09:35     STONE HOLDINGS<00409> - Announcement (2)                            

    will be settled in cash. It is possible that the Future                   
    Disposals, on an aggregate basis, may constitute a                        
    major transaction of the Company under the Listing                        
    Rules depending on the size of the transactions                           
    effected. The Company will implement a procedure to                       
    ensure that the SINA Shares will be sold via third                        
    party brokers and/or licensed dealers to independent                      
    third parties who are not connected to any directors,                     
    chief executives or substantial shareholders of the                       
    Company or any of its subsidiaries or any of their                        
    respective associates. The Company will not knowingly                     
    sell the SINA Shares to a connected person of the                         
    Company. If the SINA Shares are or are to be sold to                      
    the connected persons of the Company, the Company will                    
    comply with the relevant applicable requirements                          
    under Chapter 14A of the Listing Rules.                                   
                                                                              
    If all of the remaining SINA Shares held by the Group                     
    are disposed of at an average price of US$29.17                           
    (equivalent to approximately HK$227.53), being the                        
    average closing price of SINA Shares on NASDAQ for                        
    the six months ended 18 February 2005 (the latest                         
    practicable date prior to the date of this                                
    announcement for ascertaining such information), the                      
    total gross proceeds for the Group arising from the                       
    possible Future Disposals would amount to                                 
    approximately US$72,991,333 (equivalent to                                
    approximately HK$569,332,397). The loss on disposal                       
    of the SINA Shares expected to accrue to the Group                        
    calculated on the basis of such an average price of                       
    US$29.17 is approximately US$7,231,571 (equivalent                        
    to approximately HK$56,406,254). As the fluctuation                       
    in the market price for the SINA Shares has been                          
    volatile, with highest and lowest closing prices                          
    during such a 6 month period of US$38.85 and US$19.85                     
    respectively, the actual gain/loss which is expected                      
    to accrue to the Group may or may not be such an amount,                  
    which would depend on the actual prices at which the                      
    SINA Shares are disposed of. The closing price of SINA                    
    Shares on NASDAQ as at 18 February 2005 and the average                   
    closing price of SINA Shares on NASDAQ for the 5                          
    trading days up to and including 18 February 2005 were                    
    US$25.60 and US$23.91 respectively.                                       
                                                                              
    The net profits/losses attributable to the SINA                           
    Shares currently held by the Company before taxation                      
    and extraordinary items for the two financial years                       
    ended 31 December 2003 were losses of approximately                       
    US$269,528 (equivalent to approximately HK$2,102,322)                     
    and profits of approximately US$1,663,037                                 
    (equivalent to approximately HK$12,971,687)                               
    respectively. The net profits/losses attributable to                      
    the SINA Shares currently held by the Company after                       
    taxation and extraordinary items for the two                              
    financial years ended 31 December 2003 were losses                        
    of approximately US$269,528 (equivalent to                                
    approximately HK$2,102,322) and profits of                                
    approximately US$1,616,981 (equivalent to                                 
    approximately HK$12,612,455) respectively.                                
                                                                              
    The Directors will exercise due care in considering                       
    each such Future Disposals by reference to the                            
    previous six months' market prices of SINA Shares and                     
    comparing the book values of SINA Shares with a view                      
    to maximizing the profits on disposals of such shares.                    
                                                                              
    USE OF PROCEEDS                                                           
                                                                              
    The Company presently intends to use the proceeds from                    
    the possible Future Disposals for general working                         
    capital. Calculated on basis of an average