09:19     TOWN HEALTH<08138> - Announcement & Resumption of Trading(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.                                                             
                                                                              
    TOWN HEALTH INTERNATIONAL HOLDINGS COMPANY LIMITED                        
    (Incorporated in the Cayman Islands with limited liability)               
    (Stock code: 8138)                                                        
                                                                              
    (1) PROPOSED ISSUE OF CONVERTIBLE BONDS;                                  
    AND                                                                       
    (2) ENTERING INTO NON-LEGALLY BINDING                                     
    LETTER OF INTENT REGARDING                                                
    INVESTMENT IN A PRC HOSPITAL PROJECT                                      
                                                                              
    Placing Agent                                                             
    KINGSTON SECURITIES LIMITED                                               
                                                                              
    (1)   ISSUE OF CONVERTIBLE BONDS                                          
    On 2 February 2005, the Company and the Placing Agent entered             
    into the Placing Agreement pursuant to which the Placing Agent            
    conditionally agreed to place on a best effort basis to not fewer         
    than six Placees the Convertible Bonds which are proposed to be           
    issued in an aggregate principal amount of HK$32,000,000. The             
    Convertible Bonds will carry a right to convert into new Shares           
    at the conversion price of HK$0.037 per Share, subject to                 
    adjustment, from the date of issue to the Maturity Date.                  
    864,864,864 Shares will be allotted and issue upon full                   
    conversion of the Convertible Bonds at the conversion price of            
    HK$0.037 per Share.                                                       
                                                                              
    No application will be made for the listing of the Convertible            
    Bonds. Application will be made to the Listing Committee of the           
    Stock Exchange for the listing of, and permission to deal in,             
    the Conversion Shares falling to be issued upon exercise of the           
    conversion rights attaching to the Convertible Bonds.                     
    Completion of the Placing Agreement is conditional upon, amongst          
    other things, the Stock Exchange granting or agreeing to grant            
    the listing of, and permission to deal in, the Conversion Shares,         
    and the passing of the relevant resolutions by the Shareholders           
    at the EGM approving the Placing Agreement, the issue of the              
    Convertible Bonds and the allotment and issue of the Conversion           
    Shares.                                                                   
                                                                              
    A circular of the Company containing, amongst other things,               
    further details of the issue of the Convertible Bonds and a               
    notice of the EGM for the purpose of approving the Placing                
    Agreement, the issue of the Convertible Bonds and the allotment           
    and the issue of the Conversion Shares will be despatched to the          
    Shareholders as soon as practicable in accordance with the GEM            
    Listing Rules.                                                            
                                                                              
    Shareholders and potential investors should note that the                 
    Placing Agreement is subject to conditions precedent to be                
    fulfilled. Shareholders and potential investors are reminded to           
    exercise caution when dealing in the Shares.                              
                                                                              
    (2)   ENTERING INTO NON-LEGALLY BINDING LETTER OF INTENT                  
    REGARDING INVESTMENT IN A PRC HOSPITAL PROJECT                            
    Sino Allied (a wholly owned subsidiary of the Company), Mr. Chan          
    and Beijing Joie De VC have entered into the LOI for the                  
    investment of the Project, which involves cooperation with a              
    hospital in Beijing, the PRC. Under the LOI, Beijing Joie De VC           
    will be responsible for procuring the exclusive right of                  
    cooperation and entering into of the relevant formal cooperation          
    agreement with the Beijing hospital while Sino Allied and Mr.             
    Chan will together invest not more than RMB 30,000,000 in Beijing         
    Joie De VC.                                                               
                                                                              
    The hospital to be built pursuant to the Project will be situated         
    in Zhong Guan Cun area in Beijing. No specific site location has          
    been determined up to the date of this announcement. The planned          
    site area of the hospital is approximately 12,284 sq.m. with a            
    gross superstructure floor area of approximately 25,796 sq.m.             
    It is intended that 300 beds will be provided in the hospital             
    with certain specialty centres and a medical check-up center.             
    Besides its equity interests in the Project, the Group is                 
    expected to involve in the management and operation of the                
    hospital to be built under the Project.                                   
                                                                              
    The LOI is non-legally binding. The Project may or may not                
    proceed. Shareholders and potential investors are reminded to             
    exercise caution when dealing in the Shares.