CHK Oil Limited — M&A Activity 2004

Nov 18, 2004

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 howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

CHINA MERCHANTS DICHAIN (ASIA) LIMITED 招商迪辰( 亞洲) 有限公司[*] (incorporated in Bermuda with limited liability) (Stock Code: 632)

MAJOR TRANSACTIONS PROPOSED ACQUISITIONS OF 60% EQUITY INTEREST IN GUANGZHOU MEIRI LOGISTICS COMPANY LIMITED BY TRANSFER AND CAPITAL INVESTMENT AND ACQUISITION OF 60% EQUITY INTEREST IN JIANGXI DICHAIN LOGISTICS CO., LTD.

Proposed acquisition of 60% in Guangzhou Meiri by transfer and capital investment and the acquisition of 60% equity interests in Jiangxi Dichain

On 13 November 2004, DWS and the Vendors entered into (i) the Investment Agreement; (ii) Guangzhou Meiri Acquisition Agreement; and (iii) the Jiangxi Dichain Acquisition Agreement. Pursuant to the terms of the Investment Agreement, DWS has agreed to acquire from the Vendors 24% and 60% equity interests in Guangzhou Meiri and Jiangxi Dichain respectively. The Vendors have also agreed with DWS that after the Guangzhou Meiri Acquisition, DWS shall invest RMB4.5 million (equivalent to approximately HK$4.25 million) in Guangzhou Meiri as a shareholder so that the registered capital and the total investment of Guangzhou Meiri shall be increased from RMB5 million (equivalent to approximately HK$4.72 million) to RMB9.5 million (equivalent to approximately HK$8.96 million). Subsequent to the investment, Guangzhou Meiri will be owned as to 60% by DWS and become an indirect subsidiary of the Company. It is also agreed by the Vendors and the Company that a joint venture in Inner Mongolia will be established by Guangzhou Meiri and Jiangxi Dichain in the future. Pursuant to the terms of the Guangzhou Meiri Acquisition Agreement, DWS has agreed to acquire from the Vendors 24% equity interest in Guangzhou Meiri. The aggregate consideration for the Guangzhou Meiri Acquisition is RMB2.7 million (equivalent to approximately HK$2.55 million) which will be satisfied by DWS in cash on the completion of Guangzhou Meiri Acquisition Agreement. Pursuant to the terms of the Jiangxi Dichain Acquisition Agreement, DWS has agreed to acquire from the Vendors the 60% equity interest in Jiangxi Dichain. The aggregate consideration for the Jiangxi Dichain Acquisition is RMB0.3 million (equivalent to approximately HK$0.28 million) which will be satisfied by DWS in cash on the completion of Jiangxi Dichain Acquisition Agreement.

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Pursuant to Rule 14.22 of the Listing Rules, the Guangzhou Meiri Acquisition, the Jiangxi Dichain Acquisition and the Capital Investment are required to be aggregated in calculating the relevant Percentage Ratio. As result of the aggregation, the Guangzhou Meiri Acquisition, the Jiangxi Dichain Acquisition and the Capital Investment constitute major transactions and are subject to the approval of the Shareholders by convening a general meeting. The Shareholders’ approval can be obtained either by convening a general meeting of the Company or, pursuant to Rule 14.44 of the Listing Rules, by means of a written approval by Shareholders who together hold more than 50% in nominal value of the Shares giving the right to attend and vote at such general meeting in compliance with Rules 14.44 to 14.46 of the Listing Rules. No Shareholders or their associates will be required to abstain from voting at the relevant special general meeting to approve the transactions. A written approval from DiChain Holdings Limited, who hold approximately 57.17% in the nominal value of the Shares that carry voting rights will be obtained. Dichain Holdings Limited does not have any interest in the Guangzhou Meiri Acquisition, the Jiangxi Dichain Acquisition and the Capital Investment. Accordingly, no special general meeting of the Company will be required for the approval of the Guangzhou Meiri Acquisition, the Jiangxi Dichain Acquisition and the Capital Investment.

At the request of the Company, trading in the Shares was suspended from 9:30 a.m. on 15 November 2004 pending the issue of this announcement. Applications have been made by the Company to the Stock Exchange for the resumption of trading in the Shares on the Stock Exchange from 9:30 a.m. on 18 November 2004.

INTRODUCTION

On 13 November 2004, DWS and the Vendors entered into (i) the Investment Agreement; (ii) Guangzhou Meiri Acquisition Agreement; and (iii) the Jiangxi Dichain Acquisition Agreement.

