09:35     STONE HOLDINGS<00409> - Announcement (3)                            

    price of US$29.17 per SINA Share (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 actual amount of                       
    proceeds for the Group from the Future Disposals may                      
    or may not be such an amount, which would depend on                       
    the actual prices at which the SINA Shares are                            
    disposed of.                                                              
                                                                              
    REASONS FOR THE DISPOSALS                                                 
                                                                              
    As disclosed in its 2002 annual report, the Company                       
    has reclassified its investment in SINA as a                              
    short-term investment. With this change in strategy                       
    with respect to its shareholdings in SINA, the Company                    
    decided to dispose of the SINA Shares gradually on                        
    market with a view to maximizing the profits on such                      
    disposals. It was further disclosed in the Company's                      
    subsequent interim and annual reports that the Group                      
    has since February 2003 disposed of part of its                           
    shareholding in SINA, decreasing its shareholding                         
    from 9,476,526 shares (representing approximately                         
    20.63%) as at 31 December 2002 to 2,502,274 shares                        
    (representing approximately 4.96%) as at the date of                      
    this announcement.                                                        
                                                                              
    On the basis of the value of the SINA Shares currently                    
    held by the Company calculated by reference to the                        
    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 Future Disposals, on an                            
    aggregate basis, may constitute a major transaction                       
    of the Company under the Listing Rules which will be                      
    subject to the relevant compliance requirements                           
    thereunder, including the obtaining of Shareholders'                      
    approval. Given the volatile fluctuation in market                        
    prices of SINA Shares, obtaining the Shareholders'                        
    approval of such possible Future Disposals now would                      
    give the Directors flexibility in making timely                           
    decisions and enable the Directors to capture                             
    opportunities for disposals of its SINA Shares at                         
    favourable prices if and when favourable market                           
    conditions for such disposals shall arise. It is                          
    expected that the Company will benefit from the Future                    
    Disposals if the Future Disposals are approved by the                     
    Shareholders and the Company is able to dispose of                        
    its SINA Shares with a view to maximizing profits to                      
    the Company when favourable market conditions for                         
    disposals shall arise.                                                    
                                                                              
    The Directors (including the independent                                  
    non-executive Directors) consider that it is fair and                     
    reasonable and it is in the interests of the Company                      
    and the Shareholders as a whole to obtain                                 
    Shareholders' approval of the Future Disposals, and                       
    will ensure that the terms of Future Disposals will                       
    be fair and reasonable and in the interests of the                        
    Company and the Shareholders as a whole.                                  
                                                                              
    INFORMATION ON THE GROUP AND SINA                                         
                                                                              
    The Group is principally engaged in the manufacture,                      
    distribution and sale of electronic and electrical                        
    products, office equipment and the manufacture,                           
    distribution and sale of healthcare products, and                         
    multi-media business.