575 Madison Avenue, 7th Floor

New York, NY 10022

Tel: 212.792.9148
Fax: 212.531.6153

Report for Quarter Ended March 31, 2011

Dear Partners,

This is the quarterly letter for Kerrisdale Partners LP for the quarter ended March 31, 2011.

Kerrisdale Partners Kerrisdale Partners

LP – Gross of Fees LP – Net of Fees S&P 500
Q1 2011 89.1% 73.2% 5.9%
2010 81.6% 66.3% 15.1%
2009* 47.2% 38.7% 22.6%
Since Inception 405.6% 299.5% 49.4%
* 2009 performance only includes 7/1/09 to 12/31/09, due to fund launch date of July 1, 2009.

Fund Perform ance

450.00
Indexed (6/30/09 = 100)

400.00
350.00
300.00
250.00
200.00
150.00
100.00
50.00
09

10

11
09

10

10

11
-0

-1
p-

p-
n-

n-

n-
-

-
ec

ec
ar

ar
Ju

Ju

Ju
Se

Se
M

M
D

Kerrisdale Partners LP - Net S&P 500

The fund was up 73.2% in the quarter ended 3/31/11 net of fees, comprised of monthly returns of 5.3%, 23.7%
and 33.0% for January, February and March. Gross of fees, the fund was up 89.1%, comprised of monthly
returns of 6.3%, 28.0%, and 39.0%. In comparison, the S&P 500 was up 5.9% over the quarter, comprised of
monthly returns of 2.4%, 3.4% and 0.0%.

Since inception, the fund is up 299.5% net of fees and 405.6% gross of fees. In comparison, the S&P 500 is up
49.4%.

In this quarter, we benefited from equity declines in U.S.-listed Chinese companies that in our opinion are
falsifying their SEC financial statements. We wrote in our prior letter:

“Already in the first three weeks of 2011, more than half a dozen U.S.-listed Chinese companies have
been the subject of published fraud allegations, and this trend is likely to intensify in the coming months.
Our guess is that 2011 will produce abysmal returns for investors in U.S.-listed Chinese frauds, and
bearish positions on such frauds constitute a large portion of our short book.”

The Chinese “fraudcap” space imploded this quarter. Chinese reverse merger stock scams were down
anywhere from 10% to 80%, with many stocks down 50%+. On average, 1-2 frauds were exposed per week,
with long, detailed reports put out by a wide variety of research firms, including Muddy Waters LLC, Glaucus
Research, Citron Research, etc.

As one of the first funds to expose scams within the U.S.-listed Chinese reverse merger universe, we benefited
from our intimate knowledge of the sector. Most of the frauds exposed this quarter contributed to our returns in
some shape or form, as did equity declines in many Chinese fraudcaps that were not exposed.
Aside from fraudulent U.S.-listed Chinese companies, our portfolio roughly tracked the market, contributing
approximately 5 percentage points of gains during the quarter. Our two payday lenders, Cash Store Financial
and Cash Store Australia, were our biggest losing positions, but each contributed less than 100bps of negative
P&L. Other non-Chinese losing positions included James River Coal and MTN Group. PriceSmart was our
largest positively contributing long position, followed by E&P firms Energy XXI (Bermuda) Ltd. (EXXI) and
Platinum Energy Resources Inc. (PGRI). All of these non-Chinese positive contributors each contributed less
than 100 bps of positive P&L during the quarter.

Our top five positive contributors were all shorts in U.S.-listed Chinese reverse merger frauds. Our top five
negative contributors were Cash Store Australia, Cash Store Financial, James River Coal, and two of our
U.S.-listed Chinese reverse merger frauds.

China MediaExpress Holdings, Inc. (CCME)

China MediaExpress is a Chinese stock scam that operates a television advertising network on inter-city
express buses in China. The company installs televisions on buses, and generates revenue from selling
advertising time on those TVs. It went public via a Special Purpose Acquisition Company (“SPAC”) in 2009 and
grew to a market capitalization of more than $600 million prior to being exposed in February as a fraud and
having its stock halted in March.