1. THE INVESTMENT AGREEMENT Date 13 November 2004

Parties

DWS, Wan, Liu, Tu, Chen and Zhu

Terms

Pursuant to the Investment Agreement, DWS has conditionally agreed to acquire from the Vendors 24% and 60% equity interests in Guangzhou Meiri and Jiangxi Dichain respectively. It was also agreed that after the completion of Guangzhou Meiri Acquisition, DWS shall invest RMB4.5 million (equivalent to approximately HK$4.25 million) in Guangzhou Meiri so that both of the registered capital and the total investment of Guangzhou Meiri shall be increased from RMB5 million (equivalent to approximately HK$4.72 million) to RMB9.5 million (equivalent to approximately HK$8.96 million). Subsequent

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to the Capital Investment, Guangzhou Meiri will be owned as to 60% by DWS and become an indirect subsidiary of the Company. The results of Guangzhou Meiri will be included in the consolidated account of the Group from the completion of the Guangzhou Meiri Acquisition Agreement and the Capital Investment. The Vendors have undertaken to the Company not to dispose their remaining equity interests in Guangzhou Meiri and Jiangxi Dichain respectively within 2 years from the date of the execution of the Investment Agreement save and except the transfer contemplated in the Guangzhou Meiri Acquisition Agreement and the Jiangxi Dichain Acquisition Agreement. Such restriction was extended to 3 years to a shareholder of Guangzhou Meiri and Jiangxi Dichain who will also be a director of Guangzhou Meiri and Jiangxi Dichain, namely, Wan. DWS will not be subject to such restriction. The Vendors have also warranted that the aggregate consolidated audited annual profit after tax for the year ended 31 December 2005 of Guangzhou Meiri, Jiangxi Dichain and the JV will be not less than RMB2 million (equivalent to approximately HK$1.89 million). In the event that the profit after tax will be less than RMB2 million (equivalent to approximately HK$1.89 million), such shortfall will be paid by the Vendors to Guangzhou Meiri in cash within 7 days after the issue of the financial result of the relevant financial year. Since Guangzhou Meiri has a wellestablished PRC logistics network, and is the major operating arm among Guangzhou Meiri, Jiangxi Dichain and the JV, DWS and the Vendors consider the payment to Guangzhou Meiri to the best interest of the business structure. DWS also agreed to provide shareholder’s loan to Guangzhou Meiri in normal banking interest rate if and when necessary in the event that there will be new investment opportunity with estimated rate of return (as agreed by both DWS and the Vendors) of not less than 12%. No specific amount has yet been determined. The Company will comply with the Listing Rules requirement in respect of the grant of the shareholder’s loan.

It was also agreed that Guangzhou Meiri and Jiangxi Dichain shall establish a joint venture in Inner Mongolia which will be owned as to 90% by Guangzhou Meiri and 10% by Jiangxi Dichain in due course. Upon completion of Guangzhou Meiri Acquisition, the Jiangxi Dichain Acquisition and the Capital Investment, the effective interest held by the Company in the JV will be 60%. The purpose of establishing the JV is to further utilize the preferential investment policies, the vast opportunities and prospects in logistics industry bought by the PRC’s western development scheme. Other details of the JV have yet been decided. The Company will comply with the Listing Rules requirement in respect of formation of the JV.

Condition Precedent

The Investment Agreement will become effective upon the approval of the Investment Agreement by the Shareholders having been obtained. There is no long stop date set for the Investment Agreement. The Capital Investment will be conditional upon the completion of

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the Guangzhou Meiri Acquisition. The formation of JV will be conditional upon the completion of Guangzhou Meiri Acquisition, the Capital Investment and the Jiangxi Dichain Acquisition.

2. THE GUANGZHOU MEIRI ACQUISITION AGREEMENT DATED 13 NOVEMBER 2004 Date

• 13 November 2004

Parties

1. Wan, Liu, Tu, Chen and Zhu as vendors. Each of the Vendors is independent of and not connected with the Company and the connected persons (as defined in the Listing Rules) of the Company.

2. DWS as purchaser

Assets to be acquired

Pursuant to the Guangzhou Meiri Acquisition Agreement, DWS has conditionally agreed to acquire from the Vendors in aggregate 24% equity interest in Guangzhou Meiri. As at the date of the Guangzhou Meiri Acquisition Agreement, Guangzhou Meiri is held as to 35% by Wan, 25% by Liu, 14% by Tu, 13% by Chen and 13% by Zhu.

