09:39     SHANGHAI PECHEM<00338> - Announcement (1)                           

    The Stock Exchange of Hong Kong Limited takes no responsibility for       
    the contents of this announcement, makes no representation as to its      
    accuracy or completeness and expressly disclaims any liability            
    whatsoever for any loss howsoever arising from or in reliance upon        
    the whole or any part of the contents of this announcement.               
                                                                              
    Sinopec Shanghai Petrochemical Company Limited                            
    (A joint stock limited company incorporated in the People's Republic      
    of China)                                                                 
                                                                              
    (Stock Code: 338)                                                         
                                                                              
    CONNECTED TRANSACTION                                                     
                                                                              
                                                                              
    The 22nd meeting of the 4th session of the Board of Directors             
    was convened on 28 April 2005 during which the Board of Directors         
    considered and approved the execution of the Sale and Purchase            
    Agreement between the Company and Sinopec International.                  
                                                                              
    Pursuant to the Sale and Purchase Agreement, the Company agrees to        
    transfer approximately 12.67% of its equity interest in Jin Shan to       
    Sinopec International at a consideration of RMB10,000,000.                
                                                                              
    Under the Hong Kong Listing Rules, the Sale and Purchase Agreement        
    is considered to be a connected transaction and subject to reporting      
    and announcement requirements but is exempt from independent              
    shareholders' approval. The same announcement is also published in        
    Shanghai pursuant to the Shanghai Listing Rules.                          
                                                                              
    The Company and all members of the Board of Directors confirm that        
    the information contained in this announcement is true, accurate and      
    complete, and jointly accept full responsibility for any false            
    statement, misleading representation or material omissions in this        
    announcement.                                                             
                                                                              
                                                                              
    Introduction                                                              
    The Board is pleased to announce that it passed a resolution on 28        
    April 2005 approving the execution and performance of the Sale and        
    Purchase Agreement (this `transaction' or this `connected                 
    transaction').                                                            
                                                                              
    Pursuant to rule 14A.32 of the Hong Kong Listing Rules, this              
    connected transaction is subject to reporting and announcement            
    requirements but is exempt from independent shareholders' approval.       
    This announcement is also published in Shanghai pursuant to the           
    Shanghai Listing Rules.                                                   
                                                                              
    The Sale and Purchase Agreement                                           
    On 28 April 2005, the Company entered into the Sale and Purchase          
    Agreement between the Company and Sinopec International.                  
                                                                              
    Pursuant to the Sale and Purchase Agreement, the Company agrees to        
    transfer a 12.67% equity interest in Jin Shan to Sinopec                  
    International. The Company intends to retain majority shareholding        
    interest in Jin Shan. (The details of the Immediately prior to the share  
    transfer, the ownership structure of the Company, please refer to the     
    press announcement today.)                                                
                                                                              
    Sinochem and Shanghai Overseas are substantial shareholders of Jin        
    Shan. Accordingly, Sinochem and Shanghai Overseas are connected           
    persons of the Company as defined in the Hong Kong Listing Rules.         
                                                                              
    Immediately following the transaction, the Company's equity interest      
    in Jin Shan will be reduced from 80% to 67.33%. Jin Shan will             
    continue to be a subsidiary of the Company following this                 
    transaction.                                                              
                                                                              
    Jin Shan is a joint venture company established in October 1981 in        
    the PRC which business comprises the trading, distribution and            
    marketing of imported and locally produced petrochemical products.        
                                                                              
    Consideration and Value of the share transfer                             
    In consideration for the Company transferring its 12.67% equity           
    interest in Jin Shan to Sinopec International, Sinopec International      
    agrees to pay the Company an amount of RMB10,000,000 in cash (the         
    `Consideration'). According to the Sale and Purchase Agreement,           
    Sinopec International shall pay to the Company the Consideration          
    within 2 months of the Sale and Purchase Agreement.