Xinhua Sports Entertainment Announces ADS Ratio Change

Beijing :Xinhua Sports & Entertainment Limited has announced that the ratio for its American Depositary Shares (the “ADS”) representing ordinary shares of the Company (“Shares”) will change from one ADS representing two Shares to one ADS representing thirty Shares (the “Ratio Change”), effective as of January 18, 2011.

Pursuant to the Ratio Change, the record holders of the Company’s ADS as of January 18, 2011 will be entitled to receive one (1) new ADS, each representing thirty (30) Shares, in exchange for every fifteen (15) ADSs held by them. No new Shares will be issued in connection with the Ratio Change. ADS holders will be required to surrender their certificates to The Bank of New York Mellon, as depositary, on a mandatory basis in order to exchange them for new ADSs.

The Bank of New York Mellon will contact ADS holders and arrange for the exchange of their current ADSs for new ADSs. As a result of this Ratio Change, the ADS price is expected to automatically increase proportionally. For example, assuming a price per ADS of $0.21, representing the market price of the ADSs as of January 5, 2011, upon completion of the Ratio Change, the price per ADS would be $3.15. The Company can give no assurance, however, that the post-amendment ADS price will be equal to or greater than the pre-amendment ADS price multiplied by the ratio.

The Company believes the expected price increase of the ADSs will enable it to regain compliance with the continued listing standard of The NASDAQ Global Market (“NASDAQ”) relating to minimum bid price. Following a hearing held in September 2010 before a NASDAQ Listing Qualifications Panel (the “Panel”), the Panel granted the Company’s request for an extension of time, as permitted under NASDAQ’s Listing Rules, to regain compliance with the $1.00 minimum bid price requirement for continued listing on NASDAQ.

The Panel’s decision requires, among other things, that on or before February 1, 2011, the Company must have evidenced a closing bid price of $1.00 or more per ADS for a minimum of ten consecutive trading days. Although the purpose of this Ratio Change is to maintain continued listing of the ADSs on NASDAQ, the Company can give no assurance that this strategy will be successful.

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