China Top Pick A-Shares Guidebook Ping an Securities Company Ltd

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黑龙江

吉林

辽宁内蒙古蒙古族自治区

河北青海宁夏回族自治区山西山东甘肃西藏藏族自治区陕西河南安徽江苏 Ping An Securities Company Ltd. 四川湖北 Address: 3/F, Ping An Building, Bagua 3rd Road, Shenzhen 浙江

Postal Code: 518029 湖南贵州江西 Tel.: 86-4008866338 福建 Fax: 86-755-82433794 云南广西壮族自治区广东台湾 QFII Contact: William Kwok Head of QFII Business Department 海南 11/F, Chater House, Central, Hong Kong Tel.: 852-37629298 ‘Your PAth to China’ China Mobile: 86-13902969894 Email: [email protected] Website: www.pa18.com/qfii Ping An Securities Company Ltd. PING AN SECURITIES COMPANY LTD.

PING AN SECURITIES – 22 OUTLETSContents IN CHINA Profile of Ping An Group and Ping An Securities...... 2 Overview on China’s A-share Markets...... 5 Financials and Real Estate Sector...... 8 China Merchants Bank Co., Ltd...... 8 China Vanke Co., Ltd...... 10 China Life Insurance Company Limited...... 12 China Merchants Property Development Co., Ltd...... 14 Suzhou New District Hi-tech Industrial Co., Ltd...... 16 Energy Sector...... 18 Blue Star New Chemical Material Co., Ltd...... 18 Xinjiang Tianfu Thermoelectric Co., Ltd...... 20 Xinjiang Guanghui Industry Co., Ltd...... 22 Yunnan Wenshan Electric Power Co., Ltd...... 24 PING AN SECURITIESShanxi Zhangze RESEARCH Electric Power Co., INSTITUTE Ltd...... has established a professional26 research team consisted of overTransportation 40 analysts (30% Sector holds...... doctor degrees or above; over 60% holds master28 degrees). 1) Macro EconomicDaqin Railway& Policy Co., Research Ltd...... - Topics, Financial Engineering & Bonds28 2) Investment COSCOStrategy Shipping Research Co., Ltd...... - IPOs and Funds 30 3) Sector and CompanyGuangzhou BaiyunResearch International Airport- 8 Co.,Main Ltd. Sectors...... 32 4) Research ProductJiangxi GanyuePromotion Expressway Co., Ltd..-...... Publication and Distribution 34 Xiamen International Airport Group Co., Ltd...... 36 RESEARCH PRODUCTSMaterials Sector ...... 38 Morning Express,Baoshan Research Iron & Steel Highlights, Co., Ltd...... Top Pick Guidebook & Daily Market Review38 Angang Steel Company Limited...... 40 RECOGNITIONAnhui Conch Cement Co., Ltd...... 42 New Fortune 2003/2004:Shandong Gold-mining Co.,The Ltd. .Best...... Analyst in Power Sector and Strategy44 Analysis Shanghai SecuritiesInner Mongolia News 2005: Baotou Steel Ranked Rare-earth the Hi-tech 2nd in “TopCo., Ltd. Brokerage...... Forecast” Award46 CCTV 2006: Machinery and Autos Sector The Best...... Analyst in Pharmaceuticals Sector 48 StarMine AnalystShanghai Awards Zhenhua 2006: Port Machinery Ranked Co., the Ltd. 4th...... with 7 awards 48 Guangzhou Shipyard International Co., Ltd...... 50 Henan PinggaoRank ElectricBroker Co., Ltd...... No. of Awards 52 Harbin Air Conditioning Co., Ltd...... 54 Jiangling Motors 1 Co., Ltd.Deutsche...... Bank Securities 13 56 IT Sector...... 2 Credit Suisse 10 58 Gree Electric Appliances, Inc. of Zhuhai Co., Ltd...... 58 Guangdong Midea 3 ElectricGoldman Appliances Sachs Co., Ltd...... 9 60 Tongfang Co., 4Ltd...... Ping An Securities 7 62 Shenyang Neusoft Co., Ltd...... 64 China United Telecommunications5 UBS Co., Ltd...... 6 66 Consumer Products & Services Sector...... 68 PING AN HEADQUARTERSKweichow Moutai Co., Ltd. IN...... SHENZHEN, CHINA 68 Luzhou Lao Jiao Co., Ltd...... 70 Huangshan Tourism Development Co., Ltd...... 72 Shandong Huatai Paper Co., Ltd...... 74 Shenzhen Agricultural Products Co., Ltd...... 76 Pharmaceuticals Sector...... 78 Guangzhou Baiyunshan Pharmaceutical Co., Ltd...... 78 CNTIC Trading Co., Ltd...... 80 Shenzhen Accord Pharmaceutical Co., Ltd...... 82 Zhejiang Huahai Pharmaceutical Co., Ltd...... 84 Hualan Biological Engineering, Inc...... 86

1 PINGPING AN AN SECURITIES SECURITIES COMPANYCOMPANY LTD. PING AN SECURITIES COMPANY LTD.

PINGPING AN AN INSURANCE SECURITIES (GRO RESEARCHUP) OF CHINA, INSTITUTE LTD. PING AN SECURITIES – 22 OUTLETS IN CHINA StockDEBUT Code: (2318.HKHONG KONG & 601318.SH) RECEPTION

四川

山东

Life P &C ANNUITY TRUST HEALTH ASSET MGT SZ COMM. OVERSEAS 江苏四川湖北 Insurance Insurance BANK HOLDINGS 浙江

广东

海南· PING AN ASSET MGT INSURANCE PING AN SECURITIES RESEARCH INSTITUTE has established a professional research team PING AN BANK HONG KONG HONG KONG SECURITIES consisted of over 40 analysts (30% holds doctor degrees or above; over 60% holds master degrees). 1) Macro Economic & Policy Research - Topics, Financial Engineering & Bonds 2) Investment Strategy Research - IPOs and Funds 3) Sector and Company Research - 8 Main Sectors 4) Research Product Promotion - Publication and Distribution PING AN GROUP is the first Chinese integrated financial services group, with activities spanning rd across insurance, banking, trust, securities, annuities, and asset management. It is the 3 largest Chinese RESEARCH PRODUCTS nd property & casualty insurance company, and the 2 largest Chinese life insurance company by premium Morning Express, Research Highlights, Top Pick Guidebook & Daily Market Review revenue. As of Aug. 31, 2007, its market capitalization had topped HKD 700 billion (USD 90 billion). RECOGNITION PING AN ASSET MANAGEMENT CO., LTD. was established in May 2005, a wholly-owned New Fortune 2003/2004: The Best Analyst in Power Sector and Strategy Analysis subsidiary of Ping An Group, located in Pudong, Shanghai. It handles over RMB 330 billion asset Shanghai Securities News 2005: Ranked the 2nd in “Top Brokerage Forecast” Award (USD 44 billion) by equities, funds, fixed incomes, money market, and foreign currencies in China. CCTV 2006: The Best Analyst in Pharmaceuticals Sector StarMine Analyst Awards 2006: Ranked the 4th with 7 awards PING AN ASSET MANAGEMENT (HONG KONG) CO., LTD. was established in Hong Kong as a subsidiary of Ping An Group for overseas investment ~ QDII. Rank Broker No. of Awards 1 Deutsche Bank Securities 13 PING AN FUTURES BROKERAGE CO., LTD. was established in 1996 upon approval from China Securities Regulatory Commission, with Futures Brokerage Licenses. It is headquartered in Shenzhen 2 Credit Suisse 10 with a representative office in Shanghai 3 Goldman Sachs 9 4 Ping An Securities 7 5 UBS 6 PING AN SECURITIES COMPANY LTD. was set up in Shenzhen, CHINA in 1995 under Ping An Group. Its latest total asset is over USD5 billion. Supported by Ping An’s well-known brand and PING AN HEADQUARTERS IN SHENZHEN, CHINA strong reputation, Ping An Securities has developed from a regional securities house into an integrated securities company nationwide. It has been graded as an “A” CLASS brokerage firm by China Securities Regulatory Commission. (http://www.pa18.com/qfii)

Our main operations in China’s A-share market include: 1) Investment Banking - IPO & Investment and Fundraising Projects…etc. 2) Fixed Income - Government, Corporate and Convertible Bonds…etc. 3) Asset Management - Collective Asset Management Business… etc. 4) Brokerage - A & B Shares, Funds, Bonds, Warrants and QFII 5) Research Institute - Macro Economy, Investment Strategy, Sector & Company Research 2 3 PING AN SECURITIES COMPANY LTD. PING AN SECURITIES COMPANY LTD. China Top Pick A-shares Guidebook

PING AN SECURITIES RESEARCH INSTITUTE Investment Strategy Section: DEBUT HONG KONG RECEPTION Analyst: Luo Xiaoming 86-755-22626443/[email protected]

Overview on China’s A-share Markets

I. A-share Profile

Ended June 2007, there were totally 1,434 companies listed in A-share markets with a total share capital of 1,409.149 billion shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.56 trillion. Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and Shanghai-Shenzhen 300 Index’s average PE was 29.05 multiples.

Chart 1. Movement of PE and PB of Shanghai Composite Index

Source: Ping An Research & Wind Info

Chart 2. Movement of PE and PB of Shenzhen Component Index

Source: Ping An Research & Wind Info

PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] 4 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. 5 The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. PINGPINGPING ANAN AN SECURITIESSECURITIES SECURITIES COMPANYCOMPANY COMPANY LTD.LTD. LTD. ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook ChinaChinaChina TopTop Top PickPick Pick A-sharesA-shares A-shares GuidebookGuidebook Guidebook Investment Strategy Section: Investment Strategy Section: II. Top 20 Listed Companies by Market Cap III. Analysis to Positions of Qualified Foreign Institutional Investors (QFIIs) Analyst: Luo Xiaoming 86-755-22626443/[email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (KWEICHOW MOUTAI CO., LTD.) Table 1. Ranking of Top 20 Listed Companies by Market Cap (July 11, 2007) Table 3. Top 10 A-share listed companies positioned by Qualified Foreign Institutional Investors (QFIIs) (Ended st Code Name Total Mkt Cap (RMB bn) the 1 quarter, 2007) Overview on China’s A-share Markets Overview on China’s A-share Markets Top 10 by 1 601398 INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED 1,803.70179 Top 10 by Business Description: QFIIs’ QFIIs’ Position 2 601988 BANK OF CHINA LIMITED 1,314.88686 CodeThe companyName is a liquor producer with the strongeCodest profitabilityName in China, with itsPosition soy sauce Ratio (100 million 3 601628 CHINA LIFE INSURANCE COMPANY LIMITED 1,248.73467 in Tradable I. A-share Profile I. aromaticA-share Profileliquor “Kweichow Moutai” praisedshares) as “national liquor”, which is in undersupply in the 4 600028 CHINA PETROLEUM & CHEMICAL CO., LTD. 1,101.988 long term. The company, listed in China’s A-share market in 2001, with a total marketShares cap of(%) 5Ended 601318 June PING2007, AN there INSURANCE were totally (GROUP) 1,434 companies COMPANY liste OF CHINA,d in A-share LTD. markets with a total 565.05495share capital 601006EndedRMB June 112.1Daqin 2007, Railwaybillion there and were a total totally number 1,434 of 1.2572companiesstaff of 6,418.601666 liste d inPINGDINGSHAN A-share markets COAL with a total share21.1547 capital 000001 SDB 0.9827 6of 1,409.149601328 BANK billion OF shares, COMMUNICATIONS a total market capCO., ofLTD. RMB 16.62 trillion and a tradable market 542.85777cap of RMB of 1,409.149 billion shares, a total market cap of RMB601001 16.62DATONG trillion andCOAL a tradable market cap17.6216 of RMB 601398 ICBC 0.7997 75.56 600036 trillion. CHINA Ended MERCHANTS the end of BANK June CO., 2007, LTD. all A shares’ average PE was 33.5 multiples,404.05981 and 5.56 trillion. Ended the end of June 2007, all000527 A shares’MIDEA average APPLIANCES PE was 33.5 multiples,16.082 and 601666 PINGDINGSHAN COAL 0.7827 002067 JINGXING PAPER 14.8319 8Shanghai-Shenzhen 601998 CHINA CITIC 300 Index’s BANK CORPORATIONaverage PE was LIMITED 29.05 multiples. 353.25176 Shanghai-ShenzhenInvestment Points: 300 Index’s average PE was 29.05 multiples. 9 601600 ALUMINUM CORPORATION OF CHINA LIMITED 265.20639 0005271. KweichowMIDEA APPLIANCES Moutai Liquor, a typical0.7336 representa600495tive ofJINXI China’s AXLE soy sauce aromatic liquors,14.2208 600000 PDB 0.6296 10 600019 BAOSHAN IRON & STEEL CO., LTD. 196.65976 has been awarded international gold medals600066 for manyYUTONG times BUS and has been praised13.3206 as 600350 SHANDONG INFRA. 0.5772 600627 SHANGHAI POWER 13.3002 11 601166 INDUSTRIAL BANK CO., LTD. 183.4 “national liquor”, forming an oligopoly in the soy sauce aromatic liquor market. A 600050 CHINA UNICOM 0.5543 600188 YANZHOU COAL 13.0905 12Chart 601006 1. Movement DAQIN of RAILWAY PE and PB CO., of ShanghaiLTD. Composite Index 182.71274 Chart 1.production Movement cycleof PE and of thePB of company’s Shanghai Composite products Index lasts for five years; the pace of capacity 601001 DATONG COAL 0.4934 expansion is far behind the pace of demand 002052growth; theCOSHIP situation ELEC ofTRONICS supply falling short12.1604 of 13 600016 CHINA MINSHENG BANKING CORP., LTD. 172.59064 601988 BANK OF CHINA 0.4748 600897 XIAMEN AIRPORT 11.225 demand is obvious; thus, the company’s pricing capability is relatively strong. 14 600030 CITIC SECURITIES CO., LTD. 166.3677 Source: Ping An Research & Wind Info 15 601991 DATANG INTERNATIONAL POWER GENERATION CO., LTD. 159.66117 16 600000 SHANGHAI PUDONG DEVELOPMENT BANK CO., LTD. 158.73547 2. The company has accelerated to raise retail prices since 2006. In Feb. 2006, prices of Moutai series products were raised by around 15% on average; in Sept. 2006, prices of unscheduled 17 600018 SHANGHAI INTERNATIONAL PORT (GROUP) CO., LTD. 152.39244 For the top 10 heavyweights of QFIIs, in terms of sectors, they were mainly concentrated in financials, products were raised by 105; in Jan. 2007, prices of years old liquors were increased by 20%; 18 601919 CHINA COSCO HOLDINGS CO., LTD. 152.16389 transportation and coal industries; in terms of risk indicators, QFIIs held relatively stable positions, and in Mar. 2007, prices of ordinary Moutai liquors were raised by 12%. The price increase 19 600837 SHANGHAI URBAN AGRO-BUSINESS CO., LTD. 149.12801 majority of their heavyweights had a BETA less than 1, while QFIIs also held large quantities of effect as of 2007 will be shown after the 2nd quarter; there is room for revenue and gross 20 600900 CHINA YANGTZE POWER CO., LTD. 140.33419 positions in those individual shares with better growth; in terms of the percentage of QFII holdings in a profit margin to further rise. After the price rises, ex-factory prices still have a relatively Source: Ping An Research & Wind Info listed company’s tradable shares, among the top 10 listed companies, QFII positions all exceeded 10%, large gap with retail prices, and, the situation of supply falling short of demand has not been while the percentage in PINGDINGSHAN TIANAN COAL (601666) even hit 21%. Perhaps due to effectively eased, therefore, there is room for the company to further raise prices. Table 2. Ranking of Top 20 Listed Companies by Tradable Market Cap (July 11, 2007) similarity of their investment styles, sometimes many QFIIs had taken certain listed company as their Total Tradable Mkt Cap respective heavyweight. Code Name (RMB bn) 3. Since its capacity is unable to fully meet market demand, the company is actively adjusting 1 600036 CHINA MERCHANTS BANK CO.,LTD 129.43487 its product mix through such strategies as actively promoting mild liquors, increasing efforts 2Source:600030 Ping AnCITIC Research SECURITI & WindES Info CO.,LTD 123.57291 Source:to Ping promote An Research series & liquors Wind Info and launching high-end products to fill up the huge price faultage 3 600000 SHANGHAI PUDONG DEVELOPMENT BANK CO.,LTD 118.84917 between ordinary Moutai liquors and Moutai years old liquors so as to meet market demand 4 000002 CHINA VANKE CO., LTD 103.4858 and boost increase of the company’s overall capacity. 5 600016 CHINA MINSHENG BANKING CORP., LTD 87.2129 6Chart600900 2. MovementCHINA of YANGTZE PE and PB PO ofWER Shenzhen CO., LTD Component Index 66.53939 Chart4. 2.Previously, Movement of the PE company’s and PB of Shenzhen general Component manager QiaoIndex Hong was investigated by Guizhou 7 601318 PING AN INSURANCE (GROUP) COMPANY OF CHINA,LTD. 61.92865 Provincial Discipline Commission and was removed from the company due to personal 8 600019 BAOSHAN IRON & STEEL CO.,LTD 53.17947 issues. In our view, his departure would not change the scarcity attribute of the company’s 9 601398 INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED 49.57621 products, and the successful operating strategy would not be changed, therefore, “STRONG BUY” rating is retained. 10 600050 CHINA UNITED TELECOMMUNICATIONS CO.,LTD 47.68665 11 600519 KWEICHOW MOUTAI CO., LTD 47.25472 12 600028 CHINA PETROLEUM & CHEMICAL CO.,LTD 45.55264 Risk Warning: 13 000001 SHENZHEN DEVELOPMENT BANK CO.,LTD 43.59128 Consumption of Moutai is mainly concentrated in commercial and political activities; if 000858 WULIANGYE YIBIN CO.,LTD 42.09571 14 relatively large fluctuations happen in economic growth, it would have a relatively large impact 601628 CHINA LIFE INSURANCE COMPANY LIMITED 39.762 15 on the company’s performance growth. 16 600009 SHANGHAI INTERNATIONAL AIRPORT CO., LTD 36.07611 17 600177 YOUNGOR GROUP CO.,LTD 34.66047 18 002024 SUNING APPLIANCE CO.,LTD. 32.52465 19 600104 SHANGHAI AUTOMOTIVE CO.,LTD 30.3406 20Source: 601006 Ping AnDAQIN Research RAILWAY & Wind CO., Info LTD. 29.86686 Source: Ping An Research & Wind Info Source: Ping An Research & Wind Info

PINGPINGPING ANPING AN RESEARCHAN RESEARCHAN SECURITIES SECURITIES Contact: Contact: Ms. Ms. Qiu Qiu Xiaojin Xiaojin Contact Contact [email protected]: Qiu [email protected]: Qiu Xiaojin Xiaojin [email protected] [email protected] PINGPINGPINGPINGPINGPING ANPINGAN ANAN RESEARCHANRESEARCHAN RESEARCHANRESEARCH SECURITIESSECURITIES SECURITIES Contact: Contact: Contact: Ms.Ms. Ms. Qiu Qiu Qiu Xiaojin Xiaojin Xiaojin Contact Contact Contact Contact [email protected] [email protected]:: Qiu [email protected] :: QiuQiu XiaojinXiaojin XiaojinXiaojin [email protected] [email protected] [email protected]@pasc.com.cn 6 ThisThis isThis preparedisThis preparedis prepared is prepared for for clients for clients forclients ofclients of Ping ofPing Pingof An AnPing AnSecurities Securities AnSecu Securities CompanyritiesCompany Company Company Ltd. Ltd. and Ltd. and otherother and other ot professionals.professionals.her professionals. professionals. The The info in formationrmation and and points points contained contained herein herein do donot not form form bids bids or or ThisThisThisThis isThisisThis prepared ispreparedisThis preparedispreparedis prepared preparedis prepared forfor forfor clients clients for for clientsclients for clientsclients ofclientsof of of PingPing ofPingofPing PingPingof An An AnPingAn AnSecurities AnSecurities Securities An SecuSecu Securitiesrities Company ritiesCompanyCompany CompanyCompany Company Ltd. Ltd. Ltd.Ltd. and andLtd. andand otherotherother otherand ototherher ot professionals. professionals.professionals.her professionals.professionals. professionals. TheThe TheThe info info inin formationformationrmationrmation andand andand pointspoints pointspoints containedcontained containedcontained hherein erein hhereinerein dodo do notdonot not not formform formform bidsbids bids bids oror 7 oror inquiriesinquiriesTheThe ofinformation the ofinformation thesaid said securities and securities and points points and containedand are contained are only only forherein hereinforreference referencedo donot .not form. form bids bids or inquiriesor inquiries of theof thesaid said securities securities and and are are only only for forreference reference. . inquiriesinquiriesinquiriesinquiriesTheTheThe of informationofinformation thethe ofinformationof the saidthesaid saidsaid securitiessecurities andand securitiessecurities and pointspoints points andand contained andcontained and areare contained are are onlyonly onlyonly forhereinforherein forherein referenceforreference reference doreferencedo notdonot . not. formform. .form bidsbids bids oror inquiriesorinquiries inquiries ofof thetheof the saidsaid said securitiessecurities securities andand and areare are onlyonly only forfor for referencereference reference.. . 3/32/2 PING AN SECURITIES COMPANY LTD. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. China Top Pick A-shares Guidebook ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook

( Stock Code: 600036 ) Financials and Real Estate Sector: Investment Strategy Section: Analyst: Shao Ziqin 86-755-82416978 / [email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (CHINA MERCHANTS BANK CO., LTD.)

CHINA MERCHANTS BANK CO., LTD. Business Description: Overview on China’s A-share Markets ᢯ଚ䫊㸠㙵ӑ᳝䰤݀ৌ The best retail bank in China – The bank was established in March 1987. Currently, it has preliminarily formed an institutional system and a business network basing upon Shenzhen, I.radiating A-share theProfile whole country and facing overseas, with over 500 outlets and 23,000 staff. Ended the end of 2006, the bank’s total asset was RMB 934.1 billion, and its balance of deposits and Endedloans wasJune RMB 2007, 773.7 there billionwere totally and RMB 1,434 565.7 companies billion respectively.listed in A-share markets with a total share capital of 1,409.149 billion shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.56Investment trillion. Points: Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and Rating: Strong Buy Current (Aug6): ̞33.72 Target: ̞40 Co Visit: High Shanghai-Shenzhen1. Brand advantages 300 Index’s obvious average in its PE personal was 29.05 business multiples. and its intermediary business. Its intermediary business has an obvious scale benefit and its personal business has an outstanding advantage. It has led the industry in terms of international business, asset custodian, credit card issue, credit card consumption and wealth management. Chart 1. Movement of PE and PB of Shanghai Composite Index 2. A domestic commercial bank headmost for realizing a business transformation. By right of a solid personal client base, an advanced IT platform and quality client services, the bank is actively transforming into a retail bank. We can see from its financial statements that the bank continuously reduces the proportion of loans and increases the proportion of discounts and bonds in its total asset; in loans, it reduces the proportion of general loans while increases the proportion of personal loans; in general loans, it raises the proportion of trade financing.

3. Potential to realize a comprehensive operation. The bank not only has a broad cooperation in the non-commercial banking field and also has directly entered the non-banking financials industry. Along with loosening of the mixed operation policy, the bank is likely to realize its conceiving of building a comprehensive financial platform.

Risk Warning: Management Information Major Shareholders & Type of Shares Source:Apart Pingfrom An such Research industry & Wind risks Info as credit risks, liquidity risks, interest rate risks, exchange rate Chairman Qin Xiao Name Type % risks, operational risks and technical risks, we think investors still need to consider the following CFO Li Hao China Merchants Steam Navigation Restricted tradable A 12.1 several risk factors when investing in the bank: Co Sec. Lan Qi COSCO Group Restricted tradable A 6.44 Chart1. Risks 2. Movement from enlargement of PE and PB of of the Shenzhen tradable Component cap after the Index lock-up period. In the two or three years Tel. 0755-83198888*5832 Guangzhou Maritime Transport Restricted tradable A 3.84 after the lock-up period expired on Feb. 23, 2008, there will be shares equivalent to 1.6 Website www.cmbchina.com Shenzhen Yanqing Investment Restricted tradable A 2.95 times of the existing tradable cap getting tradable. Under abundant gains, increase in the share supply is likely to lash its share price to a certain extent.

