Shanghai Airlines Co., Ltd. saw a 26% YOY jump in revenue to RMB 7.03 bln, a net profit of RMB 23.41 mln and an interim EPS of RMB 0.022 in the first half of 2008. China Southern Airlines Co., Ltd. achieved a revenue of RMB 27.45 bln, up 8.9% YOY, a 368% YOY soar in net profit to RMB 838 mln and an interim EPS of RMB 0.19. Moreover, the non-recurring gains and losses of Shanghai Airlines were RMB 44.5 mln and China Southern Airlines were RMB 480 mln, which according to their separate semiannual reports, was mainly a result of government subsidies.

It is worth noting that though the top 10 largest shareholders of Shanghai Airlines still consists of six companies and four investment funds, four former companies among the top 10 listed showed an obvious selling trend of the company's shares, with one of them even dropping off of the list. Due to the panicked selling, the threshold for being one of the Top 10 was lowered from 9 mln shares of the company in 1Q 2008 to 3.42 mln shares, with only one of the former investment funds holding over 10 mln shares. As of 30 Jun 2008, the total amount of shares held by the top 10 holders was 400 mln, decreasing by 35 mln from 1Q 2008.

A similar situation has occurred in China Southern Airlines. Two individuals moved into the Top 10 list of its shareholders, replacing two investment funds, resulting in there only being seven remaining instead of nine in 1Q 2008. The second-largest shareholder listed in its 2008 Semiannual Report only held 11 mln shares of the company, of which one shareholder was not qualified as one of the Top 10 shareholders in 1Q 2008.

As China Southern Airlines anticipates a long gloomy performance in the civil aviation industry for the second half of 2008, it has thoroughly cut its profit targets set at the beginning of the year.


Source: Securities Times

Date: 19 Aug 2008

CN01/RL/JL/BT/KM