09:33     LUEN THAI<00311> - 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.                                
                                                                              
    LUEN THAI HOLDINGS LIMITED                                                
    (incorporated in the Cayman Islands with limited liability)               
    (Stock Code: 311)                                                         
                                                                              
    DISCLOSEABLE TRANSACTION                                                  
                                                                              
    The Directors are pleased to announce that the Purchaser, a               
    wholly-owned subsidiary of the Company, has entered into and              
    completed a Sale and Purchase Agreement on 3 May 2005,                    
    pursuant to which the Purchaser has acquired a 71% interest               
    in the issued and fully paid share capital of the Acquired                
    Company from the Vendor, a third party independent of the                 
    Company and its connected persons (as defined in the Listing              
    Rules), for a cash consideration to be determined pending the             
    audited and consolidated financial statements of the Acquired             
    Company for the two years ending on 31 December 2006 subject              
    to a minimum of US$7,959,100 (equivalent to approximately                 
    HK$62,080,980) and a maximum of US$20,000,000 (equivalent to              
    approximately HK$156,000,000). The Consideration shall be                 
    funded from the internal resources of the Group and paid by               
    the Purchaser over three instalments.                                     
                                                                              
    The terms of the Sale and Purchase Agreement were negotiated              
    on an arm's length basis and the Directors consider that the              
    Transaction is made on normal commercial terms and in the                 
    interests of the Group and the Company's shareholders as a                
    whole.                                                                    
                                                                              
    The Transaction constitutes a discloseable transaction for                
    the Company, and is therefore subject only to the disclosure              
    requirements, under the Listing Rules. A circular containing              
    details of the Transaction will be despatched to the                      
    shareholders of the Company within 21 days from the date of               
    publication of this announcement.                                         
                                                                              
    I.   THE SALE AND PURCHASE AGREEMENT                                      
    Date:   3 May 2005                                                        
                                                                              
    Parties:   (1)   The Vendor                                               
       (2)   Warrantor                                                        
       (3)   The Purchaser                                                    
       (4)   Guarantor                                                        
                                                                              
    Pursuant and subject to the Sale and Purchase Agreement which             
    was dated and completed on 3 May 2005, the Vendor sold, and               
    the Purchaser purchased, 710 Shares in the share capital of               
    the Acquired Company, representing 71% of the entire issued               
    and fully paid share capital of the Acquired Company.                     
                                                                              
    Pursuant to the Sale and Purchase Agreement, the Guarantor (a             
    wholly-owned subsidiary of the Company) has agreed to                     
    guarantee the performance of all obligations of the Purchaser,            
    its wholly-owned subsidiary, arising under the Sale and                   
    Purchase Agreement.                                                       
                                                                              
    To the best knowledge, information and belief of the                      
    Directors, having made all reasonable enquiries, each of the              
    Vendor, the Warrantor, Novelwill and Trumpinvest and their                
    respective ultimate beneficial owners are third parties                   
    independent of the Company and connected persons (as defined              
    in the Listing Rules) of the Company.                                     
                                                                              
    Consideration:                                                            
    The Consideration, negotiated on an arm's length basis                    
    between the parties, shall be determined with reference to:               
                                                                              
    (a)   the average of the consolidated net profit of the                   
    Acquired Company for the 2 years ending on 31 December 2006;              
                                                                              
    (b)   a price-earnings multiple of 5 (which is within the                 
    prevailing industry average of 5-7 times); and                            
                                                                              
    (c)   the agreed valuation of certain machineries as at 31                
    December 2004 which were held by the Acquired Company as at               
    Completion, being US$1,410,000 (equivalent to approximately               
    HK$10,998,000).