Dida Inc. — Capital/Financing Update 2005

Nov 7, 2005

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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CHINA SHIPPING DEVELOPMENT COMPANY LIMITED

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock code: 1138)

STATE SHARE REFORM PROPOSAL

Upon the request and authorization of the controlling shareholder of the Company, CSC, the Board hereby announces the proposal made by CSC to the A Shareholders in relation to the proposed conversion of all the State-owned Shares held by CSC into A Shares. Under such proposal, CSC proposes to offer 2.3 State-owned Shares to each A Shareholder for every 10 A Shares held by such A Shareholder as at close of business on the Record Date, as consideration for their approval of the Conversion. CSC has no plan to make similar offer of shares to the holders of H Shares under the same proposal.

This announcement is made pursuant to Rule 13.09(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The board of directors (the “ Board ”) of China Shipping Development Company Limited (the “ Company ”) wishes to announce that, as requested and authorized by the controlling shareholder of the Company, China Shipping (Group) Company ( ) (“ CSC ”), which holds approximately 50.51% of the Company’s registered share capital, the Company had on 7 November 2005 issued a notice to the holders (the “ A Shareholder(s) ”) of the domestic shares of the Company which are listed and traded on the Shanghai Stock Exchange (the “ SSE ”) (the “ A Share(s) ”) and CSC for a meeting to be held on 8 December 2005 of the holders of domestic shares of the Company (the “ Domestic Shareholder(s) ”) (the “ Domestic Shareholders’ Meeting ”), to seek the A Shareholders’ approval and the Domestic Shareholders’ approval of CSC’s proposal for the conversion (the “ Conversion ”) of all the unlisted domestic shares in the Company held by CSC (the “ State-owned Shares ”) into A Shares (the “ State Share Reform Proposal ”).

The following is a summary of the State Share Reform Proposal. Details of the State Share Reform Proposal and copies of all other relevant documents required to be filed under the rules of the SSE are posted on the website of the SSE at www.sse.com.cn.

State Share Reform Proposal

1. The Conversion and Offer of shares

The Conversion will take place in stages with the State-owned Shares (excluding those State-owned Shares which are to be offered for transfer to the A Shareholders pursuant

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to the State Share Reform Proposal) first converted into shares that are entitled to be (but not actually) listed and traded on the SSE on the first trading day immediately following the date when the State Share Reform Proposal becomes effective, which is currently expected to be 30 December 2005 (the “ Listing Date ”), subject to the trading moratorium as described in Section 3 below. Upon the expiry of the three years commencing from the Listing Date, the above shares will be converted into A Shares. The State-owned Shares which are to be offered for transfer to the A Shareholders pursuant to the State Share Reform Proposal will be converted into A Shares forthwith upon the coming into effect of the State Share Reform Proposal.

CSC proposes to offer 2.3 State-owned Shares to each A Shareholder for every 10 A Shares held by such A Shareholder as at the close of business on the record date for identifying the A Shareholders and the number of A Shares held by each A Shareholder, for the purpose of attendance at the Domestic Shareholders’ Meeting, currently expected to be 23 November 2005 (“ Record Date ”), as consideration for their approval of the Conversion. CSC has no plan to make similar offer of shares to the holders of the overseas listed foreign invested shares in the Company (the “ H Share(s) ”) under the State Share Reform Proposal.

(a) Shareholding structure

**Immediately before the coming **	**Immediately before the coming **	into effect of	into effect of	**Immediately after the coming **	**Immediately after the coming **	into effect of	into effect of
**the State **	**Share Reform **	Proposal		the State Share Reform Proposal
		Percentage				Percentage
	Number	of registered			Number of	of registered
	of shares	share capital			shares	**share **	capital
			(%)				(%)
Unlisted shares:				Shares subject
				to trading
				moratorium:
State-owned	1,680,000,000		50.51	State-owned	1,599,500,000		48.09
Shares				Shares (held by
(held by CSC)				CSC)
Sub total	1,680,000,000		50.51	Total	1,599,500,000		48.09
Listed shares:				Listed shares not
				subject to trading
				moratorium
(i) A Shares	350,000,000		10.52	(i) A Shares	430,500,000		12.94
(ii) H Shares	1,296,000,000		38.97	(ii) H Shares	1,296,000,000		38.97
Sub-total	1,646,000,000		49.49	Sub-total	1,726,500,000		51.91
Total	3,326,000,000		100	Total	3,326,000,000		100

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• (b) Total value of the State-owned Shares offered to the A Shareholders under the State Share Reform Proposal

Based on a value of HK$5.40 (approximately RMB5.63) per A Share which is the closing price of H Shares as quoted on The Stock Exchange of Hong Kong Limited at close of trading on 4 November 2005, and the offer of 2.3 State-owned Shares to each A Shareholder made by CSC for every 10 A Shares held by such A Shareholder, the total value of the State-owned Shares offered to the A Shareholders would be approximately RMB453,215,000. As such, the total value of the consideration offered to the A Shareholders would be approximately RMB453,215,000.

2. Conditions

The coming into effect of the State Share Reform Proposal is subject to the obtaining of the approvals by and/or consent of:

• (a) at least two-thirds of the voting rights held by A Shareholders attending the Domestic Shareholders’ Meeting and at least two-thirds of the voting rights held by the Domestic Shareholders attending the Domestic Shareholders’ Meeting. If such approvals are not obtained, CSC may convene another meeting of the Domestic Shareholders upon the expiry of three months from the date of the Domestic Shareholders’ Meeting, according to the relevant laws and regulations of the PRC;

• (b) the State-owned Assets Supervision and Administration Commission (the “ SASAC ”) of the State Council of the People’s Republic of China (the “ PRC ”). If such approval is not granted before the date of the Domestic Shareholders’ Meeting as currently scheduled, the Domestic Shareholders’ Meeting may be postponed to a later date following the obtaining of such approval; and

• (c) the Ministry of Commerce of the PRC.

