09:46     STONE HOLDINGS<00409> - Announcement (11)                           

    Turnover        53.9            126.7                                     
    Net profit before tax   25.7            67.2                              
    Net profit after tax    25.7            67.2                              
                                                                              
    Net asset value 35.7            87.0                                      
                                                                              
    The principal assets of Beijing MTY includes                              
    receivables, intangible assets including but not                          
    limited to intellectual properties and fixed assets                       
    such as office equipment.                                                 
                                                                              
    Reasons for and benefits of the Acquisition                               
    The principal activity of the Company is investment                       
    holding. The principal activities of its subsidiaries                     
    are the manufacture, distribution and sale of                             
    electronic and electrical products, office equipment,                     
    the manufacture, distribution and sales of healthcare                     
    products and multimedia business.                                         
                                                                              
    It has been the Group's long term strategy to                             
    progressively identifying new business opportunities                      
    to form solid foundation for strengthening the                            
    Group's further operating profits and as a result,                        
    enhancing the earning base and investment value of                        
    the Group.                                                                
                                                                              
    The Directors believe the wireless telecommunication                      
    VAS market in the PRC has substantial growth potential                    
    as the popularity of mobile phone continues to grow                       
    in the PRC. With its already established market                           
    position in the PRC, Beijing MTY is poised to capture                     
    the growth potential in this market. In particular,                       
    the Directors are optimistic about the MTY Group's                        
    latest automobile telecommunication services as the                       
    number of automobiles in the PRC is expected to                           
    continue to grow in tandem with the economic growth                       
    of the PRC in the coming years. The Directors consider                    
    that the Acquisition will provide the Group the                           
    opportunity to tap into the growing wireless                              
    telecommunication VAS market in the PRC while                             
    enhancing the Group's profitability, which is in the                      
    interests of the Company and the Shareholders as a                        
    whole are concerned.                                                      
                                                                              
    The Group will leverage on its experience in its                          
    existing investments such as SINA Corporation, one                        
    of the leading online media companies and value added                     
    information services providers in the PRC, and its                        
    intelligent transportation system business, to                            
    manage and develop the wireless telecommunication VAS                     
    business of the MTY Group. At the same time, the                          
    Directors will continue to look for any possible                          
    business cooperation opportunities between the MTY                        
    Group and the Group's existing operations, in                             
    particular its media related businesses, to generate                      
    synergy which can enhance the overall efficiency and                      
    profitability of the Group as a whole.                                    
                                                                              
    The Directors consider that the Gotech Consideration,                     
    which represents the price earning ratio of 5.93 times                    
    40% of the 2005 Guaranteed Profit, is fair and                            
    reasonable so far as the Company and the Shareholders                     
    as a whole are concerned, having considered the                           
    trading multiples of comparable telecommunication                         
    companies listed on the Stock Exchange.                                   
                                                                              
    GENERAL                                                                   
    A circular containing, among other things, further                        
    details of the Acquisition will be despatched to the                      
    Shareholders as soon as practicable.