Dida Inc. — Capital/Financing Update 2006

Dec 29, 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.

==> picture [66 x 48] intentionally omitted <==

CHINA SHIPPING DEVELOPMENT COMPANY LIMITED

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

(Stock code: 1138)

CONNECTED TRANSACTION

The Board of Directors of the Company is pleased to announce that the Company and Dili Recovery Company entered into the Sale and Purchase Agreement on 28 December 2006 whereby the Company had agreed to sell and Dili Recovery Company had agreed to purchase the Oil Tanker weighing 7455.7 long tonne. The consideration for the sale of the Oil Tanker is RMB17,287,009.69 (approximately HK$17,287,009.69). Such consideration has been determined with reference to the market price (as of 30 November 2006) of scrap metal at the rate of US$296.5 (approximately RMB2318.63) per long tonne.

The Group Company holds approximately 47.46 percent of the issued share capital of the Company, being the controlling shareholder of the Company as defined under the Listing Rules. Dili Recovery Company is a wholly-owned subsidiary of Shanghai Shipping (Group) Company which in turn is a wholly owned subsidiary of the Group Company. Therefore, Dili Recovery Company is a connected person (as defined under the Listing Rules) of the Company. Hence, the Transaction constitutes a connected transaction of the Company for the purposes of the Listing Rules. As the applicable percentage ratios in respect of the Transaction is more than 0.1% but less than 2.5%, the Transaction is only subject to the reporting and announcement requirements under Rule 14A.45 to 14A.47 of the Listing Rules but does not require the approval of the Independent Shareholders.

The terms and conditions of the Transaction have been negotiated on an arm’s length basis and are conducted on normal commercial terms. The Transaction is in the ordinary and usual business of the Company. The Board (including the Independent Directors) considers the terms of the Transaction to be fair and reasonable, and is in the interests of the Company and the Shareholders, taken as a whole. Particulars of the Sale and Purchase Agreement are set forth below, and will also be disclosed in the Company’s 2006 annual report.

The board (the “Board”) of directors (the “Directors”) of China Shipping Development Company Limited (the “Company”) is pleased to announce that the Company and Digang Dili Material Recovery Company ( ) (“Dili Recovery Company”) entered into a sale and purchase agreement (the “Sale and Purchase Agreement”) on 28 December 2006 whereby the Company had agreed to sell and Dili Recovery Company had agreed to purchase the oil tanker named “Daqing 42” (the “Oil Tanker”) weighing 7455.7 long tonne.

— 1 —

1. Sale and Purchase Agreement dated 28 December 2006

• 1.1 Parties

Vendor: The Company

Purchaser: Dili Recovery Company

1.2 Oil Tanker

The Oil Tanker was constructed by an independent third party shipyard in Dalian, and was commissioned into service on 1 January 1976. The Oil Tanker weighs 7455.7 long tonne.

1.3 Sale of the Oil Tanker

Pursuant to the Sale and Purchase Agreement, the Company has agreed to sell the Oil Tanker as scrap metal and Dili Recovery Company has agreed to purchase the Oil Tanker, and thereafter to dismantle it.

1.4 Purchase price and payment terms

Pursuant to the Sale and Purchase Agreement, Dili Recovery Company will pay to the Company in cash a sum of RMB17,287,009.69 (approximately HK$17,287,009.69) as consideration for the sale of the Oil Tanker. The purchase price was determined based on the market price (as of 30 November 2006) of scrap metal at the rate of US$296.5 (approximately RMB2318.63) per long tonne. No valuation has been performed. The net book value of the Oil Tanker as at 30 November 2006 was RMB1,970,343.84 (approximately HK$1,970,343.84). The net profit expected to arise from the sale of the Oil Tanker, being the difference between the consideration for such sale and the net book value of the Oil Tanker, is RMB15,316,665.85 (approximately HK$15,316,665.85). The Company intends to use the net proceeds arising from the sale of the Oil Tanker as its working capital. The net profits before taxation and extraordinary items attributable to the Oil Tanker for the financial years ended 31 December 2004 and 31 December 2005, respectively, are RMB18,809,075.28 and RMB26,592,320.72. The net profits after taxation and extraordinary items attributable to the Oil Tanker for the financial years ended 31 December 2004 and 31 December 2005, respectively, are RMB16,555,861.19 and RMB23,745,974.11. The above financial information of the Oil Tanker were prepared under PRC GAAP.

It is a term of the Sale and Purchase Agreement that Dili Recovery Company will first arrange payment to the Company a deposit of RMB1,728,700.97 (approximately HK$1,728,700.97) by remittance to the Company’s designated bank account at the same time of signing the Sale and Purchase Agreement by both parties. The remaining balance of the purchase price of the Oil Tanker, being RMB15,558,308.72 (approximately HK$15,558,308.72), shall be paid by remittance to the Company’s designated bank account 3 days prior to the delivery of the Oil Tanker to Dili Recovery Company pursuant to the Sale and Purchase Agreement. As at the date of this announcement the Company has not received the deposit or the aforesaid balance of the purchase price for value.

