09:30     FIRST DRAGONCOM<00875> - Announcement & Resumption (3)              

    The existing issued share capital of the Company is                       
    HK$25,325,430.83 divided into 2,532,543,083 Shares. Assuming that         
    the entire principal amount of the Bond is converted at the               
    conversion price of HK$0.0429 per Share, a total of approximately         
    466,200,466 Shares will be issued. These Shares represent (i)             
    approximately 18.41% of the existing issued share capital of the          
    Company; and (ii) approximately 15.55% of the issued share capital        
    of the Company as enlarged by the new Shares to be issued upon full       
    conversion of the Bond.                                                   
                                                                              
    The Conversion Shares will not be issued under the general mandate        
    to allot, issue and otherwise deal with Shares granted during the         
    annual general meeting held on 4 June 2004 (the ``General                 
    Mandate''). Under the General Mandate, the Directors were                 
    authorized to allot, issue and otherwise deal with up to                  
    426,508,616 Shares. 400,000,000 Shares was allotted and issued            
    according to a placing agreement dated 3 February 2005 entered into       
    between the Company and Concord Capital Securities Limited.               
    Accordingly, only 26,508,616 Shares remain under the General              
    Mandate, representing 6.22% of the total number of Shares which           
    may be allotted and issued under the General Mandate and there is         
    no sufficient number of Shares which can be allotted and issued           
    under the General Mandate where such exercise of the conversion           
    right of the Bond is made. If the General Mandate is refreshed,           
    an extra 505,508,616 Shares will be allowed to be allotted and            
    issued by the Company. In view of the fact that 466,200,466 Shares        
    which will be issued upon exercise of the conversion rights               
    attached to the Bond will represent 92.04% of the total number of         
    Shares which may be allotted and issued under refreshed General           
    Mandate and inevitably, will have utilized the refreshed General          
    Mandate to the fullest extent, the Board decided to choose a direct       
    and immediate means to obtain shareholders' approval and then make        
    allotment and issue of the Conversion Shares pursuant to the said         
    shareholders' approval.                                                   
                                                                              
    The shareholding of the existing public Shareholders will be              
    diluted from approximately 79.05% to approximately 66.76% as a            
    result of the full conversion of the Bond at the conversion price         
    as aforesaid.                                                             
                                                                              
    At present                                                                
    Upon full exercise of the conversion rights attached to the Bond          
                                                                              
    Number of Shares                                                          
    Approximate Percentage                                                    
    Number of Shares                                                          
    Approximate Percentage                                                    
                                                                              
    Dragon Delta (Note 1)                                                     
    530,530,000                                                               
    20.95%                                                                    
    530,530,000                                                               
    17.69%                                                                    
                                                                              
    Top Strategy                                                              
    0                                                                         
    0%                                                                        
    466,200,466                                                               
    15.55%                                                                    
                                                                              
    Public                                                                    
    2,002,013,083                                                             
    79.05%                                                                    
    2,002,013,083                                                             
    66.76%                                                                    
                                                                              
    Total                                                                     
    2,532,543,083                                                             
    100.00%                                                                   
    2,998,743,549                                                             
    100.00%                                                                   
                                                                              
    Note 1 The 530,530,000 Shares are directly held by Dragon Delta.          
    Dragon Delta is owned as to 60% and 40% by Dragoncom (Hong Kong)          
    Limited and HK World respectively. The ultimate beneficial owners         
    of Dragoncom (Hong Kong) Limited and HK World are Dr. Hon Fong Ming       
    Perry and Mr. Zhang Xiaoxiong respectively.                               
                                                                              
    Voting rights of holders of the Bond                                      
                                                                              
    The Bondholder will not be entitled to attend or vote at any meeting      
    of the Company by reason of being the Bondholder.