09:45     CITIC 21CN<00241> - Announcement & Resumption of Trading (2)        

    Any Shareholders or other persons contemplating                           
    selling or purchasing Shares and/or Warrants in their                     
    nil-paid form during the period from 1 March 2005 to                      
    9 March 2005 who are in any doubt about their position                    
    are recommended to consult their professional                             
    advisers. Any Shareholders or other persons dealing                       
    in Shares up to the date on which all the conditions                      
    to which the Rights Issue is subject are fulfilled                        
    (and the date on which the Underwriter's right of                         
    termination of the Underwriting Agreement ceases) and                     
    any persons dealing in the nil-paid Warrants during                       
    the period from 1 March 2005 to 9 March 2005 will                         
    accordingly bear the risk that the Rights Issue may                       
    not become unconditional or may not proceed.                              
                                                                              
    The Company will apply to the Stock Exchange for the                      
    listing of, and permission to deal in, the Warrants,                      
    both in their nil-paid and fully-paid forms, and the                      
    Shares to be issued upon exercise of the subscription                     
    rights attaching to the Warrants.                                         
                                                                              
    The net proceeds from the Rights Issue are expected                       
    to be not less than HK$50 million (depending on the                       
    number of Shares in issue on the Record Date) out of                      
    which approximately HK$30 million will be used to                         
    finance the development of the joint venture company,                     
    *(CITIC Quality Check                                                     
    Information Technology Co., Ltd.*), which intends to                      
    be engaged in the provision of authentication service                     
    for commodities currently being traded in the PRC,                        
    and the balance for general working capital purpose.                      
                                                                              
    Trading of the Shares has been suspended with effect                      
    from 10:01 a.m. on 3 February 2005 pending the release                    
    of this announcement. The Company has applied for                         
    resumption of trading of the Shares with effect from                      
    9:30 a.m. on 8 February 2005.                                             
                                                                              
    THE RIGHTS ISSUE                                                          
    The Company proposes to issue, by way of Rights Issue,                    
    not less than 548,970,998 and not more than                               
    572,586,554 Warrants at HK$0.10 each. The Company                         
    will provisionally allot one Warrant in nil-paid form                     
    for every six existing Shares held to the Qualifying                      
    Shareholders on the Record Date. The terms of the                         
    Rights Issue are summarised as follows:                                   
                                                                              
    Issue statistics                                                          
    Basis of the Rights Issue:      one Warrant for every                     
    six Shares held on the Record Date                                        
                                                                              
    Number of existing Shares in issue:     3,293,825,996                     
    Shares as at the date of this announcement                                
                                                                              
    Number of Warrants:     not less than 548,970,998                         
    (assuming 3,293,825,996 Shares in issue on the Record                     
    Date) and not more than 572,586,554 Warrants                              
    (assuming 3,435,519,332 Shares in issue on the Record                     
    Date)                                                                     
                                                                              
    Upon full exercise of the 548,970,998 Warrants would                      
    result in the issue of up to 548,970,998 Shares,                          
    representing approximately 16.67% of the existing                         
    issued share capital and approximately 14.29% of the                      
    Company's issued share capital as enlarged by the                         
    issue of Shares upon the full exercise of the                             
    subscription rights attaching to the Warrants. Shares                     
    to be issued upon exercise of the Warrants will be                        
    issued under the general mandate granted by the                           
    Directors at the annual general meeting of the Company                    
    dated 23 August 2004. The Directors