Longtop Financial Technologies Limited Announces Unaudited Financial Results for the Fiscal Quarter Ended September 30, 2008

  -- Second Quarter Total Revenues of US$28.2 million, Up 40.8% Year-on-Year;

  -- Second Quarter Adjusted(1) Net Income of US$16.2 million, an Increase
     of  40.4% Year-on-Year;

  -- Second Quarter US GAAP Net Income of US$14.2 million, an Increase of
     43.1% Year-on-Year;

  -- Full Year 2009 Revenue Guidance Increased to US$98.5 million from
     US$93.0 million, Adjusted Net Income Guidance Increased to US$49.5
     million from US$47.0 million and Adjusted Diluted Earnings Per Share
     Guidance Increased to $0.94 Per Share from $0.87 Per Share;

  (1) Explanation of the Company's Adjusted (i.e. non-GAAP) financial
      measures and the related reconciliations to GAAP financial measures
      are included in the accompanying "Non-GAAP Disclosure" and the
      "Consolidated Adjusted Statements of Operations.



XIAMEN, China, Nov. 16 /Xinhua-PRNewswire/ -- Longtop Financial Technologies Limited ("Longtop") (NYSE: "LFT"), a leading software developer and solutions provider targeting the financial services industry in China, announced today unaudited financial results for the quarter ended September 30, 2008, which is the second quarter of its fiscal year ending March 31, 2009.

"I'm pleased to report that once again our second quarter financial results exceeded our top and bottom line guidance.  These results demonstrate that even in the current economic environment our business model has a strong foundation based on recurring revenue and profits, a dependable, diversified and well-capitalized customer base, a business focus on a high-growth market, and a range of software development products and solutions that bring value to our customers," commented Weizhou Lian, CEO of Longtop.  "Based on these strong fundamentals and our ongoing discussions with customers about their IT spending plans, we are again increasing our full year guidance and are confident we can achieve our existing 2010 financial targets."

  FISCAL SECOND QUARTER DETAILED FINANCIAL RESULTS


  Revenue

  2008 Q2 and 2009 Q2 Revenue - US$000s

                           Three months ended           Six months ended
                       September September   %     September September  %
                       30, 2007  30, 2008  Change  30, 2007  30, 2008 Change
  Software development  $18,126   $23,583   30.1%   $26,332   $39,652  50.6%
  Other services         $1,887    $4,605  144.0%    $5,094    $7,864  54.4%
  Total revenue         $20,013   $28,188   40.8%   $31,426   $47,516  51.2%




Total revenues for the quarter ended September 30, 2008, were US$28.2 million, an increase of 40.8% year-on-year (YoY) from US$20.0 million in the corresponding year ago period, and exceeding company guidance of US$26 million. Software development revenues of US$23.6 million contributed 83.7% of total revenues, a YoY increase of 30.1%.

Total revenues for the six months ended September 30, 2008, were US$47.5 million, an increase of 51.2% YoY from US$31.4 million in the corresponding year ago period.  Software development revenues, which were 83.4% of total revenues for the six months ended September 30, 2008, amounted to US$39.7 million, a YoY increase of 50.6%.

  Software Development Revenue by Customer Type - US$000s

                       Three months ended            Six months ended
                   September September  % Change September September  %
                    30, 2007  30, 2008 (Decrease) 30, 2007 30, 2008 Change
  Big Four Banks     10,224    11,862     16.0%    16,394   21,028   28.3%
  Other Banks         5,371     8,672     61.5%     6,646   13,922  109.5%
  Insurance           1,500     2,283     52.2%     1,887    3,169   67.9%
  Enterprises         1,031       766    (25.7%)    1,405    1,533    9.1%
  Total              18,126    23,583     30.1%    26,332   39,652   50.6%



  Software Development Revenue Customer Concentration Analysis

                       Three months ended           Six months ended
                  September September  Change  September September   Change
                   30, 2007  30, 2008(Decrease) 30, 2007  30, 2008 (Decrease)
  % of Software
   Development

  Revenue from
  Big Four Banks      56.4%    50.3%    (6.1%)     62.3%     53.0%    (9.3%)
  Other Banks         29.6%    36.8%     7.2%      25.2%     35.1%     9.9%
  Insurance            8.3%     9.7%     1.4%       7.2%      8.0%     0.8%
  Enterprises          5.7%     3.2%    (2.5%)      5.3%      3.9%    (1.4%)
  Total              100.0%   100.0%     0.0%     100.0%    100.0%     0.0%




Software development revenue from the Big Four Banks in the second quarter was US$11.9 million, an increase of 16.0% YoY.  Big Four banks accounted for 50.3% of software development revenues for the fiscal second quarter 2009, as compared to 56.4% in the corresponding year ago period.  Software development revenue from the Big Four Banks for the six months ended September 30, 2008, was US$ 21.0 million, an increase of 28.3% YoY.  Big Four Banks accounted for 53.0% of software development revenues for the six months ended September 30, 2008, as compared to 62.3% in the corresponding year ago period.

