Background:
The company's share price rose along with its bank shares.

Investment highlights:
1. The company placed shares to three strategic investors: Shougang Group Company, State Grid Corporation of China and Deutsche Bank Co., Ltd. Deutsche Bank is a full-service bank with outstanding capacity for growth and competitiveness in mixed operations, retail banking and investment banking, and is seen as a valuable part of the company's business expansion.

2. The company is now comprised of 22 branches and five sub-branches in 27 cities. It is now qualified to undertake national social security fund custody businesses and conduct underwriting for short-term financing. These recent developments will expand the scope of its business.

3. A plan to adjust the current income tax rate on domestic banks is being negotiated: the current 33% income tax rate and 5% business tax rate might be combined into one tax and adjusted to 25%. This change will boost the company's profit.

Risk warning:
Several major state-owned banks which are highly competitive with financial strength, solid operating networks, a high-level management base and well-qualified personnel have been listed. Mid-sized and small commercial banks are speeding up reform to increase competitiveness. Certain foreign banks have registered in China to compete in the Chinese financial market. All the above confront the company with heightened competition.

Related plate:
Bank plate


Source: www. topcj. com

Date: 13 Oct 2008

CN01/NW/DM/NK/KM