FY2009/10 Third Quarter Results Announcement

10 February 2010

This presentation may contain certain projection and forward-looking statements that involve risks,

uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove

incorrect, the results of Digital China may differ materially from those expressed or implied by such

forward-looking statements and assumptions. All statements other than statements of historical fact are

statements that could be deemed forward-looking statement, including but not limited to any projections

of revenue, margins, expenses, charges, earnings or other financial items; any statements of the plans,

strategies, and objectives of management for future operations, including execution of any restructuring

plans; any statements concerning the expected development, performance or market share relating to

products or services; any statements of expectation or belief; and any statements of assumptions

underlying any of the foregoing. Risks, uncertainties and assumptions include macroeconomic and

geopolitical trends and events; execution and performance of contracts by suppliers, customers and

partners; employee management issues; the challenge of managing asset levels, including inventory;

the difficulty of aligning expense levels with revenue changes; expectations and assumptions relating to

the execution and timing of workforce restructuring programs.

In addition, statistical and other information relating to the PRC and the technology industry contained in

this presentation have been compiled from various publicly available official or unofficial sources

generally believed to be reliable. However, the quality of such source materials cannot be guaranteed.

Moreover, statistics derived from multiple sources may not be prepared on a comparable basis.

Disclaimer

2

AGENDA

Business Overview

Financial Review

Business Review by Segments

Services

Supply Chain Services

Systems

Distribution

Company Outlook

Management Remarks

3

Business Overview

4

Business Transformation

— “Customer-Focused & Service-Oriented” Model

Industry Market (Services)

Major industries FOCUS: FSI, Telco, Gov & Public

End-2-End service capability

High-tech Industries Market (Supply Chain Services)

DIRECT customer coverage

High efficient and professional logistic capability

Enterprise Market (Systems)

Mid/High-End product PORTFOLIO & EXPERTISE

VALUE-ADDED service capability

SMB & Consumer Market (Distribution)

Most COMPLETE product coverage

Effective RISK MANAGEMENT mechanism

Business Overview

5

Financial Review

6

Financial Highlights

Q3 FY09/10

Turnover up 19.87% yoy to HK$13,362 million

Gross profit margin decreased yoy to 6.80%

Profit from operating activities grew 34.05% yoy to HK$442 million

Net profit up 0.96% yoy to HK$265 million

Net cash inflow from operating activities was HK$558 million

7

Q1-Q3 FY09/10

Turnover up 17.30% yoy to HK$37,826 million

Gross profit margin decreased yoy to 6.44%

Profit from operating activities grew 43.77% yoy to HK$990 million

Net profit up 33.75% yoy to HK$677 million

Basic EPS reached 68.89 HK cents, up 31.14%.

Net cash inflow from operating activities was HK$1,126 million

Income Statement Highlights

HK$ millionFY2009/10

Q1-Q3

FY2009/10

Q3

FY2008/09

Q1-Q3

FY2008/09

Q3

Turnover 37,826 ↑17.30% 13,362 ↑19.87% 32,249 11,147

Gross profit margin (%) 6.44 ↓49 bps* 6.80 ↓14bps* 6.93 6.94

Other income and gains 469 ↑42.35% 227 ↑63.50% 329 139

Operating expenses 1,914 ↑2.04% 693 ↑19.06% 1,876 582

Profit from operating activities 990 ↑43.77% 442 ↑34.05% 689 330

Net profit 677 ↑33.75% 265 ↑0.96% 506 262

Basic EPS (HK cents) 68.89 ↑31.14% - - 52.53 -

As of 31 December 2009

As of 31 December 2008

ROE 16.71% 16.83%

ROA 4.14% 4.23%

Current Ratio 1.36x 1.41x

Quick Ratio 1.10x 1.09x

Capital Expenditure (HK$ million) 52 64

8

* bps=basic points

Segment Breakdown

HK$ million

Distribution Systems Supply Chain Services Consolidated

09/10

Q1-Q3

Y-o-Y

change

09/10

Q1-Q3

Y-o-Y

Change

09/10

Q1-Q3

Y-o-Y

Change

09/10

Q1-Q3

Y-o-Y

Change

09/10

Q1-Q3

Y-o-Y

change

Revenue 17,034 ↑17.3% 10,849 ↑7.7% 6,650 ↑87.6% 3,293 ↓19.8% 37,826 ↑17.3%

Gross Profit 727 ↑14.4% 975 ↑4.9% 225 ↑53.4% 508 ↓3.0% 2,436 ↑9.0%

Gross Profit Margin (%) 4.27% ↓11 bps 8.98% ↓14 bps 3.39% ↓75 bps 15.44% ↑267 bps 6.44% ↓49 bps