Consideration

The aggregate consideration of RMB2.7 million (equivalent to approximately HK$2.55 million) for the Guangzhou Meiri Acquisition, will be satisfied by DWS by cash on completion of the Guangzhou Meiri Acquisition. The consideration will be paid to the Vendors in proportion to the interests they respectively transfer to DWS. The consideration will be paid out of the internal resources of the Group. The consideration for the Guangzhou Meiri Acquisition was arrived at after arm’s length negotiations between all parties to the Guangzhou Meiri Acquisition Agreement by reference to 60% of the enlarged registered capital of Guangzhou Meiri of RMB9.5 million (equivalent to approximately HK$8.96 million), which equals to RMB5.7 million (equivalent to approximately HK$5.38 million). Aggregate of the consideration for the acquisition of 24% equity interest in Guangzhou Meiri (i.e. RMB2.7 million, equivalent to approximately HK$2.55 million) and the investment to be contributed by DWS for Capital Investment (i.e. RMB4.5 million, equivalent to approximately 4.25 million) represent a premium of RMB1.5 million (equivalent to approximately HK$1.42 million) of the said RMB5.7 million (equivalent to approximately HK$5.38 million) (i.e. 60% of the enlarged registered capital of Guangzhou Meiri). Taking into account the aforesaid profit guarantee in the amount of RMB2 million (equivalent to approximately HK$1.89 million) provided by the Vendors under the Investment Agreement, the Directors believe that the consideration is fair and reasonable. The Capital Investment will be conditional upon the completion of the Guangzhou Meiri Acquisition and the approval of the Investment Agreement by the Shareholders having been obtained and that the completion of the Guangzhou Meiri Acquisition Agreement is conditional upon the

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approval of the Guangzhou Meiri Acquisition Agreement by the Shareholders having been obtained. The Directors consider that it is unlikely that the Capital Investment will not proceed.

Condition Precedent

Completion of the Guangzhou Meiri Acquisition Agreement is conditional upon the approval of the Guangzhou Meiri Acquisition Agreement by the Shareholders having been obtained. There is no long stop date set for the Guangzhou Meiri Acquisition Agreement. The Guangzhou Meiri Acquisition Agreement is not conditional upon the completion of the Investment Agreement and the Jiangxi Dichain Acquisition Agreement.

Completion

Completion of the Guangzhou Meiri Acquisition shall take place within 10 days after the fulfillment of the abovementioned condition and that the Vendors shall arrange for the change of shareholding registration in the relevant industrial and commerce administrative bureau.

Immediately following to the registration, Guangzhou Meiri will be owned as to 24% by the DWS, 26.6% by Wan, 19% by Liu, 10.64% by Tu, 9.88% by Chen and 9.88% by Zhu. Any profit of Guangzhou Meiri will be shared between the shareholders according to their shareholding ratio.

The following table illustrates Guangzhou Meiri’s shareholding changes as a result of the Guangzhou Meiri Acquisition:

	Immediately	Immediately
	before	after	Immediately
	completion of	completion of	after
	Guangzhou	Guangzhou	completion of
	Meiri	Meiri	Capital
	Acquisition	Acquisition	Investment
	equity interest	equity interest	equity interest
Wan	35%	26.6%	14%
Liu	25%	19%	10%
Tu	14%	10.64%	5.6%
Chen	13%	9.88%	5.2%
Zhu	13%	9.88%	5.2%
DWS	0%	24%	60%
Total	100%	100%	100%

3. THE JIANGXI DICHAIN ACQUISITION AGREEMENT DATED 13 NOVEMBER 2004 Date

13 November 2004

Parties

1. Wan, Liu, Tu, Chen and Zhu as vendors. Each of the Vendors is independent of and not connected with the Company and the

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connected persons (as defined in the Listing Rules) of the Company.

2. DWS as purchaser

Assets to be acquired

Pursuant to the Jiangxi Dichain Acquisition Agreement, DWS has conditionally agreed to acquire from the Vendors in aggregate 60% equity interest in Jiangxi Dichain. As at the date of the Jiangxi Dichain Acquisition Agreement, Jiangxi Dichain was owned as to 35% by Wan, 25% by Liu, 14% by Tu, 13% by Chen and 13% by Zhu.