Software development revenue from Other Banks in the fiscal second quarter 2009 was US$8.7 million, a YoY increase of 61.5%. Other Banks accounted for 36.8% of software development revenues for the three months ended September 30, 2008, as compared to 29.6% in the corresponding year ago period.  Software development revenue from Other Banks for the six months ended September 30, 2008, was US$13.9 million, an increase of 109.5% YoY.  Other Banks accounted for 35.1% of software development revenues for the six months ended September 30, 2008, as compared to 25.2% in the corresponding year ago period.

  Gross Margins

                   Three months ended               Six months ended
           September    September    Change   September  September   Change
            30, 2007     30, 2008  (Decrease)  30, 2007   30, 2008 (Decrease)
  Adjusted
   Total
   Gross
   Margin %   83.2%        73.1%     (10.1%)     79.8%      70.8%     (9.0%)
  US GAAP
   Total
   Gross
   Margin %   82.0%        69.8%     (12.1%)     78.3%      67.3%    (10.9%)




Adjusted Total Gross Margin of 73.1% in the second fiscal quarter was in line with the Company's guidance and was 10.1% lower than the 83.2% in the corresponding year ago period.  US GAAP total gross margin in the second quarter was 69.8% as compared to 82.0% in the corresponding year ago period with the difference between US GAAP and Adjusted Gross Margin being the exclusion of share-based compensation and amortization of acquired intangibles. Adjusted Total Gross Margin for the six months ended September 30, 2008 was 70.8%, as compared to 79.8% in the corresponding year ago period.  US GAAP total gross margin for the six months ended September 30, 2008 was 67.3%, as compared to 78.3% in the corresponding year ago period.

The YoY decline in gross margin is consistent with previous guidance of full year Adjusted Gross Margin of 70.0% and was due to lower gross margins on Fenet, which was acquired in October 2007, and a higher mix of customized solution revenue with 71.2% of revenue coming from customized solutions for the three months and 67.7% for the six months ended September 30, 2008, as compared to 48.3% and 52.0% in the respective year ago periods.  The Company is well on track to achieve its target for Adjusted Gross Margin of 70.0% for fiscal 2009.

  Operating Expenses

                         Three months ended            Six months ended
                     September  September   %    September  September   %
                      30, 2007   30, 2008 Change  30, 2007   30, 2008 Change


  Adjusted Operating
   Expenses - US$000s   3,052      5,038   65.1%    5,930      9,006   51.9%
  Adjusted Operating
   Expenses - % of
   revenue              15.3%      17.9%      --    18.9%      19.0%      --
  US GAAP operating
   expenses - US$000s   3,229      6,159   90.7%    6,366     11,157   75.3%
  US GAAP operating
   expenses - % of
   revenue              16.1%      21.8%      --    20.3%      23.5%      --




Adjusted Operating Expenses, which were 17.9% and 19.0% of revenue for the three and six months ended September 30, 2008, are in line with full year Company guidance of 20.0%.  The YoY increase in total Adjusted Operating Expenses of 51.9% for the first six months of 2009 is in line with total revenue growth of 51.2%.   US GAAP operating expenses, which were 23.5% of revenue for the six months ended September 30, 2008, increased 75.3%from the corresponding year ago period as compared to 51.9% for Adjusted Operating Expenses primarily due to share-based compensation expenses subsequent to the initial public offering in October 2007, which are excluded from the Adjusted Operating Expenses.

