China Education Alliance (PINK:CEU)

Valuation Scenarios

Added to GeoBargain list on June 3, 2009 ($2.77)

Data Inputs:

Fiscal Year Ends in December
Tax Adjusted 2008 non-GAAP EPS: $0.28 ^a,b

Date	06/17/09	08/14/09
Price	$3.05	$5.02
12 Months Trailing Tax-Adjusted EPS a,b	$0.31	$0.36
Published 2009 Analyst Tax-Adjusted EPS Estimate  a,b	$0.43	$0.38
Published 2010 Analyst Tax-Adjusted EPS Estimate  a,b	n/a	$0.54
Future EPS Growth Rate Based on 2009 Tax-Adjusted Estimate a,b	53.6%	35.7%
Future EPS Growth Rate Based on 2010 Tax-Adjusted Estimate a,b	n/a	42.1%
Trailing P/E Ratio a,b	9.84	13.94
PEG Ratio Based on 2009 Growth Rate (P/E divided by growth rate) a,b	0.18	0.39
PEG Ratio Based on 2010 Growth Rate (P/E divided by growth rate) a,b	n/a	0.33

Short-Term Valuation Scenarios

Date	06/12/09	08/14/09
Price Based on P/E of 25 on Four Quarters Trailing EPS	$7.75	$9.00
Price Based on P/E of 20 on Four Quarters Trailing EPS	$6.20	$7.20
Price Based on P/E of 15 on 2009 Tax-Adjusted Analyst EPS Estimates	$7.75	$5.70
Price Based on P/E of 15 on 2010 Tax-Adjusted Analyst EPS Estimates	n/a	$8.10

Long-Term (6 to 18 Months Forward) Valuation Scenarios

Date	06/12/09	08/14/09
Price Based on P/E of 25 on 2009 Tax-Adjusted Analyst EPS Estimates	$10.75	$9.50
Price Based on P/E of 20 on 2009 Tax-Adjusted Analyst EPS Estimates	$8.60	$7.60
Price Based on P/E of 25 on 2010 Tax-Adjusted Analyst EPS Estimates	n/a	$13.50
Price Based on P/E of 20 on 2010 Tax-Adjusted Analyst EPS Estimates	n/a	$10.80

Peg Ratio Analysis - Common rule of thumb that PEG ratio should be less than 1.0

PEG Ratio Less than 1?

YES

^a China Education Alliance is not paying a full U.S. tax rate.  The GeoTeam® prefers to use U.S. fully-taxed EPS figures when calculating potential valuation scenarios. Therefore, all EPS numbers have been adjusted by the GeoTeam ® to reflect a standard U.S. tax rate of 36%

^b Non-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . The GeoTeam ® non-GAAP figures may, from time to time, differ from company supplied figures.

These scenarios are not investment advice, but are scenarios based on some commonly used investment guidelines.  They are provided to aid investors in making their own investment decisions.

Valuation Scenarios

Added to Geo Bargain list on June 3, 2009 ($2.77)

Data Inputs:

Fiscal Year Ends in December

Date	06/17/09
Price	$3.05
12 Months Trailing EPS a,b	$0.31
Published 2009 Analyst EPS Estimate $0.62	$0.43 a,b
Future EPS Growth Rate Based on 2009 Tax- Adjusted Estimate a,b	53.6%
Trailing P/E Ratio a,b	9.8
PEG Ratio (P/E divided by growth rate) a,b	0.18

Short-Term Valuation Scenarios

Date	06/12/09
Price Based on P/E of 25 on Four Quarters Trailing EPS	$7.75
Price Based on P/E of 20 on Four Quarters Trailing EPS	$6.20
Price Based on P/E of 15 on 2009 Tax-Adjusted Analyst EPS Estimates	$7.75

Long-Term (12 Months Forward) Valuation Scenarios

Date	06/12/09
Price Based on P/E of 25 on 2009 Tax-Adjusted Analyst EPS Estimates	$10.75
Price Based on P/E of 20 on 2009 Tax-Adjusted Analyst EPS Estimates	$8.60

Peg Ratio Analysis - Common rule of thumb that PEG ratio should be less than 1.0

PEG Ratio Less than 1?

YES

^a China Education Alliance is not paying a full U.S. tax rate.  The GeoTeam ® prefers to use U.S. fully-taxed EPS figures when calculating potential valuation scenarios. Therefore, all EPS numbers have been adjusted by the GeoTeam ® to reflect a standard U.S. tax rate of 36%

^b Non-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . The GeoTeam ® non-GAAP figures may, from time to time, differ from company supplied figures.

These scenarios are not investment advice, but are scenarios based on some commonly used investment guidelines.  They are provided to aid investors in making their own investment decisions.