Guoxia Technology Co., Ltd. - Proxy Solicitation & Information Statement 2006

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Wing On Travel (Holdings) Limited, you should at once hand this circular to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or the transfer was effected for transmission to the purchaser or transferee.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this circular, 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 circular.

This circular is for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for the shares or other securities of the Company.

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WING ON TRAVEL (HOLDINGS) LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1189)

ISSUE OF CONVERTIBLE EXCHANGEABLE NOTES AND CONNECTED TRANSACTION

Financial adviser to Wing On Travel (Holdings) Limited

SOMERLEY LIMITED

Independent financial adviser to the independent board committee and the independent shareholders of Wing On Travel (Holdings) Limited

A letter from the board of directors of the Company is set out on pages 5 to 16 of this circular. A letter from the independent board committee of the Company and a letter from Guangdong Securities Limited containing their recommendations and advices are set out on page 17 and pages 18 to 31 of this circular, respectively.

A notice convening a special general meeting of Wing On Travel (Holdings) Limited to be held at 8th Floor, Harcourt House, 39 Gloucester Road, Wanchai, Hong Kong on Monday, 8 May 2006 at 10:00 a.m. is set out on pages 42 to 43 to this circular. A form of proxy for use at the special general meeting is enclosed. Whether or not you are able to attend the meeting in person and vote at such meeting, you are advised to read the notice and complete the enclosed form of proxy in accordance with the instructions printed thereof as soon as possible and return it to the Company’s head office and principal place of business at 7th Floor, Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding such meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjourned meeting if you so wish.

21 April 2006

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Subscription Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Principal terms of the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Reasons for the issue of the Notes and use of proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Shareholding structure of Wing On . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Dilution effect on Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Summary of equity fund raising activities of
Wing On in the past twelve months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
Listing Rules implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Procedure for demanding a poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
Further information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Letter from Guangdong Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
Appendix – General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	32
Notice of the SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	42

– i –

DEFINITIONS

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

“Announcement”	the joint announcement of Wing On and China Strategic dated 27
	March 2006 in relation to, among others, the issue of the Notes
	by Wing On
“associates”	has the meaning ascribed to it under the Listing Rules
“Capital Reorganisation”	the reduction in the nominal value of the issued share capital of
	Wing On from HK$1.00 each per share to HK$0.10 per adjusted
	share by cancelling HK$0.90 paid-up capital on each issued share,
	and the subdivision of each authorised but unissued share of
	HK$1.00 in the capital of Wing On into 10 adjusted shares of
	HK$0.10 each, which have become effective on 11 April 2006
“CEL”	China Enterprises Limited, a company incorporated in Bermuda
	with limited liability, the shares of which are traded on the OTC
	(over-the-counter) Bulletin Board in the United States of America
	and is owned as to approximately 55.22% effective equity interest
	and approximately 88.79% effective voting interest by China
	Strategic
“CEL Notes”	the HK$300 million 2% convertible exchangeable notes due 2011
	proposed to be issued by Wing On and subscribed by CEL pursuant
	to the CEL Subscription Agreement, which entitle the holders
	thereof to, among others, convert the outstanding principal amount
	into the Conversion Shares at the Initial Conversion Price
“CEL Subscription”	the subscription of the CEL Notes by CEL pursuant to the CEL
	Subscription Agreement
“CEL Subscription Agreement”	a conditional subscription agreement dated 23 March 2006 entered
	into between CEL and Wing On in relation to the CEL
	Subscription, subject to the terms and conditions contained therein
“China Strategic”	China Strategic Holdings Limited, a company incorporated in Hong
	Kong with limited liability and the shares of which are listed on
	the Main Board of the Stock Exchange
“Completion”	completion of the Subscription Agreements
“Concert Parties”	has the meaning ascribed thereto under the Takeovers Code

– 1 –

DEFINITIONS

“connected persons”	has the meaning ascribed to it under the Listing Rules
“Conversion Shares”	the 1,265,822,784 new Shares which fall to be issued upon exercise
	in full of the conversion rights attaching to the Notes at the Initial
	Conversion Price
“Directors”	directors of Wing On
“Exchange Rights”	the rights to exchange all or part of the Notes into Exchange
	Shares pursuant to the instruments of the Notes
“Exchange Shares”	the ordinary shares comprised in the share capital of the Spin-off
	Entity held by Wing On or its wholly-owned subsidiaries which
	are to be transferred to the Noteholder upon the exercise of its
	Exchange Rights
“Group”	Wing On and its subsidiaries
“Guangdong Securities”	Guangdong Securities Limited, which is a licensed corporation
	under the SFO permitted to carry out types 1, 4 and 6 regulated
	activities (as defined in the SFO) and the independent financial
	adviser to the Independent Board Committee and the Independent
	Shareholders
“Hong Kong”	Hong Kong Special Administrative Region of the PRC
“HIL”	Hutchison International Limited, a company incorporated in Hong
	Kong with limited liability and a wholly-owned subsidiary of HWL
“HWL”	Hutchison Whampoa Limited, a company incorporated in Hong
	Kong with limited liability and the shares of which are listed on
	the Main Board of the Stock Exchange
“Independent Board Committee”	the independent committee of the board of Wing On comprising
	Mr. Kwok Ka Lap, Alva, Mr. Sin Chi Fai and Mr. Wong King
	Lam, Joseph, all of whom are the independent non-executive
	Directors
“Independent Shareholders”	Shareholders other than CEL and its associates
“Initial Conversion Price”	the initial conversion price of HK$0.79 per Share (subject to
	adjustment) of the Notes
“Last Full Trading Day”	22 March 2006, being the last full trading day for the Shares prior
	to the suspension of dealings of the Shares on the Stock Exchange
	pending the issue of the Announcement

– 2 –

DEFINITIONS

“Latest Practicable Date”	18 April 2006, being the latest practicable date prior to printing
	of this circular for the purpose of ascertaining certain information
	for inclusion in this circular
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Maturity Date”	the fifth anniversary of the date of issue of the Notes
“Noteholders”	holders of the Notes
“Notes”	the HK$1,000 million 2% convertible exchangeable note (including
	CEL Notes) due 2011 proposed to be issued by Wing On and
	subscribed by the Subscribers pursuant to the Subscription
	Agreements, which entitle the holders thereof to, among others,
	convert the principal amount outstanding into the Conversion
	Shares at the Initial Conversion Price, subject to adjustments
“Offers”	the possible voluntary offer to acquire all the shares of Group
	Dragon Investments Limited not already held by Well Orient
	Limited and its Concert Parties; and the possible mandatory cash
	offer to acquire all the shares of China Strategic not already held
	or agreed to be acquired by Nation Field Limited and its Concert
	Parties, details of which are set out in the joint announcement of
	China Strategic dated 19 April 2005 and the circular of China
	Strategic dated 10 September 2005
“Other Subscribers”	nine subscribers (other than CEL and HIL) of the Notes which are
	funds managed by global asset management firms and/or
	professional investor
“Placing”	the placing of up to 175,000,000 new Shares, on a best effort
	basis, by the Placing Agent to the placees at HK$0.69 each under
	the placing agreement dated 1 March 2006, details of which are
	set out in the announcement of Wing On dated 1 March 2006 and
	circular of Wing On dated 17 March 2006
“Placing Agent”	Success Securities Limited
“PRC”	the People’s Republic of China
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)

– 3 –

DEFINITIONS

“SGM”	the special general meeting of Wing On to be convened to consider
	and approve the transactions contemplated in the Subscription
	Agreements including the issue of the Notes and the Conversion
	Shares which fall to be issued and allotted on exercise of the
	conversion rights attached to the Notes
“Shareholders”	holders of the Shares
“Share(s)”	ordinary share(s) of HK$0.10 each in the capital of Wing On
“Spin-off Entity”	any company which is an affiliated company (as defined in Rule
	13.11(2)(a) of the Listing Rules) or subsidiary of Wing On that is
	to be listed on a stock exchange through an initial public offering
“Spin-off Shares”	shares in the share capital of the Spin-off Entity
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subscribers”	CEL, HIL and the Other Subscribers
“Subscription”	the subscription of the relevant Notes by the relevant Subscribers
	pursuant to the respective Subscription Agreements
“Subscription Agreements”	a total of 8 conditional subscription agreements dated 23 March
	2006 entered into between Wing On and each of CEL, HIL, a
	fund manager (on behalf of four Other Subscribers which are
	investment funds managed by it) and five Other Subscribers in
	relation to the Subscription, subject to the terms and conditions
	contained therein
“subsidiary”	has the meaning ascribed to it under the Listing Rules
“Takeovers Code”	the Hong Kong Code on Takeovers and Mergers
“Wing On” or ‘Company”	Wing On Travel (Holdings) Limited, a company incorporated in
	Bermuda with limited liability and the shares of which are listed
	on the Main Board of the Stock Exchange
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“%”	per cent.

– 4 –

LETTER FROM THE BOARD

WING ON TRAVEL (HOLDINGS) LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1189)

Executive Directors:

Mr. Yu Kam Kee, Lawrence, B.B.S., M.B.E., J.P. (Chairman)

Mr. Cheung Hon Kit (Managing Director) Dr. Yap, Allan Mr. Chan Pak Cheung, Natalis

Mr. Lui Siu Tsuen, Richard Ms. Luk Yee Lin, Ellen

Non-Executive Director:

Mr. Chan Yeuk Wai (Honorary Chairman)

Independent Non-Executive Directors:

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Head office and principal place of business in Hong Kong: 7th Floor, Paul Y. Centre 51 Hung To Road Kwun Tong, Kowloon Hong Kong

Mr. Kwok Ka Lap, Alva

Mr. Sin Chi Fai

Mr. Wong King Lam, Joseph

21 April 2006

To the Shareholders

Dear Sir or Madam,

ISSUE OF CONVERTIBLE EXCHANGEABLE NOTES AND CONNECTED TRANSACTION

INTRODUCTION

The Board announced on 27 March 2006 that Wing On entered into a total of 8 Subscription Agreements in relation to the subscription by the Subscribers of the Notes with an aggregate principal amount of HK$1,000 million on 23 March 2006. Save for the principal value of the Notes to be subscribed and the identity of the Subscribers, the principal terms of each of the Subscription Agreements are identical.

– 5 –

LETTER FROM THE BOARD

The Independent Board Committee, comprising Mr. Kwok Ka Lap, Alva, Mr. Sin Chi Fai and Mr. Wong King Lam, Joseph, has been constituted to advise the Independent Shareholders relating to the CEL Subscription Agreement and the issue of the CEL Notes. Guangdong Securities has been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

The purpose of this circular is to provide you with, among other things, (i) details of the Subscription Agreements and the Notes; (ii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders; (iii) a letter of advice from Guangdong Securities to the Independent Board Committee and the Independent Shareholders on the terms of the CEL Subscription Agreement and the CEL Notes; and (iv) a notice of the SGM.

SUBSCRIPTION AGREEMENTS

Date: 23 March 2006

Parties to the Subscription Agreements:

Issuer: Wing On Subscribers: (i) CEL, conditionally agreeing to subscribe at Completion for the CEL Notes with principal amount of HK$300 million by cash;
(ii) HIL, conditionally agreeing to subscribe at Completion for a Note with principal amount of HK$200 million by cash; and
(iii) a fund manager (on behalf of four Other Subscribers which are investment funds managed by it) and five Other Subscribers, conditionally agreeing to subscribe at Completion for the Notes with aggregate principal amount of HK$500 million by cash.

