<P><FONT face=黑体 size=6><STRONG>GS 高盛：每日中国报告 07.03 </STRONG></FONT></P>
<P><FONT face=黑体 size=6><STRONG>China Daily Insights 07.03     9页</STRONG></FONT></P>
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<P>Today’s focus<BR>Focus Media (FMCN): Delays filing annual report in response to investor letter<BR>China: Banks: CBRC "window guidance" on small banks; retain N sector stance<BR>China Resources Land (1109.HK): Limited potential benefits without improving underlying profitability<BR>Headline news<BR>HK becomes world's 2nd largest IPO market (China Daily)<BR>China's June manufacturing pace in 4-month low (Shanghai Daily)<BR>Market still waits for ABC restructuring plan (Shanghai Daily)<BR>China heading for top spot in world tourism rankings (Yahoo)<BR>Focus Media (FMCN): Delays filing annual report in response to investor letter, James Mitchell, CFA<BR>• News: Focus Media (FMCN, US$47.40, Buy, Conviction Buy List) announced that it has delayed filing its annual report because its audit committee (which includes the CEO of Sina (SINA, US$42.91, Buy) and the former CFO of Ctrip (CTRP, US$78.84, Neutral)) is procedurally bound to investigate a letter from US counsel to an investor with a short position in Focus stock questioning Focus’ related party transactions. Speaking to Focus investor relations, it appears that the transactions (previously disclosed) include a small loan by Focus’ founder’s father to the company, and related parties revenue contributing around 5% of Focus’ 2005 total revenue. The CFO had earlier told us that the loan was to provide renminbi liquidity because Focus’ IPO proceeds were in US dollars, and that the related parties revenue flowed from Focus operating an office in a Shanghai science park, so that revenue from all fellow residents of that science park (notably Samsung Electronics and an online wedding arranger) was treated as “related”. Focus does not intend to publish the letter, and aims to release the annual report “shortly”,</P>