China Finance Online acquires 85% stake in Hong Kong broker

Source: China Finance Online

China Finance Online Co., Limited (Nasdaq: JRJC; "CFO"), a leading Chinese online financial information, data, and analytics provider, today announced that it has entered into definitive agreements with the existing shareholders of Daily Growth Investment Company Limited ("Daily Growth Investment"), on September 7th, 2007 to acquire 85% equity interest in Daily Growth Investment, a licensed securities brokerage firm incorporated in Hong Kong with a history of over 35 years.

Under the definitive agreements, CFO will pay approximately US$3 million in exchange for 85% of the equity of Daily Growth Investment, and the exact payment will be determined on the basis of the net asset value as at the date of completion. CFO has the right to acquire the remaining 15% of equity of Daily Growth Investment within 5 years from the completion date.

The completion of this transaction is conditional upon (1) Daily Growth Investment remaining a licensed corporation to engage in securities brokerage activities up to the completion date; (2) Securities and Futures Commission ("SFC") of Hong Kong approving CFO to become a substantial shareholder of Daily Growth Investment; and (3) other customary closing conditions. In addition, if the aggregate shares acquired by CFO upon the completion date are less than 75% of the entire issued share capital of Daily Growth Investment, CFO may unilaterally terminate the transaction. It is expected that the transaction will be completed by the end of 2007.

"Under the pilot program announced in August 2007, the Chinese government will allow individual investors to directly trade Hong Kong-listed securities by opening accounts at Bank of China's branch in Tianjin, a northern city near Beijing, and the bank's Hong Kong brokerage arm, BOCI Securities Ltd. We believe that this trial investment program may signal a new stage of financial liberalizing for local retail investors by allowing them to access Hong Kong- listed securities as well as access to other international stock markets in the long term. By acquiring and fully integrating Daily Growth Investment with our existing resources, particularly the vast investor base of our premium websites and, our goal in the long run is to provide a diversified portfolio of brokerage and informational services to our users and improve the monetization rate of our website user base by capitalizing our users' growing interest in investing in Hong Kong-listed securities, thereby transforming our current business model and significantly increase our stockholders values," Mr. Zhiwei Zhao, CEO of China Finance Online, said. "With over 35 years of history and highly respected reputation, Daily Growth Investment can add tremendous value to us as we continue to realize our full potential to become a leading financial services provider in greater China."

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