09:45     HON PO GROUP<00228> - 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 contents of this announcement.                   
                                                                              
                                                                              
    Hon Po Group (Lobster King) Limited                                       
    (Incorporated in the Cayman Islands with limited liability)               
    (Stock code: 228)                                                         
                                                                              
    PLACING OF EXISTING SHARES                                                
    AND                                                                       
    SUBSCRIPTION OF NEW SHARES                                                
                                                                              
                                                                              
    On 20 January 2005, the Vendor and Yicko entered into the Placing         
    Agreement where Yicko has been appointed as the Placing Agent to place    
    126,000,000 existing Shares beneficially owned by the Vendor to           
    independent investors at a price of HK$0.0624 per Placing Share on a      
    best effort basis. This price was determined after arm's length           
    negotiation among the Vendor, the Placing Agent and the Company and       
    represents (i) a discount of approximately 20% to the closing price of    
    HK$0.078 per Share as quoted on the Stock Exchange on 20 January 2005,    
    being the date of this announcement; and (ii) a discount of               
    approximately 14.52% to the average closing price of HK$0.073 per Share   
    as quoted on the Stock Exchange for the five consecutive trading days     
    ended 20 January 2005.                                                    
                                                                              
    On the same date, the Vendor and the Company entered into the             
    Subscription Agreement where the Vendor has conditionally agreed to       
    subscribe and the Company agreed to allot and issue 126,000,000           
    Subscription Shares at a price of HK$0.0624 per Subscription Share.       
    After deducting expenses, the net price is approximately HK$0.0603 per    
    Subscription Share.                                                       
                                                                              
    The net proceeds of the Subscription are expected to be approximately     
    HK$7,600,000, after taking into consideration of the placing commission   
    payable to the Placing Agent and other accrual expenses and will be used  
     as general working capital of the Group.                                 
                                                                              
    The Placing Shares represents approximately 20% of the existing issued    
    share capital of the Company and approximately 16.67% of the Company's    
    issued share capital as enlarged by the issue of the Subscription         
    Shares. The Subscription Shares will be alloted and issued pursuant to    
    the resolutions passed at the annual general meeting of the Company held  
     on 27 May 2004 authorising the directors to issue new Shares up to a     
    maximum of 20% of the issued share capital of the Company as at the date  
     of the said annual general meeting.                                      
                                                                              
    Completion of the Subscription is subject to the satisfaction of certain  
     conditions as described below.                                           
                                                                              
    THE PLACING                                                               
                                                                              
    Date   :   20 January 2005                                                
                                                                              
    Vendor   :   The Vendor, the controlling shareholder of the Company,      
    which is interested in approximately 60.32% of the existing issued share  
     capital of the Company.                                                  
                                                                              
    Placing Agent   :   Yicko has been appointed as the Placing Agent to      
    place the Placing Shares on a best effort basis. The Placing Agent is     
    not a connected person (as defined in the Listing Rules) of the Company.  
                                                                              
                                                                              
    Placees   :   Not less than six placees who will be independent           
    individual, corporate and/or institutional investors. Such placees and    
    their ultimate beneficial owners will not be connected person(s) (as      
    defined in the Listing Rules) of the Company and will be independent      
    third parties and not connected with the directors, chief executive or    
    substantial shareholders of the Company or any of its subsidiaries or     
    any of their respective associates (as defined in the Listing Rules).     
                                                                              
    Number of    :   126,000,000 existing Shares, representing approximately  
     20% of the existing issued share capital of 630,000,000                  
      Placing Shares      Shares of the Company and approximately 16.67% of   
    the issued share capital of the Company as enlarged by the Subscription   
    to 756,000,000 Shares.                                                    
                                                                              
    Placing Price   :   HK$0.0624 per Placing Share. This price was           
    determined after arm's length negotiation among the Vendor, the Placing   
    Agent and the Company and represents (i) a discount of approximately 20%  
     to the closing price of HK$0.078 per Share as quoted on the Stock        
    Exchange on 20 January 2005, being the date of this announcement; and