09:52     YANION INT'L<00082> - Announcement & Resumption (16)                

    HK$199,108,000) and RMB141,406,000 (approximately                         
    HK$133,402,000) respectively, and the unaudited net                       
    asset value and unaudited net cash balance of the                         
    Steel Plant was approximately RMB849,136,000                              
    (approximately HK$801,072,000) and RMB34,000,000                          
    (approximately HK$32,075,000) respectively as at 30                       
    November 2004.                                                            
                                                                              
    The Directors noted that the plant expansion in 2004,                     
    which increased the production capability of the                          
    Steel Plant substantially, had only commercially                          
    attained a normalised level of production output                          
    since August 2004. Therefore, the full year's                             
    earnings contribution from such plant expansion would                     
    be felt starting in 2005. In addition, upon completion                    
    of the intended plant expansion expected at around                        
    mid 2005, the Steel Plant's annual production output                      
    will be expected to double and thus further contribute                    
    substantially to increase in revenues.                                    
                                                                              
    Upon completion of the Acquisition and the Capital                        
    Increase, the results of the Steel Plant, Yingkou                         
    Steel JV and Guohua International will be                                 
    consolidated into the financial statements of the                         
    Group.                                                                    
                                                                              
    REASONS FOR AND BENEFITS OF THE ACQUISITION AND THE                       
    PLACING                                                                   
    In addition to the operation of the existing business                     
    of the Company, the Directors have been seeking                           
    investment opportunities in the specialised steel                         
    sector whose targeted customer segments are utilities                     
    and shipbuilding industries in order to diversify the                     
    Company's business in the PRC. According to industry                      
    sources, the PRC is a net importer of hot roll medium                     
    flat steel plates. The target customers of the Steel                      
    Plant are in the "encouraged" steel segments and its                      
    steel products are mainly supplied to                                     
    non-construction related sectors.                                         
                                                                              
    Further, the Directors consider that the Steel Plant                      
    has just begun to realise the benefits from its plant                     
    expansion efforts of last year and consider that its                      
    production output and revenues would significantly                        
    increase in 2005 relative to 2004. Such increase would                    
    be compounded by the intended further plant expansion                     
    which is expected to take place at around mid 2005.                       
    Production output of the Steel Plant is expected to                       
    increase from the current level of 1,000,000 tonnes                       
    per annum to approximately 2,000,000 tonnes per annum                     
    thereafter. In the environment of the relatively                          
    rapid economic development of the PRC economy and                         
    demand for the Steel Plant's products, earnings                           
    growth would be expected as the result of the                             
    Acquisition. In order to capture the business                             
    opportunities, the Directors consider that the                            
    Placing would provide the Group with immediate source                     
    of funding to finance the Acquisition and expansion                       
    plan of the Steel Plant as well as enlarge the                            
    shareholders base of the Company. The Directors                           
    believe that the Acquisition and the Placing will be                      
    for the best overall interests of the Company and the                     
    Shareholders.                                                             
                                                                              
    IMPLICATION OF THE LISTING RULES                                          
    The Acquisition constitutes a very substantial                            
    acquisition for the Company under the Listing Rules                       
    and is required to be made conditional on                                 
    Shareholders' approval pursuant to Rule 14.33 of the                      
    Listing Rules. Presently, no Shareholder is required                      
    to abstain from voting in relation to the Acquisition.                    
    The proposed Placing is also subject