Year-on-Year Net Profit1 Climbs 45.7 Percent and Revenue Climbs 48.

6 Percent in Second Quarter Company Continues to Drive Growth in Membership and Value-Added Services Revenue
Second Quarter Highlights  Registered users reached 53.4 million, adding 10.7 million y-o-y  China Gold Supplier members grew 50.2 percent y-o-y to 105,810  China TrustPass members saw record high quarterly net additions of 51,821 in Q2 totaling 593,498, up 34.3 percent y-o-y  Quarterly revenue grew by 48.6 percent y-o-y to RMB1.37 billion (US$200.9 million) due to strong paying member acquisition and increased revenue from value-added services (VAS)  Deferred revenue grew 34.7 percent y-o-y to RMB3.72 billion (US$547.3 million)  Pre-SBC EBITA margin remained strong at 35.4 percent due to accelerated growth of VAS revenue HONG KONG, August 10, 2010 – Limited (HKSE:1688) (1688.HK), the world's leading small business e-commerce company, today announced its unaudited interim financial results for the three months and half-year ended June 30, 2010. Results demonstrated that our long-term strategy of providing products and services targeted at small businesses continues to bear fruit. Second Quarter 2010 Unaudited Financial Highlights
Q2 2009 RMB million (Restated) 919.3 269.0 249.2 50.4 2,763.6 426.7 34.7% Q2 2010 RMB million YoY Change Q1 2010 RMB million QoQ Change

FINANCIAL HIGHLIGHTS (UNAUDITED) Revenue Earnings before interest, taxes and amortization (“EBITA”) Profit attributable to equity owners Share-based compensation expense Deferred revenue and customer advances Recurring free cash flow Pre-share-based compensation expense EBITA margin (“Pre-SBC EBITA margin”) Earnings per share, basic (HK$) Earnings per share, diluted (HK$)

1,366.2 404.3 363.0 79.0 3,721.8 483.3 35.4%

+48.6% +50.3% +45.7% +56.8% +34.7% +13.3% +0.7%pts

1,220.6 374.6 330.0 51.1 3,567.9 438.4

+11.9% +7.9% +10.0% +54.7% +4.3% +10.2%

34.9% +0.5%pts

5.60 cents 5.58 cents

8.20 cents 8.18 cents

+46.4% +46.6%

7.45 cents 7.37 cents

+10.1% +11.0%


Excludes profit attributable to non-controlling interests.


8% +43.5% +42.784 5.15 cents 11.645 4.586.6 2.7 +49.1% -17.166 5.-based company.763.10 cents 35.5% +5.054 13.801.9 693.5% +34. taxes and amortization (“EBITA”) Profit attributable to equity owners Share-based compensation expense Deferred revenue and customer advances Recurring free cash flow Pre-share-based compensation expense EBITA margin (“Pre-SBC EBITA margin”) Earnings per share.684 533.7% +34.1% -0.0% +9.770 1.330 541.812.643.S.559 593.799 June 30.559.065.2% -29.6 769.115 1.4 2.6% +7.431 2.701 100.219 441.781.793.453 19.252.509. 2009 42.8 90.939 +44.693 7.382. 2010 53. which helps not only those small businesses in the U. “We continued to build our membership base by enhancing our product offerings and followed our strategy to acquire technology through building.278.218 9.” 2 .354 1. chief executive officer of 83.3% +8.009 +41. 2010 QoQ Q2 2010 Change Net Adds +6.097 450.318.187.677 Note 1: Includes paying members with active storefront listings on our international and China marketplaces as well as paying members who have paid membership package subscription fees but whose storefronts have not been activated.6% 3.7% 11. but also our paying members in locations like China.881 6.6%pts 15.65 cents 15. India and Turkey.121.8% +38.9% +34.471 70. “Our goal of focusing on customers and offering relevant value-added services that address our customers’ needs has once again resulted in a solid financial performance.8 921.3% 7.4% 37. we are able to attract fast-growing 54.8% +8.473 712.736.0 130.1 3. Note 2: Certain comparative figures have been restated pursuant to the business combination under common control upon acquisition of the business management software division of Alisoft Holding Limited and its subsidiaries.930 +19.116 -2.6% +7.361 39.810 13.9% 50.8 778.First-Half 2010 Unaudited Financial and Operational Highlights Six months ended June 30.249.705 33. buying or partnering to meet customer needs.S.437.462. In this quarter.” said David Wei. basic (HK$) Earnings per share.694 16. buyers to our wholesale transaction platform AliExpress and the main sourcing platform Alibaba.0% +47.2% +5.S.6 529. 2009 2010 RMB million RMB million Change (Restated) 1.986 658.8% FINANCIAL HIGHLIGHTS (UNAUDITED) Revenue Earnings before interest. Through the acquisition of the U.821 +24. Vendio. diluted (HK$) 35.513 5. we made our first international acquisition designed to help small businesses grow and prosper.867 105.498 YoY Change March 31.5 495.55 cents +40.476.1% +50.577.672.771 51.126.1% OPERATIONAL HIGHLIGHTS Registered users International marketplace China marketplace Storefronts International marketplace China marketplace Paying members (Note 1) China Gold Supplier Global Gold Supplier China TrustPass June 30.7% +19.615 531.3% +5.260 1.2% 12.1% +39.4% +40.721.