Following the coming into effect of the State Share Reform Proposal, relevant registration would need to be completed with China Securities Depository and Clearing Corporation Limited, Shanghai Branch for the changes in the number of A Shares.

Any decision made or opinion given by the China Securities Regulatory Commission (the “ CSRC ”) or the SSE does not represent any recommendation or assurance in relation to the coming into effect of the State Share Reform Proposal, the value of the shares of the Company and/or the interests of the investors.

1. Undertakings by CSC

CSC has undertaken to the Company and the A Shareholders as follows, among others:

• (a) if the State Share Reform Proposal is approved by the SASAC as well as the A Shareholders and the Domestic Shareholders at the Domestic Shareholders’ Meeting, the State-owned Shares (excluding those State-owned Shares which are to

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be offered to the A Shareholders pursuant to the State Share Reform Proposal) held by CSC will not be listed and traded on the SSE, nor transferred, immediately following the coming into effect of the State Share Reform Proposal and within 12 months from the Listing Date;

• (b) if the State Share Reform Proposal is approved by the SASAC as well as the A Shareholders and the Domestic Shareholders at the Domestic Shareholders’ Meeting, the State-owned Shares (excluding those State-owned Shares which are to be offered to the A Shareholders pursuant to the State Share Reform Proposal) held by CSC will not be listed and traded on the SSE within the 24 months period immediately following the date on which the period referred to in paragraph (a) above expires;

• (c) within the 24 months period from the date on which the period referred to in paragraph (b) above expires, CSC shall not sell any of its State-owned Shares (subject to any adjustment resulting from any alteration to the registered share capital of the Company) on the SSE at a price less than 120% of the closing A Share price as quoted on the SSE on the trading day immediately before the date of this announcement;

• (d) CSC will arrange for the deposit of the State-owned Shares to be offered to the A Shareholders pursuant to the State Share Reform Proposal with China Securities Depository and Clearing Corporation Limited, Shanghai Branch; and

• (e) CSC will be responsible for all the costs and expenses arising from the implementation of the State Share Reform Proposal.

• Opinions of the Sponsor and PRC Legal Adviser

• (a) Changjiang BNP Paribas Peregrine Securities Company Limited, the sponsor to CSC on the State Share Reform Proposal, considers that CSC has offered a fair and reasonable amount of consideration to the A Shareholders for their approval of the Conversion.

• (b) Jun He Law Offices, the legal adviser to CSC on the State Share Reform Proposal as to PRC laws, is of the opinion that:

  • (i) each of CSC and the Company is a corporate legal person which is legally established and validly existing in the PRC and qualified to participate in the State Share Reform Proposal;

  • (ii) the State Share Reform Proposal is in full compliance with the applicable laws and regulations of the PRC, and is not in conflict with any of the provisions of the existing articles of association of the Company;

  • (iii) as of the date of this announcement, the provisions (including the related procedures) of the State Share Reform Proposal are in full compliance with the Administration Procedures of the Share Reform Plan of Listed Companies as promulgated by the CSRC;

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• (iv) the State Share Reform Proposal is subject to approval by at least two-thirds of the voting rights held by A Shareholders attending the Domestic Shareholders’ Meeting and approval by at least two-thirds of the voting rights held by Domestic Shareholders attending the Domestic Shareholders’ Meeting;

• (v) the State Share Reform Proposal is subject to the approval(s) of the SASAC;

• (vi) the State Share Reform Proposal is subject to the approval of or consent from the Ministry of Commerce of the PRC;

• (vii) on the basis that the current PRC laws and regulations and the circulars issued by CSRC do not expressly address the rights and interests of the holders of H Shares in a share reform situation similar to the one under the State Share Reform Proposal, under PRC law, the legal rights and interests of the holders of the H Shares will not be adversely affected as a result of the State Share Reform Proposal; and

• (viii) the State Share Reform Proposal only affects the legal rights and interests of CSC and the A Shareholders.

5. Suspension and Resumption of Trading in A Shares

The Company has applied for the suspension in trading in the A Shares on the SSE with effect from 7 November 2005. Trading in the A Shares will continue to be suspended on the SSE pending release of an announcement containing the final agreed terms of the State Share Reform Proposal, which is currently expected to be no later than 16 November 2005. Trading in the A Shares is currently expected to resume on or before 17 November 2005. The Company will apply for a further suspension in trading in the A Shares on the SSE with effect from the trading day immediately following the Record Date and trading in the A Shares is expected to resume on the Listing Date.

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The Company will issue further announcements from time to time to update its shareholders and potential investors on any material development on the State Share Reform Proposal.

By order of the Board China Shipping Development Company Limited Yao Qiaohong Company Secretary

7 November 2005

Shanghai, the PRC

• Note: Unless otherwise specified and for reference only, the conversion of Hong Kong dollars into Renminbi is based on the exchange rate of HK$1 = RMB1.0426 in this announcement.

• As at the date of this announcement, the Board comprises of Mr. Li Shaode, Mr. Wang Daxiong, Mr. Mao Shijia, Mr. Wang Kunhe and Mr. Yao Zuozhi as executive directors, Mr. Xie Rong, Mr. Hu Honggao and Mr. Zhou Zhanqun as independent non-executive directors.

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

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