2. Risks from surplus steadiness and deficient expansion. The bank, a company pursuing a localization strategy, has a relatively steady operating style. From this point, the bank has risks from deficient expansion, which we think is related to China Merchants’ control right. Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield China Merchants especially emphasizes its leading right, saying right and controllability to Dec. 31, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) its subsidiaries. Even if it is a relative control right, China Merchants also hopes to become a 2005 19,179 3,788 20.5 0.37 0.08 72.1 0.3 most influential shareholder in a period of time as long as possible. 2006 25,085 7,108 87.7 0.48 0.12 54.4 0.5 3. Risks from further real estate policy controls. Although the bank has a proportion of real 2007F 35,397 11,323 59.3 0.77 0.19 34.2 0.7 estate loans lower than other commercial banks (the proportion was only 4.73% in 2006), if 2008F 46,386 17,231 52.2 1.17 0.29 22.5 1.1 further real estate policy controls occur, then the bank will suffer certain influence in 2009F 58,600 22,837 32.5 1.55 0.39 16.9 1.5 development loans and personal loans these two aspects. Note: PE and dividend yield is respectively calculated based on July’s price. Source: Ping An Research & Wind Info

( Stock Code: 000002 ) Financials and Real Estate Sector: Investment Strategy Section: Analyst: Liu Xihui 86-755-22627484 / [email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (CHINA VANKE CO., LTD.)

CHINA VANKE CO., LTD. Business Description: Overview on China’s A-share Markets ϛ⾥ӕϮ㙵ӑ᳝䰤݀ৌ The company, established in May 1984, entered the housing industry in 1988. It covered over 20 cities with three urban economic circles (Pearl River Delta, Yangtze River Delta and Pan-Bohai I.Sea) A-share as the Profile pivot in terms of its business in 2006 and is the biggest professional housing developer in China at present. Listed in 1991, the company is the 2nd listed company in Shenzhen EndedStock JuneExchange. 2007, thereIt had were a total totally market 1,434 cap companies of RMB 67.23 listed billion in A-share at the markets end of with2006, a rankingtotal share the capital st of1 1,409.149 among the billion listed shares, companies a total inmarket Shenzhen cap of Stock RMB Exchange.16.62 trillion Si nceand 16a tradable years of market listing, cap the of RMB 5.56company trillion. has Ended recorded the a end compound of June growth 2007, ra allte onA core shares’ revenue average of 28.3% PE was and 33.5 a compound multiples, and Rating: Strong Buy Current (Aug7): ̞33.89 Target: ̞42 Co Visit: High Shanghai-Shenzhengrowth rate on net profit300 Index’s of 34.1%, average a Chinese PE was enterprise 29.05 multiples. with the longest year span of sustaining profit growth after listing. In 2006, with a floor space of buildings newly started of 5,006,000 square meters and a floor space of buildings completed of 3,275,000 square meters, the company posted sales revenue, settlement revenue and net profit of RMB 21.23 billion, RMB 17.67 billion Chartand RMB 1. Movement 2.15 billion of PE andrespectively PB of Shanghai and paid Composite tax of RMBIndex 2.42 billion. To the end of 2006, the company had a total asset of RMB 48.51 billion and a net asset of RMB 14.88 billion.

Investment Points: 1. Good operations in the first quarter 2007. In January – March 2007, the company recorded gross floor area sold of 626,000 square meters and sales amount of RMB 4.61 billion, a 61.3% and 101.3% increase respectively year on year. It realized settlement revenue of RMB 4.06 billion with a floor space of buildings settled amounting to 530,000 square meters. It posted operating revenue and net profit of RMB 4.114 billion and RMB 0.612 billion respectively, an increase of 78.56% and 49.27% respectively year on year. At the end of the quarter, the company still had 1,265,000 square meters of sold resources yet to be completed and settled; the signed amount totaled approximately RMB 10.08 billion; its first-quarter EPS was RMB 0.14.

2. Around 10 million square meters of project resources to be further increased in 2007 Source:according Ping An Research to the company’s& Wind Info planned 3-year development strategy. Therefor, the company Management Information Major Shareholders & Type of Shares will increase efforts to consolidate resources to gain more quality project resources in a more Chairman Wang Shi Name Type % effective way. In the first quarter, the company obtained 19 new projects (including CFO Wang Wenjin China Resources Tradable A-shares 14.54 Shanghai Hengda Project), with a total occupation area of 1,706,000 square meters and a Co Sec. Xiao Li Southern Quality Growth Fund Tradable A-shares 2.53 Charttotal 2. Movement planned ofconstruction PE and PB arof eaShenzhen of 2,929,000 Component square Index meters. Tel. 0755-25606666 CLSA Limited B-shares 1.76 Website www.vanke.com Liu Yuansheng Tradable A-shares 1.34 3. A very strong growth and development capability. In latest 3 years, the company has realized a rapid growth, with net profit growth exceeding 50%, compound growth rate reaching 57.04% and EPS compound growth rate reaching 41%. Its EPS is forecast to be RMB 0.50 and RMB 0.66 respectively in 2007 and 2008.

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield 4. Reasons for optimism on the company and the rating. Under the background that Jul. 13, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) macro-controls will necessarily lead to a substantial increase in industry concentration, in view of its stable and sustainable profitability, its development capability for rapid expansion 2004A 7,667 878 61.9 0.39 0.15 55.1 0.83 and its position of consolidating industry resources when the industry trends to see its 2005A 10,559 1,350 53.8 0.36 0.15 58.6 0.83 concentration enhanced, we maintain “STRONG BUY” rating to the company. 2006A 17,848 2,155 59.6 0.49 0.15 43.1 0.83 2007E 27,517 3,302 53.2 0.50 0.15 42.2 0.83 Risk Warning: 2008E 35,924 4,311 30.6 0.66 0.15 32.3 0.83 The real estate industry’s industry risks under macro-controls Source: Ping An Research & Wind Info

PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] PINGPINGPING ANPING AN RESEARCHAN RESEARCH AN SECURITIES SECURITIES Contact: Contact: Ms. Ms. Qiu Qiu Xiaojin Xiaojin Contact Contact [email protected]: Qiu :[email protected] Qiu Xiaojin Xiaojin [email protected] [email protected] 10 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. ThisThis isThis preparedisThis preparedis prepared is prepared for for clients for clients clients for of clientsof Ping ofPing Ping ofAn An Ping AnSecurities Securities Secu An Securities CompanyCompanyrities Company Company Ltd. Ltd. and Ltd.and otherother andother professionals. professionals.ot professionals.her professionals. The The info in formationrmation and and points points contained contained herein herein do donot not form form bids bids or 11 or The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. inquiriesinquiriesThe ofTheinformation the of information thesaid said securities and securities andpoints andpoints containedand are containedare only only forherein forreference herein referencedo not do. formnot. form bids bidsor inquiries or inquiries of the of saidthe saidsecurities securities and andare onlyare only for reference for reference. . 2/2 PING AN SECURITIES COMPANY LTD. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. China Top Pick A-shares Guidebook ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook Investment Strategy Section: Stock Code: 601628 ) Financials and Real Estate Sector: ( Analyst: Shao Ziqin 86-755-22626592 / [email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (CHINA LIFE INSURANCE COMPANY LIMITED) CHINA LIFE INSURANCE COMPANY LIMITED Business Description: Overview on China’s A-share Markets The company, sponsored and established by China Life Insurance (Group) Company as a sole Ё೑Ҏᇓֱ䰽㙵ӑ᳝䰤݀ৌ sponsor on June 30, 2003, listed in New York Stock Exchange, Hong Kong Stock Exchange and I.Shanghai A-share StockProfile Exchange on Dec. 17 , Dec. 18, 2003 & Jan. 9, 2007 respectively. The company is the largest insurance asset manager and one of the largest institutional investors in China. In Ended2006, June with 2007, a market there share were oftotally 45.27%, 1,434 the companies company liste continuedd in A-share keeping markets a leading with a positiontotal share in capital ofChina’s 1,409.149 life insurancebillion shares, market. a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.56 trillion. Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and Investment Points: Rating: Strong Buy Current (Aug8): ̞48.22 Target: ̞60 Co Visit: High Shanghai-Shenzhen 300 Index’s average PE was 29.05 multiples. 1. The company is the biggest life insurance company in China. It occupied a 49.4% market share in China’s life insurance industry with its distribution outlets spreading nearly all over county-level administrative regions except Tibet Autonomous Region. Chart2. The 1. Movement company of will PE andbe thePB ofbiggest Shanghai beneficiary Composite from Index loosening of investment channels, and will benefit from an interest-increase cycle. Asset allocation has determined yield. Investment yield is the most sensitive factor of intrinsic value. Loosening of investment channels is advantageous to improving investment term structure and enhancing yield level. Due to solid governmental resources, the company is likely to gain the biggest boon during the process of loosening of investment channels. Days ago, its entry into China Southern Power Grid and its successful investment in such projects as CITIC Securities and Guangdong Development Bank also have all shown the company’s competitive advantage in terms of investment. 3. Preliminary effects have been seen in the company’s product structure adjustment and its organizational structure adjustment space is awaited for release. Consolidation of sales resources, guarantee resources, internal control resources, human resources and investment resources is being conducted; Shanghai Data Center and Beijing R&D Center are being prepared for construction; based on the province-level concentration of data, a bid concentration of data nationwide will be gradually achieved. Source: Ping An Research & Wind Info Management Information Major Shareholders & Type of Shares Risk Warning: Chairman Yang Chao Name Type % Besides marketing misleading risks, pricing and investment risks, asset-liability mismatch risks, CFO Liu Jiade China Life Insurance (Group) Restricted tradable A 68.37 solvency deficiency risks and comprehensive operation risks, 2 more risk should be considered: Co Sec. Liu Ting’an HKSCC Nominees Limited H-shares 24.30 Chart1. Risks 2. Movement from being of PE controlledand PB of Shenzhen by the substantialComponent shareholder:Index Before the issue, China Life Tel. 010-85659999 Richbo Investment Limited H-shares 1.52 Insurance (Group) Company, holding a 72.2% stake in the company, was a controlling

Website www.e-chinalife.com State Development and Investment Restricted tradable A 0.18 shareholder of the company. Since the issue quantity of 1.5 billion shares only accounted for 5.3% of the total share capital upon the issue, after the issue, China Life Insurance (Group) Company held a 68.4% stake, still keeping its position as a controlling shareholder. Therefore, the parent company has capability to impose significant influences on the company’s decisions, specifically including dividend payments, capital increase or reduction, Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield securities issuance, amendment of articles of association, mergers & acquisitions and other Dec. 31, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) important transactions. 2005 140.4 2. Exchange rate risks: In 2005 and the first half of 2006, the company incurred exchange 81022 9365 29.7 0.35 0.05 0.102 losses of RMB 0.634 billion and RMB 0.213 billion respectively, mainly because of the 2006 99417 20051 65.5 114.1 0.75 0.14 0.285 yuan’s appreciation. According to our estimation, the yuan would slightly appreciate at a 2007F 112638 26429 52.8 31.8 0.93 0.20 0.400 pace of 3%-5% annually. Since there lack financial instruments that can hedge exchange rate 2008F 128663 38326 36.4 45.0 1.35 0.31 0.635 risks in China at present, limiting any capability on managing exchange rate risks, therefore, 50128 27.8 2009F 147968 30.8 1.76 0.44 0.902 certain exchange rate risks will be faced. Note: PE and dividend yield is respectively calculated based on July’s price. Source: Ping An Research & Wind Info

Financials and Real Estate Sector: Investment Strategy Section: Stock Code: 000024 ) Ping An Research – (CHINA MERCHANTS PROPERTY DEVELOPMENT CO., LTD.) ( Analyst: Liu Xihui 86-755-22627484 / [email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Business Description: The company was established in Shenzhen in 1994 which is a pioneer developer in China and CHINA MERCHANTS PROPERTY DEVELOPMENT CO., LTD. also one of the three coreOverview business of on China China’s Merchants A-share Group. ItMarkets is listed in Shenzhen Stock ᢯ଚሔഄѻ᥻㙵㙵ӑ᳝䰤݀ৌ Exchange (SC: 000024) and Singapore Stock Exchange (SC: 200024). At the end of 2006, the company’s total asset exceeds RMB 14.2 billion. It had over 40 large-scaled property projects in I.Shenzhen, A-share Profile Beijing, Shanghai, Guangzhou, Tianjin, Suzhou, Nanjing, Chongqing, Zhangzhou and other large and middle cities respectively, with an accumulated development area exceeding 8 Endedmillion June square 2007, meters. there were totally 1,434 companies listed in A-share markets with a total share capital of 1,409.149 billion shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.56 trillion. Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and Rating: Buy Current (Aug9): ̞63.50 Target: ̞70.50 Co Visit: High Investment Points: Shanghai-Shenzhen1. With a complete 300 businessIndex’s average mode, PE the was company 29.05 multiples. has an improved industrial chain and a capability resisting risks. Currently, the company has 5.42 million square meters of land reserves for planned construction areas and has preliminarily accomplished a nationwide layout for its property business. The company’s held properties for lease presented an upside Chart trend,1. Movement from which of PE theand company PB of Shanghai could Compositegain stable Index rent returns. The properties to be added for lease in 2007 are the office building project in New World Plaza. 2. China Merchants Group has clearly positioned the company as an unified carrier of property development. Currently, real estate development business’s proportion in China Merchants is 23% and its profit contribution is 11%, therefore, real estate business is awaited for further development and can obtain the substantial shareholder’s support and commitment. 3. In China Merchants Group’s real estate development and operation business, the company is positioned in the development and operation of specific projects. Other two property carriers Shekou Industrial Zone Company and Zhangzhou Development Zone Company are responsible for construction of tracts of development zones and primary land development and operation within the development zones, of which, Shekou Industrial Zone Company currently possess approximately 2 million square meters of resources and a part of hotel business.

4. After completion of the Hong Kong – Shenzhen Western Corridor, it will significantly enhance the company’s performance and value. From the viewpoint of the company’s Management Information Major Shareholders & Type of Shares Source:development Ping An Research and & the Wind substantial Info shareholder’s business positioning, after the finish, the Chairman Sun Chengming Name Type % Western Corridor is forecast to provide a good opportunity for the parent company’s assets injection; we estimate the most likely one is the quality assets in the Shekou area. CFO Huang Peikun China Merchants Shekou Industrial Zone Tradable A 23.82 5. If the parent company’s assets injection is not taken into account, in a short-term view, its Co Sec. Chen Yu Hong Kong Panorama Investment B-shares 10.14 Chart A-share2. Movement valuation of PE andis basically PB of Shenzhen reasonable. Component The company’s Index EPS is forecast to be RMB 0.90 Tel. 0755-26818600 China Merchants Securities (HK) B-shares 4.8 and RMB 1.41 respectively in 2007 and 2008 after the share conversion and the private Website www.cmpd.cn Foxrot International Limiter Tradable A 2.99 placement. Integrating the results of the relative valuation and the absolute valuation, we think the company’s value would be approximately at RMB 70.50. 6. Reasons for optimism on the company and the rating. What we are optimistic to is the company’s unique business mode, the substantial shareholder’s support, finish of the Western Corridor’s lifting the company’s performance and finish of the Western Corridor’s Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield providing likelihood for the parent company’s assets injection, and its B-shares have certain May 10, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) price difference against its A-shares and have a lower premium to the revalued net asset per 2004A 3,476 360 61.9 0.58 0.15 112.4 0.23 share, therefore, “BUY” rating is given to its A-shares and “STRONG BUY” rating is given 2005A 2,659 422 17.2 0.68 0.15 95.9 0.23 to its B-shares. 2006A 2,939 568 34.7 0.92 0.02 70.9 0.03 2007E 4,580 763 34.3 0.9 0.025 72.4 0.04 Risk Warning: 2008E 7,312 1,195 56.7 1.41 0.03 46.2 0.05 Uncertainties exist in its equity incentives and the assets injection; its share price suffers a relatively large impact from its substantial shareholder. Source: Ping An Research & Wind Info PINGPINGPING AN AN RESEARCHAN RESEARCH SECURITIES Contact: Ms. Qiu Xiaojin Contact Contact [email protected]: Qiu : Qiu Xiaojin Xiaojin [email protected] [email protected] ThisThis isThis preparedisPING preparedis prepared ANfor for clients forSECURITIES clients clients of of Ping ofPing Ping An An AnSecurities Securities Secu rities CompanyCompany Company Ltd. Ltd.Contact: and and otherother other professionals.professionals.Ms. professionals. Qiu Xiaojin The The info information rmation [email protected] and and points points contained contained herein h erein do donot not form form bids bids or or PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] 2/2 14 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. inquiriesinquiriesThe This ofinformation the of is the saidprepared said securities and securities for points clients and containedand are of are onlyPing only forherein An forreference Secu referencedorities not. form Company. bids or Ltd. inquiries and ot herof the professionals. said securities and are only for reference. 15 The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. PING AN SECURITIES COMPANY LTD. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. China Top Pick A-shares Guidebook ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook Investment Strategy Section: Stock Code: 600736 ) Financials and Real Estate Sector: ( Analyst: Liu Xihui 86-755-22627484 / [email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (SUZHOU NEW DISTRICT HI-TECH INDUSTRIAL CO., LTD.) SUZHOU NEW DISTRICT HI-TECH INDUSTRIAL CO., LTD. Business Description: Overview on China’s A-share Markets The company, listed in Shanghai Stock Exchange in July 1996, is mainly engaged in carrier 㢣Ꮂᮄऎ催ᮄᡔᴃѻϮ㙵ӑ᳝䰤݀ৌ product construction, infrastructure operation, real estate development and hi-tech enterprise I.investment A-share Profile in Suzhou Hi-tech Development Zone.

EndedInvestment June 2007, Points: there were totally 1,434 companies listed in A-share markets with a total share capital of1. 1,409.149Suzhou city’sbillion real shares, estate a totalmarket market goes capsteady of RMBas a whole. 16.62 The trillion housing and ama tradablerket in marketSuzhou, cap with of RMB a relatively balanced supply and demand relationship, has a good development potential and Rating: Strong Buy Current (Aug10): ̞16.30 Target: ̞18.10 Co Visit: High 5.56 trillion. Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and Shanghai-Shenzhenprospects, also 300 attractive Index’s reaveragelative toPE the was housing 29.05 multiples. markets in Hangzhou and Nanjing etc. around the Yangtze River Delta area.

2. Real estate has become a core business of the company. Besides, the company is fully Chartdeveloping 1. Movement infrastructure of PE and PB of operations Shanghai Composite with sewa Indexge treatment as the core. We expect the sewage treatment business would retain an average annual growth pace of 30% over next 3-5 years.

3. Currently, the company has relatively rich land reserves, which can be used for at least 3 years of development in the future. At present, its land reserves amount to 1.50 million square meters, and its housing and commercial buildings under construction amount to 1.702 million square meters. We estimate that it could provide the company’s development over next 3 years.

4. We expect the company’s performance would grow in a sustainable and rapid way in 2007 and 2008 with net profit’s annual growth pace exceeding 60%. Its EPS is forecast to reach RMB 0.42 and RMB 0.68 respectively in 2007 and 2008. Increase in the proportion of housing business profit will make the company’s profit growth far exceed its revenue growth in 2007 and its existing projects and land reserves in 2008 would bring rapid growth of Source:revenue Ping An and Research profit. & Wind Info Management Information Major Shareholders & Type of Shares Chairman Ji Xiangqun Name Type % 5. Undervalued shown on its absolute and relative value. Its dynamic PE is 39.2x and 24.2x CFO Pan Cuiying SND Group Corporation Tradable A-shares 40.29 respectively in 2007 and 2008, lower than the industry’s average level; under the situation Co Sec. Miu Kai Suzhou New District Innovation Tech. Tradable A-shares 2.8 Chartthat 2. Movement the market of PE is and revaluating PB of Shenzhen real estateComponent shares Index and share prices continuously exceed Tel. 0512-68072571 CCB-Huaxia Mixed Open-end Fund Tradable A-shares 2.27 revaluated values, the absolute valuation shows that the company’s value is RMB 14.92, Website www.sndht.com Xinghe Securities Investment Fund Tradable A-shares 1.87 which is absolutely undervalued; meanwhile, the company’s current market capitalization is RMB 5.9 billion, while its project inventories’ book values have reached RMB 5.3 billion.

6. “STRONG BUY” rating is given for the first time with a price target of RMB 18.10. According to the industry’s PE level as of 2007 and PB level as of 2006 and the company’s Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield revaluated net asset, we conservatively consider that the company’s reasonable value is Aug. 8, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) between RMB 14.92 and RMB 21.28, the median of which is adopted, thus a 12-month price target of RMB 18.10 is given. 2004A 1,613 130 19.43 0.28 0.15 58.8 0.91 2005A 1,609 143 10.20 0.31 0.18 53.1 1.09 Risk Warning: 2006A 2,075 145 1.57 0.32 0.18 51.4 1.09 Certain uncertainty exists in Suzhou’s future real estate market and the company’s transforming 2007E 1,838 233 60.16 0.42 0.18 39.2 1.09 from a park construction function discharger into a real estate developer, but we think both these 2008E 3,053 379 62.84 0.68 0.18 24.2 1.09 two risks are controllable. Source: Ping An Research & Wind Info

2. Currently, the parent company still has some quality new-material assets and new material projects under construction; some other non-new-material secondary lines of business are being split off; what can be injected into the listed company in the future are all quality assets.

3. “STRONG BUY” rating is maintained. We estimate the company’s EPS would reach RMB 1.10 and RMB 1.56 (the performance 2007 and 2008 is diluted respectively upon the private placement) respectively in 2007 and 2008. Taking into account the company is the biggest listed company of comprehensive new materials at home, along with such

high-gross-profit-margin projects as 100,000-ton organosilicon and 10,000-ton PPO’ being Source:put Ping into An production, Research & Windrecovery Info of bisphenol A business and the chance of going public as a Management Information Major Shareholders & Type of Shares whole faced by the company, we maintain “STRONG BUY” rating. Chairman Ren Jianming Name Type % CFO Yu Jibing China National BlueStar (Group) State-owned 54.27 ChartRisk 2.Warning: Movement of PE and PB of Shenzhen Component Index Co Sec. Fen Xinhua CIFM Double Interest Balance Mixed Fund Tradable A-shares 2.97 Since the new materials industry has relatively high technical barriers, and even if the new Tel. (010)64411094 CIFM Alpha Equity Fund Tradable A-shares 2.94 device is put into production, relatively large risks exist with certain time of adaptation needed. Website www.star-nm.com CIFM China Advantage Equity Fund Tradable A-shares 2.46 If the progress of new materials projects is not smooth, it will impact the company’s earnings status and valuation, which investors should pay key attention to.

