No Timetable for 800 mln New Share Offering

On 7 July, the company's share price rose by 7.06% to close at RMB 22.43, stimulated by the good news that its projected 1H 2008 net profit will surge 140% YOY. However, the price had fallen 28% from its closing price of RMB 40.89 (before ex-rights) on 28 February, on which the company announced its additional offering plan.

Shen Si, Secretary of the Board of Directors, told reporters that there is no further development nor set timetable as the China Securities Regulatory Commission (CSRC) is reviewing the company's additional offering plan.

Ji Xiaohui, Chairman of the Board of Director, said at the general meeting of shareholders that the company plans to issue up to 800 mln new A-shares to raise up to RMB 20 bln. But at that time, its share price was approximately RMB 40, comparing with the current RMB 20 post ex-rights price, 800 mln shares certainly will not meet its target of RMB 20 bln. Shen told reporters that the actual issuance will be made in accordance with the market situation, but the number of new shares will definitely be no more than 800 mln.

The raised capital will be employed to increase its capital adequacy ratio. Fu Jianhua, President of Pudong Development Bank, implied that its current capital adequacy ratio is around 9%, lower than the required 10% by the Hong Kong Monetary Authority for listing in the Hong Kong market.


Source: First Financial Daily

Date: 8 Jul 2008

CN01/NW/RZ/BT/WH