FY2010/11 Interim Results Announcement

10 November 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

Investment Highlights

Financial Review

Business Review by Segments

Services

Systems

Distribution

Supply Chain Services

Company Outlook

Questions & Answers

3

Agenda

4

Investment Highlights

Strong China background

Key participator in National 12th 5-yr Plan

Deputy Chief for National Standard Committee for IT Services

Long lasting relationship with customers from various sectors

20 years of knowledge on the local market and local customers

Extensive network and market coverage

Outstanding technical capabilities with independent intellectual property rights

Top certifications & qualifications as a Integrated Service Provider

Financial Highlights

5

Q2 FY10/11

Turnover up to HK$14,550 million, achieved another record-high of quarterly revenue

Gross profit margin increased significantly yoy to 6.45%

Net profit up 64.79% yoy to HK$247 million

Interim FY10/11

Turnover up 12.65% yoy to HK$27,560 million, gross profit margin increased yoyto 6.41%

Operating profit improved 96.64% yoy, reached HK$529

Net profit up 30.42% yoy to HK$537 million, EPS reached 52.60 HK cents, up 23.07% from 1H FY09/10

Net cash inflow from operating activities was HK$579 million

Overall operating expenses ratio down to 4.75%

Revenue contribution from software and services accounted for 56% within Services, and supported the gross profit margin up to 14.55%

Potentiality for Sm@rt City deployment emerged from 47 cities

Income Statement Highlights

HK$ millionFY2010/11

Interim

FY2010/11

Q2

FY2009/10

Interim

FY2009/10

Q2

Turnover 27,560 ↑12.65% 14,550 ↑5.41% 24,464 13,804

Gross profit margin (%) 6.41 ↑17 bps* 6.45 ↑34 bps* 6.24 6.11

Other income and gains 267 ↑10.41% 148 ↑209.43% 242 48

Operating expenses 1,310 ↑7.33% 714 ↑8.89% 1,221 656

Profit from operating activities 724 ↑32.12% 372 ↑58.60% 548 235

Finance costs 91 ↑62.93% 56 ↑85.22% 56 30

Tax 97 ↑67.02% 70 ↑75.34% 58 40

Net profit 537 ↑30.42% 247 ↑64.79% 412 150

EPS (HK cents) 52.60 ↑23.07% - - 42.74 -

As of 30 September 2010

As of 30 September 2009

ROE 11.96% 10.89%

ROA 2.84% 2.89%

Current Ratio 1.32x 1.44x

Quick Ratio 1.05x 1.17x

Capital Expenditure (HK$ million) 51 27

6

* bps=basic points

0

5,000

10,000

15,000

20,000

FY09/10Q2

Q3 Q4 FY10/11Q1

Q2

0

150

300

450

600

FY09/10Q2

Q3 Q4 FY10/11Q1

Q2

0

300

600

900

1,200

FY09/10Q2

Q3 Q4 FY10/11Q1

Q2

2

4

6

8

10

FY09/10

Q2 Q3 Q4 FY10/11

Q1 Q2

0

1

2

3

4

FY09/10

Q2 Q3 Q4 FY10/11

Q1 Q2

0

10

20

30

40

50

FY09/10

Q2 Q3 Q4 FY10/11

Q1 Q2

Key Financial Performance

Revenue$ million

EPS$

Net Margin%

Operating Expense%

Operating Income$ million

Gross Margin%

+5% Y/Y+12% seq

+34bps Y/Y+8bps seq

+61bps Y/Y-54bps seq

+56% Y/Y-15% seq

+59% Y/Y+6% seq

7

+9% Y/Y+20% seq

Consolidated Statement of Financial Position

HK$ million 30 Sep 2010 30 Jun 2010 30 Sep 2009

Fixed assets

Other non-current assets

Inventories

Trade and bills receivables

Prepayments, deposits and other receivables

Cash and equivalents

Derivative financial instruments

Available-for-sale investments (current)

672

1,541

3,529

8,304

1,635

3,462

28

-

468

1,174

3,147

6,792

1,835

2,812

42

159

395

388

2,541

6,993

1,438

2,466

21

-

Total assets 19,171 16,429 14,242

Trade and bills payables

Other current liabilities

Interest-bearing bank borrowings (current)

