The banking industry is currently linked to national financial security and is a sector heavily held by main institutional investors. In 2007, publicly listed banks on the Shanghai and the Shenzhen stock markets, as a whole, had strong growth.

Yet the profit of certain banks were far beyond that of some of their counterparts, such as Shanghai Pudong Development Bank Co. Ltd (600000) as predicted by analysts. Shanghai Pudong Development Bank is a mid-sized bank with steady growth and generally sound quality service. The reduction of effective taxation rate may boost its profit growth, making it one of the fastest growing banks.

With current P/E and P/B ratios, the bank represented an evaluation advantage among its counterparts and its major shareholder is also very strong. As a major platform to integrate financial asset resources of the Shanghai Municipality, the bank is of the opinion that it has great potential for its mid and long-term development.

Source: Shanghai Securities News

Date: 22 May 2008

CN01/DM/BT/KM