COSCO SHIPPING Development Co., Ltd. — Capital/Financing Update 2006

Aug 30, 2006

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.

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(A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock code: 2866)

Connected Transaction Acquisition of Shares

The Board is pleased to announce that on 27 August 2006, CSHK, a wholly-owned subsidiary of the Company, entered into the Agreement with CS Logistics, Rich Shipping and CS Agency to acquire the entire issued share capital of Universal Shipping. Under the Agreement, CS Logistics, Rich Shipping and CS Agency agreed to sell their respective entire 37.5%, 31.25% and 31.25% shareholding interests in Universal Shipping to CSHK at an aggregate cash consideration of HK$79,766,300. Upon completion of the Agreement, Universal Shipping will become a whollyowned subsidiary of the Company.

Since CS Logistics, Rich Shipping and CS Agency are all connected persons (as defined under the Listing Rules) of the Company, the Agreement constitutes a connected transaction of the Company under the Listing Rules. However, the aggregate consideration payable for the above acquisition does not exceed 2.5% of any of the applicable percentage ratios. Under Rule 14A.32 of the Listing Rules, the Agreement is therefore exempted from the independent shareholders’ approval requirement applicable to connected transactions under the Listing Rules, but is still subject to the relevant disclosure and reporting requirements.

THE AGREEMENT

(a) Date: 27 August 2006

(b) Parties:

Purchaser: CSHK, a wholly-owned subsidiary of the Company

Vendors: CS Logistics, Rich Shipping and CS Agency, all of whom are connected persons of the Company

(c) Shares to be Acquired

CSHK shall acquire 37.5%, 31.25% and 31.25% shareholding interests in Universal Shipping from CS Logistics, Rich Shipping and CS Agency respectively. Universal Shipping shall become a whollyowned subsidiary of the Company upon completion of the Agreement.

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(d) Consideration

Pursuant to the Agreement, the aggregate cash consideration for this acquisition to CS Logistics, Rich Shipping and CS Agency is HK$79,766,300, and is payable in full by CSHK to the bank accounts designated by the above vendors within 10 business days after the Agreement was signed. The Agreement was negotiated and entered into on an arm’s length basis and on normal commercial terms, and the total consideration was determined based on the appraised value of shareholders’ interest in Universal Shipping as at 31 December 2005 amounting to HK$79,766,300 as set out in a valuation report of Universal Shipping prepared by an independent and duly qualified PRC valuer appointed by CS Logistics and such consideration will be funded from CSHK’s internal resources. The Board confirms that the said valuation report was independently prepared by the said PRC valuer without any information or documents provided by the Group. The Board also confirms that the Group was not involved in the preparation of the said valuation report. The unaudited net asset value of Universal Shipping as at 31 July 2006 amounted to HK$45,809,006.

For the two preceding financial years ended 31 December 2004 and 2005, the audited net profits before taxation and extraordinary items of Universal Shipping were HK$5,312,202 and HK$17,163,566, respectively; and for the two preceding financial years ended 31 December 2004 and 2005, the audited net profits after taxation and extraordinary items of Universal Shipping were HK$4,515,899 and HK$14,164,142, respectively. All the audited and unaudited financial figures of Universal Shipping set out in this announcement are based on accounting principles generally accepted in Hong Kong.

(e) Completion

The Agreement shall be completed on 1 September 2006.

REASON FOR THE ACQUISITION

Universal Shipping is principally engaged in container cargo sub-route services in the Pearl River Delta Region, the South China Sea and the North China Sea. The acquisition of the entire issued share capital of Universal Shipping will enable the Company to strengthen the integration and coordination of the solicitation of cargos, transportation and operations of its major trade lanes and sub-routes and to further improve its economic efficiency.

GENERAL INFORMATION

The Group is principally engaged in the operation and management of international and domestic container marine transportation.

CS Logistics is a limited liability company incorporated in Hong Kong and is a wholly-owned subsidiary of China Shipping, which is the controlling shareholder of the Company. Therefore, CS Logistics is a connected person of the Company. The principal business activities of CS Logistics are logistics, storage, finance lease and project investment and development.

