09:05     SUN HUNG KAI CO<00086> - Results Announcement (2)                   

                                                                              
    (b)     Other Expenses                                                    
                                    Group                                     
                                    2004            2003                      
                                    HK$'000         HK$'000                   
                                                                              
    Net exchange losses             -               40                        
    Net loss on disposal of other investments                                 
                                    -               6,302                     
    Loss on deemed disposal of an associated company                          
                                    4,455           -                         
    Permanent impairment of other investments transferred from investment     
    revaluation reserve               16,898          6,524                   
    Provision for diminution in value of an associated company                
                                    -               21,892                    
    Provision for interest and legal cost in respect of litigation with New   
    World Development Company Limited *                                       
                                    2,934           58,364                    
    Provision for doubtful debts    16,074          34,684                    
                                    --------------------------                
                                    40,361          127,806                   
                                                                              
                                                                              
    *       On 1 April 2004, the High Court of Hong Kong awarded a judgment ( 
    the "Judgment") in favour of New World Development Company Limited ("NWDC 
    ") against Sun Hung Kai Securities Limited ("SHKS") following legal       
    proceedings regarding a joint venture in respect of land and two hotels in
    Kuala Lumpur, Malaysia. The Judgment was for a principal amount of HK$80, 
    117,652.72 together with interest of HK$25,416,365.50 and interest at     
    judgment rate from 16 December 1998 until payment, and costs (together    
    estimated by the Company to be in the region of approximately HK$160      
    million).                                                                 
                                                                              
    SHKS has since year 2000 booked as "Other Investments" an amount of       
    approximately HK$118 million including payments already made to NWDC in a 
    total sum of HK$35.3 million. A provision of HK$18.7 million for interest 
    was made in 2000. Additionally, a provision of HK$58,364,000 was made in  
    these accounts in respect of interest and legal costs in 2003 and an      
    interest expense of HK$2,934,000 was paid in 2004.                        
                                                                              
    SHKS has appealed against the Judgment. The Company's present             
    understanding of the Judgment is that SHKS now has an effective 12.5%     
    interest, including its share of shareholders' loans, in a completed      
    project in Kuala Lumpur consisting of two first class hotels with around  
    1,000 rooms, and a convention and retail complex presently known as "The  
    Renaissance Kuala Lumpur Hotel".                                          
                                                                              
                                                                              
    3.      Earnings per Share                                                
                                                                              
    The calculation of earnings per share was based on the profit attributable
    to shareholders of HK$384,795,000 (2003: HK$241,914,000) and 1,245,703,156
    ordinary shares in issue during the year (2003: the weighted average      
    number of 1,293,241,156 ordinary shares).                                 
                                                                              
    No diluted earnings per share were presented for the year as there were no
    dilutive potential ordinary shares as at year end (2003: Nil).            
                                                                              
    For more details, please refer to the press announcement today.