Subscribers:

CEL is a company incorporated in Bermuda with limited liability, the shares of which are traded on the OTC (over-the-counter) Bulletin Board in the United States of America and is owned as to approximately 55.22% effective equity interest and approximately 88.79% effective interest of voting right by China Strategic. China Strategic is an investment holding company and its subsidiaries are involved in manufacturing and trading of battery products and related accessories and investments in securities. CEL is an investment holding company. Through its subsidiaries, CEL is engaged in the business of property investment and development in the PRC and has substantial interests in investment holding companies, the subsidiaries of which are principally engaged in manufacturing and marketing of tires in the PRC and other countries aboard, and the business of providing package tour, travel and other related services and hotel operations. CEL is the single largest shareholder of Wing On holding 121,386,481 Shares (representing approximately 27.74% of the total issued Shares) as at the date of the CEL Subscription Agreement.

HIL is a wholly-owned subsidiary of HWL (a company incorporated in Hong Kong with limited liability and the shares of which are listed on the Main Board of the Stock Exchange). HIL’s principal activity is investment holding and activities of its principal subsidiaries include ports and related services, property and hotels, retail, energy, infrastructure, finance and investments, and telecommunications.

– 6 –

LETTER FROM THE BOARD

The Other Subscribers include funds managed by global asset management firms and/or professional investor.

Wing On confirms that to the best of knowledge, information and belief of the Directors and having made all reasonable enquiries, each of HIL, HWL (being HIL’s controlling shareholder), the Other Subscribers and the respective ultimate beneficial owners of the Other Subscribers are third parties independent of Wing On and its connected persons. Two of the Other Subscribers (with total subscription amount of HK$40 million) are funds which are related to each other to the extent that they are managed by a common investment manager. Four of the Other Subscribers (with total subscription amount of HK$145 million) are funds which are related to each other to the extent that they are managed by another common investment manager. As at the date of the Subscription Agreements, none of HIL and the Other Subscribers held any Shares or other securities in Wing On.

Conditions of the Subscription Agreements:

Completion of each of the Subscription Agreement is conditional upon:

(i) the passing by the requisite majority of Independent Shareholders in general meeting of all necessary resolutions to ratify Wing On’s entering into the Subscription Agreements and performance of the transactions contemplated in the Subscription Agreements including the issue of the Notes and the Conversion Shares which fall to be issued and allotted on exercise of conversion rights attached to the Notes;
(ii) the Listing Committee of the Stock Exchange having granted the listing of and permission to deal in the Conversion Shares;
(iii) the passing by the requisite majority required under the Listing Rules of the shareholders of China Strategic in general meeting of a resolution to approve the terms of the CEL Subscription Agreement (including the exercise of conversion rights and exchange rights attached to the CEL Notes);
(iv) the obtaining of all consents (including shareholders’ approval) that may be required under the Takeovers Code or the Executive in connection with the Offers;
(v) if required, an increase of authorised share capital of Wing On to facilitate the issue of the Conversion Shares and the Bermuda Monetary Authority having approved the issue of shares of Wing On permitted by such increased authorised capital, the issue of the Notes and the Conversion Shares and the transferability of the Notes and the Conversion Shares;
(vi) the completion of the Capital Reorganisation;
(vii) the warranties made by Wing On in the Subscription Agreements are complete and accurate and not misleading when made and shall be true, complete and accurate, and not misleading as at Completion as if made at Completion;
(viii) the Subscribers having received legal opinions issued by the Bermuda and Hong Kong counsel of Wing On in respect of matters relating to Wing On and transaction documents in form and substance reasonably satisfactory to the Subscribers; and

– 7 –

LETTER FROM THE BOARD

(ix) the trust deed constituting the Notes and the paying and conversion agency agreement, each in a form reasonably satisfactory to the Subscribers, shall have been executed by all parties thereto on or prior to Completion.

The Subscription Agreements are to be completed at the same time and none of the Subscribers are obliged to complete, if all of the other Subscribers do not complete the Subscription under the relevant Subscription Agreements. If any of the above conditions precedent have not been fulfilled or waived by the relevant Subscribers (in respect of the conditions (vii), (viii) and (ix) above) on or before the day which falls on the expiry of 120 calendar days immediately following the date of the Subscription Agreements (or such later date as may be agreed by the parties to the Subscription Agreements in writing), then the Subscription Agreements shall lapse immediately thereafter and be of no further effect and neither party to the Subscription Agreements shall have any claim against or liability or obligation to other party under the Subscription Agreements.

Completion:

Completion shall take place on the third business day next following the date of fulfilment or waiver (as the case may be) of the conditions precedent stated in the section headed “Conditions of the Subscription Agreements” above, or such other date as the Subscribers and Wing On may agree.

PRINCIPAL TERMS OF THE NOTES

Aggregate principal amount: HK$1,000 million

Initial Conversion Price:

HK$0.79 per Share, subject to usual anti-dilution adjustments in certain events such as share consolidation, share subdivision, capitalisation issue, capital distribution, rights issue and other equity or equity derivatives issues by Wing On.

The Initial Conversion Price of HK$0.79 per Share represents:

a premium of approximately 11.3% over the closing price of HK$0.71 per Share (adjusted for the Capital Reorganisation) as quoted on the Stock Exchange on 23 March 2006, being the last trading day immediately before trading in the Shares was suspended pending the release of the Announcement;
a premium of approximately 12.9% over the closing price of HK$0.70 per Share (adjusted for the Capital Reorganisation) as quoted on the Stock Exchange on the Last Full Trading Day; and
a premium of approximately 10.6% over the average closing price of HK$0.714 per Share (adjusted for the Capital Reorganisation) as quoted on the Stock Exchange for the last 10 trading days up to and including the Last Full Trading Day; and
a discount of approximately 19.4% to the closing price of HK$0.98 per Share as quoted on the Stock Exchange on the Latest Practicable Date.

– 8 –

LETTER FROM THE BOARD

The Initial Conversion Price was determined after arm’s length negotiations between the Subscribers and Wing On with reference to the prevailing market price of the Shares before the date of the Announcement.

Interest rate: 2.0% per annum Maturity: The fifth anniversary from the date of issue of the Notes Redemption: Unless previously converted or lapsed or redeemed by Wing On, Wing On will redeem the Notes on the Maturity Date at the redemption amount which is 110% of the principal amount of the Notes outstanding.

In the event of a change of control of Wing On (where person(s) other than CEL and/or its Concert Parties acquire more than 50% equity interests of Wing On or the consolidation or merger of substantially all of the assets of Wing On with such person(s)) prior to the Maturity Date, the Noteholders may require Wing On to redeem at the redemption amount which is 110% of the principal amount of the Notes then outstanding plus interest accrued.

In the event of the occurrence of events of default specified in the Notes instrument, the Noteholders may also require Wing On to redeem the principal amount of the Notes then outstanding plus interest accrued.

Transferability: The Notes are freely transferable but may not be transferred to a connected person of Wing On (unless the Noteholder is already a connected person and the transferee is its associates) without the prior written consent of Wing On. Wing On undertakes to the Stock Exchange that it will promptly notify the Stock Exchange upon becoming aware of any dealings in the Notes by any connected persons of Wing On. Conversion period: Each of the Noteholders shall have the right to convert, on any business day commencing from the 7th day after the date of issue of the Notes up to and including the date which is 7 days prior to the Maturity Date, the whole or any part (in an amount or integral multiple of HK$1,000,000) of the principal amount of the Notes into Shares at the then prevailing conversion price.

– 9 –

LETTER FROM THE BOARD

Exchange Rights:	Subject to certain restrictions which are intended to facilitate compliance
	of relevant rules and regulations, each Noteholder shall have the right to
	exchange from time to time all or part (in the amount of HK$10,000,000
	or integral multiples thereof) of 50% of the initial principal amount of
	its Note for Spin-off Shares at the price (subject to adjustment for sub-
	division or consolidation of Spin-off Shares if the Exchange Rights are
	exercised after the listing date of the Spin-off Shares) at which the Spin-
	off Shares are actually issued to the public (as defined by the rules of
	the relevant stock exchange) at the time of the listing on that stock
	exchange.
	As at the Latest Practicable Date, Wing On does not have any concrete
	plan as regards any spin-off proposal. Shareholders of Wing On and
	China Strategic and potential investors should note that the spin-off by
	Wing On may or may not proceed. Further announcement will be made
	by Wing On in the event that the spin-off materialises.
Voting:	A Noteholder will not be entitled to receive notice of, attend or vote at
	any general meeting of Wing On by reason only of it being a Noteholder.
Listing:	No application will be made for the listing of the Notes on the Stock
	Exchange or any other stock exchange. An application will be made by
	Wing On for the listing of, and permission to deal in, the Conversion
	Shares to be issued as a result of the exercise of the conversion rights
	attached to the Notes.
Ranking:	The Notes will rank pari passu with all other present and future unsecured
	and un-subordinated obligations of Wing On.
	The Conversion Shares to be issued as a result of the exercise of the
	conversion rights attached to the Notes will rank pari passu in all respects
	with all other Shares in issue at the date on which the conversion rights
	attached to the Notes are exercised.

Based on the terms of the Notes, the expected yield to maturity of the Notes is approximately 3.85% per annum.

– 10 –

LETTER FROM THE BOARD

REASONS FOR THE ISSUE OF THE NOTES AND USE OF PROCEEDS

The principal activity of Wing On is investment holding, with its subsidiaries mainly engaged in the provision of package tours, travel and related services, and hotel operations.

Given the improving economic atmosphere in Hong Kong, the continuous expansion of the Closer Economic Partnership Arrangement and the PRC Individual Visit Scheme to Hong Kong, and the recovery in the outbound market to Southeast Asian countries from the Indian Ocean tsunami happened in 2004, the Group has achieved satisfactory growth in its travel, hotel and related business in 2005. The Directors consider that these positive momentum, coupled with the hosting of the Beijing Olympic Games in 2008 and the staging of the equestrian events of 2008 Olympic Games in Hong Kong, will continue to boost the tourism industry and overall demand for hotel rooms in the region. The Directors consider that the positive market development will provide the Group with immense opportunities. The Group will actively explore new investment opportunities to enlarge its market share through expansion in its branch network and expand its leisure business and hotel network further to the acquisition in February 2005 of the interest in an associated company engaged in hotel business in Macau. The Directors are of the view that issue of the Notes with conversion feature would strengthen the financial capability of the Group and raise capital for further possible acquisitions when such opportunities arise without immediate dilution in shareholding to existing Shareholders. The exchangeable right into shares of the Spin-off Entity is structured into the Notes to provide the Subscribers an opportunity to leverage on future possible positive corporate development of the Group during the relatively long maturity of the Notes. The Directors consider the terms of the Subscription and the Notes (including the CEL Subscription Agreement and the CEL Notes which have the same principal terms as those set out in the Subscription Agreements and the Notes to be issued to the Other Subscribers) are fair and reasonable and the Subscription is in the interests of Wing On and its shareholders as a whole.

