CDC Corp. Reports an Increase in Non-GAAP Revenue & Improved Gross Margin in the Third Quarter of 2010 Compared to Prior Year...

CDC Corporation (NASDAQ: CHINA), 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 financial results for the quarter ended Sept. 30, 2010. For the third quarter of 2010, CDC Corporation reported Non-GAAP revenue(a) of $79.6 million and Adjusted EBITDA(a) of $7.0 million, compared to Non-GAAP revenue of $76.6 million and Adjusted EBITDA of $9.0 million for the third quarter of 2009. For the nine months ended Sept. 30, 2010, Adjusted EBITDA was $24.6 million compared to $28.6 million in the same period a year earlier.

Third quarter 2010 Non-GAAP revenue of $79.6 million exceeded First Call consensus third quarter estimate of $78.9 million. CDC Corporation’s Non-GAAP gross margin(a) for the third quarter of 2010 was 52 percent, compared to 49 percent in the third quarter of 2009. As of Sept. 30, 2010, the company had Non-GAAP cash and cash equivalents(a) of $104.0 million and cash flow from operations was $6.9 million for the third quarter of 2010 and $8.7 million for the nine months ended Sept 30, 2010.

“Overall, we are satisfied with the performance of our assets and are very excited about our new investment initiative - the recently announced RMB Fund,” said Peter Yip, CEO of CDC Corporation. “CDC Corporation’s Non-GAAP gross margin improved to 52 percent primarily due to increases in gross margin for its CDC Software and CDC Games’ businesses. CDC Corporation’s largest publicly-listed investment, CDC Software, has made outstanding progress in improving top line revenue and building higher margin software-as-a–service (SaaS) revenue under its new hybrid enterprise software business model. CDC Global Services has made key inroads in helping to position the company for growth in the cloud computing market in China with the launch of the Foshan Cloud Computing Center. CDC Games also improved its revenue and profitability despite the summer vacations impacting game playing time.”

Growth-Oriented Core Asset Revenue and Operating Metrics Summary

As a value-added investor in hybrid (SaaS and on-premise) enterprise software, IT services and new media assets, CDC Corporation executes two investment strategies. The first strategy includes growing its core majority interests in its portfolio of enterprise software, IT services and New Media assets.

Below is a summary of the financial results of CDC Corporation’s core portfolio of assets.

CDC Software (NASDAQ:CDCS)

On a standalone basis, CDC Software had the following results for the three months ended Sept. 30, 2009 and 2010:

Q3 2009 Q3 2010 Non-GAAP revenue $48.6 million $54.2 million Adjusted EBITDA $13.2 million $10.1 million

Adjusted EBITDA Margin(a)

27% 19%

Operating cash flow in the third quarter of 2010 was $12.0 million, and cash and cash equivalents were $36.4 million as of September 30, 2010. Third quarter 2010 license revenue increased by 18 percent to $9.0 million, compared to $7.6 million in the third quarter of 2009. Non-GAAP SaaS revenue(a) increased 48 percent to $3.9 million, compared to $2.6 million in the second quarter of 2010. Third quarter 2010 Total Contracted Backlog (TCB) was $133.9 million, compared to $99.3 million in the third quarter of 2009. TCB is the sum of the remaining revenue value of SaaS and term license or rental contracts through the end of their respective terms, the value of contracted renewals for current SaaS and rental contracts based on 12 months of value, plus annualized maintenance revenues from existing on-premise contracts based on the rolling average of the previous 12 months.

“Overall, we are pleased with our third quarter 2010 results, including our 18 percent growth in license revenue and 12 percent increase in Non-GAAP revenue compared to the third quarter of 2009, an impressive 35 percent improvement in third quarter TCB of $133.9 million compared to $99.3 million in the third quarter 2009, significant expansion in application sales, and solid cash flow from operations of $12.0 million,” said Bruce Cameron, president of CDC Software. “While the transition to this hybrid model, which includes increased R&D and sales and marketing spending, will impact profitability in the short-term, we believe we are headed in the right direction for resuming healthy top line revenue growth, and maintaining above industry average profitability with a more predictable recurring revenue stream. With an impressive 35 percent improvement in third quarter Total Contracted Backlog compared to the third quarter 2009, and increases in our recurring revenue for the third quarter, we expect to accomplish our previously announced goal to develop recurring revenue streams reaching closer to 70 percent of total revenue over the next few years. We also expect to accomplish our plans to expand our hybrid business model through organic growth, accelerating cross-sell activity and expanding in emerging markets, as well as through strategic investments and acquisitions.”

For more information regarding the financial performance of CDC Software during the third quarter of 2010, please see CDC Software's third quarter 2010 earnings press release located at the company's website: www.cdcsoftware.com.

CDC Global Services

On a standalone basis, CDC Global Services had the following results for the three months ended Sept. 30, 2009 and 2010:

Q3 2009 Q3 2010 GAAP Revenue: $19.2 million $18.6 million Adjusted EBITDA: $0.3 million $(0. 3) million Adjusted EBITDA Margin: 2% (2)%

For the third quarter of 2010, CDC Global Services reported GAAP revenue of $18.6 million and Adjusted EBITDA of negative ($300,000), compared to GAAP revenue of $19.2 million and Adjusted EBITDA of $300,000 in the third quarter of 2009. For the nine months ended Sept 30, 2010, Adjusted EBITDA improved to $2.3 million compared to $914,000 for the same period a year ago.

Third quarter 2010 revenue of $18.6 million improved sequentially compared to $16.4 million and $17.6 million reported in the first and second quarters in 2010, respectively. Total staff utilization was approximately 87 percent in the third quarter of 2010.

In the third quarter of 2010, CDC Global Services opened its Foshan Municipal Cloud Computing Center in China, which provides cloud-based computing resources to the public sector users and businesses in the city of Foshan and the neighboring regions. During the third quarter, CDC Global Services also launched its ERP Solutions practice in China as well. These practices are positioning the company for growth in the cloud computing market and for deeper penetration into the ERP consulting and solution services market in China.

