Digital China Software and SJI Will Form a Strategic Partnership to Jointly Develop Businesses in China and Japan

HONG KONG, Nov. 4 /PRNewswire-Asia/ -- Digital China Holdings Limited ("Digital China" or the "Group"; Stock Code: 00861.HK), a leading IT services provider in China, announced that its non-wholly owned subsidiary Digital China Software (BVI) Limited ("Digital China Software") and King Tech Service HK Limited ("King Tech"), in which the Group owns a 16.1% interest, will acquire 23.65% and 6.96% equity interest respectively in the Japan-listed IT company SJI within this year. The consideration for the transaction is JPY 2,805 million (equivalent to about HK$242 million). Moreover, both companies will acquire SJI share options which will allow Digital China Software and King Tech to raise their equity interests in SJI to 30.81% and 10.07% respectively from 16 June 2010 to 25 December 2011. When the share options are fully converted into SJI shares, Digital China Software has to pay the amount of JPY1,665 million (equivalent to about HK$144 million) for the equity interest. Meanwhile, Digital China Software agreed to transfer the entire interest of its stake in DGT Information Systems Limited ("DGT Information Systems") to a wholly-owned subsidiary of SJI. The consideration for the transfer of DGT Information Systems has not been determined yet.

"The Group has a long history of cooperation with SJI. The strengthening of our cooperation will create a win-win situation to both parties. The Group and SJI agreed in principle that we will share specialties and intellectual property, technology, human resources and sales network with each other to jointly expand businesses in China and Japan. The Group believes that the cooperation with SJI will contribute to its development of IT operations in Japan and further enhance its outsourcing business and management capability," said Mr. Guo Wei, Chairman and Chief Executive Officer of Digital China.

SJI Inc. is a company established in Japan and listed on the JASDAQ Securities Exchange, Inc. (Stock Code: 2315). From the company's corporate website, for the financial year ended 31 March 2009, SJI reported sales of approximately JPY25.8 billion (equivalent to about HK$2.21 billion). As of 31 March 2009, its total assets amounted to JPY20.5 billion (equivalent to about HK$1.76 billion) and its net assets were JPY9.2 billion (equivalent to about HK$790 million).

About Digital China

Digital China Holdings Limited ("Digital China" or the "Group"; Stock Code: 00861.HK) is the largest IT services provider in China. Headquartered in Beijing, Digital China has regional centres in 19 major cities nationwide with 8,300 employees. The Group provides customers with comprehensive IT products and services, driving technological innovations for work and life and enhancing the digitalization process in China with four core businesses: IT Services, Enterprise Systems, IT Products Distribution and Supply Chain Services. The Group has maintained its No. 1 position in IT product distribution while it has increasingly focused on expanding into IT services. Digital China remains one of the top five IT services providers across various sectors in China including telecommunication, finance and government, by providing self-developed and proprietary products that are customized for specific industry needs.

For additional information about Digital China, please visit the Company's website at http://www.digitalchina.com.hk .

    For investor and media inquiries:

     Wycee Liu
     Digital China Holdings Limited
     Tel:   +852-3416-8089
     Email: liuyqa@digitalchina.com

     Winnie Wang
     Digital China Holdings Limited
     Tel:   +852-3416-8090
     Email: wangminh@digitalchina.com

     Vivian Shi
     Digital China Holdings Limited
     Tel:   +852-3416-8076
     Email: vivianshi@digitalchina.com

     Henry Chik
     PRChina
     Tel:   +852-2522-1368
     Email: hchik@prchina.com.hk

     David Shiu
     PRChina
     Tel:   +852-2522-1838
     Email: dshiu@prchina.com.hk

     Eric Song
     PRChina
     Tel:   +852-2522-1368
     Email: esong@prchina.com.hk

SOURCE Digital China Holdings Limited