  Operating Income

                         Three months ended           Six months ended
                    September September    %    September September    %
                     30, 2007 30, 2008  Change   30, 2007 30, 2008   Change

  Adjusted Operating
   Income - US$000s   13,598   15,567    14.5%    19,149   24,624     28.6%
  Adjusted Operating
   Income - % of
   revenue             67.9%    55.2%       --     60.9%    51.8%        --
  US GAAP operating
   income - US$000s   13,174   13,526     2.7%    18,225   20,843     14.4%
  US GAAP operating
   income - % of
   revenue             65.8%    48.0%       --     58.0%    43.9%        --




Adjusted Operating Income was US$15.6 million for the second quarter and US$24.6 million for the six months ended September 30, 2008, a YoY increase of 14.5% and 28.6%, respectively.  Adjusted Operating Margin for the six months ended September 30, 2008, was 51.8%, higher than the Company guidance of 50% for the full year.  US GAAP operating income was US$13.5 million for the second quarter and US$20.8 million for the six months ended September 30, 2008, a YoY increase of 2.7% and 14.4%, respectively, from the corresponding year ago periods.

  Net Income

                         Three months ended          Six months ended
                   September   September   %    September September    %
                    30, 2007    30, 2008 Change  30, 2007  30, 2008  Change
                                                                   (Decrease)
  Adjusted Net
   Income - US$000s  11,568      16,238   40.4%   17,065    24,065   41.0%
  Adjusted Net
   Income per
   diluted share       0.28        0.31   10.4%     0.42      0.46    9.5%
  Adjusted Net Income
   - % of revenue     57.8%       57.6%      --    54.3%     50.6%      --
  US GAAP net
   income - US$000s   9,919      14,197   43.1%   14,848    20,284   36.6%
  US GAAP net income
   per diluted share   0.24        0.27   12.5%     0.37      0.27  (27.0%)
  US GAAP net income
   - % of revenue     49.6%       50.4%      --    47.2%     42.7%      --



  Reconciliation between US GAAP Net Income and Adjusted Net Income

                      Three months ended              Six months ended
               September   September    %       September September    %
                30, 2007    30, 2008  Change     30, 2007  30, 2008  Change
                                    (Decrease)                     (Decrease)

  Adjusted
   Net Income   $11,568     $16,238    40.4%     $17,065   $24,065     41.0%
   - US$000s

  Stock
   compensation    $180      $1,428   693.3%        $442    $2,742    520.4%
  Acquisition
   related
   amortization
   and charges     $244        $613   151.2%        $482    $1,039    115.6%
  Loss from
   discontinued
   operations    $1,225         $--  (100.0%)     $1,293       $--   (100.0%)


  Sub-total      $1,649      $2,041    23.8%      $2,217    $3,781     70.5%

  US GAAP
   net income    $9,919     $14,197    43.1%     $14,848   $20,284     36.6%




Adjusted Net Income for the quarter ended September 30, 2008, of US$16.2 million or US$0.31 per fully diluted share increased 40.4% as compared to Adjusted Net Income of US$11.6 million in the corresponding year ago period, and exceeded Company guidance of US$13.5 million and US$0.25 per fully diluted share.  US GAAP net income for the quarter ended September 30, 2008, of US$14.2 million or US$0.27 per fully diluted share increased 43.1% as compared to US GAAP net income of US$9.9 million in the corresponding year ago period. US GAAP and Adjusted Net Income for the quarter ended September 30, 2008, included an $877,000 government subsidy (September 30, 2007: Nil) recorded as other income and a $1.9 million income tax refund (September 30, 2007: Nil).

Adjusted Net Income for the six months ended September 30, 2008, of US$24.1 million or US$0.46 per fully diluted share increased 41.0% as compared to Adjusted Net Income of US$17.1 million in the corresponding year ago period. US GAAP net income for the six months ended September 30, 2008, of US$20.3 million or US$0.27 per fully diluted share increased 36.6% as compared to US GAAP net income of US$14.8 million in the corresponding year ago period. Adjusted and US GAAP net income for the six months ended September 30, 2008 included $1.1 million in exchange losses on US dollar denominated deposits which were in China pending conversion to Renminbi, and included a $877,000 government subsidy (six months end September 30, 2007: Nil) recorded as other income and a $1.9 million income tax refund (six months end September 30, 2007: $795,000).

Unrestricted cash balances at September 30, 2008, were US$209.0 million giving the Company sufficient resources for potential acquisitions in the still fragmented China financial IT services sector.

Commenting on the results, Derek Palaschuk, CFO of Longtop said: "The outstanding results from the fiscal second quarter further solidified Longtop's financial strength. The second quarter's record revenues were supported by robust cash flow from operations, which was US$19.5 million during the quarter.  And looking ahead, the strong US$36.0 million in software development revenue backlog from having signed a record number of contracts this quarter, has enabled us to boost once more our current estimate for fiscal 2009 revenues to US$98.5 million and for Adjusted Net Income per fully diluted share to US$0.94, which is up substantially from our original guidance in May 2008 for revenues of US$86.0 million and Adjusted Net Income per fully diluted share of US$0.80."