The net proceeds of approximately HK$998.8 million raised from the Subscription are expected to be used by the Group for the purpose of expanding its hotel business and travel related business. The Directors have been identifying suitable investment targets in the hotel and travel related business for the Group. However, as at the Latest Practicable Date, no negotiations for investments in any targets have been materialised or proceeded to a mature stage. To the extent that the net proceeds are not immediately applied for the above purposes, the Directors intend that the net proceeds may be used to reduce the gearing of the Group. Based on the annual report of Wing On for the year ended 31 December 2005, the gearing ratio of the Group (calculated as total debts and borrowings divided by equity attributable to shareholders of the parent) as at 31 December 2005 was approximately 1.06.

– 11 –

LETTER FROM THE BOARD

SHAREHOLDING STRUCTURE OF WING ON

Set out below is the shareholding structure of Wing On as at the Latest Practicable Date, upon completion of the Placing (assuming the maximum of all 175,000,000 Shares are being placed under the Placing) and assuming conversion of the Notes:

As at the Latest Practicable Date Shares CEL_(Note 2) 121,386,481 HIL(Note 3) – Other Subscribers (Note 3)_ – Placees of the Placing – Other public Shareholders 316,199,627 Total public Shareholders 316,199,627 Total 437,586,108	As at the Latest Practicable Date Shares CEL_(Note 2) 121,386,481 HIL(Note 3) – Other Subscribers (Note 3)_ – Placees of the Placing – Other public Shareholders 316,199,627 Total public Shareholders 316,199,627 Total 437,586,108	As at the Latest Practicable Date Shares CEL_(Note 2) 121,386,481 HIL(Note 3) – Other Subscribers (Note 3)_ – Placees of the Placing – Other public Shareholders 316,199,627 Total public Shareholders 316,199,627 Total 437,586,108	% 27.74 – –	Upon completion of the Placing (Note 1) Shares % 121,386,481 19.81 – – – –	Upon completion of the Placing (Note 1) Shares % 121,386,481 19.81 – – – –	Upon completion of the Placing and assuming full conversion of the Notes Shares 501,133,316 253,164,556 632,911,393	% 26.68 13.48 33.69	Upon completion of the Placing and assuming conversion of the CEL Notes only Shares 501,133,316 – –	% 50.50 – –
		– 316,199,627	– 72.26	175,000,000 316,199,627	28.57 51.62	175,000,000 316,199,627	9.32 16.83	175,000,000 316,199,627	17.64 31.86
		316,199,627 437,586,108	72.26 100.00	491,199,627 612,586,108	80.19 100.00	491,199,627 1,878,408,892	26.15 100.00	491,199,627 992,332,943	49.50 100.00

Notes:

Assuming the maximum of all 175,000,000 Shares are being placed.
As at the Latest Practicable Date, CEL, through its wholly-owned subsidiary Million Good Limited, is beneficially interested in 121,386,481 Shares.
Should HIL and each of the Other Subscribers hold less than 10% of the issued Shares upon full conversion of the Notes, each of them will be treated as a public Shareholder.

As at the date of the Subscription Agreements, CEL was interested in 121,386,481 Shares, representing approximately 27.74% of the existing issued Shares and 19.81% of the issued Shares on completion of the Placing. Depending on the then shareholding structure of Wing On and the extent to which the conversion rights of the Notes are to be exercised by any of the Subscribers, certain Subscribers may individually become interested in 30% or more of the enlarged issued share capital of Wing On upon conversion of their Notes. In such circumstances, the relevant Subscriber(s) and their Concert Parties will be obliged to make a mandatory offer to the Shareholders to acquire all the Shares, other than those already owned or agreed to be acquired by such Subscriber(s) and their Concert Parties, in accordance with Rule 26 of the Takeovers Code unless a waiver thereto is obtained. Such Subscriber(s) and their Concert Parties will comply with the relevant requirements of the Takeovers Code in such event that an obligation for a mandatory general offer arises.

– 12 –

LETTER FROM THE BOARD

As at the Latest Practicable Date, no decision has been made as to whether or when or the extent to which the conversion rights attached to the CEL Notes are to be exercised by CEL. The extent of exercise of the conversion rights attached to the CEL Notes by CEL would depend on a number of factors such as the future financial position and business prospects of the Group, the market performance of the Shares, and the extent to which HIL and the Other Subscribers exercise the conversion rights attached to their Notes. Accordingly, the directors of China Strategic are not in a position to state their intention about the extent of conversion rights that would be exercised by CEL and whether Wing On will become a subsidiary of CEL at this stage.

Wing On and the Directors will take appropriate steps to ensure that there will be sufficient public float for the Shares immediately following conversion of the Notes and at any time during the term of the Notes.

The Stock Exchange has indicated that should the Subscription be completed, it will closely monitor trading in the Shares if less than 25% of the issued Shares are held by the public. If the Stock Exchange believes that a false market exists or may exist in the trading in the Shares, or there are too few Shares in public hands to maintain an orderly market, then it will consider exercising its discretion to suspend trading in the Shares until a sufficient level of public float is attained.

DILUTION EFFECT ON SHAREHOLDERS

In view of the future dilution of existing Shareholders on the exercise of the conversion rights attaching to the Notes, Wing On will keep the Shareholders informed of the level of dilution and details of conversion as follows:

(i) Wing On will make a monthly announcement (the “Monthly Announcement”) on the website of the Stock Exchange after Completion. Such announcement will be made on or before the fifth business day following the end of each calendar month and will include the following details in a table form:
(a) whether there is any conversion of the Notes during the relevant month. If there is a conversion, details thereof, including the conversion date, number of new Shares issued and conversion price for each conversion. If there is no conversion during the relevant month, a negative statement to that effect;
(b) the number of outstanding Notes after the conversion, if any;
(c) the total number of new Shares issued pursuant to other transactions during the relevant month, including new Shares issued pursuant to exercise of options under any share option scheme(s) of Wing On (if any); and
(d) the total issued share capital of Wing On as at the commencement and the last day of the relevant month; and

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LETTER FROM THE BOARD

(ii) in addition to the Monthly Announcement, if the cumulative amount of new Shares issued pursuant to the conversion of the Notes reaches 5% of the issued share capital of Wing On as disclosed in the last Monthly Announcement or any subsequent announcement made by Wing On in respect of the Notes (as the case may be) (and thereafter in a multiple of such 5% threshold), Wing On will make an announcement on the website of the Stock Exchange including details as stated in (a) above for the period commencing from the date of the last Monthly Announcement or any subsequent announcement in respect of the Notes (as the case may be) up to the date on which the total amount of Shares issued pursuant to the conversion amounted to 5% of the issued share capital of Wing On as disclosed in the last Monthly Announcement or any subsequent announcement made by Wing On in respect of the Notes (as the case may be).

SUMMARY OF EQUITY FUND RAISING ACTIVITIES OF WING ON IN THE PAST TWELVE MONTHS

On 1 March 2006, Wing On announced that it entered into a placing agreement with the Placing Agent pursuant to which the Placing Agent conditionally agreed to place, on a best effort basis, up to 175,000,000 new Shares at a price of HK$0.69 per share to not less than six placees. The net proceeds from the Placing are estimated to be about HK$119.7 million which will be used as the Group’s general working capital. The Placing is conditional on (i) the passing of the resolution at the special general meeting by the Shareholders; (ii) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Placing Shares; and (iii) the completion of the Capital Reorganisation. The resolution for approving the Placing has been passed by the Shareholders at the special general meeting of the Company on 10 April 2006. The Capital Reorganisation has become effective on 11 April 2006. Completion of the Placing shall take place on the second business day following the satisfaction of the aforesaid conditions or such other date as the parties may agree. Details of the Placing are set out in the announcement of Wing On dated 1 March 2006 and circular of Wing On dated 17 March 2006.

Other than the Placing as mentioned above, Wing On has not conducted any other fund raising activities in the past twelve months from the date of the Announcement.

LISTING RULES IMPLICATIONS

CEL, a non wholly-owned subsidiary of China Strategic, is the substantial shareholder of Wing On holding approximately 27.74% of the total issued Shares as at the date of the CEL Subscription Agreement and therefore a connected person of Wing On pursuant to the Listing Rules. Accordingly, the issue of the CEL Notes by Wing On to CEL under the CEL Subscription Agreement constitutes a connected transaction for Wing On pursuant to the Listing Rules. The Subscription Agreements are to be completed at the same time and none of the Subscribers are obliged to complete, if all of the other Subscribers do not complete the Subscription under the relevant Subscription Agreements. On this basis, the Subscription Agreements are subject to the approval of the Independent Shareholders at a general meeting of Wing On on which voting will be taken by poll. CEL and its associates will abstain from voting on the relevant resolution in relation to the Subscription Agreements.

An independent board committee has been constituted by Wing On to advise the Independent Shareholders and Guangdong Securities has been appointed by Wing On to advise the Independent Board Committee and the Independent Shareholders as regards the terms of the CEL Subscription Agreement and the CEL Notes.

– 14 –

LETTER FROM THE BOARD

SGM

A notice convening the SGM, at which an ordinary resolution will be proposed to the Independent Shareholders to consider and, if thought fit, approve the Subscription Agreements, the issue of the Notes, the issue of the Conversion Shares and all matters contemplated under the Subscription Agreements, is set out on pages 42 to 43 of this circular.

Voting on the resolution in relation to the Subscription Agreements, the issue of the Notes, the issue of the Conversion Shares and all matters contemplated under the Subscription Agreements set out in the notice of the SGM contained in this circular will be conducted by way of a poll. CEL and its associates, holding 121,386,481 Shares as at the Latest Practicable Date, shall abstain from voting on such resolution at the SGM.

A form of proxy for use at the SGM is accompanied with this circular. If you are not able to attend the SGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the head office and principal place of business of the Company in Hong Kong at 7th Floor, Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the SGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjourned meeting if you so wish.

An announcement will be made by Wing On following the conclusion of the SGM to inform you of the results thereof.

PROCEDURE FOR DEMANDING A POLL

Pursuant to bye-laws 70 and 70A of the Company’s Bye-Laws, at any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) demanded:

(i) by the chairman of the meeting; or
(ii) by at least three Shareholders present in person or by a duly authorised corporate representative or by proxy for the time being entitled to vote at the meeting; or
(iii) by any Shareholder or Shareholders present in person or by a duly authorised corporate representative or by proxy and representing not less than one-tenth of the total voting rights of all the Shareholders having right to vote at the meeting; or
(iv) by any Shareholder or Shareholders present in person or by a duly authorised corporate representative or by proxy and holding Shares in the Company conferring a right to vote at the meeting being Shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the Shares conferring that right.

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LETTER FROM THE BOARD

If (a) the aggregate proxies held by the chairman of a particular meeting, and the Directors, account for 5% or more of the total voting rights at the meeting, and (b) on a show of hands in respect of any resolution, the Shareholders at the meeting vote in the opposite manner to that instructed in the proxies referred to in (a) above, the chairman of the meeting and/or any Director holding the proxies referred to above shall demand a poll. However, if it is apparent from the total proxies held by the persons referred to in (a) above that a vote taken on a poll will not reverse the vote taken on a show of hands, then no poll shall be required.

