As a member of China Foreign Exchange Trading Center and Shanghai Gold Exchange, Hua Xia Bank Co. Limited (600015) can conduct capital management business on China's interbank lending market and foreign exchange market. The booming and sustained economic growth of China could create development opportunities for the bank. Rapid growth of China's capital market and its fledging comprehensive business platform could create opportunities for the company in investment banking services and capital services.

It is worth noting that the bank's cooperation with Deutsche Bank, its second largest shareholder, has produced good results. The two banks have issued joint credit cards and made progress in wealth management products, clearing accounts, trade financing and home and foreign currency capital businesses. In addition, with the aid of Deutsche Bank, the company finished making a plan to separate credit risk management and corporate business and will put it into practice. The two banks also have cooperated well regarding market risk management, operation risk management and asset-liability management. It is believed that such cooperation will help boost development of the bank. Based on the bank's 1Q 2008 Report, its current stock price is at a relatively low P/E ratio.

Source: Shanghai Securities News

Date: 7 May 2008

CN01/DM/KM/WH