10:25     NAM TAI EEP<02633> - Announcement (6)                               

    The Group is a well-established vertically integrated                     
    manufacturing solutions provider for reputable brand                      
    owners of consumer electronics and communications                         
    products. The Group focuses on four segments of the                       
    consumer electronics and communications sectors                           
    including optical devices, home entertainment                             
    devices, mobile phone accessories and educational                         
    products.                                                                 
                                                                              
    REASONS FOR THE ACQUISITION                                               
    As a well-established vertically integrated                               
    manufacturing solutions provider of consumer                              
    electronics and communications products, the Company                      
    is continuously striving to capture business                              
    opportunities in the outsourcing trend of the                             
    consumer electronics, communications and automotive                       
    electronics sectors, augment profitability and                            
    maximize shareholders' value. The Acquisition offers                      
    the Company an opportunity to acquire the entire                          
    issued share capital of Namtek, which wholly-owns                         
    Namtek Shenzhen and Namtek Japan.                                         
                                                                              
    In respect of augmenting profitability, as Namtek                         
    Group's software development for digital                                  
    dictionaries has high gross and net profit margins                        
    of 79.0% and 48.5% respectively for the year ended                        
    31 December 2004, the Acquisition will enable the                         
    Company to enhance its profit margin and profit return                    
    via this new product segment.                                             
                                                                              
    Insofar as capturing emerging industry trends is                          
    concerned, through the Acquisition, the Company can                       
    embark upon the automotive electronics sector more                        
    swiftly by eliminating unnecessary time and costs in                      
    research and development of this business area. By                        
    acquiring the Namtek Group, the Company will be able                      
    to provide innovative and one stop solution for the                       
    car navigation system from map formatting, software                       
    and hardware development to PCB assembly and hence                        
    provide vast business opportunities for the Company.                      
                                                                              
    Further, the Company will be able to leverage on the                      
    experience and knowledge of the staff of Namtek Group                     
    to integrate their relevant know-how to the Group's                       
    new and existing products. Upon the Acquisition, the                      
    Company and Namtek Group can also cross-sell their                        
    products and services to their existing customers and                     
    contacts.                                                                 
                                                                              
    The Directors confirmed that the Sale and Purchase                        
    Agreement was negotiated on an arm's length basis                         
    among the Parties. The Directors consider that the                        
    terms of the Acquisition and the Sale and Purchase                        
    Agreement are normal commercial terms and are fair                        
    and reasonable and in the interests of the Company                        
    and the Shareholders as a whole.                                          
                                                                              
    GENERAL                                                                   
     As each of the percentage ratios (other than the                         
    profits ratio) is more than 2.5% and the total                            
    consideration for the Acquisition is more than                            
    HK$10,000,000, the Acquisition constitutes a                              
    connected transaction of the Company under Chapter                        
    14A of the Listing Rules and is subject to the approval                   
    by the independent Shareholders.                                          
                                                                              
    The total consideration for the Acquisition                               
    represents more than 5% but less than 25% of the                          
    consideration ratio calculated pursuant to Rule                           
    14.07(4) of the Listing Rules. Accordingly, the                           
    Acquisition also constitutes a discloseable                               
    transaction of the Company under Chapter 14 of the                        
    Listing Rules.