How Merrill Lynch Assisted I C B C during the IPO Process Section: 2 Group: 3

Agenda Environment of Investment Bank Background of Merrill Lynch Case study: ICBC

Global IPO situation First three quarters of 2006 % Change in Proceeds ($US mils) Number of Issues Number of Issues United States 30,241.9 126 28,468.3 162 6.2% Asia Pacific ex Australia 34,635.4 241 17,372.0 296 99.4% Australia 2,070.7 35 4,842.3 57 -57.2% EMEA* 63,971.5 278 38,626.5 229 65.6% Japan 10,111.7 144 5,833.9 119 73.3% *EMEA-Europe, Middle East & Africa Source: http://thomsonfinanacial.co.jp/pdf/3Q06ECMEng3Q06.pdf

Performance of Investment Banks 1/1/2006-9/30/2006 1/1/2005-9/30/2005 Bookrunner Proceeds US$m Rank Mkt. Share No. Deals Chg. In Mkt. Share Morgan Stanley 15,367.5 1 10.2 53 3 8.2 2.0 Goldman Sachs & Co 14,603.6 2 9.7 43 8.4 1.3 UBS 13,010.2 8.7 47 4 6.2 2.5 JP Morgan 10,233.4 6.8 37 8 3.8 3.0 Credit Suisse 8,466.5 5 5.6 41 9.3 -3.7 Merrill Lynch &Co Inc 7,790.5 6 5.2 38 6.0 -0.8 Top Ten Total 92.092.6 61.2 352 49.4 Industry Total 150,457.7 100 877 Source: http://thomsonfinanacial.co.jp/pdf/3Q06ECMEng3Q06.pdf

Background of Merrill Lynch formed on January 6,1914 became publicly traded company on June 23, 1971 presence in 35 countries and territories outside the United States e.g. United States, Europe Merrill Lynch Financial Centre – New York

Three business segments: Global Markets and Investment Banking Group (“GMI”) Global Private Client (“GPC” ) Merrill Lynch Investment Managers (“MLIM”) Merrill Lynch Financial Centre – London

Main revenue come from Global Markets and Investment Banking Group (“GMI”)

The duties of “GMI” are: - Securities underwriting - Strategic advisory services, including:      - Mergers and acquisitions      - Strategic valuation      - Other corporate finance and advisory activities For example: ICBC has hired Merrill Lynch to arrange its IPO of more than US$10 billion in 2006.

Background of ICBC leading financial player in China multi-dimension business structure market competitiveness premier brand value

Its business lines include: Liabilities business Assets business Intermediary business

Corporate Strategy Diversify Revenue and Asset Mix Prudently Grow , Enhance Credit Portfolio Continue to Improve Customer Mix and Profitability Strategically Expand Traditional Branch Network and Enhance Sales and Marketing Continue to Strengthen Risk Management and Internal Control Capabilities Leverage Partnerships Enhance Employee Performance

Case study: How Merrill Lynch Assisted I C B C during the IPO Process

How Merrill Lynch featured in the process of the IPO of ICBC hire Merrill Lynch, Credit Suisse, China International Capital Corp and, ICEA more than US$10 billion

Problem solving on 1 Sep and 11 Sep, 2006 (on 1September, 2006) ICBC A +H technical retard (on 11 September, 2006 ) problem has been solved

Approval of IPO on 21 Sep, 2006 received provisional approval initial public offering selling 13 billion Class A shares and 35.39 billion Class H shares

Global Road shows from 9 Oct to 19 Oct,2006 started its international road show first briefing for institutional investors about: -ICBC will launch its IPO next Monday (16 Oct). -Trading in both A shares and H shares of the bank will commence on 27 Oct.

Day of issue from 16 Oct to 23 Oct,2006 The minimum entering price of ICBC IPO is $3,101. take the ICBC IPO application forms from banks from white electronic IPO (https://www.eipo.com.hk).

The close of the application lists 19 Oct, 2006 12: 00 noon 1)The close of the application lists of 1398.HK International placing is over subscription for over 30 times HK IPO retail over 76 times attracts roughly over $418.3 billions worth of orders 2)IPO A is issued on-line

HK Economic Journal (信報) 2006-10-20

Price confirmation of A and H shares on 23 Oct, 2006 1)Both shares are priced at the top end of the indicative price range (HK$2.56-$3.07) A share: RMB$3.12 while H share:HK$3.07 2)A-shares offered in Shanghai: 3.12 Yuan at the limit of the IPO range of 2.60-3.12 Yuan

HK Economic Times (香港經濟日報) 2006-10-18

Result announcementon 26 Oct, 2006

HK Economic Times (香港經濟日報) 2006-10-20

The First Day of Trade on 27 Oct, 2006 Start to be listed and traded H share Hong Kong 1398.HK A share Shanghai 601398.SS

The First Day of Trade on 27 Oct, 2006

The First Day of Trade on 27 Oct, 2006 Closing Price H share: HK$3.52, a 14.66% rise A share: RMB$3.28, a 5% rise

Our group’s conclusion

1. Inspired other banks The world’s biggest IPO Prepared for over a year Need management system It’s successful

2. A and H shares simultaneously list List on 27th Oct, 2006 H shares $ 3.07 A shares $ 3.12 yuan

3. Price of the IPO can be higher

4. eIPO First time issue No need to go to bank Through internet 3 banks or PPS (HSBC, Hengseng, China Bank)

Limitation Send back the signature Need to register first In English

Thank You ! Merrill Lynch!