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Jul. 20, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 2005 2,489.79 216.44 116.74 0.90 0.058 48.02 0.13 2006 3,735.17 200.41 -7.41 0.56 0.18 77.18 0.42 2007E 8,547.60 543.70 171.28 1.10 - 39.29 - 2008E 10,189.63 769.69 41.82 1.56 - 27.71 - 2009E 12,527.81 818.07 28.85 2.10 - 20.58 - Source: Ping An Research & Wind Info

PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] PINGPING ANPING AN RESEARCH RESEARCH AN SECURITIES Contact: Ms. Qiu Xiaojin Contact Contact : Qiu :[email protected] Qiu Xiaojin Xiaojin [email protected] [email protected] ThisThis is preparedis Thisprepared is preparedfor for clients clients for of clientsof Ping Ping ofAn An Ping Securities Securities An Secu CompanyCompanyrities Company Ltd. and Ltd. otherother and professionals. professionals.other professionals. The The info in formationrmation and and points points contained contained herein herein do donot not form form bids bids or or 18 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. 192/2 The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. inquiriesinquiries ofThe the of information thesaid said securities securities and andpoints and are containedare only only for forreference herein reference do. not. form bids or inquiries of the said securities and are only for reference. PING AN SECURITIES COMPANY LTD. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. China Top Pick A-shares Guidebook ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook Investment Strategy Section: Stock Code: 600509 ) Energy Sector: ( Analyst: Fu Yunfeng 86-21-62481416 / [email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (XINJIANG TIANFU THERMOELECTRIC CO., LTD.) XINJIANG TIANFU THERMOELECTRIC CO., LTD. Overview on China’s A-share Markets Business Description: ᮄ⭚໽ᆠ⛁⬉㙵ӑ᳝䰤݀ৌ The company, established in Mar. 1999 and listed in Shanghai Stock Exchange on Feb. 28, 2002, I.is A-share the first Profilelisted company of cogeneration (CHP) in the Northwest. Ended the end of June 2006, the company had a total share capital of 253.6275 million shares and a total asset of RMB 3.539 Endedbillion, June with 2007, totally there 3,155 were staff. totally 1,434 companies listed in A-share markets with a total share capital of 1,409.149 billion shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.56 trillion. Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and Rating: Strong Buy Current (Aug14): ̞25.02 Target: ̞40 Co Visit: High Shanghai-ShenzhenInvestment Points: 300 Index’s average PE was 29.05 multiples. 1. Its generating sets are likely to grow 55% at the end of 2007. Currently, the company has two generating projects under construction: the first is the 2×125,000 kilowatts of combined heat and power project in Nanre Power Plant, #1 generating set of which is estimated to be Chartput 1. Movement into production of PE and in PB the of Shanghai second halfComposite 2007 Index and #2 generating set of which will be accomplished and put into production in 2008; the second is the 1st-graded radial 50,000 kilowatts of hydropower project in Manasi River, the first generating set with 1.6 kilowatts of which has been combined into the network for power generation in Sept. 2006 and the rest of which will be put into production in the second half 2007 at latest. To 2008 when all projects under construction are put into production, the company’s controllable installed capacity will reach 562,000 kilowatts and its equity installed capacity will reach 499,500 kilowatts, doubling its power generating scale.

2. Currently, the industrial progress of high-tech projects exceeds expectations. No matter carbon materials, carbon bead or carborundum crystal projects, their industrial and commercial processes have exceeded our expectations.

3. “STRONG BUY” rating is retained. We expect the company’s EPS would reach RMB 0.42, RMB 0.86 and RMB 1.41 respectively in 2007, 2008 and 2009. Considering carborundum Management Information Major Shareholders & Type of Shares Source:crystals’ Ping An hugeResearch technical & Wind Info barri ers and huge market prospects, while the company is an exclusive enterprise engaged in production of carborundum crystals at present, having a very Chairman Cheng Feng Name Type % strong cost advantage, we raise the target price to RMB 40.00 apiece and retain “STRONG CFO Zhang Zongzhen Xinjiang Tianfu Electric Power (Group) State-owned 51.66 BUY” rating. Co Sec. Xu Ruimin Guolian Securities Tradable A-shares 4.64 Chart 2. Movement of PE and PB of Shenzhen Component Index Tel. (0536)2308043 Guangfa Small Cap Growth Equity Fund Tradable A-shares 1.01 Website www.tfrd.com Tang Xianghong Tradable A-shares 0.87 Risk Warning: The new materials industry has relatively high technical barriers, and certain technical risk exists in its new projects, which investors should pay key attention to.

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Jul. 20, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 2005 816.18 63.94 6.16 0.25 0.18 134.39 0.74 2006 975.17 34.17 -46.56 0.13 0.14 172.79 0.56 2007E 1,146.28 106.68 212.20 0.42 - 57.60 - 2008E 1,677.36 218.44 104.76 0.86 - 28.13 - 2009E 2,148.28 358.14 63.95 1.41 - 17.16 -

Source: Ping An Research & Wind Info

2. Along with LNG resources’ supply falling short of demand, the company’s bargaining position in terms of price is very strong; the downstream price markup is larger than the upstream price markup; we estimate it is hard for the situation of resource constraints to be eased within next several years, and the company’s LNG business still would enjoy a high gross profit margin in the long term. Since the natural gas company’s equities have been well settled, the company can conduct a scale expansion to the natural gas project under this platform by making full use of its experience from the natural gas project phase I so as to develop the LNG business larger and stronger and create a larger value to its shareholders.

3. The company planned to issue not more than 300 million shares in a non-public way with a total amount of raised proceeds not more than RMB 2.5 billion. The raised proceeds would be used in the following investment projects: (1) Construct a methanol project with annual Source:output Ping An of Research 1.20 million & Wind tons Info or a dimethyl ether (coal base) project with annual output of Management Information Major Shareholders & Type of Shares 800,000 tons, with RMB 2 billion; (2) Refund bank loans, with not more than RMB 0.5 Chairman Sun Fengyuan Name Type % billion of raised proceeds planed to be invested in. Upon completion of the methanol project with annual output of 1.20 million tons with annual output of 800,000 tons, integrated with CFO Liu Xiuchun Xinjiang Guanghui Industry Investment Legal person 41.93 Chartthe 2. Movementcurrently existingof PE and liquefied PB of Shenzhen natural Componentgas industry, Index the company will become a clean energy Co Sec. Yan Jinsheng Shanghai Huineng Investment Management Restricted A 13.57 company with prominent core businesses in the future. Tel. (0991)3762327 Liu Shiying Restricted A 3.82 Website www.xjguanghui.com Xinjiang Urumchi Technical Reform State-owned 2.59 4. “STRONG BUY” rating is maintained. We estimate its EPS would reach RMB 0.46, RMB 0.54 and RMB 0.86 (the performance 2009 is diluted on the private placement) in 2007, 2008 and 2009 respectively. Taking into consideration its likely LNG business expansion and coal chemicals development in the future, we consider the company’s reasonable target price would be RMB 18.00 apiece. Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Jul. 20, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) Risk Warning: 2005 2,264.86 193.72 -13.88 0.22 0.09 48.50 0.84 Certain uncertainty exists in whether China Securities Regulatory Commission would approve 2006 1,855.90 182.86 -5.60 0.21 - 50.81 - the company’s coal chemicals projects through a private placement, from which investors should 2007E 2,373.56 398.36 117.85 0.46 - 23.20 - pay close attention to the risks arising. 2008E 2,913.70 467.64 17.39 0.54 - 19.76 - 2009E 5,603.68 988.14 111.30 0.86 - 12.41 - Source: Ping An Research & Wind Info

Investment Points: 1. Wenshan’s heavy industry drives its power demand. The market has not fully known that th ChartWenshan 1. Movement District’s of PE and heavy PB of industry Shanghai would Composite develop Index at a supernormal pace during the “11 5-year plan” period, driving its power demand to grow at an annual rate of above 20%, becoming a footstone for the company’s rapid growth.

2. Electricity price adjustments are advantageous to the company’s development. The company’s retail prices of electricity have risen by different degrees each year. The adjustment extent of the company’s retail prices of electricity is relatively large in 2007, which would significantly enhance the company’s profitability. In our view, the company’s electricity prices would continue to increase in 2008, as the power consumption demand will keep growing prosperously while the power supply will retain a relatively constraint status along with Wenshan’s economic development in 2008; meanwhile, demand-end users have continuingly strengthened sustainability to electricity prices; under such a supply and demand environment, electricity prices are likely to be raised anew.

3. “BUY” rating retained. Since the company is likely to retain an annual average growth of Management Information Major Shareholders & Type of Shares Source:25% Ping in An recent Research 4 years, & Wind we Info estimate a valuation of 25x PE for 2008, corresponding to a share Chairman Yang Bin Name Type % price of around RMB 13.50 apiece. CFO Xiong Pingwu Yunnan Power Grid State-owned 29.57 Co Sec. Duan Dengqi Yunnan Guangju Mingyuan Investment Legal person 12.95 ChartRisk 2.Warning: Movement of PE and PB of Shenzhen Component Index Tel. (0871)3193778 Harvest Open-end Fund Tradable A 1.53 Negative changes in the power purchase and sales structure exceed expectations; Wenshan’s Website www.wsdl.com.cn Yunnan Power Industry Development State-owned 1.35 power demand growth pace is lower than expected.

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Jul. 19, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 2005 468 77 96.1 0.44 0.30 18.2 3.8 2006 578 77 -0.7 0.35 0.10 22.9 1.3 2007E 795 104 36.2 0.37 0.20 21.6 2.5 2008E 1024 125 19.5 0.46 0.20 17.4 2.5

Source: Ping An Research & Wind Info

PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] PINGPING ANPING AN RESEARCH RESEARCH AN SECURITIES Contact: Ms. Qiu Xiaojin Contact Contact : Qiu :[email protected] Qiu Xiaojin Xiaojin [email protected] [email protected] ThisThis is preparedis Thisprepared is preparedfor for clients clients for of clientsof Ping Ping ofAn An Ping Securities Securities An Secu CompanyCompanyrities Company Ltd. and Ltd. otherother and professionals. professionals.other professionals. The The info in formationrmation and and points points contained contained herein herein do donot not form form bids bids or or 24 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. 252/2 The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. inquiriesinquiries ofThe the of information thesaid said securities securities and andpoints and are containedare only only for forreference herein reference do. not. form bids or inquiries of the said securities and are only for reference. PING AN SECURITIES COMPANY LTD. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. China Top Pick A-shares Guidebook ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook Investment Strategy Section: Stock Code: 000767 ) Energy Sector: ( Analyst: Dou Zeyun 86-755-22622741 / [email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (SHANXI ZHANGZE ELECTRIC POWER CO., LTD.) SHANXI ZHANGZE ELECTRIC POWER CO., LTD. Overview on China’s A-share Markets Business Description: ┇⋑⬉࡯㙵ӑ᳝䰤݀ৌ The company, a platform for China Power Investment Corporation, one of the five large power I.groups, A-share to Profileconsolidate its power assets in Shanxi and North China, has certain guarantee in terms of its expansion prospects. With relatively low electricity prices, the company has certain Endedadvantage June in2007, a long-term there were view. totally According 1,434 companies to its commitments listed in A-share in the sharemarkets overhaul with a totalreform, share its capital ofbonus 1,409.149 issue forbillion three shares, years awould total marketbe 65% cap of theof RMB distributable 16.62 trillion profit; and its dividenda tradable yield market in recentcap of RMB 5.56three trillion.years is Endedlikely to the reach end ove ofr 6%. June Shanxi 2007, has all richA shares’coal res averageources; the PE company was 33.5 is likely multiples, to and keep a faster expansion in this region. Rating: Buy Current (Aug17): ̞12.40 Target: ̞15.00 Co Visit: High Shanghai-Shenzhen 300 Index’s average PE was 29.05 multiples.

Investment Points: Chart1. “Starting 1. Movement big of projects PE and PB while of Shanghai holding Composite down sm Indexall projects” has provided development opportunities for newly constructed projects. A peak time for power supply construction has elapsed. Currently, the difficulty for newly constructed projects to get approved is far larger than that in 2004 and 2005. The policy of “starting big projects while holding down small projects” has provided opportunities for the company’s subsequent development.

2. Large quantities of projects under progress support the company’s development. Currently, the relatively confirmed new projects among the company’s large quantities of projects planned for construction include: 2 generating units in Linfen with 300,000 kilowatts each, one of which still awaits approval; 2 generating units in Houma with 300,000 kilowatts each (originally 2 generating units with 200,000 kilowatts each; currently, applied to change into 300,000 kilowatts each); 2 generating units in Niangziguan with 600,000 kilowatts, which awaits approval; 2 IGCC (Integrated Gasification Combined Cycle) units with 400,000 kilowatts each in Langfang, Hebei, under push; 2 wind power generating units with 50,000 kilowatts each in Inner Mongolia, to be started soon. Besides, there are still over 20 previous projects under progress. The above relatively confirmed projects will be basically put into Management Information Major Shareholders & Type of Shares Source: Ping An Research & Wind Info production within the end of 2008 to 2009, which would support the company to realize a Name Type % Chairman Wang Qingwen rapid growth in 2009. CFO Liang Huajun China Power Investment Corporation State-owned 36.24 Co Sec. Wang Yifeng Shanxi International Power State-owned 27.34 Chart3. “BUY” 2. Movement rating of is PE retained. and PB Inof Shenzhen2009, the Component power plants Index currently under progress will gradually Tel. (0351)4265109 Ningbo Luoguan Garments Legal person 1.51 bring earnings; the company will restart its scale and performance expansion, but it will be Website www.zhangzepower.com China Life Insurance Tradable A 1.10 certainly accompanied with refinancing. Combining the company’s valuation level and its long-term growth outlook, we estimate the company is under-valued.

Risk Warning: Number of put-into-production installed generating units in Shanxi exceeds expectations, leading Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield to a sharp decrease in the utilization hours of the generating units. Jul. 18, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 2005 2349 240 14.5 0.28 0.16 34.0 1.7 2006 3126 354 47.9 0.32 0.16 29.9 1.7 2007E 3749 547 54.3 0.41 0.16 23.2 1.7 2008E 4124 584 6.8 0.44 0.16 21.8 1.7

Source: Ping An Research & Wind Info

PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] PINGPINGPING ANPING AN RESEARCHAN RESEARCH ANSECURITIES SECURITIES Contact: Contact: Ms. Ms. Qiu Qiu Xiaojin Xiaojin Contact Contact [email protected] : Qiu : [email protected] Qiu Xiaojin Xiaojin [email protected] [email protected] ThisThis isThis preparedis Thispreparedis prepared is preparedfor for clients for clients clients for of clientsof Ping ofPing Ping Anof An Ping AnSecurities Securities Secu An Securities CompanyCompanyrities Company Company Ltd. Ltd. and Ltd.and otherother otandher professionals. professionals.ot professionals.her professionals. The The info in formation rmation and and points points contained contained herein herein do donot not form form bids bids or or 26 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. 272/2 The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. inquiriesinquiriesThe ofinformationThe the of information thesaid said securities and securities pointsand and points containedand are containedare only only forherein forreference herein referencedo not do. form not. form bids bidsor inquiries or inquiries of the of said the saidsecurities securities and areand only are onlyfor reference for reference. . PING AN SECURITIES COMPANY LTD. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. China Top Pick A-shares Guidebook ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook Investment Strategy Section: Stock Code: 601006 ) Transportation Sector: ( Analyst: Tian Yalin 86-21-62078329 / [email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (DAQIN RAILWAY CO., LTD.) DAQIN RAILWAY CO., LTD. Overview on China’s A-share Markets Business Description: ໻⾺䪕䏃㙵ӑ᳝䰤݀ৌ The company is the first railway operator with road-network core mainlines as the principal part I.in A-share China. ItsProfile main asset, Daqin Railway, linking Datong and Qinhuangdao, is a main line of our country’s coal transportation. The company, listed in Shanghai Stock Exchange on Aug. 1, 2006, Endedcurrently June has 2007, 40,728 there staff. were totally 1,434 companies listed in A-share markets with a total share capital of 1,409.149 billion shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.56 trillion. Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and Investment Points: ̞ Shanghai-Shenzhen 300 Index’s average PE was 29.05 multiples. Rating: Buy Current (Aug20): 17.05 Target: RMB 18.50 Co Visit: High 1. West-East coal transmission will remain as a main pattern of China’s energy supply in the future. The railways held by the company have formed a main artery of West-East coal transmission. Chart 1. Movement of PE and PB of Shanghai Composite Index 2. The company’s transport capacity will retain a rapid expansion. The company conducted a capacity expansion and alteration in 2005, with its transport volume reaching 200 million tons, which was continuingly expanded to 250 million tons in 2006. It planned to make its transport capacity reach 300 million tons in 2007 and reach 400 million tons within next 2-3 years. Daqin Line’s capacity expansion was basically an alteration to the original line, with the railway’s carrying capacity being increased depending on kickoff of heavy trucks and increase of departure density. Currently, Daqin Line kicks off 20,000-ton heavy duty trains, which has refurbished railways’ record in terms of heavy transportation. From certain meaning view of point, Daqin Railway, an important trial of Ministry of Railways in terms of heavy-duty cargo transport technologies and investment & financing, will necessarily gain great supports from Ministry of Railways.

3. It is likely to be benefited from the process of railway assets securitization. Currently, China’s busy railway lines are over 10,000 kilometers, while Shanghai’s four railways are Management Information Major Shareholders & Type of Shares Source:less Ping than An 1,000Research kilometers. & Wind Info All the currently listed railway companies have opportunities to continuingly expand their company assets and profit scales. Daqin’s asset injection is being Chairman Wu Xun Name Type % boosted. We believe the scheme would lift the company’s earnings per share. Besides, CFO Zhang Hongyi Taiyuan Railway Bureau State-owned 72.94 obviously lower railway transport prices make return on assets be suppressed, which is Co Sec. Huang Songqing Datang International Power Generation Tradable A 1.29 Chartlikely 2. Movement to be graduallyof PE and PB enhanced of Shenzhen in the Component future. Therefore, Index the company’s potential growth Tel. 0352-7121395 China Huaneng Group State-owned 1.29 ability is huge. Website www.daqintielu.com Qinhuangdao Port Group Tradable A 1.09 4. Valuation is attractive. The company’s dynamic PE as of 2008 is approx. 27x. In view of the performance growth from potential asset injections and expectations on long-term increase in return on assets, we consider this valuation level is still attractive. Rating is “BUY”.

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Jul. 19, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) Risk Warning: 2005 13,105 3,561 48.9 0.36 - - - The progress of asset acquisitions is likely slower than market expectations. 2006 16,145 4,370 22.7 0.34 0.30 42.0 2.1 2007 E 17,017 5,334 22.0 0.41 0.33 34.9 2.3 2008 E 19,540 7,110 33.3 0.55 0.44 26.0 3.1 2009 E 20,919 7,304 2.7 0.56 0.45 25.5 3.1

Source: Ping An Research & Wind Info

Chart2. Semi-submersible 1. Movement of PE vesseland PB business of Shanghai has Compositecertain cyclical Index feature; demand cycle mainly lies on the long-term level of oil prices rather than such freight indices as BDI. Adjustment of supply of semi-submersible vessels is a slow process, as well as a game process. Like a game of I-go, the company and Dockwise’s respective ship-building plan will impact the opposing party’s decision-making on capital expenditures.

3. Competition of heavy lift carriers might be intensified, but time charter level is less likely to drop within two to three years.

4. Multi-purpose cargo ships are line with the unique trade modes of China with Africa and Latin America; its heavy lift orientation will become the main direction of the company’s shipbuilding. Due to scarcity of global slipways, slowdown of growth of transport capacity of Handy-typed multi-purpose cargo ships in the past two years guarantees freight in next several years. The company’s competitive edge in general cargo carrier business is not obvious; currently, quality of car-carrying vessels’ transport business is relatively low; Management Information Major Shareholders & Type of Shares Source:capital Ping Anexpenditure Research & requirementsWind Info are relatively high. There is still space for improvement of the company’s business structure. Chairman Xu Lirong Name Type % CFO Lin Jingwei Guangzhou Ocean Shipping Legal person 50.13 5. We estimate the company would start up injection of lumber ship and asphalt carrier assets Co Sec. Xue Jundong Anshun Fund Legal person 4.44 Chartfrom 2. Movement its parent of PEcompany. and PB Besides,of Shenzhen development Component of Index the car-carrying vessels is also likely to Tel. (020)62621288 Social Security 106 Account Tradable A 2.52 accelerate in 2008. Website www.coscol.com.cn CCB Principal Fund Tradable A 2.15 6. By NAV Method, the company’s existing business value is around RMB 16.00-18.00. The current share price has fully reflected the value of the fleet. The company’s first-half EPS is RMB 0.54; its full-year EPS is forecast to be RMB 1.26. Considering its management’s Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield strategic planning to create value continuously, execution capability and performance record, Jul. 17, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) and the asset injection chance over next one year, the target price is RMB 34.25 apiece 2005 3741.5 685.1 82.7 1.05 0.2 20.60 0.9 calculated as per 25x PE for 2008; we recommend investors buy its shares and keep holding 2006 3848.0 615.0 -10.2 0.94 0.46 23.01 2.2 for a long term investment. 2007E 3938.8 782.3 27.2 1.26 0.47 17.17 2.8 2008E 3946.5 791.3 1.1 1.37 0.49 15.79 2.8 Risk Warning: 2009E 4077.9 906.8 14.6 1.53 0.57 14.14 3.2 The highest risk is the variation of its competition pattern of semi-submersible vessels and heavy 2010E 4830.4 1551.8 71.1 2.36 1.02 9.17 5.5 lift carries which interrupt the schedule of shipping plan. Besides, BDI volatility also brings risks to the freights of return cargoes of multi-purpose cargo ships of the company. Source: Ping An Research & Wind Info

Transportation Sector: Investment Strategy Section: Stock Code: 600004 ) (GUANGZHOU BAIYUN INT’L AIRPORT CO., LTD.) ( Analyst: Tian Yalin 86-21-62078329 / [email protected] Ping An Research – Analyst: Luo Xiaoming 86-755-22626443/[email protected] Business Description: The company is responsibleOverview for operation on ofChina’s the Baiyun A-share Airport. Its Markets main businesses include the GUANGZHOU BAIYUN INTERNATIONAL AIRPORT CO., LTD. airport’s passenger pass services, airplane landing and takeoff services, the ground services ᑓᎲⱑѥ೑䰙ᴎഎ㙵ӑ᳝䰤݀ৌ related to aviation transportation and such relevant outspread services as terminal operation. Listed on Apr. 28, 2003 in Shanghai Stock Exchange, it has 2,173 staff at present. I. A-share Profile Investment Points: Ended June 2007, there were totally 1,434 companies listed in A-share markets with a total share capital 1. A golden investment stage with the capacity utilization rate steadily rising: Baiyun of 1,409.149 billion shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB Airport is in a lifecycle stage where the capacity utilization rate is being enhanced. Currently, 5.56 trillion. Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and its utilization rate is only around 60%, meaning the volume could double without Shanghai-Shenzhen 300 Index’s average PE was 29.05 multiples. Rating: Strong Buy Current (Aug22): ̞19.88 Target: ̞22.30 Co Visit: High large-scaled capital expenditures over next 4-5 years; along with enhancement of the capacity utilization rate, the airport company’s gross profit margin will also rapidly rise. We estimate the airport’s handling capacity will be saturated in 2010. During this process, its net Chartprofit 1. Movement would grow of PE byand over PB of3 times.Shanghai Composite Index 2. Operation improvement brings a rapidly growing performance: In past 2 years, certain problem existed in the company’s cost controls. In early 2007, the company replaced by new general manager and chairman who have rich experience with good previous records. We believe the management improvement would lead to an obvious improvement in cost controls. According to the company’s marketing plan and its first-half operating data, the company signed a strategic cooperation agreement with China Southern Airlines in early 2007, to strive for China Southern Airlines’ volume of flights to grow 30% in Baiyun Airport within 2007. Besides, its management clearly said cost controls should be boosted. In our view, as long as the company can effectively control its relatively high labor costs, then its earnings would likely reach RMB 0.37 and RMB 0.64 per share in 2007 and 2008 respectively, with a compound growth of 50%.