2 percent increase from the first quarter of 2010. Deferred revenue and customer advances were RMB3. up 50.2 percent y-o-y and 5.9 million). up 34. 2010. As a result of the increase in the number of paying members and VAS revenue." Second Quarter 2010 Financial and Operational Results Paying Members and Revenue The number of paying members in our marketplaces continued to grow significantly.6 percent q-o-q.867 paying members. As of June 30.763.0 million (US$116. representing a 34. representing a 34.” Wei added.1 percent increase from the second quarter of 2009 and an 8. Reflecting new business initiatives on the China marketplace. We remain positive and confident about the outlook of e-commerce and our company.2 million (US$200.Outlook “We continue to take a cautious view on the global economy and small business development and expect a slowdown in export growth for the following quarters. "Nevertheless e-commerce remains an irreversible trend and an effective tool for small businesses to create opportunities for business growth. We believe small businesses can easily ride on the e-commerce trend and grasp the opportunities to enhance market competitiveness by purchasing VAS tailored to their business needs.6 million (US$406. “As we have laid out in our strategy.3 million) as of June 30. International Marketplace Revenue from our international marketplace was RMB791. we had 712. representing a 48. 2010. 2009.721. We are delighted to see that VAS penetration on both marketplaces is steadily progressing as users see the value in these services.498. up 9.7 percent increase from RMB2. The increase was mainly due to the continued healthy growth in China Gold Supplier membership and the strong growth of our China marketplace as we launched new business initiatives. on the other hand. total revenue in the second quarter was RMB1. the number of China TrustPass members reached 593.3 million) for the 3 .1 percent q-o-q.9 percent q-o-q. As of the end of the first half of 2010.6 percent increase y-o-y or up 11.4 million) as of June 30. our membership plus VAS model is the key to long-term success of our customers and our business.8 million (US$547.810.366. We may see some slow down in customer net additions in both marketplaces in the following quarters.3 percent y-o-y. we believe VAS development and penetration may further accelerate." Wei continued. the number of China Gold Suppliers was 105.

559 as of June 30. representing a 52.4 million (US$6. an increase of 37. our revenue from Global Gold Suppliers in the first half of 2010 increased to RMB42. The sustained growth in our user base continued to drive traffic and buyer activities on the international marketplace. revenue from our international marketplace increased to RMB1.810 as of June 30. AliExpress We officially launched AliExpress. While our user base is expanding.1 million). and users will also have access to the Alibaba. Vendio will be integrated directly with the AliExpress platform. Inc.510. we have seen a healthy increase in both user activity and transaction volume. The growth for both the half-year and the quarter was mainly resulted from the increase of China Gold Supplier members and revenue from VAS. we still continue to manage our customer renewal rates and growth in VAS adoption among renewed China Gold Supplier customers. Gold Supplier Our China Gold Supplier members reached 105. 2010. For the first half of 2010.5 percent decrease from June 30.097.1 percent increase y-o-y. The VAS revenue contribution to China Gold Supplier revenue grew faster than what we anticipated.second quarter. marketing and technology infrastructure. which included the addition of product features and higher pricing.357 or 50. 2009. in April 2010. 4 .0 million (US$222. 2010. Despite the decrease in our Global Gold Supplier member numbers. (“Vendio”). In the second quarter of 2010. bringing even more value to small merchants in the U. representing a 39. registered users increased by 1.881 storefronts on our international marketplace.559. At launch. there were 13. VAS revenue accounted for about 25 percent of China Gold Supplier revenue in the first half of 2010. our online wholesale cross-border transaction platform.431 and storefronts grew by 83. in July 2010. Going forward. Vendio’s services are delivered via a Software as a Service (“SaaS”) cloud-computing model to nearly 80. The number of Global Gold Supplier members declined to 13. 2010. funds that are being spent mainly on user acquisition.0 percent q-o-q. As of June 30. representing an increase of 35.S. 2009. we announced a US$100 million investment in building the AliExpress business. This was due to the upgrade of the Global Gold Supplier package. an e-commerce platform providing a one-stop solution for small businesses that are selling across multiple online retail channels.6 percent y-o-y and 10.065.361 registered users and 1. As a first step of this investment.2 million).643.8 percent increase from the same period in 2009.2 percent from June 30. representing a 29. as well as our global base of we completed an acquisition of Vendio Services. in July 2009. we will continue to serve our members by introducing more applications and functionalities that cater to the varying needs of their businesses. Since the launch. that we believe can benefit by sourcing products from suppliers on AliExpress and Alibaba.000 small merchants in the U.