Interest-bearing bank borrowings (non-current)

Bond payables

Derivative financial instruments

9,161

2,639

817

1,284

265

3

7,235

1,984

1,007

994

228

4

6,972

1,702

671

651

226

-

Total liabilities 14,169 11,452 10,222

Share capital

Other reserves

Retained earnings

Proposed final dividend

Minority interests (Non-controlling interest)

102

2,184

2,202

-

514

102

2,155

1,956

289

475

102

2,090

1,590

-

239

Total equity 5,002 4,977 4,0218

43 53 57 54 53

FY09/10

Q2 Q3 Q4 FY10/11

Q1 Q2

16 15 17 15 16

FY09/10Q2

Q3 Q4 FY10/11Q1

Q2

17 20 25 24 22

FY09/10

Q2 Q3 Q4 FY10/11

Q1 Q2

A/R

Inv

en

tory

A/P

Ca

sh

Cy

cle

Working Capital & Concentration Analysis

9

42 47 49 46 47

FY09/10

Q2 Q3 Q4 FY10/11

Q1 Q2

0 1,000 2,000 3,000 4,000

Intel

Oracle

Toshiba

IBM

Acer

Lenovo

Asus

Dell

Cisco

HP

% of the Group’s total procurement of 1H

Purchase from Top 10 Suppliers accounted for 65% of the Group’s total procurement

15%

9%

9%

8%

7%

7%

6%

2%

2%

2% HK$ million

Segment Breakdown

HK$ million

Distribution Systems Supply Chain Services Consolidated

10/11

Interim

10/11

Q2

10/11

Interim

10/11

Q2

10/11

Interim

10/11

Q2

10/11

Interim

10/11

Q2

10/11

Interim

10/11

Q2

Revenue 13,269 7,098 6,468 3,340 5,174 2,850 2,649 1,262 27,560 14,550

Y/Y Growth, % +19.0% +12.8% +10.4% +6.7% +10.4% +0.3% -4.5% -17.8% +12.7% +5.4%

Gross Profit Margin (%) 4.33% 4.50% 9.33% 9.07% 3.96% 3.79% 14.55% 16.48% 6.41% 6.45%

Y/Y Growth, bps +7bps +66bps +12bps -88bps +75bps +87bps +146bps +305bps +17bps +34bps

Operating expenses (401) (238) (405) (226) (159) (86) (292) (129) (1,310) (736)

Y/Y Growth, % +17.8% +34.1% +4.8% +1.5% +49.4% +34.4% +2.9% -10.1% +7.3% +12.2%

EBIT 199 95 261 109 46 23 113 87 724 372

Y/Y Growth, % +42.1% +33.7% +64.3% +15.3% +15.2% +36.4% +22.7% +25.2% +32.1% +58.6%

Net Profit 537 247

Y/Y Growth, % +30.4% +64.8%

Distribution

13,26948%

Systems

6,46823%

FY10/11 Interim Revenue: HK$ 27,560 million

HK$ million

Services

2,64910%

10

Supply Chain

5,17419%

Distribution

57432%

Systems

60334%

FY10/11 Interim Gross Profit: HK$ 1,767 million

HK$ million

Services

38522%

Supply Chain

20512%

Segment Review:

Industry Market (Services)

11

Turnover decreased by 4.45% yoy

Service-only revenue up 37%, self-branded service up 40%

Revenue from software & service accounted bigger share in the mix

Services Segment Interim FY10/11

S/W & Service

56%

S/W &Service

40%

H/W60%

H/W44%

12

Launched “Sm@rt City” version 3.0, and awarded the “Citizen Card” Project in Zhenjiang City, deployment of Sm@rt City potentialities now over 47 cities

0 200 400 600

State of Taxation

CCB

Taikang

Zhejiang Power

Petro China

GuangdongZhongjie

Alibaba

China Unicom

China Telecom

China Mobile

HK$ mill ion1.10%

1.31%

1.66%

1.68%

2.21%

2.73%

6.46%

21.52%

11.56%

8.62%

% as of Services Business’s revenue of 1H

Sales to Top 10 Customers accounted for 58.84% of Services Business’s revenue

13

Services Segment Interim FY10/11

• Nominated as the Deputy Chief for the National Standard Committee on IT Service and IT Operation & Maintenance

• Qualification Level II for Information System Operation & Maintenance Service Supplier • ITSM Recognized Application Supplier” 1 of the 6 nation-wide

• Best IT Service Management Solution for Year 2009-2010.

