09:56     TONGDA GROUP<00698> - Announcement (2)                              

                                                                              
     (b)   all approvals, consents, authorization and                         
    licences, if any, in relation to the transactions                         
    contemplated under the Agreement having been obtained                     
    from the relevant PRC authorities and particulars of                      
    changes having been registered with the relevant                          
    Administrative Bureau of Industry and Commerce.                           
                                                                              
    The Agreement will lapse in the event that the above                      
    conditions are not fulfilled on or before 19 January 2006                 
    or any subsequent date as agreed.                                         
                                                                              
    5.   Completion Date                                                      
    Completion of the Disposal shall take place on or before                  
    19 January 2006 or any subsequent date as agreed by both                  
    parties.                                                                  
                                                                              
    (II)   TONG DA METALS                                                     
    Tong Da Metals, located at Lunhou Industrial Zone, Shishi                 
    City, Fujian, the PRC, is engaged in the manufacture and                  
    sale of ironware parts, specializing in molding and                       
    producing all kinds of metal shells of domestic                           
    electrical appliances, metal framework pieces and metal                   
    heat-dispelling pieces.                                                   
                                                                              
    Based on the Accounts, the net asset value of Tong Da                     
    Metals is approximately RMB 11 million (equivalent to                     
    approximately HK$10.38 million) as at 31 December 2004.                   
    The net profits before and after taxation but before                      
    extraordinary items were approximately RMB 2.32 million                   
    (equivalent to approximately HK$2.19 million) and RMB                     
    1.48 million (equivalent to approximately HK$1.40                         
    million) respectively for the year ended 31 December 2004                 
    and about RMB 1.68 million (equivalent to approximately                   
    HK$1.58 million) and RMB 1.24 million (equivalent to                      
    approximately HK$1.17 million) respectively for the year                  
    ended 31 December 2003.                                                   
                                                                              
    Following the Disposal, the Group will no longer hold any                 
    equity interests in Tong Da Metals.                                       
                                                                              
    (III)   BASIS OF VALUATION                                                
    The consideration of HK$42,984,645 for the Sale Loan                      
    represents the face value of the Shareholder's Loan due                   
    from Tong Da Metals to the Vendor as at the date of the                   
    Agreement.                                                                
                                                                              
    The consideration of HK$12 million for the Sale Capital                   
    represents:                                                               
                                                                              
    (i)   a historical price/earnings ratio of                                
    approximately 8.59 times, being the consideration of the                  
    Sale Capital of HK$12 million divided by the net profit                   
    after taxation but before extraordinary items of Tong Da                  
    Metals for the year ended 31 December 2004 of                             
    approximately RMB 1.48 million (equivalent to HK$1.40                     
    million) as per the Accounts; and                                         
                                                                              
    (ii)   approximately 15.64% premium over the net assets                   
    value of Tong Da Metals as at 31 December 2004 of                         
    approximately RMB 11 million (equivalent to                               
    approximately HK$10.38 million) as per the Accounts.                      
                                                                              
    The consideration of the Sale Capital and the Sale Loan                   
    under the Agreement has been arrived at after                             
    arm's-length negotiations between the Vendor and                          
    Purchaser. The Directors including the independent                        
    non-executive Directors considered that the terms of the                  
    Agreement are fair and reasonable, in the interests of                    
    the Company and the Shareholders as a whole and on normal                 
    commercial terms.                                                         
                                                                              
    (IV)   REASONS FOR THE DISPOSAL AND USE OF PROCEEDS                       
    The Group currently has a production plant in Shenzhen                    
    (the "Shenzhen factory") facilitating the similar                         
    production function of the production plant owned by Tong                 
    Da Metals in Shishi City, Fujian, the PRC. The Shenzhen                   
    factory has greater production capacity and more                          
    advanced machinery than Tong Da Metals currently                          
    procures.