CDC Global Services was also included in the Deloitte Technology Fast 50 China Program as recognition of its growth and its delivery of innovation and quality to the IT services market. Deloitte Technology Fast 50 China ranks mainland China and Hong Kong technology companies based on a three-year average revenue growth rates.

Some additional highlights in the CDC Global Services business during the third quarter of 2010 included several significant engagements:

A Fortune 500 supplier of systems and services to aerospace and defense markets purchased CDC Global Services’ Catalyst XPS small parcel shipping solution and related services at 15 sites in North America, Canada, EMEA and Asia/Pacific.
CDC Global Services has been engaged to provide IT strategic planning advice to Zhangzhou Development Park in the coastal region of China.
CDC Global Services was chosen to provide SAP consulting services for the China State Power Grid National Project.
CDC Global Services has secured several SAP staff augmentation contracts in Shanghai, and expects to grow rapidly in this practice.
CDC Global Services is providing security reviews of multiple banking sites throughout Asia/Pacific for the largest Australian bank in Asia.
One of the largest insurance companies in the world has contracted with CDC Global Services to provide IT and related services for its business analytics initiative.

“We are making significant progress in expanding our business in China with the recent opening of the Foshan Cloud Computing Center, as well as the launch of the new practices announced last quarter. We also plan to open up new offices in Nanjing and Foshan and a new consulting joint venture in Beijing in the next few months,” said CK Wong, CEO of CDC Global Services. “Already, we have been seeing momentum in our consulting and services business with a number of key new engagements in China.”

New Media (includes CDC Games and China.com)

On a standalone basis, CDC Games had the following results for the three months ended Sept. 30, 2009 and 2010:

Q3 2009 Q3 2010 GAAP Revenue: $6.2 million $6.4 million Adjusted EBITDA: $(0.9) million $1.1 million Adjusted EBITDA Margin: (14)% 16%

GAAP revenue for CDC Games during the third quarter of 2010 increased by 4.0 percent to $6.4 million, compared to $6.2 million in the third quarter of 2009. Adjusted EBITDA for the third quarter of 2010 improved to $1.1 million, compared to negative Adjusted EBITDA of ($900,000) in the third quarter of 2009, primarily due to cost-cutting measures and streamlining of operations. Adjusted EBITDA margin was 16 percent in the third quarter of 2010, compared to Adjusted EBITDA margin of negative (14) percent in the third quarter of 2009.

Update on Games Portfolio in the New Media Business

During the third quarter of 2010, CDC Games’ saw increased metrics for Yulgang after the launch of its major 5.0 release. Revenue has nearly doubled for EVE Online since the launch of this game’s Wormhole expansion release in June 2010. Street Gears, a new casual game, is currently in closed beta testing, a new version release of Shaiya is planned for later this month, and a new game called Mythical Legends is currently in early alpha testing.

CDC Games holds the exclusive distribution rights in China for The Lord of the Rings Online (LOTRO), which is the only massively multiplayer online role playing game (MMORPG) based on the literary works of J.R.R. Tolkien. LOTRO is developed by North American-based Turbine, Inc., a subsidiary of Warner Bros. Home Entertainment Group. CDC Games is currently working with the technical and support staff of Turbine in the development of the free-to-play version that will also include social media features. Previously, CDC Games and Turbine were working on the development of a subscription-based game for China. Turbine, however, later developed a free-to-play version of LOTRO for launch in North America and Europe. Despite causing a delay in the launch, CDC Games decided to launch LOTRO as a free-to-play game since the company believes this model will meet with more success in the China market. Furthermore, Turbine has advised that the LOTRO launch this Fall was considered successful in North America and Europe. The planned launch of LOTRO in China is expected at the end of the first quarter of 2011.

“We are pleased with our improved revenue and profitability, despite the third quarter being impacted by less game playing time due to summer vacations,” said Simon Wong, CEO of CDC Games. “The new version releases of our games have been well received in the third quarter and we are looking forward to launching new games and major new version releases in the coming months. We are also looking forward to the upcoming launch of LOTRO as a free-to-play game. We have continued to receive solid support from Turbine and we are working diligently with them for our upcoming planned launch date. While we delayed the launch due to our decision to offer the game as a free-to-play, we believe this is the best model for LOTRO in the China games market. Most notably, Turbine’s success in launching LOTRO as a free-to play-game in the U.S. and Europe gives us added confidence in our upcoming planned launch.”

On a standalone basis, China.com had the following results for the three months ended Sept. 30, 2009 and 2010:

Q3 2009 Q3 2010 GAAP Revenue: $2.7 million $3.1 million Adjusted EBITDA: $(0.4) million $(0.3) million

Adjusted EBITDA Margin:

(14)%

(9)%

GAAP revenue for the third quarter of 2010 was $3.1 million, compared to $2.7 million in the third quarter of 2009. China.com reported negative Adjusted EBITDA of approximately ($300,000) in Q3 2010, compared to negative Adjusted EBITDA of approximately ($400,000) in Q3 2009.

During the third quarter of 2010, China.com’s Portal business continued to expand its Automobile and web games channels and added some major global brand clients. China.com had a solid performance from its TTG business that organized the Singapore Gifts and Stationary Show and its print projects from the Shanghai EXPO. China.com’s tourism publication has been appointed the official publication for the inaugural Youth Olympics in Singapore.

On September 10, 2010, the board of directors of China.com approved a special dividend of $0.077 per share, or $8.2 million to its shareholders. CDC Corporation, which owns approximately 79 percent of China.com, received approximately $6.5 million in cash.

Minority Interest Investments

CDC Corporation’s other investment 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.

