CHINA Hopeful on Future

With a strong track record in consolidation and organic growth of its software business, we believe CDC Corporation (CHINA - Snapshot Report) is poised for growth. Also, the 4th quarter revenue estimates reflect continued revenue growth from its CDC Games.

With continuous focus on vertical industries and cost reduction initiatives in its software segment, CDC should develop a significant competitive advantage in 2009 and beyond. New launches and upgrades (Yulgang 2.0 and Ross Enterprise v6.3) in its product line as well as its share repurchase plan currently in action will further help the company drive growth.

As such, we maintain our Buy rating on the shares of CDC, but with a lower 6-month target price of $2.50, given the global economic recession.