Company Gains Zhaoqing Project

On 4 Dec 1997, Head Crown International Limited (HCIL), a wholly-owned subsidiary of the company, signed an agreement with Gangao Holding Co., Ltd. to acquire the entire stakes in five BVI-based subsidiaries of Hong Kong-listed Gangao Holding with its 60% stake and related credits in Shenzhen Longcheng Xingyuan Co., Ltd. as consideration. Consequently, the company indirectly acquired the Zhaoqing Beiling Tourist Resort Project (Zhaoqing Resort Project), with HKD 610,523,481 worth of initial book value, owned by the five subsidiaries.

As of 31 Dec 2007, due to certain write-downs in recent years, the book balance for the Zhaoqing Resort Project amounts to RMB 559,620,925, accounting for 38% of the company's total assets.

In order to complete the project, HCIL will cooperate with WG, a subsidiary of Foshan Nanhai Guanglian Industrial Development Co., Ltd. to co-found Head Crown Business Properties Development Co., Ltd., with proportional holdings of 49% and 51% respectively.

At a meeting of the 7th Board of Directors, held on 28 Sept 2008, the aforementioned cooperation in the Zhaoqing Project was examined and approved.

Board of Directors
8 Oct 2008


Source: Securities Times

Date: 9 Oct 2008

CN01/RL/MR/BT/KM