• Outstanding Supplier of Urban Informatization in China Year 2010,

• Gold Award of Satisfaction 2010 for IT Operation Services Outstanding Contribution

Hainan Local Tax Consolidated Center for Tax CollectionElectronic Customs System Design, O&M and Customer Service Shandong Local Tax Upgrade of Consolidated Data CenterChengdu Bank New Generation of Core Banking

Xi’an Commercial BankMigration of Core Banking and Construction of Standardized Testing System

Long Gang Township Bank SaaSChina Telecom Operation Data Storage (ODS)Heilongjiang Mobile NG1-BOSS NG1-CRMHainan Mobile Integration of Network Management and New Businesses

13.43%

16.09%

13.37% 12.80%

16.48%

0

500

1000

1500

2000

FY09/10Q2

Q3 Q4 FY10/11 Q1

Q2

Services Segment Interim FY10/11

HK$ mill ion

FY2010/11 Interim Services Business:HK$2,649 million

Others10%

Finance15%

Telecom51%

Gov’t23%

14

Services P&L

HK$ millions Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10 Q2 FY10

(Restated)

Revenues 1,536 1,183 1,405 1,386 1,262

Q/Q Growth,% 24.26% (23.00%) 18.81% (1.33%) (8.95%)

Y/Y Growth,% (17.82%)

Gross Profit 206 190 188 177 208

Gross Margin 13.43% 16.09% 13.37% 12.80% 16.48%

EBIT 70 118 (48) 26 87

EBIT Margin 4.55% 9.99% (3.40%) 1.88% 6.93%

Quarterly Revenue & Gross Margin

13.09%

14.55%

12%

13%

13%

14%

14%

15%

15%

FY09/10H1 FY10/11H1

Gross Margin Improvement

Gross profit margin improved to 14.55% in 1H, and achieved 16.48% for Q2.

Segment Review:

Enterprise Market (Systems)

15

9.21

9.33

9.15

9.2

9.25

9.3

9.35

FY09/10 1H FY10/11 1H

FY10/11 1H Gross Margin

5.86

6.47

5.4

5.6

5.8

6

6.2

6.4

6.6

FY09/10 1H FY10/11 1H

FY10/11 1H Revenue

Systems Segment Interim FY10/11

HK$ bill ion

FY09/10 1H FY10/11 1H

FY10/11 1H Regional Clients Revenue

%

561

813932

FY08/09 FY09/10 FY10/11 1H

Accumulated Number of Clients

16

Revenue up 10.43% yoy; Gross profit margin up to 9.33% from 9.21%

Contribution from regional clients supports the growth

Systems Segment Interim FY10/11

EBIT increased by 64.27% to HK$261 million

Effective business expansion into Key Regional Clients, turnover increased by 56% yoy

Others 15%

Packagedsoftware

13%

Storageproducts

17%

Networkingproducts

37%

Unix servers18%

FY10/11 Interim Systems Business: HK$6,468 million

17

9.95%9.02%

10.33%9.61% 9.07%

0

2000

4000

6000

FY09/10Q2

Q3 Q4 FY10/11 Q1

Q2

HK$ mill ion

Quarterly Revenue & Gross Margin

Systems P&L

HK$ millions Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10 Q2 FY10

(Restated)

Revenues 3,130 4,330 3,134 3,128 3,340

Q/Q Growth,% 14.78% 38.36% (27.63%) (0.20%) 6.80%

Y/Y Growth,% 6.72%

Gross Profit 311 390 324 301 303

Gross Margin 9.95% 9.02% 10.33% 9.61% 9.07%

EBIT 95 135 125 152 109

EBIT Margin 3.03% 3.12% 4.00% 4.85% 3.27%

Segment Review:

SMB & Consumer Market (Distribution)

