09:37     KIU HUNG INT'L<00381> - Announcement (2)                            

    which HK$1 shall be the consideration for the sale and purchase of the    
    Sale Shares and HK$14,029,904 shall be the consideration for the sale     
    and purchase of the Sale Loan.                                            
                                                                              
    The aggregate consideration for the sale and purchase of the Sale Shares  
    and the Sale Loan shall be payable in cash by Kiu Hung Holdings to        
    Legend Wealth in the following manner:                                    
                                                                              
    (a)        HK$2,029,905, being payment towards the consideration for the  
    sale and purchase of the Sale Shares and part payment towards the         
    consideration for the sale and purchase of the Sale Loan, shall be        
    payable by Kiu Hung Holdings to Legend Wealth on the date of Completion;  
                                                                              
    (b)        HK$3,000,000, being part payment towards the consideration     
    for the sale and purchase of the Sale Loan, shall be payable by Kiu Hung  
    Holdings to Legend Wealth on or before six calendar months from the date  
    of Completion;                                                            
                                                                              
    (c)        HK$3,000,000, being part payment towards the consideration     
    for the sale and purchase of the Sale Loan, shall be payable by Kiu Hung  
    Holdings to Legend Wealth on or before 12 calendar months from the date   
    of Completion;                                                            
                                                                              
    (d)        HK$3,000,000, being part payment towards the consideration     
    for the sale and purchase of the Sale Loan, shall be payable by Kiu Hung  
    Holdings to Legend Wealth on or before 18 calendar months from the date   
    of Completion; and                                                        
                                                                              
    (e)        HK$3,000,000, being part payment towards the consideration     
    for the sale and purchase of the Sale Loan, shall be payable by Kiu Hung  
    Holdings to Legend Wealth on or before 24 calendar months from the date   
    of Completion.                                                            
                                                                              
    The consideration for the Disposal was calculated based on (i) the        
    amount of HK$14,029,904 advanced by the Group to Huge Profit; (ii) Huge   
    Profit did not yield any operating revenue since its incorporation; and   
    (iii) the net liabilities of Huge Profit of approximately HK$1,605,000    
    as at 31 December 2004.                                                   
                                                                              
    As the Disposal comprises the sale and purchase of the Sale Shares and    
    the Sale Loan and the aggregate consideration for the Disposal is         
    HK$14,029,905, the Directors consider that the consideration of HK$1      
    represents a fair value of the consideration of the sale and purchase of  
    the Sale Shares.                                                          
                                                                              
    The consideration for the Disposal was arrived at after arm's length      
    negotiations between the parties to the Sale and Purchase Agreement. The  
    Directors consider the terms and conditions of the Disposal to be fair    
    and reasonable and are in the interests of the Group and the              
    Shareholders as a whole. The Directors consider the terms and conditions  
    of the Disposal to be on normal commercial terms. The Independent Board   
    Committee will also seek the view of the independent financial adviser    
    as to the fairness and reasonableness of the Disposal.                    
                                                                              
    Condition:                                                                
                                                                              
    The Disposal is conditional upon the passing by the Independent           
    Shareholders by poll at an extraordinary general meeting to be convened   
    and held of an ordinary resolution to approve the Disposal.               
                                                                              
    If the condition is not satisfied on or before 12:00 noon on 17 June      
    2005, the Sale and Purchase Agreement shall cease and determine and       
    neither party to the Sale and Purchase Agreement shall have any           
    obligations and liabilities hereunder save for any antecedent breaches    
    of the terms of the Sale and Purchase Agreement.                          
                                                                              
    Completion:                                                               
                                                                              
    Completion shall take place within ten Business Days after the date on    
    which the condition of the Sale and Purchase Agreement has been           
    fulfilled.                                                                
                                                                              
    Upon Completion, the Group will not hold any interests in the capital of  
    Huge Profit or Sangyang Spandex and Huge Profit will cease to be a        
    subsidiary of the Company.                                                
                                                                              
    Guarantee:                                                                
                                                                              
    Under the Sale and Purchase Agreement, each of Mr Hui Kee Fung, Mr Hui    
    Ki Yau and Madam Hui Hung Tan, Teresa has guaranteed to Legend Wealth     
    the due and punctual performance of Kiu Hung Holdings of its obligations  
    under the Sale and Purchase Agreement, including but not limited to the   
    obligation to pay the consideration.                                      
                                                                              
    INFORMATION ON KIU HUNG HOLDINGS