09:51     XINAO GAS<02688> - 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.                                                     
                                                                              
    XinAo Gas Holdings Limited                                                
    (incorporated in the Cayman Islands with limited                          
    liability)                                                                
    (Stock Code: 2688)                                                        
    (Website: www.xinaogas.com)                                               
                                                                              
    ANNOUNCEMENT                                                              
                                                                              
    CONTINUING CONNECTED TRANSACTIONS                                         
                                                                              
    The Existing Waiver granted by the Stock Exchange on                      
    27 May 2002 from strict compliance with the relevant                      
    requirements of the Listing Rules in respect of the                       
    Existing Continuing Connected Transactions expired                        
    on 31 December 2004.                                                      
                                                                              
    The Board wishes to announce that on 31 January 2005                      
    the Group has entered into the New Agreements with                        
    the Wang Family Companies. As Mr. Wang is a                               
    substantial shareholder of the Company, the New                           
    Continuing Connected Transactions contemplated under                      
    the New Agreements constitute continuing connected                        
    transactions for the Company under Chapter 14A of the                     
    Listing Rules. The New Continuing Connected                               
    Transactions are subject to the reporting and                             
    announcement requirements under Chapter 14A of the                        
    Listing Rules and the Non-Exempt Continuing Connected                     
    Transaction will also have to be approved by the                          
    Independent Shareholders by way of poll at the EGM.                       
                                                                              
    A circular containing, inter alia, details of the                         
    Non-Exempt Continuing Connected Transaction, letters                      
    from the Independent Board Committee and an                               
    independent financial adviser to the Independent                          
    Board Committee and the Independent Shareholders in                       
    relation to the Non-Exempt Continuing Connected                           
    Transaction, together with a notice to convene the                        
    EGM for approving the Non-Exempt Continuing Connected                     
    Transaction will be despatched to the Shareholders                        
    as soon as practicable.                                                   
                                                                              
    BACKGROUND                                                                
    On 27 May 2002, Stock Exchange granted the Company                        
    the Existing Waiver in respect of the Existing                            
    Continuing Connected Transactions, a brief summary                        
    of which is set out below:                                                
                                                                              
    (1)     Transactions between the Group and Langfang                       
    Property Management pursuant to their property                            
    management service agreements and supplemental                            
    property management service agreements whereby                            
    Langfang Property Management agreed to provide the                        
    Group with property management services to two                            
    properties (with a total gross floor area of 14,974                       
    m2) in Langfang City, PRC occupied by the Group at                        
    an aggregate annual management fee of RMB1,380,000                        
    (equivalent to approximately HK$1,302,000) for a term                     
    of four years commencing 1 January 2001 ("Transaction                     
    1");                                                                      
                                                                              
    (2)     Transactions between the Group and XGCL                           
    pursuant to their property leasing agreement and                          
    supplemental property leasing agreement whereby the                       
    Group agreed to lease to XGCL certain property in                         
    Langfang City, PRC (with a total gross floor area