09:24     SINOTRONICS<01195> - Announcement (1)                               

    The Stock Exchange of Hong Kong Limited takes no responsibility           
    for the contents of this announcement, makes no representation as         
    to its accuracy or completeness and expressly disclaims any               
    liability whatsoever for any loss howsoever arising from or in            
    reliance upon the whole or any part of the content of this                
    announcement.                                                             
                                                                              
    SINOTRONICS HOLDINGS LIMITED                                              
    (Incorporated in the Cayman Islands with limited liability)               
    (Stock Code: 1195)                                                        
                                                                              
    ANNOUNCEMENT                                                              
                                                                              
    Reference is made to the announcement of the Company made on 24           
    November 2004.                                                            
                                                                              
    The Board wishes to advise that the Legal Opinion which identified        
    that the funding of RMB30,000,000 advanced to the Third Party by          
    Fujian Fuqiang pursuant to agreement entered into on 29 March 2004        
    (``the Agreement''), is not a loan agreement but an investment            
    agreement which does not contravene with the relevant PRC laws and        
    regulation, except that the 8% return of the investment capital           
    is unenforceable, and that the Memorandum and Articles of                 
    Association of Fujian Fuqiang does not contain any provisions             
    prohibiting the transaction.                                              
                                                                              
    Notwithstanding the legal opinion, the Company's auditors                 
    considered that the transaction should be accounted for and               
    presented in accordance with its substance and economic reality,          
    and not merely in its legal form; thus, an entry as a loan was made       
    accordingly in the financial statements of the Company for the year       
    ended 30 June 2004.                                                       
                                                                              
    To avoid causing confusion to the public, the Company made the            
    Announcement to name it as a loan agreement to be in conformity           
    with the accounting treatment of the transaction under the said           
    financial statements where it was named as a loan receivable,             
    notwithstanding the view taken by the Company's legal adviser in          
    the PRC. The Board was also of the opinion that the Announcement          
    has disclosed the essential elements of the transaction as                
    required under Rule 13.16 of the Listing Rules, irrespective of           
    whether the transaction was treated as a loan or an investment.           
                                                                              
    The Board wishes to further advise that to minimise the confusion         
    and concerns of the shareholders, the Third Party confirmed that          
    they will refund the investment capital of RMB30,000,000 and the          
    8% return to Fujian Fuqiang in March 2005. Consequently, the              
    Company will no longer be participating in the designing,                 
    production and packaging of certain circuit boards in the project         
    of the Third Party upon the receipt of investment capital. In spite       
    of the refund, the Board is of the opinion that the co-operation          
    between the Company and the Third Party was not affected.                 
                                                                              
    This announcement has been made at the request of the Stock               
    Exchange of Hong Kong Limited (``the Announcement'').                     
                                                                              
    Reference is made to the announcement of the Company made on 24           
    November 2004.                                                            
                                                                              
    The board of directors (``Board'') of Sinotronics Holdings Limited        
    (the ``Company'') wishes to advise that the Company had obtained          
    a legal opinion (``the Legal Opinion'') from the Company's adviser        
    in the People's Republic of China (``PRC'') was obtained, which           
    identified that the funding of RMB30,000,000 advanced to *(``the          
    Third Party'') by Fujian Fuqiang Delicate Circuit Plate Co., Ltd.         
    (``Fujian Fuqiang'') pursuant to the Agreement, is not a loan             
    agreement but an investment agreement which does not contravene           
    with the relevant PRC laws and regulation, except that the 8%             
    return of the investment capital is unenforceable, and that the           
    Memorandum and Articles of Association of Fujian Fuqiang does not         
    contain any provisions prohibiting the transaction.                       
                                                                              
    Notwithstanding the Legal Opinion, the Company's auditors                 
    considered the transaction should be accounted for and presented          
    in accordance with its substance and economic reality, and not            
    merely in its legal form; thus, an entry as a loan was made               
    accordingly in the financial statements of the Company for the year       
    ended 30 June 2004.