CS Agency is a limited liability company incorporated in Hong Kong and is a wholly-owned subsidiary of China Shipping. Therefore, CS Agency is a connected person of the Company. The principal business activities of CS Agency are shipping agency, freight forwarding, customs declaration and financial settlement for international ocean going vessels.

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Rich Shipping is a limited liability company incorporated in Hong Kong and is a 95% held subsidiary of China Shipping. Therefore, CS Logistics is a connected person of the Company. The principal business activities of Rich Shipping are freight forwarding, cargo and container transshipment, bare-boat feeder service, cargo booking, shipping consignment, customs declaration, customs clearance, collecting and paying freight, container transshipment, vessel trading, vessel chartering and leasing of containers.

Since CS Logistics, Rich Shipping and CS Agency are all connected persons of the Company, the Agreement constitutes a connected transaction of the Company under the Listing Rules. However, the aggregate consideration payable for the above acquisition does not exceed 2.5% of any of the applicable percentage ratios. Under Rule 14A.32 of the Listing Rules, the Agreement is therefore exempted from the independent shareholders’ approval requirement applicable to connected transactions under the Listing Rules, but is still subject to the relevant disclosure and reporting requirements.

The Board (including the independent non-executive directors) believes that the terms of the transaction contemplated under the Agreement (including the consideration) are fair and reasonable, on normal commercial terms, in the interests of the Company and its shareholders as a whole and no less favourable to the Company than terms available from independent third parties.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions have the following meanings:

• “Agreement” a share purchase agreement entered into between CSHK as purchaser and CS Logistics, Rich Shipping and CS Agency as sellers regarding the acquisition by CSHK of the entire issued share capital of Universal Shipping

• “Board”

the board of directors of the Company

• “China Shipping” China Shipping (Group) Company (中國海運（集團）總公司 ), a PRC stateowned enterprise, which is the controlling shareholder of the Company, having a 59.87% shareholding interest

• “Company” China Shipping Container Lines Company Limited (中海集裝箱運輸股份有限 公司 ), a joint stock limited company established in the PRC, of which 2,420,000,000 H shares are listed on The Stock Exchange of Hong Kong Limited

• “CS Agency” China Shipping (Hong Kong) Agency Co., Ltd. (中海（香港）船務代理有限公 司), a limited liability company incorporated in Hong Kong and a wholly-owned subsidiary of China Shipping

• “CS Logistics” China Shipping Logistics (Overseas) Co., Limited (中海物流（海外）有限公司 ), a limited liability company incorporated in Hong Kong and a wholly-owned subsidiary of China Shipping

• “CSHK” China Shipping Container Lines (Hong Kong) Co., Ltd. (中海集裝箱運輸（香 港）有限公司 ), a limited liability company incorporated in Hong Kong and a wholly-owned subsidiary of the Company

• “Directors” the directors of the Company

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“Group” the Company and its subsidiaries

• “HK$”

Hong Kong dollars, the lawful currency of Hong Kong

“Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• “Rich Shipping” China Shipping Agency Co., Ltd. (鵬達船務有限公司 ), a limited liability company incorporated in Hong Kong and a 95% held subsidiary of China Shipping

• “PRC” People’s Republic of China

• “Universal Shipping” Universal Shipping (Asia) Co., Ltd. (五洲航運有限公司 ), a limited liability company incorporated in Hong Kong

By order of the Board of

China Shipping Container Lines Company Limited Li Shaode Chairman

• Shanghai, the People’s Republic of China 29 August 2006

The Board as at the date of this announcement comprises of Mr. Li Shaode, Mr. Jia Hongxiang, Mr. Huang Xiaowen and Mr. Zhao Hongzhou, being executive directors, Mr. Zhang Jianhua, Mr. Wang Daxiong, Mr. Zhang Guofa, Mr. Yao Zuozhi and Mr. Xu Hui, being non-executive directors, and Mr. Hu Hanxiang, Mr. Gu Nianzu, Mr. Wang Zongxi and Mr. Lam Siu Wai, Steven, being independent non-executive directors.

• The Company is registered as an oversea company under Part XI of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) under its Chinese name and the English name “China Shipping Container Lines Company Limited”.

• “Please also refer to the published version of this announcement in the South China Morning Post”

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