  BUSINESS OUTLOOK

  Longtop anticipates for the quarter ending December 31, 2008:

  i)  Total revenues of US$29.0 million, compared to previous guidance in
      August 2008 of US$26 million; representing an increase of 55.9% YoY
      from revenues of US$18.6 million in the corresponding year ago period;
  ii) Adjusted Net Income guidance of US$15.5 million or US$0.30 per diluted
      share, representing an increase of 47.6% YoY from Adjusted Net Income
      of US$10.5 million in the corresponding year ago period.

  Longtop anticipates for its fiscal year ending March 31, 2009,

  i)  Total revenues of US$98.5 million, compared to previous guidance in
      August 2008 of US$93.0 million, representing an increase of 47.7% YoY
      from revenues of US$66.7 million in fiscal year 2008;
  ii) Adjusted Net Income to be US$49.5 million, compared to previous
      guidance in August 2008 of US$47.0 million, representing an increase
      of 46.4% YoY from Adjusted Net Income of US$33.8 million;
  iii)Adjusted Diluted Earnings Per Share of US$0.94 per share compared to
      US$0.87 previously guided in August 2008.

  CONFERENCE CALL AND WEBCAST


Longtop's management team will host a conference call at 7:00 AM ET, November 17, 2008 (or 4:00 AM U.S. Pacific Time on November 17, 2008, and 8:00 PM on November 17, 2008, Beijing/Hong Kong time).  To participate in the conference call, please use the dial in numbers below:

  U.S Toll Free: 1866 549 1292
  China Toll Free: 800 701 1223
  Hong Kong and International: [phone]
  Passcode: 765115#



A replay of the call will be available for two weeks following the call and can be accessed on the Company website or by dialing the numbers below:

  U.S Toll Free: 1866 753 0743
  Hong Kong and International: [phone]
  Passcode: 136397#



A live audio webcast of the conference call, as well as online replay of the call, will be available on Longtop's website at http://www.longtop.com/en .

NON-GAAP DISCLOSURE ("ADJUSTED")

To supplement the unaudited consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Longtop's management reports and uses non-GAAP ("Adjusted") measures of revenues, cost of revenues, operating expenses, net income and net income per share, which are adjusted from results based on GAAP.  Management believes these non-GAAP financial measures enhance the user's overall understanding of our current financial performance and our prospects for the future and, additionally, uses these non-GAAP financial measures for the general purpose of analyzing and managing the Company's business.  Specifically, we believe the non-GAAP financial measures provide useful information to both management and investors by excluding certain items that we believe are not indicative of our core operating results. The presentation of this additional information is not meant to be considered superior to, in isolation from or as a substitute for results prepared in accordance with US GAAP.  We encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures contained in this release and which we discuss below.  Readers are cautioned not to view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies.

Definitions of Non-GAAP Measures

Adjusted Cost of Revenue is defined as cost of revenue excluding, if applicable: (1) non-cash compensation expense and (2) amortization of acquired intangibles.

Adjusted Gross Margin is defined as Adjusted Revenue less Adjusted Cost of Revenue.

Adjusted Operating Expenses is defined as operating expenses excluding, if applicable: (1) non-cash compensation expense,(2) amortization of acquired intangibles and goodwill impairment, and (3) one-time items.

Adjusted Operating Income is defined as Adjusted Gross Margin less Adjusted Operating Expenses.

Adjusted Net Income is defined as Adjusted Operating Income plus/minus other income/(expenses), less income taxes, excluding: (1) one-time items and (2) discontinued operations.

Adjusted EPS is defined as Adjusted Net Income divided by diluted shares.

One-Time Items, if applicable, are excluded from Adjusted Operating Income and Adjusted Net Income.  These items are one-time in nature and non-recurring, infrequent or unusual, and have not occurred in the past two years or are not expected to recur in the next two years. GAAP results include one-time items.

