CHINA (CDC Corporation)

August 19, 2005

Quarter Results and Conference Call

Summary: good quarter. No major problems visible.

Revenue and net income sharply up year-on-year: $64.6 million revenue (up 44%); .03 million income (vs. loss of $2 million year-ago). Earnings per share rose to 0 from (0.02).

But much of the revenue increase was due to acquiring Ross.

What they did not say: software sales in China are not showing much traction yet. For the most part this company is no longer mainly a China play; most revenue comes from Europe and the U.S.

Conference notes:

Claims still building on web presence in China, including hosting multiplayer virtual reality games. Portal traffic has doubled since start of year and revenues should increase later this year.

Asia was only 5% of global software revenue in past; grew to 10% this quarter (includes Japan; I suspect is mostly Japan).

Pivotal introduced Japanese version of their suite.

Some decline in mobile revenues due to change in regulatory environment in China.

$221 million v. $226 cash last quarter, due to M&A payments. Will exit 2005 with around $200 million.

Caveat: possible restructuring and additional investment charges in the short term.

Q&A:

Game revenues are not consolidated because they have a less than 50% interest, but can say it is in a growth mode.