Below is a brief snapshot of CDC Corporation’s minority-interest investments:

A memorandum of understanding (MOU) was signed to jointly establish a private equity fund, “Foshan Nanhai-CDC Technology and New Media Fund,” initially to be funded at 600 million RMB, with the government of Nanhai District, Foshan. The Fund is expected to mainly consist of investments in start-up and growth technology companies, as well as leading U.S. technology and new media companies. Formal approvals from the China government for this RMB Fund are expected in the coming months.
Menue (formerly Bbmf) is one of the largest independent operators of 3G comics in Japan. CDC Corporation holds a 20 percent equity interest in this company. Menue has developed and launched more than 400 mobile gaming applications. The company also recently launched operations in the U.S.
eBizNET, a provider of SaaS supply chain execution solutions, is part of CDC Software’s Strategic Cloud Investment Partner Program (SCIPP). eBizNET recently won the 4th Express, Logistics and Supply Chain award in the category of “Best Supply Chain Management Solutions Provider of the Year.”
Marketbright, a SaaS marketing automation solutions provider, is part of CDC Software’s SCIPP. In Q3 2010, the company closed on a Marketbright/Pivotal cross-sell deal to one of the leading digital security companies and has several others in the pipeline. The integration tool for Marketbright and CDC’s Pivotal CRM solution is expected to be available at the end of this year.

Share Buyback

Since September 2010, CDC Corporation has purchased a total of 47,500 of its shares at an average price of $4.17 per share. Since the beginning of the year, CDC Corporation, management and certain affiliates of the company, have purchased an aggregate of approximately 167,391 shares at an average price of $5.53 per share. Since the third quarter of 2009, CDC Corporation, CDC Software, management, affiliates and family members, have purchased, in aggregate, a total of nearly $8.0 million of the respective CDC Corporation and CDC Software shares.

Concluding Remarks

Yip concluded, ”In the third quarter, we continued to advance our two key investment strategies that include enhancing the value of our growth-oriented core assets in hybrid enterprise software, IT services and New Media, and co-investing with venture capital and private equity funds through minority interests in fast growth companies in emerging markets. We believe we are executing well on the strategies we have in place, and along with our planned RMB Fund, we believe we are creating additional value for our assets, as well positioning the company to deliver improved returns for shareholders. As a valued-added growth investor, we believe CDC’s core assets are not reflected in its current market valuation, and as such, we expect to continue to buy CDC Corporation shares.”

Conference Call

The company's senior management will host a conference call for financial analysts and investors on Thursday, Nov. 18, 2010, at 8:30 AM EDT.

USA-based Toll Free Number: +1-(888) 603-6873

International: +1 973 582 2706

Passcode: #:# 18661278 Call Leader: Monish Bahl

Investors are invited to listen to a live webcast of the conference call which can be accessed through the investor section of the CDC Corporation website at www.cdccorporation.net. The call can also be accessed through www.streetevents.com. To listen to the call, please go to the website at least 15 minutes prior to the call and download any necessary audio software.

Instant Replay

For those unable to call in, a digital instant replay will be available after the call until Dec. 2, 2010. U.S. based Toll Free Number: +1 800 642 1687, U.S.-based Toll Number: +1 706 645 9291 Passcode or PIN #: 18661278

Footnotes:

All dollar amounts are in U.S. dollars

* CDC Corporation has recently changed the composition of its Adjusted EBITDA measurement, as provided herein, to be consistent with the presentation of Adjusted EBITDA for its subsidiary, CDC Software Corporation. CDC Corporation believes this revised presentation is a useful measure of operating performance.

(a) Adjusted Financial Measures

This press release includes Adjusted EBITDA, Non-GAAP revenue, Non-GAAP cash and cash equivalents, Adjusted EBITDA margin, Non-GAAP SaaS revenue, which are not prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) (collectively, the "Non-GAAP Financial Measures"). We believe that these Non-GAAP Financial Measures are helpful in understanding our past financial performance and our future results. Non-GAAP Financial Measures are not alternatives for measures such as revenue, cash and cash equivalents and other measures prepared under GAAP. These Non-GAAP Financial measures may also be different from Non-GAAP measures used by other companies. Non-GAAP Financial Measures should not be used as a substitute for, or considered superior to, measures of financial performance prepared in accordance with GAAP.

Investors should be aware that these Non-GAAP Financial Measures have inherent limitations, including their variance from certain of the financial measurement principals underlying GAAP, should not be considered as a replacement for GAAP performance measures, and should be read in conjunction with our consolidated financial statements prepared in accordance with GAAP. These supplemental Non-GAAP Financial Measures should not be construed as an inference that the Company's future results will be unaffected by similar adjustments to net earnings determined in accordance with GAAP. Reconciliations of Non-GAAP Financial Measures to GAAP are provided herein immediately following the financial statements included in this press release.

(b) Revised 2009 Information

Results provided herein for 2009 may be different than those previously reported in our press releases due to certain year-end adjustments required to be made in connection with the audit of our financial statements for the year ended December 31, 2009.