18

11.15

13.27

10

10.5

11

11.5

12

12.5

13

13.5

FY09/10 1H FY10/11 1H

FY10/11 1H Revenue

Distribution Segment Interim FY10/11

19

3.84

4.5

3.4

3.6

3.8

4

4.2

4.4

4.6

FY09/10 Q2 FY10/11 Q2

FY10/11 Q2 Gross Margin%HK$ bill ion

With a stabilized leadership in market, Distribution also improved on GPM

Growth in Distribution supported by a more balanced portfolio and expansion of various vendor cooperation

PC Server

Consumer IT

NB

FY10/11 1H Product line revenue growth

Distribution Segment Interim FY10/11

EBIT increased by 42.13% to HK$199 million

Aggressive expansion into T4-T6 cities, the number of “@ port” retail outlets increased 82% yoy

NotebookComputers

37%

Others 1%

Consumer ITProducts

13%

Accessories9%

Peripherals14%

DataProjectors

3%

PC Servers15%

DesktopComputers

8%

FY10/11 Interim Distribution Business:HK$7,098 million

20

3.84%4.30%

4.77%4.12%

4.50%

0

2000

4000

6000

8000

10000

FY09/10Q2

Q3 Q4 FY10/11 Q1

Q2

HK$ mill ion

Quarterly Revenue & Gross Margin

Distribution P&L

HK$ millions Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10 Q2 FY10

Revenues 6,296 5,885 5,688 6,171 7,098

Q/Q Growth,% 29.71% (6.52%) (3.35%) 8.49% 15.03%

Y/Y Growth,% 12.75%

Gross Profit 242 253 272 254 320

Gross Margin 3.84% 4.30% 4.77% 4.12% 4.50%

EBIT 71 48 47 103 95

EBIT Margin 1.13% 0.81% 0.83% 1.67% 1.34%

Changes of # of Franchise Stores in 1H

Segment Review:

High-tech Industries Market(Supply Chain Services)

21

44

45

46

47

48

49

50

51

52

53

FY09/10H1 FY10/11H1

4.69

5.17

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

FY09/10H1 FY10/11H1

3.21%

3.96%

6021

97138

342

42

378420

524

43

529571

0

100

200

300

400

500

600

Cities Coverage Self-run Authorized Network

Maintenance stations

FY08 FY09 FY10 1H

HK$ bill ion

Supply Chain Services Segment Interim FY10/11

22

0

5

10

15

20

25

FY09/10H1 FY10/11H1

12.1

20.3

HK$ bill ion

SCS business sustains the growth & improvement on margin by optimizing business structure

Turnover increased by 10.42% yoy Gross profit margin up 75bps CES increased by 69% yoy

Maintenance Business

# of Service Station over 571, covering 524 cities

Quantity for service request reached 200,000 orders

Revenue on maintenance service grew 34.4% yoy

Supply Chain Services Segment Interim FY10/11

FY10/11 Interim Supply Chain Services Business:HK$5,174 million

Others4%

CES38%

FA58%

23

2.92%

3.81% 3.82%4.16%

3.79%

0

1000

2000

3000

4000

FY09/10Q2

Q3 Q4 FY10/11 Q1

Q2

Quarterly Revenue & Gross Margin

HK$ mill ion

Supply Chain Services P&L

HK$ millions Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10 Q2 FY10

Revenues 2,843 1,964 2,125 2,325 2,850

Q/Q Growth,% 54.19% (30.90%) 8.19% 9.39% 22.58%

Y/Y Growth,% 0.25%

Gross Profit 83 75 81 97 108

Gross Margin 2.92% 3.81% 3.82% 4.16% 3.79%

EBIT 17 22 20 23 23

EBIT Margin 0.58% 1.12% 1.41% 0.99% 0.79%FY09/10 1H FY10/11 1H

FY10/11 1H Logistics Revenue

Company Outlook

24

Company Outlook

25

– Enterprise –Full service coverage to all

verticals

– Telco –Full solution portfolio provider

for Tri-Net Convergence

– Banking –Market leader in "Cloud

Service" in banking sector

– SCS –Establishing the capacity

in E-Commerce

– SMB –Penetration into value-add

portal services for MIDs

– Consumer –Extensive retail coverage by

"@ Port Outlets"

Thank You

Questions & Answers