10:06     SINOCHEM HK<00297> - Announcement & Resumption of Trading(4)        

    The Circular, containing the matters referred to herein, is               
    expected to be despatched to the Shareholders within seven days           
    after obtaining the approval from the Listing Committee of the            
    Company's new listing application.                                        
                                                                              
    In addition, as Completion is subject to the fulfillment of a             
    number of conditions as set out in the sub-paragraph headed               
    Conditions under the paragraph A headed The Acquisition Agreement         
    below, the Acquisition may or may not proceed. In particular, the         
    Executive may or may not grant the Whitewash Waiver and the new           
    listing application may or may not be approved.                           
                                                                              
    Shareholders and potential investors should exercise caution              
    when dealing in the Shares.                                               
                                                                              
    Suspension and resumption of trading                                      
                                                                              
    At the request of the Company, trading in the Ordinary Shares on          
    the Stock Exchange was suspended from 12.01 p.m. on 26 January            
    2005 pending the release of this announcement.  Application has           
    been made by the Company to the Stock Exchange for the resumption         
    of trading in the Ordinary Shares on the Stock Exchange with              
    effect from 9.30 a.m. on 31 January 2005.                                 
                                                                              
    A.   THE ACQUISITION AGREEMENT                                            
                                                                              
    Parties                                                                   
                                                                              
    1.   The Company, as purchaser                                            
                                                                              
    2.   Sinochem HK, a subsidiary of Sinochem Corporation, as vendor         
                                                                              
    Assets involved                                                           
                                                                              
    The entire issued share capital of the Fertiliser Company. The            
    Fertiliser Company was established to become the holding company          
    of the Fertiliser Group, which is a leading vertically integrated         
    fertiliser group in the PRC, principally engaged in the sourcing,         
    production and sale of fertiliser and other agricultural related          
    products in the PRC. The Fertiliser Group is also the largest             
    importer of fertiliser products in the PRC in terms of import             
    volume.                                                                   
                                                                              
    (The details diagrams illustrate the simplified corporate and             
    shareholding structure of the Company, the Fertiliser Company and         
    their respective principal subsidiaries immediately before and            
    after the Completion, in each case, assuming completion of the            
    Reorganisation, please refer to the press announcement today.)            
                                                                              
    Consideration                                                             
                                                                              
    The consideration for the Acquisition is HK$5,050 million, which          
    has been arrived at after arms' length negotiations between the           
    parties with reference to various factors including, but not              
    limited to, the financial results of the Fertiliser Group and the         
    earnings potential and the prospects of the Fertiliser Group.             
    This represents approximately 12.87 times the audited net profit          
    (based on PRC GAAP) of the Fertiliser Group for the year ended            
    31 December 2003. The audited net profit (based on PRC GAAP) of           
    the Fertiliser Group for the nine months ended 30 September 2004          
    was approximately RMB404.1 million. The consideration also                
    represents approximately 2.8 times the net asset value of the             
    Fertiliser Group as at 30 September 2004. Based on the historical         
    earnings record of the Fertiliser Group and the factors set out           
    in the paragraph D headed Reasons for and benefits of the                 
    Acquisition below, the Directors consider that the terms of the           
    Acquisition are fair and reasonable and in the interests of the           
    Shareholders as a whole.