RECOMMENDATION

The Directors consider that the Subscription Agreements and the issue of the Notes are in the interests of the Company and the Shareholders as a whole. The Directors therefore recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the SGM.

Your attention is drawn to the recommendation of the Independent Board Committee (as set out on page 17 of this circular) and advice of Guangdong Securities (set out on pages 18 and 31 of this circular) regarding the terms of the CEL Subscription Agreement and the CEL Notes.

FURTHER INFORMATION

Your attention is drawn to the further information contained in the appendix to this circular.

Yours faithfully, For and on behalf of the Board of Wing On Travel (Holdings) Limited Lui Siu Tsuen, Richard Executive Director

– 16 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

WING ON TRAVEL (HOLDINGS) LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1189)

21 April 2006

To the Independent Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION RELATING TO THE PROPOSED ISSUE OF CEL NOTES

We refer to the circular of the Company dated 21 April 2006 (the “Circular”), of which this letter forms part. Terms used herein have the same meanings as those defined in the Circular unless the context otherwise requires.

We have been appointed as the Independent Board Committee to consider the terms of the CEL Subscription Agreement and the CEL Notes, and to advise you as to whether, in our opinion, such terms are fair and reasonable so far as the Company and the Independent Shareholders are concerned and the CEL Subscription Agreement and the issue of the CEL Notes are in the interests of the Company and the Shareholders as a whole.

Guangdong Securities has been appointed as the independent financial adviser to advise us and you regarding the terms of the CEL Subscription Agreement and the CEL Notes. Details of its advice, together with the principal factors and reasons it has taken into consideration in giving its advice, are set out in its letter on pages 18 to 31 of the Circular. Your attention is also drawn to the letter from the Board and the additional information set out in the appendix to the Circular.

Having considered the terms of the CEL Subscription Agreement and the CEL Notes together with the independent advice of Guangdong Securities, we consider that the terms of the CEL Subscription Agreement and the CEL Notes are fair and reasonable so far as the Company and the Independent Shareholders are concerned, and the CEL Subscription Agreement and the issue of the CEL Notes are in the interests of the Company and the Shareholders as a whole. On this basis, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the SGM to approve the CEL Subscription Agreement, the issue of the CEL Notes, the issue of new Shares pursuant to the exercise of conversion rights attached to the CEL Notes and all matters contemplated under the CEL Subscription Agreement.

Yours faithfully,

Independent Board Committee

Kwok Ka Lap, Alva Sin Chi Fai Wong King Lam, Joseph Independent Non-Executive Directors

– 17 –

LETTER FROM GUANGDONG SECURITIES

The following is the text of the letter of advice given by Guangdong Securities Limited in relation to the terms of the CEL Subscription Agreement and the CEL Notes for inclusion in this circular.

Guangdong Securities Limited Unit 2505-06 25/F Low Block Grand Millennium Plaza 181 Queen’s Road Central Hong Kong

21 April 2006

To the Independent Board Committee and the Independent Shareholders

Dear Sirs,

CONNECTED TRANSACTION RELATING TO THE PROPOSED ISSUE OF THE CEL NOTES

We refer to our appointment as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the terms of the CEL Subscription Agreement and the CEL Notes, details of which are contained in the letter from the Board in the circular issued to the Independent Shareholders dated 21 April 2006 (the “Circular”), of which this letter forms part. Terms used in this letter shall have the same respective meanings as defined in the Circular unless the context requires otherwise.

The Board announced on 27 March 2006 that Wing On Travel (Holdings) Limited (the “Company”) entered into a total of 8 Subscription Agreements in relation to the subscription by the Subscribers of the Notes with an aggregate principal amount of HK$1,000 million on 23 March 2006. Save for the principal value of the Notes to be subscribed and the identity of the Subscribers, the principal terms of each of the Subscription Agreements are identical. CEL, a non wholly-owned subsidiary of China Strategic, is a substantial shareholder of the Company holding approximately 27.74% of the total issued Shares as at the date of the CEL Subscription Agreement and therefore a connected person of the Company pursuant to the Listing Rules. Accordingly, the issue of the CEL Notes by the Company to CEL under the CEL Subscription Agreement constitutes a connected transaction for the Company pursuant to the Listing Rules.

The Independent Board Committee, comprising Mr. Kwok Ka Lap, Alva, Mr. Sin Chi Fai and Mr. Wong King Lam, Joseph, all of whom are independent non-executive Directors, has been established to advise the Independent Shareholders as to whether the terms of the CEL Subscription Agreement and the CEL Notes are fair and reasonable so far as the Independent Shareholders are concerned and whether the entering into CEL Subscription Agreement is in the interests of the Company and the Shareholders as a whole.

– 18 –

LETTER FROM GUANGDONG SECURITIES

In formulating our opinion, we have relied on the accuracy of the information and facts supplied, and the opinions and representations expressed to us by the Directors, the Company and its management. We have also assumed that all statements of belief, opinion and intention made by the Directors in the Circular were reasonably made after due and careful enquiry and are based on honestly-held opinions. We have no reason to doubt the truth, accuracy and completeness of the information and representations referred to in the Circular and provided to us by the Company and the Directors, and have been advised by the Directors that no material facts have been omitted from the information provided to us and referred to in the Circular. We have also assumed that all statement of intention of the Company or its Directors as set out in the Circular will be implemented. We have assumed that all information and representations made or referred to in the Circular and provided to us by the Company and the Directors, for which they were solely and wholly responsible, were true, complete and accurate at the time they were made and continue to be true, complete and accurate at the date of the SGM.

In formulating our opinion, we have performed our work in accordance with the requirements stipulated under the Listing Rules and we have obtained and reviewed relevant information and documents provided by the Company and its Directors and management in connection with the transaction and discussed with the management of the Group so as to assess the fairness and reasonableness of the terms of the CEL Subscription Agreement and the CEL Notes. Relevant information and documents, included, among other things, the Subscription Agreements and the annual report of the Group for the year ended 31 December 2005. We consider that we have reviewed sufficient information to enable us to reach an informed view and to provide a reasonable basis for our opinion regarding the CEL Subscription Agreement and the CEL Notes. We have not, however, carried out any independent verification of the information and representations provided to us nor have we conducted any form of independent investigation into the businesses and affairs, financial position or the future prospects of the Company.

Our opinion is necessarily based upon the financial, economic, market, regulatory and other conditions as they existed on, and the facts, information, representations and opinions made available to us as of, the Latest Practicable Date. Our opinion does not in any manner address the Company’s own decision to proceed with the issue of the CEL Notes. We disclaim any undertaking or obligation to advise any person of any change in any fact or matter affecting the opinion expressed herein, which may come or be brought to our attention after the Latest Practicable Date.

– 19 –

LETTER FROM GUANGDONG SECURITIES

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion and recommendation to the Independent Board Committee and the Independent Shareholders relating to the fairness and reasonableness of the terms of the CEL Subscription Agreement and the CEL Notes, we have taken into consideration, inter alia, the following principal factors and reasons:

A. Background information

The Group is principally engaged in the business of providing package tours, travel and other related services, and hotel operation in Hong Kong and the PRC.

(a) For the financial year ended 31 December 2004

According to the Group’s annual report for the year ended 31 December 2005 of which the results of 2004 and 2005 have both been adopted the a number of new Hong Kong Financial Reporting Standards (the “HKFRSs”), Hong Kong Accounting Standards (the “HKASs”) and Interpretations (the “INT”) (hereinafter collectively referred to as the “New HKFRSs”), the Group’s turnover for the year amounted to HK$1,722,177,000, represented an increase of 21.6% when compared with that of the previous year. This is mainly due to the increase of 18.6% of revenue from the travel and related services and the revenue resulted from the newly acquired the hotel and leisure services in 2004 when compared with previous year.

In 2004, the Company has undergone the following transactions: (1) the Group underwent a group reorganization which resulted in (i) a change of status of Apex Quality Group Limited, from being an associate to a subsidiary and (ii) the disposal of an associate, Heilongjiang Ananda Entertainment Company Limited at a profit of HK$500,000; (2) the Group received a proceed of approximately HK$188,988,000 from the disposal of interest in an 50% owned associate, resulting in a profit of HK$37,930,000.

(b) For the financial year ended 31 December 2005

According to the annual results for the year ended 31 December 2005, the Group’s turnover for the year amounted to HK$1,815,718,000, representing an increase of 5.4% when compared with that of the previous year. This is mainly due to the increase of 17.7% of revenue from the hotel and leisure services and the increase of 3.9% of revenue from travel and related services when compared with previous year. The Group’s gross profit amounted to HK$346,420,000, represent an increase of 17.22%. The Company has turned around from its loss position for the year of approximately HK$2,829,000 in 2004 to a profit of approximately HK$32,234,000 in 2005.

In 2005, the Company has undergone the following transactions: (1) the Group acquired an approximately 36.26% interest in Kingsway Hotel Limited; and, (2) the establishment of a joint venture, in which the Group has a 50% interest, for the provision of travel and related services.

– 20 –

LETTER FROM GUANGDONG SECURITIES

Given that the Company (1) disposed its transportation services in 2003, (2) has continuously acquired companies engaging in the hotel and leisure services during 2004 and 2005 as mentioned above, we consider that the Company is focusing on the business of the travel and related services and of the hotel and leisure services. We also noted that the Group has turned around into profitability in year 2005 and the newly acquired business of hotel and leisure services have contributed profit, to the Group.

B. Reasons for the issue of the Notes

As stated in the letter from the Board, given the improving economic atmosphere in Hong Kong, the continuous expansion of the Closer Economic Partnership Arrangement and the PRC Individual Visit Scheme to Hong Kong, and the recovery in the outbound market to Southeast Asia countries from the Indian Ocean tsunami happened in 2004, the Group has achieved satisfactory growth in its travel, hotel and related business. The Directors consider that these positive momentums, coupled with the hosting of the Beijing Olympic Games in 2008 and the staging of equestrian events of 2008 Olympic Games in Hong Kong, will continue to boost the tourism industry and overall demand for hotel rooms in the region. The Directors consider that the positive market development will provide the Group with immense opportunities. The Group will actively explore new investment opportunities to enlarge its market share through expansion in its branch network and expand its leisure business and hotel network further to the acquisition in February 2005 of the interest in an associated company engaging in hotel business in Macau.

We refer to reports from the Hong Kong Tourism Board and note that (1) the number of visitors arrived to Hong Kong are 15.5 million, 21.8 million and 23.0 million for year 2003 to 2005 respectively, representing yearly increase of 40.2% and 7.1% in 2004 and 2005; and (2) the yearly total expenditures associated to inbound tourism are HK$74.9 billion, HK$91.8 billion and HK$105.7 billion for the year 2003 to 2005 respectively, representing increase of 22.6% and 15.1% in 2004 and 2005. Moreover, we refer to reports from the Macau Government Tourist Office and note that the number of visitors arrived to Macau are 11.9 million, 16.7 million and 18. 7 million for year 2003 to 2005 respectively, representing yearly increase of 40.3% and 12.0% in 2004 and 2005. In this regard, we share the same view with the Directors that traveling, hotel and leisure related business in Hong Kong and Macau is promising and is of good prospect.

