Xinhua Finance Reports Continued Strong Profitable Growth All Service Lines Performing in Line With Forecasts

Xinhua Finance Reports Continued Strong Profitable Growth All Service Lines Performing in Line With Forecasts

May 15, 2006

    SHANGHAI, China, May 15 /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$3.6 million for the first
quarter of 2006 under International Financial Reporting
Standards ("IFRS"), a threefold increase over
first quarter 2005 net income of US$1.0 million.  Total
revenue for the three months ended March 31, 2006 was
US$37.4 million, a 68% increase over the first quarter of
2005.  EBITDA grew 84% to US$5.8 million from US$3.1
million in the year ago period.

    Management's successful strategy for profitable growth
continues to drive shareholder value creation.  Top and
bottom line growth was again underpinned by the profitable
contributions of all four core service lines - indices,
ratings, financial news and investor relations.  The
company also reported the achievement of profitability
under JGAAP, which is a financial reporting system that
accounts for certain business developments in a
fundamentally different way than IFRS; and profitability in
both IFRS and JGAAP reflects the depth of the strategic and
operational progress achieved by Xinhua Finance. 

    Fredy Bush, CEO of Xinhua Finance, commented,
"Building on the record financial results we reported
for the full year 2005, we are proud to announce another
strong quarter of sales and earnings growth to kick off the
2006 fiscal year.  Our service lines are successfully
capitalizing on the healthy demand for our services in
China and abroad, and are focused on delivering their
business targets. 

    We are increasing the pace of leveraging our
proprietary financial data and information onto multiple
distribution platforms.  Through this strategy, we are
generating new revenue streams and enhancing our
cross-selling and cost synergy opportunities.  Our
objective is to strengthen our earnings power and the
market positions of our global operations to better profit
from China's internationalization." 

    CFO Gordon Lau added, "The success of Xinhua
Finance's strategy is measured across major financial
metrics.  Along with strong top and bottom line growth, we
are also improving the efficiency of our operations, as
evidenced by our first quarter 2006 EBITDA margin of 15.4%,
up from 14.1% in the same period last year.  With this
disciplined approach to expand our margins while driving
the top line, we reaffirm our confidence in achieving our
full year 2006 forecasts."

    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 21 news bureaus
and offices in 18 locations across Asia, Australia, North
America and Europe.  


First Quarter 2006(1) vs. First Quarter 2005(1) - unit:
million USD (at current yet rate)


                                   Q1 2006          Q1 2005
         % change     
    Sales                            37.4             22.2 
           68.0 %
    EBITDA                            5.8              3.1 
           83.6 %
    Net Income(2)                     3.6              1.0 
          272.8 %


Full Year 2006 forecasts - unit: million USD (at estimated
exchange rate of USD1 = £¤105)


                                           For 6 months    
      For the year      
    Revenue                                      74.7      
           166.0 
    EBITDA                                       11.5      
            25.6 
    Net Income                                    6.4      
            13.8 


First Quarter 2006 results (Japan GAAP(3)) - unit: million
USD


                                   Q1 2006          Q1 2005
          % change     
    Revenue                          37.4             22.2 
           68.0 %
    EBITDA                            5.6              3.1 
           82.1 %
    Net Income(2)                     0.9             -0.8 
             N/A 

    1. For three months period-to-date ended March 31, 2006
results and three months ended March 31, 2005 results at
current Japanese yen exchange rate, the amounts in Japanese
yen are calculated by the foreign currency exchange rate
(middle rate), being US$1.00=£¤117.47, from the Tokyo
Foreign Exchange Market as of March 31, 2006.

    2. Net income for three months period-to-date ended
March 31, 2006 includes a one-time gain of US$0.6mn from
the sale of a minority stake in a subsidiary to a strategic
investor.

    3. 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.

    (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.

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

    For further information, please contact:

     Xinhua Finance
     Japan: 
     Mr. Sun Jiong
     Tel:   [phone]
     Email: [e-mail]

     Hong Kong: 
     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