09:52     XINAO GAS<02688> - Announcement (3)                                 

                                                                              
    Proportion of aggregate value to the                                      
      net tangible assets of the Group      0.01%           0.14%             
            0.08%                                                             
                                                                              
    Transaction 4                                                             
    Aggregate value RMB25,980,000           RMB10,701,942                     
            RMB27,261,552                                                     
                                                                              
    Proportion of aggregate value to the                                      
      net tangible assets of the Group      2.55%           0.76%             
            1.37%                                                             
                                                                              
    For each of the two financial years ended 31 December                     
    2003, none of the aggregate value of the Existing                         
    Continuing Connected Transactions exceeded their                          
    respective annual cap amount under the Existing                           
    Waiver. Based on the aggregate value of the Existing                      
    Continuing Connected Transactions for the six months                      
    ended 30 June 2004, the Board anticipates that the                        
    aggregate value of the Existing Continuing Connected                      
    Transactions for the financial year ended 31 December                     
    2004 will also be within their respective annual cap                      
    amount under the Existing Waiver.                                         
                                                                              
    THE NEW CONTINUING CONNECTED TRANSACTIONS                                 
    The Group and the Wang Family Companies have, from                        
    time to time, entered into the Existing Continuing                        
    Connected Transactions and will continue to enter                         
    into such transactions and certain other new                              
    transactions on a regular basis. In light of this,                        
    on 31 January 2005, the Group and the Wang Family                         
    Companies entered into the New Agreements (the terms                      
    thereof are different from those of the agreements                        
    for the Existing Continuing Connected Transactions)                       
    in relation to the New Continuing Connected                               
    Transactions, brief particulars of which are set out                      
    below:                                                                    
                                                                              
    (1)     New Transaction 1 - "Property Management                          
    Service Agreement"                                                        
    Date:   31 January 2005                                                   
                                                                              
    Parties:        a.      the Group                                         
                                                                              
    b.      Wang Family Companies                                             
                                                                              
    Subject matter:                                                           
    Those Wang Family Companies being property management                     
    companies have agreed to provide the Group with                           
    property management services to the properties                            
    situated in the PRC occupied by the Group.                                
                                                                              
    Duration and fees:                                                        
    For the provision of the property management services                     
    by the Wang Family Companies, the Group will pay a                        
    management fee to be determined between the parties                       
    by reference to the market rate for a term of three                       
    years commencing 1 January 2005 provided such fee                         
    shall not be higher than the fee charged to                               
    Independent Third Parties for provision of similar                        
    services by the Wang Family Companies.                                    
                                                                              
    Reasons for and benefits of the Property Management                       
    Services Agreement:                                                       
    As some of the Wang Family Companies are engaged in                       
    the provision of property management services and                         
    thus have the necessary expertise, the entering into                      
    of the Property Management Services Agreement will                        
    facilitate the operation of the Group. The                                
    consideration for the services under the Property                         
    Management Services Agreement was determined after                        
    arm's length negotiations between the parties thereto                     
    and will be no less favourable than terms