58.com Reports First Quarter 2019 Unaudited Financial Results

BEIJING,May 29,2019 -- 58.com Inc.(NYSE: WUBA) ("58.com" or the "Company"),China's largest online marketplace for classifieds,today reported its unaudited financial results for the first quarter ended March 31,2019.

First Quarter 2019 Highlights

Total revenues were RMB3,028.3 million (US$449.7 million[1]),a 22.5% increase from RMB2,471.2 million in the same quarter of 2018,exceeding the high end of the Company's guidance of RMB2,960 million.

Total number of paying business users[2] was approximately 3.4 million in the first quarter of 2019,a 7.5% increase from the same quarter of 2018.

Gross margin was 90.2% compared with 89.6% in the same quarter of 2018.

Income from operations was RMB281.3 million (US$41.8 million),a 5.4% increase from RMB266.8 million in the same quarter of 2018.

Non-GAAP income from operations[3] was RMB465.1 million (US$69.1 million),a 13.0% increase from RMB411.6 million in the same quarter of 2018.

Net income attributable to 58.com Inc. ordinary shareholders was RMB698.2 million (US$103.7 million),a 299.9% increase from RMB174.6 million in the same quarter of 2018.

Non-GAAP net income attributable to 58.com Inc. ordinary shareholders[4] was RMB435.9 million (US$64.7 million),a 42.6% increase from RMB305.8 million in the same quarter of 2018.

Basic and diluted earnings per ADS attributable to ordinary shareholders were RMB4.71 (US$0.70) and RMB4.65 (US$0.69),respectively,representing 296.5% and 298.2% increases from RMB1.19 and RMB1.17,in the same quarter of 2018. One ADS represents two Class A ordinary shares.

Non-GAAP basic and diluted earnings per ADS[5] attributable to ordinary shareholders were RMB2.94 (US$0.44) and RMB2.90 (US$0.43),representing 23.0% and 23.3% increases from RMB2.08 and RMB2.05,in the same quarter of 2018.

[1]This press release contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) solely for the convenience of the readers. Unless otherwise specified,all translations of Renminbi amounts into US$ amounts in this press release are made at RMB6.7335 to US$1.00,which was the U.S. dollars middle rate announced by the PRC State Administration of Foreign Exchange on March 31,2019. The percentages stated in this press release are calculated based on the Renminbi amounts. On May 28,2019,such exchange rate was RMB6.8973 to US$1.00.

[2]Paying business users refer to users who are identified as business users with unique identity information such as business licenses or personal identification information and who used the Company's subscription-based membership services or purchased at least one type of online marketing services in a given period. One paying business user can open up several paying user accounts on one or multiple online platforms. The number and the percentage calculation doesn't include paying business users on Ganji,which the Company stopped selling stand-alone Ganji subscription-based membership services in 2018 or earlier in all of its content categories.

[3]Non-GAAP income from operations is defined as income from operations excluding share-based compensation expenses and amortization of intangible assets resulting from business acquisitions. See "Reconciliation of GAAP and Non-GAAP Results" at the end of this press release.

[4]Non-GAAP net income attributable to 58.com Inc. ordinary shareholders is defined as net income attributable to 58.com Inc. ordinary shareholders excluding share-based compensation expenses,amortization of intangible assets resulting from business acquisitions,change in fair value of long-term investments,share-based compensation expenses included in share of results of equity investees,and income tax effects of GAAP to non-GAAP reconciling items. See "Reconciliation of GAAP and Non-GAAP Results" at the end of this press release.

[5]Non-GAAP basic and diluted earnings per ADS is defined as non-GAAP net income attributable to 58.com Inc. ordinary shareholders divided by weighted average number of basic and diluted ADSs.

Management Comments

"We began the year with solid operational and financial results," commented Mr. Michael Yao,Chairman and Chief Executive Officer of 58.com. "Our revenues grew 22.5% during the quarter,exceeding the high end of our previously announced guidance. On a non-GAAP basis,operating income and net income grew 13.0% and 42.6% year over year,as user traffic to our apps in particular and user engagement continued to gain growth momentum."

