The mission of Xinhua Finance is to provide the best investment tools developed to international standards and localize them for China's markets. We are committed to setting standards for China's financial markets, fostering:

• Sound and reliable investment infrastructure based on international standards and local knowledge;
• Investor confidence, transparency, and market efficiency;
• Long-term sustainable growth.

Xinhua Finance has grown dramatically since our inception. As we develop, accumulating capital resources and market recognition, our strategic focus has remained sharply trained on rapidly evolving and emerging opportunities.

Partnership

In our initial stage of development, from 1999 to 2003, our growth strategy centered on forging strategic partnerships with domestic and international market leaders in our business areas. We looked at the international marketplace and decided to partner with the companies who could bring the best international standards, methodologies and technologies to the products and services we wanted to take root in China. We sought out companies who were best in their field and run by entrepreneurial individuals who shared the same passion and ambition as we do for China and its future. Since inception, we have partnered with worldwide leaders such as Xinhua News Agency for news, FTSE Group and Lehman Brothers for indices, Shanghai Far East Credit Rating for ratings, and PR Newswire for corporate announcement services.

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Acquisition

Since then, we have continued to add depth and breadth to our portfolio of services. As our company matured, we developed the resources to acquire companies to advance our strategic plan. We acquire companies that provide new opportunities for our products and services either due to significant client demand or to regulatory and market developments in China. Through careful selection and effective integration, we ensure the acquired domestic and international companies bring valued leadership and expertise in their respective fields to China. The acquisitions also allowed us to cross sell our products to a wider client base worldwide. To name a few, we acquired Market News International, G7 Group, Washington Analysis and Stone & McCarthy Research Associates to strengthen our news offerings, and Taylor Rafferty to give us global leadership in investor relations services.

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Xinhua Finance has adopted a four-pronged strategy for strong, profitable growth.

• Positioning Xinhua Finance's global operations to profit from China's internationalization
• Acquiring and growing complementary financial information and media service lines
• Seizing and creating value from our first mover platforms in China
• Building China distribution capabilities to leverage the value of Xinhua Finance's content
  
  

Positioning our global operations to profit from China's internationalization

As China's transforms, some key trends can be observed:

• The regulatory framework is evolving in line with international protocols.
• The universe of financial instruments is expanding, offering institutional and retail investors much broader asset allocation selection.
• The demand for hedge funds, index funds, futures, corporate bonds, derivatives & structured products are rising fast.
• The entry of foreign institutional investors brings sophistication to the market, with fundamental analysis becoming mainstream.
• Chinese companies are expanding their financing activities and operations to overseas markets, bringing opportunities in a myriad of fields.
• Capital controls and regulatory restraints are being eased in regards to cross-border investment and trading.
• The RMB is gaining convertibility.
  
  

At Xinhua Finance, we apply the expertise gained by senior management in mature international markets to the emerging Chinese markets. Our commitment to global best practices and unique position in China enables us to help our clients capture the great opportunities as China's financial markets evolve. We provide tools for QFIIs to invest in China and help usher in the QDII program as Chinese institutional investors are granted access to overseas markets.

Acquiring and growing complementary financial information and media service lines

Xinhua Finance continues to investigate ways to expand our four complementary service lines as per client demand and China's development changes. Each acquisition we make follows a strict set of criteria:

• It is a strategic fit, adding breadth and depth to our existing service lines and advancing Xinhua Finance's growth strategy.
• The target company is best-in-class that helps to build our China leadership.
• It is profitable with strong entrepreneurial management already in place.
• It expands our international selling network, while enabling us to capture full revenue streams.

Seizing and creating value from our first mover platforms in China

Xinhua Finance is a pioneer in China's financial information and media landscape. The leadership we have built during the course of our business expansion has enabled us to set a number of precedents in the Chinese market. Our leadership in our chosen markets generates value for our shareholders, clients, and the global financial community. The first-mover advantage we have built will translate into lasting market share in the long-term.

We have accomplished 'firsts' in all of our core businesses:

• Indices: Xinhua FTSE Index launched the first ever comprehensive index covering constituents from both the Shanghai and Shenzhen Stock Exchanges, and is the first and only China index provider with both local and international clients. Also, China's first ever index fund, umbrella fund, and core-satellite fund were tied to XFI indices.
• Financial News: Xinhua Finance News was the first international newswire providing comprehensive and in-depth news feeds sharply focused on China.
• Ratings: Xinhua Far East China Ratings was the first ratings services in China to provide issuer credit ratings based on public information with the application of international standards.
• IR Services: Xinhua PR Newswire is the first and only corporate announcements distribution service in China with such an extensive network in China and worldwide.
  
  

Building China distribution capabilities to leverage the value of Xinhua Finance's content

Xinhua Finance is developing its China distribution capabilities upon its proprietary financial information products, solid client base and increasingly visible brand name. The Company is moving its existing content onto various new financial and media platforms to extend product distribution and derive new revenue from distribution and advertising. This distribution strategy expands our reach from our current customer base of leading financial institutions and corporations to "high net worth" individuals and executives who need our information to make investment decisions for their clients and themselves. We can also provide advertising opportunities to our financial institution and corporate clients with advertising and sponsorship slots obtained by providing content. These financial institutions and corporations are the prime candidates for advertising through the media distribution network that we are developing since they want to promote their businesses to the same "high net worth" demographic that we are targeting.

In order to implement this strategy effectively, we are building up our program production and advertising capabilities, enabling us to match content and advertisements at key media distribution points that are appealing to China's "high net worth" individual demographic.

Xinhua Finance is also further developing its desktop terminal business, another key medium for financial information. We are focusing on commodities and futures data and intend to expand into other key asset classes such as equities, fixed income, and foreign exchange.

With deeper penetration into China, Xinhua Finance is the preferred choice for information and services on which to make well-informed investment decisions.

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At a group level, we drive value generation by capitalizing on the following key strengths:

• Strategic focus on China's financial markets. China's economy is growing rapidly while investors lack financial information developed according to methodologies generally used in international markets. We have maintained our focus on providing financial information relevant to investors interested in participating in China's fast-growing financial markets. Our focus on China's markets and our local capabilities differentiate our services offerings, allowing us to provide actionable information and data on China as it continues to play a pivotal role in the global economy. Moreover, our global network of partners and affiliates facilitates domestic investors going out from China to seek overseas funding and investment.
• Unique position in China's financial information market. A trusted leader in China's financial markets, Xinhua Finance provides an investment infrastructure that was previously unavailable to Chinese and global investors. Our profile as a pioneer and market leader has enabled us to set a number of precedents in the Chinese market. The first-mover advantage we have built will translate into lasting market share in the long-term.
• Comprehensiveness of service lines. We have developed a unique mix of services, comprising essential components that have become the investment infrastructure for China's financial markets. This comprehensive range of services (market indices, ratings, financial news and investor relations) helps the business professional and international investor understand and analyze China's markets. Our unique product suites are complementary to each other and highly customizable. Each module of our products can be bundled flexibly and delivered on our clients' preferred distribution channels, ensuring maximum usability and fidelity to client needs.
• Strong management team with international expertise. Our management team has proven experience in structuring East-West business transactions and is well-versed in the intricacies of China's commercial landscape. Our international team is focused on formulating innovative business initiatives, capturing attractive business opportunities, and drawing on expertise in diverse areas. We believe that our management is able to develop and execute our business strategy effectively, while responding efficiently to changes in our business environment.