09:43     CHINA VELOCITY<00149> - Announcement (2)                            

    Acquired Group has presented the Company with the opportunity to          
    acquire the Acquired Group at a low price compared to if the Acquired     
    Group was reporting a profit. The Directors, including the independent    
    non-executive Directors, consider that the terms of the transaction       
    are fair and reasonable and in the interests of the Company and the       
    shareholders of the Company as a whole.                                   
                                                                              
    The entire consideration shall be paid at Completion in equal share to    
    each of the Vendors.                                                      
                                                                              
    Condition Precedent:        Completion of the Agreement is conditional    
    upon: (i) the warranties given by the Vendors under the Agreement         
    remaining true and accurate and not misleading in any material respect    
    at Completion; (ii) each of the Vendors having complied fully with its    
    obligations under the Agreement in respect of conduct pending             
    Completion, obtaining consent of third parties in connection with the     
    transaction contemplated under the Agreement pursuant to their            
    contracts with any member of the Vendors Group and releasing any          
    guarantees and undertakings given by the Vendors Group and (iii) to       
    the extent required by the Listing Rules, the passing by the              
    independent shareholders of a resolution at a general meeting of China    
    Velocity to approve the terms of this Agreement.                          
                                                                              
    If the conditions precedent are not fulfilled on or prior to the Long     
    Stop Date, the Agreement shall terminate and none of the parties shall    
    have any claim against the other party whatsoever except for any claim    
    for rights and liabilities accrued prior thereto.                         
                                                                              
    Reasons for and benefits of the Acquisition                               
                                                                              
    The Company is principally engaged in property development in the PRC.    
                                                                              
    The Company has been considering investment opportunities in              
    businesses that would complement its property development business,       
    and to add to its steady income stream in addition to its rental          
    income. There are currently no other investment opportunities             
    available, however, the Company will from time to time evaluate any       
    such opportunities when they come up. For this reason, the Company        
    approached the Vendor for the Acquisition. The Acquisition represents     
    a good opportunity for the Company to broaden its income base while       
    not substantially affecting its financial resources or the main focus     
    of its business as a property developer. The Group intends to apply       
    and believes it has management expertise within its existing business     
    to manage and improve the business being acquired. While food and         
    beverage business is not the Company's principal business and there is    
    no intention for the Company to change its business focus, the Company    
    is of the view that such business with a steady income stream will        
    complement its property development business which income (other than     
    rented income) tends to fluctuate.                                        
                                                                              
    Information on the Acquired Group                                         
                                                                              
    Health Food and JLT are wholly beneficially owned by the Vendors in       
    equal shares. Following completion of the Acquisition, Health Food and    
    JLT will become wholly owned subsidiaries of the Company.                 
                                                                              
    Each of Health Food and JLT is an investment company. The sole assets     
    of Health Food and JLT comprise shares in Beijing JLT and Shenzhen        
    JLT, which interests in aggregate represent their respective entire       
    issued share capital. The negative net asset value of Health Food and     
    JLT was approximately HK$8,000 each as at 31 December 2004 based on       
    the audited accounts of Health Food and JLT. The loss before and after    
    tax for Health Food and JLT were approximately HK$8,000 each for the      
    financial year ended 31 December 2004. For illustration, the present      
    shareholding structure of the Acquired Group is as follows:               
                                                                              
    Vendors        Vendors                                                    
                                                                              
    100%        100%                                                          
                                                                              
    Health Food        JLT                                                    
                                                                              
    40%        70%                                                            
                                                                              
    30%        60%                                                            
                                                                              
    Beijing JLT        Shenzhen JLT                                           
                                                                              
    Beijing JLT and Shenzhen JLT are principally engaged in the food and      
    beverages businesses, which are operated through two restaurants in       
    Beijing and Shenzhen respectively.