CCME occupied a critically important role within the Chinese fraudcap universe for several reasons. First, it
was a far better executed fraud than many other Chinese stock scams. Whereas frauds like China Sky One
Medical or China Education Alliance feature fairly absurd business claims, CCME had fabricated a relatively
more believable story for investors. Its SEC filings were somewhat error-free and the company was
exceptionally responsive to investor inquiries. Because it went public through a SPAC, as opposed to a more
traditional reverse takeover (“RTO”) of a publicly trading shell, CCME did not fit the same model as many other
Chinese fraudcaps. Its investor base did not include many of the PIPE funds typically associated with
U.S.-listed Chinese frauds.

CCME also was able to dupe a top-4 auditor, Deloitte Touche Tohmatsu, to audit its 2010 financial statements,
and similarly tricked an outsider to the Chinese fraudcap universe, CV Starr & Co., the private equity firm run
by former AIG chairman Hank Greenberg, to purchase a large stake in the company. Starr is now suing
CCME.

For the above reasons, China MediaExpress had the most ardent supporters of any U.S.-listed Chinese stock
scam. Its shares were widely touted on Yahoo message boards, Seeking Alpha, thelion.com, and various
other sites that cater to retail investors. The company even had its own Facebook page, “Friends of China
MediaExpress Holdings”, which provided weekly updates on the company’s every move.

CCME also had active followers in the short community. With a high market capitalization and a stock price
above $10, it was an attractive candidate to expose. It also had certain features that rendered the fraud
relatively obvious. Its local Chinese filings were available in their original photocopies and featured the CEO’s
signature and photo, in contrast to the electronic filings available for other Chinese companies. The company
had several publicly traded competitors, such as VisionChina Media and Focus Media, who rarely saw CCME
in their competitive landscape, and argued with conviction that the company was much smaller than SEC
filings indicated. Last but not least, CCME had margins, revenue growth and return on capital that defied
common sense and were far too good to be true.

The debate came to a head in late January when the stock rallied above $20, with the final surge triggered by
Purdue college student Glen Bradford’s article “CCME: The Biggest Short Squeeze of 2011”, which sent the
stock up 17% on January 27th. By then, just about every short seller that published on Chinese frauds was
frothing at the opportunity to expose CCME. On January 30, Andrew Left’s Citron Research first wrote on the
stock, and throughout February and March, a litany of investors including Carson Block’s Muddy Waters LLC,
began releasing volumes of evidence that CCME was far smaller than it claimed to be in its SEC filings.

Kerrisdale Capital Management, LLC | 575 Madison Avenue, 7th Floor | New York, NY 10022 | Tel: 212.792.9148 | Fax: 212.531.6153 2
When Deloitte resigned and the stock was subsequently halted, the Chinese fraudcap space began to
implode. Given that CCME was the “gold standard” of U.S.-listed Chinese frauds, its downfall was ominous for
the fraudcap sector as a whole. More than any other stock, CCME occupied a symbolic position within the
general debate between longs and shorts about SAIC filings, the reliability of audited SEC financial
statements, the reliability of analyst research coverage on these companies, etc. Shorts like us have long
argued that SAIC filings provide meaningful data points on whether certain Chinese companies are scams,
and that SEC financial statements are not worth the paper they’re printed on. Rather, investors need to
conduct independent diligence on these companies to verify whether their business claims are accurate.

In the wake of the CCME debacle, investor interest in owning Chinese stock scams has steadily evaporated,
and the sector has suffered a steep decline since. February and March were terrible months for U.S.-listed
Chinese reverse merger frauds. We aggressively increased our short exposure in the sector as the CCME
debate progressed.

How to Solve the Problem of Chinese Fraudcaps

The central problem with Chinese stock scams is that U.S. investors have no legal recourse to the Chinese
management teams committing fraud. Shareholders own stock in a U.S. legal entity which owns a Chinese
subsidiary run by China-based management. The U.S. legal entity is publicly traded in the United States and is
regulated by U.S. regulators. Yet the fraud is being committed by Chinese management teams that don’t need
to obey U.S. laws any more than U.S. management teams need to obey Chinese laws. Because China and the
United States don’t have an extradition treaty, no one is technically breaking any laws in massive frauds like
CCME or RINO.