"We are not immune to China's softening economy given our exposure to several key local services categories such as jobs,housing and auto. The market opportunity in China however remains massive and heavily underpenetrated given the nation's large population and the enormous growth potential we continue to unlock in our platform by improving the user experience and applying innovative technology. Our core housing and jobs businesses lead the market,while newer businesses like Zhuan Zhuan and 58 Town are growing rapidly. We are confident in our online classifieds marketplace business model and will continue to invest in innovation and marketing to further strengthen our leadership position."

First Quarter 2019 Financial Results

Revenues

Total revenues were RMB3,028.3 million (US$449.7 million),representing an increase of 22.5% fromRMB2,471.2 millionin thesame quarter of 2018.

Membership revenues were RMB982.0 million (US$145.8 million),an increase of 5.7% from RMB928.9 million in the same quarter of 2018.

Online marketing servicesrevenues were RMB1,940.9 million (US$288.2 million),an increase of 30.1% from RMB1,492.0 million in the same quarter of 2018.

The increase was primarily driven by the increasing adoption and effectiveness of the Company's various online marketing services such as real-time bidding,priority listing and various other online marketing services.

Cost of Revenues

Cost of revenues was RMB296.9 million (US$44.1 million),an increase of 15.1% from RMB257.9 million in the same quarter of 2018. The year-over-year increase was primarily driven by increases in the cost of services provided on Anjuke and ChinaHR platforms,traffic acquisition costs paid to 58.com's advertising union partners as well as salaries and benefits primarily for information quality control teams.

Gross Profit and Gross Margin

Gross profit wasRMB2,731.4 million (US$405.6 million),an increase of 29.0% from RMB2,213.2 million during the same quarter of 2018.

Gross margin was 90.2%,compared with 89.6% during the same quarter of 2018.

Operating Expenses

Operating expenses were RMB2,450.1 million (US$363.9 million),an increase of 25.9% from RMB1,946.4 million in the same quarter of 2018.

Sales and marketing expenses in the first quarter of 2019 were RMB1,793.0 million (US$266.3 million),an increase of 24.6% from RMB1,439.2 million in the same quarter in 2018.

Within sales and marketing expenses,advertising expenses in the first quarter of 2019 were RMB886.5 million (US$131.7 million),an increase of 30.0% from RMB682.0 million in the same quarter of 2018.

The increase was primarily due to an increase in mobile traffic acquisition expenses,particularly for mobile applications such as 58.com and Anjuke,which are part of the Company's core business.

Non-advertising sales and marketing expenses in the first quarter of 2019 were RMB906.5 million (US$134.6 million),an increase of 19.7% from RMB757.2 million in the same quarter in 2018.

Non-advertising sales and marketing expenses include salaries and benefits,commissions and share-based compensation expenses for the Company's sales,sales support,customer service,marketing dealer management personnel,online and offline promotional expenses,and other operating expenses that are associated with sales and marketing activities.

The increase in non-advertising sales and marketing expenses was mainly related to an increase in field sales teams and customer service personnel commissions and salaries and marketing and promotional expenses for 58.com and newer platforms such as 58 Town and Zhuan Zhuan.

Research and development expenses in the first quarter of 2019 were RMB495.0 million (US$73.5 million),an increase of 42.9% from RMB346.4 million in the same quarter of 2018. The increase was primarily due to increases in salaries and benefits and share-based compensation expenses for the Company's research and development personnel for the development of new features and services.

General and administrative expenses in the first quarter of 2019 were RMB162.2 million (US$24.1 million),which was generally stable compared with RMB160.8 million in the same quarter of 2018.

Income from Operations

Income from operations was RMB281.3 million (US$41.8 million) in the first quarter of 2019,an increase of 5.4% from RMB266.8 million in the same quarter of 2018.

Operating margin,defined as income from operations divided by total revenues,was 9.3%in the first quarter of 2019,compared with 10.8% in the same quarter of 2018.

Non-GAAP income from operations was RMB465.1 million (US$69.1 million) in the first quarter of 2019,an increase of 13.0% from RMB411.6 million in the same quarter of 2018.

Non-GAAP operating margin,defined as non-GAAP income from operations divided by total revenues,was 15.4% in the first quarter of 2019,compared with 16.6% in the same quarter of 2018.

Other Income/(expenses)

Net other income in the first quarter of 2019 was RMB554.3 million (US$82.3 million),compared with net other income of RMB8.8 million in the same quarter of 2018.

