<P>高盛－浦发银行：基于估值下调评级至中性 </P>
<P>Removed from Asia Pacific Buy List Shanghai Pudong Development Bank</P>
<P>07.17 8页</P>

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<P>Current view<BR>We would hold SPDB, as SPDB’s 2008E P/E at 17.8X remains reasonable<BR>vs. average 20X 2008E P/E for smaller A-share banks (except 35X for CITIC<BR>A-share [601998.SS, Sell]), and as SPDB is a Yangtze River delta focused<BR>bank with decent corporate banking and corporate deposit franchise. We<BR>would be more positive, if:<BR>1) Citigroup’s stake was increased to maximum 19.9% and SPDB’s further<BR>cooperation with Citigroup made solid progress. We believe given the<BR>recent management changes of SPDB, and Citigroup’s 20% stake<BR>investment in Guangdong Development Bank, the negotiation on the stake<BR>sale and further cooperation has not started ytd;<BR>2) New management team (including the new Chairman and President) of<BR>SPDB clarify SPDB’s mid-term growth strategy, including how to enhance<BR>its relatively weak consumer loans and deposits franchise (12% and 15% of<BR>total loans/deposits respectively in 2006); and<BR>3) SPDB posts better than expected NIM, fee income and consumer<BR>deposits growth in its 1H2007/3Q2007 results.<BR>Risks to SPDB include macro hard landing, draconian</P>