CDC Corporation's (CHINA) subsidiary has issued an updated advisory to shareholders about the impact that Chinese telecom regulations issued in July will have on its financial results.

The new policies include requiring subscribers to provide double confirmations for orders and MVAS providers to send billing reminders to subscribers, and have resulted in having fewer new subscribers for its services and higher cancellation rates. In addition, costs to acquire new users have increased. says it anticipates that both the revenue and net profit of its MVAS business unit will be significantly affected this quarter. The following table sets out the

unaudited revenue for the Company's MVAS business unit for the months of

July and August 2006 as compared with the same months in 2005.

The company says to further reduce costs and improve operational efficiencies it initiated a headcount reduction program in August, reducing the workforce of its mobile value-added services business unit by approximately 30%.


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