09:57     TONGDA GROUP<00698> - Announcement (3)                              

                                                                              
    Tong Da Metals has an old production plant which produces                 
    traditional computer casing and DVD or VCD casing.                        
    According to the Accounts, the gross profit margin for                    
    Tong Da Metals dropped from approximately 11.38% for the                  
    year ended 31 December 2003 to approximately 7.74% for                    
    the year ended 31 December 2004. However, Shenzhen                        
    factory, which started operation in 2002, targets the                     
    latest model in metal parts business for producing                        
    aluminium products for plasma TV surface, digital camera,                 
    MP3 casing, coil fan for motor vehicle etc., which has                    
    a relatively higher gross profit margin as compared with                  
    Tong Da Metals.                                                           
                                                                              
    As such, the Directors are of the view that there might                   
    be a mismatch of resources between Tong Da Metals and the                 
    Shenzhen factory. In order to have a better control and                   
    management of the resources to enhance the                                
    competitiveness of the Group, the Directors consider                      
    that the Disposal is in the interests of the Company and                  
    the Shareholders as a whole.                                              
                                                                              
    The proceeds from the Disposal is intended to be applied                  
    as the general working capital of the Group. Upon                         
    Completion, there will not be any material impact on or                   
    disruption to the operations of the Group.                                
                                                                              
    (V)   FINANCIAL EFFECT OF THE DISPOSAL                                    
    Taking account of the proceeds from the Sale Capital of                   
    HK$12 million and the net asset 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, it is estimated that, upon Completion, the                  
    Group will record a gain of approximately HK$1.62 million.                
                                                                              
    (VI)   CIRCULAR                                                           
    The Disposal constitutes a discloseable transaction for                   
    the Company under Rule 14.06(2) of the Listing Rules as                   
    it exceeds 5% but not more than 25% of the applicable size                
    tests under Chapter 14 of the Listing Rules. A circular                   
    containing, among other things, further information on                    
    the Disposal will be dispatched to the Shareholders as                    
    soon as practicable.                                                      
                                                                              
    (VII)   INFORMATION ON THE GROUP                                          
    The Group is principally engaged in the design,                           
    manufacture and sale of components and accessories for                    
    electrical and electronic appliances. The products of                     
    the Group comprise ironware parts, appliance accessories,                 
    electronic components and fittings, and communication                     
    facilities.                                                               
                                                                              
    The Vendor is an indirectly wholly-owned subsidiary of                    
    the Company.                                                              
                                                                              
    (VIII)   DEFINITIONS                                                      
    "Accounts"   the final draft accounts of Tong Da Metals                   
    provided by the auditor of the Group to the board of Tong                 
    Da Metals for signing off in respect of the year ended                    
    31 December 2004                                                          
                                                                              
    "Agreement"   the conditional share purchase agreement                    
    dated 19 May 2005 in connection with the Disposal                         
                                                                              
    "Business Day"   a day (excluding Saturday) on which                      
    licensed banks in Hong Kong are open for business                         
                                                                              
    "Company"   Tongda Group Holdings Limited, a company                      
    incorporated in Bermuda with limited liability and the                    
    issued shares of which are listed on the Stock Exchange                   
                                                                              
    "Completion"   completion of the Disposal in accordance                   
    with the terms of the Agreement                                           
                                                                              
    "Directors"   the directors of the Company                                
                                                                              
    "Disposal"   the sale of the Sale Capital and the                         
    assignment of the Sale Loan under the Agreement                           
                                                                              
    "Group"   the Company and its subsidiaries                                
                                                                              
    "Hong Kong"   Hong Kong Special Administrative Region of                  
    the PRC                                                                   
                                                                              
    "Listing Rules"   the Rules Governing the Listing of                      
    Securities on the Stock Exchange