09:17     MATSUNICHI<00283> - Announcement & Resumption (3)                   

    Jade Forest (Note)   421,202,894   71.5   341,202,894   57.9              
    421,202,894   63                                                          
    Public Shareholders   167,883,789   28.5   247,883,789   42.1             
    247,883,789   37                                                          
                                                                              
    Total   589,086,683   100   589,086,683   100   669,086,683   100         
                                                                              
    Note: Jade Forest is wholly and beneficially owned by Mr. Pan             
    Su Tong, a Director.                                                      
                                                                              
    REASONS FOR THE PLACING AND SUBSCRIPTION                                  
                                                                              
    The Group sales turnover reached HK$817 million in the first              
    half year of the fiscal year 2004/2005, representing a                    
    remarkable growth of approximately 268% over the corresponding            
    period in the previous year. Attributed to this strong                    
    business growth, the Directors consider that it is in the best            
    interests of the Company to raise capital from the equity                 
    market in order to place the Company in a stronger position to            
    capture business opportunities through new product                        
    developments and working capital financing for the procurement            
    of raw materials. The Directors are further of the view that              
    the Placing and Subscription will enhance the capital base of             
    the Company and strengthen the Group's financial position.                
                                                                              
    The Placing Price and the Subscription Price were determined              
    after arm's length negotiations between the Company, Jade                 
    Forest and the Placing Agents and the Directors consider that             
    the Placing Price and the Subscription Price are fair and                 
    reasonable.                                                               
                                                                              
    USE OF PROCEEDS                                                           
                                                                              
    All the commission, cost incurred in relation to the Placing              
    and Subscription, which is expected to be HK$6 million will be            
    borne by the Company and the interest accrued on the net                  
    Placing proceeds from the date of completion of Placing to the            
    date of completion of the Subscription will be for the benefit            
    of the Company.                                                           
                                                                              
    Assuming the maximum number of Shares are placed and                      
    subscribed, the net proceeds of the Subscription is expected              
    to be not less than HK$202 million, of which it is expected               
    that no less than HK$95 million will be used to finance                   
    development of new digital products including new models of               
    MP3 players and portable media players and the remaining                  
    balance being not more than HK$107 million for general working            
    capital of the Group. Accordingly, the net placing price per              
    Share is approximately HK$2.5.                                            
                                                                              
    LOCK UP                                                                   
                                                                              
    Pursuant to the Placing Agreement, Jade Forest has undertaken             
    to the Placing Agents that (i) it and it will procure its                 
    associates, nominees or trustees holding in trust for it that,            
    prior to the date falling 6 months from the date of completion            
    of the Placing Agreement, not to sell, transfer or dispose of,            
    or create any rights in respect of, any Shares (other than the            
    Shares placed pursuant to the Placing but include the Shares              
    acquired under the Subscription) owned by it or any company               
    controlled by it, (ii) it will procure the Company not to                 
    allot or issue or issue options on other rights in respect of             
    any Shares or any other securities convertible into, the                  
    Shares for a period of 6 months from the date of completion of            
    the Placing Agreement, without the prior written consent of               
    the Lead Manager (for and on behalf of the Placing Agents),               
    other than the Shares acquired under the Subscription and                 
    Shares that may fall to be issued pursuant to the grant or                
    exercise of options under the share option scheme of the                  
    Company); and (iii) it will procure its shareholder that,                 
    prior to the date falling 6 months from the date of completion            
    of the Placing Agreement, save with the prior written consent             
    of the Lead Manager (for and on behalf of the Placing Agents)             
    not to sell, transfer or dispose of, or create any rights in              
    respect of any shares in the Jade Forest owned by it or any               
    company controlled by it.                                                 
                                                                              
                                                                              
    GENERAL                                                                   
                                                                              
    The Company has not conducted any other equity fund raising               
    activities in the past twelve-month period immediately before             
    the date of this announcement.                                            
                                                                              
    Trading in the Shares on the Stock Exchange has been suspended            
    since 9:30 a.m. on 23 February 2005 at the request of the                 
    Company. The Company has submitted an application to the Stock            
    Exchange for the resumption of trading of the Shares at 9:30              
    a.m. on 24 February 2005.