Non-Cash Expenses That Are Excluded From Our Non-GAAP Measures

Non-cash compensation expense consists principally of expense associated with the grants, including unvested grants assumed in acquisitions, of restricted stock, restricted stock units and stock options.  These expenses are not paid in cash, and we include the related shares in our fully diluted shares outstanding which, for restricted stock units and stock options, are included on a treasury method basis.  Longtop's management believes excluding the share-based compensation expense from its non-GAAP financial measure is useful for itself and investors.  Further, the amount of share-based compensation expense cannot be anticipated by management and business line leaders and these expenses were not built into the annual budgets and quarterly forecasts, which have been the basis for information Longtop provides to analysts and investors as guidance for future operating performance.  As share-based compensation expense does not involve any upfront or subsequent cash outflow, Longtop does not factor this in when evaluating and approving expenditures or when determining the allocation of its resources to its business segments.  As a result, the monthly financial results for internal reporting and any performance measure for commission and bonus are based on non-GAAP financial measures that exclude share-based compensation expense.

Amortization of acquired intangibles is non-cash expenses relating to acquisitions.  At the time of an acquisition, the intangible assets of the acquired company, such as backlog, customer relationships, and intellectual property are valued and amortized over their estimated lives.  While it is likely that we will have significant intangible amortization expense as we continue to acquire companies, we believe that since intangibles represent costs incurred by the acquired company to build value prior to acquisition, they were part of transaction costs.  Acquisition proceeds allocated to deferred compensation arises where a portion of the purchase price paid to shareholders who continue to work with Longtop as employees is considered compensation expense rather than purchase price.  We believe these costs are part of the transaction costs and amortized within the service period.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

It is currently expected that the Business Outlook will not be updated until the release of Longtop's next quarterly earnings announcement; however, Longtop reserves the right to update its Business Outlook at any time for any reason.

This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by such terms as "believes," "expects," "anticipates," "intends," "estimates," the negative of these terms, or other comparable terminology.  Factors that could cause actual results to differ include the effectiveness, profitability, and marketability of the company's solutions; the Company's limited operating history; its reliance on a limited number of customers that continue to account for a high percentage of the Company's revenues; risk of payment failure by any of its large customers, which could significantly harm the Company's cash flows and profitability; the ability of the Company to operate effectively as a public company; future shortage or availability of the supply of employees; general economic and business conditions; the volatility of the company's operating results and financial condition; the company's ability to attract or retain qualified senior management personnel and research and development staff; and other risks detailed in the company's filings with the Securities and Exchange Commission.  These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about the companies and the industry.  The company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law.  Although the company believes that the expectations expressed in these forward looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.  Our actual results of operations for the quarter ended September 30, 2008, are not necessarily indicative of our operating results for any future periods.  Any projections in this release are based on limited information currently available to us, which is subject to change.

About Longtop Financial Technologies Limited

Longtop is a leading software development and solutions provider targeting the rapidly growing financial services industry in China.  Longtop develops and delivers a comprehensive range of software applications and solutions with a focus on meeting the rapidly growing IT needs of financial institutions in China.  According to the independent market research firm IDC, Longtop is positioned as the "most competitive banking IT solutions provider" in China in 2007, as measured by both development strategy and development capability in the IDC MarketScape analysis model.  Longtop has five solution delivery centers, three research centers and thirty-nine service centers located in 20 provinces throughout China.  Longtop was founded in 1996 by Xiaogong Jia, Chairman and Weizhou Lian, CEO, as a system integration company focusing on the financial services industry in China and made the transition to a software and solutions provider in 2001.  For more information, please visit: http://www.longtop.com/ .

                       CONSOLIDATED BALANCE SHEETS

                                           March        June     September
                                          31, 2008    30, 2008    30, 2008
                                          (In U.S. dollar thousands, except
                                              share and per share data)
  Assets
  Current assets:
        Cash and cash equivalents         $204,526    $201,528    $208,996
        Restricted cash                      6,733       2,207      10,926
        Accounts receivable, net            21,254      26,375      37,488
        Inventories                          1,351       3,029       3,895
        Deferred tax assets                  1,517         698         106
        Other current assets                 3,843       4,844       6,313

        Total current assets               239,224     238,681     267,724

  Fixed assets, net                          8,167      19,171      18,722
  Intangible assets, net                     7,764       7,471       8,929
  Goodwill                                  14,966      15,315      16,559
  Long term investment                          --       2,613       2,171
  Deferred tax assets                          246       1,106         834
  Other assets                                 524         488       1,192

        Total assets                      $270,891    $284,845    $316,131

  Liabilities, mezzanine equity and
   shareholders' equity
  Current liabilities:
        Short-term borrowings                 $512        $633        $619
        Accounts payable                     4,143       9,196      12,801
        Deferred revenue                     9,487      11,608      17,037
        Amounts due to related parties          54          --          --
        Deferred tax liabilities               491         501         504
        Accrued and other current
         liabilities                        18,773      12,824      17,513