3. Its long-term growth prospects are optimistic: FedEx Asia Transit Center will start operation in Baiyun Airport in Oct. 2008. According to FedEx’s plan, it would bring at least Management Information Major Shareholders & Type of Shares Source: Ping An Research & Wind Info over RMB 100 million of landing and takeoff income to the airport. Besides, improvement Name Type % Chairman Xian Weixiong of the line network will significantly enhance Baiyun Airport’s competitiveness in the freight CFO Mo Mingzhen Guangdong Airport Management Group Restricted tradable 60.48 market in the Pearl River Delta area, thereby expanding its freight business’s earnings space. Co Sec. Xu Guangyu BOSERA 3rd Industry Growth Fund Tradable A-shares 1.61 ChartApart 2. Movement from freight, of PE and Baiyun PB of Air Shenzhenport has Component provided Indexthe biggest commercial area at home; the Tel. 020-36063595 First State Cinda Leading Growth Fund Tradable A-shares 1.59 potential value of commercial property resources is huge. Website www.baiyunairport.com Harvest Stable Open-end Equity Fund Tradable A-shares 1.29 4. Its value is evidently underestimated compared with other domestic airports: Currently, Baiyun Airport’s market cap is only one fourth of that of Pudong Airport and is 50% of that of Capital Airport, while Baiyun Airport is one with the most complete assets and businesses among currently listed airport companies. Priced according to 25x PE upon a full load and Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield discounted to the current with an 8% discount rate, the company’s reasonable price is RMB Jul. 19, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 22.30. “STRONG BUY” rating is given. 2005 2,149 252 -16.2 0.25 0.10 71.1 0.6 2006 2,410 292 18.0 0.29 0.15 61.3 0.8 Risk Warning: 2007 E 2,738 424 45.2 0.37 0.19 48.1 1.1 Adjustment on the standard of charges for domestic airports might reduce income. The measures 2008 E 3,269 713 68.2 0.62 0.32 28.7 1.8 on collection of airport construction fees after 2010 might affect the airport’s subsidy income. 2009 E 3,948 1,000 40.3 0.87 0.45 20.4 2.5

Source: Ping An Research & Wind Info

JIANGXI GANYUE EXPRESSWAY CO., LTD. Overview on China’s A-share Markets Business Description: ∳㽓䌷㉸催䗳݀䏃㙵ӑ᳝䰤݀ৌ The company, listed in Shanghai Stock Exchange on May 18, 2000, invests in highways, bridges I.and A-share other Profiletraffic infrastructure constructions. It has 570 kilometers of quality expressway assets in Jiangxi province, and all of its main expressways are situated in the main expressway lines of Endedour country, June 2007, thus itsthere road-network were totally positi 1,434on companies is important liste andd inits A-sharegrowth ismarkets good. with a total share capital of 1,409.149 billion shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.56 trillion. Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and Rating: Buy Current (Aug23): ̞17.79 Target: ̞18.50 Co Visit: High Shanghai-ShenzhenInvestment Points: 300 Index’s average PE was 29.05 multiples. 1. The company’s performance will keep a benign growth over next two years: We estimate its roads’ vehicle flows would grow at least over 10% in the next two years; in view of the weight-based toll charges started in the second half of last year and the growth from Chartnewly 1. Movement acquired of PEroad and assets, PB of Shanghaithe company’s Composite recu Indexrrent gains and losses would grow at least over 25% in 2007 and maintain a 10%-15% growth in 2008. However, due to uncertainty in subsidy income, the company’s overall performance growth might be lower than 10% in 2007.

2. Jiangxi province’s expressway constructions might bring some acquisition chances: According to Jiangxi’s expressway construction planning, Jiangxi’s expressway mileages will reach 3,226 kilometers before 2010, 1,650 kilometers of which needs to be constructed, with a total investment of approx. RMB 61.55 billion. The expressways needed for construction in 2010-2020 will amount to 1,452 kilometers, with a total investment of approx. RMB 55.26 billion. Under such planning, fully making use of listed companies’ fundraising functions is a reasonable choice, therefore, we believe the company would still have a relatively large room in terms of acquiring assets.

3. The company’s current value is underestimated: Its dynamic PE is only around 16x and Management Information Major Shareholders & Type of Shares Source:its Ping PB Anis 2.8xResearch in 2007, & Wind both Info low in the industry, while DCF absolution valuation shows the Chairman Huang Zheng Name Type % company’s internal value is over 30% higher than its share price. “BUY” rating is CFO Zou Longgan Jiangxi Expressway Investment State-owned 51.98 recommended. Co Sec. Xiong Changshui ABC–INVESCO Great Wall Fund Tradable A 2.44 Chart 2. Movement of PE and PB of Shenzhen Component Index Tel. 0791-6532505 ABC–INVESCO Great Wall Fund Tradable A 1.05 Risk Warning: Website www.jxexpressway.com Morgan Stanley China A-shares Fund Tradable A 0.86 The company enjoyed an income tax rate of 15% with subsidy income of RMB 129 million in its interim earnings 2007, which might change in the future, but we have taken these change factors

into account in our estimates to its future earnings. Besides, the company has investment both in real estate and financial fields.

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Jul. 19, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 2005 1,309 399 8.1 0.34 0.20 38.9 1.5 2006 1,825 824 106.6 0.71 0.18 18.6 1.4 2007 E 2,291 987 19.8 0. 85 0.22 15.6 1.6 2008 E 2,624 1,077 9.1 0.92 0.23 14.4 1.8 2009 E 2,867 1,139 5.8 0.98 0.25 13.5 1.9

Source: Ping An Research & Wind Info

EndedInvestment June 2007, Points: there were totally 1,434 companies listed in A-share markets with a total share capital of1. 1,409.149The company billion will shares, become a total an market exclusive cap listedof RMB airport 16.62 compa trillionny andwithout a tradable any runway market incap the of RMB 5.56 second trillion. half Ended of 2007; the its end abundant of June cash 2007, has provide all A shares’d possibility average for it PE to wasacquire 33.5 its multiples,parent’s and Rating: Buy Current (Aug24): ̞19.58 Target: ̞20.12 Co Visit: High Shanghai-Shenzhenaviation assets 300 without Index’s any average dilution. PE Thewas 29.05 progr essmultiples. of “three direct links” (mail, air and shipping services and trade) across the Taiwan Straits in the future is also likely to bring unexpected surprise.

Chart2. In 1. ourMovement view, estimating of PE and PBthe of airports Shanghai with Composite different Index capacity utilization rates by using average P/E ratio is easy to underestimate the growth potential of the airports with low utilization rates. The company is not only with the lowest utilization rate but also with low depreciation and operating costs. Its future revenue growth can largely be transformed into stable profit growth.

3. An airport has higher potential in revenue growth when it has lower capacity utilization rate. The company’s runways and terminals are enough to support its growth of landing and take off at the rate of 11% for next 5 years, and its excellent cost management will make its profit growth obviously exceed revenue growth over next 5 years.

4. The phase where an airport’s utilization rate rapidly increases is always a phase where return on stock investment is relatively high. The company’s growth of landing and take off reached 15.4% in 2006; we estimate permanent population growth acceleration, rich crowd gathering and tourism demand are enough to support 11% growth of landing and take off during the 11th 5-year plan period. In our estimates, the possibility of any progress in Management Information Major Shareholders & Type of Shares Source: Ping An Research & Wind Info cross-straits “passenger transport transfer” is not factored into for the time being although Name Type % Chairman Wang Titang the “three direct links” might change the company’s strategic position. CFO Qian Jinqun Xiamen International Airport Group Legal person 68.00 Co Sec. Zhu Zhao Credit Suisse Legal person 7.24 Chart5. We 2. Movement assume the of PE annual and PB growth of Shenzhen of landing Component and ta Indexke off is conservatively 11% over next 5 Tel. (0592)5706078 Baokang Fund Tradable A-shares 5.24 years, the company is likely to record 19% compound growth rate on profit. If our Website www.xiac.com.cn ABN AMRO TEDA Tradable A-shares 4.18 assumption is correct, once the company acquires its parent’s runways, it would additionally lift its EPS by RMB 0.21. In order to tackle the issue of valuations of airports with different utilization rates, we adopt the DDM method based on “exit value” to estimate that the company’s reasonable valuation should be around RMB 20.12. “BUY” rating is recommended.

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Risk Warning: Jul. 18, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) Due to its monopolized business and profit mode, the company’s self-business risk is relatively 2005 304.8 92.9 82.7 0.31 0.27 51.8 1.7 low; the investment risk is largely from the variance between the analyst’s assumption and the 2006 353.6 121.6 30.8 0.41 0.35 39.6 2.2 fact. Besides, changes in the situation of Taiwan Straits might bring unexpected opportunities 2007E 380.2 170.3 40.0 0.57 0.40 28.3 2.5 and risks to Xiamen Airport. 2008E 440.1 194.0 13.9 0.65 0.50 24.8 3.1

Source: Ping An Research & Wind Info

PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] PINGPING ANPING AN RESEARCH RESEARCH AN SECURITIES Contact: Ms. Qiu Xiaojin Contact Contact : Qiu : [email protected] Qiu Xiaojin Xiaojin [email protected] [email protected] ThisThis is preparedis Thisprepared is preparedfor for clients clients for of clientsof Ping Ping Anof An Ping Securities Securities An Secu CompanyCompanyrities Company Ltd. and Ltd. otherother and professionals. professionals.other professionals. The The info in formation rmation and and points points contained contained herein herein do donot not form form bids bids or or 36 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. 372/2 The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. inquiriesinquiries ofThe the of information thesaid said securities securities and and points and are containedare only only for forreference herein reference do. not. form bids or inquiries of the said securities and are only for reference. PING AN SECURITIES COMPANY LTD. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. China Top Pick A-shares Guidebook ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook Investment Strategy Section: Stock Code: 600019 ) Materials Sector: ( Analyst: Nie Xiuxin 86-755-22627806/ [email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (BAOSHAN IRON & STEEL CO., LTD.) BAOSHAN IRON & STEEL CO., LTD. Overview on China’s A-share Markets Business Description: ᅱቅ䩶䪕㙵ӑ᳝䰤݀ৌ The company, founded and listed in Shanghai Stock Exchange in 2000, is the biggest steel I.enterprise A-share inProfile China. It sold 21.405 million tons of commercial billets. In the future, the company will carry out its competition strategy of “target convergency”, focusing on development of such Endedstrategic June products 2007, there as were automobile totally 1,434 sheets, companies electric liste steel,d in pipeli A-sharene steel,markets energy-used with a total tubes,share capital ofship-building 1,409.149 billion plates, shares, stainless a total market steel cap and of high-alloyRMB 16.62 steel,trillion enhancingand a tradable comprehensive market cap of RMB 5.56competitiveness trillion. Ended of its the strategic end of products, June 2007, and kalleeping A shares’ its leading average position PE was in domestic 33.5 multiples, sheet and Rating: Buy Current (Aug27): ̞17.85 Target: ̞20.00 Co Visit: High Shanghai-Shenzhenmarket. 300 Index’s average PE was 29.05 multiples.

Investment Points: Chart1. Strong 1. Movement capability of PE and to resistPB of Shanghai risks: The Composite company’s Index product varieties are improved. The market share of such varieties as cold-rolled automobile sheets, products-used hot rolled stainless steel and home appliances-used plates has exceeded 30%. The company’s ton steel price’s down extent was smaller than the industry’s average level in 2006, reflecting the company, as an industry leader, could resist industry volatility risks to certain extent depending on its advantage in such aspects as scale and technology.

2. Equity incentives plan to be implemented soon: As the first listed central enterprise formally launching an equity incentives plan at home, the company’s equity incentives scheme has shown its resolve to build itself into an enterprise with international competitiveness. The scheme is being further revised at present and is likely to be implemented in 2007.

3. Output to be increased moderately in the next two years: The 3,700,000-ton 3rd hot-rolled band steel project originally planned for completion in middle 2007 has been Source:smoothly Ping An putResearch into production& Wind Info at the end of March; the cold-rolled stainless band steel project Management Information Major Shareholders & Type of Shares will be put into production in the second half of 2007. In 2008, release of the output of Chairman Xu Lejiang Name Type % hot-rolled plates and cold-rolled stainless steel from the 3rd hot-rolled band steel project and CFO Chen Ying Baosteel Group State-owned 78.32 such projects as the 5th cold-rolled band steel project’s being put into production will further Co Sec. Chen Ying Ping An Insurance Tradable A-shares 1.23 Chartincrease 2. Movement product of PE output. and PB Its of Shenzhen output is Component expected toIndex rise from 2006’s 21.36 million tons to Tel. (021)26645000 China Life Insurance Tradable A-shares 0.78 22.64 million tons and 24.43 million tons in 2007 and 2008 respectively. Besides, Baosteel Website www.baosteel.com Citigroup Global Markets Tradable A-shares 0.65 Group is actively implementing its M&A plan. According to the group’s development planning, steel capacity would reach over 50 million tons in 2012.

4. Share price undervalued: As an industry leader, the company has competitiveness in such aspects as market, technology, profitability and brand, but its current valuation is in an Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield industry bottom, having approached a margin of safety, therefore, “BUY” rating is Jul. 20, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) recommended. 2005 126608 12666 34.81 0.72 0.32 15.24 2.92 2006 157791 13020 2.72 0.74 0.35 14.82 3.18 2007E 174965 15928 22.43 0.91 0.35 12.05 3.18 Risk Warning: 2008E 186563 22443 40.90 1.28 0.35 8.57 3.18 Changes in boom of the steel industry will affect the company’s performance. 2009E 196958 23158 3.19 1.32 0.35 8.31 3.18 Source: Ping An Research & Wind Info

ANGANG STEEL COMPANY LIMITED Overview on China’s A-share Markets Business Description: 䵡䩶㙵ӑ᳝䰤݀ৌ The company, established in May 1997, was listed in Hong Kong in July 1997 and in Shenzhen I.in A-share November Profile 1997. The company has become a refined sheet base, with an annual output of 16 million tons of steel and with automobile sheets, home-appliance sheets, container sheets, Endedship-building June 2007, plates, there pipeline were steeltotally and 1,434 cold-roll companiesed silicon liste steeld in asA-share the leading markets products. with a total share capital of 1,409.149 billion shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.56 trillion. Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and Rating: Buy Current (Aug28): ̞34.45 Target: ̞35.00 Co Visit: High Shanghai-ShenzhenInvestment Points: 300 Index’s average PE was 29.05 multiples. 1. The company’s profitability is in an advanced level in the industry, with reasons as follows: on the one hand, listing of the group’s steel assets has eliminated partial related party transactions, enabling the company’s earnings to be obviously improved, which can be Chartreflected 1. Movement in the of enhancementPE and PB of Shanghai of gross Composite profit ma rginsIndex of cold-rolled sheets and galvanized sheets in 2006; on the other hand, under the backdrop that iron ore prices are rising, the iron ore resources held by the group help the company hold a relatively stable cost advantage. By rough calculations, relative to other enterprises in the industry, the company saved costs of approximately RMB 171 per ton of steel in the first half.

2. After the whole listing, the company’s product structure has been optimized. In the future, the company will carry out variety structure adjustments, increase production of special steel and gradually quit the straight carbon sheet field, based on the formed complete product series. Along with the Bayuquan project’s being put into production, the company’s competitiveness in terms of sheets will be further strengthened.

3. Implementing strategy of internationalized operations and paying attention to expansion of international markets, the company has continuously increased efforts on steel exports in recent years. In 2006, the company exported 3.35 million tons of steel, accounting for 7.78% Source: Ping An Research & Wind Info Management Information Major Shareholders & Type of Shares of China’s total steel exports, ranking the first in the industry. Therefore, the company Chairman Zhang Xiaogang Name Type % suffered a relatively large direct impact from the policy on restraining steel exports in the CFO Ma Lianyong Anshan Iron and Steel (Group) State-owned 67.25 first half. By rough calculations, a reduction in export tax rebates would directly affect the company’s profit by 0.3%, approximately RMB 0.2 billion, and its EPS by RMB 0.034. Co Sec. Fu Jihui HKSCC Nominees Limited Foreign shares (B/H) 14.86 Chart 2. Movement of PE and PB of Shenzhen Component Index Tel. (0412)8419192 Harvest Strategic Growth Mixed Fund Tradable A-shares 0.88 Website www.ansteel.com.cn Taihe Equity Fund Tradable A-shares 0.60 4. Its EPS is forecast to be RMB 1.51, RMB 1.87 and RMB 2.21 respectively in 2007, 2008 and 2009, corresponding to 12.42x, 10.03x and 8.49x PE respectively, a relatively low level in the industry. From REP (an economic profit margin indicator) perspective, the company’s share price remains undervalued.

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Jul. 20, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) Risk Warning: 2005 26488 2079 17.07 0.70 0.36 25.35 2.03 The Bayuquan project, invested with the proceeds raised from the share placement, cannot 2006 54596 6845 229.17 1.15 0.58 15.43 3.28 contribute to the company’s performance in 2007. If the share placement is conducted within 2007E 66387 8939 30.59 1.51 0.58 11.75 3.28 2007, it would dilute the company’s performance. 2008E 74704 11068 23.82 1.87 0.58 9.49 3.28 2009E 85629 13106 18.41 2.21 0.58 8.03 3.28 Source: Ping An Research & Wind Info

PINGPINGPING AN AN RESEARCHAN RESEARCH SECURITIES Contact: Ms. Qiu Xiaojin Contact Contact [email protected]: Qiu : Qiu Xiaojin Xiaojin [email protected] [email protected] PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] ThisThis isThis preparedis preparedisPING prepared for AN for clients for clients SECURITIES clients of of Ping ofPing Ping An An AnSecurities Securities Secu rities CompanyCompany Company Ltd. Ltd. andContact: and otherother other professionals.professionals. Ms.professionals. Qiu Xiaojin The The info informationrmation [email protected] and points points contained contained herein herein do donot not form form bids bids or or 40 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. inquiriesinquiriesThe ofinformationThis the of thesaidis prepared said securities and securities points for and clients containedand are are ofonly Ping only forherein An forreference Secu referencedo notrities. form .Company bids or inquiriesLtd. and otofher the professionals. said securities and are only for reference. 412/2 The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. PING AN SECURITIES COMPANY LTD. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. China Top Pick A-shares Guidebook ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook Investment Strategy Section: Stock Code: 600585 ) Materials Sector: ( Analyst: Wang Xin 86-755-22627926/[email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (ANHUI CONCH CEMENT CO., LTD.) ANHUI CONCH CEMENT CO., LTD. Overview on China’s A-share Markets Business Description: ᅝᖑ⍋㶎∈⊹㙵ӑ᳝䰤݀ৌ The company was established and listed in Hong Kong Stock Exchange in 1997. It was then I.listed A-share in Shanghai Profile Stock Exchange on Feb. 7, 2002. The company, focusing on production and sales of high-and-mid-graded cement and quality commercial clinkers, is a leading enterprise in Endeddomestic June cement 2007, industry.there were It totally ranked 1,434 the firstcompanies nationwide liste d in in 2006,A-share with markets cement with capacity a total ofshare 65 capital ofmillion 1,409.149 tons. billion shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.56 trillion. Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and Shanghai-Shenzhen 300 Index’s average PE was 29.05 multiples. Rating: Buy Current (Aug29): ̞60.50 Target: ̞65.00 Co Visit: High Investment Points: 1. In recent years, the company has continuously expanded its production scale. Based on stabilizing the East China market, it expanded towards the South China region, to buck for a Chartlarger 1. Movement market of control PE and PB capabil of Shanghaiity within Composite the region. Index It will also take currently existing territories as the main part and make use of the superior resources and wharf advantages of the occupied spots to expand its production lines. It planned to make expansion at a pace at least with an increase of 10-15 million tons of capacity each year in the next several years.

2. Successful implementation of the T-shaped strategy has been provided the company with dual advantages of resources and markets. Due to a good strategy layout, core competitiveness that other manufacturers are hard to imitate and copy has been formed in the company, which is the most important basic resource for the company’s future development. As a pioneer of generating electricity with waste heat in domestic cement industry, the company has effectively reduce production costs in the way of power generation with waste heat, which is also in line with the policy of increasing energy efficiency called for by the State with great efforts recently. A full-scale promotion of power generation projects with waste heat in the company indicates the company is transforming from a denotative growth simply depending on capacity expansion in the past to a Source:connotative Ping An Research growth & paying Wind Info attention to enhancing benefits and saving costs. Management Information Major Shareholders & Type of Shares Chairman Guo Wensan Name Type % 3. Its additional share issue plan has been approved by its shareholders’ general meeting. The CFO Ren Yong Anhui Conch Group Restricted tradable A 29.7% company planned to publicly issue not more than 0.2 billion A-shares, and the proceeds Co Sec. Zhang Mingjing HKSCC Nominees Limited H-shares 27.66% Chartraised 2. Movement from it of would PE and be PB used of Shenzhen to increase Component output, Index expand power generation projects with Tel. (0553) 3114546 Anhui Conch Venture Investment Restricted tradable A 18.39% waste heat, conduct structural adjustments of the projects in East China and South China and Website www.conch.cn invest in cement equipment and supporting facility projects, with a total investment of RMB 12 billion. Upon the projects’ being put into production, nearly 22 million tons of clinker and cement production capacity would be added; the company’s scale would be further enlarged, and its leading market position would be further consolidated.

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Risk Warning: Jul. 19, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) The State’s macro-control policies might affect cement demand. Certain uncertainty exists in the 2005 10826.21 406.89 -59.66 0.32 0.07 181.52 0.15 new share issue and the raised proceeds. 2006 15246.28 1427.93 250.93 1.14 0.20 51.72 0.42 2007F 18900 2685.43 88.06 1.71 0.20 27.57 0.42 2008F 22032 3510.25 30.71 2.24 0.20 21.05 0.42 2009F 24640 4496.66 28.1 2.87 0.20 16.43 0.42 Source: Ping An Research & Wind Info

PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] PINGPINGPING ANPING AN RESEARCHAN RESEARCH ANSECURITIES SECURITIES Contact: Contact: Ms. Ms. Qiu QiuXiaojin Xiaojin Contact Contact [email protected]: Qiu : [email protected] Xiaojin Xiaojin [email protected] [email protected] ThisThis isThis preparedis preparedisThis prepared is preparedfor for clients for clients clients for of of clientsPing ofPing Ping An ofAn PingAnSecurities Securities Secu An ritiesSecu CompanyCompanyrities Company Company Ltd. Ltd. and andLtd. otherother ot andher professionals.professionals. ot professionals.her professionals. The The info in formation rmation and and points points contained contained herein herein do donot not form form bids bids or or 42 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. 432/2 The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. inquiriesinquiriesThe ofinformationThe the of information thesaid said securities and securities points and and points containedand are are containedonly only forherein forreference herein referencedo not do. form not. formbids orbids inquiries or inquiries of the of said the securitiessaid securities and are and only are foronly reference for reference. . PING AN SECURITIES COMPANY LTD. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. China Top Pick A-shares Guidebook ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook Investment Strategy Section: Stock Code: 600547 Materials Sector: ( Analyst: Peng Bo 86-755-22623797 / [email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (SHANDONG GOLD-MINING CO., LTD.) SHANDONG GOLD-MINING CO., LTD. Overview on China’s A-share Markets Business Description: ቅϰ咘䞥ⷓϮ㙵ӑ᳝䰤݀ৌ The company is mainly engaged in exploration, mining, dressing and smelting of gold geology, andI. A-share purification, Profile processing, production and sales of noble metals, nonferrous metal products and gold and jewelry ornaments, with its main products gold and silver. Ended June 2007, there were totally 1,434 companies listed in A-share markets with a total share capital of 1,409.149 billion shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB Investment5.56 trillion. Points: Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and Rating: Buy Current (Aug30): ̞129.50 Target: ̞150.00 Co Visit: High 1.Shanghai-ShenzhenGold remains an 300 asset Index’s with averagethe most PE potential was 29.05 for multiples. appreciation in the future. In our view, such factors as supply crunch, the currency factor, concerns on inflation, potentially huge demand for official gold reserves and instability geopolitics would support gold prices to go highs persistently. Chart 1. Movement of PE and PB of Shanghai Composite Index 2. Smooth implementation of the private placement will substantially lift the company’s future profitability and core competitiveness. The three large mines, held by the company, currently have proven equity gold reserves of around 74 tons. In 2007, the company’s existing Xincheng, Jiaojia and Jinzhou Gold Mines planned to produce gold of 5.42 tons. Meanwhile, the gold selling rights of the three mines will be managed by the company. According to the company’s private placement plan, once Jincang Gold Mine, Linglong Gold Mine, Sanshandao Gold Mine and Yinan Gold Mine held by the group and Xinhui Gold Mine of Pingdu Gold Company are injected, the company’s proven gold reserves would substantially increase from currently 74 tons to 159 tons; meanwhile, the company’s annual gold output will increase approx. 7.8 tons to around 13 tons. The substantial increase in its annual gold output will substantially lift the company’s future profitability and core competitiveness.

