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July , 2007

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July , 2007

    First State Cinda Leaders Growth Equity Securities Investment Fund

    2007 Second Quarterly Report

    July 18, 2007

    First State Cinda Leaders Growth Equity Securities

    Investment Fund Quarterly Report

    ;Second-Quarterly2007?

1. THE IMPORTANT HINTS

    [English translation for reference only. Should there be any inconsistency between the Chinese and English versions, the Chinese version should prevail.]

    The BOD and directors of the Company promise that there is no existence of untrue record, misleading statements or material omission in the contents, and take individual and joint liability for the authenticity, accuracy and integrity of the report contents.

    The fund custodian China Construction Bank, in accordance with the Fund Contract, rechecked the following contents of this report on 9 July 2007, including the financial indicators, fund performance and the statement of profit distribution, the financial and accounting reports, the investment portfolio, etc. The custodian confirms that there is no existence of untrue record, misleading statements or material omission in the rechecked contents.

    Fund manager promises to manage fund assets in the principles of honest trust and due diligence, but can not ensure the profitability of fund assets.

    The past performance of the Fund is not necessarily a guide to the future performance of the Fund. There exists no investment without risks. Investors shall read the Fund Prospectus carefully before making investment decisions.

    The financial materials in this report are unaudited. This report covers the period from April 1, 2007 to June 30, 2007.

2. THE FUND PRODUCT OVERVIEW

    Abbreviation of Fund Name? First State Cinda Leaders Growth

    Operational Type of Fund? Contractual and Open-end

    Effective Date of Fund Contract? March 8, 2007

    First State Cinda Leaders Growth Equity Securities Investment Fund

    2007 Second Quarterly Report

    Total Fund Shares at the 10,566,169,288.03 unit shares

    Reporting Period End?

    Investment Objective? The Fund picks out the quality companies which

    offer steady earnings growth, makes long-run

    investment on them in accordance with strict

    investment management procedures and achieves

    long-term capital appreciation of the Fund assets

    through a share of the sustainable value growth of

    those companies.

    Investment Strategy? The Fund centers on the bottom-up well-chosen

    securities strategy, properly utilizes the asset

    allocation strategy and sector allocation strategy to

    adjust the investment orientation, controls the risks

    systematically and effectively, picks out the quality

    companies which can combat against multi-wave

    economic fluctuations and offer steady earnings

    growth, makes long-run investment on them in

    accordance with strict investment management

    procedures and achieves long-term capital

    appreciation of the Fund assets through a share of the

    sustainable value growth of those companies.

    Performance Benchmark: Shanghai Shenzhen 300 Index Yield * 80% + China

    Bonds Index Yield* 20%

    Return & Risk Features? Equity fund with relative high return and relative

    high risk

    Fund Manager? First State Cinda Fund Management Co., Ltd

    Fund Custodian? China Construction Bank Corporation Limited

    3. THE MAJOR FINANCIAL INDICATORS & THE FUND PERFORMANCE The following fund performance indicators do not count in the expense from fund

    subscription or transaction by fund unit holders (e.g., fund subscription and

    redemption commission etc). The actual return will be lower than the listed figures

    when the expense is reckoned in.

? Major Financial Indicators

    (Unit: RMB?)

    Net Return of Fund for This Period 253,756,860.41

    Net Return per Unit Share for This Period 0.0274

    Net Asset Value of Fund at the Period End 14,247,781,974.09

    Net Value per Unit Share at the Period

    End 1.3484

    First State Cinda Leaders Growth Equity Securities Investment Fund

    2007 Second Quarterly Report

    ? The Growth Rate of net Value per Share and its Comparison to the Performance Benchmark Yield in the Corresponding Period.

    Stages Growth Rate Standard Performance Standard

    of net Value Deviation of Benchmark Deviation of

    Growth Rate Performance per Share? Yield? ?)? ?)?

    of net Value Benchmark

    per Share? Yield?

    the past 3

    32.63% 2.20% 27.15% 2.02% 5.48% 0.18% months

    ? The Changes in the net Value per unit Share since the effective date of Fund Contract, and its Comparison to the Changes in Performance Benchmark in the Corresponding Period

    First State Cinda Leaders Growth Equity Securities Investment Fund Comparative Graph of Historical Trend of the Cumulative Growth Rate of net Value per

    Share and Performance Benchmark Yield in the Corresponding Period

    (From March 8, 2007 to June 30, 2007)

    Notes: 1). This Fund Contract went into effect on March 8, 2007. The Company began to

    conduct fund subscription and redemption businesses since May 10, 2007.

