Profit Warning

Story: CNTD issued a profit warning that the group is likely to report losses for its 3Q08 results and for the full year Dec’08.

Point: The main contributors were due to: (i) a one time loss owing to the MTM losses expected from the settlement of its 5% dollar settled convertible bonds on 12th Sept’08, which Singapore Company Focus have previously provided for in their forecast, and (ii) an additional non-cash provision of RMB 220m due to a revaluation loss of RMB 400 from their retail properties. These items are non – cash in nature and excluding the above provisions, Singapore Company Focus expect the company to report positive operating profit for FY08.

Maintain HOLD and TP of 6c.