Investment portfolio inside extract

Fund manager knows:

SHANGHAI REAL ESTATE (HKStck No. 1207, H-Shares, HK$ 4.6 billion market cap)The company is engaging in property development preparation of raw land property leasing sale of housing-tech products and services and golf course operation in shanghai. Despite the implementation of macro-economic control by the state and local government of the People¡¦s Republic of China, for the year 2005/06, the company out-perform her counterparts, to name the most comparable ones, CHINA RESOURCES LAND LIMITED (HKStck No. 01109) and GUANGZHOU R&F PROPERTIES CO., LTD. (HKStck No. 02777), with an exceptionally low PE ratio around 10 compared to the average industry PE range of 25-34; the high cash & assets ratio versus the market capital and brisk increase in the percentage of turnover, gross and net profit margin would be anticipated to reflect in the coming boost in stock price.

From both fundamental perspective and boosting property market in China, the stock price is expecting to soar, with anticipated satisfactory results announcements in late march 2007, and the spinning-off of it subsidiary business for IPO by end of the year, and the market speculation of the stock returning to Shanghai A-Share market.

The good financials prompt the stock be classified as a highly volatile one, it is likely to become materially more volatile over the next 1-6 months compared with the past three years, with an estimation of a 45% chance of a price surge, to a mid-term stock price target of HKD 8.56, based on our quantitative assessment of historical data, and in our analyst¡¦s view.

Target over $8??