CDC Corporation to Initiate New Share Repurchase Program
September 01 2010 - 10:04AM
Business Wire
CDC Corporation (NASDAQ: CHINA/CHIND), a leading China-based
value-added operator of, and growth investor in, hybrid
(SaaS/On-Premise) enterprise software, IT Services, and New Media
assets, today announced it is planning to initiate a new 10b5-1
trading plan to repurchase its common shares in the open
market.
CDC Corporation, management and affiliates, have repurchased,
from January 2009 to present, approximately 697,816 shares on a
post split basis at an average price of approximately $4.21 per
share (2.1 million pre-split shares at average of $1.36 per share).
Since January 2010, CDC Corporation has purchased 119,891 shares on
a post split basis at an average price of $6.07 per share (359,672
pre-split shares at an average price of $2.02 per share).
CDC Corporation is buying back shares since it believes the
current market price of its shares is not reflective of the true
value contained in its assets, especially with its solid balance
sheet and consolidated cash position of more than $100 million.
As of June 30, 2010, CDC had total shareholder equity of $260.8
million or book value per share of $7.45 and non-controlling
interest total equity of $294.3 million or book value per share of
$8.41. As of June 30, 2010, CDC reported total current assets of
$178.5 million and total assets of $541.7 million, and reported
positive GAAP cash flow from operations for the six month period
ended June 30, 2010.
As a valued-added growth investor, CDC has a sum of parts
valuation, which it believes is the most appropriate valuation
metric for the company. The company believes its value lies within
its majority-controlled business units, as well as in its numerous
direct and indirect minority investments, which are in various
stages of maturity. Accordingly, this portfolio of investments
provides a foundation upon which investors can conduct a sum of the
parts valuation for CDC Corporation. As a result of CDC’s sum of
the parts valuation, the company will not be issuing financial
guidance since the company believes it should be measured on the
performance of its underlying businesses. Investors should not rely
upon the company’s previously announced guidance.
“As we have stated previously, we believe CDC shares are
undervalued and do not reflect the value of its underlying assets,”
said Peter Yip, CEO of CDC Corporation. “CDC’s share price is
significantly below the market capitalization of its core assets
which include its two publicly traded companies, CDC Software,
which is approximately 85 percent owned and has a market
capitalization of approximately $153.4 million, and 79
percent-owned China.com with a market capitalization of
approximately $60 million. Please refer to our earnings release for
the quarter ended June 30, 2010, for a detailed breakdown of cash
on hand, net assets, and other balance sheet items for our
majority-owned investments.”
As previously announced, CDC Corporation filed a motion opposing
Evolution Capital Management’s move to restrict CDC’s declaration
and payment of any form of dividend to its shareholders. Evolution
Capital is the last remaining non-affiliated holder of the
company’s unsecured convertible debentures. In March 2010, CDC
Corporation filed a lawsuit against Evolution alleging breach of
non-disclosure agreements, breach of the note purchase agreement
relating to Notes, breach of the Notes, and tortious interference
with business relations, seeking a recovery in excess of
$295,000,000. CDC plans to pursue its rights and seek damages to
which it believes it is entitled in its action against
Evolution.
About CDC Corporation
CDC Corporation is a China-based value-added operator of, and
growth investor in, hybrid (on premise and SaaS) enterprise
software, IT, and new media businesses. The company pursues two
value-added investment strategies. The first strategy includes
actively managing majority interests in its core portfolio of
hybrid enterprise software, IT services and New Media businesses,
adding value by driving operational excellence, top-line growth and
overall profitability. The second strategy includes identifying and
executing on opportunities to co-invest with leading venture
capital and private equity funds through minority interests in
fast growth companies in emerging markets related to CDC
Corporation’s core assets. This second strategy, which complements
the first, helps to mitigate risk and enhance deal flow for the
company. CDC Corporation expects to deliver superior returns and
additional value for its shareholders through these strategies, as
well as through its plans to declare and pay regular dividends in
the form of registered shares of its publicly listed subsidiaries
and other assets. For more information about CDC Corporation
(NASDAQ: CHINA), please visit www.cdccorporation.net.
Cautionary Note Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the United States Private Securities Litigation
Reform Act of 1995, including statements relating to, among other
things, our belief that CDC is undervalued and its sun-of-parts
valuation, our beliefs regarding the continuation and extent of
management and company purchases of CDC shares, the effect of the
company’s new share repurchase program, its beliefs regarding the
value of CDC and its underlying assets and other statements which
are not historic fact. These statements are based on management's
current expectations and are subject to risks and uncertainties and
changes in circumstances. There are important factors that could
cause actual results to differ materially from those anticipated in
the forward-looking statements, including the following: (a) the
ability to realize strategic objectives by taking advantage of
market opportunities in targeted geographic markets; (b) the
ability to make changes in business strategy, development plans and
product offerings to respond to the needs of current, new and
potential customers, suppliers and strategic partners; (c) the
ability to integrate operations or new acquisitions in accordance
with the company's and its subsidiaries’ business strategies; (d)
the effects of restructurings and rationalization of operations;
(e) the ability to address technological changes and developments
including the development and enhancement of products; (f) the
ability to develop and market successful products and services; (g)
the entry of new competitors and their technological advances; (h)
the need to develop, integrate and deploy products and services
that meet customer's requirements; (i) the possibility of
development or deployment difficulties or delays; (j) the
dependence on customer satisfaction with the company's and its
subsidiaries’ products and services; (k) continued commitment to
the deployment of the company’s and its subsidiaries’ products and
services, including enterprise software solutions; (l) risks
involved in developing software solutions and integrating them with
third-party software and services; (m) the continued ability of the
company's enterprise software solutions to address client-specific
requirements; (n) demand for, and market acceptance of, new and
existing enterprise software and services and the positioning of
the company's solutions; (o) the popularity and market acceptance
of CDC Games' existing and new games; and (p) the continued growth
of the online games industry in our target markets, including
China. Further information on risks or other factors that could
cause results to differ is detailed in our filings or submissions
with the United States Securities and Exchange Commission,
including our Annual Report on Form 20-F for the year ended
December 31, 2009, filed with the SEC on June 30, 2010. All
forward-looking statements included in this press release are based
upon information available to management as of the date of the
press release, and you are cautioned not to place undue reliance on
any forward looking statements which speak only as of the date of
this press release. The company assumes no obligation to update or
alter the forward looking statements whether as a result of new
information, future events or otherwise. Historical results are not
indicative of future performance.
Cdc Corp. (MM) (NASDAQ:CHIND)
Historical Stock Chart
From Apr 2024 to May 2024
Cdc Corp. (MM) (NASDAQ:CHIND)
Historical Stock Chart
From May 2023 to May 2024