Consideration

The aggregate consideration of RMB0.3 million (equivalent to approximately HK$0.28 million) for the Jiangxi Dichain Acquisition, will be satisfied by DWS by cash on completion of the Jiangxi Dichain Acquisition. The consideration will be paid to the Vendors in proportion to the interests they respectively transfer to DWS. The consideration will be paid out of the internal resources of the Group. The consideration for the Jiangxi Dichain Acquisition was arrived at after arm’s length negotiations between all parties to the Jiangxi Dichain Acquisition Agreement by reference to the amount of 60% of the registered capital of Jiangxi Dichain of RMB0.5 million (equivalent to approximately HK$0.47 million), which equals to RMB0.3 million (equivalent to approximately HK$0.28 million).

Condition Precedent

Completion of the Jiangxi Dichain Acquisition Agreement is conditional upon the approval of the Jiangxi Dichain Acquisition Agreement by the Shareholders having been obtained. There is no long stop date set for the Jiangxi Dichain Acquisition Agreement. The Jiangxi Dichain Acquisition Agreement is not conditional upon the completion of the Investment Agreement and the Guangzhou Meiri Acquisition Agreement.

Completion

Completion of the Jiangxi Dichain Acquisition shall take place within 10 days after the fulfillment of the abovementioned condition and that the Vendors shall arrange for the change of shareholding registration in the relevant industrial and commerce administrative bureau.

Subsequent to the completion of the Jiangxi Dichain Acquisition, Jiangxi Dichain will become an indirect 60% owned subsidiary of the Company. The results of Guangzhou Jiangxi Dichain will be included in the consolidated account of the Group from the completion of the Jiangxi Dichain Acquisition Agreement. The remaining of the equity interest will be owned as to 14% by Wan, 10% by Liu, 5.6% by Tu, 5.2% by Chen and 5.2% by Zhu. Any profit of Jiangxi Dichain will be shared between the shareholders according to their shareholding ratio.

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The following table illustrates Jiangxi Dichain’s shareholding changes as a result of the Guangzhou Meiri Acquisition:

	Immediately before	Immediately after
	completion of	completion of
	Jiangxi Dichain Acquisition	Jiangxi Dichain Acquisition
	equity interest	equity interest
Wan	35%	14%
Liu	25%	10%
Tu	14%	5.6%
Chen	13%	5.2%
Zhu	13%	5.2%
DWS	0%	60%
Total	100%	100%

INFORMATION ON THE GUANGZHOU MEIRI AND JIANGXI DICHAIN

Guangzhou Meiri, a domestic company established in the PRC, is engaged in the logistics business and operations in China, and provides a total logistics solution and value added services, such as third party warehousing, total logistics services and inventory management. The total investment of Guangzhou Meiri is amounted to RMB5 million (equivalent to approximately HK$4.72 million). The registered capital of Guangzhou Meiri is amounted to RMB5 million (equivalent to approximately HK$4.72 million) which has been fully paid-up. The total investment and the registered capital upon completion of the Capital Investment will be RMB9.5 million (equivalent to approximately HK$8.96 million). As at the date of this announcement, the board of Guangzhou Meiri comprises 5 directors, namely Wan, Liu, Tu, Chen and Zhu. Upon the completion of the Guangzhou Meiri Acquisition, Liu, Tu, Chen and Zhu will resign from the board and Wan will remain as a director. The board of Guangzhou Meiri will be comprised of 5 directors, in which DWS will have the right to nominate 3 directors and the Vendors will together nominate 2 directors (including Wan).

Jiangxi Dichain, a domestic company established in the PRC, is engaged in the logistics business and operations in China, and provides a total logistics solution and value added services, such as third party warehousing, total logistics services and inventory management. The total investment of Jiangxi Dichain is amounted to 0.5 million (equivalent to approximately HK$0.47 million) and the registered capital of Jiangxi Dichain is amounted to RMB0.5 million (equivalent to approximately HK$0.47 million) which has been fully paid-up. As at the date of this announcement, the board of Jiangxi Dichain comprises 5 directors, Wan, Liu, Tu, Chen and Zhu. Upon the completion of the Jiangxi Dichain Acquisition, Liu, Tu, Chen and Zhu will resign from the board and Wan will remain as a director. The board of Jiangxi Dichain will be comprised of 5 directors, in which DWS will have the right to nominate 3 directors and the Vendors will together nominate 2 directors (including Wan).

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Details of the unaudited net assets value as at 31 December 2003 and unaudited profit before and after tax of Guangzhou Meiri for the 2 financial years ended 31 December 2003 and the unaudited net assets value of Jiangxi Dichain as at 31 October 2004 are set out in the table below:

	For the year ended	For the year ended
Name of the Company	31 December 2003	31 December 2002
	(RMB)	(RMB)
Guangzhou Meiri	516,081.26	343,877.26
Profit before tax	(equivalent to approximately	(equivalent to approximately
	HK$486,869.11)	HK$324,412.51)
	For the year ended	For the year ended
Name of the Company	31 December 2003	31 December 2002
	(RMB)	(RMB)
Guangzhou Meiri	516,081.26	343,877.26
Profit after tax	(equivalent to approximately	(equivalent to approximately
	HK$486,869.11)	HK$324,412.51)
	As at 31 December 2003	As at 31 December 2002
Guangzhou Meiri	1,536,081.26	1,015,000
Net assets value	(equivalent to approximately	(equivalent to approximately
	HK$1,449,133.26)(note 2)	HK$957,547.17)
	As at 31 October 2004
Jiangxi Dichain_(note 1)_	500,000	–
Net assets value	(equivalent to approximately
	HK$471,698.11)

• Note 1: Jiangxi Dichain was established on 9 September 2004 and has not yet commenced operation, therefore, no profit or revenue has yet been earned.

• Note 2: In December 2003, the registered capital of Guangzhou Meiri was RMB1.01 million. The registered capital and the total investment of Guangzhou Meiri have been increased to RMB5 million in 2004. The increase in registered capital contributed to the substantial increase in the net asset value as at 30 June 2004.

As at 30 June 2004, the unaudited net asset value of Guangzhou Meiri was RMB4,959,821.26 (equivalent to approximately HK$4,679,076.67). The consideration for acquiring 24% of Guangzhou Meiri represents an approximately RMB1.5 million (equivalent to approximately HK$1.42 million) premium of the net asset value of Guangzhou Meiri as at 30 June 2004. The consideration for acquiring 60% of Jiangxi Dichain equals to 60% of the net assets value of Jiangxi Dichain.

REASONS FOR THE GUANGZHOU MEIRI ACQUISITION AND THE JIANGXI DICHAIN ACQUISITION

The Group had been principally engaged in the operating bonded warehouse, provision of logistics and related services and logistics-related property investment. The Directors believe that Guangzhou Meiri is a successful logistics entity with a well-established PRC logistics network and Jiangxi Dichain will provide the Group an opportunity to develop new logistics business in regions outside the Guangdong province. With controlling shareholding interests in Guangzhou Meiri and Jiangxi Dichain,

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the Directors believe that the Group will be able to substantially increase its presence in the logistic business in the PRC. The Directors expected that Guangzhou Meiri and Jiangxi Dichain will act as door-to-door and last-mile service provider for the Group’s existing logistic customers and DWS will be acted as exporting window for Guangzhou Meiri and Jiangxi Dichain’s customers. The Directors consider that the Guangzhou Meiri Acquisition, the Jiangxi Dichain Acquisition and the Capital Investment will also contribute positively to the Group’s revenues and to save time and costs for the Group to become a total logistics service provider.

The Directors believe that the terms of the Investment Agreement, Guangzhou Meiri Acquisition Agreement and the Jiangxi Dichain Acquisition Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS FOR THE COMPANY

Pursuant to Rule 14.22 of the Listing Rules, the Company is required to aggregate the Guangzhou Meiri Acquisition, the Jiangxi Dichain Acquisition and the Capital Investment in calculating the relevant Percentage Ratio, as a result of which, the Guangzhou Meiri Acquisition, the Jiangxi Dichain Acquisition and the Capital Investment constitute major transactions of the Company and are therefore subject to the approval of the Shareholders at a special general meeting to be convened for such purpose. The Shareholders’ approval can be obtained either by convening a general meeting of the Company or, pursuant to Rule 14.44 of the Listing Rules, by means of a written approval by Shareholders who together hold more than 50% in nominal value of the Shares giving the right to attend and vote at such general meeting in compliance with Rules 14.44 to 14.46 of the Listing Rules. No Shareholders or their associates will be required to abstain from voting at the relevant special general meeting to approve the transaction. The Company will obtain a written approval from DiChain Holdings Limited, which holds approximately 57.17% in the nominal value of the Shares that carry voting rights. DiChain Holdings Limited does not have any interest in the Guangzhou Meiri Acquisition, the Jiangxi Dichain Acquisition and the Capital Investment. Accordingly, no special general meeting of the Company will be required for the approval of the Guangzhou Meiri Acquisition, the Jiangxi Dichain Acquisition and the Capital Investment.

SUSPENSION AND RESUMPTION OF TRADING

At the request of the Company, trading in the Shares was suspended from 9:30 a.m. on 15 November 2004 pending the issue of this announcement. Applications have been made by the Company to the Stock Exchange for the resumption of trading in the Shares on the Stock Exchange from 9:30 a.m. on 18 November 2004.

GENERAL INFORMATION

As at the date of this announcement, the board of Directors comprises five executive directors, namely Messrs. Fan Di, Zhou Li Yang, Li Xinggui, Wu Shiyue and Zheng Yingsheng, two non-executive directors, namely Messrs. Robert Fung Hing Piu and Wang Shizhen, and three independent

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non-executive directors, namely Messrs. Barry J. Buttifant, Iain F. Bruce and Victor Yang. DEFINITIONS

• In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:– “Capital Investment” the contribution of investment in the amount of RMB4.5 million (equivalent to approximately HK$4.25 million) in Guangzhou Meiri by DWS pursuant to the Investment Agreement;

• “Chen” Chen Ke Hai; “Company” China Merchants Dichain (Asia) Limited, an exempted company incorporated in Bermuda with limited liability and the shares of which are listed on the main board of the Stock Exchange;

• “Directors” directors of the Company;

• “DWS” 迪辰倉儲服務（深圳）有限公司 (Dichain Warehouse Services (Shenzhen) Co., Ltd), a wholly foreign owned enterprise established in the PRC on 30 November 1993, a wholly owned subsidiary of the Company;

• “Group” the Company and its subsidiaries;

• “Guangzhou Meiri” 廣州美日物流有限公司 (Guangzhou Meiri Logistics Co., Ltd), a domestic company established in the PRC on 29 April 2001;

• “Guangzhou Meiri the acquisition of 24% equity interest in Guangzhou Acquisition” Meiri by DWS pursuant to the Guangzhou Meiri Acquisition Agreement;

• “Guangzhou Meiri the acquisition agreement entered into by DWS as Acquisition the purchaser and the Vendors as the vendors Agreement” regarding the Guangzhou Meiri Acquisition dated 13 November 2004;

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong;

• “Hong Kong” The Hong Kong Special Administrative Region of the People’s Republic of China;

• “Investment the investment agreement entered into between Agreement” DWS and the Vendors dated 13 November 2004;

• “Jiangxi Dichain” 江西迪辰物流有限公司 (Jiangxi Dichain Logistics Co., Ltd), a domestic company established in the PRC on 9 September 2004;

• “Jiangxi Dichain the acquisition of 60% equity interest in Jiangxi Acquisition” Dichain by DWS pursuant to the Jiangxi Dichain Acquisition Agreement;

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“Jiangxi Dichain	the acquisition agreement entered into by DWS as
Acquisition	the purchaser and the Vendors as the vendors
Agreement”	regarding the Jiangxi Dichain Acquisition dated 13
	November 2004;
“JV”	the joint venture purposed to be established by
	Guangzhou Meiri and Jiangxi Dichain in Inner
	Mongolia in due course pursuant to the Investment
	Agreement;
“Listing Rules”	The Rules Governing the Listing of Securities on
	the Stock Exchange;
“Liu”	Lui Xiao Hong;
“PRC”	the People’s Republic of China, for the purpose of
	this announcement, excluding Hong Kong, Macao
	Special Administrative Region and Taiwan;
“Percentage Ratio”	the percentage ratios under Rule 14.07 of the
	Listing Rules;
“RMB”	Renminbi yuan, the lawful currency of the PRC;
“Shares”	share(s) of HK$0.01 each in the capital of the
	Company;
“Shareholders”	shareholder of the Company;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“subsidiary”	has the meaning ascribed to it under the Companies
	Ordinance (Chapter 32, Laws of Hong Kong) and
	“subsidiaries” shall be construed accordingly;
“Tu”	Tu Zhao Lu;
“Vendors”	Wan, Liu, Tu, Chen and Zhu; and
“Wan”	Wan Gui Ping;
“Zhu”	Zhu Mei Qi;
“%”	per cent.

By order of the board of China Merchants DiChain (Asia) Limited Fan Di Chairman

Hong Kong, 17 November 2004

* for information purposes only

Unless otherwise specified in this announcement, amounts denominated in RMB have been translated, for illustration only, into Hong Kong dollars at the rate of HK$1=RMB1.06.

In the event of inconsistency between the Chinese names of the PRC entities mentioned in this announcement and their English translation, the Chinese version shall prevail.

Please also refer to the published version of this announcement in The Standard.

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