China has ranked 4th in the world in terms of overnight tourist arrivals and ranked 5th in terms of receipt in foreign exchanges according to World Tourism Organization figures in 2004. With reference to reports from the China Tourism Administration, we note that (1) the number of visitors arrived to China are 91.7 million, 109.0 million and 120.3 million for year 2003 to 2005 respectively, representing yearly increase of 18.9% and 10.4% in 2004 and 2005; and (2) the yearly total expenditures associated to inbound tourism are US$17.4 billion, US$25.7 billion and US$29.2 billion for the year 2003 to 2005 respectively, representing increase of 47.7% and 13.6% in 2004 and 2005. We regard that China has become one of the most influential countries in the global tourism industry in the recent decade.

As stated in the letter from the Board, the net proceeds of approximately HK$998.8 million raised from the Subscription are expected to be used by the Group for the purpose of expanding its hotel business and travel related business. The Directors have been identifying suitable investment targets in the hotel and travel related business for the Group. However, as at the Latest Practicable Date, no negotiations for investments in any targets have been materialized or proceeded to a mature stage.

– 21 –

LETTER FROM GUANGDONG SECURITIES

Given the increasing trend of the number of visitors arriving in Hong Kong, Macau, and China, and the increase in the respective expenditures, we hold an optimistic view on the tourism related industries in Hong Kong, Macau and the PRC. We share the same view with the Directors’ that issuing the Notes can provide flexibility and funds to expand its hotel and trade related business when appropriate opportunities arise.

As stated in the letter from the Board, the Directors have been identifying suitable investment targets in the hotel and travel related business for the Group. However, as at the Latest Practicable Date, no negotiation for investment in any targets have been materialized or proceeded to a mature state. To the extent that the net proceeds are not immediately applied for the above purposes, the Directors intend that the net proceeds of HK$998.8 million raised from the Subscription may be used to reduce the borrowings of the Group. Moreover, with reference to the paragraphs headed under “Effect on the net tangible asset and on the liquidity and the cash position” and “Effect on the gearing ratio” below, we share the same view with the Directors’ that the issue of the Notes with conversion feature would strengthen the financial capability of the Group and raise capital for further possible acquisitions, when such opportunities arise without immediate dilution in shareholding to existing Shareholders.

C. Alternative means of financing

In order to provide funds for the Group to explore new investment opportunities as detailed in the paragraph headed “Reason for the issue of the Notes” above, the Directors have considered various alternative means of financing.

(a) Debt financing from bank borrowings

In considering the raising of funds through bank borrowings, the Directors have taken into account the following factors: (1) Since the gearing ratio of the Group (calculated as total debts and borrowings divided by equity attributable to the shareholders of the parent). as at 31 December 2005 as extracted from the annual report for the year ended 31 December 2005 is 1.06, we concur with the Directors’ view that the gearing ratio of the Group stands at a relatively high level and that the Group might not easily borrow sufficient and significant funds from bank borrowings further. (2) Since the interest rate of the Notes of 2% per annum and the expected yield to maturity of the Notes of 3.85% per annum are both (i) below the average borrowing cost of the Group of approximately 5.76% per annum for the year ended 31 December 2005; and (ii) below the yield of the 5-year Hong Kong Exchange Fund Notes which is 4.60% per annum as at the Latest Practicable Date, we concur with the Directors’ view that the interest rate and the expected yield to maturity of the Notes are considered to be low as compared with the high cost of bank borrowings expected. (iii) Besides, we share the same view with the Directors’ that the Notes are free from any pledge of assets of the Group while bank borrowings will normally require a pledge of certain assets of the Group. In light of the higher interest cost to be incurred from the bank borrowings and the requirement of pledge of certain assets of the Group under the bank borrowings, we consider that bank borrowings are a less appropriate means of financing than the issue of Notes.

– 22 –

LETTER FROM GUANGDONG SECURITIES

(b) Other equity financing

The Directors have considered other equity financing as follows: (1) in March 2006, the Company proceeded with the Placing which will result in an immediate dilution of the then shareholdings of the Shareholders. We concur with the Directors’ view that it will not be in the best interests of the Shareholders to further dilute their shareholdings if equity financing of the size comparable to the Notes is raised through a placing of new Shares; (2) the average daily trading volume of the Shares for the trading days during the one year period ended on the Last Full Trading Day is approximately 1,685,551 Shares per day, representing 0.39% of the total number of Shares in issue and approximately 0.53% of the number of Shares in public hands as at the Latest Practicable Date. Due to the fact that the trading volume of the Shares is very thin, we share the same view with the Directors that if the Company raises the necessary funds by way of a right issue or an open offer instead of the Notes, the right issue or open offer would have to be set at a high offer ratio and the subscription price would have to be set at significant discounts to the prevailing market price of the Shares and the underlying net asset value so as to attract subscription by the Shareholders; and (3) the market risk associated with a rights issue or an open offer is normally higher as it would take a longer time to complete a right issue or an open offer and any arm’s length underwriting is normally subject to standard force majeure clause in favour of the underwriter. In light of the fact that there is already an immediate dilution of shareholdings of the Shareholders through the Placing, a significant discount rate to the prevailing market price of the Shares has to be offered in order for a right issue or an open offer to be fully underwritten by independent underwriter(s) and a longer period of completion time will be required by a right issue or an open offer, we consider that a right issue or an open offer is a less appropriate means of financing than the issue of Notes.

Accordingly, as compared to debt financing from bank borrowings and other equity financing, we share the same view with the Directors’ that the issue of Notes, including the CEL Notes under the prevailing arrangement is a better funds raising alternative to finance the Group’s business expansion plans and we consider that the fund raising by way of the issue of Notes, including the CEL Notes, is so far an appropriate means of financing.

D. Principal terms of the CEL Notes under the CEL Subscription Agreement

Pursuant to the Subscription Agreements, each of CEL, HIL, and a fund manager (on behalf of four Other Subscribers which are investment funds managed by it) and five Other Subscribers have conditionally agreed to subscribe for the Notes by cash to be issued by the Company with a principal amount of HK$300 million, HK$200 million and aggregate principal amount of HK$500 million respectively.

– 23 –

LETTER FROM GUANGDONG SECURITIES

(a) Conversion price and interest rate

As stated in the letter from the Board, each of the Noteholders shall have the right to convert, on any business day commencing from the 7th day after the date of issue of CEL Notes up to and including the date which is 7 days prior to the Maturity Date, the whole or any part (in an amount or integral multiple of HK$1,000,000) of the principal amount of the CEL Notes into Shares at the then prevailing conversion price.

The Initial Conversion Price of HK$0.79 per Share, subject to usual anti-dilution adjustments in certain events such as share consolidation, share subdivision, capitalisation issue, capital distribution, rights issue and other equity or equity derivatives issues by the Company, was determined after arm’s length negotiations between the Subscribers and the Company with reference to the prevailing market price of the Shares. The Initial Conversion Price of HK$0.79 per Share represents:

a premium of approximately 11.3% over the closing price of HK$0.71 per Share (adjusted for the Capital Reorganisation) as quoted on the Stock Exchange on 23 March 2006, being the last trading day immediately before trading in the Shares was suspended pending the release of the Announcement;
a premium of approximately 12.9% over the closing price of HK$0.70 per Share (adjusted for the Capital Reorganisation) as quoted on the Stock Exchange on the Last Full Trading Day;
a premium of approximately 10.6% over the average closing price of HK$0.714 per Share (adjusted for the Capital Reorganisation) as quoted on the Stock Exchange for the last 10 trading days up to and including the Last Full Trading Day; and
a discount of approximately 19.4% to the closing price of HK$0.98 per Share as quoted on the Stock Exchange on the Latest Practicable Date.

– 24 –

LETTER FROM GUANGDONG SECURITIES

Conversion Price

(I) Share price performance

The chart below shows the historical closing prices of the Shares traded on the Stock Exchange for the past one year from 23 March 2005 to the Last Full Trading Day, i.e. 22 March 2006.

==> picture [319 x 214] intentionally omitted <==

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HK$2.50
HK$2.00
HK$1.50
HK$1.00
HK$0.79
HK$0.50
HK$0.00
Mar-05 Apr-05 May-05 Jun-05 Jul-05 Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06
----- End of picture text -----

Source: Bloomberg

From the above chart, it can be seen that the market price of the Shares gradually declined from the highest closing price recorded at HK$1.95 on 24 March 2005 to the lowest closing price recorded at HK$0.58 on 26 October 2005. We further noted that during the period from 13 October 2005 to the Last Full Trading Day, the Shares were traded below the Initial Conversion Price.

The Initial Conversion Price represents premium of approximately 12.9% over the closing price of HK$0.70 per Share at the Last Full Trading Day and is higher than the placing price of HK$0.69 per new share of the Company under the Placing as announced on 1 March 2006.

– 25 –

LETTER FROM GUANGDONG SECURITIES

(II) Comparables

In view of the fluctuation of the stock market conditions from time to time, we consider that it would be more appropriate to select comparables of the issue of convertible notes by companies listed on the Stock Exchange which were announced shortly before the date of the Subscription Agreements (i.e. 23 March 2006). Therefore, for comparison and analysis purposes, we have reviewed the principal terms of convertible notes and bonds denominated in HK$ and US$ issued and announced by companies listed on the Stock Exchange (“Comparables”) from 1 March 2006 to the date immediately before the suspension of trading of the Shares, i.e. 23 March 2006, and set out the findings as follows:

					Conversion
					price per
					share as a
					premium/
					(discount)
					to the
					closing price
					of the last
					trading day
					immediately
					prior to
					the date of	Redemption
	Date of	Principal		Interest	respective	premium at
Name of Company	announcement	amount	Duration	rate	announcement	maturity
	(D/M/Y)	(million)	(Year)	(%)	(%)	(%)
China Advance Holdings	1/03/2006	HK$6	3	1.0%	(41.2)	100%
Limited
(Stock code: 8117)
Hung Hing Printing Group	3/03/2006	HK$750	5	5.0%	30.0%	114.36%
Limited (Stock code: 450)
Techpacific Capital Limited	7/03/2006	US$75	5	0.0%	2.2%	103.23%
(Stock code: 8088)
Geely Automobile Holdings	9/03/2006	HK$741.6	5	0.0%	25.0%	126.46%
Limited (Stock code: 175)
Honesty Treasure International	17/3/2006	HK$93.8	5	2.50%	(30.0)%	100.00%
Holdings Limited
(Stock code: 600)
Maximum				5.0%	30.0%	126.46%
Mean				1.7%	(2.8)%	108.81%
Minimum				0.0%	(30.0)%	100.00%
The Notes		HK$1,000	5	2.0%	11.3%	110.00%

As depicted above, (1) the interest rate of approximately 2.0% of the CEL Notes falls into that of the Comparables which ranges between 0.0% and 5.0%; (2) the premium of approximately 11.3% represented by the Initial Conversion Price of HK$0.79 per Share over the closing price of HK$0.71 per Share as quoted on the Stock Exchange immediately before the date of suspension of trading of Shares falls into that of the Comparables which ranges between discount of 30.0% and premium

– 26 –

LETTER FROM GUANGDONG SECURITIES

of 30.0% of the respective shares; (3) the redemption premium at maturity of the Notes of 110% falls into that of the Comparables which ranges between approximately 100.00% and 126.46%.