3. “BUY” rating is maintained. Suppose the private placement would increase the company’s shares by 80 million shares and would be completed at the end of September, then we adjust the company’s EPS to RMB 1.31 and RMB 2.43 for 2007 and 2008 respectively. By Management Information Major Shareholders & Type of Shares Source: Ping An Research & Wind Info referring to the P/NAV valuation contrast results (the adopted future long-term mean of gold Name Type % Chairman Shi Min prices is RMB 155/gram (USD 606/ounce), we believe the company’s reasonable share price CFO Chen Yumin Shandong Gold Group Restricted tradable 51.53 after the group’s mine assets are injected should be between RMB 100-150; its share price Co Sec. Lin Pufang Shenyin Wanguo-Citigroup-UBS Tradable shares 3.48 Chartstill 2. Movementhas a relatively of PE largeand PB upside of Shenzhen room in Component the future Index compared with the current market price. Tel. 0531-88562807 Penghua Fund Tradable shares 2.31 Website www.sdhjgf.com China International Fund Tradable shares 1.81 Risk Warning: Volatility in gold prices

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Jul. 19, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 2005 3803 88 51.4 0.55 0.33 157.4 0.38 2006 3562 128 45.8 0.80 0.48 107.9 0.56 2007E 4352 265 106.4 1.39 0.75 62.1 0.78 2008E 5295 666 151.4 3.50 1.91 24.7 1.65

Source: Ping An Research & Wind Info

PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] PINGPINGPING AN PINGAN RESEARCHAN RESEARCH SECURITIESAN SECURITIES Contact: Contact: Ms. QiuMs. QiuXiaojin Xiaojin Contact Contact [email protected]: Qiu : [email protected] Xiaojin Xiaojin [email protected] [email protected] ThisThis isThis preparedis preparedisThis prepared is for prepared for clients for clients clients forof of clientsPing ofPing Ping An Anof AnSecurities PingSecurities Secu Anrities Secu CompanyCompany ritiesCompany Company Ltd. Ltd. and and Ltd. otherother ot andher professionals.professionals. otprofessionals.her professionals. The The info in formationrmation and and points points contained contained herein herein do donot not form form bids bids or or 44 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. 452/2 The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. inquiriesinquiriesThe ofinformationThe the of theinformationsaid said securities and securities points and and points containedand are are onlycontained only forherein forreference herein referencedo not do. form not. bidsform or bids inquiries or inquiries of the ofsaid the securities said securities and are and only are for only reference for reference. . PING AN SECURITIES COMPANY LTD. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. China Top Pick A-shares Guidebook ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook Investment Strategy Section: Stock Code: 600111 ) Materials Sector: ( Analyst: Peng Bo 86-755-22623797 / [email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (BAOTOU STEEL RARE-EARTH HI-TECH)

INNER MONGOLIA BAOTOU STEEL RARE-EARTH HI-TECH CO., LTD. Overview on China’s A-share Markets :ݙ㩭সࣙ䩶⿔ೳ催⾥ᡔ㙵ӑ᳝䰤݀ৌ Business Description The company is a leading production enterprise in China’s rare earth industry. Currently, its I. upstreamA-share Profilerare-earth concentrate capacity is around 200,000 tons.

Ended June 2007, there were totally 1,434 companies listed in A-share markets with a total share capital ofInvestment 1,409.149 billion Points: shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.561. trillion.We initiated Ended a “BUY” the end rating of June to the 2007, company all A on shares’ May 23, average 2006. PE On was April 33.5 26, 2006, multiples, the and Rating: Strong Buy Current (Aug31): ̞41.13 Target: ̞60.00 Co Visit: High Shanghai-Shenzhengovernment for 300 the Index’s first time average through PE wasMinistry 29.05 ofmultiples. Land and Resources issued a circular on administration of China’s rare earth industry. In our view, this is a start for the State to strongly consolidate the whole rare earth industry, while the company, as an industry leader, would see the best development opportunity. Chart 1. Movement of PE and PB of Shanghai Composite Index 2. We upgraded the rating to “STRONG BUY” on Dec. 11, 2006 as the industry entered a prosperous cycle due to promulgation of a series of rectification measures on domestic rare earth industry by the State, active downstream and upstream markets, increase in raw material demand and substantial rally in rare earth product prices, and as the company is likely to control up to 60% of output of the country’s PrNd market through the sales way of “barter trade”.

3. Currently, we maintained a “STRONG BUY” rating to the company. Upon being still for half a year, in May 2007, main rare earth product prices soared for the 2nd time since the industry’s recovery. Based on expectations that the industry would be towards a good direction in the long term, and taking into account the company’s position as a leader in domestic rare earth industry, its absolute advantage in controlling rare earth resources and its broad development prospects of consolidating Northern rare earth mines in three steps in the future, we strongly believe that the company’s reasonable valuation range would be RMB Management Information Major Shareholders & Type of Shares Source:40.00-60.00. Ping An Research & Wind Info Chairman Cui Chen Name Type % CFO Zhao Shengping Baotou Iron and Steel Group State-owned legal person 47.49 Risk Warning: Co Sec. Zhang Rihui Jiaxin (HK) Foreign shares 12.14 ChartOn 2. June Movement 7, 2007, of PE one and of PB the of threeShenzhen main Component extraction Index workshops of a plant of the company’s Tel. (0472) 2207799 CITIC-Prudential Fund Tradable A-shares 2.39 smelting mill was fired. Its main product is La, Ce, Pr & Nd single rare earth compound. Website www.reht.com SYWG BNP PARIBAS Tradable A-shares 1.74 According to statistics, the net book value of properties of the fired workshop is RMB 56.52 million, which the company made full drawing of in the 2nd quarter, thereby leading to just passable performance of the 2nd quarter.

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Jul. 19, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 2005 881 13 -40.36 0.03 0 875.80 0 2006 1328 79 505.88 0.20 0.05 144.55 0.18 2007E 1820 246 210.93 0.61 0.16 46.49 0.55 2008E 1829 342 39.17 0.90 0.19 31.46 0.66

Source: Ping An Research & Wind Info

PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] PINGPINGPING PINGAN AN RESEARCHAN ANRESEARCH SECURITIES SECURITIES Contact: Contact: Ms. Ms. Qiu Qiu Xiaojin Xiaojin Contact Contact [email protected]: [email protected] : Qiu Xiaojin Xiaojin [email protected] [email protected] ThisThis isThis preparedisThis preparedis preparedis prepared for for clients for clients for clients clientsof of Ping ofPing Pingof An PingAn AnSecurities Securities An Secu Securities ritiesCompanyCompany Company Company Ltd. Ltd. andLtd. and other otherand other ot professionals.professionals.her professionals. professionals. The The info in formationrmation and and points points contained contained herein herein do donot not form form bids bids or or 46 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. 472/2 The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. inquiriesinquiriesTheThe ofinformation the informationof thesaid said securities and securities and points points and containedand are contained are only only forherein herein forreference referencedo donot not. form .form bids bids or orinquiries inquiries of theof the said said securities securities and and are are only only for for reference reference. . PING AN SECURITIES COMPANY LTD. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. China Top Pick A-shares Guidebook ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook Investment Strategy Section: Stock Code: 600320 ) Machinery and Autos Sector: ( Analyst: Wang Hexu 86-021-62483458/[email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (SHANGHAI ZHENHUA PORT MACHINERY CO., LTD.) SHANGHAI ZHENHUA PORT MACHINERY CO., LTD. Overview on China’s A-share Markets Business Description: Ϟ⍋ᤃढ␃ষᴎẄ˄䲚ಶ˅㙵ӑ᳝䰤݀ৌ The company has become the biggest heavy port machinery manufacturer in the globe, and I. retainedA-share theProfile ranking of No. 1 in terms of global container crane orders for consecutive 7 years since 1998, with its market share rising from 1999’s 25% to 2006’s 70%. Along with continuous Endedreduction June of2007, its productionthere were totallycosts, it1,434 is likely companies to occupy liste ad marketin A-share share markets of over with 80% a totalin 2010. share Its capital ofcore 1,409.149 profit marginbillion hasshares, also a ri totalsen frommarket 2002’s cap of9% RMB to 2006’s 16.62 14%. trillion and a tradable market cap of RMB 5.56 trillion. Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and The company started to enter the offshore heavy machinery field in 2003. Along with rapid Rating: Strong Buy Current (Sep3): ̞26.40 Target: ̞38.50 Co Visit: High Shanghai-Shenzhen 300 Index’s average PE was 29.05 multiples. development of the offshore oil engineering industry and conduct of the projects invested with its raised proceeds, the company is likely to pick up its development in the offshore heavy machinery field. Chart 1. Movement of PE and PB of Shanghai Composite Index

Investment Points: 1. Container crane business would still have room for growth. It grew 40% in 2006, and is still likely to retain a 30% growth pace in the next two years. Due to increase in the company’s bargaining position, its net profit could likely grow at a higher pace.

2. Offshore heavy machinery business and steel structure business have huge potential. Offshore heavy machinery will become a hot spot along with rapid development of oceanic petroleum exploitation. Steel structure, positioned in high-and-mid-graded international markets, has profitability far higher than domestic enterprises. Depending on its coastal bases and wharfs, world famous brand and rich international marketing experience, it is a matter of time for the company to become a leading enterprise of offshore heavy machinery.

3. Substantial shareholder’s support is increasing. China Communications Construction Group Source:committed Ping An Research to invest & Wind part Info of capital to mechanical equipments when raising funds in Hong Management Information Major Shareholders & Type of Shares Kong, and would like to develop its port machinery sector larger and guide its development Chairman Zhou Jichang Name Type % towards offshore heavy equipment manufacturing. Besides, Shanghai Port Machinery, also CFO Wang Jue China Communications Construction State-owned 24.19 an affiliated company of China Communications Construction Group, only has a sales scale Co Sec. Wang Jue Zhen Hua Engineering Overseas 18.71 Chart 2.one Movement tenth of of that PE and of thePB of company. Shenzhen InComponent order to Index address industry competition, it might be Tel. 021 50390727 Toyo Securities Asia A/C Client B-shares 1.65 injected into the company. Website www.zpmc.com HKSBCSB S/ABanque Int’l A Luxembourg B-shares 1.03

Risk Warning: 1. Rises of raw material prices and labor prices might affect the company’s competitiveness.

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield 2. RMB appreciation influences the company’s price competition advantage. Jul. 19, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 3. Overly high market share of container cranes, a core product, might lead to reduction of the 2004A 71.94 4.65 67.5 0.15 0.11 127 0.58 growth room. 2005A 121.05 12.08 159.78 0.39 0.14 49 0.74 2006A 175.40 16.34 35.26 0.53 0.14 36 0.74 2007F 226.25 21.37 30.78 0.69 0.18 28 0.95 2008F 284.06 33.90 58.63 1.10 0.24 21 1.26 Source: Ping An Research & Wind Info

PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] PINGPINGPING PINGAN AN RESEARCHAN ANRESEARCH SECURITIES SECURITIES Contact: Contact: Ms. Ms. Qiu Qiu Xiaojin Xiaojin Contact Contact [email protected]: [email protected] : Qiu Xiaojin Xiaojin [email protected] [email protected] ThisThis isThis preparedisThis preparedis preparedis prepared for for clients for clients for clients clientsof of Ping ofPing Pingof An PingAn AnSecurities Securities An Secu Securities ritiesCompanyCompany Company Company Ltd. Ltd. andLtd. and other otherand other ot professionals.professionals.her professionals. professionals. The The info in formationrmation and and points points contained contained herein herein do donot not form form bids bids or or 48 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. 492/2 The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. inquiriesinquiriesTheThe ofinformation the informationof thesaid said securities and securities and points points and containedand are contained are only only forherein herein forreference referencedo donot not. form .form bids bids or orinquiries inquiries of theof the said said securities securities and and are are only only for for reference reference. . PING AN SECURITIES COMPANY LTD. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. China Top Pick A-shares Guidebook ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook Investment Strategy Section: Stock Code: 600685 ) Machinery and Autos Sector: ( Analyst: Wang Hexu 86-021-62483458/[email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (GUANGZHOU SHIPYARD INTERNATIONAL CO., LTD.) GUANGZHOU SHIPYARD INTERNATIONAL CO., LTD. Overview on China’s A-share Markets Business Description: ᑓᎲᑓ㠍೑䰙㙵ӑ᳝䰤݀ৌ The company, committing itself to becoming a leading handy-size liquid cargo ship base in the I. worldA-share and Profile the biggest high-value-added special ship manufacturing base in South China, is mainly engaged in production of MR refined-oil ships and chemical product ships, and is also an Endedexclusive June 2007, dockyard there were with totally advanced 1,434 semi-scompaniesubmersible listed in vessel A-share and markets ro-ro with passenger a total share ship capital ofmanufacturing 1,409.149 billion performance shares, a total in China,market withcap of it sRMB refined-oil 16.62 trillion ships and a chemical tradable market product cap ships of RMB 5.56accounting trillion. for Ended 14% of the the end global of market June 2007,share. all A shares’ average PE was 33.5 multiples, and Rating: Strong Buy Current (Sep4): ̞73.48 Target: ̞91.00 Co Visit: High Shanghai-Shenzhen 300 Index’s average PE was 29.05 multiples. Investment Points: 1. The prosperous cycle of the shipbuilding industry exceeds expectations. Stable development Chart 1.of Movement global economy, of PE and continuous PB of Shanghai promulgation Composite of Index new international shipping rules, high raw material and energy prices, and rapid growth of consumption of refined oil and chemical products by developing countries especially our country would result in continuous high-level consolidations of handy-size liquid cargo ship prices in 2007.

2. Handy-size liquid cargo ships have unique competitiveness. Handy-size refined-oil ships and chemical product ships, with higher value added and entry barriers, have better growth prospects and anti-cyclicity. The company, the strongest at home and one of top 3 in the world in terms of manufacturing of handy-size liquid cargo ships, sees its production efficiency synchronously grow with its capacity, with its profitability being continuously enhanced.

3. It might involve in the ships with higher value added. The company is an exclusive dockyard with ro-ro passenger ship and semi-submersible ship performance in China, and it has a relatively strong bargaining position and profit grasp in bidding of these two shipping Source:products. Ping An Research & Wind Info Management Information Major Shareholders & Type of Shares Chairman Li Zhushi Name Type % 4. It will necessarily benefit from the listing of China State Shipbuilding Corporation (CSSC). CFO Zeng Xiangxin China State Shipbuilding State-owned 35.71 In our view, the company will enjoy the same growth outlook with Hudong Heavy Co Sec. Li Zhidong HKSCC Nominees H-shares 29.91 Chart 2.Machinery Movement Co.,of PE Ltd.and PB through of Shenzhen being Component absorbed Index by it or have better prospects than the Tel. 020-81898378 China Int’l Growth Pioneer Equity Fund Tradable A 2.63 integrated assets of CSSC through being retained as a manufacturing base of handy-size Website www.chinanhl.com Tongsheng Securities Investment Fund Tradable A 1.56 liquid cargo ships and special ships.

Risk Warning: The biggest risk lies with shortage of talents resulting from CSSC’s transferring its technical and management cadremen and technicians. Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Jul. 19, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 2005A 272892 9819 192 0.20 0 249 0 2006A 332230 29362 199 0.59 0 84 0 2007F 521667 97048 231 1.96 0.8 26 1.60 2008F 704250 127822 32 2.58 1.0 19 1.26 Source: Ping An Research & Wind Info

Ended June 2007, there were totally 1,434 companies listed in A-share markets with a total share capital ofInvestment 1,409.149 billion Points: shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.561. trillion.In 2006, Endedthe company the end realized of June core revenue 2007, all of RMBA shares’ 1,534.80 average million, PE a was36.7% 33.5 increase multiples, year and Rating: Strong Buy Current (Sep5): ̞26.79 Target: ̞30.00 Co Visit: High Shanghai-Shenzhenon year, and realized 300 Index’s net profitaverage of PERMB was 157.07 29.05 multiples.million, a 49% increase year on year. The overall level is slightly lower than expected. Viewed from the sub-divided data, the following points are worth attentions: first, revenue growth is basically in line with expectations; second, gross profit margin retains growth; third, the feature of rapid growth of Chart period1. Movement expenses of PE will and be PB improved of Shanghai in 2007. Composite Index

2. The company’s orders are abundant as the company currently is basically in a full-load running status; restricted by capacity, the company would not see too large revenue growth in 2007, projected at 20%-30%, but it would be relatively assured.

3. Viewed from the company’s profit formation, Toshiba’s contribution proportion is always maintained at 70%-80%. Currently, Pinggao Toshiba, where the company holds 50% stake, is in a full-load running. The construction expansion project will be finished in Sept. 2007, making Pinggao Toshiba’s core role be able to continue to the year 2009.

4. Siyuan Electric, with additionally arranged directors to the company reaching 3 ones, has had larger saying in the company. In a long-term view, management benefits will necessarily substantially increase after Siyuan’s entry. In a short-term view, equity complexity might increase the company’s management risks, which is also a big uncertainty factor of the Source:company Ping An Research in the near & Wind future. Info Management Information Major Shareholders & Type of Shares Chairman Wei Guanglin Name Type % 5. We maintain the estimates that its EPS would reach RMB 0.691 and RMB 1.021 in 2007 and CFO Zhang Haoyi Pinggao Group Domestic Legal person 22.71 2008 respectively, corresponding to 36.2x and 24.5x PE respectively. In our view, according Co Sec. Cheng Zhanbiao Kerui Group Domestic Legal person 20.12 Chart to2. Movementthe company’s of PE growth, and PB of35-40x Shenzhen PE couldComponent be given Index for 2007 and 30-35x PE could be given Tel. (0375)3804029 Asia Pacific Century Domestic Legal person 13.80 for 2008, corresponding to a share price of RMB 24-35, with a value centrum of RMB 30, Website www.pinggao.com Guangfa Fund Tradable A 2.63 implying a less than 20% upside room from the current share price. In view of the company’s industry position and its sustainable growth, we maintain the “STRONG BUY” rating.

Risk Warning: Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Very large uncertainty exists in terms of the impact of the stake fight on the company. Dec. 31 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 2005 1535 105 101.8 0.289 0.40 62 2 2006 2098 157 49.0 0.430 0 42 0 2007F 1859 252 60.6 0.691 0.10 29 1 2008F 2232 373 47.7 1.021 0.10 20 1 Source: Ping An Research & Wind Info

Ended June 2007, there were totally 1,434 companies listed in A-share markets with a total share capital ofInvestment 1,409.149 billion Points: shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.561. trillion.The company’s Ended the leading end ofproducts June 2007, include all pe Atrochemical shares’ average air coo PEling was and 33.5 power-station multiples, and Rating: Strong Buy Current (Sep6): ̞21.60 Target: ̞28.00 Co Visit: High Shanghai-Shenzhencooling, the company’s 300 Index’s competitive average PE advantage was 29.05 in multiples. both which is relatively obvious. In terms of petrochemical air cooling, the company’s competitive advantage is obvious, with market share reaching 50%. In terms of power-station air cooling, the company entered into the high-power power-station air cooler market for the first time in 2004, symbolizing the Chart company1. Movement has of formed PE and a PB technical of Shanghai system Composite with inte Indexllectual property rights in this field, with its products reaching international advanced levels. Relying on continuously enhanced technical strength and the State’s encouragement policies on homegrown equipment use, the company’s market share still has upside room, likely to reach 30%-40%.

2. All kinds of positive factors of China’s economic growth still will continue to exist over next 10 to 15 years. This also becomes a macro-economic base for rapid development of petrochemical air coolers. For power-station air cooling, despite with negative expectations on thermal power’s gradually seeing top, increase in the proportion of air cooling and increase in market share are advantageous to the company’s development.

3. We slightly upgrade our estimates that the company’s EPS would reach RMB 0.753 and RMB 0.948 respectively for 2007 and 2008, mainly due to our expectations that its future orders would rise.

Management Information Major Shareholders & Type of Shares Source:4. Taken Ping An its Research performance & Wind 2007 Info as a benchmark, calculated according to 35x PE, the company’s share price would be at RMB 26.35; taken its performance 2008 as a benchmark, calculated Chairman Yu Mingsheng Name Type % according to 30x PE, its share price would be at RMB 28.43. Thus, the prospective price CFO Zhang Yanjun Harbin Machinery Holdings Domestic legal person 46.69 target is RMB 26-28, implying a over 20% gain extent relative to the current share price. We Co Sec. Sun Shuling UBS Tradable A 2.94 Chart maintain2. Movement the of“STRONG PE and PB BUY” of Shenzhen rating. Component Index Tel. (0451)84644521 Jingyang Fund Tradable A 2.92 Website www.hac.com.cn Shenyin & Wanguo Tradable A 2.56 Risk Warning: There exists certain uncertainty in terms of the scale of power-station construction and the promotion force of mine mouth power plants, which would directly impacting the company’s orders and performance.

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Dec. 31 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 2005 92283 9358 754.0 0.381 0.40 24 4.0 2006 90544 8431 14.0 0.430 0.10 27 1.0 2007E 143484 18500 73.4 0.753 0.10 15 1.0 2008E 181024 23285 25.8 0.948 0.10 12 1.0

Source: Ping An Research & Wind Info

2. Upgrade of high-cost-performance products: In 2007, the company has created a best first-half sales record; in the first half, there were totally 45,728 completed vehicles sold, a 5% rise from the same period of last year. Both the company’s main products, light trucks and Transit series, recorded good performance, a 12% and 9% increase respectively. In the future, Transit sales would still have a growth space due to increase in the overall market share of diesel light cars.

3. V348, technically synchronous with the Europe, is a transformation from Transit light cars to the high-and-mid-end, with a core competitive advantage that its comprehensive performance is more superior and its functions are more complete. It has been put into trial production currently and is expected to be launched at the end of 2007. Its sales are Management Information Major Shareholders & Type of Shares Source: Ping An Research & Wind Info projected to be at 2000-3000 vehicles in 2007. Launch of V348 will become a bright spot of Name Type % Chairman Wang Xigao the company’s performance growth. Certain marketing expense is estimated to occur on the CFO Chen Yuanqing Jiangling Motor Holding Co., Ltd. Restricted tradable A 41.03 launch of new products in the fourth quarter, therefore, gradual ease of expense pressures Co Sec. Wan Hong Ford Motor B-shares 30.00 Chart 2.will Movement be mainly of PEreflected and PB after of Shenzhen 2008. Component Index Tel. 0791-5235675 Shanghai Automobile Industry Restricted tradable A 3.01 Website www.jmc.com.cn China Baoan Group Restricted tradable A 1.39 4. Performance to exceed market expectations: In the past one year, the company had a very good record in terms of digesting price cut pressures, which was determined by its excellent management capability and outstanding cost control system. We believe the company would record a good performance this year. We expect its EPS would be RMB 0.80 and RMB 0.89 in 2007 and 2008 respectively. Calculated according to the closing price on Aug. 30, its PE Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield is 25x and 23x, far lower than the industry’s average level. Therefore, “BUY” rating is Aug. 30, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) maintained. 2005 6281 495 27.91 0.57 0.15 10.70 2.46 2006 7369 604 22.02 0.70 0.27 17.71 2.17 2007E 7893 690 14.20 0.80 0.29 25.29 1.43 Risk Warning: 2008E 8360 782 15.68 0.89 0.32 22.73 1.58 Intensified competition; production cost rises 2009E 9300 979 25.19 1.12 0.36 18.06 1.78

Source: Ping An Research & Wind Info

PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] PINGPINGPING PINGAN AN RESEARCHAN ANRESEARCH SECURITIES SECURITIES Contact: Contact: Ms. Ms. Qiu Qiu Xiaojin Xiaojin Contact Contact [email protected]: [email protected] : Qiu Xiaojin Xiaojin [email protected] [email protected] ThisThis isThis preparedisThis preparedis preparedis prepared for for clients for clients for clients clientsof of Ping ofPing Pingof An PingAn AnSecurities Securities An Secu Securities ritiesCompanyCompany Company Company Ltd. Ltd. andLtd. and other otherand other ot professionals.professionals.her professionals. professionals. The The info in formationrmation and and points points contained contained herein herein do donot not form form bids bids or or 56 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. 572/2 The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. inquiriesinquiriesTheThe ofinformation the informationof thesaid said securities and securities and points points and containedand are contained are only only forherein herein forreference referencedo donot not. form .form bids bids or orinquiries inquiries of theof the said said securities securities and and are are only only for for reference reference. . PING AN SECURITIES COMPANY LTD. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. China Top Pick A-shares Guidebook ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook Investment Strategy Section: Stock Code: 000651 ) IT Sector: ( Analyst: Shao Qing 86-755-22622740/[email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (GREE ELECTRIC APPLIANCES, INC.OF ZHUHAI CO., LTD.) GREE ELECTRIC APPLIANCES, INC.OF ZHUHAI CO., LTD. Overview on China’s A-share Markets Business Description: ⦴⍋Ḑ࡯⬉఼㙵ӑ᳝䰤݀ৌ Established in 1991 and listed on Nov. 18, 1996, the company is the biggest specialized I.air-conditioning A-share Profile enterprise in China and even in the world with integration of R&D, production, sales and services. It has ranked No. 1 by output and sales and by market share for consecutive Ended11 years June since 2007, 1995. there were totally 1,434 companies listed in A-share markets with a total share capital of 1,409.149 billion shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.56 trillion. Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and Rating: Buy Current (Sep10): ̞43.80 Target: ̞45.60 Co Visit: High Shanghai-ShenzhenInvestment Points: 300 Index’s average PE was 29.05 multiples. 1. The gap between Gree, Midea and Haier, and other brands has widened year by year. The top three brands’ combined market share rose from 34.6% in 2003 to 55.8% in 2006; the top 10 brands’ combined share reached 85.1%. Gree has ranked No. 1 in terms of domestic Chartair-conditioning 1. Movement of PE ranking and PB for of Shanghaiconsecutive Composite many yIndexears; in 2006, it was awarded an exclusive “Chinese world brand” in domestic air-conditioning industry.

