China Southern Airlines, the nation's largest carrier, said Monday it
plans to issue one billion A shares to raise 2.64 billion yuan (321
million dollars) for new aircraft.

The offer, to be launched on Thursday this week, will fund the
purchase of Boeing B737-800 passenger planes, it said in a statement
published in the Shanghai Securities News.

The company will sell the shares at 2.70 yuan each, reflecting a
price-to-earnings ratio of 18 based on its fully-diluted earnings per
share for 2002.

China Galaxy Securities Co. Ltd. is the main underwriter of the issue
and the shares will be listed on the Shanghai Stock Exchange.

Guangzhou-based China Southern, Asia's fifth biggest airline,
recorded a net profit of 513.35 million yuan in 2002, against 417.05
million yuan in 2001.

The company said risks for investors include insufficient cash flow,
seasonal factors, macroeconomic conditions and possible regulatory
changes by the Civil Aviation Administration of China.

The airline signed a deal with Boeing in October 2001 for procurement
of 20 737-800 aircraft by 2005 to replace the same number of older
model 737s.

The company was hard hit during the recent outbreak of Severe Acute
Respiratory Syndrome, with thousands of flights cancelled.
