| China Eastern Airlines Corporation Ltd. | |||
| Ticker: | CEA | 2550 Hong Qiao Road, Hong Qiao International Airport | |
| Exchange: | New York Stock Exchange | Shanghai, CHINA 200335 | |
| Industry: | Transportation (SIC Code 4512) | ||
| Type of Shares: | American Depositary Receipts | Filing Date: | 1/10/97 | |
| U.S. Shares: | 6,300,000 | Offer Date: | 2/2/97 | |
| Non-U.S. Shares: | 7,700,000 | Filing Range: | $16.00 - $18.00 | |
| Primary Shares: | 14,000,000 | Offer Price: | $18.00 | |
| Secondary Shares: | 0 | Gross Spread: | $0.94 | |
| Offering Amount: | $238,000,000 | Selling: | $0.57 | |
| Expenses: | $10,000,000 | Reallowance: | $0.10 | |
| Shares Out After: | 44,000,000 |
| Manager | Tier | Phone |
| Morgan Stanley & Co. Incorporated | Lead Manager | (212) 761-5900 |
| CS First Boston | Co-manager | (212) 325-2000 |
| Merrill Lynch & Co. | Co-manager | (212) 449-4600 |
| Smith Barney Inc. | Co-manager | (212) 723-7300 |
| Issuer's Law Firm: | Sullivan & Cromwell |
| Bank's Law Firm: | Shearman & Sterling |
| Auditor: | Coopers & Lybrand |
| Registrar/Transfer Agent: | HKSCC Registrars Limited |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/95 | 6/30/96 | 6/30/96 | |||
| Revenue: | $793.00 | $397.10 | Assets: | $2,539.00 | |
| Net Income: | $181.20 | $30.80 | Curr Assets: | ||
| EPS: | $2.53 | $1.03 | Liabilities: | $2,283.90 | |
| Prior EPS: | $135.21 | Curr Liabilities: | |||
| Cash Flow/Oper: | Equity: | $255.10 | |||
| Cash Flow/Fin: | Cash: | ||||
| Cash Flow/Inv: | |||||
| Business Description |
| The company is one of the three largest air carriers in China. In 1995, the three largest airlines in China accounted for approximately 58% of total commercial air traffic, and more than 85% of the international and Hong Kong regional commercial air traffic, handled by Chinese airlines. The company, which provides passenger and cargo airline services, operates over 1,100 scheduled flights per week from 44 airports within China and abroad. The company's flights operate primarily from Shanghai's Hong Qiao International Airport, the hub of the company's domestic and international route network and the location of its corporate headquarters. In 1995, the company accounted for approximately one-third of total commercial take-offs and landings in Shanghai. According to estimates by the Civil Aviation Administration of China, the principal regulator of Chinese airlines, the company ranked number one among all Chinese airlines in management, service quality and on-time performance in each of 1993, 1994 and 1995. |
| Competition |
| The company faces varying degrees of competition in each of the markets its serves. In the future, competition from other Chinese airlines on the company's routes may increase as the CAAC de-emphasizes the importance of regional hubs in allocating such routes. |
| Business Plan |
| The company's strategy is to grow its business by building upon its strategic base and dominant presence in Shanghai. The company's goal is to improve its overall operating and financial performance while carefully controlling its operating costs. The company believes that its commitment to "safety first" and its strong safety record have contributed significantly to its ability to compete for passengers. The company believes that the airline industry in China could begin to consolidate as competition increases, and the company's long term goal is to maintain its position as one of the three dominant air carriers in China. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to make payments in respect of the acquisition of new aircraft and related spare parts and equipment, to finance the capital expenditures to be incurred in 1997 for the construction of airport facilities at the new Pudong airport and additional maintenance facilities at Hong Qiao Airport, for the acquisition of an A300-600R flight simulator, for other capital expenditures and for general corporate purposes. |