Ninetowns (NINE), which streamlines the import/export process in China through its scalable enterprise platform products, today announced its financial results for the fourth quarter and full year ended December 31, 2005.

Total net revenue for the full year of 2005 was US$29.7 million, an increase of 19.0% compared to US$24.4 million in the full year 2004.

Net revenue from sales of enterprise software for the full year of 2005 was US$25.2 million, representing 84.7% of total net revenue, as compared to 93.6% for the full year of 2004.

Net revenue from software development services for the full year of 2005 was US$4.5 million, representing 15.0% of total net revenue, as compared to 6.3% for the full year of 2004.

Gross margin and operating margin for the full year of 2005 were 92.0% and 55.9%, respectively, compared to 97.8% and 69.3%, respectively, for the full year of 2004.

Net income for the full year of 2005 was US$18.8 million, compared to net income of US$16.2 million for the full year of 2004. Diluted earnings per ADS / share for the full year of 2005 were US$0.52, compared to the diluted earnings per ADS / share of US$0.57 for the full year of 2004. Diluted earnings per ADS / share computations for the full year 2005 were based on 35.8 million weighted average number of ADSs / shares outstanding, compared to 28.3 million in the year ago period.

Total net revenue for the fourth quarter of 2005 was US$6.5 million, a decrease of 15.8% compared to US$7.5 million in the year ago period. Net revenue from sales of enterprise software for the fourth quarter of 2005 was US$5.8 million, representing 88.4% of total net revenue, as compared to 87.0% for the fourth quarter of 2004.

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