10:12     HI SUN GROUP<00818> - Announcement (2)                              

    Rules. Accordingly, the adoption of the Employee                          
    Incentive Scheme is subject to Shareholders' approval                     
    under the Listing Rules.                                                  
                                                                              
    A circular setting out information relating to the                        
    above matters, notice of the SGM to be convened for                       
    the purpose of considering and, if thought fit,                           
    approving the Subscription Agreement and the                              
    transactions contemplated therein, including the                          
    issue of the Conversion Shares and the adoption of                        
    the Employee Incentive Scheme and the form of proxy                       
    will be despatched to the Shareholders on 18 March                        
    2005.                                                                     
                                                                              
    INTRODUCTION                                                              
    As announced by the Company on 11 November 2004, on                       
    9 November 2004, Turbo Speed, a wholly owned                              
    subsidiary of the Company, entered into the                               
    Subscription Agreement with the Subscribers in                            
    relation to the subscription by the Subscribers of                        
    the Convertible Preference Shares at a total                              
    subscription price of US$4 million (approximately                         
    HK$31.2 million). The Subscription will result in a                       
    material dilution of the Company's interest in Turbo                      
    Speed under Rule 13.36(1)(a)(ii) of the Listing                           
    Rules.                                                                    
                                                                              
    As set out in the Circular, a written approval has                        
    been obtained from Rich Global Limited, the                               
    controlling shareholder holding approximately 56.8%                       
    in the nominal value of the securities giving the                         
    right to attend and vote at a general meeting of the                      
    Company to approve the Subscription. Subsequent to                        
    the issue of the Circular, the Stock Exchange and the                     
    Company have agreed that the Subscription, which                          
    constitutes a material dilution of the Company's                          
    interest in Turbo Speed pursuant to Rule                                  
    13.36(1)(a)(ii) of the Listing Rules, is subject to                       
    Shareholders' approval in a general meeting.                              
    Accordingly, a general meeting will be convened for                       
    the Shareholders to consider and, if thought fit,                         
    approve the Subscription and the issue of the                             
    Conversion Shares pursuant to the Subscription                            
    Agreement.                                                                
                                                                              
    As set out in the Announcement and the Circular, the                      
    Company intended to issue the Conversion Shares under                     
    the General Mandate. However, to allow greater                            
    flexibility to the Company given that under the terms                     
    of the Subscription Agreement, the number of                              
    Conversion Shares may exceed the maximum limit of the                     
    number of Shares issuable under the General Mandate,                      
    the Board decided to seek Shareholders' approval for                      
    the issue of the Conversion Shares.                                       
                                                                              
    Also, the Board intends Turbo Speed to adopt the                          
    Employee Incentive Scheme. The grant of the Option                        
    Shares, which represents a possible disposal of the                       
    Company's interest in Turbo Speed, when aggregated                        
    with the Subscription, which represents a deemed                          
    disposal of the Company's interest in Turbo Speed,                        
    constitutes a major transaction for the Company                           
    pursuant to the Listing Rules. Accordingly, the                           
    adoption of the Employee Incentive Scheme is subject                      
    to Shareholders' approval under the Listing Rules.                        
                                                                              
    ISSUE OF THE CONVERTIBLE PREFERENCE SHARES BY TURBO                       
    SPEED                                                                     
    The Subscription Agreement                                                
    As disclosed in the Announcement and the Circular,                        
    on 9 November 2004, Turbo Speed, a wholly owned                           
    subsidiary of the Company, entered into the                               
    Subscription Agreement with the Subscribers in                            
    relation to the subscription by the Subscribers of