— 2 —

1.5 Delivery

The Oil Tanker will be delivered to Dili Recovery Company at Digang Dismantling Shipyard in the PRC on or before 31 December 2006.

1.6 Other significant terms

All responsibilities, liabilities and risks relating to the delivery of the Oil Tanker shall be borne by the Company prior to delivery of the Oil Tanker, and by Dili Recovery Company immediately after such delivery.

The Sale and Purchase Agreement is subject to the usual force majeure provisions. In the event of occurrence of force majeure events prior to the delivery of the Oil Tanker on 31 December 2006 such as earthquake, fire, tidal wave and war and, as a result, the Sale and Purchase Agreement cannot be performed by the Company, the Company shall return the deposit to Dili Recovery Company immediately.

If Dili Recovery Company fails to pay the deposit of1,728,700.97 (approximately HK$1,728,700.97) or the remaining balance of RMB15,558,308.72 (approximately HK$15,558,308.72) in accordance with the Sale and Purchase Agreement, the Company shall have the right to terminate the Sale and Purchase Agreement and claim for any consequential losses and interest.

Should any dispute arise between the Company and Dili Recovery Company in respect of the Sale and Purchase Agreement, which remains unresolved after reasonable discussions, such dispute shall be referred to the China Maritime Arbitration Commission, which was established in accordance with a decision made by the State Council of the People’s Republic of China (the “PRC”), for arbitration in Shanghai, the PRC.

2. Reasons for and benefits of entering into the Sale and Purchase Agreement

The Oil Tanker came into operation on 1 January 1976. In accordance with the notice issued by the Ministry of Communication of the PRC ( ) on 5 July 2006, the mandatory scrappage age of the Oil Tanker is 31 years. Therefore, the Oil Tanker will meet the deadline for mandatory scrappage on 31 December 2006. As a result, the Board decided to sell it as scrap metal. Dili Recovery Company is a special service entity which specializes in ship dismantling business. The Board believes that the disposal of the Oil Tanker will provide the Company with more working capital. The Board does not have intention on any specific use of the working capital. The Directors believe that such disposal does not have any material adverse impact to the Company and its subsidiaries.

3. General

The business of the Company mainly involves coastal, ocean and Yangtze River cargo transportation, container transportation, oil transportation, international passenger transportation, chartering, cargo agency and cargo transportation agency. The business of Dili Recovery Company mainly involves ship dismantling and repair.

— 3 —

4. Listing Rules Requirements

China Shipping (Group) Company (the “Group Company”) holds approximately 47.46 percent of the issued share capital of the Company, being the controlling shareholder of the Company as defined under The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”). Dili Recovery Company is a wholly owned subsidiary of Shanghai Shipping (Group) Company Limited, which in turn is a wholly owned subsidiary of the Group Company. Therefore, Dili Recovery Company is a connected person (as defined under the Listing Rules) of the Company. Hence, the transaction as contemplated under the Sale and Purchase Agreement (the “Transaction”) constitutes a connected transaction of the Company for the purposes of the Listing Rules.

As the applicable percentage ratios in respect of the Transaction is, more than 0.1% but less than 2.5%, the Transaction is subject only to the reporting and announcement requirements under Rule 14A.45 to Rule 14A.47 of the Listing Rules and does not require approval by the Shareholders other than the Group Company and its associates (as defined under the Listing Rules) (the “Independent Shareholders”). Particulars of the Sale and Purchase Agreement will also be disclosed in the Company’s 2006 annual report.

The terms and conditions of the Transaction have been negotiated on an arm’s length basis and the Directors (including the independent non-executive Directors) are of the view that the terms and conditions are conducted on normal commercial terms. The Transaction is in the ordinary and usual course of business of the Company. The Board (including the independent non-executive Directors, referred to herein as the “Independent Directors”) considers the terms of the Transaction to be fair and reasonable, and is in the interests of the Company and the shareholders of the Company (the “Shareholders”), taken as a whole.

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

Shanghai, the PRC 28 December 2006

Note: Unless otherwise specified, the conversion of HK$ into RMB is based on the exchange rate of HK$1.00=RMB1.00 and the conversion of US$ into RMB is based on the exchange rate of US1.00 = RMB7.82.

As at the date of this announcement, the Board of Directors of the Company is comprised of Mr. Li Shaode, Mr. Lin Jianqing, Mr. Wang Daxiong, Mr. Zhang Guofa, Mr. Mao Shijia and Mr. Wang Kunhe as executive directors, Mr. Yao Zuozhi as non-executive directors, Mr. Xie Rong, Mr. Hu Honggao, Mr Ma Xun and Mr. Zhou Zhanqun as independent non-executive directors.

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

— 4 —