Net other income in the first quarter of 2019 was mainly attributable to a RMB509.0 million fair value gain as a result of an increase in the share price of 5I5J Holding Group Co.,Ltd.,a publicly traded company,in which the Company invested in the third quarter of 2018 and holds a minority stake,and income of RMB35.6 million from short-term commercial bank investment products the Company purchased with its surplus cash.

Net Income Attributable to 58.com Inc. Ordinary Shareholders

Net income attributable to 58.com Inc.ordinary shareholders wasRMB698.2 million (US$103.7 million) in the first quarter of 2019,an increase of 299.9% fromRMB174.6 million in the same quarter of 2018.

Net margin,defined as net income attributable to 58.com Inc. ordinary shareholders divided by total revenues,was 23.1% in the first quarter of 2019,compared with 7.1% in the same quarter of 2018.

Non-GAAP net income attributable to 58.com Inc. ordinary shareholders was RMB435.9 million (US$64.7 million) in the first quarter of 2019,an increase of 42.6% from RMB305.8 million in the same quarter of 2018.

Non-GAAP net margin,defined as non-GAAP net income attributable to 58.com Inc. ordinary shareholders divided by total revenues,was 14.4% in the first quarter of 2019,compared with 12.4% in the same quarter of 2018.

Basic and Diluted Earnings per ADS

Basic and diluted earnings per ADS attributable to ordinary shareholders in the first quarter of 2019 were RMB4.71 (US$0.70) and RMB4.65 (US$0.69),in the same quarter of 2018.

Non-GAAP basic and diluted earnings per ADS attributable to ordinary shareholders in the first quarter of 2019 were RMB2.94 (US$0.44) and RMB2.90 (US$0.43),in the same quarter of 2018.

Cash Flow

Net cash provided by operating activities was RMB564.9 million (US$83.9million) in the first quarter of 2019,a decrease of 20.4% from RMB710.0million in the same quarter of 2018.

Cash and Cash Equivalents,Restricted Cash and Short-term Investments

As of March 31,the Company had cash and cash equivalents,restricted cash and short-term investments of RMB7,696.6 million (US$1,143.0 million).

Shares Outstanding

As of March 31,the Company had a total of 297,145,051 ordinary shares (including 251,912,931 Class A and 45,232,120 Class B ordinary shares) issued and outstanding.

Business Outlook

Based on the Company's current operations,total revenues for the second quarter of 2019 are expected to be between RMB4.0 billion and RMB4.1 billion. This represents a year-over-year increase of 17% to 20% in Renminbi amounts. These estimates reflect the Company's current and preliminary view,which is subject to change.

Non-GAAP Financial Measures

To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States,or GAAP,this press release presents non-GAAP income from operations,non-GAAPoperating margin,non-GAAP net incomeattributable to 58.com Inc. ordinary shareholders,non-GAAP net marginand non-GAAP basic and diluted earnings per share and per ADSby excluding share-based compensation expenses,income tax effects of above GAAP to non-GAAP reconciling items. The Company believes these non-GAAP financial measures are important to help investors understand the Company's operating and financial performance,compare business trends among different reporting periods on aconsistent basis and assess the Company's core operating results,as they exclude certain expenses that are not expected to result in cash payments. The use of the above non-GAAP financial measures has certain limitations. Share-based compensation expenses,non-cash gain or loss and income tax effects resulting from GAAP to non-GAAP reconciling items have been and will continue to be incurred in the future and are not reflected in the presentation of the non-GAAP financial measures,but should be considered in the overall evaluation of the Company's results. TheCompany compensates for these limitations by providing the relevant disclosure of its share-based compensation expenses,income tax effects of above GAAP to non-GAAP reconciling items,all of which should be considered when evaluating the Company's performance. These non-GAAP financial measures should be considered in addition to financial measures prepared in accordance with GAAP,but should not be considered a substitute for,or superior to,financial measures prepared in accordance with GAAP. Reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP financial measure isset forth at the end of this release.

Conference Call

58.com's management will host an earnings conference call onMay 29,2019at8:00 a.m.U.S. Eastern Time (8:00 p.m. Beijing/Hong Kong time onthe same day).

