10:09     SHANGHAI ELECTRIC GROUP COMPANY LIMITED<02727> - Ann. (1)           

    Not for publication, distribution or release in the                       
    United States of America (including its territories                       
    and possessions, any State of the United States and                       
    the District of Columbia), the United Kingdom,                            
    Singapore, Japan, France, Netherlands, the PRC and                        
    Canada.                                                                   
                                                                              
    The information contained herein does not constitute                      
    an offer of securities for sale in the United States.                     
    Securities may not be offered or sold in the United                       
    States unless they are registered under applicable                        
    law or are exempt from registration. No public                            
    offering of securities will be made in the United                         
    States.                                                                   
                                                                              
    This announcement is for information purposes only                        
    and does not constitute an invitation or offer to                         
    acquire, purchase or subscribe for securities.                            
                                                                              
    The Stock Exchange of Hong Kong Limited ("Stock                           
    Exchange") and Hong Kong Securities Clearing Company                      
    Limited ("HKSCC") take no responsibility for the                          
    contents of this announcement, make no representation                     
    as to its accuracy or completeness and expressly                          
    disclaim any liability whatsoever for any loss                            
    howsoever arising from or in reliance upon the whole                      
    or any part of the contents of this announcement.                         
                                                                              
    Unless defined herein, terms in this announcement                         
    shall have the same meaning as those defined in the                       
    prospectus of Shanghai Electric Group Company Limited                     
    ("the Company") dated 18 April 2005 (the                                  
    "Prospectus").                                                            
                                                                              
    In connection with the Global Offering, Credit Suisse                     
    First Boston (Hong Kong) Limited ("CSFB"), being the                      
    Global Coordinator, on behalf of the International                        
    Underwriters or any person acting for it, may                             
    over-allocate or effect any other transactions with                       
    a view to stabilizing or maintaining the market price                     
    of the H Shares at a level higher than that which might                   
    otherwise prevail for a limited period after the last                     
    day for the lodging of applications under the Hong                        
    Kong Public Offering. Such transactions, if commenced,                    
    may be discontinued at any time. The Global                               
    Coordinator has been appointed as stabilizing manager                     
    for the purposes of the Global Offering and will                          
    conduct any stabilizing activities (if any) on a basis                    
    equivalent to that required under the Securities and                      
    Futures (Price Stabilizing) Rules made under the                          
    Securities and Futures Ordinance (Chapter 571 of the                      
    Laws of Hong Kong) and, should stabilizing                                
    transactions be effected in connection with the                           
    Global Offering, this will be at the absolute                             
    discretion of the Global Coordinator. The number of                       
    H Shares being offered in the Global Offering may be                      
    increased up to an aggregate of 445,936,000 H Shares                      
    through the exercise of the Over-allotment Option                         
    expected to be granted to the Global Coordinator by                       
    the Company and the Selling Shareholders. The                             
    Over-allotment Option gives the Global Coordinator                        
    the right exercisable on behalf of the International                      
    Underwriters, at any time from the date of the                            
    International Underwriting Agreement up to the 30th                       
    day after the last date for the lodging of                                
    applications under the Hong Kong Public Offering to                       
    require the Company to allot and issue up to an                           
    aggregate of 405,396,000 additional Offer Shares, and                     
    to require the Selling Shareholders to sell up to an                      
    aggregate of 40,540,000 additional Offer Shares. In                       
    the event the Over-allotment Option is exercised, a                       
    press announcement will be made.