per share

39,805,975

39,312,231

40,324,108

40,108

39,311,705