China Education Alliance, Inc. (“CEU” or the “Company”) sustained positive year-over-year revenue and earnings growth in the first quarter, seasonally its weakest quarter, as the Company experienced continued strong demand for its exam-oriented training services and vocational training programs. Net income grew nearly 12% to $3.66 million on revenues of $8.62 million. While the results missed RedChip estimates, CEU gave some very positive and clarifying growth plans in the earnings conference call which raises our confidence in the near-term growth of the Company.
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The company will hold a conference call on Wednesday, May 12, 2010 at 10:00 a.m. EDT (7:00 a.m. Pacific Daylight time) to discuss financial results for the first quarter ended March 31, 2010.

To participate in the call, please dial (877) 941-4774, or (480) 629-9764 for international calls, approximately 10 minutes prior to the scheduled start time. Interested parties may also listen via a live Internet webcast, which can be found at the Company's website at http://www.chinaeducationalliance.com , or alternately at http://viavid.net/dce.aspx?sid=0000754B.

A replay of the call will be available for two weeks from 1:00 p.m. EDT on May 12, 2010, until 11:59 p.m. EDT on May 26, 2010. The number for the replay is (800) 406-7325. The passcode for the replay is 4299854. In addition, a recording of the call will be available via the company's website at http://www.chinaeducationalliance.com for one year. Listen to webcast  

Value Proposition China Education Alliance has $69 million in cash or $2.17 per share in cash. It is trading at an 8 P/E in a sector that trades at a 22-25 P/E. The stock should trade at $14.00, an upside of 196%. Buy now and be patient. The traffic jam will clear and the stock should run to its fair value.

Presentation from the RedChip
2009 Shanghai Conference

Zack Pan CFO of CEU

Overview
China Education Alliance, Inc. (“CEU” or the “Company”) is an educational services company which offers online educational materials for all levels of education as well as on-site training and tutorials to a wide variety of clients including school teachers, university professors, educational officials, and families. CEU provides testing materials, preparation materials, research, study guides, educational audio recordings, and various certification trainings. The Company offers more than 350,000 exams and test papers for use in elementary schools through the collegiate level. CEU is headquartered in Harbin, China.

• Upgraded to NYSE
  On January 27, CEU moved from the NYSE Amex to the NYSE. The move to the world’s premier stock exchange will increase liquidity in the stock, giving the Company access to a wider range of institutional investors and a tighter bid-ask spread that will reduce risk for investors. The uplisting will also give CEU greater access to capital that can be used to grow the business.
• Acquisition Plan Unfolding
  CEU plans to make several acquisitions throughout 2010. The first acquisition was completed on February 4, when CEU incorporated Beijing New Shifan Education & Technology, a publisher of academic magazines for High School students and nationwide academic contest organizer, for about $900,000. Management estimates that Beijing Shifan will generate at least $10 million in revenue and $3.5 million in net profit over the next five years. With CEU’s large cash balance and excellent cash flow from operations, the Company has ample resources with which to acquire companies that will add to top and bottom line growth and ultimately increase the value of CEU.

• Total revenue increased 5.0% year-over-year to $8.6 million in 1Q10, compared to revenue of $8.2 million in 1Q09.
• Gross profit rose 12.3% year-over-year to $6.8 million or 79.3% of sales in 1Q10, compared to 74.2% of sales, or $6.1 million, in 1Q09.
• Operating income increased 15.7% year-over-year to $3.9 million in 1Q10, compared to an operating income of $3.4 million in 1Q09.
• Net income increased 11.7% year-over-year to $3.7 million in 1Q10, compared to net income of $3.3 million in 1Q09.