        Total current liabilities           33,460      34,762      48,474

  Long-term liabilities:
        Obligations under capital
         leases, net of current portion        233         264         220
        Deferred tax liabilities             1,863       1,938       2,331
        Other non-current liabilities          445         259         259

        Total liabilities                   36,001      37,223      51,284


  Shareholders' equity:
  Ordinary shares $0.01 par value
   (1,500,000,000 shares authorized,
   50,274,126, 50,429,426 and
   50,569,341 shares issued and
   outstanding as of March 31, June 30,
   and September 30, 2008,
   respectively)                              $502        $504        $506
  Additional paid-in capital               234,771     236,596     238,287
  Retained earnings/(Accumulated
   deficit)                                (14,021)     (7,934)      6,263
  Accumulated other comprehensive
   income                                   13,638      18,456      19,791

        Total shareholders' equity         234,890     247,622     264,847

        Total liabilities, mezzanine
         equity and shareholders'
         equity                           $270,891    $284,845    $316,131




                  CONSOLIDATED STATEMENTS OF OPERATIONS

                                 Three Months Ended      Six Months Ended
                               September   September   September   September
                                30,2007     30,2008     30,2007     30,2008
                                    (In U.S. dollar thousands, except
                                         share and per share data)

  Revenues:
        Software development    $18,126     $23,583     $26,332     $39,652
        Other services            1,887       4,605       5,094       7,864
        Total revenues           20,013      28,188      31,426      47,516

  Cost of revenues:
        Software development      2,638       5,962       4,949      11,770
        Other services              972       2,541       1,886       3,746
        Total cost of
         revenues                 3,610       8,503       6,835      15,516
  Gross profit                   16,403      19,685      24,591      32,000

  Operating expenses:
        Research and
         development                471       1,204         921       2,313
        Sales and marketing         825       2,616       1,829       4,408
        General and
         administrative           1,933       2,339       3,616       4,436
        Total operating
         expenses                 3,229       6,159       6,366      11,157
  Income from operations         13,174      13,526      18,225      20,843

  Other income (expenses):
        Interest income             198       1,609         473       3,516
        Interest expense           (269)        (25)       (438)       (292)
        Other income
         (expense), net              32         717          66        (295)

        Total other income          (39)      2,301         101       2,929

  Income before income tax
   expense                       13,135      15,827      18,326      23,772
        Income tax expense       (1,991)     (1,630)     (2,185)     (3,488)

  Income from continuing
   operations                    11,144      14,197      16,141      20,284
        Loss from
         discontinued
         operations, net of
         tax                     (1,225)         --      (1,293)         --
  Net income                      9,919      14,197      14,848      20,284

  Net income (loss) per
   share:
          Continuing
           operations             $0.28       $0.28       $0.40       $0.40
          Discontinued
           operations            $(0.03)        $--      $(0.03)        $--
        Basic ordinary share      $0.25       $0.28       $0.37       $0.40
          Continuing
           operations             $0.28         $--       $0.40         $--
          Discontinued
           operations            $(0.03)        $--      $(0.03)        $--
        Basic preferred
         share                    $0.25         $--       $0.37         $--
          Continuing
           operations             $0.27       $0.27       $0.40       $0.39
          Discontinued
           operations            $(0.03)        $--      $(0.03)        $--
        Diluted                   $0.24       $0.27       $0.36       $0.39

  Shares used in computation
   of net income (loss) per
   share:
        Basic ordinary share 29,745,320  50,491,027  29,725,294  50,406,533
        Basic preferred
         share               10,244,339          --  10,231,172          --
        Diluted              41,192,580  52,398,944  40,844,608  52,455,884

  Includes share-based
   compensation related to:
  Cost of revenues software
   development                       $3        $419          $6        $779
  Cost of revenues other
   services                          --          63          --         122
  General and administrative
   expenses                         166         473         414         945
  Sales and marketing
   expenses                          11         371          22         713
  Research and development
   expenses                          --         102          --         183




         UNAUDITED CONSOLIDATED ADJUSTED STATEMENTS OF OPERATIONS

                                 Three Months Ended      Six Months Ended
                               September   September   September   September
                                30,2007     30,2008     30,2007     30,2008
                                   (In US dollar thousands, except share and
                                               per share data)

  Revenues:
        Software development     18,126      23,583      26,332     39,652
        Other services            1,887       4,605       5,094      7,864
        Total revenues           20,013      28,188      31,426     47,516

