Fang Liu - IR Manager Jianyu Yang - Chairman and Chief Executive Officer Kong Yap - Chief Financial Officer

Good morning and good evening everyone. Welcome to Concord Medical’s First Half 2016 Earnings Conference Call. With us today are Dr. Jianyu Yang, Chairman and Chief Executive Officer of Concord Medical; Ms. Kong Yap, Chief Financial Officer of the company; and Ms. Fang Liu, IR Manager of the company. [Operator Instructions] I must advise you that this conference is being recorded today, Thursday, August 25, 2016. I would now like to hand the conference over to your first speaker today, Ms. Fang Liu. Thank you. Please go ahead.

Hello, everyone. The conference results were released earlier today and are available on the company’s Investor Relations website as well as on the respective wire services. Before we continue, please note that the discussion today will contain forward-looking statements made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties and as such our results may materially differ from the views expressed today. Further information regarding those and other risks and uncertainties is included in our registration statement and our Form 10-K and other documents filed with the SEC. Concord Medical does not assume any obligation to update any forward-looking statements, except as required under applicable law. At this time, I would like to turn the call over to our Chairman and CEO, Dr. Yang. Please go ahead.

Hello, everyone. Welcome to the Concord Medical first half 2016 earnings conference call. In the first half of this year, our revenue and profit was seeing some headwinds due to internal and external factors and we have taken initiatives in cutting cost and expenses to lower the impact. During the second quarter of 2016, we are glad to see our loss was apparently decreased quarter-over-quarter. In Q2, our total revenue fell about 21.7% than the same period last year with the loss of RMB18 million. Since late last year, industrial regulation has started restricting our original business model of collaborating with military hospitals. At the same time, as we initiated the business model transformation since 2014, former centers are gradually coping and the company was focused on the planning and construction of our wholly owned hospitals. Both the deteriorating regulatory environment and the strategic transformation remain the main factors contributing to the revenue decrease. Concord Cancer Hospital, which we acquired in Singapore last April, was keeping restructuring to a new stage of business and treatment process brought obvious net loss. We are delighted to see patients from mainland China have started to visit our hospital and with the most advanced treatment approach and chemotherapy since this March. We will be able to provide better oncology service with further collaboration between Concord Cancer Hospital and MD Anderson Cancer Center, MDACC for short, on treatment technology, know-how and branding. At the same time, we achieved inspiring achievements on our strategic information. As an upgraded version of our original business model, the Meizhongjiahe network of wholly owned imaging diagnosis and radiotherapy hospitals is gradually implemented. The first hospital under this chain, Datong Meizhongjiahe Cancer Hospital, has opened preliminary since May. Datong Hospital will join the local social insurance coverage and provide high quality…

Okay. Thank you, Dr. Yang. Welcome everyone to our call. First, I would like to review the highlights of our first half 2016 financial results. Please note that all financial currency amounts mentioned in this presentation will be in RMB, expect those which will be specifically identified in other currencies or format. For the first half of 2016, total revenues were RMB254.6 million, a 21.7% decrease from RMB325.2 million in the same period last year. Total net revenues is composed of net revenues from the network business of $246.7 million and from Concord Cancer Hospital of $8 million. Gross profit was $101.6 million, representing a 33.9% decrease from RMB153.6 million in the first half of 2015. The gross profit margin for the first half of 2016 was 39.9% compared to 47.2% for the same period last year. Net loss attributable to ordinary shareholders for the first half of 2016 were RMB50.4 million, which consist of RMB32.2 million in Q1, RMB18.2 million in Q2 compared to a net income of RMB65.1 million for the same period last year. Net loss is composed of net loss from the network business of RMB20.4 million and from Concord Cancer Hospital of RMB30 million. Basic and diluted loss per American Depositary Share, or ADS, for short, in the first half of 2016 were both RMB1.15 or $0.17 compared to basic and diluted profit per ADS of RMB1.45 and RMB1.44 respectively in the same period last year. Adjusted EBITDA non-GAAP was RMB68.6 million for the first half of 2016, representing a 49.1% decrease from RMB134.8 million in the same period last year. And now let me present our financial results for the first half of 2016 by segment. Let’s start with our network business. Net revenues from the network business were RMB246.7 million, a 22.2% decrease…

Once again, thank you for joining us today. Please don’t hesitate to contact us if you have further questions. Thank you for your continued support. Have a good day.

Ladies and gentlemen, that doesn’t include our conference for today. Thank you for participating. You may all disconnect.

Thank you.