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

International:

+1-412-317-6061

U.S. Toll Free:

+1-888-317-6003

Hong Kong Toll Free:

800-963976

Hong Kong

852-58081995

China Toll Free:

4001-206115

Passcode:

0146637

Please dial in 15 minutes before the call is scheduled to begin and provide the passcode to join the call.

A telephone replay of the call will be available after the conclusion of the conference call through8:00 a.m.U.S. Eastern Time,June 5,2019. The dial-in details for the replay are as follows:

International:

+1-412-317-0088

U.S. Toll Free:

+1-877-344-7529

Passcode:

10131884

Additionally,a live and archived webcast of the conference call will be available on the Investor Relations section of 58.com's website athttp://ir.58.com.

About 58.com Inc.

58.com Inc. (NYSE: WUBA) operates China's largest online marketplace for classifieds,as measured by monthly unique visitors on both its www.58.com website and mobile applications. The Company's online marketplace enables local business users and consumer users to connect,share information and conduct business. 58.com's broad,in-depth and high quality local information,combined with its easy-to-use website and mobile applications,has made it a trusted marketplace for consumers. 58.com's strong brand recognition,large and growing user base,merchant network and massive database of local information create a powerful network effect. For more information on 58.com,please visit http://www.58.com.

Safe Harbor Statements

This press release contains forward-looking statements 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," "confident" and similar statements. 58.com 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 report to shareholders,in press releases and other written materials and in oral statements made by its officers,directors or employees to third parties. Any statements that are not historical facts,including statements about 58.com's beliefs and expectations,are forward-looking statements that involve factors,risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include,but not limited to the following: 58.com's goals and strategies; its future business development,financial condition and results of operations; its ability to retain and grow its user base and network of local merchants for its online marketplace; the growth of,and trends in,the markets for its services in China; the demand for and market acceptance of its brand and services; competition in its industry in China; its ability to maintain the network infrastructure necessary to operate its website and mobile applications; relevant government policies and regulations relating to the corporate structure,business and industry; and its ability to protect its users' information and adequately address privacy concerns. Further information regarding these and other risks,uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release,and 58.com does not undertake any obligation to update such information,except as required under applicable law.

For more information,please contact:

58.com Inc.

ir@58.com

Christensen

In China

Mr. Christian Arnell

Phone: +86-10-5900-1548

E-mail: carnell@christensenir.com

In US

Ms. Linda Bergkamp

Phone: +1-480-614-3004

Email: lbergkamp@ChristensenIR.com

58.comInc.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands,except share and per share data,unless otherwise noted)

As of

December 31,

2018

March 31,

2019

March 31,

2019

RMB

RMB

US$

ASSETS

Current assets:

Cash and cash equivalents

2,387,478

2,556,108

379,611

Restricted cash-current

812,000

848,693

126,040

Short-term investments

4,587,610

4,291,790

637,379

Accounts receivable,net.

917,443

934,117

138,727

Prepayments and other current assets

813,403

872,736

129,611

Total current assets

9,517,934

9,503,444

1,411,368

Non-current assets:

Property and equipment,net

1,329,752

1,315,038

195,298

Intangible assets,099,945

1,057,756

157,089

Right-of-use assets,net

-

286,345

42,525

Land use rights,net

3,610

3,591

533

Goodwill

15,874,220

15,897,711

2,360,988

Long-term investments

3,365,906

4,324,564

642,246

Long-term prepayments and other non-current assets

639,478

535,215

79,486

Total non-current assets

22,312,911

23,420,220

3,478,165

Total assets

31,830,845

32,923,664

4,889,533

LIABILITIES,MEZZANINE EQUITY AND

SHAREHOLDERS' EQUITY

Current liabilities:

Short-term loans

812,794

723,851

107,500

Accounts payable

887,558

969,661

144,005

Deferred revenues

2,348,333

2,427,742

360,547

Customer advances

1,465,169

1,640,851

243,685

Taxes payable

250,231

161,073

23,921

Salary and welfare payable

642,445

519,057

77,086

Operating lease liabilities,current

-

124,267

18,455

Accrued expenses and other current liabilities

878,368

802,287

119,149

Total current liabilities

7,284,898

7,368,789

1,094,348

Non-current liabilities:

Deferred tax liabilities

283,112

323,679

48,070

Operating lease liabilities,non-current

-

148,250

22,017

Other non-current liabilities

1,675

1,675

249

Total non-current liabilities

284,787

473,604

70,336

Total liabilities

7,569,685

7,842,393

1,164,684

Mezzanine equity:

Mezzanine classified noncontrolling interests

1,944,397

1,941,293

288,304

Total mezzanine equity

1,304

Shareholders' equity:

58.com Inc. shareholders' equity:

Ordinary shares (US$0.00001 par value,4,800,000,000 Class A and

200,000 Class B shares authorized,250,858,415 Class A and

45,586,164 Class B shares issued and outstanding as of December

31,2018 and 251,120 Class B shares

issued and outstanding as of March 31,respectively)

19

19

3

Additional paid-in capital

21,621,665

21,714,716

3,224,877

Retained earnings

439,514

1,171,364

173,961

Accumulated other comprehensive loss

(40,622)

(45,803)

(6,802)

Total 58.com Inc. shareholders' equity

22,020,576

22,840,296

3,392,039

Noncontrolling interests

296,187

299,682

44,506

Total shareholders' equity

22,316,763

23,139,978

3,436,545

Total liabilities,mezzanine equity and shareholders' equity

31,533

58.comInc.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands,except share,per share and per ADS data,unless otherwise noted)

For the Three Months Ended

March 31,

2018

December 31,

2019

RMB

RMB

RMB

US$

Revenues:

Membership

928,886

1,122,208

982,028

145,842

Online marketing services

1,491,978

2,275,034

1,940,900

288,245

E-commerce services

7,895

25,954

28,023

4,162

Other revenues

42,414

186,115

77,302

11,480

Total revenues

2,471,173

3,609,311

3,028,253

449,729

Cost of revenues(1)

(257,946)

(457,691)

(296,851)

(44,086)

Gross profit

2,213,227

3,151,620

2,731,402

405,643

Operating expenses(1):

Sales and marketing expenses(2)

(1,439,222)

(1,719,902)

(1,792,950)

(266,273)

Research and development expenses

(346,396)

(493,524)

(494,977)

(73,510)

General and administrative expenses

(160,804)

(231,819)

(162,168)

(24,084)

Total operating expenses

(1,946,422)

(2,445,245)

(2,450,095)

(363,867)

Income from operations

266,805

706,375

281,307

41,776

Other income/(expenses):

Interest income,174

11,895

8,462

1,256

Investment income/(loss),net

41,085

(190,866)

544,570

80,875

Share of results of equity investees

(37,335)

(15,802)

(10,571)

(1,570)

Foreign currency exchange gain,net

902

701

2,949

438

Others,net

2,997

29,554

8,928

1,326

Income before tax

275,628

541,857

835,645

124,101

Income tax expenses

(70,108)

(93,439)

(106,109)

(15,758)

Net income

205,520

448,418

729,536

108,343

Net loss/(income) attributable to noncontrolling interests

821

(2,931)

2,314

344

Net income attributable to 58.com Inc.

206,341

445,487

731,850

108,687

Deemed dividend to mezzanine classified noncontrolling

interests

(31,766)

(34,551)

(33,700)

(5,005)

Net income attributable to 58.com Inc. ordinary

shareholders

174,575

410,936

698,150

103,682

Net earnings per ordinary share attributable to ordinary

shareholders‑ basic

0.59

1.39

2.35

0.35

Net earnings per ordinary share attributable to ordinary

shareholders‑ diluted

0.58

1.38

2.33

0.35

Net earnings per ADS attributable to ordinary shareholders –

basic (1 ADS represents 2 Class A ordinary shares)

1.19

2.78

4.71

0.70

Net earnings per ADS attributable to ordinary shareholders–

diluted (1 ADS represents 2 Class A ordinary shares)

1.17

2.75

4.65

0.69

Weighted average number of ordinary shares used in computing

basic earnings per share

294,163,060

295,558,994

296,690,552

296,552

Weighted average number of ordinary shares used in computing

diluted earnings per share

298,920,086

298,705,512

300,567

300,567

Note:

(1) Share-based compensation expenses were allocated in cost of revenues and operating expenses as follows:

