09:30     KINGWAY BREW<00124> - 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.                                                     
                                                                              
    KINGWAY BREWERY HOLDINGS LIMITED                                          
    (Incorporated in Bermuda with limited liability)                          
    (Stock Code: 124)                                                         
                                                                              
    CONTINUING CONNECTED TRANSACTIONS                                         
                                                                              
    SUMMARY                                                                   
    The Group is principally engaged in the production                        
    and distribution of beer under its Kingway brand.                         
    Since the listing of the Company's shares on the Stock                    
    Exchange in 1997, the Company has been purchasing malt                    
    (being one of the major raw materials for producing                       
    beer) from certain members of the SDL Group (which                        
    are currently subsidiaries of GDH, the holding                            
    company of the Company). At the time of the Listing,                      
    the Company obtained from the Stock Exchange a waiver                     
    from strict compliance with the announcement and                          
    independent shareholders' approval requirements of                        
    the Listing Rules in respect of the said purchasing                       
    of malt from such members of the SDL Group, and the                       
    Company has been complying in full with the conditions                    
    imposed under the waiver, including reporting the                         
    details of such purchasing of malt in its annual                          
    reports since the Listing.                                                
                                                                              
    The Company estimates that the purchasing of malt from                    
    the SDL Group (on an annual basis) for each of the                        
    three years ending 31st December, 2007 will fall                          
    within the ambit of Rule 14A.48 (as, on an annual basis,                  
    they amount to more than HK$10 million) (and such                         
    purchasing shall be referred to as Continuing                             
    Connected Transactions in this announcement). The                         
    Company will, after the publication of this                               
    announcement, need to seek the approval of the                            
    Independent Shareholders at the EGM for the                               
    Continuing Connected Transactions and the Proposed                        
    Annual Caps in respect thereof, and, assuming that                        
    the said approval of the Independent Shareholders                         
    will be forthcoming, will also need to comply with                        
    the reporting requirements set out in Rules 14A.45                        
    and 14A.46 and the annual review requirements of Rules                    
    14A.37 and 14A.38. The Company and SDL have entered                       
    into the Agreement on 3rd May, 2005 in relation to                        
    the Continuing Connected Transactions between the                         
    Group and the SDL Group. The Agreement is conditional                     
    upon the obtaining of the approval of the Independent                     
    Shareholders at the EGM in respect of the Continuing                      
    Connected Transactions and the Proposed Annual Caps.                      
                                                                              
    The Proposed Annual Caps for the Continuing Connected                     
    Transactions for the three years ending 31st December,                    
    2007 are RMB212,000,000 (equivalent to approximately                      
    HK$199,768,000), RMB294,000,000 (equivalent to                            
    approximately HK$277,036,000) and RMB368,000,000                          
    (equivalent to approximately HK$346,766,000),                             
    respectively.                                                             
                                                                              
    The Company will convene the EGM to seek the                              
    Independent Shareholders' approval for the                                
    Continuing Connected Transactions and the Proposed                        
    Annual Caps. A circular containing the particulars                        
    of the Continuing Connected Transactions, a letter                        
    from the Independent Board Committee, a letter of