09:27     TEXHONG TEXTILE<02678> - Ann. & Resumption of Trading (1)           

    This announcement is for information purpose only and                     
    does not constitute an invitation or offer to acquire,                    
    purchase or subscribe for securities. This                                
    announcement is made pursuant to Rule 13.09 of the                        
    Listing Rules.                                                            
                                                                              
    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.                                                     
                                                                              
    TEXHONG TEXTILE GROUP LIMITED                                             
    (incorporated in the Cayman Islands with limited                          
    liability)                                                                
    (Stock Code: 2678)                                                        
                                                                              
    LEASE OF ADDITIONAL MANUFACTURING FACILITIES                              
                                                                              
    On 28 January 2005, the Board announced that Texhong                      
    BVI, a direct wholly owned subsidiary of the Company,                     
    Jiangsu Yinyu and Xuzhou Textile entered into a lease                     
    agreement, pursuant to which, Texhong BVI is entitled                     
    to use Jiangsu Yinyu's five factories and their                           
    accessory facilities effective from 1 February 2005                       
    to 30 April 2007. Subsequent to entering into the                         
    Lease Agreement, the Group's production capacity of                       
    yarn will increase substantially by 87,000 spindles                       
    (or 42.9%), from 203,000 spindles to 290,000                              
    spindles.                                                                 
                                                                              
    Trading of the Shares on the Stock Exchange was                           
    suspended at the request of the Company with effect                       
    from 9:30 a.m. on 31 January 2005 pending the release                     
    of this announcement, which the Directors believe is                      
    price sensitive. Application has been made by the                         
    Company for the resumption of trading in the Shares                       
    with effect from 9:30 a.m. on 1 February 2005.                            
                                                                              
    Appropriate disclosure of this transaction will be                        
    included in the next published annual report and                          
    accounts of the Company in accordance with the Listing                    
    Rules.                                                                    
                                                                              
    THE LEASE AGREEMENT                                                       
    The Company and all its Directors hereby confirm the                      
    truthfulness, accuracy and completeness of the                            
    contents of this announcement and jointly and                             
    severally accept full responsibility for any false                        
    representation, misleading statement or material                          
    omission herein contained.                                                
                                                                              
    On 28 January 2005, the Board announced that Texhong                      
    BVI, a direct wholly owned subsidiary of the Company,                     
    Jiangsu Yinyu and Xuzhou Textile entered into a lease                     
    agreement, pursuant to which, Texhong BVI is entitled                     
    to use Jiangsu Yinyu's five factories which are                           
    currently dormant as Jiangsu Yinyu is in liquidation                      
    and their accessory facilities effective from 1                           
    February 2005 to 30 April 2007.                                           
                                                                              
    Date                                                                      
    28 January 2005                                                           
                                                                              
    Parties                                                                   
    (i)     Texhong BVI, as the lessee. Texhong BVI is a                      
    direct wholly owned subsidiary of the Company. The                        
    principal business activity of the Group is the                           
    manufacture and sale of yarn, grey fabrics and garment                    
    fabrics.                                                                  
                                                                              
    (ii)    Jiangsu Yinyu, as the lessor. Jiangsu Yinyu