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 third 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 third 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. These forward-looking statements include statements regarding our beliefs and expectations about any potential investments or transactions that we may undertake, our beliefs and expectations regarding our transition to a hybrid model at CDC Software, including future increases in R&D and sales and marketing expense, as well as the potential impact to profitability, our beliefs regarding any future revenue or business growth, recurring revenues, and other metrics, our beliefs regarding plans to expand our hybrid business through organic growth, accelerated cross-selling activity, expanding in emerging markets, as well as through strategic investments and acquisitions, our beliefs and expectations for future growth in our CDC Global Services business, including growth in the cloud computing and ERP consulting and sales markets, our beliefs and expectations regarding any trends or momentum we may see, our expectations regarding any future or planned game testing or launches, including LOTRO, our beliefs regarding the free-to-play version of LOTRO and the potential success thereof, our beliefs and expectations regarding the Foshan Nanhai-CDC Technology and New Media Fund, including the potential receipt of requisite approvals relating thereto, our beliefs and expectations regarding our strategies and our success in executing thereon, our beliefs regarding the value of our shares and our sum of parts valuation approach, our beliefs about our plans and strategies and factors that may affect them, our beliefs regarding any amounts, projections of performance and other matters relating to any future period, our expectations regarding revenue and SaaS revenue growth, including the rate thereof, our goals with respect to levels of recurring revenue, our plans relating to joint ventures or other partnerships, our beliefs and expectations regarding improved profitability and our positioning for growth at CDC Global Services, our expectations regarding opportunities for revenue growth in China, our beliefs regarding the decrease in metrics at CDC Games and the condition of the games market in China, our beliefs regarding value that can be provided to our customers and potential customers, our expectations regarding future expansion in China and the potential benefits to us, our customers and shareholders, our beliefs regarding the utility of the Non-GAAP and pro forma financial information provided herein, and other statements that are not historical fact, the achievement of which involve risks, uncertainties and assumptions. 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 effects of restructurings and rationalization of operations in our companies; (d) the ability to address technological changes and developments including the development and enhancement of products; (e) the ability to develop and market successful products and services; (f) the entry of new competitors and their technological advances; (g) the need to develop, integrate and deploy enterprise software applications to meet customer's requirements; (h) the possibility of development or deployment difficulties or delays; (i) the dependence on customer satisfaction with the company's games, software products and services; (j) continued commitment to the deployment of the products, including enterprise software solutions; (k) risks involved in developing software solutions and integrating them with third-party software and services; (l) the continued ability of the company's products and services to address client-specific requirements; (m) demand for and market acceptance of new and existing enterprise software and services and the positioning of the company's solutions; (n) risks associated with our convertible debt; (o) the outcome of any litigation in which we are a party; and (p) the ability of staff to operate the enterprise software and extract and utilize information from the company's products and services. If any such risks or uncertainties materialize or if any of the assumptions proves incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make. Also, the results and benefits experienced by customers and users set forth in this press release may differ from those of other users and customers. Further information on risks or other factors that could cause results to differ is detailed in filings or submissions with the United States Securities and Exchange Commission made by CDC Corporation in its 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. For these and other reasons, investors are cautioned not to place undue reliance upon any forward-looking statement in this press release.

CDC CorporationConsolidated Balance Sheets(Amounts in thousands of U.S. dollars except share and per share data) December 31, September 30, 2009 (b) 2010 ASSETS Audited Unaudited Current assets: Cash $ 115,290 $ 90,918 Restricted cash 790 140

Accounts receivable (net of allowance of $8,839 and $8,367 at December 31, 2009 and September 30, 2010, respectively)

58,883 57,873 Available-for-sale securities 2,418 1,427 Deferred tax assets 5,387 5,527 Prepayments and other current assets 13,276 17,265 Total current assets 196,044 173,150 Property and equipment, net 13,500 11,261 Goodwill 177,858 197,940 Intangible assets, net 94,859 85,961 Investments 12,863 13,030 Equity investments 11,360 11,360 Deferred tax assets 35,983 36,171 Other assets 4,220 6,680 Total assets $ 546,687 $ 535,553 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 22,513 $ 20,487 Purchase consideration payables 2,457 1,638 Income tax payable 2,867 5,539 Accrued liabilities 37,382 37,087 Restructuring accruals, current portion 2,061 1,543 Short-term loans 12,539 7,923 Convertible notes 52,320 57,101 Deferred revenue 59,975 57,369 Deferred tax liabilities 1,797 1,669 Total current liabilities 193,911 190,356 Deferred tax liabilities 23,985 24,069 Long-term debt - 8,242 Purchase consideration payables, net of current portion 810 2,452 Other liabilities 14,584 15,812 Total liabilities 233,290 240,931 Contingencies and commitments Shareholders’ equity:

Preferred shares, $0.003 par value; 1,666,667 shares authorized, no shares issued

- -

Class A common shares, $0.00075 par value; 266,666,667 shares authorized; 39,492,990 and 39,557,163 shares issued as of December 31, 2009 and September 30, 2010, respectively; 35,253,982 and 35,182,698 shares outstanding as of December 31, 2009 and September 30, 2010, respectively

28 28 Additional paid-in capital 740,981 744,481

Common stock held in treasury; 4,239,008 and 4,374,465 shares at December 31, 2009 and September 30, 2010, respectively

(58,091 ) (57,824 ) Accumulated deficit (427,169 ) (444,739 ) Accumulated other comprehensive income 18,796 21,324 Total shareholders’ equity 274,545 263,270 Noncontrolling interest 38,852 31,352 Total equity 313,397 294,622 Total liabilities and shareholders’ equity $ 546,687 $ 535,553 CDC Corporation Unaudited Consolidated Statement of Operations (Amounts in thousands of U.S. dollars except share and per share data) Three months ended June 30, September 30, 2010 2010 REVENUE: CDC Software $ 52,591 $ 53,007 CDC Global Services 15,767 15,870 CDC Games 7,111 6,384 China.com 3,092 3,095 Total revenue 78,561 78,356 COST OF REVENUE: CDC Software 23,612 23,517 CDC Global Services 12,932 13,224 CDC Games 5,233 4,976 China.com 1,362 1,342 Total cost of revenue 43,139 43,059 Gross profit 35,422 35,297 Gross margin % 45 % 45 % OPERATING EXPENSES: Sales and marketing expenses 13,000 12,172 Research and development expenses 7,062 6,868 General and administrative expenses 15,125 18,277 Exchange gain (1,182 ) (1,139 ) Amortization expenses 2,121 2,195 Restructuring and other charges 878 (18 ) Total operating expenses 37,004 38,355 Operating loss (1,582 ) (3,058 ) Operating margin % -2 % -4 % Other loss, net (1,870 ) (1,526 ) Loss before income taxes (3,452 ) (4,584 ) Income tax expense (3,964 ) (1,409 ) Net loss (7,416 ) (5,993 ) Net (income) loss attributable to noncontrolling interest (493 ) (107 ) Net loss attributable to controlling interest $ (7,909 ) $ (6,100 ) Basic and diluted loss per share from operations attributable to controlling interest (1) $ (0.23 ) $ (0.18 ) Basic and diluted loss per share attributable to controlling interest (1) $ (0.23 ) $ (0.18 ) Weighted average number of common shares outstanding - basic 35,232,253 35,162,009 Weighted average number of common shares outstanding - diluted 35,232,253 35,162,009 (1) Refer to "Unaudited Basic and Diluted Earnings (Loss) Per Share Calculation" schedule for calculation of earnings per share amounts. CDC Corporation Unaudited Consolidated Statement of Operations (Amounts in thousands of U.S. dollars except share and per share data)

