09:25     CHINA RES CMENT<00712>-Announcement&Resumption of Trading(3)        

    Company by the long stop date, the Share Swap Agreement shall             
    automatically be terminated and be null. The Company and the Vendors      
    acknowledge that the above conditions 1 and 2 are requirements under the  
     Listing Rules, which cannot be waived.                                   
                                                                              
    Completion:   It is expected that the Acquisition will be completed on    
    or before 28 February 2005.                                               
                                                                              
    MEMORANDUM OF STRATEGIC ALLIANCE                                          
                                                                              
    Pursuant to the Share Swap Agreement, the Company and the Vendors will    
    enter into a Memorandum of Strategic Alliance in connection with the      
    cement manufacturing business upon completion of the Acquisition. The     
    Company and the Vendors desire to strengthen their alliance by            
    cooperating in the (i) supply of clinker by Sumitomo Corporation; (ii)    
    supply of granulated blast furnace slag by Sumitomo Corporation; and      
    (iii) assistance to be rendered by secondees of the Vendors for the       
    development of the cement manufacturing business of the Group. Under      
    this Memorandum of Strategic Alliance, the Company will enter into a      
    material supply agreement and an agreement for secondment with the        
    Vendors. The term of the Memorandum of Strategic Alliance is five years   
    from the date on which it comes into effect, unless terminated            
    otherwise.                                                                
                                                                              
    (i)    Material supply agreement                                          
                                                                              
    The Company will agree to purchase and Sumitomo Corporation will agree    
    to supply an annual total volume of not less than 600,000 tonnes of       
    clinker at mutually acceptable price for the future ten years. The        
    pricing shall be determined annually and each transaction is subject to   
    the signing of separate sale and purchase contract.                       
                                                                              
    (ii)    Agreement for secondment                                          
                                                                              
    The Vendors will arrange secondees to the Company to assist the Group in  
     the development of its cement manufacturing business. The principal      
    responsibilities of the secondees include (a) rendering technical         
    assistance to the cement factories of the Group; (b) giving advice on     
    how to enhance efficiency in production, and sales planning and           
    coordination, including export matters, of the Group; and (c) assisting   
    in feasibility study of new projects in cement manufacturing and related  
     businesses. The Company will pay annual management fees of HK$300,000    
    to each of Sumitomo Corporation and UBE Industries during the term of     
    the agreement which runs concurrently with the Memorandum of Strategic    
    Alliance.                                                                 
                                                                              
    SHAREHOLDING BEFORE AND AFTER THE ISSUE OF CONSIDERATION SHARES AND       
    CONVERSION SHARES                                                         
                                                                              
    The table below shows the shareholding before and after the issue of the  
     Consideration Shares and the Conversion Shares:                          
                                                                              
             After the issue of the    After the issue of the                 
             Consideration Shares and   Consideration Shares and              
             the Conversion Shares   the Conversion Shares                    
             (assume Qualifying    (assume no Qualifying                      
             Shareholders take up all the    Shareholders take up the         
       Before the issue of the   After the issue of the   Bonds under the     
        Bonds under the                                                       
       Consideration Shares    Consideration Shares   Clawback Offer)         
    Clawback Offer)                                                           
    Shareholders   No. of Shares       %      No. of Shares       %      No.  
     of Shares       %      No. of Shares       %                             
                                                                              
    China Resources Holdings   270,132,647       74.5%       270,132,647      
           70.8%      570,132,647      72.9%      670,132,647      85.7%      
    Public                                                                    
      Sumitomo Corporation    -      0.0      7,600,000       2.0%            
    7,600,000      1.0%      7,600,000      1.0%                              
      Sumitomo (Hong Kong)    -      0.0      1,900,000       0.5%            
    1,900,000      0.2%      1,900,000      0.2%                              
      UBE Industries    -      0.0       9,500,000       2.5%      9,500,000  
          1.2%      9,500,000      1.2%                                       
      Other shareholders    92,674,814       25.5%      92,674,814            
    24.2%      192,674,814      24.7%      92,674,814      11.9%              
                                                                              
       362,807,461       100.0%       381,807,461       100.0%                
    781,807,461      100.0%      781,807,461      100.0%                      
                                                                              
    Reference is made to the circular of the Company dated 24 December 2004   
    in relation to, amongst other things, the Subscription Agreement and the  
     announcement of the Company dated 10 January 2005 regarding the results  
     of extraordinary general meeting. As at the date of this announcement,   
    the Subscription Agreement is completed and the Bonds of an aggregate     
    principal amount of HK$800.0 million have been issued by China Resources