09:35     SHANGHAI ZENDAI<00755> - Announcement & Resumption (3)              

    -  5.00% per annum per annum during the year commencing on the            
    first anniversary date of issue of the Convertible Notes; and             
                                                                              
    -   5.25% per annum during the year commencing on the second              
    anniversary date of issue of the Convertible Notes.                       
                                                                              
    Maturity Date  :  The date falling three years after the date of issue    
    of the Convertible Notes.                                                 
                                                                              
    Status  :  The obligations of the Company arising under the Convertible   
    Notes constitute general, unconditional, unsecured, unsubordinated        
    obligations of the Company and rank, and shall at all times rank,         
    equally among themselves and pari passu with all other present and        
    future unsecured and unsubordinated obligations of the Company except     
    for obligations accorded preference by mandatory provisions of            
    applicable law.                                                           
                                                                              
    Conversion Price  :  HK$0.24 per Conversion Share. The Conversion Price   
    is subject to adjustment for, amongst other matters, subdivision or       
    consolidation of Shares, bonus issues, rights issues, capital reduction   
    and other events that have diluting effects on the issued share capital   
    of the Company.                                                           
                                                                              
    The initial Conversion Price of HK$0.24 represents (i) a discount         
    of approximately 4% to the closing price of HK$0.25 per Share as quoted   
    on the Stock Exchange on 1 February 2005, being the last trading day      
    immediately before the date of this announcement; (ii) a discount of      
    approximately 0.4 % to the average of the closing price per Share of      
    approximately HK$0.241 as quoted on the Stock Exchange for the last ten   
    trading days up to and including 1 February 2005, being the last          
    trading day immediately before the date of this announcement; and (iii)   
    a premium of approximately 385.8% to the unaudited net asset value per    
    Share of approximately HK$0.05 as at 30 June 2004, based on the latest    
    published unaudited interim results of the Group for the six months       
    ended 30 June 2004.                                                       
                                                                              
    The Directors confirm that the Conversion Price was arrived at            
    after arm's length negotiation between the Company and Value Partners     
    with reference to the historical performance of trading price of the      
    Shares and the Group's business prospects.                                
                                                                              
    Conversion Rights  :  The holder(s) of the Convertible Notes shall have   
    the right to convert on any Business Day during a period commencing on    
    the date after 3 months from the date of issue of the Convertible Notes   
    and ending on the Business Day immediately preceding the Maturity Date    
    (both days inclusive), the whole or any part(s) of the principal amount   
    of the Convertible Notes into the Conversion Shares at the Conversion     
    Price, provided that such parts of the principal amount of the            
    Convertible Notes to be converted shall not be less than HK$8,000,000     
    at any one time (unless the aggregate outstanding principal amount of     
    the Convertible Notes is less than HK$8,000,000 in which case the whole   
    (but not part only) of that amount may be converted).                     
                                                                              
    Redemption  :  The Convertible Notes will be redeemed by the Company at   
    their principal amount outstanding together with accrued interest         
    thereon up to and including the Maturity Date.                            
                                                                              
    Ranking of the  Conversion Shares  :  The Conversion Shares will rank     
    pari passu in all respects with all other existing Shares outstanding     
    as at the date of issue and allotment.                                    
                                                                              
    Transferability  :  The Convertible Notes shall not, without the prior    
    written consent from the Company, be transferable.                        
                                                                              
    Voting  :  The Convertible Notes do not confer any voting rights at       
    general meetings of the Company on the holder of the Convertible Notes.   
                                                                              
    Listing  :  No application will be made for the listing of the            
    Convertible Notes on the Stock Exchange or any other stock exchange.      
                                                                              
    Grant of Option                                                           
                                                                              
    Pursuant to the Subscription Agreement, the Company has agreed to, at     
    Completion, grant to Value Partners (for the Funds) the Option which      
    may be exercised by Value Partners (for the Funds), in whole or in        
    part, during the Option Period. The maximum aggregate Exercise Price      
    payable by Value Partners (for the Funds) for the exercise of the         
    Option during the Option Period shall be equivalent to the aggregate      
    principal amount of the Convertible Notes outstanding immediately prior   
    to the Option Commencement Date. The Option shall not be exercisable      
    prior to the Option Commencement Date.                                    
                                                                              
    The Option shall not be exercisable prior to the Option Commencement