    2). This Fund mainly invests in stocks. Stock assets account for 60%-95% of the

    fund assets. Bond assets constitute 0%-35% of the fund assets. Cash and

    short-term financial instrument make up 5%-40% of the fund assets. The

    reserved cash or the government bonds and the Central Bank notes within 1

    year of expiration should be no less than 5% of the net asset value of the Fund

    for the purpose of meeting investors redemption requirement. According to

    First State Cinda Leaders Growth Equity Securities Investment Fund

    2007 Second Quarterly Report

    relevant rules, the Fund will achieve the above investment ratios within 6 months

    since the effective date of the Fund Contract.

4. FUND MANAGER REPORT

    ? Fund Manager

    Mr. Zeng Zhaoxiong: master degree of Economic, graduated from Peking University, with 15 years of work experience in security and fund business. Work Experience: Deputy Director of the Market Service Department of Shenzhen Exchange; General Manager of the International Operation Department of Union Securities Corporation; Asia-Pacific Strategy Analyst& Assistant to Fund Manager of Dresdner Asset Management Co., Ltd in London Headquarter; Assistant to CEO of ABN AMRO Xiangcai Fund Management Co., Ltd; Deputy Investment Director of Invesco Great Wall Fund Management Co., Ltd; Assistant to CEO, Fund Manager of Social Security 110 of China Merchants Fund Management Co., Ltd . Joined First State Cinda Fund Management Co. Ltd, in June 2006, and now serving as Company Investment Officer of First State Cinda Fund Management Co., Ltd and Fund Manager of First State Cinda Leaders Growth Equity Fund.

    ? Compliance of fund operation during the reporting period

During this reporting period, the Company complied strictly with the the Law on

    Securities Investment Fund, the Measures for the Administration of Securities

    Investment Fund Sales, the Measures for the Administration of Securities

    Investment Fund Operation, the Fund Contract, and other relevant laws and

    regulations and related rules of regulatory authority, and managed the fund asset in the principles of honest trust, due diligence, safe efficiency. During the reporting period, the Fund did not breach any rules of relevant laws and regulations on the investment portfolio proportion, nor did it have any behavior that would undermine fund investors interests.

? The Fund Performance and Investment Strategy

    ? The Fund Performance

Up to June 30, 2007, the net value per share was ?1.3484; during the reporting

    period, the growth rate of net value per share was 32.63%(while the performance

    benchmark yield in the corresponding period was 27.15%

    ? Market Review and Operation Analysis

    The Fund was officially established on March 8, 2007. The Second Quarter was the

    First State Cinda Leaders Growth Equity Securities Investment Fund

    2007 Second Quarterly Report

    stage in which the Fund improved the investment portfolio on the basis of the initial positions construction in the early March. Owing to the joint effort of the investment team, the Fund embraced favorable investment return during the reporting period(

    with the net growth rate per share over-performing the benchmark yield by 5.48%. Meanwhile, our effort has been recognized by investors. Ever since the Fund was opened to subscription and redemption business on May 10, the fund shares has increased from 8.334 billion to 10.566 billion ; and the fund asset value has raised from RMB?8.33 billion to RMB? 14.2 billion.

    The Fund has been established for only over three months. Three months is quite a short period for mutual fund management. However, during this period, the Chinese Capital Market witnessed dramatic changes: performance of listed companies growing rapidly and greatly in the first quarter, stocks with subjects speculated crazily, and the government regulating and controlling asset prince through monetary and financial polices. Faced with the situation of globally most expensive A-share market estimated in static PE ratio, large premium of A-share stocks compared to H-share stocks, market participants irrationally pricing partial capital assets, with listed companies achieving performance growth by stage and part quality companies increasing internal value continuously, an investor of long-run value has to make difficult decisions and choices.

    However, we firmly believed that there are three fundamental driving reasons for the

    stcurrent bull market: 1, the large increase of the profitability and capacity of the listed

    ndcompanies; 2, the over liquidity driven by the expectation on the RBM appreciation; rd3, the gradual change of market participants behaviors driven by the capital market

    reform. Among these reasons, the change of the listed companies’ profitability is the

    fundamental one. In March and at the beginning of this quarter, we applied some advanced indicators and company researches, and concluded that the listed companies’ performance would increase by a large scale in the first quarter or even in the whole year. However, at the same time, due to part of the market investors’ pursuit

    after the subject-related stocks and their ignorance of the internal value of listed companies, some companies’ stock price did not reflect the full picture of the

    companies internal value, growth trend and prospects. Therefore, we bought in the stocks of these companies determinedly at the time when the market adjusted or these stock prices fluctuated, and gradually increased the ratios of investment in these companies.

