09:25     CHING HING<00692> - 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.                   
                                                                              
    CHING HING (HOLDINGS) LIMITED                                             
    (Incorporated in Bermuda with limited liability)                          
    (Stock Code: 692)                                                         
                                                                              
    CONTINUING CONNECTED TRANSACTION                                          
                                                                              
    On 1 February 2005, Ching Hing Weaving, Dyeing & Printing Factory         
    Limited ("CHW"), a wholly-owned subsidiary of Ching Hing (Holdings)       
    Limited (the "Company") entered into a memorandum for provision of        
    fabric processing services (the "Memorandum") with Ching Hong Textiles    
    Limited ("CHT"). Pursuant to the Memorandum, CHW agrees to provide        
    fabric processing services to CHT for three years commencing from 1       
    February 2005 at normal commercial terms determined by both parties       
    after arm's length negotiation and on individual contract basis.          
                                                                              
    The shareholdings of CHT are owned by Mr. Yiu Kwok Yung ("Mr. Yiu") as    
    to 70 percent and by an independent third party as to 30 percent. Mr.     
    Yiu was a director of the Company within the preceding 12 months from     
    the date of the Memorandum (Resigned on 1 January 2005). He is also the   
    son of Mr. Yiu Ching On ("CO Yiu"), the Chairman of the Company and the   
    brother of Mr. Yiu Kwok Ming, Tommy ("Tommy"), the Managing Director of   
    the Company. Mr. Yiu is the sole shareholder of Modern Fashion Inc        
    ("MF") which holds 32,500,000 shares of the Company, representing         
    approximately 10.1% of the entire share capital of the Company. In        
    addition, Mr. Yiu is one of the beneficiaries of The Yiu's Family Unit    
    Trust found by CO Yiu, which holds about 117,618,055 shares of the        
    Company (representing about 36.7% shareholding). CHT is therefore a       
    connected person of the Company.                                          
                                                                              
    Given the annual fabric processing fees payable by CHT represents more    
    than 2.5% but less than 25% of the applicable percentage ratios under     
    the Rules Governing the Listing of Securities on The Stock Exchange of    
    Hong Kong Limited (the "Listing Rules") and the annual consideration      
    will be less than HK$10,000,000.00. The Memorandum is only subject to     
    the reporting and announcement requirement under the Listing Rules and    
    does not require independent shareholders' approval.                      
                                                                              
    The Memorandum                                                            
                                                                              
    Date of the Memorandum:        1 February 2005                            
                                                                              
    Parties:        (i)        CHW; and                                       
                                                                              
            (ii)        CHT                                                   
                                                                              
    Particulars                                                               
                                                                              
    Pursuant to the Memorandum, CHW agrees to provide fabric processing       
    services to CHT for three years commencing from 1 February 2005 at        
    normal commercial terms determined by both parties after arm's length     
    negotiation and on individual contract basis. CHW and CHT will enter      
    into separate fabric processing contracts when CHT places fabric          
    processing orders to CHW afterwards. The terms, conditions and            
    particulars of each transaction will be determined at arm's length basis  
    and stated out on each separate fabric processing contract by CHW. The    
    average fabric processing fee charged by CHW to its existing customers,   
    which are independent third parties and CHW's fellow subsidiaries, was    
    approximately HK$3.03 per yardage of fabric for the year ended 31         
    December 2004 with credit term of about 60 days.                          
                                                                              
    Reasons for, and benefits of, the Memorandum                              
                                                                              
    One of the principal business activities of CHW is provision of fabric    
    processing service. Upon entering into the Memorandum, CHW can expand     
    its income base, diversify the customer sources and increase its          
    revenue. The Directors (including the independent non-executive           
    directors) consider that provision of fabric processing service is in     
    the ordinary and usual course of business of CHW and the Memorandum and   
    the terms thereof are fair and reasonable and on normal commercial        
    terms, and in the best interests of the Company and its shareholders as   
    a whole.                                                                  
                                                                              
    The annual cap                                                            
                                                                              
    The board of directors (the "Board") estimate that the maximum aggregate  
    annual fabric processing fees (the "Annual Cap") charged to CHT by CHW    
    will not exceed HK$6,000,000.00. The fabrics processing fees were         
    determined by the parties on arm's length basis and on terms no less      
    favourable than those paid to CHW by independent third parties. The