Other Income

and Gains0.4 ↓99.2% 13 ↓79.6% 0.2 ↓91.1% 75 ↑139.8% 469 ↑42.4%

Operating expenses (553) ↑19.0% (660) ↓2.8% (162) ↑61.0% (400) ↓16.7% (1,914) ↑2.0%

EBIT 188 ↓13.5% 317 ↑1.6% 61 ↑35.7% 188 ↑140.7% 990 ↑43.8%

Finance Costs (93) ↓31.4%

Tax (157) ↑87.6%

Net profit 677 ↑33.8%

Distribution

727

30%

Systems

975

40%

FY09/10 Q1-Q3 Gross Profit: HK$ 2,436 million

HK$ millionServices

508

21%

9

Supply Chain

Services

225

9%

Distribution

636

28%

Systems

929

42%

FY08/09 Q1-Q3 Gross Profit: HK$ 2,235 million

HK$ millionServices

524

23%

Supply Chain

Services

147

7%

Consolidated Balance Sheet

HK$ million 31 Dec 2009 30 Sep 2009 31 Dec 2008

Fixed assets

Other non-current assets

Inventories

Trade and bills receivables

Prepayments, deposits and other receivables

Cash and bank balances

Derivative financial instruments

394

746

2,925

7,104

1,889

3,319

17

395

388

2,541

6,993

1,438

2,466

21

424

351

2,521

5,220

1,313

2,162

0

Total assets 16,394 14,242 11,991

Trade and bills payables

Other current liabilities

Interest-bearing bank borrowings (current)

Interest-bearing bank borrowings (non-current)

Bond payable

8,006

2,032

935

651

226

6,972

1,702

671

651

226

5,015

2,027

917

703

227

Total liabilities 11,850 10,222 8,889

Share capital

Other reserves

Retained earnings

Proposed final dividend

Minority interests

102

2,141

1,806

0

495

102

2,090

1,590

0

239

96

1,584

1,325

0

97

Total equity 4,544 4,021 3,102

10

Turnover Days for the Group

26.94 22.89

16.79

FY07/08 Q1-Q3 FY08/09 Q1-Q3 FY09/10 Q1-Q3

30.25

37.60

47.40

FY07/08 Q1-Q3 FY08/09 Q1-Q3 FY09/10 Q1-Q3

21.30 22.85 19.31

FY07/08 Q1-Q3 FY08/09 Q1-Q3 FY09/10 Q1-Q3

35.89 37.64

44.88

FY07/08 Q1-Q3 FY08/09 Q1-Q3 FY09/10 Q1-Q3

A/R Turnover Days

Cash Cycle DaysA/P Turnover Days

Inventory Turnover Days

11

0 3,000 6,000 9,000

Toshiba

AMD

INTEL

Asus

Acer

Lenovo

IBM

DELL

Cisco

HP

Concentration Analysis

% of the Group’s total procurement

Purchase from Top 10 Suppliers accounted for 70% of the Group’s total procurement

20%

9%

9%

8%

6%

6%

6%

2%

2%

2% HK$ million

12

Business Development

New Initiatives:- Ensure the successful delivery of key projects within major accounts

- Active involvements in the "master purchase" opportunities to guarantee market leadership

- Grasp the year-end spending season to support the growth

- Further expansion into the retail outlets

Segment Review:

Industry Market (Services)

