09:17     CHINA ASSETS<00170> - Announcement (1)                              

    The Stock Exchange of Hong Kong Limited takes no responsibility for the   
    contents of this announcement, makes no representation as to its          
    accuracy or completeness and expressly disclaims any liability            
    whatsoever, for any loss howsoever arising from or in reliance upon the   
    whole or any of the contents of this announcement.                        
                                                                              
                                                                              
    CHINA ASSETS (HOLDINGS) LIMITED                                           
    (Incorporated in Hong Kong with limited liability)                        
    (Stock Code : 170)                                                        
                                                                              
                                                                              
    VERY SUBSTANTIAL DISPOSAL                                                 
    - POSSIBLE DISPOSAL OF SHARES IN                                          
    KONGZHONG CORPORATION                                                     
                                                                              
                                                                              
    The Company plans to dispose of its shares in KongZhong, one of its       
    investee companies. Presently, the Company holds 125,282,520 KongZhong    
    Shares representing 9.1% of the existing issued ordinary share capital    
    of KongZhong. No contracts have been entered into in connection with      
    this proposed disposal but, as a necessary preliminary to being able to   
    effect it, the Directors are seeking the requisite approval of            
    Shareholders as the disposal of the shares in KongZhong when aggregated   
    with the disposal disclosed in the Announcement may constitute a very     
    substantial disposal for the Company under the Listing Rules.             
                                                                              
    A circular containing, among other things, details of the proposed        
    disposal and a notice of an extraordinary general meeting of the Company  
    will be despatched to the Shareholders in due course.                     
                                                                              
    The Possible Disposal Of Kongzhong Shares                                 
                                                                              
    The Company plans to dispose of its shares in KongZhong, one of its       
    investee companies. Presently the Company holds 125,282,520 KongZhong     
    Shares representing some 9.1% of the existing issued ordinary share       
    capital of KongZhong.                                                     
                                                                              
    The unaudited consolidated total assets and net asset value of the        
    KongZhong Group as at 31 December 2004 were about US$104.37 million and   
    US$99.81 million respectively. The following is a summary of the          
    consolidated results of KongZhong Group for the years ended 31 December   
    2004 and 2003 and the period from 6 May 2002 to 31 December 2002          
    respectively:-                                                            
                                                                              
                                            For the                           
                                            period from                       
            Year ended                 Year ended                6 May 2002   
    to                                                                        
            31 December 2004                31 December 2003                  
    31 December 2002                                                          
            US$'000                US$'000                US$'000             
            (Unaudited)                (Audited)                (Audited)     
                                                                              
    Turnover        47,969                7,807                200            
                                                                              
                                                                              
    Profit/(loss) before taxation        20,369                2,408          
    (494        )                                                             
                                                                              
                                                                              
    Taxation        0                0                0                       
                                                                              
                                                                              
    Profit/(loss) after taxation        20,369                2,408           
    (494        )                                                             
                                                                              
                                                                              
    No contracts have been entered into by the Company in relation to the     
    possible disposal of KongZhong Shares as the Directors consider that the  
    Company should first obtain its Shareholders' approval for the disposal   
    so that a disposal can be effected expeditiously when market conditions   
    are favourable. The disposal of its KongZhong Shares when aggregated      
    with the disposal disclosed in the Announcement may constitute a very     
    substantial disposal for the Company under the Listing Rules, for which   
    Shareholders' approval is required and any Shareholder and its            
    associates with a material interest in the transaction must abstain from  
    voting. Here, none of the Shareholder and its associate is required to    
    abstain from voting.                                                      
                                                                              
    The disposal either through the open market or by way of placing for      
    which advance Shareholders' approval is being sought will be effected     
    only if:                                                                  
                                                                              
    - it is completed within twelve months from the date of approval of       
    Shareholders being given, which the Directors consider to be a            
    reasonable period to conduct such a disposal of KongZhong Shares;