  Software development
   revenue adjustments:
  Adjusted revenues:
        Software development     18,126      23,583      26,332     39,652
        Other services            1,887       4,605       5,094      7,864

        Total adjusted revenues  20,013      28,188      31,426     47,516


  Cost of revenues:
        Software development      2,638       5,962       4,949     11,770
        Other services              972       2,541       1,886      3,746
        Total cost of revenues    3,610       8,503       6,835     15,516

  Cost of revenue adjustments:
        Share-based compensation
         software development        (3)       (419)         (6)      (779)
        Share-based compensation
         other services              --         (63)         --       (122)
        Amortization of
         acquired intangible
         assets other services     (244)       (283)       (482)      (532)
        Amortization of
         acquired intangible
         assets software
         development                 --         (98)         --       (140)
        Amortization of
         acquired deferred
         compensation other
         services                               (39)         --        (39)
        Amortization of
         acquired deferred
         compensation
         software
         development                            (18)         --        (18)

  Adjusted cost of revenues:
        Software development      2,635       5,427       4,943     10,833
        Other services              728       2,156       1,404      3,053
        Total adjusted cost
         of revenues              3,363       7,583       6,347     13,886

  Gross profit                   16,403      19,685      24,591     32,000

  Adjusted gross profit          16,650      20,605      25,079     33,630

  Operating expenses:
        Research and
         development                471       1,204         921      2,313
        Sales and marketing         825       2,616       1,829      4,408
        General and
         administrative           1,933       2,339       3,616      4,436
        Total operating
         expenses                 3,229       6,159       6,366     11,157

  Operating expense
   adjustments:
        Share-based
         compensation
         research and
         development                 --        (102)         --       (183)
        Share-based
         compensation sales
         and marketing              (11)       (371)        (22)      (713)
        Share-based
         compensation
         general and
         administrative            (166)       (473)       (414)      (945)
        Amortization of
         acquired intangible
         assets sales and
         marketing                   --        (136)         --       (243)
        Amortization of
         acquired intangible
         assets general and
         administrative              --         (39)         --        (67)

  Adjusted operating
   expenses:
        Research and
         development                471       1,102         921      2,130
        Sales and marketing         814       2,109       1,807      3,452
        General and
         administrative           1,767       1,827       3,202      3,424
        Total adjusted
         operating expenses       3,052       5,038       5,930      9,006

  Income from operations         13,174      13,526      18,225     20,843

  Adjusted income from
   operations                    13,598      15,567      19,149     24,624


  Other income (expenses):
        Interest income             198       1,609         473      3,516
        Interest expense           (269)        (25)       (438)      (292)
        Other income
         (expenses), net             32         717          66       (295)

        Total other income
         (expenses)                 (39)      2,301         101      2,929

  Other income (expenses)
   adjustments:

  Adjusted other income
   (expenses):
        Interest income             198       1,609         473      3,516
        Interest expense           (269)        (25)       (438)      (292)
        Other income
         (expenses), net             32         717          66       (295)
        Total adjusted other
         income (expenses)          (39)      2,301         101      2,929


  Income before income tax
   expense                       13,135      15,827      18,326     23,772

  Adjusted income before
   income tax expense            13,559      17,868      19,250     27,553

        Income tax expense       (1,991)     (1,630)     (2,185)    (3,488)

  Income from continuing
   operations                    11,144      14,197      16,141     20,284

  Adjusted income from
   continuing operations         11,568      16,238      17,065     24,065

        Loss from
         discontinued
         operations              (1,225)         --      (1,293)        --

  Net income                      9,919      14,197      14,848     20,284

  Adjusted net income            11,568      16,238      17,065     24,065


  Net income (loss) per
   share:
          Continuing
           operations             $0.28       $0.28       $0.40      $0.28
          Discontinued
           operations            $(0.03)      $0.00      $(0.03)     $0.00
        Basic ordinary share      $0.25       $0.28       $0.37      $0.28
          Continuing
           operations             $0.28       $0.00       $0.40      $0.00
          Discontinued
           operations            $(0.03)      $0.00      $(0.03)     $0.00
        Basic preferred
         share                    $0.25       $0.00       $0.37      $0.00
          Continuing
           operations             $0.27       $0.27       $0.40      $0.27
          Discontinued
           operations            $(0.03)      $0.00      $(0.03)     $0.00
        Diluted                   $0.24       $0.27       $0.36      $0.27