13

Services Segment FY09/10 Q1-Q3

Turnover decreased by 19.75%

Gross profit margin up to 15.44%

Net profit achieved HK$188 million

Launched Core banking system in Jinshang Bank

Issued Citizen Card in Wuxi City

Awarded the BPO contract for Jinzhong Bank

HK$ million

FY2009/10 Q1-Q3 Services Business:HK$3,293 million

Others10%

Finance18%

Telecom50%

Gov’t22%

BU Quarterly Revenue

14

0

500

1000

1500

2000

FY08/09 Q1 Q2 Q3 Q4 FY09/10 Q1 Q2 Q3

Digital China banking industry total solution ModelB@nk 2.0

Software Infrastructure（Middle Ware, Database, Operation System）

ESB & Financial Service Definition

Data Integration Platform & Financial Data Model

MB Finteractive MB Finnovator MB FintelligenMB Fusion

GL

Co

ntrib

utio

n

Man

agem

ent

Acco

un

ting

PB

OC

CB

RC

SAFE

Risk Management

Finance & Performance

Regulatory

Core BankingTreasu

ry

Trade Fin

ance

Loan

Dep

osit

Paym

ent

Financial Product & Service

Interm

ediate

Bu

siness

Card

Cash

M

anagem

ent

Loan

We

alth

Marketing & Sales

CRM

Loyalty

ECIF

integratio

n

con

tract

Cu

stom

er Service

Marketin

g

Sales

Channel Integration

Multi-Chanel Platform

Bank & Corp. Direct Link

VIP

E-Banking

Intern

et

Mo

bile

ATM

Branch

Teller

Payment Gateway

CNAPS CUP SWIFT

Teleph

on

e

Customer Value Case Banking Solutions

Cred

it

ALM

Op

eration

15

Customer Value Case Telecom Solution

B2B

Integratio

n P

ortal

CorpServiceProducts

CorpCustomer

ISPCustomerService

Gateway / Integrated Business Portal / ISP Systems

3rd PartySolution

Unified Business Support Portal

Concerted Network

Data Integration Portal

BSS A

pp

lication

Pro

cess Integratio

n P

ortal

Operation Analysis System

Billing & Settlement

CRM

HR & KnowledgeManagement

Gateway & Monitoring

Ma

na

gem

ent

Info

rmat

ion

Sys

tem

Quality Control

Complaints

Settlement

Channel Mgt

Product Mgt

Customer Service

Mobile/Fixed-line/Broadband ServiceBOSS/BSS

16

0 100 200 300 400 500

State Taxation

CDB

CNPC

CCB

PICC

China Telecom

Alibaba

China Mobile

Zhongjie

China Unicom

Customer Analysis

HK$ million1.48%

1.95%

2.59%

2.84%

4.20%

4.60%

4.67%

14.63%

11.34%

8.63%

Sales to Top 10 Customers accounted for 36.51% of Services Business’s revenue

% as of Services Business’s revenue

Sales to Top 10 Customers accounted for 56.93% of Services Business’ revenue

17

Segment Review:

High-tech Industries Market(Supply Chain Services)

18

Supply Chain Services Segment FY09/10 Q1-Q3

One-stop supply chain services, comprising logistics, business flow, capital flow and information flow

Targeting IT manufacturers, major vertical account customers, and other high-value products manufacturers

Revenue up 87.58% to HK$6,650 million

FA grew up 85.43%, CES with 100.95%

FY09/10 Q1-Q3 Supply Chain Services Business:HK$6,650 million

Others3%

CES26%

FA71%

19

Distribution

Supply ChainServices

Distribution

Before

Now

Segment Review:

Enterprise Market (Systems)

20

Systems Segment FY09/10 Q1-Q3

Turnover increased by 7.71% yoy.

Effective business expansion into Key Regional Clients, turnover increased by 52.99% yoy

Product-based services revenue sustained a “faster than industry-average” growing trend

Awarded China Development Bank’s Video Conference Solution

Digital China awarded with Petrol China’s Management System for gas station

Others 20%

Packagedsoftware

11%

Storageproducts

16%

Networkingproducts

30%

Unix servers23%

FY09/10 Q1-Q3 Systems Business: HK$10,849 million

21

Segment Review:

SMB & Consumer Market (Distribution)

22

Distribution Segment FY09/10 Q1-Q3

Turnover grew 17.26% yoy

Aggressive expansion into 4th-6th tier cities, turnover increased 70% yoy

Cooperated with BlackBerry

Notebook grew 52% yoy, PC Servers with 49%

Over 400 “@PORT” franchise retail outlets

NotebookComputers

38%

Others 1%

Consumer ITProducts

11%

Accessories9%

Peripherals14%

DataProjectors

2%

PC Servers15%

DesktopComputers

10%

FY09/10 Q1-Q3 Distribution Business:HK$17,034 million

23

Company Outlook

24

-To steer all the business segments to fulfill the pre-set objectives, and ensure a healthy and stable growing year

-To fully leaverage all business initiatives to strengthen the leadership both in marketshare and in major business segments

- Will monitor the opportunities as well as the challenges brought by the macro economic trends, and lay out a practical & comprehensive business plan for further development in the coming year.

Company Outlook

25

26

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