Xinhua Far East Assigns AA- Issuer Rating to Guangzhou Development Industry (Holdings) Co., Ltd.

Xinhua Far East Assigns AA- Issuer Rating to Guangzhou Development Industry (Holdings) Co., Ltd.

February 27, 2006

    HONG KONG, Feb. 27 /Xinhua-PRNewswire/ -- Xinhua Far
East China Ratings today assigned Guangzhou Development
Industry (Holdings) Co Ltd ("the Company", SH A
600098) with an AA- domestic currency issuer credit rating.
The rating outlook is stable.

    The rating reflects the Company's competitive market
position in terms of target region, its scale of operation
and its power generating efficiency compared with
Guangzhou's other power generation corporations.  The
Company's consistent growth is underpinned by strong demand
for power in Guangzhou city, its main sales market in recent
years.  The rating also takes into account the considerable
government support the Company enjoys from its indirect
controlling shareholder, the Guangzhou Municipal
Government.  

    On the other hand, Xinhua Far East expects the
Company's profit margin will continue to dwindle, given the
mounting operational risks associated with the deregulation
of power coal prices in China.  Xinhua Far East also notes
that although the Company's new operations in energy
logistics have replaced power generation as the largest
contributor to revenue, these operations have not proved
successful but rather have placed a strain on the Company's
overall profitability.  In line with this, Xinhua Far East
expects that power generation will remain the primary
source of the Company's earnings, while its plans for
business diversification face uncertainties.

    Nevertheless, considering the Company's relatively low
debt ratios, stable cash flows and solid cash reserves,
Xinhua Far East believes that the Company's sound financial
situation will enable it to meet future capital expenditure
and support its current rating. 

    The rating outlook is stable, given the fast economic
growth in Guangdong Province, the Company's sound financial
profile and the expected growth to be gained by entering
into projects, via its strong relationship with the
government, which generate stable cash flow. 

    As of September 30, 2005, Guangzhou Development
Industry (Holdings) had registered capital of about RMB2.06
billion and consolidated total assets of about RMB10.8
billion.  The Company's attributable installed capacity was
996.6 MW as of June 30, 2005.

    Guangzhou Development Group Co Ltd is the largest
shareholder of Guangzhou Development Industry (Holdings),
with a 78.18% stake.  Guangzhou Development Group Co Ltd is
100% controlled by Guangzhou Municipal Government. 

    Guangzhou Development Group Co Ltd is a constituent in
the Xinhua/FTSE China A50 Index.  As of February 24, 2006,
the total market cap of the company accounted for RMB8.5
billion with an investable market cap of RMB3.4 billion.

    For the rating report summary, please visit
http://www.xinhuafinance.com/creditrating .

    About Xinhua FTSE China A50 Index
    
    The FTSE/Xinhua China A50 Index is a real-time tradable
index comprising the largest 50 A Share companies by full
market capitalization. Designed to meet the needs of QFIIs,
it can be used as a basis for both on-exchange and OTC
derivative products, mutual funds and ETFs.  For daily data
and further information, see www.xinhuaftse.com.

    About Xinhua Far East China Ratings

    Xinhua Far East China Ratings (Xinhua Far East) is a
pioneering venture in China that aims to rank credit risks
among corporations in China.  It is a strategic alliance
between Xinhua Finance (TSE Mothers: 9399), and Shanghai
Far East Credit Rating Co., Ltd.  Shanghai Far East became
a Xinhua Finance partner company in 2003 and the first
China member of The Association of Credit Rating Agencies
in Asia in December 2003.

    Capitalizing on the synergy between Xinhua Finance and
Shanghai Far East, Xinhua Far East's rating methodology and
process blend unique local market knowledge with
international rating standards.  Xinhua Far East is
committed to provide investors with independent, objective,
timely and forward-looking credit opinions on Chinese
companies.  It aims to help investors differentiate the
credit risks among the corporations in China, thereby,
cultivating their awareness and promoting information
disclosures and transparency in China market.  For more
information, see http://www.xfn.com/creditrating . 

    About Xinhua Finance Limited

    Xinhua Finance Limited is China's unchallenged leader
in financial information and media, and is listed on the
Mothers board of the Tokyo Stock Exchange (symbol: 9399)
(OTC ADRs: XHFNY).  Bridging China's financial markets and
the world, Xinhua Finance serves financial institutions,
corporations and re-distributors through four focused and
complementary service lines: Indices, Ratings, Financial
News and Investor Relations.  Founded in November 1999, the
Company is headquartered in Shanghai with 21 news bureaus
and offices in 18 locations across Asia, Australia, North
America and Europe. For more information, please visit
http://www.xinhuafinance.com .

    About Shanghai Far East Credit Rating Co., Ltd

    Shanghai Far East Credit Rating Co., Ltd. is the first
and leading professional credit rating company with
comprehensive business coverage in China.  It is an
independent agency established by the Shanghai Academy of
Social Sciences with the mission to develop internationally
accepted standards for capital market in China.  The company
is a pioneer in conducting bond-rating business in China. 
For years, it has been authorized by the Shanghai branch of
the PBOC to undertake loan certificate credit rating.

    Since establishment, it has rated over 1,000 corporate
long-term bonds and commercial papers, based on the
principles of objectivity, fairness and independence.  The
company has also maintained over 50% market share in the
loan certificate-rating sector in Shanghai for three
consecutive years.  With its strong local presence and
knowledge, it provides investors with unique and the most
insightful credit opinion.  For more information, see
http://www.fareast-cr.com .

    For more information, please contact:

    Hong Kong
     Joy Tsang
     Director of Corporate Communications
     Xinhua Finance
     Tel:   [phone] or
[phone]
     Email: [e-mail]

    US
     David Leeney
     Taylor Rafferty (IR/PR Contact in US)
     Tel:   [phone]
     Email: [e-mail]

SOURCE  Xinhua Far East China Ratings