In light of the fact that: (1) the Initial Conversion Price for the CEL Notes represents a premium over the closing price as quoted on the Stock Exchange on 23 March 2006, the closing price per Share as quoted on the Stock Exchange on the Last Full Trading Day and the closing price per Share as quoted on the Stock Exchange for the last 10 trading days up to and including the Last Full Trading Day; and (2) the CEL Notes are having the same Initial Conversion Price as the other Notes issued to the other independent Subscribers, we consider that the Initial Conversion Price of the CEL Notes under the CEL Subscription Agreement is fair and reasonable so far as the Company as a whole and the Independent Shareholders are concerned.

Interest

The CEL Notes carry an interest rate of 2% per annum. This interest rate is (1) lower than the average borrowing cost of the Group of approximately 5.76% per annum for the year ended 31 December 2005; (2) below the yield of the 5-year Hong Kong Exchange Fund Notes which is 4.60% per annum as at the Latest Practicable Date; (3) within the range of the interest rate of the Comparables from 0% to 5% as shown above; and (4) the same as the interest rate of the other Notes issued to the Other Subscribers, we consider that the interest rate of the CEL Notes under the CEL Subscription Agreement is fair and reasonable so far as the Company as a whole and the Independent Shareholders are concerned.

(b) Redemption

Unless previously converted or lapsed or redeemed by the Company, the Company will redeem the CEL Notes on the Maturity Date at the redemption amount which is 110% of the principal amount of the CEL Notes outstanding. In the event of a change of control of the Company (where person(s) other than CEL and/or its Concert Parties acquire more than 50% equity interests of the Company or the consolidation or merger of substantially all of the assets of the Company with such person(s)) prior to the Maturity Date, the Noteholders may require the Company to redeem at the redemption amount which is 110% of the principal amount of the CEL Notes then outstanding plus interest accrued. In the event of the occurrence of events of default specified in the CEL Notes, the Noteholders may also require the Company to redeem the principal amount of the CEL Notes then outstanding plus interest accrued. Since (1) the redemption premium at maturity of the Notes of 110% falls within that of the Comparables which ranges between approximately 100.00% and 126.46%; (2) we regards such redemption premium at maturity are normal for debt securities of this kind; and (3) terms of redemption are the same as those of the other Notes issued to the Other Subscribers, we consider that the terms of redemption of the CEL Notes under the CEL Subscription Agreement are fair and reasonable so far as the Company as a whole and the Independent Shareholders are concerned.

– 27 –

LETTER FROM GUANGDONG SECURITIES

(c) Exchange Rights

As stated in the letter from the Board, subject to certain restrictions which are intended to facilitate compliance of relevant rules and regulations, CEL (as a subscriber to the Notes) shall have the right to exchange from time to time all or part (in the amount of HK$10,000,000 or integral multiples thereof) of 50% of the initial principal amount of its Note for Spin-off Shares at the price (subject to adjustment for subdivision or consolidation of Spin-off Shares if the Exchange Rights are exercised after the listing date of the Spin-off Shares) at which the Spinoff Shares are actually issued to the public (as defined by the rules of the relevant stock exchange) at the time of the listing on that stock exchange. As at the Latest Practicable Date, the Company does not have any concrete plan as regards any spin-off proposal. Shareholders of the Company and China Strategic and potential investors should note that the spin-off by the Company may or may not proceed. Further announcement will be made by the Company in the event that the spin-off materialises. The Directors consider that the exchangeable right into shares of the Spin-off Entity is structured into the Notes to provide the Subscribers an opportunity to leverage on future possible positive corporate development of the Group during the relatively long maturity of the Notes.

We consider that (1) the feature of the exchange rights will attract the Subscribers to enter into the Subscription Agreements for the issue of the Notes; and (2) the exchange of the initial principal amount of its Notes for Spin-off Shares is at the price (subject to adjustment for subdivision or consolidation of Spin-off Shares if the Exchange Rights are exercised after the listing date of the Spin-off Shares) equivalent to the price of the Spin-off Shares actually issued to the public at the time of the listing on that stock exchange; and (3) the terms of the exchange rights of the CEL Notes are the same as those of the other Notes issued to the Other Subscribers, we consider that the terms of the exchange rights of the CEL Notes under the CEL Subscription Agreement are fair and reasonable so far as the Company as a whole and the Independent Shareholders are concerned.

(d) Maturity, transferability, voting and ranking

The CEL Notes as well as the other Notes have a maturity period of five years from the date of issue.

The CEL Notes are freely transferable but may not be transferred to a connected person of the Company (unless the Noteholder is already a connected person and the transferee is its associates) without the prior written consent of the Company. The Company undertakes to the Stock Exchange that it will promptly notify the Stock Exchange upon becoming aware of any dealings in the CEL Notes by any connected persons of the Company.

CEL (as a subscriber to the Notes) will not be entitled to receive notice of, attend or vote at any general meeting of the Company by reason only of it being a subscriber to the Notes.

The CEL Notes will rank pari passu with all other present and future unsecured and un-subordinated obligations of the Company. The Conversion Shares to be issued as a result of the exercise of the conversion rights attached to the CEL Notes will rank pari passu in all respects with all other Shares in issue at the date on which the conversion rights attached to the CEL Notes are exercised.

– 28 –

LETTER FROM GUANGDONG SECURITIES

We consider that the terms of the CEL Notes under the CEL Subscription Agreement in relation to the maturity, transferability, voting and ranking which are normal for debt securities of this kind and are in the same terms as the other Notes, are fair and reasonable so far as the Company as a whole and the Independent Shareholders are concerned.

Having considered that: (1) the Initial Conversion Price of the CEL Notes under the CEL Subscription Agreement; (2) the interest rate of the CEL Notes under the CEL Subscription Agreement; (3) the terms of redemption of the CEL Notes under the CEL Subscription Agreement; (4) the terms of the exchange rights of the CEL Notes under the CEL Subscription Agreement; and (5) the terms of the CEL Notes under the CEL Subscription Agreement in relation to the maturity, transferability, voting and ranking are fair and reasonable, we are of the view that the terms of the CEL Subscription Agreement and the CEL Notes are fair and reasonable and the entering into of the Subscription Agreements with the Subscribers as a whole benefits to the Company and are in the interests of the Company and the Independent Shareholders as a whole.

E. Summary of Equity Fund Raising Activities of the Company in the Past Twelve Months

As stated in the letter from the Board, the Company announced on 1 March 2006 that it entered into a placing agreement with the Placing Agent pursuant to which the Placing Agent conditionally agreed to place, on a best effort basis, up to 175,000,000 new Shares at a price of HK$0.69 per Share to not less than six placees. The net proceeds from the Placing are estimated to be about HK$119.7 million which will be used as the Group’s general working capital. Details of the Placing are set out in the announcement of the Company dated 1 March 2006 and the circular of the Company dated 17 March 2006. Other than the Placing as mentioned above, the Company has not conducted any other fund raising activities in the past twelve months from the date of the Announcement.

F. Effects of the Notes

(a) Effect on the net tangible asset value and on the liquidity and the cash position

From 1 January 2005 onwards, the Company has adopted the New HKFRSs. Accordingly, the Company will follow Hong Kong Accounting Standards 32 for the accounting treatment of the Notes. Based on our discussion with the management of the Company, we have the following analysis with reference to the annual report of the Group for the year ended 31 December 2005 published on 11 April 2006.

Upon the issue of the Notes and before any conversion of the Notes, the consolidated balances of bank balances and cash balance, the consolidated total liabilities and the consolidated net tangible assets (excluding minority interests) of the Group will be increased by HK$998.8 million, HK$820.1 million and HK$178.7 million respectively, resulting in the consolidated balances of bank balances, the consolidated total liabilities and the consolidated net tangible assets (excluding minority interests) of the Group of HK$1,041.9 million, HK$2,437.7 million and HK$1,106.9 million respectively. The consolidated net tangible assets per Share immediately after the issue of the Notes would be increased from approximately HK$2.12 (based on the consolidated net tangible assets of the Group excluding minority interest as at 31 December 2005 of approximately HK$928.2 million and 437.6

– 29 –

LETTER FROM GUANGDONG SECURITIES

million Shares in issue as at 31 December 2005) to approximately HK$2.53, representing an increase of approximately 19.3%. Assuming the Notes are converted in full at HK$0.79 per Share, the consolidated total liabilities of the Group will be decreased from HK$2,437.7 million to HK$1,617.6 million, representing a decrease of HK$820.1 million and the consolidated net tangible assets (excluding minority interests) of the Group will be increased from HK$1,106.9 million to HK$1,927.0 million, representing an increase of HK$820.1 million. The consolidated net tangible assets per Share after the full conversion of the Notes would be decreased from approximately HK$2.53 to approximately HK$1.13 (based on the consolidated net tangible assets of the Group excluding minority interest of approximately HK$1,927.0 million and 1,703.4 million Shares in issue after full conversion of the Notes), representing a decrease of approximately 55.3%. However, having considered that: (1) there is a substantial increase in bank and cash balances upon issuing the Notes which can provide liquid funding for the Company to expand its hotel and trade related business when appropriate opportunities arise, details of which can be referred in the paragraph headed “Reasons for the issue of the Notes” above; and (2) the issue of the Notes is by far an appropriate means of financing as compared with other alternatives as discussed above, we consider that the decrease in consolidated net tangible assets per Share as aforesaid is justifiable in so far as the Independent Shareholders are concerned.

(b) Effect on the gearing ratio

As mentioned above, due to the increase in the total borrowings balance of the Group and equity of the Group attributable to the Shareholders as a result of the issue of the Notes, the gearing ratio of the Group (calculated as total debts and borrowings divided by the equity attributable to the shareholders of the parent) when the Notes are issued and before any conversion of the Notes would be increased from approximately 1.06 to approximately 1.60, representing an increase of 50.9%. The gearing ratio of the Group will then be decreased from approximately 1.60 to approximately 0.52 (representing a decrease of approximately 67.5%) if the Notes are converted in full at HK$0.79 per Share. However, having considered that: (1) as stated in the paragraph headed “Reasons for the issue of the Notes” above, the Directors are of the view that the positive market development of Hong Kong, Macau and China will provide the Group with immense opportunities; and (2) the funds raised from the issue of the Notes will enable the Group to invest in any possible investment opportunities when identified, we consider that the increase in the gearing ratio of the Group upon issuing the Notes as aforesaid is justifiable in so far as the Independent Shareholders are concerned.

(c) Dilution effect on the shareholding of the Independent Shareholders

By reference to the paragraph headed “Shareholding structure of Wing On” in the letter from the Board, the shareholdings of the placees of the Placing and other public Shareholders upon the completion of the Placing of 28.57% and 51.62% respectively will be diluted to 9.32% and 16.83% respectively upon the completion of the Placing and assuming full conversion of the Notes or to 17.64% and 31.86% respectively upon the completion of the Placing and assuming conversion of the CEL Notes only. Accordingly, the shareholding dilution appears to be substantial. However, the Shareholders should note that they would face a similar level of dilution if a placing as well as a rights issue or an open offer of the similar size of the Notes is proceeded instead of the issue of the Notes and the Shareholders do not subscribe for the shares in full (under the right issue or the open offer). Nevertheless,

– 30 –

LETTER FROM GUANGDONG SECURITIES

as discussed in the section headed “Alternative means of financing” above, a placing, a right issue or an open offer is not an appropriate alternative to the Company at the prevailing time. Having considered that (1) the use of proceeds from the issue of the Notes as described in the paragraph headed “Reasons for the issue of the Notes” above; (2) the issue of the Notes is so far an appropriate means of financing compared with all alternative means of financing as discussed in the paragraph headed “Alternative means of financing” above; and (3) the dilution effects on the shareholding of the Shareholders will only happen if the Notes are converted into the Conversion Shares in full or in part in the future, we consider that the dilution effects on the shareholdings are justifiable so far as the Independent Shareholders are concerned.

