10:56     CHEUNG KONG<00001> - Announcement (2)                               

    respect of the Wenjiang Land subject to and on the terms and              
    conditions set out therein                                                
                                                                              
    The Board of CKH wishes to announce that Glory Sense, a company           
    owned as to                                                               
    50/50 by the respective indirect wholly owned subsidiaries of             
    CKH and HWL, was successful in the bid for the Wenjiang Land              
    for development into residential and commercial properties. JVCo,         
    a new joint venture owned 50/50 through Glory Sense, has been             
    established on 2nd March, 2005 for the sole purpose of owning             
    and developing the Wenjiang Land.                                         
                                                                              
    Pursuant to the Land Use Right Transfer Contract, JVCo agreed             
    to acquire the land use right in respect of the Wenjiang Land             
    for a consideration of RMB347,200,000 (approximately                      
    HK$326,360,000) payable by instalments and subject to the terms           
    and conditions set out therein.                                           
                                                                              
    To fund the payment of land cost, construction costs and other            
    project costs for the development of the Wenjiang Land, the total         
    investment and registered capital of JVCo are proposed to be              
    RMB570,000,000 (approximately HK$535,800,000) and                         
    RMB200,000,000 (approximately HK$188,000,000) respectively.               
    Any contribution to the registered capital of, and any                    
    shareholders' loans to, JVCo is expected to be made equally by            
    indirect subsidiaries of CKH and HWL in proportion to their               
    respective equity interests in JVCo. It is expected that any              
    profit of JVCo is to be for the sole account of Glory Sense and           
    to be ultimately shared equally by indirect subsidiaries of CKH           
    and HWL in proportion to their respective indirect equity                 
    interests in JVCo.                                                        
                                                                              
    Reasons for the transaction                                               
                                                                              
    The addition of the Wenjiang Land to the landbank for development         
    into residential and commercial properties is consistent with             
    one of the core business strategies for CKH.                              
                                                                              
    The Board of CKH, including the independent non-executive                 
    directors, considers the terms for the purchase of the Wenjiang           
    Land and for the establishment of JVCo for the purpose of the             
    Acquisition and Development to be in the interests of CKH and             
    its shareholders, on normal commercial terms and fair and                 
    reasonable so far as CKH and its shareholders are concerned.              
                                                                              
    Connected transaction                                                     
                                                                              
    HWL is a substantial shareholder of certain subsidiaries of CKH           
    and hence is a connected person of CKH within the meaning of              
    the Listing Rules. The joint venture arrangements for the purpose         
    of effecting the Acquisition and Development constitute a                 
    connected transaction for CKH under Listing Rule 14A.13(6). The           
    Stock Exchange rules that the amount of total capital commitment          
    of each of CKH and HWL in connection with the establishment of            
    JVCo is equal to 50% of the proposed total investment of JVCo             
    for the purpose of Listing Rule 14.15(2). As the relevant                 
    percentage ratios represented by such "commitment" amount for             
    CKH are more than 0.1% but less than 2.5%, such establishment             
    of JVCo is according to Listing Rule 14A.32 exempt from the               
    independent shareholders' approval requirements and is subject            
    to the reporting and announcement requirements set out in Listing         
    Rules 14A.45 to 14A.47.                                                   
                                                                              
    General                                                                   
                                                                              
    The principal activities of the CKH Group are investment holding,         
    property development and investment, hotel and serviced suite             
    operation, property and project management and investments in             
    securities.