10:14     K. WAH INT'L<00173> - Announcement (6)                              

    the PRC, and the reduced registered capital of the PRC Company of         
    RMB297,835,041 (equivalent to approximately HK$283,652,420) as at 30      
    June 2004.                                                                
                                                                              
    The Directors are of the view that the terms of the Joint Venture         
    Contract and the Capital Increase Agreement are on normal commercial      
    terms and are fair and reasonable and are in the interest of the          
    Company and the Shareholders and that the increase in registered          
    capital of the PRC Company, the transformation of the PRC Company         
    into and the establishment of the Joint Venture Company are in the        
    interests of the Company and the Shareholders as a whole.                 
                                                                              
    8.                                                                        
    LISTING RULES IMPLICATIONS                                                
    Based on the aggregate amount to be contributed by the Company to         
    the Joint Venture Company under the Joint Venture Contract, the           
    Articles of Association and the Capital Increase Agreement, the           
    Transaction constitutes a discloseable transaction of the Company         
    under the Listing Rules.                                                  
                                                                              
    A circular containing, among other things, details of the Joint           
    Venture Contract and the Capital Increase Agreement will be               
    despatched to the Shareholders as soon as possible.                       
                                                                              
    9.                                                                        
    DEFINITIONS                                                               
    In this announcement, the following expressions have their                
    respective meanings set out below unless the context requires             
    otherwise.                                                                
                                                                              
    `Articles of Association'      the sino-foreign equity joint              
                                   venture articles of                        
                                   association dated 31st                     
                                   January 2005 entered into                  
                                   between the Joint Venture                  
                                   Parties in relation to, among              
                                   other things, the increase in              
                                   registered capital of the PRC              
                                   Company and the                            
                                   transformation of the PRC                  
                                   Company into and the                       
                                   establishment of the Joint                 
                                   Venture Company                            
    `Board'                        the board of Directors                     
    `Capital Increase Agreement'   the capital increase                       
                                   agreement dated 31st January               
                                   2005 entered into between the              
                                   Joint Venture Parties and the              
                                   PRC Company in relation to,                
                                   among other things, the                    
                                   increase in registered                     
                                   capital of the PRC Company                 
                                   and the transformation of the              
                                   PRC Company into and the                   
                                   establishment of the Joint                 
                                   Venture Company                            
    `Company'                      K. Wah International Holdings              
                                   Limited, an exempted company               
                                   incorporated in Bermuda with               
                                   limited liability and the                  
                                   shares of which are listed on              
                                   the main board of the Stock                
                                   Exchange                                   
    `connected person(s)'          has the meaning as ascribed                
                                   to the expression under the                
                                   Listing Rules                              
    `Director(s)'                  the director(s) of the                     
                                   Company                                    
    `Group'                        the Company and its                        
                                   subsidiaries                               
    `HK$'                          Hong Kong dollars, the lawful              
                                   currency of Hong Kong                      
    `Hong Kong'                    the Hong Kong Special                      
                                   Administrative Region of the               
                                   PRC                                        
    `Joint Venture Company'        Shanghai Baosteelland Co.,                 
                                   Ltd  (to be renamed as                     
                                   `Shanghai Baoland Co., Ltd.                
                                   ', a sino-foreign equity                   
                                   joint venture company to be                
                                   transformed from the PRC                   
                                   Company and established                    
                                   pursuant to the Joint Venture              
                                   Contract, the Capital                      
                                   Increase Agreement and the                 
                                   Articles of Association and                
                                   the equity interest in which               
                                   to be held by Shanghai                     
                                   Baosteel Group Corporation as              
                                   to 41.5%, the Company as to                
                                   41.5%, Mitsubishi as to 15%                
                                   and Tokyu as to 2%                         
                                   respectively                               
    `Joint Venture Contract'       The sino-foreign equity joint