G. Recommendation

Having considered the above principal factors and reasons, we consider that the entering into the CEL Subscription Agreement is in the interests of the Company and the Independent Shareholders as a whole, and that the terms of the CEL Subscription Agreement and the CEL Notes are fair and reasonable so far as the Company as a whole and the Shareholders are concerned. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote in favor of the ordinary resolution approving the entering into the CEL Subscription Agreement at the SGM.

Yours faithfully, For and on behalf of

GUANGDONG SECURITIES LIMITED C. K. Poon

Managing Director and Head of Corporate Finance Department

– 31 –

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading.

2. DISCLOSURE OF INTERESTS

(a) Interests of Directors or chief executive of the Company

As at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interests and short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which were required (i) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO); or (ii) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Listing Rules adopted by the Company to be notified to the Company and the Stock Exchange.

(b) Interests of Shareholders discloseable pursuant to the SFO

As at the Latest Practicable Date, so far as is known to the Directors or chief executive of the Company, the following persons (other than a Director or chief executive of the Company) had an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

(i) Interests in the Shares

					Approximate
Name of	Long position/		Nature of	Number of	percentage of
Shareholder	Short position	Capacity	interest	Shares held	shareholding
China Strategic	Long position	Interest of	Corporate	121,386,481	27.74%
(Note 2)		controlled	interest
		corporations
CEL_(Note 2)_	Long position	Interest of a	Corporate	121,386,481	27.74%
		controlled	interest
		corporation
Million Good Limited	Long position	Beneficial owner	Corporate	121,386,481	27.74%
(“Million Good”)			interest
(Note 2)

– 32 –

GENERAL INFORMATION

APPENDIX

(ii) Interests in underlying Shares under equity derivatives (as defined in Part XV of the SFO)

				Number of	Approximate	Approximate
				underlying	percentage of
				Shares (under	the issued
				unlisted equity	share	capital
Name of	Long position/		Nature of	derivatives of		of the
Shareholder	Short position	Capacity	interest	the Company)	Company
(a) Mr. Li	Long position	Founder of	Corporate	253,164,556	57.85%
Ka-shing		discretionary	and other
(Note 1)		trusts and	interests
		interest of
		controlled
		corporations
Li Ka-Shing	Long position	Trustee and	Other	253,164,556	57.85%
Unity Trustee		beneficiary of	interest
Corporation		a trust
Limited (as
trustee of The
Li Ka-Shing
Unity
Discretionary
Trust)
(Note 1)
Li Ka-Shing	Long position	Trustee and	Other	253,164,556	57.85%
Unity		beneficiary of	interest
Trustcorp		a trust
Limited (as
trustee of
another
discretionary
trust)
(Note 1)
Li Ka-Shing	Long position	Trustee	Other	253,164,556	57.85%
Unity Trustee			interest
Company
Limited (as
trustee of The
Li Ka-Shing
Unity Trust)
(Note 1)

– 33 –

APPENDIX

GENERAL INFORMATION

				Number of	Approximate
				underlying	percentage of
				Shares (under	the issued
				unlisted equity	share capital
Name of	Long position/		Nature of	derivatives of	of the
Shareholder	Short position	Capacity	interest	the Company)	Company
Cheung Kong	Long position	Interest of	Corporate	253,164,556	57.85%
(Holdings)		controlled	interest
Limited		corporations
(“CKH”)
(Note 1)
HWL	Long position	Interest of a	Corporate	253,164,556	57.85%
(Note 1)		controlled	interest	(Note 1)
		corporation
HIL	Long position	Beneficial	Corporate	253,164,556	57.85%
(Note 1)		owner	interest	(Note 1)
(b) China	Long position	Interest of	Corporate	379,746,835	86.78%
Strategic		controlled	interest
(Note 2)		corporations
CEL	Long position	Interest of a	Corporate	379,746,835	86.78%
(Note 2)		controlled	interest
		corporation
Million Good	Long position	Beneficial	Corporate	379,746,835	86.78%
(Note 2)		owner	interest
(c) PMA Asian	Long position	Beneficial	Corporate	38,101,266	8.71%
Opportunities		owner	interest
Fund_(Note 3)_
PMA Prospect	Long position	Beneficial	Corporate	65,316,456	14.93%
Fund_(Note 3)_		owner	interest
Diversified	Long position	Beneficial	Corporate	70,886,076	16.20%
Asian		owner	interest
Strategies
Fund_(Note 3)_
PMA Capital	Long position	Investment	Corporate	183,544,304	41.94%
Management		Manager	interest
Limited_(Note_	3)

– 34 –

GENERAL INFORMATION

APPENDIX

				Number of	Approximate
				underlying	percentage of
				Shares (under	the issued
				unlisted equity	share capital
Name of	Long position/		Nature of	derivatives of	of the
Shareholder	Short position	Capacity	interest	the Company)	Company
(d) DKR Capital	Long position	Interest of	Corporate	126,582,278	28.93%
Inc.		a controlled	interest
(Note 4)		corporation
DKR	Long position	Interest of	Corporate	126,582,278	28.93%
Management		a controlled	interest
Co. Inc.		corporation
(Note 4)
DKR Capital	Long position	Interest of	Corporate	126,582,278	28.93%
Partners LP		a controlled	interest
(Note 4)		corporation
DKR Oasis	Long position	Investment	Corporate	126,582,278	28.93%
Management		Manager	interest
Co. LP
(Note 4)
Oasis	Long position	Interest of	Corporate	126,582,278	28.93%
Management		a controlled	interest
Holdings LLC		corporation
(Note 4)
DKR	Long position	Beneficial owner	Corporate	126,582,278	28.93%
SoundShore			interest
Oasis Holding
Fund Ltd.
(e) Gandhara	Long position	Investment	Corporate	253,164,557	41.30%
Advisors		manager	interest
Asia Ltd.
(beneficial
owner is
Gandhara Master
Fund Ltd.)

– 35 –

GENERAL INFORMATION

APPENDIX

				Number of	Approximate
				underlying	percentage of
				Shares (under	the issued
				unlisted equity	share capital
Name of	Long position/		Nature of	derivatives of	of the
Shareholder	Short position	Capacity	interest	the Company)	Company
(f) Michael Austin	Long position	Beneficial owner	Corporate interest	31,600,000	7.22%
(Note 5)
Clive Harris	Long position	Beneficial owner	Corporate interest	31,600,000	7.22%
(Note 5)
Highbridge	Long position	Interest of	Corporate interest	31,600,000	7.22%
GP, Ltd.		a controlled
(Note 5)		corporation
Highbridge	Long position	Investment	Corporate interest	31,600,000	7.22%
International		manager
LLC
(Note 5)
Highbridge	Long position	Investment	Corporate interest	31,600,000	7.22%
Capital		manager
Management
LLC
(Note 5)
JPMorgan	Long position	Investment	Corporate interest	50,697,085	11.59%
Chase & Co.		manager
(Note 5)

Notes:

(1) Li Ka-Shing Unity Holdings Limited, of which each of Mr. Li Ka-shing, Mr. Li Tzar Kuoi, Victor and Mr. Li Tzar Kai, Richard is interested in one-third of the entire issued share capital, owns the entire issued share capital of Li Ka-Shing Unity Trustee Company Limited. Li Ka-Shing Unity Trustee Company Limited as trustee of The Li Ka-Shing Unity Trust, together with certain companies which Li Ka-Shing Unity Trustee Company Limited as trustee of The Li Ka-Shing Unity Trust is entitled to exercise or control the exercise of more than one-third of the voting power at their general meetings, hold more than one-third of the issued share capital of CKH.

In addition, Li Ka-Shing Unity Holdings Limited also owns the entire issued share capital of Li Ka-Shing Unity Trustee Corporation Limited (“TDT1”) as trustee of The Li Ka-Shing Unity Discretionary Trust (“DT1”) and Li Ka-Shing Unity Trustcorp Limited (“TDT2”) as trustee of another discretionary trust (“DT2”). Each of TDT1 and TDT2 holds units in The Li Ka-Shing Unity Trust. The discretionary beneficiaries of DT1 and DT2 are, inter alia, Mr. Li Tzar Kuoi, Victor, his wife and children and Mr. Li Tzar Kai, Richard.

Certain subsidiaries of CKH are entitled to exercise or control the exercise of one-third or more of the voting power at the general meetings of HWL. HWL holds the entire issued share capital of HIL.

By virtue of the SFO, HWL, CKH, Li Ka-Shing Unity Trustee Company Limited, TDT2, TDT1 and Mr. Li Ka-shing who is the settlor and may be regarded as a founder of each of DT1 and DT2 for the purpose of the SFO, are all deemed to be interested in 253,164,556 underlying Shares (in respect of unlisted equity derivatives of the Company) held by HIL.

– 36 –

GENERAL INFORMATION

APPENDIX

Pursuant to the subscription agreement dated 23 March 2006 entered into between HIL and the Company, HIL has conditionally agreed to subscribe at completion of the subscription agreement a 2% convertible exchangeable note due 2011 (the “HIL Note”) proposed to be issued by the Company with a principal amount of HK$200,000,000. HIL or its nominee(s) is entitled to convert the HIL Note into 253,164,556 new shares of par value of HK$0.10 each in the capital of the Company on full conversion at an initial conversion price of HK$0.79 per share (subject to adjustment).

(2) Million Good is a wholly-owned subsidiary of CEL, whose shares are traded on the OTC Bulletin Board in the United States of America, which in turn is a company owned as to approximately 55.22% effective equity interest and approximately 88.79% effective voting interest by China Strategic. China Strategic and CEL are deemed to be interested in 121,386,481 Shares held by Million Good by virtue of the SFO.
(3) PMA Asian Opportunities Fund, PMA Prospect Fund, Asian Diversified Total Return Limited Duration Company (“Asian Diversified”) and Diversified Asian Strategies Fund are directly whollyowned by PMA Capital Management Limited. Asian Diversified has interest in 9,240,506 underlying Shares.
(4) DKR Oasis Management Co. LP is indirectly owned as to 49% by Oasis Management Holding LLC. DKR Oasis Management Co. Ltd. is indirectly owned as to 51% by DKR Capital Partner LP which is indirectly owned as to 50% by DKR Management Co. Inc. DKR Management Co. Inc. and DKR Capital Partners LP are indirectly owned as to 100% and 50% by DKR Capital Inc. respectively.
(5) Highbridge GP, Ltd. is indirectly owned as to 50% by Michael Austin and 50% by Clive Harris. Highbridge International LLC is directly wholly-owned by Highbridge Asia Opportunities Master L.P. which is indirectly wholly-owned by Highbridge GP, Ltd..
Highbridge Capital Management, LLC is directly owned as to 55% by JPMorgan Asset Management Holdings Inc. which is indirectly wholly-owned by JPMorgan Chase & Co..

