China Construction & Infrastructure: Weekly Bulletin

Infrastructure: Xi’an-Pingliang Started Construction:Xi’an-Pingliang Line, one of the normal lines planned inthe MT to LT Railway Plan by 2020, started constructionrecently. This line starts from Xi’an (Shaanxi Province)and ends at Pingliang (Gansu Province) with the totallength of 263.1 km and designed speed of 120 km/hour.The current designed cargo turnover capacity is 30million tons per year. The total investment may reachRmb7.1bn with a construction period of 48 months.Infrastructure: The third quarter new sign contractsvalue for Chinese construction contractors decreased by27.3% from Rmb1,292bn to Rmb939bn, mainly due tothe property kick-off and capex decrease in 3Q. TheBuilding segment (including commodity andnon-commodity building) is the biggest contributor in theChinese construction industry, accounting for 60% of theconstruction output in China. YTD new sign contractsgrew by 8% YoY to Rmb3,611bn, 22.2ppt lower than30.3% YoY in 1H08.Company Highlights:CRGL (390-HK): The locking period of 587.8 millionshares expired on December 7, representing 2.8% ofthe total shares of 21.3 billion and 14% of the floating Hshares. These shares belonged to China Life FranklinAsset Management, GIC, Grahamstowe InvestmentsLimited, Honeybush Limited, Andalee InvestmentsLimited, Fenbourne Investments, Kesco InvestmentLimited, OZ Master Fund, Ltd and Best InvestmentCorporation at the price of HK$5.41. The last close priceof CRGL was HK$4.97, implying 8.1% discount to theplacement price of HK$5.41.China Railway Erju (600528-CN), one subsidiary ofCRGL (390-HK) announced that it planed to issueRmb1.5bn bonds with warrants recently. The purposeof this bond is to solve the problem of the shortage of theworking capital.