At the work conference of the Group, Chairman Tang Shuangning calls for deeply implementing the scientific concept of development and winning the reform battles on four battlegrounds
The first battleground: financial enterprises
The second battleground: industrial enterprises
The third battleground: China Everbright Financial Holding Group
The fourth battleground: subsidiaries in Hong Kong

　　On the morning of January 17, China Everbright Group (“the Group”) held the 2008 picturephone work conference in Beijing. Leaders of related authorities, including the Central Committee for Discipline Inspection of the CPC, the Organization Department of the CCCPC, the People’s Bank of China, the Ministry of Finance, China Banking Regulatory Commission, China Securities Regulatory Commission, China Insurance Regulatory Commission and China National Audit Office, were present at the conference. Leaders of the Group, related personnel of the Board of Supervisors, cadres at division level of the Head Office in Beijing, related personnel of China Everbright Industrial Group and managers of the Group’s subsidiaries in Beijing, department managers of the Head Office of China Everbright Bank (“the Bank”) and managers of branches of the Bank attended the conference in the main conference hall in Beijing, and department managers of the Head Office of the Group in Hong Kong, cadres at the middle level of the Group’s subsidiaries outside Beijing and managers of the Bank and China Everbright Securities Company attended the conference in each branch conference hall.

　　At the conference, Chairman Tang Shuangning reviewed and summarized the Group’s work in 2007, and clarified the tasks of the Group’s reform in four battlegrounds.

　　Each subsidiaries of the Group achieved good operating results in 2007. China Everbright Bank further improved its profitability and development momentum by product innovation, service innovation, technology innovation, publicity and marketing, and optimization of business structure and operational mechanism. It generated net profit of RMB4.57 billion in 2007. Leveraging on the rare market opportunity, China Everbright Securities Company reaped net profit of RMB4.63 billion, a record in its history. Sun Life Everbright Insurance Company continued to launch new products in line with the market needs, and generated premium income of RMB1.67 billion in 2007, largely higher than the previous year. Its financial position also turned for the better. Such subsidiaries as Everbright Investment Management Company, Shanghai Everbright Exhibition Center and Everbright Property Company also witnessed continuously improved operating results by strengthening business operation, internal management, revenue enhancing and expenditure control. The Group generated a total profit of RMB15.4 billion in 2007.

　　In the meanwhile, the Group made a breakthrough and gained remarkable achievements in reform and development last year. The Group’s reform and restructuring plan was approved by the State Council on August 5, 2007, and then its restructuring was formally activated. After formulation of the Plan, the Party Committee of the Group established the general concept of “Four Regards and One Drive”. On November 30, 2007, China SAFE Investments Limited injected US dollars equivalent to RMB20 billion into the Bank, indicating the start-up of the third campaign, i.e. the IPO of the Bank. Furthermore, the IPO of China Everbright Securities Company was progressing smoothly. China Everbright Industrial Group Company was formally incorporated. The Group’s subsidiaries in Hong Kong were stable.

　　While summarizing the achievements in 2007, Chairman Tang Shuangning also stressed that in 2008 the Group should continue to deeply implement the scientific concept of development, keep innovating in working ideas, improve working mechanism, address working problems, and win the battles on the four battlegrounds of the Group reform.

　　　The first battleground is financial enterprises. With an aim to going public, the Bank should win five battles, i.e. 1) to study the recovery of accumulated losses; 2) to study the issue of subordinated bonds; 3) to dispose of non-performing assets; 4) to introduce strategic investors; 5) to make an IPO. According to the development trend of domestic and foreign capital markets and based on the overall analysis of the Bank’s internal conditions and external environment, the Bank intends to first issue A-shares and get listed on the Shanghai Stock Exchange. The specific time of issuance is subject to the situations of the capital market, approval progress and other related circumstances. After completion of the A-share issuance, the Bank will issue H-shares whenever practicable.
China Everbright Securities Company should strive to complete an IPO within March or April 2008. With respect to business development, first, we should form the first-mover advantage in such innovative businesses as QDII, stock index futures and direct investment, following the strategy of snapping share for traditional business and taking the preemptive opportunities for innovative business. Second, we should study how to make our business go global, and strive to fulfill the plan of integrating broking, asset management and underwriting business in Hong Kong, in collaboration with China Everbright Limited. Third, we should firmly uphold the business philosophy of being law-abiding and compliant. Fourth, after the IPO of the Bank, we should engage in market-oriented merger and acquisition, expand business size, improve profitability and presence in the market in due course.

　　Sun Life Everbright Insurance Company should give play to the joint-venture advantage, late-comer advantage and Group advantage, devote more efforts to marketing, innovate in business modes, optimize business structure, achieve rapid growth of premium income, and keep improving its financial results.
The second battleground is industrial enterprises. After establishment of China Everbright Industrial Group Company, the main tasks for the next step are to: 1) take over transferred industrial assets, and completely resolve related party transactions; 2) improve internal organizational framework and replenish necessary personnel; 3) formulate scientific rules of procedures and form sound internal control mechanism; 4) establish an overall cooperation relation, help each other, achieve business complementation and seek common development with China Financial Holding Group.

　　The third battleground is China Everbright Financial Holding Group. We aim to transform China Everbright Group from an administrative management-type institution into a modern financial holding group company which takes equity management as the means, capital operation as the vehicle and the enhancement of competitiveness as the core. Currently, our initial idea is that China Everbright Financial Holding Group should be established in the form of a subsidiary. Meanwhile, it should take full advantage of the merits of universal banking division mode, form a mixed organizational framework combining subsidiary mode with division mode, and form a matrix management mode integrating multi-level management and vertical management. That can give play to not only the effect of firewall and capital lever, but also the advantages of effective internal coordination and sufficient information sharing of division mode. That also enables such a new financial organization form as China Everbright Financial Holding Group to bring its advantages in scale economy, scope economy and synergistic effect into play.

The fourth battleground is subsidiaries in Hong Kong. The Group’s subsidiaries in Hong Kong should take advantage of current good business development trend and the opportunities of capital market to expand their business, strengthen business interaction with domestic subsidiaries of the Group, so as to make them stronger and bigger. With approval of the State Council, these subsidiaries remained unchanged in respect of organization, business and staff. In the next step, after domestic subsidiaries succeed in reform and restructuring, the Group should study a plan on restructuring of subsidiaries in Hong Kong in line with the principle of “being beneficial to the consolidation of the reform achievements of domestic subsidiaries, beneficial to the development of subsidiaries in Hong Kong, and beneficial to the prosperity and stability of Hong Kong.”

Chairman Tang Shuangning stressed that the four battlegrounds of Group reform are closely related and distinguished from one another. This year, we should win a decisive victory on the first and second battlegrounds. Especially on the first battleground, we should succeed in the IPOs of China Everbright Securities and China Everbright Bank, to drive development of other business lines; on the third battleground, we need to have a good start, lay a solid foundation, and seize opportunities; on the fourth battleground, we should draw up feasible plans in line with the situations and conditions of the Group.