Cost of revenues

1,103

2,041

1,833

272

Sales and marketing expenses

17,135

27,158

28,520

4,236

Research and development expenses

35,597

55,909

51,220

7,607

General and administrative expenses

40,749

52,695

51,732

7,683

(2) Amortization of intangible assets resulting from business acquisitions were allocated in operating expenses as follows:

Sales and marketing expenses

43,649

43,410

42,954

6,379

Research and development expenses

11,677

11,997

11,997

1,782

(3) Breakdown of sales and marketing expenses was as follows:

Advertising expenses

682,019

796,505

886,470

131,651

Non-advertising sales and marketing expenses

757,203

923,397

906,480

134,622

58.comInc.

Reconciliation of GAAP and Non-GAAP Results

(in thousands,ADS,

2019

RMB

RMB

RMB

US$

GAAP income from operations

266,776

Share-based compensation expenses[6]

89,421

132,777

128,875

19,140

Amortization of intangible assets resulting from

business acquisitions

55,326

55,407

54,951

8,161

Non-GAAP income from operations

411,552

894,559

465,133

69,077

GAAP net income attributable to 58.com Inc.

174,682

Share-based compensation expenses

89,161

Change in fair value of long-term investments

-

206,700

(508,950)

(75,585)

Share-based compensation expenses included in share

of results of equity investees

(16)

14

9

1

Income tax effects of GAAP to non-GAAP reconciling

items[7]

(13,556)

(49,519)

62,878

9,338

Non-GAAP net income attributable to 58.com Inc.

305,750

756,315

435,913

64,737

GAAP operating margin

10.8%

19.6%

9.3%

9.3%

Share-based compensation expenses

3.6%

3.7%

4.3%

4.3%

Amortization of intangible assets resulting from

business acquisitions

2.2%

1.5%

1.8%

1.8%

Non-GAAP operating margin

16.6%

24.8%

15.4%

15.4%

GAAP net margin

7.1%

11.4%

23.1%

23.1%

Share-based compensation expenses

3.6%

3.7%

4.3%

4.3%

Amortization of intangible assets resulting from

business acquisitions

2.2%

1.5%

1.8%

1.8%

Change in fair value of long-term investments

-

5.7%

(16.8)%

(16.8)%

Share-based compensation expenses included in share

of results of equity investees

(0.0)%

0.0%

0.0%

0.0%

Income tax effects of GAAP to non-GAAP reconciling

items

(0.5)%

(1.3)%

2.0%

2.0%

Non-GAAP net margin

12.4%

21.0%

14.4%

14.4%

Weighted average number of ordinary shares used in

computing non-GAAP basic earnings per share

294,552

Weighted average number of ordinary shares used in

computing non-GAAP diluted earnings per share

298,567

Weighted average number of ADS used in computing

non-GAAP basic earnings per ADS

147,081,530

147,779,497

148,345,276

148,276

Weighted average number of ADS used in computing

non-GAAP diluted earnings per ADS

149,460,043

149,352,756

150,125,284

150,284

Non-GAAP net earnings per ordinary share

attributable to ordinary shareholders‑ basic

1.04

2.56

1.47

0.22

Non-GAAP net earnings per ordinary share

attributable to ordinary shareholders ‑ diluted

1.02

2.53

1.45

0.22

Non-GAAP net earnings per ADS attributable to

ordinary shareholders ‑ basic

2.08

5.12

2.94

0.44

Non-GAAP net earnings per ADSattributable to

ordinary shareholders ‑ diluted

2.05

5.06

2.90

0.43

[6]From the third quarter of 2017,certain share-based awards with redemption features granted to the Company's employees were expected to be

settled in cash and were classified as liabilities. The share-based compensation expenses recognized for this type of awards amounted to RMB5.2

million,RMB5.0 million and RMB4.4 million in the first and fourth quarter of 2018 and the first quarter of 2019,were excluded

from the GAAP to non-GAAP reconciliation accordingly.

[7]This is to exclude the income tax benefits related to amortization of intangible assets resulting from business acquisitions calculated at PRC

statutory income tax rate of 25% and income tax benefits/(expense) related to change in fair value of long-term investments. Other GAAP to non-

GAAP reconciling items have no income tax effect.

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