10:13     K. WAH INT'L<00173> - Announcement (3)                              

    registered capital and the     following events (whichever                
    premium contributions by the   is the latest):  (1) the                   
    Company, Mitsubishi and        issue of the business licence              
    Tokyu:                         of the Joint Venture Company;              
                                    (2) the completion of the                 
                                   registration of the change of              
                                   the capital structure of the               
                                   Joint Venture Company as                   
                                   follows: 41.5% by Shanghai                 
                                   Baosteel Group Corporation,                
                                   41.5% by the Company, 15% by               
                                   Mitsubishi and 2% by Tokyu;                
                                   and  (3) the completion of                 
                                   the registration of the                    
                                   change of the board of                     
                                   directors of the Joint                     
                                   Venture Company in accordance              
                                   with the terms and conditions              
                                   of the Joint Venture Contract              
    Board composition of the       The board of directors of the              
    Joint Venture Company:         Joint Venture Company shall                
                                   consist of six directors.                  
                                   Shanghai Baosteel Group                    
                                   Corporation and the Company                
                                   shall each be entitled to                  
                                   appoint two directors, whilst              
                                   Mitsubishi shall be entitled               
                                   to appoint one director. The               
                                   remaining director shall be                
                                   the executive director of the              
                                   Joint Venture Company. The                 
                                   appointments of the chairman               
                                   and the executive director of              
                                   the Joint Venture Company                  
                                   shall be elected by a                      
                                   resolution of the board of                 
                                   directors of the Joint                     
                                   Venture Company with the                   
                                   approval of over two-thirds                
                                   of the directors of the Joint              
                                   Venture Company.                           
    Profit sharing ratio:          The net profit of the Joint                
                                   Venture Company after                      
                                   deducting tax and statutory                
                                   reserves will be shared by                 
                                   the shareholders of the Joint              
                                   Venture Company in proportion              
                                   to their entitlement of the                
                                   registered capital of the                  
                                   Joint Venture Company, namely              
                                   41.5% by Shanghai Baosteel                 
                                   Group Corporation, 41.5% by                
                                   the Company, 15% by                        
                                   Mitsubishi and 2% by Tokyu.                
    Duration of the Joint Venture  15 years from the date of the              
    Company:                       issue of the business licence              
                                   of the Joint Venture Company.              
    Taking Effect:                 The Joint Venture Contract                 
                                   will take effect upon the (a)              
                                   approval from the relevant                 
                                   PRC government authorities;                
                                   (b) internal approval from                 
                                   and due execution by the                   
                                   respective Joint Venture                   
                                   Parties; and (c) Capital                   
                                   Increase Agreement taking                  
                                   effect.                                    
                                                                              
                                                                              
                                                                              
    3.                                                                        
    CAPITAL INCREASE AGREEMENT                                                
    A summary of the principal terms of the Capital Increase Agreement        
    is as follows:                                                            
                                                                              
    Date:                          31st January 2005                          
    Parties:                        (1) Shanghai Baosteel Group               
                                   Corporation;  (2)  the                     
                                   Company;  (3) Mitsubishi;                  
                                   (4) Tokyu; and  (5) The PRC                
                                   Company. The Directors                     
                                   confirm that, to the best of               
                                   their knowledge, information               
                                   and belief having made all                 
                                   reasonable enquiries, the PRC              
                                   Company is a state-owned                   
                                   corporation.                               
    Registered capital of the PRC  RMB 297,835,041 (equivalent                
    Company:                       to approximately                           
                                   HK$283,652,420)                            
    Sole shareholder of the PRC    Shanghai Baosteel Group                    
    Company as at the date of      Corporation                                
    this announcement:                                                        
    Registered capital of the      RMB 717,674,797 (equivalent