Tel.

+44 (0)20 7232 3090 Traded on

AIM, London
Fax +44 (0)20 7232 3099 Stock Exchange

www.iirgroup.com Regulated and

LSE: IIR authorised by

China Digital TV Holding Co. Ltd. 02 July 2008

Company News Alert

Significant decline in ADR price

ADR BUY Although the ADR price has plummeted since our previous report, we maintain our BUY rating on the
Fundamental Stock Direct
China Digitalaccess toCo.
TV Holding theLtd.’s
full(China
report free
Digital of charge
TV) ADR, based on at
the company’s leading position in
the Smart Card market and increasing digital TV penetration in China aided by government support.
Wehttp://www.iirgroup.com/researchoracle/viewreport/show/20162
also believe the company’s initiatives to enhance its revenue stream by investing in developing
value-added services businesses will drive revenues. Therefore we do not anticipate any change in our
Ticker: STV current rating for the ADR.
Target price: US$25.50
Current price: US$12.91
Price change We will reassess the ADR rating for China Digital TV in our next full update report
(30.8%)
since last report:

European BUY As we now anticipate a positive currency impact on the ADR over the next 6–24 months2, we maintain
our BUY rating on the European ADR at current levels, until we fully reassess the company in the
ADR1 coming weeks.
Ticker: STVy.F
Target price: €15.18
Current price: €8.64
We will reassess the European ADR for China Digital TV in our next update report.
Price change
(18.2%)
since last report:

Supervisor: Meera Patil Investment horizon- short term actionable trading strategies
Analyst: Namrata Chheda This report addresses the needs of strategic investors with a long-term investment horizon of 6-24months. If
Editor: Shem Pennant this report is provided to you by your broker under the Global Settlement, you may now also access (free of
Global Research Director: charge) the short-term trading outlook that we publish from time to time for this issuer, looking at the coming
Satish Betadpur, CFA 5-30 days for readers with a shorter trading horizon. These are available on-line only at
www.researchoracle.com
Next news due:
2Q 08 results, July 2008
We rated the ADR a BUY in our initiation report dated 19 March 2008, with a 6-12 months target price
of US$25.50 per share, representing a potential upside of 37%. The ADR has declined 30.8% since,
closing at US$12.91 on 01 July 2008. We believe this decline in the ADR price has been a result of
certain selling pressure witnessed amongst investors at higher levels and augmented by weakness in
global bourses over concerns of an economic slowdown. The NYSE composite index has fallen 2.1%
over the same period.

However, we believe that the digital switchover in China supported by government efforts and China
Digital TV’s leading position as a Smart Card vendor will continue to drive robust revenue growth. The
company is also undertaking efforts to expand its value-added services business to enhance revenue
streams. Hence, based on the company’s strong fundamentals in the lucrative Chinese digital market,
our outlook for the ADR remains positive at current levels.

Footnotes

1 The STVy.F stock has low average daily trading volume of below US$1 mn over the last 7 months.

2 On 16 June 2008, we revised our forecast for EUR/USD. We now expect the euro to depreciate against the US dollar over the coming 12 months to trade
at 1.5, after which it is expected to decline to 1.35 over a 24 month horizon. Therefore, we expect to take a 6-24 month horizon to value this stock in our
next update report.

Page 1