2. In 2006, the company recorded sales revenue and net profit of RMB 23.803 billion and RMB 0.628 billion respectively, an increase of 30.32% and 23.88% respectively from a year earlier, with EPS of RMB 0.78 and ROE of 20.18%. Sales in domestic markets reached RMB 18.545 billion, a 26.23% increase YoY; sales in overseas markets reached RMB 5.258 billion, a 47.16% increase YoY. The company predicted that its 2007 interim results would increase over 50%, of which, growth of home air-conditioners would exceed 40%, while growth of residential central air-conditioners would exceed 100%. Its industry position continued to be consolidated, with its profitability being persistently strengthened.

3. The company raised equities in Gree Group Financial Company through auction and has totally held a 53.92% stake. Completion of its share overhaul reform and implementation of the management’s equity incentives plan make the company enter a stage with sustainable Source:and Ping stable An Research growth. & Gree Wind Group’sInfo transferring 10% equities of the company to dealers would Management Information Major Shareholders & Type of Shares further consolidate its strategic cooperation relationship with dealers. Currently, Gree’s Chairman Zhu Jianghong Name Type % dealers in each area are also actively entering into local home-appliance chains; coordination CFO Dong Mingzhu Zhuhai Gree Group Restricted A-shares 28.58 of the two sales networks is advantageous to the company’s sustainable development. Co Sec. Liu Xinghao Hebei Jinghai Guarantee and Investment Restricted A-shares 10.00 Chart 2. Movement of PE and PB of Shenzhen Component Index Tel. 756-8614883*2416 Zhuhai Gree Real Estate Tradable A-shares 5.80 Website www.gree.com.cn China Life Insurance Tradable A-shares 4.56 Risk Warning: Risks from raw material price rallies’ reducing gross profit margins of products

Risks from RMB appreciation’s increasing exchange losses Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Jul. 18, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) Mainstream air-conditioning enterprises are rapidly expanding production of residential central 2005 18248.13 509.62 21.1 0.94 0.40 52.0 1.23 air-conditioners; intensified competition might decrease gross profit margins. 2006 23802.88 628.16 23.3 0.78 0.00 41.8 0.00 2007F 33617.46 910.71 45.0 1.13 0.45 28.8 1.38 2008F 43702.70 1226.45 34.7 1.52 0.60 21.4 1.84 2009F 54628.38 1569.86 28.0 1.94 0.78 16.7 2.39 Note: Share capital expansion not taken into account in 07/08/09 EPS respectively (such as the upcoming share placement) Source: Ping An Research & Wind Info

IT Sector: Investment Strategy Section: Stock Code: 000527 ) (GUANGDONG MIDEA ELECTRIC APPLIANCES CO., LTD.) ( Analyst: Shao Qing 86-755-22622740/[email protected] Ping An Research – Analyst: Luo Xiaoming 86-755-22626443/[email protected] Business Description: The company, founded Overviewin Mar. 1992 onand China’slisted in Nov. A-share 1993, is Marketsmainly engaged in production GUANGDONG MIDEA ELECTRIC APPLIANCES CO., LTD. and sales of home and commercial air-conditioners, compressors, refrigerators and washers. ᑓϰ㕢ⱘ⬉఼㙵ӑ᳝䰤݀ৌ Investment Points: I. A-share Profile 1. Currently, the shift of global air-conditioning industrial chains to China has been basically accomplished; the air-conditioning manufacturing has entered a maturity stage; domestic Ended June 2007, there were totally 1,434 companies listed in A-share markets with a total share capital air-conditioning industry has entered an oligarch era. Industry leading enterprises will obtain of 1,409.149 billion shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB monopoly profits in China’s fast-growing economic environment by right of such 5.56 trillion. Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and advantages as scale, technology, brand and channel. The company has ranked the 2nd in the Rating: Buy Current (Sep11): ̞33.40 Target: ̞41.70 Co Visit: High Shanghai-Shenzhen 300 Index’s average PE was 29.05 multiples. home air-conditioning field and the 1st in terms of domestic ranking of residential central air conditioning.

Chart2. With1. Movement 14 years of ofPE persistently and PB of Shanghai rapid growth, Composite the Indexcompany has recorded an accumulated total profit of RMB 5 billion and a net profit of more than RMB 3 billion. In the first quarter of 2007, the company’s performance continuingly increased by a large margin, far exceeding market expectations. The company predicted that its 2007 first-half performance would rise 100%-150%, of which, residential central air-conditioners, refrigerators and washers are main sources of growth, mainly on Midea brand sales and OEM, with a high capacity utilization ratio; with its operation stepping into a leap-forward development stage where product upgrade and relevant diversification push profit to substantially increase, the company has core competitiveness for sustainable development.

3. As one of the representatives of China’s private enterprises, the company has a clear and transparent ownership and has established modern corporate governance, which is relatively improved, with mutual balancing of the shareholders’ general meeting, the board of directors, the supervisory board and the management, and is effectively run. Currently, its introducing Goldman Sachs as a strategic investor has been rejected by China Securities Regulatory Source:Commission, Ping An Research which & Wind might Info affect the company’s future development, but the company’s Management Information Major Shareholders & Type of Shares thinking and steps of a globalization layout would not stop; we estimate it would either Chairman He Hengjian Name Type % revise the plan with Goldman Sachs for another application or introduce other strategic CFO Zhao Jun Midea Group Restricted tradable A 46.74% investors. Co Sec. Li Feide Foshan Kailian Industrial Development Restricted tradable A 4.13% Chart 2. Movement of PE and PB of Shenzhen Component Index Tel. 086-0757-26338779 Credit Suisse (Hong Kong) Limited Tradable A 4.12% Risk Warning: Website www.midea.com.cn Foshan Shunde Xinhong Industrial B shares 2.38% 1. Risks from raw material price rallies’ reducing gross profit margins of products

2. Risks from RMB appreciation’s increasing exchange losses

3. Over 80% of its export sales are OEM modes, which might have a negative impact on the Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield company’s internationalized brand operation for the long term. Sept. 3, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 2005 21313.61 381.77 16.9 0.61 0.15 112.48 0.44 4. Currently, the parent company has no clear plan for asset consolidation, thus competition 2006 20138.83 505.47 32.40 0.8 0.25 84.95 0.73 exists within the group. 2007F 34480.73 1133.59 124.26 0.9 0.35 37.88 1.03 5. Currently, the commercial air-conditioning market with a high gross profit margin is in a 2008F 44628.57 1751.61 54.52 1.39 0.36 24.51 1.06 stage with rapid growth; future intensified competition might decrease the gross profit 2009F 58098.27 2670.96 52.49 2.12 0.56 16.08 1.63 margin. Source: Ping An Research & Wind Info

Investment Points: Chart1. The1. Movement company’s of PEnew and industry PB of Shanghai groups have Composite stepped Index into a star-styled stage from a child-styled stage several years ago. Nuctech Company Limited, Rui’an Micro-electronics, TTKN and Tongfang Industry Company etc. have become its performance mainstay at present and in the future, supporting the company to walk out of the low ebb and walk up to a sustainable growth.

2. Among the company’s business units, Nuctech Company Limited, Rui’an Micro-electronics Company, TTKN and Tongfang Industry Company should be highly paid attention to. These 4 companies each is expected to post a net profit of RMB 0.16 billion, RMB 0.14 billion, RMB 50 million and RMB 60 million respectively in 2006. These several enterprises are in a star-enterprise stage; their sustainable and rapid growth will become a main impetus supporting the company’s rapid growth in recent two years.

3. Tsinghua Tongfang Environment Co., Ltd. is engaged in power desulfurization and Tsinghua Tongfang Artificial Environment Co., Ltd. is engaged in the air-conditioning industry is Source:expected Ping An Research to post & a Wind profit Info of RMB 14 million and RMB 26 million respectively in 2006, Management Information Major Shareholders & Type of Shares having a space for further improvement, while Langfang Photoelectricity Company, Chairman Rong Yonglin Name Type % producing blue and green LED epi wafers, can be regarded as a child-styled business unit, CFO Sun Min Tsinghua Holdings Co., Ltd. Restricted tradable A 33.06 and its future growth flexibility is very huge, which is likely to become an engine boosting Co Sec. Sun Ming Tellhow Group Restricted tradable A 0.68 Chart the2. Movement company’s of growthPE and PBafter of twoShenzhen years. Component Index Tel. 86-10-82399888 Jinxin Equity Fund Tradable A 0.66

Website www.thtf.com.cn SSE 50 Equity Fund Tradable A 0.54 4. Its EPS is estimated to be RMB 0.59, RMB 0.95 and RMB 1.31 respectively in 2007-2009. Integrated the company’s overall PE valuation and its affiliated core subsidiaries’ split valuation, the target price would be RMB 50.00 apiece. “STRONG BUY” rating is recommended.

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Jul. 19, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) Risk Warning: The company is a hi-tech enterprise with diversified business, therefore, it is relatively difficult 2005 5931 104 -14% 0.18 0.1 180 0.30 to estimate the company’s long-run performance. 2006 6820 165 59% 0.28 0.1 118 0.30 2007F 7843 399 142% 0.59 0.1 55 0.30 2008F 9020 634 59% 0.95 0.1 35 0.30 2009F 10373 866 37% 1.31 0.1 25 0.30 Source: Ping An Research & Wind Info

Investment Points: Chart1. Among1. Movement the of company’s PE and PB incomeof Shanghai structure, Composite domestic Index system integration accounts for the biggest proportion, but its current profitability is moderate. The main reasons are competition in domestic system integration business is intensified and the industry’s entry threshold is not high. Improvement of this business’s profitability needs to await the industry environment’s gradually turning better, that is, enterprise customers attach more importance to the quality of software system integration, and the conflict of customization and scale delivery of the system integration business gets balanced. In our view, domestic system integration business’s profitability has been in a low ebb level, and it has room for gradual improvement in the long term.

2. Software outsourcing business, with its current income proportion rapidly rising, has become a mainstay of the company’s profit. At present, the net profit contributed by software outsourcing has accounted for around 50% of the company’s total profit, while calculated as per software outsourcing business’s compound annual growth pace’s reaching around 40%,

this part of business would become a main source of the company’s profit. Software Source:outsourcing’s Ping An Research general & Wind per Info capita revenue is around RMB 200,000; currently, net profit Management Information Major Shareholders & Type of Shares margin on sales of the company’s software outsourcing is about 20%. Chairman Liu Jiren Name Type % CFO Wang Li Neusoft Group Restricted tradable A 50.30 3. We are optimistic to the software outsourcing industry’s development prospects, at the same Chart time,2. Movement we also of PE concern and PB thisof Shenzhen year’s dualComponent factors Index (the yen’s depreciation and the yuan’s Co Sec. Xu Qingrong Jingfu Equity Fund Restricted tradable A 2.46 appreciation)’ squeezing software outsourcing enterprises’ profits; the company’s profit Tel. 86-24-83662115 Haifutong Profit Growth Equity Fund Tradable A 2.13 might be affected in the short term. Website www.neusoft.com Haifutong Jingxuan Equity Fund Tradable A 2.11 4. The company’s EPS is estimated to be RMB 0.72 and RMB 1.00 respectively in 2007-2008;

“BUY” rating is recommended.

Risk Warning: Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Negative impact from the yen’s depreciation and the RMB’s appreciation on software Jul. 19, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) outsourcing enterprises’ profits 2005 2442 58 -79 0.12 0 0 2006 3330 206 254 0.43 0.2 95 0.50 2007F 4150 372 40 0.72 0.2 57 0.50 2008F 5400 540 44 1.00 0.2 41 0.50 Source: Ping An Research & Wind Info

The company separated its G-network marketing department from its C-network marketing department in early 2007. After that, the monthly user development pace has obviously increased, with monthly added users rising from originally less 1% to around 1.2-1.3%. However, mobile fees continued to drop, driven by China Mobile. We estimate the company’s 2007 interim and year-end net profit would remain good oriented, but the extent would be limited.

China’s 3G license issue remains in an uncertain status; whether the company to be reorganized or not also has no verdict. In our view, majority of the widely-rumoured reorganization versions would enhance the company’s strength; “STRONG BUY” rating is maintained to the company.

Source:Risk Warning:Ping An Research & Wind Info Management Information Major Shareholders & Type of Shares Uncertain risks related to restructuring of China’s telecom industry Chairman Chang Xiaobin Name Type % CFO Sun Qian China United Telecommunications Restricted tradable A 61.74 Co Sec. Lao Jianhua BoCom Schroders Enhanced Fund Tradable A-shares 1.84 Chart 2. Movement of PE and PB of Shenzhen Component Index Tel. 86-21-52732228 China Life Traditional Product Tradable A-shares 1.80

Website www.chinaunicom-a.com Southern Stable Growth Fund Tradable A-shares 1.44

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Jul. 27, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 2005 76,109 2,842 15.0 0.134 0.0414 46.49 0.66 2006 80,480 3,645 28.2 0.172 0.0672 36.22 1.08 2007F 83,699 4,903 34.5 0.231 - 26.97 - 2008F 87,884 5,739 17.1 0.271 - 22.99 - 2009F ------Source: Ping An Research & Wind Info

2. The company has accelerated to raise retail prices since 2006. In Feb. 2006, prices of Moutai series products were raised by around 15% on average; in Sept. 2006, prices of unscheduled products were raised by 105; in Jan. 2007, prices of years old liquors were increased by 20%; in Mar. 2007, prices of ordinary Moutai liquors were raised by 12%. The price increase effect as of 2007 will be shown after the 2nd quarter; there is room for revenue and gross profit margin to further rise. After the price rises, ex-factory prices still have a relatively large gap with retail prices, and, the situation of supply falling short of demand has not been effectively eased, therefore, there is room for the company to further raise prices.

3. Since its capacity is unable to fully meet market demand, the company is actively adjusting its product mix through such strategies as actively promoting mild liquors, increasing efforts to promote series liquors and launching high-end products to fill up the huge price faultage Management Information Major Shareholders & Type of Shares Source: Ping An Research & Wind Info between ordinary Moutai liquors and Moutai years old liquors so as to meet market demand Yuan Renguo Name Type % Chairman and boost increase of the company’s overall capacity. CFO Tan Dinghua China Kweichow Moutai Restricted tradable A 61.78 Co Sec. Fan Ningpin Kweichow Moutai Technic Dvlpmt. Restricted tradable A 3.69 Chart4. Previously,2. Movement theof PE company’s and PB of Shenzhen general Component manager Qiao Index Hong was investigated by Guizhou Tel. 86-852-2386002 Guangfa Strategic Selected Mixed Fund Tradable A 0.93 Provincial Discipline Commission and was removed from the company due to personal Website www.moutaichina.com Fullgoal Tianyi Value Equity Fund Tradable A 0.85 issues. In our view, his departure would not change the scarcity attribute of the company’s products, and the successful operating strategy would not be changed, therefore, “STRONG BUY” rating is retained.

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Risk Warning: Jul. 19, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) Consumption of Moutai is mainly concentrated in commercial and political activities; if 2005 3,931 1,119 36.32 1.19 0 100.20 - relatively large fluctuations happen in economic growth, it would have a relatively large impact 2006 4,896 1,504 34.47 1.59 0.70 74.51 0.59 on the company’s performance growth. 2007F 6,205 2,083 38.46 2.21 0.88 53.82 0.74 2008F 7,884 3,020 45.00 3.20 1.28 37.11 1.08 2009F 9,762 3,767 24.74 3.99 1.60 29.75 1.34

Source: Ping An Research & Wind Info

Consumer Products & Services Sector: Investment Strategy Section: Stock Code: 000568 ) Ping An Research – (LUZHOU LAO JIAO CO., LTD.) ( Analyst: Chen Xun 86-755-22626431 / [email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (KWEICHOW MOUTAI CO., LTD.) Business Description: As an originator of strongOverview aromatic Chinese on China’s spirits and A-share a constitutor Markets of the industry standards, the LUZHOU LAO JIAO CO., LTD. company has rich old cellar resources, with its main products including “Guo Jiao 1573”, ⋌Ꮂ㗕な㙵ӑ᳝䰤݀ৌ Business Description: “LuzhouThe company Laojiao is aTequ” liquor and producer “Bainian with Laojiao” the stronge etc.. stEstablished profitability in in1993 China, and withlisted its in soy Chinese sauce A-share market in 1994, the company currently has a total market cap of RMB 42.4 billion and I. aromaticA-share Profileliquor “Kweichow Moutai” praised as “national liquor”, which is in undersupply in the haslong 1,760 term. staff. The company, listed in China’s A-share market in 2001, with a total market cap of EndedRMB June 112.1 2007, billion there and were a total totally number 1,434 of companiesstaff of 6,418. liste d in A-share markets with a total share capital Investment Points: of 1,409.149 billion shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 1. In 2001, the company launched super-high-graded liquor “Guo Jiao 1573” and has exerted 5.56 trillion. Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and itself to cultivating it. Currently, the Guo Jiao series have entered a growth phase from a Rating: Strong Buy Current (Sep18): ̞60 Target: ̞70 Co Visit: High Shanghai-ShenzhenInvestment Points: 300 Index’s average PE was 29.05 multiples. 1. cultivationKweichow phaseMoutai and Liquor, have a become typical representathe most tive important of China’s profit soy source sauce of aromatic the company’s liquors, performancehas been awarded and a main internationa drivingl force gold of medals its profit for growth. many times“Guo andJiao has1573” been sales praised volume as reached“national 1,448 liquor”, tons in forming 2006, a an76.59% oligopoly increase in fromthe the soy last sauce year, aromatic becoming liquor a main market. source of A contribution to the company’s profit. However, in its statements, revenue from high-graded Chart 1.production Movement cycleof PE and of thePB of company’s Shanghai Composite products Index lasts for five years; the pace of capacity liquorsexpansion only is increased far behind 23.87%, the pace obviously of demand not matcgrowhingth; the with situation the growth of supply situation falling of the short 1573. of Wedemand estimate is obvious; the company’s thus, the intention company’s to drive pricing down capability its performance is relatively is relatively strong. obvious.

2.2. TheThe company has accelerated10,084 old tocellars, raise retailincluding pric es1,619 since above-100-year-old 2006. In Feb. 2006, cellars. prices ofThe Moutai base liquors produced from the above-100-year-old cellar group are used for producing “Guo Jiao series products were raised by around 15% on average; in Sept. 2006, prices of unscheduled 1573”, which are uncopiable monopoly resources. products were raised by 105; in Jan. 2007, prices of years old liquors were increased by 20%; in Mar. 2007, prices of ordinary Moutai liquors were raised by 12%. The price increase 3. Newly-packed Luzhou Laojiao Tequ will be ndlaunched around September this year. To assort effect as of 2007 will be shown after the 2 quarter; there is room for revenue and gross with a high season for consumption of liquors, the company is expected to further increase profit margin to further rise. After the price rises, ex-factory prices still have a relatively Laojiao Tequ’s ex-factory prices by catching the opportunity of launch of the new packing, large gap with retail prices, and, the situation of supply falling short of demand has not been from currently RMB 84.50 per bottle to over RMB 100.00 per bottle, laying a foundation for effectively eased, therefore, there is room for the company to further raise prices. the company’s long-term development. 3. Since its capacity is unable to fully meet market demand, the company is actively adjusting 4. The company has won the bidding of equities of West China Securities (its stake in it its product mix through such strategies as actively promoting mild liquors, increasing efforts reached 19.74%) and will further raise its stake. West China Securities is expected to record to promote series liquors and launching high-end products to fill up the huge price faultage Source:a Pingnet profitAn Research of more & Windthan InfoRMB 1 billion in 2007. Calculated according to 25x PE, the part of Management Information Major Shareholders & Type of Shares between ordinary Moutai liquors and Moutai years old liquors so as to meet market demand market cap of West China Securities held by the company is equivalent to RMB 5 billion; Chairman Xie Ming Name Type % and boost increase of the company’s overall capacity. CFO Ao Zhiping Luzhou Asset Management Bureau Restricted tradable A 53.52 calculated according to the company’s share capital, its market cap per share will increase by RMB 5.70. Co Sec. Cai Qiuquan China Growth Securities Investment Fund Tradable A 1.80 Chart4. 2.Previously, Movement of the PE company’s and PB of Shenzhen general Component manager QiaoIndex Hong was investigated by Guizhou Tel. 86-830-2398824 China Advantage Growth Equity Fund Tradable A 1.53 Provincial Discipline Commission and was removed from the company due to personal 5. The equity incentives to the management will further enhance the management’s operating Website www.lzlj.com Guangfa Strategic Selected Mixed Fund Tradable A 1.42 issues. In our view, his departure would not change the scarcity attribute of the company’s enthusiasm, thus having an active influence on the company’s production and operation. The products, and the successful operating strategy would not be changed, therefore, “STRONG company’s incentives plan might be adjusted, thereby influencing the company’s profit BUY” rating is retained. release.