For the first half of 2010.821 China TrustPass members.1 percent increase y-o-y and a 15. easier and more cost-effective to source and sell internationally. This solid membership growth was largely due to positive effects from various new business initiatives introduced at the beginning of this year. we posted record high quarterly net additions of 51.699 or 34.0 percent q-o-q. bringing the total number of China TrustPass members to 593. we priced China TrustPass Basic at RMB1. Following the successful introduction of the Gold Supplier Starter Pack. totally amounted to RMB13 billion (US$1.498 as of June 30. Besides the revamp of our China site and change to a new domain.500. 2010.7 million) in the first half of 2009. In the second quarter in particular. the cumulative number of loans issued by our partner banks to our paying members was more than 5.0 million).139. Visa and MasterCard and PayPal. 2010.487. we launched China TrustPass Basic in April 2010.498 as of June 30.688 per year and positioned it as an entry-level product. Financial Results Gross profit in the second quarter increased to RMB1.165. we expanded online payment methods available on the platform to include bank transfers. It brings long-term benefit to the company although it does not serve as a revenue driver. 1688.5 percent increase y-o-y and an 11. representing an increase of 151.2 million) in the second quarter. representing a 45. China Marketplace Revenue from our China marketplace was RMB470.2 percent increase from the same period in 2009. 2010.9 billion). and up 9.4 million). which grew to account for almost 20 percent of China TrustPass revenue in the first half of 2010. making it faster.5 million).3 million (US$318. revenue from our China marketplace increased to RMB876.7 million (US$69. As of June 30. This growth was accompanied by a positive trend in VAS revenue.6 percent when compared to the end of the first quarter of 2010.6 percent from RMB1. Ali-Loan The Ali-Loan program continued to gain traction since it was launched in 2008. we have established a strategic partnership with UPS to provide favorable international logistic rates for AliExpress users.9 million (US$129.9 percent increase q-o-q. Our China TrustPass membership reached 593.To further support the development of AliExpress. Gross profit for the first half of 2010 increased to RMB2. 2009. a 38. The program has catered for the financial needs of small businesses while also increasing our member’s stickiness to our platforms.0 million (US$167. to refocus the online wholesale transaction features of our marketplace. up 45. Gross profit margin in the quarter 5 .com.0 million (US$218. In addition. representing a 41.3 percent from June 30.

