Beijing Yunji Technology Co., Ltd. — Share Issue/Capital Change 2000

Jun 7, 2000

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss however arising from or in reliance upon the whole or any part of the contents of this announcement.

CHEONG MING HOLDINGS LIMITED

(to be renamed as Sega.com Asia Limited世嘉網絡亞洲有限公司*)

(incorporated in Bermuda with limited liability)

Financial Adviser to the Company

SUBSCRIPTION OF NEW SHARES

AND CONNECTED TRANSACTION

On 5th June, 2000, the Company and Sega.com entered into the Subscription Agreement whereby the Company agreed to issue and Sega.com agreed to subscribe for the 16,000,000 Subscription Shares at the Subscription Price of HK$1.36 each.

The Subscription Shares represent about 3.24% of the Company's existing issued share capital. As at the date of the Subscription Agreement, Sega.com is interested in 160,000,000 Shares, representing approximately 32.37% of the existing share capital of the Company. After completion of the Subscription, Sega.com will be interested in 176,000,000 Shares, representing approximately 34.49% of the enlarged issued share capital of the Company.

The Subscription is conditional on, among other things, approval of listing of and permission to deal in all the Subscription Shares by the Stock Exchange.

The net proceeds from the Subscription, amounting to approximately HK$21 million, will be used as general working capital for the Company for rolling out its online gaming business in the second half of this year.

As Sega.com is a substantial shareholder and a connected person of the Company, the Subscription constitutes a connected transaction of the Company under the Listing Rules. An independent financial adviser will be appointed to advise the independent board committee on the terms of the Subscription Agreement. A circular containing, inter alia, details of the Subscription Agreement, the letter from the independent financial adviser together with a notice of the SGM, in which Sega.com and its associates (as defined under the Listing Rules) will abstain from voting, will be despatched to the shareholders of the Company as soon as practicable in accordance with the Listing Rules.

At the request of the Company, trading in the Shares was suspended from 2:30 p.m. on 5th June, 2000 pending the release of this announcement. Application has been made to the Stock Exchange for resumption of trading in the Shares with effect from 10:00 a.m. on 7th June, 2000.

AGREEMENT DATED 5TH JUNE, 2000 (THE "SUBSCRIPTION AGREEMENT") RELATING TO THE SUBSCRIPTION OF 16,000,000 NEW SHARES OF HK$0.10 EACH (THE "SHARES") IN THE COMPANY (THE "SUBSCRIPTION")

1. Parties

Issuer : Cheong Ming Holdings Limited (to be renamed as Sega.com Asia Limited世嘉網絡亞洲有限公司有限公司*) (the "Company")

Sega.com : Sega.com Inc. (the "Sega.com"), a company incorporated in Delaware, the United States of America ("USA").

Sega.com Inc. is owned as to approximately 52% by Sega Enterprises Ltd., a company organized under the laws of Japan. Sega Enterprises Ltd. is one of the largest electronic gaming software and hardware companies in the world and is listed on the Tokyo Stock Exchange.

As at the date of the Subscription Agreement, Sega.com is interested in 160,000,000 Shares, representing approximately 32.37% of the existing share capital of the Company. After completion of the Subscription, Sega.com will be interested in 176,000,000 Shares, representing approximately 34.49% of the enlarged issued share capital of the Company.

2. Subscription Shares

16,000,000 new Shares (the "Subscription Shares"), representing approximately 3.24% of the existing issued share capital of the Company and about 3.14% of the issued share capital of the Company as enlarged by the Subscription.

3. Subscription Price

HK$1.36 per Subscription Share (the "Subscription Price"). The Subscription Price represents a discount of approximately 2.2% to the closing price of HK$1.39 per Share as quoted on the Stock Exchange on 2nd June, 2000 (being the last full day of trading) and a discount of approximately 6.8% to the average closing price of approximately HK$1.46 per Share as quoted on the Stock Exchange for the last 10 trading days up to and including 2nd June, 2000. The Subscription Price was agreed between the parties based on arm's length negotiations.

4. Rights of the Subscription Shares

The Subscription Shares will, when fully paid, rank pari passu in all respects with all existing Shares including the right to receive all dividends and distributions which may be declared, made or paid on or after the date of the Subscription Agreement.

5. Conditions of the Subscription

Completion of the Subscription Agreement is conditional upon:

(a) the Listing Committee of the Stock Exchange of Hong Kong Limited (the "Stock Exchange") granting or agreeing to grant listing of, and permission to deal in, the Subscription Shares;

(b) the despatch of a circular on the Subscription Agreement to the shareholders of the Company as required by the Rules (the "Listing Rules") Governing the Listing of Securities on the Stock Exchange and the passing by the shareholders of the Company, at which Sega.com and its associates (as defined under the Listing Rules) will abstain from voting, at a special general meeting ("SGM") of the Company resolutions to approve the execution of the Subscription Agreement, the Subscription and other transactions contemplated under the Subscription Agreement; and

(c) the Stock Exchange not having indicated on or before the date on which all the conditions set out in (a) and (b) above have been satisfied that the listing of the Shares on the Stock Exchange will be or may be suspended upon completion of the Subscription.

