09:13     CHINA STAR ENT<00326> - Announcement (2)                            

    Placees                                                                   
    Not less than six independent placees (which will be                      
    independent individual, corporate and/or institutional                    
    investors) (the "Placee(s)"), who and whose ultimate                      
    beneficial owners are not connected person and are                        
    independent of the Company and its connected persons (as                  
    defined in Listing Rules). No Placees will become the                     
    substantial Shareholders.                                                 
                                                                              
    Top-Up Placing Price                                                      
    The Top-Up Placing Price and the Subscription Price of                    
    HK$0.50 represents (i) a discount of about 13.79% to the                  
    closing price of HK$0.58 per Share as quoted on the Stock                 
    Exchange on 24 February 2005, being the last trading day                  
    before this announcement; (ii) a discount of about 14.68%                 
    to the average of the closing price per Share of HK$0.586                 
    as quoted on the Stock Exchange for the last five trading                 
    days up to and including 24 February 2005, being the last                 
    trading day before this announcement; and (iii) a discount                
    of about 12.89% to the average of the closing price per                   
    Share of HK$0.574 as quoted on the Stock Exchange for the                 
    last ten trading days up to and including 24 February 2005,               
    being the last trading day before this announcement.                      
                                                                              
    The Top-Up Placing Price was negotiated on an arm's length                
    basis between the Company and the Placing Agent.                          
                                                                              
    The Top-Up Placing Shares                                                 
    The Top-Up Placing Shares represent (i) about 17.25% of                   
    the existing issued share capital of the Company of                       
    443,941,608 Shares; and (ii) about 14.72 % of the issued                  
    share capital of the Company of 520,541,608 Shares as                     
    enlarged by the Subscription.                                             
                                                                              
    Condition of the Placing                                                  
    The Top-Up Placing is unconditional and is expected to be                 
    completed on 1 March 2005.                                                
                                                                              
    THE SUBSCRIPTION AGREEMENT                                                
    On 24 February 2005, the terms of the Subscription were                   
    fixed and the Vendors entered into the Subscription                       
    Agreement with the Company. Pursuant to the Subscription                  
    Agreement, the Vendors conditionally agreed to subscribe                  
    for an aggregate of 76,600,000 Subscription Shares at a                   
    price of HK$0.50 per Share.                                               
                                                                              
    Date                                                                      
    24 February 2005                                                          
                                                                              
    Parties involved                                                          
    The Company and the Vendors                                               
                                                                              
    The Subscription Price                                                    
    The Subscription Price is HK$0.50 per Share. The                          
    Subscription price is equivalent to the Top-Up Placing                    
    Price and was determined after arm's length negotiation                   
    between the Company and the Vendors with reference to the                 
    Top-Up Placing Price of the Top-Up Placing. The Directors                 
    (including the independent non-executive Directors)                       
    consider that the terms of the Top-Up Placing and the                     
    Subscription (including the Top-Up Placing Price and the                  
    Subscription Price) are fair and reasonable based on the                  
    current market condition and in the interests of the                      
    Company and its Shareholders as a whole.                                  
                                                                              
    The net proceeds raised per Subscription Share upon the                   
    completion of Subscription will be HK$0.49 per Share.                     
                                                                              
    Number of Subscription Shares                                             
    The Subscription Shares represent (i) about 17.25% of the                 
    existing issued share capital of the Company of                           
    443,941,608 Shares; and (ii) about 14.72 % of the issued                  
    share capital of the Company of 520,541,608 Shares as                     
    enlarged by the Subscription.                                             
                                                                              
    The Subscription Shares, when issued and fully paid, will                 
    rank pari passu among themselves and with Shares in issue                 
    at the time of issue and allotment of the Subscription                    
    Shares.                                                                   
                                                                              
    Conditions                                                                
    The Subscription is conditional upon:                                     
                                                                              
    (a)   the Stock Exchange granting the listing of, and                     
    permission to deal in, the Subscription Shares;