Chen Yu, an analyst of Huatai Financial Holdings (Hong Kong) Limited noted that as international oil prices rose to a record high, both Chinese and U.S. stock markets slumped drastically. The Hong Kong stock market was also affected.

On 27 June 2008, the U.S. stock markets remained weak. As a result of soaring international oil prices, investors have lost confidence in the risk management abilities of the financial industry and issued stocks have been sold in large volumes.

On 26 June 2008, the company launched its public auction with bidding between RMB 3.08 per share and RMB 4.08 per share. According to its prospectus, its financial situation is sound while its bank deposits and cash are enough for current liabilities. However, in 2007, its revenue decreased by 6% YOY and its net profit decreased by 40% YOY, as a result of dramatic increases in operational and administrative costs. Due to intensified competition in the industry, the company's profitability is limited. Investors are advised to purchase the company's shares with their own funds.


Source: www.aastocks.com

Date: 30 Jun 2008

CN01/BG/MZ/AR/KM