10:24     CATIC SHENZHEN<00161> - Announcement (3)                            

    distributable profits carried forward from the                            
    previous years.                                                           
                                                                              
    THE SHARE TRANSFER AGREEMENT II                                           
    Date    :       20 January 2005                                           
                                                                              
    Parties                                                                   
    Vendor  :       HS Econ                                                   
    Purchaser       :       the Company                                       
                                                                              
    Assets to be acquired                                                     
    The Nanguang Shares Portion II (being 930,600 Legal                       
    Person Shares free from encumbrance, which represent                      
    0.67% of the issued capital of Nanguang).                                 
                                                                              
    Consideration and Payment                                                 
    The consideration of the Acquisition II is                                
    RMB2,605,680 (equivalent to approximately                                 
    HK$2,458,189) (being RMB2.8 per share x 930,600                           
    shares) and is payable by the Company to HS Econ                          
    pursuant to the following schedule:                                       
                                                                              
    1.      Within 10 days upon granting of approval by the                   
    State-owned Assets Supervision and Administration                         
    Commission (*), an initial payment of                                     
    RMB781,704 (equivalent to approximately HK$737,457),                      
    being 30% of the total consideration of the                               
    Acquisition II (formal application for approval will                      
    be submitted to the authority subsequent to signing                       
    of the Share Transfer Agreement II);                                      
                                                                              
    2.      Within 10 days upon registration with the China                   
    Securities Depository and Clearing Corporation                            
    Limited, Shenzhen Branch (*), to transfer the Nanguang Shares Portion     
    II to the name of the Company, a further payment of                       
    RMB1,302,840 (equivalent to approximately                                 
    HK$1,229,094), being 50% of the total consideration                       
    of the Acquisition II; and                                                
                                                                              
    3.      Within 10 days upon registration with the Shenzhen                
    Administration Bureau for Industry and Commerce (*), of the transfer of   
    the Nanguang                                                              
    Shares Portion II, the balance of RMB521,136                              
    (equivalent to approximately HK$491,638), being 20%                       
    of the total consideration of the Acquisition II.                         
                                                                              
    Conditions Precedent                                                      
    The Share Transfer Agreement II will become effective                     
    upon fulfillment of the following conditions:                             
                                                                              
    (i)     obtaining of approval by HS Econ from the                         
    State-owned Assets Supervision and Administration                         
    Commission;                                                               
                                                                              
    (ii)    obtaining of approval by the Shareholders in the                  
    general meeting of the Company; and                                       
                                                                              
    (iii)   obtaining of waiver by the China Securities                       
    Regulatory Commission regarding the Company's                             
    obligation to make general offer to all the                               
    shareholders of Nanguang.                                                 
                                                                              
    If either condition (ii) or (iii) of the aforesaid                        
    conditions cannot be fulfilled or the Nanguang Shares                     
    Portion II, without default of HS Econ, cannot be                         
    transferred to the name of the Company, the Company                       
    will have the option to terminate the Share Transfer                      
    Agreement II. In that case, HS Econ is obliged to                         
    return all payment received to the Company together                       
    with an interest based on the 6-months bank lending                       
    rate within 10 days upon