09:36     MEXAN<00022> - Announcement (2)                                     

    the Property have been determined after arm's length                      
    negotiations between the parties by reference to the                      
    market value of the Property ("Market Value"). The                        
    Market Value represented the value of the Property                        
    as at 20 December 2004 according to a valuation report                    
    issued on 23 December 2004 by an independent valuer                       
    namely "Shanghai Real Estate Appraisers Co. Ltd." (*)                     
    licenced by "Shanghai                                                     
    Municipal Housing, Land and Resources Administration                      
    Bureau" (*) with "Real Estate                                             
    Valuation Institute Qualification Certificate" (*) no.*(2004)001 on 1     
    April 2004.                                                               
                                                                              
    The consideration of RMB110,864,000 for the Property                      
    represents a discount of approximately 18% compare                        
    to the Market Value of RMB135,200,000. Further, the                       
    Directors believe that the property market in                             
    Shanghai will be prosperous for forthcoming few years                     
    and therefore consider it in the interest of the                          
    Company and its shareholders as a whole to commit at                      
    this stage the purchase of the Property.                                  
                                                                              
    There is no deposit need to be paid. The consideration                    
    for the purchase of the Property was settled in cash                      
    on 29 December 2004. The Property is expected to be                       
    transferred to the Purchaser after construction work                      
    of the project related to the Property is completed,                      
    which is expected to be on or before 30 December 2006.                    
    The commercial property title certificate is expected                     
    to be received on or before 28 February 2007 and it                       
    is normal for the relevant authorities to issue title                     
    certificate within such time frame.                                       
                                                                              
    To the best of the Directors' knowledge, information                      
    and belief having made all reasonable enquiry, the                        
    Vendor and the ultimate beneficial owners of the                          
    Vendor are third parties independent of the Company                       
    and its connected persons (as defined in the Listing                      
    Rules).                                                                   
                                                                              
    REASONS FOR AND BENEFITS OF THE ACQUISITION OF THE                        
    PROPERTY                                                                  
                                                                              
    The Directors consider that the acquisition of the                        
    Property will enable the Company to expand its                            
    property business in the PRC and thereby diversify                        
    the Group's revenue base. The development project                         
    where the Property is located comprises residential                       
    units, shopping and commercial complex, is situate                        
    at the major crossroad of Huacao Zhen, Minhang                            
    District, and will be the most luxurious set up in                        
    this district and the only set up in the vicinity                         
    within which commercial units are available. Further,                     
    market research on performance of Shanghai commercial                     
    property markets over the past five years showed that                     
    the rental indexes are on the upward trends and the                       
    vacancy rates are on the downward trends and as such                      
    the Directors are of the view that the acquisition                        
    of the Property is in the interest of the Company and                     
    the terms of the Agreement are on normal commercial                       
    terms, which are fair and reasonable as far as the                        
    shareholders of the Company are concerned.                                
                                                                              
    Depending on the market situation, the Property will                      
    be rented out or may be resold at a profit and thereby                    
    generating revenue for the Group. The Vendor will not                     
    get a share of the rent or the profit from re-sale                        
    derived from the Property. The Vendor bears all the                       
    development costs of the Property. It is the Vendor's                     
    commercial decision to sell the