10:43     CHEUNG TAI HONG<00199> - Announcement & Resumption (11)             

            12.6            546,723,025             19.2                      
                                                                              
    Total   360,995,507             100.0           2,533,722,779             
    100.0                                                                     
            460,995,507             100.0           2,633,722,779             
    100.0                                                                     
            2,848,008,493           100.0                                     
                                                                              
    Note 1: Lunghin Enterprise Inc. is a company                              
    incorporated in the British Virgin Islands, whose                         
    entire issued share capital is beneficially owned by                      
    Mr. Tse Cho Tseung, an executive director of the                          
    Company.                                                                  
                                                                              
    Note 2: Save for the outstanding 2005 February                            
    Convertible Notes and share options which have                            
    already been granted under the Share Option Scheme                        
    as at the date of this announcement, the Company does                     
    not have any other securities which are convertible                       
    into Shares.                                                              
                                                                              
    Note 3: Being four of the Fund Subscribers with total                     
    subscription amount of HK$195 million which are                           
    established and managed by a common investment                            
    manager licensed by the SFC.                                              
                                                                              
    To the best of the knowledge, information and belief                      
    of the Directors and having made all reasonable                           
    enquiries, each of Loyal Concept and Hanny and their                      
    concert parties are independent of, not connected and                     
    not acting in concert with Kopola and Mr. Ho and their                    
    concert parties, and vice versa.                                          
                                                                              
    In the event that Loyal Concept exercises the                             
    conversion rights attaching to the Subscription                           
    Convertible Notes to the extent that Loyal Concept                        
    becomes a Shareholder interested in 30% or more of                        
    the enlarged issued share capital of the Company,                         
    Loyal Concept will be obliged to make a mandatory                         
    offer to the Shareholders to acquire all the then                         
    issued Shares, other than those already owned or                          
    agreed to be acquired by Loyal Concept and parties                        
    acting in concert with it in accordance with Rule 26                      
    of the Takeovers Code. As set out in the announcement                     
    of Hanny dated 20 April 2005 in relation to the                           
    subscription of Subscription Convertible Notes by                         
    Loyal Concept, Loyal Concept will comply with the                         
    relevant requirements of the Takeovers Code in such                       
    event that an obligation for a mandatory general offer                    
    arises.                                                                   
                                                                              
    The Company and the Directors will take appropriate                       
    steps to ensure that there will be sufficient public                      
    float for the Shares immediately following conversion                     
    of the Convertible Notes at any time during the term                      
    of the Convertible Notes.                                                 
                                                                              
    The Stock Exchange has indicated that should the                          
    Subscription and the Placing be completed, it will                        
    closely monitor trading in the Shares if less than                        
    25% of the issued Shares are held by the public. If                       
    the Stock Exchange believes that a false market exists                    
    or may exist in the trading in the Shares, or there                       
    are too few Shares in public hands to maintain an                         
    orderly market, then it will consider exercising its                      
    discretion to suspend trading in the Shares until a                       
    sufficient level of public float is attained.                             
                                                                              
    DILUTION EFFECT ON SHAREHOLDERS                                           
    As the Company foresees the future dilution effect                        
    on the Shareholders resulting from the exercise of                        
    the conversion rights attaching to the Convertible                        
    Notes, the Company will keep the Shareholders                             
    informed of the level of dilution effect and all                          
    relevant details of any conversion of the Convertible                     
    Notes in the following manner: