Continental Holdings Limited — Capital/Financing Update 2001

May 18, 2001

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.

(incorporated in Hong Kong under the Companies Ordinance)

Issue of US$200,000,000 Convertible Guaranteed Bonds due 2006

by

Hebe Haven Inc.

(incorporated with limited liability under the laws of the Cayman Islands)

Pursuant to the Subscription Agreement dated 10th May 2001 and signed by China Resources Enterprise, Limited and Morgan Stanley & Co. International Limited, Morgan Stanley & Co. International Limited exercised its option to further subscribe for an additional US$30,000,000 principal amount Convertible Guaranteed Bonds due 2006.

We refer to our announcement dated 10th May 2001. The directors of China Resources Enterprise, Limited (the Company'') are pleased to announce that pursuant to the terms and conditions of the Subscription Agreement dated 10th May 2001 between its wholly-owned subsidiary Hebe Haven Inc. (theIssuer''), the Company and Morgan Stanley & Co. International Limited (MSIL''), MSIL has exercised in full its option to subscribe a further US$30,000,000 principal amount of Convertible Guaranteed Bonds due 2006 (theOptional Bonds'').

The Optional Bonds will upon issue, carry a right to convert into shares of HK$1.00 each in the capital of the Company at the initial conversion price of HK$15.00 per share (subject to adjustment). The Optional Bonds will be issued at the same time and on the same terms as the US$200,000,000 principal amount of Convertible Guaranteed Bonds due 2006 expected to be issued upon completion of the Subscription Agreement which is expected to take place on or about 31st May 2001.

	By Order of the Board of
	China Resources Enterprise, Limited
	LEE Yip Wah, Peter
	Company Secretary

Hong Kong, 17th May 2001

This announcement is not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from the issuer and will contain detailed information about the company and management, as well as financial statements. ``United States'' means the United States of America, its territories and possessions, any State of the United States, and the District of Columbia.

Please also refer to the published version of this announcement in the (South China Morning Post)