10:25     CHINA HAIDIAN<00256> - Announcement (2)                             

    knowledge, no connected person of the Company has any                     
    interest in Citychamp. Ms. Sit Lai Hei and *                              
    (Lu Xiaojun) do not have any interest in the Company.                     
                                                                              
    *(Fuzhou Yingrong Investment Company Limited) is interested               
    in less than 30% of the issued share capital of Citychamp.                
    In addition, under the PRC law, Ms. Sit Lai Hei and *                     
    (Lu Xiaojun) do not, by virtue of their approximately 26.3%               
    interests in Citychamp, have control over the board of                    
    directors of Citychamp and its subsidiaries and thus                      
    Ms. Sit Lai Hei and *(Lu Xiaojun) are not able to appoint                 
    the directors of Citychamp without the support of other                   
    shareholders of Citychamp. Therefore, Citychamp is not a                  
    connected person of the Company under the Listing Rules.                  
    Ms. Sit Lai Hei and *(Lu Xiaojun) are not directors of                    
    Citychamp. Save as aforesaid, to the Directors' best                      
    knowledge, information and belief, having made all                        
    reasonable enquiries, Citychamp is independent of and not                 
    connected with the Company and its connected persons.                     
                                                                              
    Formation of Dartong                                                      
                                                                              
    Pursuant to the Agreement, the total investment and                       
    registered capital of Dartong will be RMB230.0 million                    
     (equivalent to approximately HK$217.0 million) and                       
    RMB100.0 million (equivalent to approximately                             
    HK$94.3 million) respectively. Dartong will be                            
    principally engaged in the manufacturing and                              
    sale of enamelled copper wires in the PRC.                                
                                                                              
    The difference between the total investment and                           
    registered capital of Dartong is RMB130.0 million                         
    (equivalent to approximately HK$122.7 million). The                       
    respective amount of the future capital or cash                           
    injection by the Company and Citychamp in relation                        
    to such difference is not stipulated in the Agreement.                    
    If the Company increases its investment in Dartong,                       
    the Company will comply with the relevant                                 
    requirements of the Listing Rules.                                        
                                                                              
    Form of capital injection                                                 
                                                                              
    The Company                                                               
                                                                              
    The Company agreed to invest a sum of RMB49.0 million                     
    (equivalent to approximately HK$46.2 million) into                        
    Dartong in cash within one month from the date of                         
    establishment of Dartong. The capital injection                           
    payable by the Company under the Agreement will be                        
    primarily funded by its internal cash resources with                      
    the remaining balance by bank borrowings.                                 
                                                                              
    Citychamp                                                                 
                                                                              
    Citychamp agreed to transfer the land, factory                            
    (located at *Jiangbin Road, Kuaian Science Park, Economic                 
    and Technology Development Zone of Fuzhou City), Fujian                   
    Province, the PRC) and the related production machinery                   
    (collectively known as the "Properties") to Dartong.                      
    Based on an independent valuation carried out by *                        
    (Fuzhou United Asset Valuation Company Limited), a PRC                    
    valuer, the fair value less the unpaid portion of the                     
    consideration of the Properties was approximately                         
    RMB127.8 million (equivalent to approximately                             
    HK$120.6 million) as at 31 March 2005. The Company and                    
    Citychamp agreed that the consideration for the                           
    Properties was to be approximately RMB127.6 million                       
    (equivalent to approximately HK$120.4 million), which is                  
    equivalent to the appraised value of the Properties as at                 
    31 March 2005 as assessed by Greater China Appraisal Limited,             
    an independent professional