GUANGZOU, China - July 7, 2003 - The Board of Directors of China Southern Airlines Company Ltd., is pleased to announce that the Company received the approval of the CSRC for the A Share Issue on July 4, 2003.

The Prospectus will be published on the website of the Shanghai Stock Exchange and a summary of the Prospectus will be published in newspapers in the PRC on July 7, 2003.

An application will be made to the Shanghai Stock Exchange for the listing of the A Shares. The Prospectus includes the GroupÁøs audited financial information for each of the three years ended December 31, 2002 and the GroupÁøs unaudited financial information for the period from January 1, 2003 to April 30, 2003 prepared in accordance with PRC GAAP.

The Board is pleased to announce that the Company received the approval of the CSRC for the A Share Issue on July 4, 2003. The Prospectus will be published on the website of the Shanghai Stock Exchange at www.sse.com.cn and a summary of the Prospectus will be published in the PRC newspapers on July 7, 2003.

An application will be made to the Shanghai Stock Exchange for the listing of the A Shares. The Prospectus includes the GroupÁøs audited financial information for each of the three years ended December 31, 2002 and the GroupÁøs unaudited financial information for the period from January 1, 2003 to April 30, 2003 prepared in accordance with PRC GAAP. The PRC auditors of the Group are KPMG Huazhen, a firm of certified public accountants in the PRC.

1,000,000,000 domestically listed ordinary A Shares of par value RMB1.00 each, representing approximately 22.9% of the total share capital of the Company after the A Share Issue will be issued at RMB2.70 per A Share.

Target subscribers include secondary market investors who are independent of the Company and its subsidiaries and their promoters, directors, supervisors, chief executive, substantial shareholders and their respective associates and who have RMB denominated ordinary A shares listed on the Shanghai Stock Exchange or the Shenzhen Stock Exchange with a market value of RMB10,000 or above as at the time of closing of trading on July 7, 2003

The 1,000,000,000 A Shares will be fully underwritten by China Galaxy Securities Company Limited as lead manager, an independent third party unconnected with the promoters, directors, supervisors, chief executive or substantial shareholder of the Company or any of its subsidiaries or an associate of any of them.

The Board believes that the A Share Issue will allow the Company to access another funding channel, provide additional currency for the acquisition of PRC assets, and enhance the shareholdersÁø base.

The net proceeds from the A Share Issue, after deducting expenses, will be used to purchase Boeing 737-800 aircraft and related onboard fittings and equipment, in replacement of 20 existing Boeing 737-300 and Boeing 737-500 aircraft, the operating leases of which are expiring.

Details of the purchase of aircraft were disclosed previously in the CompanyÁøs press announcement dated October 3, 2001 and the CompanyÁøs circular to shareholders dated October 26, 2001.

If the net proceeds of the A Share Issue exceed the sums required for the foregoing purposes, the surplus will be used to repay the CompanyÁøs long-term debt due for repayment
within one year and to supplement the CompanyÁøs working capital; if the net proceeds of the A Share Issue are insufficient for the foregoing purposes, the shortfall will be raised through commercial borrowings.

According to the terms of the contract between the Company and the Boeing Company for the purchase of 20 Boeing 737-800 aircraft, the delivery of the 20 aircraft will take place between August 2002 and March 2005.

Upon receipt of the proceeds of the A Share Issue, the Company will make the advance payments and payment of the outstanding balance in accordance with the payment schedule.

The largest airline in The PeopleÁøs Republic of China for the past 23 years, China Southern Airlines www.cs-air.com/en connects more than 80 cities around the globe. Major business and vacation destinations served in China include: Beijing, Chengdu, Guangzhou, Guilin, Hong Kong, Kunming, Shanghai, Shenzhen and Wuhan and as well as international service, including: Amsterdam, Bangkok, Fukuoka, Hanoi, Ho Chi Minh City, Islamabad, Kuala Lumpur, Jakarta, Los Angeles, Manila, Melbourne, Moscow, Osaka, Penang, Phnom Penh, Seoul, Singapore, Sydney and Tokyo.

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