Three months ended

September 30,

2009 2010 REVENUE: CDC Software $ 48,611 $ 53,007 CDC Global Services 19,223 15,870 CDC Games 6,163 6,384 China.com 2,652 3,095 Total revenue 76,649 78,356 COST OF REVENUE: CDC Software 21,445 23,517 CDC Global Services 16,020 13,224 CDC Games 4,799 4,976 China.com 1,170 1,342 Total cost of revenue 43,434 43,059 Gross profit 33,215 35,297 Gross margin % 43 % 45 % OPERATING EXPENSES: Sales and marketing expenses 11,705 12,172 Research and development expenses 4,001 6,868 General and administrative expenses 17,147 18,277 Exchange gain (848 ) (1,139 ) Amortization expenses 1,953 2,195 Restructuring and other charges 1,242 (18 ) Total operating expenses 35,200 38,355 Operating loss (1,985 ) (3,058 ) Operating margin % -3 % -4 % Other income (loss), net 10,506 (1,526 ) Income (loss) before income taxes 8,521 (4,584 ) Income tax expense (1,907 ) (1,409 ) Income (loss) from continuing operations 6,614 (5,993 ) Loss from operations of discontinued subsidiaries, net of tax (139 ) - Net income (loss) 6,475 (5,993 ) Net income attributable to noncontrolling interest (892 ) (107 ) Net income (loss) attributable to controlling interest $ 5,583 $ (6,100 ) Basic and diluted earnings (loss) per share from continuing operations attributable to controlling interest (1) $ 0.15 $ (0.18 ) Basic and diluted earnings (loss) per share attributable to controlling interest (1) $ 0.15 $ (0.18 ) Weighted average number of common shares outstanding - basic 35,333,465 35,162,009 Weighted average number of common shares outstanding - diluted 36,051,224 35,162,009 (1) Refer to "Unaudited Basic and Diluted Earnings (Loss) Per Share Calculation" schedule for calculation of earnings per share amounts. CDC Corporation Unaudited Consolidated Statement of Operations (Amounts in thousands of U.S. dollars except share and per share data)

Nine months ended

September 30,

2009 2010 REVENUE: CDC Software $ 149,573 $ 156,126 CDC Global Services 57,581 48,078 CDC Games 21,879 21,463 China.com 8,112 9,091 Total revenue 237,145 234,758 COST OF REVENUE: CDC Software 69,327 71,097 CDC Global Services 48,156 39,152 CDC Games 15,492 15,794 China.com 3,680 4,389 Total cost of revenue 136,655 130,432 Gross profit 100,490 104,326 Gross margin % 42 % 44 % OPERATING EXPENSES: Sales and marketing expenses 34,159 37,736 Research and development expenses 12,708 20,619 General and administrative expenses 48,785 48,561 Exchange gain (2,032 ) (1,697 ) Amortization expenses 5,894 6,475 Restructuring and other charges 3,332 698 Total operating expenses 102,846 112,392 Operating loss (2,356 ) (8,066 ) Operating margin % -1 % -3 % Other income (loss), net 27,235 (4,493 ) Income (loss) before income taxes 24,879 (12,559 ) Income tax expense (7,107 ) (4,188 ) Income (loss) from continuing operations 17,772 (16,747 ) Loss from operations of discontinued subsidiaries, net of tax (409 ) - Net income (loss) 17,363 (16,747 ) Net (income) loss attributable to noncontrolling interest (825 ) (823 ) Net income (loss) attributable to controlling interest $ 16,538 $ (17,570 ) Basic and diluted earnings (loss) per share from continuing operations attributable to controlling interest (1) $ 0.43 $ (0.51 ) Basic and diluted earnings (loss) per share attributable to controlling interest (1) $ 0.42 $ (0.51 ) Weighted average number of common shares outstanding - basic 35,415,668 35,222,234 Weighted average number of common shares outstanding - diluted 35,598,257 35,222,234

(1) Refer to "Unaudited Basic and Diluted Earnings (Loss) Per Share Calculation" schedule for calculation of earnings per share amounts. CDC Corporation Unaudited Consolidated Statement of Cash Flows (Amounts in thousands of U.S. dollars) Three months ended June 30, September 30, 2010 2010 OPERATING ACTIVITIES: Net loss $ (7,416 ) $ (5,993 ) Adjustments to reconcile net income to net cash provided by operating activities Loss on disposal of property and equipment 17 133 Gain on disposal of available-for-sale securities (101 ) (373 ) Bad debt expense 426 774 Amortization expense 6,679 6,813 Depreciation expense 1,820 1,695 Stock compensation expenses 1,535 1,464 Deferred income tax provision 2,293 (2,455 ) Exchange gain (1,182 ) (1,139 ) Amortization of debt issuance costs (63 ) 87 Interest expense 1,570 1,535 Changes in operating assets and liabilities: Accounts receivable (1,251 ) 5,214 Deposits, prepayments and other receivables 2,353 (782 ) Other assets 688 200 Accounts payable (1,555 ) 49 Accrued liabilities (1,346 ) (1,857 ) Deferred revenue (1,929 ) (2,404 ) Income tax payable 1,192 3,395 Other liabilities (99 ) 572 Net cash provided (used) in operating activities 3,631 6,928 INVESTING ACTIVITIES:

