10:19     HI SUN GROUP<00818> - Announcement (14)                             

    Pursuant to an approval from the Beijing Tax Bureau,                      
    the taxable income in respect of information                              
    technology products and services of certain                               
    subsidiaries of the Group, including Beijing                              
    Hi-Sunsray, are entitled to three years' PRC income                       
    tax exemption commencing from 1 January 2000. In                          
    addition, no provision for overseas profits tax has                       
    been provided in these accounts as the Group has no                       
    estimated assessable overseas profit for the year.                        
                                                                              
    Based on the unaudited management accounts of Turbo                       
    Speed, the unaudited consolidated net loss (before                        
    and after taxation) for six months ended 30 June 2004                     
    and the unaudited consolidated net labilities of                          
    Turbo Speed as at 30 June 2004 are approximately                          
    HK$7,081,000 and approximately HK$17,339,000                              
    respectively.                                                             
                                                                              
    LISTING RULES IMPLICATIONS                                                
    Since Turbo Speed is a major subsidiary of the Company                    
    and 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, the                      
    Subscription is subject to the approval of the                            
    Shareholders at a general meeting.                                        
                                                                              
    Given the aggregate consideration for (i) the                             
    Subscription, which represents a deemed disposal of                       
    the Company's interest in Turbo Speed; and (ii) the                       
    grant of the Option Shares (based on the maximum                          
    number of Scheme Shares to be granted), which                             
    represents a possible disposal of the Company's                           
    interest in Turbo Speed, is over 25% but less than                        
    100% of the Company's market capitalization, the                          
    Subscription and the grant of the Option Shares when                      
    aggregated constitutes a major transaction for the                        
    Company pursuant to the Listing Rules and is subject                      
    to approval of the Shareholders at the SGM. No                            
    shareholder is required to abstain from voting under                      
    the Listing Rules.                                                        
                                                                              
    GENERAL                                                                   
    A circular setting out (i) information relating to                        
    the Subscription and the issue of the Convertible                         
    Preference Shares (including and in addition to those                     
    set out in the circular); (ii) information relating                       
    to the Employee Incentive Scheme; and (iii) notice                        
    of the SGM to be convened for the purpose of                              
    considering and, if thought fit, approving (i) the                        
    Subscription Agreement and the transactions                               
    contemplated therein, including the issue of the                          
    Conversion Shares; and (ii) the adoption of the                           
    Employee Incentive Scheme and the form of proxy will                      
    be despatched to the Shareholders on 18 March 2005.                       
                                                                              
    As at the date of this announcement, the Board                            
    comprises eight executive Directors, namely Mr.                           
    CHEUNG Yuk Fung, Mr. KUI Man Chun, Mr. LO Siu Yu, Mr.                     
    XU Wensheng, Mr. LI Wenjin, Mr. CHAN Yiu Kwong, Mr.                       
    XU Chang Jun and Mr. ZHOU Jian, and three independent                     
    non-executive Directors, namely Mr. TAM Chun Fai, Mr.                     
    XU Sitao and Mr. LEUNG Wai Man, Roger.                                    
                                                                              
    DEFINITIONS                                                               
    In this announcement, the following terms have the                        
    following meanings:                                                       
                                                                              
    "Acme Partner"  Acme Partner International Limited,                       
    a company incorporated in the British Virgin Islands                      
                                                                              
    "Announcement"  the announcement of the Company                           
    dated 11 November 2004 in relation to the issue of