    During the reporting period, we created relative more value for investors from the chosen companies in the sectors of real estate, machinery, commercial and financial industry. However, the investment in the sectors of steel, food and beverage produced unobvious short-term effects. The market will continue to fluctuate in the second half year of 2007, and the net Fund value will inevitably be affected by the market fluctuation more or less. However, we have a strong confidence in the continuous internal value yield and growth of these companies. Hereby, we expect that, all the

    First State Cinda Leaders Growth Equity Securities Investment Fund

    2007 Second Quarterly Report investors of First Cinda Leader Growth shall judge the investment from a longer

    perspective, instead of over-concerning the short-term fluctuation of the net Fund

    value. We shall enjoy at more ease the long-term value appreciation of China capital

    market.

    5. THE INVESTMENT PORTIOLIO REPORT

    ? Asset Portfolio of Fund at the Reporting Period End.

    Items Amount (RMB Yuan) Ratio to total FUM

    Equity 13,032,035,394.93 90.3%

    Bonds 0.00 0.00

    Warrants 0.00 0.00

    Asset-backed Securities 0.00 0.00

    Total of Bank Deposit & Settlement Reserves 1,330,258,985.26 9.22%

    Other assets 69,894,694.47 0.48%

    Total 14,432,189,074.66 100.00%

? Equity Investment Portfolio Classified by Sector at the Reporting Period End.

    Market ValueRaito to the Net NO. Sectors ?Yuan? Fund Value (%)

    Agriculture, Forest, Livestock breeding and A fishery 38,879,870.40 0.27% B Mining industry 676,863,560.53 4.75% C Processing industry 5,444,162,32.95 38.21% C0 including?foodbeverages 670,136,859.69 4.70% C1 Textile, clothing ,fur 78,284,668.95 0.55% C2 Limber , furniture 0.00 0.00% C3 Paper making , printing 222,743,638.27 1.56% C4 Petrol , chemistry, plastic 88,757,381.58 0.62% C5 Electronic 39,011,709.57 0.27% C6 Metal and nonmetal 1,726,410,736.16 12.12% C7 Machinery, equipment, and apparatus 2,191,884,194.50 15.38% C8 Medical , biological products 424,589,293.96 2.98% C99 Others processing industry 2,343,838.27 0.02% D Producer and supplier of Electricity, gas, water 448,957,777.68 3.15% E Construction 102,863,545.24 0.72% F Transportation , storage 1,358,303,133.53 9.53% G IT 240,523,393.25 1.69% H Wholesaling ,retailing ,trading 848,591,470.64 5.96% I Financial industry and insurance 1,697,642,989.09 11.92% J Real estate 1,515,896,501.11 10.64%

    First State Cinda Leaders Growth Equity Securities Investment Fund

    2007 Second Quarterly Report

    K Social service 290,330,920.70 2.04%

    L Broadcasting and cultural industry 369,019,911.81 2.59%

    M Comprehensive sector 0.00 0.00%

     Total 13,032,035,394.93 91.47%

    Notes: Due to fraction rounding, the sum of the ratios of market value to the net fund

    value may have fractional variation from the total.

    ? List of top 10 Equity Holdings Sorted by the Proportion of Market Value to net Value of Fund Asset at the Reporting Period End

No. Stock Stock Name Quantity Market Value at Raito to the Net

    Code (Shares) Period end Fund Value (%)

    1 000002 Vanke-share 35,599,181 680,656,340.72 4.78%

    2 600036 China Merchants Bank 24,800,447 609,594,987.26 4.28%

    3 600019 BaoSteel Stock 47,762,702 525,389,722.00 3.69%

    4 000898 AnSteel Stock 23,953,072 423,729,843.68 2.97%

    5 HuDong Heavy 600150 2,962,492 409,534,894.08 2.87% Machinery

    6 600694 DaShang Stock 6,621,644 407,562,188.20 2.86%

    7 000402 Financial Street 13,348,762 387,114,098.00 2.72%

    8 Shanghai FuDong 600000 9,632,648 352,458,590.32 2.47% Development Bank

    9 601006 DaQin Railway 21,780,947 329,763,537.58 2.31%

    10 601318 PinAn of China 4,570,664 326,848,182.64 2.29%

    ? Bond Investment Portfolio Classified by Bond Types at the Reporting Period End.

    The Fund has not invested in Bonds by the reporting period end.

    ? List of the Top 5 Bonds Holdings Sorted by the Proportion of Market Value to net Value of Fund Asset at the Reporting Period End.

    The Fund has not invested in Bonds by the reporting period end.

    ? List of the Top 10 Asset-backed Securities Holdings Sorted by the Proportion of Market Value to net Value of Fund Asset at the Reporting Period End.

    The Fund has not invested in Asset-backed Securities by the reporting period end.