6. As an originator of strong aromatic Chinese spirits and a constitutor of the industry Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Risk Warning: standards, the company is in a stage with rapid growth. Since the company has driven down Consumption of Moutai is mainly concentrated in commercial and political activities; if Jul. 19, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) its performance intentionally, its performance reported would exceed market expectations relatively large fluctuations happen in economic growth, it would have a relatively large impact 2005 1,457 46 16.80 0.05 0.04 918.55 0.09 after implementation of the equity incentives and its reasonable valuation should be slightly on the company’s performance growth. 2006 1,869 337 628.89 0.39 0.35 126.02 0.75 higher than the market’s average level. 2007F 2,711 641 90.53 0.74 0.55 66.14 1.18 2008F 3,671 979 52.60 1.12 0.84 43.34 1.80 Risk Warning: 2009F 4,904 1,346 37.56 1.55 1.16 31.51 2.48 The time of implementation of the equity incentives has a relatively large impact on the process Source:of profit Ping release. An Research & Wind Info

PINGPINGPINGPING ANPING AN RESEARCHANAN RESEARCHAN SECURITIESSECURITIES SECURITIES Contact: Contact: Contact: Ms.Ms. Ms. QiuQiu Qiu Xiaojin Xiaojin Xiaojin Contact Contact [email protected] :[email protected] Qiu [email protected]: Qiu Xiaojin Xiaojin [email protected] [email protected] PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] ThisPINGThisPING isThis preparedis AN preparedis AN prepared RESEARCH RESEARCHfor for clients for clients clients of of Ping of Ping Ping An An An Securities Securities Secu rities CompanyCompany Company Ltd. Ltd. and and otherother ot her professionals.professionals. professionals. The ContactThe Contactinfo informationrmation : Qiu : andQiu and Xiaojin points pointsXiaojin contained contained [email protected] herein [email protected] do donot not form form bids bids or or ThisThis isThis preparedisThis preparedis preparedis prepared for for clients for clients for clients clientsof of Ping ofPing Pingof An PingAn AnSecurities Securities An Secu Securities ritiesCompanyCompany Company Company Ltd. Ltd. andLtd. and other otherand other ot professionals.professionals.her professionals. professionals. The The info in formationrmation and and points points contained contained herein herein do donot not form form bids bids or or 70 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. inquiriesinquiriesThe ofinformation the of thesaid said securities and securities points and containedand are are only only forherein forreference referencedo not. form. bids or inquiries of the said securities and are only for reference. 712/2 The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. inquiriesinquiriesTheThe ofinformation the informationof thesaid said securities and securities and points points and containedand are contained are only only forherein herein forreference referencedo donot not. form .form bids bids or orinquiries inquiries of theof the said said securities securities and and are are only only for for reference reference. . 2/2 PING AN SECURITIES COMPANY LTD. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. China Top Pick A-shares Guidebook ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook Investment Strategy Section: Stock Code: 600054 ) Consumer Products & Services Sector: ( Analyst: Wen Xian 86-755-22627143 / [email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (HUANGSHAN TOURISM DEVELOPMENT CO., LTD.) HUANGSHAN TOURISM DEVELOPMENT CO., LTD. Overview on China’s A-share Markets Business Description: 咘ቅᮙ␌থሩ㙵ӑ᳝䰤݀ৌ The company operates ticket and ropeway business of China’s AAAAA-level beauty spot I. Huangshan,A-share Profile as well as hotel and travel agency business, of which, the ticket and ropeway business is a main source of the company’s profit. Listed in 1997, the company currently has a Endedmarket June cap 2007, of RMB there 9.878 were billion totally and 1,434 2,701 companies staff. listed in A-share markets with a total share capital of 1,409.149 billion shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.56 trillion. Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and Investment Points: Rating: Neutral Current (Sep19): ̞30.31 Target: ̞19.50 Co Visit: Mid Shanghai-Shenzhen 300 Index’s average PE was 29.05 multiples. 1. The company has a franchise right on tickets of Huangshan, and operates three ropeways in Huangshan, thus it has a prominent monopoly advantage and a very good profitability. It also operates travel agency and hotel business, but the profitability is relatively worse. In Chart 2006,1. Movement it recorded of PE core and revenuePB of Shanghai of RMB Composite 0.817 billion Index and net profit of RMB 0.139 billion.

2. The company planned to conduct a non-public offering in the second half of 2007, and the raised proceeds will be mainly used for reconstructing its Yungu Ropeway and Huangshan International Hotel and Huangshan Beimen Hotel.

3. In the foreseeable future, the trend of growth of incomes of China’s residents will not change and is likely to drive domestic tourism to rapidly develop. Huangshan enjoys a quite high reputation at home and abroad, as well as abundant passenger sources in circumjacent provinces as it is situated in East China, where the economy is most developed. Along with its peripheral expressways’ being open to traffic in succession, number of tourists to Huangshan is expected to keep growing at a relatively fast pace in the next several years. With such expectation, we estimate both the company’s revenue and profit would maintain a rapid growth over next three years.

Source: Ping An Research & Wind Info Management Information Major Shareholders & Type of Shares Risk Warning: Chairman Xu Jiwei Name Type % The company’s franchise right on tickets of Huangshan might not continue after the contract CFO Yin Yin Huangshan Tourism Group Restricted tradable A 41.95 expires; meanwhile, the policy change risk is also likely to result in termination of the company’s Co Sec. Huang Huimin Golden China Master Fund B-shares 2.73 Chartticket 2. franchiseMovement right of PE contract and PB aheaof Shenzhend of schedule. Component If this Index occurs, it will have a big negative impact Tel. 86-559-5580567 Pinpoint China Fund B-shares 2.17 on the company’s performance. Website www.huangshan.com.cn China Fund Tradable A 1.32

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Dec. 31, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 2005 689 69 1490.2 0.23 0.09 124.0 0.30 2006 817 139 101.5 0.31 0.14 92.0 0.49 2007F 982 169 22.1 0.36 0.14 79.4 0.50 2008F 1113 230 35.5 0.49 0.19 58.6 0.68 2009F 1212 275 20.0 0.58 0.23 48.8 0.82 Note: PB and dividend yield is calculated respectively according to the share price as of Sept. 12, 2007. Source: Ping An Research & Wind Info

2. Grasp resources to enhance value. The company entered the upstream field through its forest-paper integration project and its acquiring waste paper in U.S. to further reduce costs and ease the impact from cyclical volatility.

3. Remain a valuation swale among declines. Newsprint rallied in 2007, rising more than RMB 200 per ton, directly enhancing the company’s profit and performance. Furthermore, the company planned to export 400,000 tons of newsprint at a price slightly higher than that in domestic sales; acquiring the group’s chemical assets would lift its performance by RMB 0.13 billion, and the group’s entire listing expectations became stronger and stronger; increase in advertisements of Olympics 2008 is likely to drive consumption of newsprint; the SC paper project, where the company holds 40% stake, will be put into production at the end of 2007 and will bring earnings in 2008; while the earnings as of 2009 depend on when the Management Information Major Shareholders & Type of Shares Source: Ping An Research & Wind Info 400,000-ton newsprint project Xinhui Phase I to be put into production. We expect the Chairman Li Jianhua Name Type % company’s EPS would reach RMB 1.1, 1.3 and 1.4 in 2007-2009 respectively, corresponding CFO Li Xia Huatai Group Legal person 40.66 to 33x, 28x and 26x PE respectively, equivalent to the industry’s average level. Whereas, as Co Sec. Li Gang Fullgoal Tianhe Stable Selected Fund Tradable A-shares 1.88 Chart 2.it Movementis a leading of newsprintPE and PB enterpriseof Shenzhen in Component mainland China,Index with excellent management and cost Tel. (0546)7798848 INVESCO Great Wall Selected Stock Fund Tradable A-shares 1.32 control capability, it should enjoy a valuation above the industry average level. Moreover, its Website www.huatai.com China Merchants Pioneer Fund Tradable A-shares 1.29 PEG as of 2007-2008 is only 0.64 and 1.54 respectively, while the current A-share market’s average PE reaches above 40x, we believe the market could accept a 38-35x PE valuation for 2007-2008, namely a price of RMB 41.8-45.5. Therefore, currently it is still a valuation swale; the “STRONG BUY” rating is maintained.

Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Risk Warning: Jul. 30, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) Its 1Q07 asset-liability ratio is high to 65.68%; newsprint prices might fluctuate in the future; 2005 2835.18 332.43 22.68 0.61 0.344 35.8 1.57 high raw material prices increase the company’s operating costs; the comprehensive tax rate 2006 3739.62 398.78 19.96 0.73 0.25 30 1.14 might increase due to application of the new accounting rules; whether the 400,000-ton 2007E 5623 603.74 51.40 1.1 0.25 19.8 1.14 newsprint project, still under review, can be completed in 2008 and bring benefits in 2009 2008E 6297 711.27 17.81 1.3 0.25 16.8 1.14 becomes one of important factors affecting the company’s performance 2009. 2009E 6530 768.36 8.03 1.4 0.25 15.6 1.14

Source: Ping An Research & Wind Info

PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] PINGPINGPING PINGAN AN RESEARCHAN ANRESEARCH SECURITIES SECURITIES Contact: Contact: Ms. Ms. Qiu Qiu Xiaojin Xiaojin Contact Contact [email protected]: [email protected] : Qiu Xiaojin Xiaojin [email protected] [email protected] ThisThis isThis preparedisThis preparedis preparedis prepared for for clients for clients for clients clientsof of Ping ofPing Pingof An PingAn AnSecurities Securities An Secu Securities ritiesCompanyCompany Company Company Ltd. Ltd. andLtd. and other otherand other ot professionals.professionals.her professionals. professionals. The The info in formationrmation and and points points contained contained herein herein do donot not form form bids bids or or 74 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. 752/2 The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. inquiriesinquiriesTheThe ofinformation the informationof thesaid said securities and securities and points points and containedand are contained are only only forherein herein forreference referencedo donot not. form .form bids bids or orinquiries inquiries of theof the said said securities securities and and are are only only for for reference reference. . PING AN SECURITIES COMPANY LTD. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. China Top Pick A-shares Guidebook ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook Investment Strategy Section: ( Stock Code: 000061 ) Consumer Products & Services Sector: Analyst: Qu Yongxiang 86-21-62483364 / [email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (SHENZHEN AGRICULTURAL PRODUCTS CO., LTD.) SHENZHEN AGRICULTURAL PRODUCTS CO., LTD. Overview on China’s A-share Markets Business Description: ഇᏖݰѻક㙵ӑ᳝䰤݀ৌ Established in 1989 and listed in 1997, the company, with developing, constructing and operating⏅ I.agri-product A-share Profile wholesale markets as its core business, is an absolute leader in China’s agri-product wholesale market. Ended June 2007, there were totally 1,434 companies listed in A-share markets with a total share capital of 1,409.149 billion shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.56Investment trillion. Points: Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and 1. The company is in an absolute leading position in the industry and its development room is ̞ ̞ Shanghai-Shenzhen 300 Index’s average PE was 29.05 multiples. Rating: Strong Buy Current (Sep21): 21.90 Target: 50 Co Visit: Mid huge. This is because: development of agri-product wholesale markets is greatly supported by the State’s policies, and agri-product wholesale markets themselves have monopoly characteristics; the company has domestically unique first-mover advantage, scale advantage, Chart management1. Movement of advantage PE and PB and of Shanghai brand advantage, Composite aIndexnd has developed a particular profit mode (“commission + rent”), which other enterprises or rivals in the ordinary industries and in the same industry are hard to compare with. Therefore, we firmly believe the company could completely realize its persistent, stable and even better-than-expected performance growth.

2. Apart from the industry background, the core competitiveness and the profit mode, we also should pay attention to the following aspects: first, the growth mode. We cannot judge the company’s development room only with denotative expansion. In fact, the company’s growth is from two kinds of growth modes, namely connotative growth and denotative expansion. The connotative growth mode has a huge excavation potential likewise. Second, the explosive growth of profitability created by market consolidation. At present, the most noticeable is the startup of the Pinghu Project. This will realize the Shenzhen market’s real value to a large extent. Third, the development strategy. Currently, the company has accelerated implementation of the “refocusing” strategy, which is especially reflected in a series of measures of picking up to dispose non-core assets. Certainly, in this aspect, we care Source:more Ping An the Research process & ofWind its Info equity incentives and the active role of implementation of the Management Information Major Shareholders & Type of Shares “refocusing” development strategy, but not only the role of enhancing the performance in the Chairman Chen Shaoqun Name Type % short term. Fourth, platform construction. The company is constructing a big-distribution CFO Ma Yanzhao Shenzhen Municipal Government State-owned 22.88 and big-market platform from traditional to modern, from tangible to intangible, from Co Sec. Chen Xiaohua Shenhen International Trust and Investment Legal person 6.76 Chart substantial2. Movement toof PE virtual, and PB of of Shenzhenwhich, weComponent should Index pay great attention to development of Tel. 0755-25810936 Harvest Strategic Growth Mixed Equity Fund Tradable A 2.71 E-commerce and AP88.COM. Website www.szap.com Bocom Schroders Enhanced Equity Fund Tradable A 2.40 3. We are very pleasant to see that its five-year development strategy planning (2006-2010)’s overall goal is to pick up implementation of the “refocusing” development strategy, innovate in the operating mode of agri-product wholesale markets, build an improved nationwide agri-product wholesale market network system and construct an agri-product distribution Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield enterprise with core competitiveness and sustainable development. This matches our Jul. 20, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) expectations and will be necessarily advantageous to build the company into an 2005 2408 14 31.20 0.04 0 548 0 internationally first-class agri-product wholesale market. 2006 1700 50 164.61 0.13 0 168 0 2007E 1100 180 36 0.46 - 48 - 2008E 800 310 72.2 0.8 - 27 - Risk Warning: 2009E 900 426 37.42 1.1 - 20 - The negative effects of the non-core businesses represented by Minrun on the company’s short-and-mid-term operating performance have yet to be completely eliminated. Source: Ping An Research & Wind Info

GUANGZHOU BAIYUNSHAN PHARMACEUTICAL CO., LTD. Business Description: Overview on China’s A-share Markets Business Description: ᑓᎲⱑѥቅࠊ㥃㙵ӑ᳝䰤݀ৌ The company is mainly engaged in R&D, production and sales of Chinese patent medicines, The company is a liquor producer with the strongest profitability in China, with its soy sauce western medicines, chemical material medicines, medicines for external use, medicines for aromatic liquor “Kweichow Moutai” praised as “national liquor”, which is in undersupply in the I.pediatric A-share use Profile and health care medicines. long term. The company, listed in China’s A-share market in 2001, with a total market cap of RMB 112.1 billion and a total number of staff of 6,418. EndedInvestment June 2007, Points: there were totally 1,434 companies listed in A-share markets with a total share capital of1. 1,409.149The company billion obviously shares, a totalbenefits market from cap our of country RMB 16.62’s industry trillion policies and a tradable of the medical market systemcap of RMB 5.56 trillion. Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and reform. Rating: Strong Buy Current (Sep24): ̞12.90 Target: ̞16 Co Visit: High Shanghai-ShenzhenInvestment Points: 300 Index’s average PE was 29.05 multiples. 1. Kweichow Moutai Liquor, a typical representative of China’s soy sauce aromatic liquors, 2. Increasehas been in the awarded efficiency internationa of utilizationl gold of medals such assets for manyas lands times will drive and hasgrowth. been praised as “national liquor”, forming an oligopoly in the soy sauce aromatic liquor market. A Chart3. Launch 1.production Movement of new cycleof productsPE and of thePB in of company’ssuccession Shanghai Compositew productsill enhance Index last thes for enterprise’s five years; value. the pace of capacity expansion is far behind the pace of demand growth; the situation of supply falling short of 4. Hutchisondemand is Whampoaobvious; thus, Guangzhou the company’s Baiyunshan pricing Chinescapabilitye Medicine is relatively Company strong. is likely to be listed overseas; the preparations are in process at present. 2. The company has accelerated to raise retail prices since 2006. In Feb. 2006, prices of Moutai 5. Qiaoguangseries products Factory, were a raisedjoint venture by around with 15% Baxter, on average;will see ain substantial Sept. 2006, growth prices inof 2009.unscheduled products were raised by 105; in Jan. 2007, prices of years old liquors were increased by 20%; 6. Thein Mar.company 2007, will prices issue of additional ordinary Moutaishares in liquors the second were half raised of by2007: 12%. new The products price increase will be launchedeffect as inof succession. 2007 will be shown after the 2nd quarter; there is room for revenue and gross profit margin to further rise. After the price rises, ex-factory prices still have a relatively 7. Decreaselarge gap in with financial retail prices,expenses and, will the increase situation the of enterprise’s supply falling earnings. short of demand has not been effectively eased, therefore, there is room for the company to further raise prices. 8. Its EPS will reach RMB 0.33 and RMB 0.47 in 2007 and 2008 respectively. 3. Since its capacity is unable to fully meet market demand, the company is actively adjusting 9. Itsits brandproduct value mix through is prominent; such strategies marketing as capabiliactively typromoting is strong; mild management liquors, increasing level is efforts being enhancedto promote gradually. series liquors and launching high-end products to fill up the huge price faultage Management Information Major Shareholders & Type of Shares Source: Ping An Research & Wind Info between ordinary Moutai liquors and Moutai years old liquors so as to meet market demand Name Type % Chairman Xie Bin 10. Weand are boost optimistic increase to of the the company’s company’s brand, overall management capacity. value, the growth from recovery of CFO Huang Zhiling Guangzhou Pharmaceutical Group Tradable A-shares 35.37% the ordinary medicine market and the growth impetus brought from joint ventures to the Co Sec. Chen Ying Baiyunshan Group Tradable A-shares 8.95% Chart4. company. 2.Previously, Movement of the PE company’s and PB of Shenzhen general Component manager QiaoIndex Hong was investigated by Guizhou Tel. 86-0520-87062599 Jiangsu Zhengtai Investment Tradable A-shares 2.11% Provincial Discipline Commission and was removed from the company due to personal Website www.gzbys.com Zhao Xuguang Tradable A-shares 2.01% 11. Itsissues. EPS isIn expected our view, to his be departRMB ure0.33 would and RMB not change 0.47 in the 2007 scarci andty 2008 attribute respec oftively; the company’s its shares currentlyproducts, trade and theat 25.92xsuccessful and ope 17.55xrating PE. strategy Beside woulds, we not have be alsochanged, found therefore, that the “STRONGcompany’s currentBUY” PSrating is obviously is retained. relatively low, showing the company has potential for growth. In the future, its performance would be improved by a relatively large margin along with enhancement of its management level. Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield Risk Warning: Dec. 31, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 12.ConsumptionSince the company’s of Moutai growth is mainly picture concentrat has begun,ed in we commercial believe its and reasonable political valuation activities; level if 2005 2817 44 -3.4 0.09 89.1 relativelyshould large be at fluctuations 35x PE as happe of 2008,n in economic translated growth,to a share it would price ha ofve RMB a relatively 16.00. large The currentimpact 2006 2742 15 -66.1 0.03 262.7 on thevaluation company’s is obviously performance relatively growth. low, therefore, we maintain the “STRONG BUY” rating. 2007E 3154 151 913.7 0.32 25.9 2008E 3784 223 47.7 0.47 17.5 Risk Warning: 2009E 4920 289 30.1 0.62 13.5 Raw material price hikes lead to increase in production costs; certain challenge occurs in the process of consolidation. Source: Ping An Research & Wind Info

PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] PINGPINGPING PINGAN AN RESEARCHAN ANRESEARCH SECURITIES SECURITIES Contact: Contact: Ms. Ms. Qiu Qiu Xiaojin Xiaojin Contact Contact [email protected]: [email protected] : Qiu Xiaojin Xiaojin [email protected] [email protected] 78 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. PINGThisPINGThisPING isThis AN preparedisThis ANpreparedis RESEARCH ANpreparedis preparedRESEARCH forSECURITIES for clients for clients for clients clientsof of Ping ofPing Pingof An Ping An AnSecurities Securities An Secu Secu rities ritiesCompanyCompany Company Company Contact: Ltd. Ltd. and Ltd. and other otherand Ms. ot her ot professionals.professionals. her Qiu professionals. professionals. Xiaojin ContactThe The Contact info in formationrmation [email protected]: Qiu : Qiu and andXiaojin pointsXiaojin points contained contained [email protected] h [email protected] herein do donot not form form bids bids or 79 or The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. ThisinquiriesThis inquiriesisThis The preparedis Theprepared is ofinformation prepared the informationof the saidfor forsaid clientssecurities for clientsand securities clientsand points of ofpoints andPing ofPing contained and Pingare containedAn An are only AnSecurities Securities only Secuforherein herein forreferencerities reference doCompanyCompany doCompanynot not. form .form Ltd. bids Ltd. bidsand or and orinquiriesotherother otinquiriesher professionals.professionals. professionals. of theof the said said securitiesThe The securities info informationrmation and and are areand onlyand onlypoints forpoints for reference contained reference contained. .herein herein do donot not form form bids bids or2/2 or inquiriesinquiriesThe ofinformation the of thesaid said securities and securities points and containedand are are only only forherein forreference referencedo not. form. bids or inquiries of the said securities and are only for reference. 2/2 PING AN SECURITIES COMPANY LTD. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. China Top Pick A-shares Guidebook ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook Investment Strategy Section: Stock Code: 600056 ) Pharmaceuticals Sector: ( Analyst: Du Dongsong 86-10-59734988 / [email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (CNTIC TRADING CO., LTD.) CNTIC TRADING CO., LTD. Overview on China’s A-share Markets Business Description: Ёᡔ䌌ᯧ㙵ӑ᳝䰤݀ৌ Listed in 1994, the company currently is mainly engaged in production, processing and trading in I. theA-share pharmaceutical Profile field.

Ended June 2007, there were totally 1,434 companies listed in A-share markets with a total share capital ofInvestment 1,409.149 billion Points: shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.561. trillion.The company, Ended whose the end substantial of June shareholder 2007, all A is shares’ the central average State-owned PE was enterprise 33.5 multiples, China and Rating: Strong Buy Current (Sep25): ̞23.10 Target: ̞24 Co Visit: High Shanghai-ShenzhenGeneral Technology 300 Index’s (Group) average Holding, PE was Limited 29.05 multiples. (Genertec) with a solid strength, is an exclusive financing platform of the group. The pressure faced by the group is that the enterprise won’t have more odds-on until developing larger and stronger as the government will further reduce number of central-owned enterprises before 2010. Therefore, the Chart 1.enterprise’s Movement futureof PE and development PB of Shanghai strategy Composite is to boost Index into industry and realize the perspective development goal of becoming a large-scaled comprehensive pharmaceutical group.

2. China Meheco Corporation, as a core asset of the company, has an obvious advantage, which is mainly reflected in the State’s relevant policy support, the significant wrinkle from consolidated tender of pharmaceutical instruments, the chance from transfer of the active pharmaceutical ingredients industry and the development opportunity from shuffle of foreign trade of health care pharmaceuticals.

3. Its investing in China Unicom Group and China Merchants Bank with its own central-enterprise advantage has brought huge investment earnings to the enterprise.

4. In our view, as an exclusive financing platform of Genertec, the company has huge development opportunities in the future, therefore, the rating is upgraded to “STRONG BUY”. After more fully analyzing the company’s M&A potential, we believe the company’s Management Information Major Shareholders & Type of Shares Source:reasonable Ping An Research valuation & Wind level Info as of 2007 would be above 40x, equivalent to a reasonable share Chairman Han Benyi Name Type % price of RMB 24.00. Its share price still has a relatively large upside room. CFO Niu Laibao China General Technology (Group) Restricted tradable A 61.10 Co Sec. Qi Jianxi Huang Guihua Tradable A-shares 0.56 ChartRisk 2. Warning: Movement of PE and PB of Shenzhen Component Index Tel. 86-10-67164267 Zhou Xuzhou Tradable A-shares 0.27 The transformation to the pharmaceuticals industry or the M&A progress is not smooth. Website www.cntic-trading.cn Li Ju Tradable A-shares 0.27

Ended Core revenue Net profit Growth ratio EPS PE Dec. 31 (RMB 10 thousand) (RMB 10 thousand) (%) (RMB) (x) 2003A 267070 4242 -6.0 0.177 84.4 2004A 217444 655 -84.6 0.027 546.6 2005A 192967 7258 1007.9 0.303 49.3 2006A 270323 7231 -0.4 0.302 49.5 2007E 297356 17187 137.7 0.719 25.5 2008E 356827 20450 19.0 0.885 17.4

Source: Ping An Research & Wind Info

SHENZHEN ACCORD PHARMACEUTICAL CO., LTD. Overview on China’s A-share Markets ⏅ഇϔ㟈㥃Ϯ㙵ӑ᳝䰤݀ৌ Business Description: Established in 1993 and listed in 2001, the company is a pharmaceutical company with the I. A-shareintegration Profile of pharmaceutical industry, pharmaceutical wholesale and retail chain business.

