09:24     CAPITAL STRAT<00497> - Announcement (2)                             

    resulted in an unaudited profit of approximately HK$12.1 million when     
    compared with the book value of HK$0.0329 per Sale Share and will         
    contribute to the cashflow of the Company. The net proceeds of            
    approximately HK$40.41 million from the Disposal will be used by the      
    Company as working capital.                                               
                                                                              
    The Disposal will not have any material or financial impact on the        
    Company.                                                                  
                                                                              
    The audited consolidated net loss of Capital Estate for the two years     
    ended 31 July 2003 and 31 July 2004 were HK$43,954,000 and                
    HK$2,861,000, respectively.                                               
                                                                              
    The Directors (including the independent non-executive Directors)         
    consider that the terms of the Disposal are fair and reasonable so far    
    as the Company and the Shareholders are concerned and that the            
    Disposal is in the interest of the Company and the Shareholders as a      
    whole.                                                                    
                                                                              
    General                                                                   
                                                                              
    The Company is an investment holding company and is principally           
    engaged in property investment and securities investment.                 
                                                                              
    Capital Estate has not been accounted for as a subsidiary of the          
    Company and after the Disposal, the Company does not have any interest    
    in Capital Estate.                                                        
                                                                              
    A circular containing, amongst others, details of the Disposal            
    Agreement will be sent to the Shareholders within 21 days from the        
    publication of this announcement.                                         
                                                                              
    DEFINITIONS                                                               
                                                                              
    In this announcement, the following expressions have the following        
    meanings, unless the context otherwise requires:                          
                                                                              
    "Board" the board of Directors                                            
                                                                              
    "Capital Estate"        Capital Estate Limited, a company incorporated in 
    Hong Kong whose securities are listed on the main board of the Stock      
    Exchange and the Company was interested in approximately 17.63% prior     
    to the Disposal                                                           
                                                                              
    "Company"       Capital Strategic Investment Limited, a company           
    incorporated                                                              
    in Bermuda with limited liability whose securities are listed on the      
    main board of the Stock Exchange                                          
                                                                              
    "connected person"      has the meanings ascribed to it under the Listing 
    Rules                                                                     
                                                                              
    "Director(s)"   the director(s) of the Company                            
                                                                              
    "Disposal"      the disposal of the Sale Shares by Success Field, a       
    wholly-                                                                   
    owned subsidiary of the Company, to Supervalue pursuant to the            
    Disposal Agreement                                                        
                                                                              
    "Disposal Agreement"    the agreement dated 17 May 2005 between Success   
    Field and Supervalue in relation to the disposal of the Sale Shares       
                                                                              
    "Group" the Company and its subsidiaries                                  
                                                                              
    "HK$"   Hong Kong dollar, the lawful currency of Hong Kong                
                                                                              
    "Hong Kong"     the Hong Kong Special Administrative Region of the PRC    
                                                                              
    "Listing Rules" the Rules Governing the Listing of Securities on the      
    Stock Exchange                                                            
                                                                              
    "PRC"   the People's Republic of China                                    
                                                                              
    "Sale Shares"   859,864,000 shares in Capital Estate                      
                                                                              
    "Shares"        ordinary shares of HK$0.04 each in the capital of the     
    Company                                                                   
                                                                              
    "Shareholders"  holders of Shares                                         
                                                                              
    "Success Field" Success Field Group Limited, a company incorporated in    
    the British Virgin Islands, and is a wholly-owned subsidiary of the       
    Company