The only real way to prevent fraud among U.S.-listed Chinese companies is for China and the United States to
form the appropriate extradition treaties to allow U.S. regulators to apprehend and punish guilty Chinese
management teams. Given that this is unlikely to happen, fraud is likely to persist in foreign companies that list
in the United States but do not list in their own countries. If foreign management teams can dupe U.S.
investors into giving them $20m+ in equity raises without any fear of legal recourse if their deceit is uncovered,
then resourceful scam artists will continue fabricating financial statements and filing them with the SEC.

We suspect that securities regulators are working to apprehend the investment banks and/or auditors that are
servicing these frauds, because forming an extradition treaty with the Chinese government is a prohibitively
difficult task. Unfortunately, we are not quite sure that these fraudcaps’ underwriters and auditors are actually
committing any wrongdoing, aside from negligence. If management teams in China are intent on forging
invoices and staging Potemkin villages when investment bankers visit their facilities, we’re not sure that the
auditors and bankers can be held liable for aiding and abetting fraud. It’s a thorny situation, and regulators
certainly have their work cut out for them. From our knowledge of the sector, we don’t think there are any easy
solutions to this unusually complex problem of foreign stock scams, aside from the diplomatically unfeasible
remedy of forming extradition treaties.

Future Returns

Our future investment returns will likely be far more mediocre than our first 21 months of results. Since
inception, our portfolio has returned 299.5% net to investors, compared with 49.4% for the S&P 500. This pace
of outperformance is highly unlikely to continue.

We have made some good investments and gravitated towards some unusually profitable market dislocations
(ie. stock scams with market caps of $400 million that are fundamentally worth less than $20 million). In the
future, we are less likely to find such profitable dislocations, and we will likely make more mistakes.

Kerrisdale Capital Management, LLC | 575 Madison Avenue, 7th Floor | New York, NY 10022 | Tel: 212.792.9148 | Fax: 212.531.6153 3
Portfolio at Quarter-End

Throughout much of the quarter, our net exposure fluctuated between 60% and 100%. Our lower market
exposure when compared to prior quarters was driven by increased bearish positions in U.S.-listed Chinese
stock scams. We expect to maintain net exposure of 60% to 100% throughout much of the second quarter.

Disclosure:
This is not an offering or the solicitation of an offer to purchase an interest in Kerrisdale Partners LP (the “Fund”). Any such offer or
solicitation will only be made to qualified investors by means of a confidential private placement memorandum and only in those
jurisdictions where permitted by law.

An investment in the fund is speculative and involves a high degree of risk. Opportunities for withdrawal, redemption and transferability of
interests are restricted, so investors may not have access to capital when it is needed. There is no secondary market for the interests and
none are expected to develop. The fees and expenses charged in connection with this investment may be higher than the fees and
expenses of other investment alternatives and may offset profits. No assurance can be given that the investment objective will be achieved
or that an investor will receive a return of all or part of his or her investment. Investment results may vary substantially over any given time
period.

The performance data represents the performance of the Fund. The results labeled “net of fees” reflect the deduction of: (i) an annual
asset management fee of 1.0%, charged quarterly; (ii) a performance allocation of 15%, taken annually, subject to a high water mark; and
(iii) other expenses incurred by the Fund. Results are compared to the performance of the S&P 500 Index for informational purposes only.
The Fund’s investment program does not mirror the S&P 500 Index and the volatility of the Fund’s investment program may be materially
different. The performance figures include the reinvestment of any dividends and other earnings, as appropriate. Past performance is not
necessarily indicative of future results. The holdings identified in this letter do not represent all of the securities purchased or sold in the
Fund.

Performance results in separately managed accounts will be different from the performance results of Kerrisdale Partners LP. Kerrisdale
Capital Management, LLC or affiliated entities (“Kerrisdale”) is not responsible for any liabilities resulting from errors contained in this
communication. Kerrisdale will not notify you of any errors that it identifies at a later date.

Kerrisdale Capital Management, LLC | 575 Madison Avenue, 7th Floor | New York, NY 10022 | Tel: 212.792.9148 | Fax: 212.531.6153 4