compared to 11.3 million) in the same period last year.65 Hong Kong cents (2. slightly decreased from 35.7 percent of the same period last year.15 Hong Kong cents (1.72 US cents) and 5. an increase of 45. respectively. 6 . compared to 5. The decrease of operating expense as a percentage of revenue was largely a result of scale benefits that we realized from sales and marketing and general and administration functions as well as the increase in VAS revenue. tax and amortization and share-based compensation expense (“Pre-SBC EBITA margin”) (non-GAAP) in the second quarter was 35. respectively).0 million (US$214. Profit attributable to equity owners was RMB363.4 percent for the first half of 2010. total operating expenses were 56.42 US cents) (basic and diluted.6 percent increase from the same period last year. which contributed to a higher margin. Total operating expenses were RMB1. Earnings per share.6 percent last year to 83. which had a relatively low gross profit margin.55 Hong Kong cents (1.015.60 Hong Kong cents (0. Earnings per share.7 percent from the same period last year.7 percent in the same period last year. a slight increase from 34. As a percentage of revenue.7 percent increase y-o-y from RMB1.declined slightly to 83.6 million) in the first half of 2010.72 US cents) (basic and diluted. Total operating expenses were RMB752. The flat Pre-SBC EBITA margin was mainly due to the diluting effect of the consolidation of HiChina's results.05 US cents) and 8. the consolidation of expenses incurred by HiChina. The y-o-y decrease in margin is primarily due to a higher cost of revenue due to the combined results of HiChina. largely from the increase in revenue contributed by our larger paying customer base. compared with 58.18 Hong Kong cents (1. representing a 43.0 million (US$53.10 Hong Kong cents (1.7 percent this year.5 percent from the same period in 2009.01 US cents) and 15. Our profit margin before interest. an expansion in our service and technology team. an increase of 39.05 US cents).2 million (US$149. compared with 85.4 million) in the second quarter.8 percent from the same period in 2009.4 percent.9 million).0 million (US$101.7 million) in the second quarter.99 US cents). Pre-SBC EBITA margin for the first half was 35.9 million (US$110.43 US cents) and 11.20 Hong Kong cents (1. basic and diluted for the second quarter were 8. offset by a lower operating expense as a percentage of revenue due to lower sales and marketing expenses and lower general and administration expense as a percentage of revenue as well as a higher margin contribution from VAS revenue.1 percent.2 percent in the same period last year and gross profit margin in the first half-year also declined from 85.459. and the marketing campaign that we launched to promote brand awareness and new offerings on our China marketplace. respectively. basic and diluted for the first half-year were 15.58 Hong Kong cents (0. The increase in operating expense in the second quarter and the half-year was mainly due to an increase in direct sales costs given the increase in revenue. Profit attributable to equity owners for the first half-year was RMB693.4 percent for the period. representing a 32. Jasper Chan Tel: +852 2215 5213 Email: jasperchan@hk.respectively). Alibaba. 2009 and an makes it easy for millions of buyers and suppliers around the world to do business online through three marketplaces: a global trade platform ( (HKSE: 1688) (1688.7 million (US$135. Recurring free cash flow (non-GAAP) in the first half-year was RMB921. Founded in 1999 in Hangzhou.145. Japan.thenewsmarket.7 million).aliexpress. Korea.80 and US$1. these marketplaces form a community of more than 53 million registered users in more than 240 countries and regions. Note: All Limited Alibaba.6 million (US$1. Recurring free cash flow (nonGAAP) was RMB483. Europe and the United States.5 percent) of our cash and bank balances were denominated in percent increase y-o-y.2 percent increase q-o-q. please take a moment to register. and. dollar conversions are based on an exchange rate of US$ for domestic trade in China. If you are a first-time user. 2009: million).jp) facilitating trade to and from Japan.1688. representing a 9.7 percent increase from June 30. Alibaba. 2009. through an associated company. 2010 were RMB7. India. representing a geared for smaller buyers seeking fast shipment of small quantities of offers a wholesale platform on the global site ( has offices in more than 60 cities across Greater China.HK) is the global leader in e-commerce for small businesses and the flagship company of Alibaba 2010.00=RMB6. In addition.0 percent (December 31.790.0 percent increase from December 31. and a a Chinese platform ( for importers and exporters.80. Cash and bank balances as of June 30. For photos and broadcast-standard video supporting this press release. and provides educational services to incubate enterprise management and e-commerce professionals. 7 . 95. Alibaba.1 million).00=HK$7. For investor inquiries please contact: Lindy Lau Tel: +852 2215 5215 Email: As of June For media inquiries please contact: Linda Kozlowski Tel: +852 2215 5210 Email: also offers business management software and Internet infrastructure services targeting businesses across China.8 percent increase y-o-y. representing a 13. please visit www. please email journalisthelp@thenewsmarket. If you have any questions.3 million (US$71. a Japanese platform (www. -EndAbout

