08:52     CHINA AEROSPACE<00031> - Results Announcement (2)                   

                                                                              
    2.      Earnings per share                                                
                                                                              
    The calculation of the basic earnings per share is based on the following 
    data:                                                                     
                                                                              
                                            1.1.2004        1.1.2003          
                                            to              to                
                                            31.12.2004      31.12.2003        
                                            HK$'000         HK$'000           
    Net Profit                                                                
    Net profit for the period for                                             
      calculation of basic earnings per                                       
      share                                 55,780          30,196            
                                            =======================           
                                                                              
    Number of Shares                                                          
    Weighted average number of ordinary                                       
      shares for the calculation of basic                                     
      earnings per share                    2,142,420,000   2,142,420,000     
                                            =============================     
                                                                              
    No diluted earnings per share has been presented for both periods as there
    is no dilutive potential share in issue.                                  
                                                                              
    3.      Qualified opinion arising from disagreement about accounting      
    treatment                                                                 
                                                                              
    The Company together with certain subsidiaries ("Borrowers") entered into 
    a debt restructuring deed on 7 December 2004 ("Deed") with a banker for   
    the purpose of restructuring the debts due to the banker. The banker will 
    waive debts of HK$193,520,000 provided the Group fully complies with the  
    repayment terms of the Deed. This amount has been recognised as income in 
    the consolidated income statement for the year ended 31 December 2004.    
    However, in the auditors' opinion, such waiver should be recognised as    
    income only when the repayment terms of the Deed have been fully complied 
    with and, accordingly, the net assets as at 31 December 2004 and the      
    profit for the year then ended should be reduced by that amount.          
                                                                              
    Except for the recognition as income of the waiver of debts of            
    HK$193,520,000, in the auditors' opinion the financial statements give a  
    true and                                                                  
    fair view of the state of affairs of the Company and the Group as at 31   
    December 2004 and of the profit and cash flows of the Group for the year  
    then ended and have been properly prepared in accordance with the         
    Companies Ordinance.                                                      
                                                                              
    4.      Certain comparative figures have been restated in order to achieve
    a consistent presentation.                                                
                                                                              
    For more details, please refer to the press announcement today.