Acquisitions, net of cash acquired

(21,075 ) 216 Payments for prior year acquisitions (2,100 ) (780 ) Purchase of property, plant & equipment (144 ) (670 ) Purchases of intangible assets (956 ) (9 ) Disposal (acquisition) of cost method investments (82 ) 372 Purchase of available-for-sale securities (391 ) - Investment in cost method investees (1,920 ) (148 ) Change in restricted cash 606 - Net cash used in investing activities (26,062 ) (1,019 ) FINANCING ACTIVITIES: Issuance of share capital, net of offering costs - 178 Short-term borrowings (repayments) 12,699 (7,208 ) Debt issuance costs (1,389 ) - Payment for capital lease obligations (289 ) (92 ) Purchase of CDC Software shares (1,599 ) (1,712 ) Purchases of treasury stock (569 ) (843 ) Dividend distribution by China.com - (2,553 ) Other financing - 1,266 Net cash provided (used) in financing activities 8,853 (10,964 ) Effect of exchange differences on cash (834 ) 2,318 Net decrease in cash (14,412 ) (2,737 ) Cash at beginning of period 108,067 93,655 Cash at end of period $ 93,655 $ 90,918 CDC Corporation Unaudited Consolidated Statement of Cash Flows (Amounts in thousands of U.S. dollars) Three months ended September 30, Nine months ended September 30, 2009 2010 2009 2010 OPERATING ACTIVITIES: Net income (loss) $ 6,475 $ (5,993 ) $ 17,363 $ (16,747 ) Adjustments to reconcile net income to net cash provided by operating activities Loss on disposal of property and equipment 147 133 226 150 Loss (gain) on disposal of available-for-sale securities (416 ) (373 ) 29 (1,352 ) Bad debt expense 345 774 1,084 1,152 Amortization expense 6,500 6,813 20,415 20,584 Depreciation expense 1,725 1,695 5,275 5,113 Stock compensation expenses 2,382 1,464 4,215 4,112 Deferred income tax provision 1,752 (2,455 ) 6,909 (162 ) Exchange gain (848 ) (1,139 ) (2,032 ) (1,697 )

Amortization of debt issuance costs and debt discount on convertible notes

1,115 87 4,312 145 Fair market value adjustment on convertible notes (11,507 ) - (33,675 ) - Interest income (1 ) - (51 ) - Interest expense - 1,535 - 4,700 Changes in operating assets and liabilities: Accounts receivable 10,165 5,214 25,750 4,119 Deposits, prepayments and other receivables 752 (782 ) (1,242 ) (1,613 ) Other assets 58 200 (612 ) 414 Accounts payable (692 ) 49 (1,417 ) (3,328 ) Accrued liabilities (1,437 ) (1,857 ) (9,459 ) (5,284 ) Deferred revenue (4,512 ) (2,404 ) (8,445 ) (5,025 ) Income tax payable 445 3,395 (3,333 ) 2,594 Other liabilities (328 ) 572 121 783 Net cash provided by operating activities 12,120 6,928 25,433 8,658 INVESTING ACTIVITIES:

Acquisitions, net of cash acquired

(1,324 ) 216 (1,324 ) (23,105 ) Payments for prior year acquisitions (944 ) (780 ) (944 ) (2,880 ) Purchase of property, plant & equipment (2,008 ) (670 ) (3,022 ) (1,101 ) Purchases of intangible assets (253 ) (9 ) (253 ) (1,222 ) Payment for capitalized software (905 ) - (3,000 ) - Disposal (acquisition) of cost method investments (398 ) 372 (1,226 ) 1,766 Purchase of available-for-sale securities - - - (688 ) Investment in cost method investees - (148 ) (38 ) (2,068 ) Proceeds from disposal of available-for-sale securities 11,025 - 26,352 1,427 Change in restricted cash 8 - 3,662 686 Net cash provided (used) in investing activities 5,201 (1,019 ) 20,207 (27,185 ) FINANCING ACTIVITIES: Issuance of share capital, net of offering costs 52,032 178 52,544 178 Short-term borrowings (repayments) (2,698 ) (7,208 ) (7,868 ) 2,679 Repayment of convertible notes (34,569 ) - (100,671 ) - Debt issuance costs - - - (1,389 ) Payment for capital lease obligations (95 ) (92 ) (460 ) (499 ) Purchase of CDC Software shares - (1,712 ) - (4,625 ) Purchases of treasury stock (241 ) (843 ) (1,350 ) (1,541 ) Dividend distribution by China.com (2,863 ) (2,553 ) (13,518 ) (2,553 ) Other financing - 1,266 - 1,266 Net cash provided (used) in financing activities 11,566 (10,964 ) (71,323 ) (6,484 ) Effect of exchange differences on cash 805 2,318 1,553 639 Net increase (decrease) in cash 29,692 (2,737 ) (24,130 ) (24,372 ) Cash at beginning of period 111,871 93,655 165,693 115,290 Cash at end of period $ 141,563 $ 90,918 $ 141,563 $ 90,918 CDC Corporation Unaudited Reconciliation From GAAP Results to Adjusted EBITDA (Amounts in thousands of U.S. dollars) Three months ended June 30, September 30, 2010 2010 (a) Reconciliation from GAAP results to Adjusted EBITDA Operating loss $ (1,582 ) $ (3,058 ) Add back restructuring and other charges 878 (18 ) Add back depreciation expense 1,820 1,695 Add back amortization expense 2,121 2,194 Add back amortization expense included in cost of revenue 4,558 4,619 Add back stock compensation expenses 1,535 1,464 Subtract exchange gain (1,182 ) (1,139 ) Add back deferred revenue grind (1) 1,444 1,194 Adjusted EBITDA $ 9,592 $ 6,951 Adjusted EBITDA margin % 12 % 9 % CDC Software Unaudited Reconciliation From GAAP Results to Adjusted EBITDA (Amounts in thousands of U.S. dollars) June 30, September 30, 2010 2010 (a) Reconciliation from GAAP results to Adjusted EBITDA Operating income $ 4,594 $ 3,852 Add back restructuring and other charges 602 (376 ) Add back depreciation expense 952 869 Add back amortization expense 1,296 1,350 Add back amortization expense included in cost of revenue 3,457 3,515 Add back stock compensation expenses 552 764 Subtract exchange gain (1,155 ) (1,105 ) Add back deferred revenue grind (1) 1,444 1,194 Adjusted EBITDA $ 11,742 $ 10,063 Adjusted EBITDA margin % 22 % 19 % CDC Global Services Unaudited Reconciliation From GAAP Results to Adjusted EBITDA (Amounts in thousands of U.S. dollars) June 30, September 30, 2010 2010 (a) Reconciliation from GAAP results to Adjusted EBITDA Operating income loss $ (1,568 ) $ (2,598 ) Add back restructuring and other charges 1,373 1,457 Add back depreciation expense 70 84 Add back amortization expense 641 605 Add back amortization expense included in cost of revenue 1 4 Add back stock compensation expenses 105 135 Add back exchange loss - 1 Add back deferred revenue grind (1) - - Adjusted EBITDA $ 622 $ (312 ) Adjusted EBITDA margin % 4 % -2 % CDC Games Corporation Unaudited Reconciliation From GAAP Results to Adjusted EBITDA (Amounts in thousands of U.S. dollars) June 30, September 30, 2010 2010 (a) Reconciliation from GAAP results to Adjusted EBITDA Operating income loss $ (1,638 ) $ (1,061 ) Add back restructuring and other charges 141 139 Add back depreciation expense 734 709 Add back amortization expense - - Add back amortization expense included in cost of revenue 1,100 1,100 Add back stock compensation expenses 181 165 Add (subtract) exchange loss (gain) - - Add back deferred revenue grind (1) - - Adjusted EBITDA $ 518 $ 1,052 Adjusted EBITDA margin % 7 % 16 % CDC China.com Unaudited Reconciliation From GAAP Results to Adjusted EBITDA (Amounts in thousands of U.S. dollars) June 30, September 30, 2010 2010 (a) Reconciliation from GAAP results to Adjusted EBITDA Operating income loss $ (496 ) $ (515 ) Add back restructuring and other charges - - Add back depreciation expense 60 33 Add back amortization expense - - Add back amortization expense included in cost of revenue - - Add back stock compensation expenses 146 210 Add (subtract) exchange loss (gain) - - Add back deferred revenue grind (1) - - Adjusted EBITDA $ (290 ) $ (272 ) Adjusted EBITDA margin % -9 % -9 % Corporate Unaudited Reconciliation From GAAP Results to Adjusted EBITDA (Amounts in thousands of U.S. dollars) June 30, September 30, 2010 2010 (a) Reconciliation from GAAP results to Adjusted EBITDA from operations Operating loss $ (2,474 ) $ (2,736 ) Add back restructuring and other charges (1,238 ) (1,238 ) Add back depreciation expense 4 - Add back amortization expense 184 239 Add back amortization expense included in cost of revenue - - Add back stock compensation expenses 551 190 Subtract exchange gain (27 ) (35 ) Add back deferred revenue grind (1) - - Adjusted EBITDA $ (3,000 ) $ (3,580 )

(1) Deferred revenue grind represents the fair value adjustment required to reduce the historical deferred revenue liabilities from acquisitions to the fair value of the Company’s legal performance obligations plus a normal profit margin based on fulfillment effort.

CDC Corporation Unaudited Reconciliation From GAAP Results to Adjusted EBITDA (Amounts in thousands of U.S. dollars)

Three months ended

Nine months ended

September 30,

2009 2010 2009 2010 (a) Reconciliation from GAAP results to Adjusted EBITDA from continuing operations Operating loss from continuing operations $ (1,985 ) $ (3,058 ) $ (2,356 ) $ (8,066 ) Add back restructuring and other charges 1,242 (18 ) 3,332 698 Add back depreciation expense 1,715 1,695 5,200 5,113 Add back amortization expense 1,953 2,194 5,894 6,474 Add back amortization expense included in cost of revenue 4,547 4,619 14,521 14,110 Add back stock compensation expenses 2,367 1,464 4,125 4,112 Subtract exchange gain (848 ) (1,139 ) (2,032 ) (1,697 ) Add back deferred revenue grind (1) - 1,194 - 3,841 Adjusted EBITDA from continuing operations (2) $ 8,991 $ 6,951 $ 28,684 $ 24,585 Adjusted EBITDA margin % 12 % 9 % 12 % 10 % CDC Software Unaudited Reconciliation From GAAP Results to Adjusted EBITDA (Amounts in thousands of U.S. dollars) Three months ended

September 30,

Nine months ended

September 30,

2009 2010 2009 2010 (a) Reconciliation from GAAP results to Adjusted EBITDA Operating income $ 7,188 $ 3,852 $ 21,767 $ 10,350 Add back restructuring and other charges 900 (376 ) 2,175 426 Add back depreciation expense 766 869 2,372 2,520 Add back amortization expense 1,094 1,350 3,381 3,926 Add back amortization expense included in cost of revenue 3,388 3,515 10,824 10,797 Add back stock compensation expenses 750 764 1,132 1,760 Subtract exchange gain (865 ) (1,105 ) (2,054 ) (1,637 ) Add back deferred revenue grind (1) - 1,194 - 3,841 Adjusted EBITDA (2) $ 13,221 $ 10,063 $ 39,597 $ 31,983 Adjusted EBITDA margin % 27 % 19 % 26 % 20 % CDC Global Services Unaudited Reconciliation From GAAP Results to Adjusted EBITDA (Amounts in thousands of U.S. dollars) Three months ended