  Adjusted net income per
   share:
        Basic ordinary share      $0.29       $0.32       $0.57      $0.48
        Diluted                   $0.28       $0.31       $0.42      $0.46

  Shares used in computation
   of net income and
   adjusted net income per
   share:
        Basic ordinary share 29,745,320  50,491,027  29,725,294 50,406,533
        Basic preferred
         share               10,244,339          --  10,231,172         --
        Diluted              41,192,580  52,398,944  40,844,608 52,455,884




                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                                      Three Months Ended  Six Months Ended
                                     September September September September
                                       30,2007  30,2008   30,2007  30,2008
                                      (In US dollar thousands, except share
                                                and per share data)

  Cash flows from operating
   activities:
  Net income                           $9,919   $14,197  $14,848    $20,284

  Adjustments to reconcile net income
   to net cash provided by operating
   activities:
        Share-based compensation          180     1,428      442      2,742
        Depreciation                      526       704      854      1,318
        Amortization of intangibles       266       602      652      1,073
        Provision for doubtful
         accounts                        (133)      156       (4)        46
        Impairment of intangible asset    393        --      393         --
        Gain (Loss) on disposal of
         fixed assets                      (7)       41       (2)        42

  Changes in assets and liabilities,
   net of effects of acquisitions:
        Accounts receivable            (2,238)  (10,030)  (1,762)   (14,464)
        Inventories                      (811)      694   (1,401)      (929)
        Other current assets           (1,153)   (1,495)  (2,422)    (2,354)
        Other non-current assets           36        95       69        194
        Other non-current liabilities      20        --       20       (194)
        Accounts payable                  849     3,373   (1,858)     8,262
        Deferred revenue                  444     5,159      881      7,032
        Accrued and other current
         liabilities                   (2,171)    3,767      289     (2,490)

  Deferred income taxes                    42       842      196        871

  Net cash provided by operating
   activities                           6,162    19,533   11,195     21,433

  Cash flows from investing
   activities:
        Change in restricted cash       3,106    (8,719)   3,148     (4,193)
        Proceeds from sale of fixed
         assets                            27       214       32        214
        Purchase of fixed assets         (181)   (1,167)    (593)   (12,036)
        Purchase of intangible assets      (1)       --       (3)        (3)
        Long term investment               --    (2,171)      --     (4,784)
        Acquisitions, net of cash
         acquired                      (3,824)   (1,378)  (3,824)    (1,378)
        Amounts due from related
         parties                          (54)       --      (54)        --

  Net cash used in investing
   activities                            (927)  (13,221)  (1,294)   (22,180)

  Cash flows from financing
   activities:
        Proceeds from short-term
         borrowings                    14,643        --   22,467         --
        Repayment of short-term
         borrowings                    (6,629)       --   (10,389)       --
        Dividend paid                  (6,105)       --    (6,105)       --
        Stock options exercised            --       265        --       778
        Repayments of capital leases
         obligations                     (184)     (149)     (298)     (582)
        Amounts due to related parties     --        --        --       (54)

  Net cash provided by financing
   activities                           1,725       116     5,675       142

  Effect of exchange rates differences    897     1,040     1,805     5,075

  Net increase (decrease) in cash and
   cash equivalents                     7,857     7,468    17,381     4,470

  Cash and cash equivalents, beginning
   of period                           79,444   201,528    69,920   204,526
  Cash and cash equivalents, end of
   period                             $87,301  $208,996   $87,301  $208,996

  Supplemental disclosure of cash flow
   information:
        Income taxes paid                $828      $788      $444    $2,811
        Interest paid                    $255       $25      $410      $295
  Supplemental disclosure of non-cash
   investing and financing activities:
       Fixed assets purchased under
        capital leases                   $227       $86      $355      $655
  Dividends paid in form of assets    $18,348       $--   $18,348       $--
  Acquisition:
        Cash consideration             $3,524    $3,549    $3,524    $6,162
        Cash consideration payable        $--    $1,140       $--    $1,140
        Assets acquired                $3,524    $4,689    $3,524    $7,302




  For more information, please contact:

  Longtop Financial Technologies Limited
   Charles Zhang
   Phone: [phone]
   Email: 

  IR Inside BV
   Caroline Straathof
   Phone: [phone]
   Email: 

DATASOURCE: Longtop Financial Technologies Limited



CONTACT: Charles Zhang of Longtop Financial Technologies Limited,

[phone], or ; Or Caroline Straathof of IR Inside BV,

[phone], or  



Web site: http://www.longtop.com/

http://www.longtop.com/en 

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