Xinhua Finance Achieves Full Year Profitability

Xinhua Finance Achieves Full Year Profitability

February 14, 2006

Record Revenue, EBITDA and Net Income Exceed Forecasts for the Full Year 2005

    SHANGHAI, China, Feb. 14 /Xinhua-PRNewswire/ -- Xinhua
Finance (TSE Mothers: 9399; OTC ADR: XHFNY), China's
unchallenged leader in financial information and media,
today reported net income of US$10.3 million for the full
year 2005 under International Financial Reporting Standards
("IFRS").  Net income was significantly ahead of
the full year forecast, which was revised upward in
December 2005 to US$9.0 million.  The company has continued
to see significant growth across its global service lines. 
The record financial results for the full year are further
evidence that management's focused strategy for profitable
growth is driving shareholder value and that Xinhua Finance
is well-positioned to capitalize on its promising business
prospects in China and worldwide. 

    Total revenue for the full year ended December 31, 2005
was US$110.0 million, an 84% increase over the full year
2004, surpassing the forecast of US$105.7 million by US$4.3
million or 4%.  EBITDA, an important international measure
of high growth companies such as Xinhua Finance, was
US$21.2 million, a 364% increase from prior year EBITDA of
US$4.6 million, beating the US$16.7 million forecast by
27%.

    Fredy Bush, CEO of Xinhua Finance, commented, "We
are proud to have surpassed our full year revenue and
EBITDA targets to deliver net income significantly ahead of
expectations.  Fiscal 2005 was a landmark year for Xinhua
Finance, both financially and operationally.  Continued
strong demand for our China products as well as positive
developments in China's regulatory environment drove growth
across all of our business lines.  We have seamlessly
integrated our recent acquisitions into the group, and they
already are strengthening our product portfolio and
contributing to bottom line profit." 

    "Looking forward to 2006, we expect to continue to
advance our strategy to extend our distribution capabilities
in China and penetrate the financial media sector.  Our core
businesses continue to grow.  By improving the quality and
depth of our proprietary content, we are creating
additional leverage to develop these financial media
distribution channels and diversify into new and lucrative
revenue streams." 

    CFO Gordon Lau added, "Xinhua Finance achieved
record financial performance in fiscal 2005.  Revenue,
EBITDA and net income were at all time highs, a direct
result of our disciplined approach to expand our margins
and drive operational efficiencies.  EBITDA margin for the
full year 2005 more than doubled from 7% in fiscal 2004. 
Given our continued strong performance and the robust
demand for our China products, we are confident in
achieving our full year 2006 forecasts."


    Full Year 2005 results vs. forecasts - unit: million
USD

                          2005 forecast       2005 actual  
     % change     
    Revenue                       105.7             110.0  
          4 %
    EBITDA                         16.7             
21.2(1)         27 %
    Net Income                      9.0              10.3  
         14 %


    Full Year 2006 forecasts - unit: million USD
 
                           For 6 months      For the year  
  
    Revenue                        74.7             166.0 
    EBITDA                         11.5              25.6 
    Net Income                      6.4              13.8 


    Full Year 2005 results (Japan GAAP(2)) - unit: million
USD
 
                            2005 actual           
    Revenue                       110.0 
    EBITDA                         18.8(1)
    Net Income (loss)(3)           (2.8)
                            
                                   
     (1) For FY2005 IFRS Reported EBITDA of US$21.2 mn and
Japan GAAP Reported 
         EBITDA of US$18.8 mn, the difference includes
US$1.5 mn of one-time forex 
         and sale of non-core assets gains, and US$0.9 mn
of other GAAP 
         reconciliatory items.
     (2) The main reason for the discrepancy between IFRS
and Japan GAAP is that  
         Japanese accounting standards take a different
approach to accounting for 
         goodwill from acquisitions.
     (3) Includes one-time charges of USD$4.4 million
associated with fundraising 
         activities.

    (Notes)

     A. We define EBITDA in relation to our IFRS financial
statements as profit 
        (loss) before interest, tax, depreciation and
amortization.
     B. Forecasts for fiscal 2006 are management estimates
only; figures have not 
        been audited or reviewed. 
     C. Performance estimates are determined based on
information currently 
        available.  Due to unforeseen factors, actual
performance may differ from 
        estimates.

    About Xinhua Finance Limited

    Xinhua Finance Limited is China's unchallenged leader
in financial information and media, and is listed on the
Mothers board of the Tokyo Stock Exchange (symbol: 9399)
(OTC ADRs: XHFNY).  Bridging China's financial markets and
the world, Xinhua Finance serves financial institutions,
corporations and re-distributors through four focused and
complementary service lines: Indices, Ratings, Financial
News and Investor Relations.  Founded in November 1999, the
Company is headquartered in Shanghai with 18 offices and 21
news bureaus across Asia, Australia, North America and
Europe. 

    For more information, please visit
http://www.xinhuafinance.com . 

    For more information, please contact:

    Xinhua Finance
     
    Japan
     Mr Sun Jiong
     Tel:   [phone]
     Email: [e-mail]
     
    China
     Ms Joy Tsang 
     Tel:   [phone],
[phone], [phone]    
     Email: [e-mail] 

    Taylor Rafferty (IR Contact)

    Japan
     Mr. James Hawrylak 
     Tel:   [phone] 
     Email: [e-mail]

    United States
     Mr. Brian Rafferty
     Tel:   [phone]
     Email: [e-mail]

SOURCE  Xinhua Finance Limited