September 30,

Nine months ended

September 30,

2009 2010 2009 2010 (a) Reconciliation from GAAP results to Adjusted EBITDA from continuing operations Operating loss from continuing operations $ (2,165 ) $ (2,598 ) $ (6,947 ) $ (5,432 ) Add back restructuring and other charges 1,460 1,457 5,253 5,244 Add back depreciation expense 84 84 220 241 Add back amortization expense 624 605 1,780 1,890 Add back amortization expense included in cost of revenue 1 4 12 6 Add back stock compensation expenses 286 135 590 335 Add back exchange loss 1 1 6 2 Add back deferred revenue grind (1) - - - - Adjusted EBITDA from continuing operations $ 291 $ (312 ) $ 914 $ 2,286 Adjusted EBITDA margin % 2 % -2 % 2 % 5 % CDC Games Corporation Unaudited Reconciliation From GAAP Results to Adjusted EBITDA (Amounts in thousands of U.S. dollars) Three months ended

September 30,

Nine months ended

September 30,

2009 2010 2009 2010 (a) Reconciliation from GAAP results to Adjusted EBITDA from continuing operations Operating loss from continuing operations $ (3,593 ) $ (1,061 ) $ (5,883 ) $ (3,043 ) Add back restructuring and other charges 231 139 607 (173 ) Add back depreciation expense 792 709 2,331 2,185 Add back amortization expense - - 23 - Add back amortization expense included in cost of revenue 1,158 1,100 3,685 3,307 Add back stock compensation expenses 519 165 760 503 Add (subtract) exchange loss (gain) - - - - Add back deferred revenue grind (1) - - - - Adjusted EBITDA from continuing operations $ (893 ) $ 1,052 $ 1,523 $ 2,779 Adjusted EBITDA margin % -14 % 16 % 7 % 13 % CDC China.com Unaudited Reconciliation From GAAP Results to Adjusted EBITDA (Amounts in thousands of U.S. dollars) Three months ended

September 30,

Nine months ended

September 30,

2009 2010 2009 2010 (a) Reconciliation from GAAP results to Adjusted EBITDA from continuing operations Operating loss from continuing operations $ (759 ) $ (515 ) $ (2,064 ) $ (1,426 ) Add back restructuring and other charges - - - - Add back depreciation expense 60 33 238 150 Add back amortization expense - - - - Add back amortization expense included in cost of revenue - - - - Add back stock compensation expenses 340 210 772 445 Add (subtract) exchange loss (gain) - - - - Add back deferred revenue grind (1) - - - - Adjusted EBITDA from continuing operations $ (359 ) $ (272 ) $ (1,054 ) $ (831 ) Adjusted EBITDA margin % -14 % -9 % -13 % -9 % Corporate Unaudited Reconciliation From GAAP Results to Adjusted EBITDA (Amounts in thousands of U.S. dollars) Three months ended

September 30,

Nine months ended

September 30,

2009 2010 2009 2010 (a) Reconciliation from GAAP results to Adjusted EBITDA from continuing operations Operating loss from continuing operations $ (2,656 ) $ (2,736 ) $ (9,229 ) $ (8,515 ) Add back restructuring and other charges (1,349 ) (1,238 ) (4,703 ) (4,799 ) Add back depreciation expense 13 - 39 17 Add back amortization expense 235 239 710 658 Add back amortization expense included in cost of revenue - - - - Add back stock compensation expenses 472 190 871 1,069 Subtract exchange gain 16 (35 ) 16 (62 ) Add back deferred revenue grind (1) - - - - Adjusted EBITDA from continuing operations $ (3,269 ) $ (3,580 ) $ (12,296 ) $ (11,632 ) (1) Deferred revenue grind represents the fair value adjustment required to reduce the historical deferred revenue liabilities from acquisitions to the fair value of the Company’s legal performance obligations plus a normal profit margin based on fulfillment effort. (2) Adjusted EBITDA does not include the adjustment related to capitalized software costs which are credited against research and development expenses in our consolidated statement of operations. Below is a summary of capitalized software credits for 2009 and 2010: Three months ended

September 30,

Nine months ended

September 30,

2009 2010 2009 2010 Subtract capitalized software credit $ (905 ) $ - $ (3,000 ) $ - CDC Corporation Unaudited Reconciliation From GAAP Results to Non-GAAP Net Income (Amounts in thousands of U.S. dollars) Three months ended September 30, June 30, September 30, 2009 2010 2010 (a) Reconciliation from GAAP net income attributable to controlling interest to Non-GAAP net income and Non-GAAP net income per share Net income (loss) attributable to controlling interest $ 5,583 $ (7,909 ) $ (6,100 ) Add back loss (gain) from operations of discontinued subsidiaries, net of tax 139 - - Add back restructuring 1,242 878 (18 ) Add back amortization expense 1,953 2,121 2,194 Add back amortization expense included in cost of revenue 4,547 4,558 4,619 Add back stock based compensation 2,367 1,535 1,464 Subtract capitalized software credits (905 ) - - Subtract exchange gain (848 ) (1,182 ) (1,139 ) Add back deferred revenue grind - 1,444 1,194 Add back non cash tax expense 1,430 1,387 493 Tax affect on all reconciling items @ 30% (2,761 ) (3,266 ) (2,930 ) Non-GAAP net income $ 12,747 $ (434 ) $ (223 ) Non-GAAP net income as % of revenue 17 % -1 % 0 % Weighted average number of common shares outstanding - basic 35,333,465 35,232,253 35,162,009 Weighted average number of common shares outstanding - diluted 36,051,224 35,232,253 35,162,009 Non-GAAP net income per share - basic $ 0.36 $ (0.01 ) $ (0.01 ) Non-GAAP net income per share - diluted $ 0.35 $ (0.01 ) $ (0.01 ) CDC Corporation Unaudited Revenue Details (Amounts in thousands of U.S. dollars) Three months ended September 30, 2009

Elimination of