Ended June 2007, there were totally 1,434 companies listed in A-share markets with a total share capital of Investment1,409.149 billion Points: shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.561. trillion.The company Ended ranked the end the of 6 th June in terms 2007, of allpharmaceutical A shares’ average commerce’s PE saleswas 33.5 scale multiples, and was and Rating: Strong Buy Current (Sep26): ̞18 Target: ̞24.8 Co Visit: High Shanghai-Shenzhenamong top 5 300 in termsIndex’s of average profitability PE was in 29.05 mainland multiples. China in 2006. It will benefit from consolidation of the pharmaceutical markets in Guangdong and Guangxi triggered by the policy of linked network tender in the next several years, with its market share likely rapidly increasing. Acceleration of its internal consolidation will continue the good trend that its Chart 1.expenses Movement continue of PE and to drop. PB of Shanghai Composite Index

2. Completion of move of Shenzhen Pharmaceutical Factory, a wholly-owned affiliate company of the company, has broken the bottleneck of capacity insufficiency that restricts its development. The incremental business mode is also very worth expectations. Equities of Main Luck Pharmaceutical Co. will be transferred from Shenzhen Pharmaceutical Factory to the company, thus the company will share this company’s rapid growth over next two years.

3. At present, the company is still with an eye to further developing the pharmaceutical commercial business larger. It is expected to acquire pharmaceutically commercial assets in succession; its market share will rapidly rise; its operating capability will be further increased.

4. Currently, the company is the most inexpensive pharmaceutically commercial stock in the market. The reason why its valuation level is relatively low is the market has yet to fully Management Information Major Shareholders & Type of Shares Source:understand Ping An Research the company’s & Wind Info future good growth. Recently, the small non-tradable shareholder Chairman Chen Weigang Name Type % Shenzhen Bao’an Shiyan Economic Development Corporation’s rapidly reducing the CFO Wei Pingxiao Sinopharm Medicine Holding Restricted tradable A 39.14 company’s shares upon being released from the float prohibition has also caused a relatively Co Sec. Chen Changbing Shenzhen Bao’an Economic Development Restricted tradable A 4.39 large impact on the company’s share price. We estimate its EPS would reach RMB 0.42, Chart 2. Movement of PE and PB of Shenzhen Component Index Tel. 86-0576-25875195 Shenzhen Shiyan Economic Development Restricted tradable A 3.18 0.59 and 0.84 in 2007-2009 respectively with a 6-month price target of RMB 24.80. The Website www.szaccord.com.cn Shenzhen Wangzong Industrial Restricted tradable A 1.76 “STRONG BUY” rating is retained.

Risk Warning: The pace of expansion of its pharmaceutical wholesale business might be lower than expected; the commercially pharmaceutical assets acquired by the company in the future might contain Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield financial risks. Jul. 19, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 2005 1635.57 35.77 31.27% 0.12 0.04 98.04 0.33 2006 5667.61 72.56 102.85% 0.25 0.09 48.33 0.74 2007E 7476 122 68.25% 0.42 0.12 28.72 0.99 2008E 10305 169 38.72% 0.59 0.15 20.71 1.23 2009E 14176 242 42.80% 0.84 0.15 14.5 1.23

Source: Ping An Research & Wind Info

ZHEJIANG HUAHAI PHARMACEUTICAL CO., LTD. Overview on China’s A-share Markets ⌭∳ढ⍋㥃Ϯ㙵ӑ᳝䰤݀ৌ Business Description: Established in 2001 and listed in 2003, the company is mainly engaged in production of chemical I. APIsA-share (active Profile pharmaceutical ingredients), intermediates and pharmaceuticals and exports.

Ended June 2007, there were totally 1,434 companies listed in A-share markets with a total share capital ofInvestment 1,409.149 billion Points: shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.561. trillion.High-value-added Ended the ACE end Inhibitors of June enter 2007, a grow all thA phase shares’ with average extended PE volume: was 33.5 the company multiples, and Rating: Strong Buy Current (Sep27): ̞23.34 Target: ̞30.4 Co Visit: High Shanghai-Shenzhenis the most important 300 Index’s supplier average of PE ACEI was 29.05 material multiples. medicines globally. Currently, the two products entering a maturity phase of Captopril and Enalapril Maleate keep a stable growth situation; the two high-value-added products of Lisinopril and Ramipril have entered a high growth phase with extended volume. We estimate this category of products would record Chart 1.sales Movement revenue of of PE RMB and PB 453 of Shanghaimillion, RMB Composite 569 millionIndex and RMB 688 million in 2007-2009 respectively, with a 3-year compound growth rate of 25.9%.

2. The Angiotensin II Receptor Antagonists market will be started up upon expiry of the patent of the compound: the first compound patent of Angiotensin II Receptor Antagonists, namely the European patent of Losartan Potassium, will expire in 2008, thereby opening the prelude of rapid development of generic drugs of Angiotensin II Receptor Antagonists in the regulated market (U.S. and Europe), and meanwhile further starting up the huge market for Angiotensin II Receptor Antagonists APIs. We estimate Angiotensin II Receptor Antagonists would record sales revenue of RMB 127 million, RMB 266 million and 359 million in 2007-2009 respectively, with a 3-year compound growth rate of 58%.

3. The first domestic enterprise to pass FDA certification; the big picture of its pharmaceuticals’ being exported to the regulated market has been started: in the 2nd quarter, the company passed U.S. FDA certification, becoming the first Chinese enterprise obtaining Management Information Major Shareholders & Type of Shares Source:a Ping qualification An Research to &sell Wind pharmaceuticals Info in U.S.. We estimate the revenue from exports to the regulated market would reach RMB 10 million, 60 million and 130 million in 2007-2009 Chairman Chen Baohua Name Type % respectively. CFO Zou Yuanlai Chen Baohua Tradable A 25.69% Co Sec. Zhu Yonghua Zhou Minghua Tradable A 25.65% Chart4. 2.Overall, Movement the of company’s PE and PB sales of Shenzhen revenue Component is expected Index to amount to RMB 0.708 billion, 1.041 Tel. 86ˉ0576-5016009 BoCom Schroders Stable Allocation Fund Tradable A 1.94% billion and 1.355 billion in 2007-2009 respectively, with a 3-year compound growth rate of Website www.huahaipharm.com Yinhua Advanced Enterprises Fund Tradable A 1.45% 34.5%.

Risk Warning: Renminbi’s appreciation, and the product price volatility and uncertainty of overseas orders Ended Core revenue Net profit Growth ratio EPS Dividend PE Dividend yield resulting from such factors as competition bring risks to the company’s operation. Dec. 31, 07 (RMB Million) (RMB Million) (%) (RMB) (RMB) (x) (%) 2005 423.25 128.91 8.23 0.56 0.3 40.03 1.32 2006 557.26 110.01 -14.66 0.48 0.2 46.91 0.88 2007E 708 126 14.72 0.55 0.3 40.89 1.32 2008E 1041 175 38.28 0.76 0.3 29.57 1.32 2009E 1355 233 33.41 1.01 0.3 22.16 1.32

Source: Ping An Research & Wind Info

PINGPINGPING AN AN RESEARCHAN RESEARCH SECURITIES Contact: Ms. Qiu Xiaojin Contact Contact [email protected]: Qiu : Qiu Xiaojin Xiaojin [email protected] [email protected] PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] ThisThis isThis preparedisPING preparedis prepared AN for for clients SECURITIESfor clients clients of of Ping ofPing Ping An An An SecuritiesSecurities Secu rities Company Company Company Ltd. Contact:Ltd. and and otherother other Ms.professionals.professionals. professionals. Qiu Xiaojin The The info in formationrmation [email protected] and and points points contained contained herein herein do donot not form form bids bids or or 84 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. inquiriesinquiriesTheThis ofinformation the ofis thepreparedsaid said securities and securities for points clients and containedand are of are Pingonly only forhereinAn forreferenceSecu referencedorities not. formCompany. bids orLtd. inquiries and other of theprofessionals. said securities and are only for reference. 2/285 The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. PING AN SECURITIES COMPANY LTD. PINGPING AN AN SECURITIES SECURITIES COMPANY COMPANY LTD. LTD. China Top Pick A-shares Guidebook ChinaChina Top Top Pick Pick A-shares A-shares Guidebook Guidebook Investment Strategy Section: Stock Code: 002007 ) Pharmaceuticals Sector: ( Analyst: Du Dongsong 86-10-59734988 / [email protected] Analyst: Luo Xiaoming 86-755-22626443/[email protected] Ping An Research – (HUALAN BIOLOGICAL ENGINEERING, INC.) HUALAN BIOLOGICAL ENGINEERING, INC. Overview on China’s A-share Markets Business Description: ढ݄⫳⠽Ꮉ⿟㙵ӑ᳝䰤݀ৌ The company produces and markets bio-pharmaceutical products and related products. Its I. productsA-share Profile are classified into four categories: plasma infusion products, immunization products, coalulation factor products, and wound healing products. Ended June 2007, there were totally 1,434 companies listed in A-share markets with a total share capital of 1,409.149 billion shares, a total market cap of RMB 16.62 trillion and a tradable market cap of RMB 5.56Investment trillion. Points: Ended the end of June 2007, all A shares’ average PE was 33.5 multiples, and Shanghai-Shenzhen1. As an individually-run 300 Index’s enterprise, average PE depending was 29.05 onmultiples. its management advantage, marketing Rating: Strong Buy Current (Sep28): ̞53.98 Target: ̞70 Co Visit: High strength, scale advantage, cost control capability and R&D strength, the company has gradually established its leading position in the industry and is likely to continue to keep profit rises of “products having pricing capabilities”. In terms of market share and growth Chart 1.pace, Movement multi-products of PE and PB including of Shanghai albumin, Composite gammaglobulin, Index tetanus immunoglobulin and coagulation factor have far exceeded those of other enterprises.

2. Along with accomplishment of restructuring of blood plasma stations, the company is likely to further expand its market share; meanwhile, the company has had a base for extending to the vaccine industry.

3. The company’s growth was good previously; we think its growth would pick up over next two years. The compound growth rate of the blood product industry is 19%, and multi-products’ market demand is sharply increasing; the company’s average annual growth rate exceeded 30% in past 3 years; along with accomplishment of restructuring of blood plasma stations and expansion to the vaccine industry, the company’s performance growth pace is still likely to continue to advance.

4. Compared with the listed companies in the same kind, the company’s valuation is obviously Source:relatively Ping An Research low, therefore, & Wind Info the “STRONG BUY” rating is given. Management Information Major Shareholders & Type of Shares Chairman An Kang Name Type % CFO Wang Qiping Xinxiang Hualan Bio-tech Restricted tradable 18.48 Risk Warning: Co Sec. Fan Bei Xinxiang Jinkang Biotech Development Restricted tradable 15.83 ChartSafety 2. Movementrisks of blood of PE products and PB of Shenzhen Component Index Tel. 86-373-5056905 Hong Kong Kekang Restricted tradable 13.84 Website www.hualanbio.com BoCom – Hanxing Equity Fund Tradable A-shares 4.52

Ended Core revenue Net profit Growth ratio EPS PE EV/EBITDA Dec. 31 (RMB 10 thousand) (RMB 10 thousand) (%) (RMB) (x) (x) 2004 32079 4136 16.5 0.274 134.1 108.7 2005 36128 5254 27.0 0.349 105.6 89.8 2006 35299 7900 50.4 0.524 70.2 61.1 2007F 41100 10881 37.7 0.722 51.0 43.9 2008F 56600 17267 58.7 1.145 32.1 27.5 2009F 78440 27009 56.4 1.792 20.5 17.6 Source: Ping An Research & Wind Info

Investment Strategy Section: Investment Strategy Section: PING AN SECURITIES RESEARCHAnalyst: IN LuoSTITUTE Xiaoming 86-755-22626443/[email protected] – MAIN COVERAGE LIST PING AN SECURITIES RESEARCHAnalyst: IN LuoSTITUTE Xiaoming 86-755-22626443/[email protected] – MAIN COVERAGE LIST Company Co. (C) Code Company Co. (C) Code Company Co. (C) Code Company Co. (C) Code Financials & Real Estate Transportation Information Technology Consumer Products & Services SHENZHEN DEVELOPMENT BANK Overview⏅থሩ˝ on000001 China’sSHENZHEN A-share AIRPORT Markets ⏅ഇᴎഎ 000089 GREE ELECTRIC APPLIANCES OverviewḐ࡯⬉఼ on000651 China’sLIJIANG A-share YULONG TOURISM Markets Б∳ᮙ␌ 002033 PUDONG DEVELOPMENT BANK ⌺থ䫊㸠 600000 BAIYUN INTERNATIONAL AIRPORT ⱑѥᴎഎ 600004 TCL CORPORATION *ST TCL 000100 HUANGSHAN TOURISM 咘ቅᮙ␌ 600054 HUA XIA BANK ढ໣䫊㸠 600015 SHANGHAI AIRPORT Ϟ⍋ᴎഎ 600009 SHENGYI SCI.TECH ⫳Ⲟ⾥ᡔ 600183 CHINA CYTS TOURS Ё䴦ᮙ 600138 MINSHENG BANKING ⇥⫳䫊㸠 600016 CHINA SHIPPING DEVELOPMENT Ё⍋থሩ 600026 GUOGUANG ELECTRIC ᑓᎲ೑ܝ EMEI SHAN TOURISM ኼⳝቅ˝ I. A-share Profile I. A-share Profile 002045 000888 CHINA MERCHANTS BANK ᢯ଚ䫊㸠 600036 COSCO SHIPPING Ё䖰㟾䖤 600428 NEUSOFT CO. ϰ䕃㙵ӑ 600718 BEIJING CAPITAL TOURISM 佪ᮙ㙵ӑ 600258 CHINA LIFE INSURANCE Ё೑Ҏᇓ 601628 SHENZHEN CHIWAN ⏅䌸⑒˝ 000022 GEHUA CATV ℠ढ᳝㒓 600037 YANJING BREWERY ➩Ҁସ䜦 000729 PING ANEnded INSURANCE June 2007, there were totallyЁ೑ᑇᅝ 1,434601318 companiesYAN liste TIANd PORTin A-share markets with a totalⲤ ⬄share␃ capital000088 B-RAYEnded MEDIA June 2007, there were totallyम⨲Ӵ᪁ 1,434600880 companiesWULIANGYE listed in A-share markets with a totalѨ ㊂share⎆ capital000858 VANKEof 1,409.149 billion shares, a totalϛ ⾥˝market 000002cap of RMBSHANGHAI 16.62 INTERNATIONAL trillion and a tradable PORT marketϞ␃䲚ಶ cap of RMB600018 GREATof WALL 1,409.149 KAIFA billion shares, a total䭓ජᓔথ market 000021cap of RMBCHANGYU 16.62 trillion and a tradable marketᓴ cap㺩˝ of RMB000869 ᢯ଚഄѻ ⽣ᓎ催䗳 CMPD5.56 trillion. Ended the end of June 2007,000024 allFUJIAN A shares’ EXPRESSWAY average PE was 33.5 multiples, 600033 and AEROSPACE5.56 trillion.INFORMATION Ended the end 㟾໽ֵᙃ of June 2007,600271 allNEW A HOPE shares’ average PE was 33.5 ᮄ multiples,Ꮰ ᳯ 000876 and OCT ढռජ˝ 000069 ANHUI EXPRESSWAY ⱪ䗮催䗳 600012 Shanghai-Shenzhen 300 Index’s average PE was 29.05 multiples. ORIENTALShanghai-Shenzhen PEARL 300 Index’sϰᮍᯢ⦴ average PE600832 was 29.05SHUANGHUI multiples. DEVELOPMENT ঠ∛থሩ 000895 FINANCIAL STREET 䞥㵡㸫 000402 HAN'S LASER TECHNOLOGY ໻ᮣ▔ܝ 002008 KWEICHOW MOUTAI 䌉Ꮂ㣙ৄ 600519 GEMDALE CORPORATION 䞥ഄ䲚ಶ 600383 CHINA UNICOM Ё೑㘨䗮 600050 HEILONGJIANG AGRICULTURE ࣫໻㤦 600598 Energy Machinery & Automobiles ZTE CORPORATION Ё݈䗮䆃 000063 TSINGTAO BREWERY 䴦ቯସ䜦 600600 CHINA PETROLEUM & CHEMICAL Ё೑⷇࣪ 600028 JIANGLING MOTORS ∳䪗≑䔺 000550 TEAMSUN TECHNOLOGY ढ㚰໽៤ 600410 YILI INDUSTRIAL Ӟ߽㙵ӑ 600887 NEW CHEMICALChart 1. Movement MATERIAL of PE and PB᯳ᮄᴤ᭭ of Shanghai600299 CompositeWANXIANG Index QIANCHAO ϛ৥䪅╂ 000559 HENGTONGChart PHOTOELECTRIC1. Movement of PE and PBѼ䗮ܝ⬉ of Shanghai600487 CompositeFIRST Index PROVISIONS STORE ㄀ϔ亳ક 600616 YANTAI WANHUA ⚳ৄϛढ 600309 WEIFU HIGH-TECHNOLOGY ࿕ᄮ催⾥ 000581 BIRD CO. ⊶ᇐ㙵ӑ 600130 LUZHOU LAO JIAO ⋌Ꮂ㗕な 000568 TIANFU THERMOELECTRIC ໽ᆠ⛁⬉ 600509 CHANGAN AUTOMOBILE 䭓ᅝ≑䔺 000625 FIBERHOME TELECOMMUNICATION ⛑☿䗮ֵ 600498 ZHANGZIDAO FISHERY ⤤ ᄤ ቯ 002069 GUANGHUI INDUSTRY ᑓ∛㙵ӑ 600256 FAW CAR ϔ≑䕓䔺 000800 NEW SEA UNION TELECOM ᮄ ⍋ ᅰ 002089 CHENMING PAPER ᰼号㒌Ϯ 000488 SHANDONG LUYANG 剕䰇㙵ӑ 002088 FAW XIALI ϔ≑໣߽ 000927 ZHONGTIAN TECHNOLOGIES Ё໽⾥ᡔ 600522 HUATAI PAPER ढ⋄㙵ӑ 600308 SHANDONG HAIHUA ቅϰ⍋࣪ 000822 YUTONG BUS ᅛ䗮ᅶ䔺 600066 GUOMAI TECHNOLOGIES ೑㛝⾥ᡔ 002093 SHAN YING PAPER ቅ呄㒌Ϯ 600567 HUAXING CHEMICAL ढ᯳࣪Ꮉ 002018 SHANGHAI AUTOMOTIVE Ϟ⍋≑䔺 600104 MIDEA ELECTRIC APPLIANCES 㕢ⱘ⬉఼ 000527 JINGXING PAPER ᱃݈㒌Ϯ 002067 OFFSHORE OIL ENGINEERING ⍋⊍Ꮉ⿟ 600583 FOTON MOTOR ⽣⬄≑䔺 600166 FOSHAN ELECTRICAL AND LIGHTING ԯቅ✻ᯢ 000541 YOUNGOR 䲙ៜᇨ 600177 HUANENG POWER ढ㛑೑䰙 600011 JIANGHUAI AUTOMOBILE ∳⏂≑䔺 600418 SUNVIM GROUP ᄮ᮹㙵ӑ 002083 GUIGUAN ELECTRIC POWER Ḗݴ⬉࡯ 600236 TIAN DI SCIENCE & TECHNOLOGY ໽ഄ⾥ᡔ 600582 SHENERGY ⬇㛑㙵ӑ 600642 CHINA STATE SHIPBUILDING Ё೑㠍㠊 600150 GD POWER ೑⬉⬉࡯ 600795 JINXI AXLE ᰟ㽓䔺䕈 600495 SDIC HUAJING POWER ೑ᡩ⬉࡯ 600886 KINGDREAM PUBLIC ∳䪏㙵ӑ 000852 YANGTZE POWER 䭓∳⬉࡯ 600900 ZOOMLION HEAVY INDUSTRY Ё㘨䞡⾥ 000157 GUANGDONG ELECTRIC POWER ㉸⬉࡯˝ 000539 SANY HEAVY INDUSTRY ϝϔ䞡Ꮉ 600031 GUANGZHOU DEVELOPMENT ᑓᎲ᥻㙵 600098 SHENYANG MACHINE TOOL ≜䰇ᴎᑞ 000410 SHENZHEN ENERGY ⏅㛑⑤˝ 000027 ZHENHUA PORT MACHINERY ᤃढ␃ᴎ 600320 Materials GREATOO MOLDS Ꮌ䕂㙵ӑ 002031 DONGLIANGSource: NEW Ping MATERIAL An Research & Wind Infoᷟṕᮄᴤ 002082 TEBIAN ELECTRIC APPARATUS ⡍ব⬉Ꮉ 600089 Source: Ping An Research & Wind Info XINJIANG JOINWORLD ᮄ⭚ӫ੠ 600888 PINGGAO ELECTRIC ᑇ催⬉⇨ 600312 YUGUANG GOLD&LEAD 䈿ܝ䞥䪙 600531 HARBIN AIR CONDITIONING જぎ䇗 600202 WESTERN MINING 㽓䚼ⷓϮ 601168 DONGFANG ELECTRICAL ϰᮍ⬉ᴎ 600875 WUHAN IRON & STEEL ℺䩶㙵ӑ 600005 GUODIAN NANJING AUTOMATION ೑⬉फ㞾 600268 Chart 2. Movement of PE and PB of Shenzhen Component Index Chart 2. Movement of PE and PB of Shenzhen Component Index BAOSHAN IRON & STEEL ᅱ䩶㙵ӑ 600019 NARI TECHNOLOGY ೑⬉फ⨲ 600406 ANGANG STEEL 䵡䩶㙵ӑ 000898 WOLONG ELECTRIC ऻ啭⬉⇨ 600580 TAIGANG STAINLESS STEEL ໾䩶ϡ䫜 000825 XJ ELECTRIC 䆌㒻⬉⇨ 000400 SINO-PLATINUM METALS 䌉ⷨ䪖Ϯ 600459 BAOSHENG TECHNOLOGY ᅱ㚰㙵ӑ 600973 CSG HOLDING फ ⦏˝ 000012 XIANGTAN ELECTRIC ␬⬉㙵ӑ 600416 CONCH CEMENT ⍋㶎∈⊹ 600585 TELLHOW SCI-TECH ⋄䈾⾥ᡔ 600590 TONGDU COPPER 䪰䛑䪰Ϯ 000630 Pharmaceuticals YUNNAN TIN 䫵Ϯ㙵ӑ 000960 TONGRENTANG ৠҕූ 600085 HONGDA CHEMICAL ᅣ䖒㙵ӑ 600331 YUNNAN BAIYAO ѥफⱑ㥃 000538 XIAMEN TUNGSTEN ॺ䮼䩼Ϯ 600549 SL PHARMACEUTICAL ঠ呁㥃Ϯ 002038 CHINA NONFERROUS METAL Ё㡆㙵ӑ 000758 TIANTAN BIOLOGICAL ໽യ⫳⠽ 600161 CHALCO Ё೑䪱Ϯ 601600 SHANDONG PHARMCEUTICAL GLASS ቅϰ㥃⦏ 600529 JIANGXI COPPER ∳㽓䪰Ϯ 600362 HISUN PHARMACEUTICAL ⍋ℷ㥃Ϯ 600267 ZHONGJIN GOLD Ё䞥咘䞥 600489 HUAHAI PHARMACEUTICAL ढ⍋㥃Ϯ 600521 SHANDONG GOLD ቅϰ咘䞥 600547 ACCORD PHARMACEUTICAL ϔ㟈㥃Ϯ 000028 SHANXI GUANLU ݇䪱㙵ӑ 000831 BAIYUNSHAN PHARMACEUTICAL ⱑ ѥ ቅ 000522 NANSHAN ALUMINUM फቅ䪱Ϯ 600219 CNTIC TRADING Ёᡔ䌌ᯧ 600056 RARE-EARTHSource: HI-TECHPing An Research & Wind Info⿔ೳ催⾥ 600111 HUALAN BIOLOGICAL ढ݄⫳⠽ 002007 Source: Ping An Research & Wind Info

PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] PING AN SECURITIES Contact: Ms. Qiu Xiaojin [email protected] 88 This is prepared for clients of Ping An Securities Company Ltd. and other professionals. This is prepared for clients of Ping An Securities Company Ltd. and other professionals. 89 The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. The information and points contained herein do not form bids or inquiries of the said securities and are only for reference. 2/2