008 276.906 43. at that rate.026. diluted (RMB) Earnings per share.891 362.953 Q1 2010 RMB’000 718.366.19 cents 7.953 574.208) 1.891 7.949 406.817 (68.105 35.253 (466.60 cents 5.357) 1.0000 for the first and second quarter of 2010 (second quarter of 2009: RMB0.18 cents 8.366.48 cents 7.20 cents 8.741) (96.230 (227. basic (HK$) (Note 3) Earnings per share. net Share of losses of associated companies.0000).230 (227.45 cents 7.999 99 330.266 (136.959 (6) 362.055) 362. 8 .891 362.58 cents 359.102 437.953 244.891 7.321 369.694 329.SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION Q2 2009 RMB’000 (Restated) Revenue International marketplace China marketplace Others Total revenue Cost of revenue Gross profit Sales and marketing expenses Product development expenses General and administrative expenses Other operating income.262) 61.261 4. net of tax Profit before income taxes Income tax charges Profit for the period Other comprehensive income Net fair value gains on available-forsale investments Currency translation differences Total comprehensive income for the period Profit/(loss) for the period attributable to Equity owners of our Company Non-controlling interests Profit for the period Total comprehensive income/(expense) for the period attributable to Equity owners of our Company Non-controlling interests Total comprehensive income for the period Dividends Earnings per share.454 1.008 (74.953 240 (644) 329.055) 362.19 cents 7.467) 49.766 333.94 cents 4.999 (52.137 95.125 (3.157 2 (4.367) (122. diluted (HK$) (Note 3) Note 3: Q2 2010 RMB’000 791.681) (85.842) 249.55 cents 6.694 6.789 393.157 249.37 cents 359.18 cents The translation of Renminbi amounts into Hong Kong dollars has been made at the rate of RMB0.022 (498.542) 7.339 - 359.802) 398.008 (74.022 (498.897 (6) 244.8812 to HK$1.8793 and RMB0.454 1.738 104.502 10.157 100 (3.20 cents 8.279) (122.339 249.485) 782.8771 to HK$1.098 100 (3.719) 330.038 470.098 Q2 2010 RMB’000 791.542) 7. net Profit from operations Finance income.998 919.595 99 359.91 cents 5. could have been or could be converted into Hong Kong dollars or vice versa. No representation is made that the Renminbi amounts have been.524 1.18 cents 329.959 (6) 362.279) (122.162) 359.220. or at any rate or at all.789 393.162) 359.610 (194.208) 1.800) 301.781 (385.694 (9.339 888.139.084) (132.139.084) (132.18 cents 8.102 437.038 470.897 (6) 329.738 104.906 43. basic (RMB) Earnings per share.820) 244.494 33.246) (117.

995 574.454 1.454 1.790.949 768.553 547.763.790.882 7.192 333.420 26.765 431.738 104.310 16.635 3.038 699.401 As of June 30.613 718.SUPPLEMENTARY QUARTERLY FINANCIAL INFORMATION (CONTINUED) Q2 2009 RMB’000 (Restated) Revenue International marketplace China Gold Supplier Global Gold Supplier 559.360) 51.721.805 Note 4: Other revenue earned with respect to our China marketplace mainly represented advertising fees paid by third-party advertisers.790 791.476) 483.318 470.950 (64.230 768.658 50.220.433 51.765 10.721.998 919.289 79.805 7.366.090 8.336 19.101.420 26.634 As of June 30.248 22. 2010 RMB’000 As of March 31.345 (64.015 8.635 3.534 547.248 22.137 95.289 79.610 444.259 438.738 104.524 1.557 3.771 14. 9 .366. excluding payment for land use rights and construction costs of corporate campus project Others Total Share-based compensation expense Amortization of intangible assets and lease prepayment 467. 2010 RMB’000 As of June 30.230 390.502 Others (Note 5) Total Recurring free cash flow (Non-GAAP) Net cash generated from operating activities Purchase of property and equipment. Note 5: Other revenue mainly represented revenue earned from the sale of Internet infrastructure and application services and certain software products.015 8. 2010 RMB’000 7.531.567.405 1.043 2. 2009 RMB’000 (Restated) Cash and bank balances Deferred revenue and customer advances 7.266 444.318 470.895) 426.038 Q2 2010 RMB’000 Q1 2010 RMB’000 Q2 2010 RMB’000 (40.710 406.476) 483.790 791.401 (44.766 China marketplace China TrustPass Other revenue (Note 4) 317.427 15.

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