If the above conditions are not fulfilled on or prior to 1st August 2000 or such later date as may be agreed between the parties, the Subscription Agreement shall terminate and neither party shall have any claim against the other save for antecedent breach.

6. Completion

Completion of the Subscription Agreement will take place on the 3rd business day after the fulfillment of the above conditions or such other date as the parties shall agree.

PRINCIPAL BUSINESS OF THE COMPANY

The Company and its subsidiaries are principally engaged in the printing and manufacture of packaging boxes, including accompanying brochures, manuals and catalogues. The Company has entered into a strategic alliance with Sega.com by way of a Share Swap Agreement dated 9th February, 2000 to diversify its business into on-line gaming and internet entertainment business. Currently, the Company holds 6.8% interest in Sega.com PC Networks Inc. (while the remaining 93.2% interest is held by Sega.com) and intends to launch an online gaming network with low latency and high reliability for both PC and Dreamcast platforms in Asia Pacific Region (excluding Japan). Such network is under development with the assistance from Sega.com since April 2000.

SHAREHOLDING STRUCTURE

The shareholding structure of the Company before and after completion of the Subscription is as follows:

Existing Immediately after the Subscription

No. of shares % to total No. of shares % to total

Harmony Link 202,546,000 40.98 202,546,000 39.69

Corporation (Note 1)

Directors of the 7,000,000 1.41 7,000,000 1.37

Company (Note 2)

Sega.com 160,000,000 32.37 176,000,000 34.49

Public shareholders 124,754,000 25.24 124,754,000 24.45

Total 494,300,000 100 510,300,000 100

Note 1: Harmony Link Corporation is beneficially wholly owned by three directors of the Company, namely Messrs. Lui Shing Ming, Brian (24.13%), Lui Shing Cheong (12.88%) and Lui Shing Chung, Victor (14.59%) and a family trust (48.40%) of which the aforesaid directors are beneficiaries.

Note 2: The holdings of the Directors are as follows:

Mr. Lui Shing Cheong (2.5 million Shares);

Mr. Lui Shing Chung, Victor (1.0 million Shares);

and his spouse Miss Ng Shuk Fong, Aman (0.5 million Shares);

Mr. Lung Wai Kee (3 million Shares).

Issue of the Subscription Shares will result in approximately 24.45% of the issued share capital of the company in public hands which is slightly below the 25% as required under Rule 8.08 of the Listing Rules. In this regard, the Stock Exchange has stated that it will closely monitor trading in the Shares if less than 25% of the Shares will be held by the public. If the Stock Exchange believes that:

- a false market exists or may exist in the Shares; or

- there are too few Shares in public hands to maintain an orderly market,

it will consider exercising its discretion to suspend trading in the Shares.

The Company and its directors ("Directors") have undertaken to procure that appropriate steps shall be taken to maintain sufficient public float for the Shares as required by the Listing Rules immediately after the issue of the Subscription Shares. The Stock Exchange has agreed to grant a period of up to one month from the date of completion for the Company to restore the public float to not less than 25%. A further announcement will be made in this regard.

REASONS FOR THE SUBSCRIPTION AND USE OF PROCEEDS

The Directors consider that the Subscription will raise further fund to enhance the Company's capital structure. In particular, the Directors believe that the Subscription reflects the strong support of Sega.com on the on-line gaming and internet entertainment business engaged by the Company.

The net proceeds from the Subscription is estimated to be approximately HK$21 million and will be used as general working capital for the Company to roll out its online gaming business in the second half of this year.

The Directors consider the terms of the Subscription to be fair and reasonable and the Subscription is in the interests of the Company and its shareholders as a whole.

CONNECTED TRANSACTION

As Sega.com is a substantial shareholder of the Company, Sega.com is deemed to be a connected person of the Company. The transaction contemplated under the Subscription Agreement therefore constitutes a connected transaction for the Company under Chapter 14 of the Listing Rules. An independent financial adviser will be appointed to advise the independent board committee on the terms of the Subscription Agreement. A circular containing, inter alia, details of the Subscription Agreement, the letter from the independent financial adviser together with a notice of the SGM will be despatched to the shareholders of the Company as soon as practicable in accordance with the Listing Rules. Sega.com and its associates (as defined under the Listing Rules) will abstain from voting at the SGM of the Company resolutions to approve the execution of the Subscription Agreement, the subscription and other transactions contemplated under the Subscription Agreement.

SUSPENSION AND RESUMPTION OF TRADING

At the request of the Company, trading in the Shares was suspended from 2:30 p.m. on 5th June, 2000 pending the release of this announcement. Application has been made to the Stock Exchange for resumption of trading in the Shares with effect from 10:00 a.m. on 7th June, 2000.

By Order of the Board

CHEONG MING HOLDINGS LIMITED

Mr. Lui Shing Ming, Brian

Deputy Chairman and Managing Director

Hong Kong, 5th June, 2000

* The Chinese name is for identification purpose only

Please also refer to the published version of this announcement in the Hong Kong iMail & Hong Kong Economic Journal.