? Notes to the Investment Portfolio Report.

    ? The issuing entities of the top 10 securities in which the Fund invested were not

    investigated by the regulatory authority during the reporting period, or condemned

    First State Cinda Leaders Growth Equity Securities Investment Fund

    2007 Second Quarterly Report

    or punished openly by the regulatory authority during one year before the report preparation date.

    ? All of the top 10 equity in which the Fund invested were within the stock pool according to the Fund Contract.

? Other assets of the Fund during the reporting period

    Unit?RMB ?

    Trading Margin 2,944,657.40

    Receivable Sum for Securities Clearing 13,139,760.39

    Receivable Dividends 1,814,881.60

    Receivable Interests 369,443.53

    Receivable Sum of Fund Subscription 51,625,951.55

    Total 69,894,694.47

    ? The Fund did not hold any convertible bonds that are in the converting period at the reporting period end.

    ? The options and warrants obtained in the reporting period:

    At the reporting period end, the Fund was not holding any warrants. During the reporting period, the Fund obtained subscription warrant from the investment in the separately-traded convertible bonds, as follows:

    No. Name of Warrant Amount (Share) Total Cost?Yuan?

    1 Wuhan Steel CWB1 2,399,198 5,559,603.14

6. THE CHAGES IN THE OPEN-END FUND SHARES

    Unit: Share

Total Fund-share Amount at the Period Beginning 8,334,367,918.42

    Total Amount of Shares Subscribed during the Period 4,498,631,714.08

    Total Amount of Shares Redeemed during the Period 2,266,830,344.47

    Total Fund-share Amount at the Period End 10,566,169,288.03

7. BRIEF INTRODUCTION TO THE FUND MANAGEMENT COMPANY

    First State Cinda Fund Management Co. Ltd (hereinafter referred to as the “Company”), established on June 5, 2006, is a joint venture between China Cinda

    First State Cinda Leaders Growth Equity Securities Investment Fund

    2007 Second Quarterly Report

    Asset Management Corporation (China Cinda) and Colonial First State Group (CFSG), a wholly owned subsidiary of the Commonwealth Bank of Australia. It is the first fund management company held by a state-owned asset management company, and also the first Australian joint venture fund management in China. The Company has its head office in Shenzhen and a branch in Beijing with a registered capital of RMB100 billion. China Cinda invested 54 billion yuan in a 54 per cent stake of the fund company, while CFSG contributed 46 billion yuan for the remaining 46 percent.

    The Company has established a sound corporate governance structure, balancing Shareholder’s Meeting, Board of Directors and Supervisors in accordance with the

    Company Law of the People’s Republic of China”. The Company has established an

    Advisory Committee which reports to the Shareholdings’ Meeting. The Board of Directors has established two specialist committees, namely, Risk Control Committee and Remuneration & Evaluation Committee, and founded the independent-director system. The General Manager is responsible for the daily management of the Company, and various committees, including the Investment Review Committee and the Risk Management Committee are established to facilitate the business-discussion and decision-making process.

    The Company has established a sound organizational structure with 6 functional departments, namely, the Compliance Department, the Investment Research Department, the Market Development Department, the Operation Department, the Administrative & Personnel Department, and the Financial & Accounting Department. All of the departments cooperate based on division of work and defined duties and responsibilities. Currently, the Company has 41 employees, of which, 22 hold master’s and above degree, with an average of over 7 years’ work experience in the securities industry.

    Up to June 30, 2007, the Company has one fund under management - First State Cinda Leaders Growth Equity Fund, of which the FUM exceeding RMB 14 billion. 8. THE CATALOGUE OF DOCUMENTS FOR REFERNCE

    ? The Catalogue of Reference Document

    ? The Approval of Fund Launch by the China Securities Regulatory

    Commission

    ? The Fund Contract of First State Cinda Leaders Growth Equity Securities

    Investment Fund

    ?The Custody Agreement of First State Cinda Leaders Growth Equity Securities

    Investment Fund

    First State Cinda Leaders Growth Equity Securities Investment Fund

    2007 Second Quarterly Report

    ? The Fund Management Companys Business Qualification Certificate and

    Business License

    ? The Fund Custodians Business Qualification Certificate and Business

    License

    ? The disclosed net Fund asset value, net Fund value per unit and other

    provisional bulletins during the reporting period..

? The Places for Keeping Documents

    The reference documents are kept at the places of the fund management company and/or the fund custodian.

? The Method for Reviewing Documents

    The documents are available for free review at the office sites, operational sites and on the websites of the fund management company and/or the fund custodian, and are available for copies in a proper time after the necessary production cost is paid.

    First State Cinda Fund Management Company, Ltd

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