(iii) Substantial Shareholders of other members of the Group

So far as is known to the Directors or chief executive of the Company, the following persons (other than a Director or chief executive of the Company) were, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of the other members of the Group as at the Latest Practicable Date:

		Percentage of
Name of subsidiary	Name of shareholder	shareholding
Silver Bay Commodities Limited	China Fortune Resources	30%
	Limited
Triumph Up Investments Limited	Mr. Chan Chak Mo	34.96%
Wing On Travel Online Limited	Fullex Limited	20%

Save as disclosed above, the Directors or chief executive of the Company are not aware that there are any other persons (not being a Director or chief executive of the Company) who, as at the Latest Practicable Date, had an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who were, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meeting of any other members of the Group, or had any options in respect of such capital.

– 37 –

GENERAL INFORMATION

APPENDIX

3. COMPETING INTERESTS

As at the Latest Practicable Date, save as disclosed below, none of the Directors or their respective associates was interested in any business which competes or is likely to compete, whether directly or indirectly, with the business of the Company. The Directors confirm that the Group is capable of carrying on its businesses independently of, and at arm’s length from the businesses as disclosed below which are considered to compete or likely compete with the businesses of the Group. The Directors also confirm that the respective management and administration of the businesses as set out below are independent from the Group.

		Description of
	Name of entity	businesses of
	which businesses	the entity which
	are considered	are considered
	to compete or	to compete or
	likely to compete	likely to compete	Nature of interest
	with the businesses	with the businesses	of the Director
Name of Director	of the Group	of the Group	in the entity
Mr. Yu Kam Kee,	Fung Choi Properties	Property investment	Director and
Lawrence	Limited	in Hong Kong	substantial
			shareholder
	City Champ Limited	Property investment	Director and
		in Hong Kong	substantial
			shareholder
	Oceanpass Holdings Ltd.	Property investment	Director and
	and its subsidiaries	in Hong Kong	substantial
			shareholder of
			Oceanpass
			Holdings Ltd.
Mr. Cheung Hon Kit	A non wholly-owned	Property business	Director
	subsidiary of China	in the PRC
	Strategic
	Cheung Tai Hong	Property development	Chairman of CTHH
	Holdings Limited	and investment in	and director of
	(“CTHH”) and	Hong Kong and	its subsidiaries
	its subsidiaries	the PRC
	China Development	Property investment	Director and
	Limited	in Hong Kong	shareholder
	Artnos Limited	Property investment	Director and
		in Hong Kong	shareholder

– 38 –

GENERAL INFORMATION

APPENDIX

		Description of
	Name of entity	businesses of
	which businesses	the entity which
	are considered	are considered
	to compete or	to compete or
	likely to compete	likely to compete	Nature of interest
	with the businesses	with the businesses	of the Director
Name of Director	of the Group	of the Group	in the entity
	Co-Forward	Property investment	Director and
	Development Ltd.	in Hong Kong	shareholder
	Orient Centre Limited	Property investment	Shareholder
		in Hong Kong
	Super Time Limited	Property investment	Director and
		in Hong Kong	shareholder
	Asia City Holdings Ltd	Property investment	Director and
		in Hong Kong	shareholder
	Supreme Best Ltd.	Property investment	Shareholder
		in Hong Kong
Dr. Yap, Allan	China Strategic	Property business	Vice chairman
	and its subsidiaries	in the PRC	of China
			Strategic
Mr. Lui Siu Tsuen,	China Strategic and	Property business	Alternate director to
Richard	its subsidiaries	in the PRC	Dr. Yap, Allan,
			vice chairman
			of China
			Strategic

4. SERVICE CONTRACTS

Mr. Chan Yeuk Wai, a non-executive Director, entered into a service agreement with the Company on 19 August 2002 with a fixed salary at the annual rate of HK$1,800,000 for a period of two years commencing from 19 August 2002 and expiring on 18 August 2004 and deemed to be renewed automatically for consecutive one (1) year periods and will be terminated by not less than one month’s prior notice in writing. Such remuneration shall include a discretionary year-end bonus of an amount (if any) to be determined by the Board and decided by the majority in number of the members of the Board after taking into account factors such as overall performance of the Group and other factors the Board may determine at its sole discretion from time to time provided that the Director in question shall abstain from voting and shall not be counted in the quorum at any meeting of the Board at which the Board is to determine the amount payable to him.

– 39 –

GENERAL INFORMATION

APPENDIX

Ms. Luk Yee Lin, Ellen, a Director, entered into a service agreement with the Company on 22 September 1997 with a fixed salary at the annual rate of HK$663,600 and is continuing unless and until terminated by not less than one month’s prior notice in writing. Such remuneration shall include a year-end bonus of an amount to be determined by the Board and decided by the majority in number of the members of the Board provided that the Director in question shall abstain from voting and shall not be counted in the quorum at any meeting of the Board at which the Board is to determine the amount payable to her and that the aggregate amount year-end bonuses payable to the Director in question and the other executive Directors in respect of any financial year shall not exceed 5% of the audited consolidated net profits after taxation and minority interests but before extraordinary and exceptional items of the Group of the same financial year.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with the Company or any of its subsidiaries or associated companies which is not determinable by the Group within one year without payment of compensation other than statutory compensation.

5. LITIGATION

As at the Latest Practicable Date, so far as the Directors are aware, neither the Company nor any of its subsidiaries was engaged in any litigation or arbitration or claims which is in the opinion of the Directors of material importance and no litigation or claims which is in the opinion of the Directors of material importance was known to the Directors to be pending or threatened against any member of the Group.

6. EXPERT

Guangdong Securities is a licensed corporation under the SFO permitted to carry out types 1, 4 and 6 regulated activities (as defined in the SFO).

Guangdong Securities has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter as set out in this circular and references to its name in the form and context in which they appear respectively.

As at the Latest Practicable Date, Guangdong Securities was not beneficially interested in the share capital of any member of the Group, nor did it have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group, nor did it have any interest, either direct or indirect, in any assets which had been since 31 December 2005 (being the date to which the latest published audited financial statements of the Company were made up) acquired or disposed of by or leased to or were proposed to be acquired or disposed of by or leased to any member of the Group.

7. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2005 (the date to which the latest published audited financial statements of the Company were made up).

– 40 –

GENERAL INFORMATION

APPENDIX

8. MISCELLANEOUS

(a) As at the Latest Practicable Date, there was no contract or arrangement entered into by any member of the Group subsisting at the Latest Practicable Date in which any Director was materially interested and which was significant in relation to the business of the Group.
(b) As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had been acquired, disposed of or leased to, or which are proposed to be acquired, disposed of or leased to, the Company or any of its subsidiaries since 31 December 2005 (the date to which the latest published audited financial statements of the Company were made up).
(c) The Hong Kong branch share registrars and transfer office of the Company is Secretaries Limited located at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.
(d) The qualified accountant of the Company is Ms. Chan Ling, Eva, who is a fellow member of the Hong Kong Institute of Certified Public Accountants.
(e) The company secretary of the Company is Ms. Fung Mei Ling, who is an associate member of the Institute of Chartered Secretaries and Administrators and the Hong Kong Institute of Chartered Secretaries.
(f) The English text of this circular and the accompanying form of proxy shall prevail over the Chinese text.

9. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours (Saturdays and public holidays excepted) at the head office and principal place of business of the Company in Hong Kong at 7th Floor, Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong from the date of this circular up to and including 8 May 2006, being the date of the SGM:

(a) the memorandum of association and Bye-laws of the Company;
(b) the annual reports of the Company for each of the two years ended 31 December 2004 and 2005;
(c) the letter from the Independent Board Committee, the text of which is set out on page 17 of this circular;
(d) the letter from Guangdong Securities, the text of which is set out on pages 18 to 31 of this circular;
(e) the written consent from Guangdong Securities referred to in the paragraph headed “Expert” in this appendix;
(f) the Subscription Agreements, which contained, among other things, the terms and conditions of the Notes and the placing agreement referred to in this circular;
(g) the service agreements disclosed under the paragraph headed “Service Contracts” in this appendix; and
(h) a copy of each of the circulars issued pursuant to the requirements set out in Chapters 14 and/or 14A of the Listing Rules which have been issued since 31 December 2005.

– 41 –

NOTICE OF THE SGM

WING ON TRAVEL (HOLDINGS) LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1189)

NOTICE IS HEREBY GIVEN that a special general meeting of Wing On Travel (Holdings) Limited (the “Company”) will be held at 8th Floor, Harcourt House, 39 Gloucester Road, Wanchai, Hong Kong on Monday, 8 May 2006 at 10:00 a.m. for the purposes of considering and, if thought fit, passing, with or without modifications, the following resolution of the Company:

ORDINARY RESOLUTION

“ THAT

(A) the eight conditional subscription agreements all dated 23 March 2006 (“Subscription Agreements”) entered into between Wing On Travel (Holdings) Limited (the “Company”) as the issuer and each of (1) China Enterprises Limited, (2) Highbridge International LLC, (3) Highbridge Asia Opportunities Master L.P., (4) PMA Asian Opportunities Fund, PMA Prospect Fund, Asian Diversified Total Return Limited Duration Company and Diversified Asian Strategies Fund collectively, (5) DKR SoundShore Oasis Holding Fund Ltd, (6) Hutchison International Limited, (7) Mr. Ma Ho Man, Hoffman and (8) Gandhara Advisors Asia Ltd., as the subscriber (collectively, the “Subscribers”) relating to the subscription of the relevant 2% convertible exchangeable notes (the “Notes”) by the relevant Subscribers (copies of the Subscription Agreements have been produced to this meeting and marked “A” to “H” and initialed by the chairman of the meeting for the purpose of identification) and all the transactions contemplated thereunder, including, with limitation, (1) the issue of the Notes and (2) issue of new shares by the Company pursuant to the exercise of the conversion rights attached to the Notes in accordance with the terms and conditions thereof be and are hereby approved, confirmed and ratified; and
(B) the directors of the Company be and are hereby authorised to take all steps and to do all such acts and things, to sign and execute all such further documents as the Directors may in their absolute discretion consider necessary, desirable or expedient to implement and/or give effect to or in connection with the Subscription Agreements and all the transactions contemplated thereunder, including, with limitation, (1) the issue of the Notes and (2) issue of new shares by the Company pursuant to the exercise of the conversion rights attached to the Notes in accordance with the terms and conditions thereof.”

By Order of the Board

Wing On Travel (Holdings) Limited Lui Siu Tsuen, Richard Executive Director

Hong Kong, 20 April 2006

– 42 –

NOTICE OF THE SGM

Notes:

Any member entitled to attend and vote at the meeting of the Company is entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares may appoint more than one proxy in respect of part only of his holding of shares in the Company to represent him and vote on his behalf at the meeting of the Company. A proxy need not be a member of the Company. In addition, a proxy or proxies representing either an individual member or a member which is a corporation, shall be entitled to exercise the same powers on behalf of the member which he or they represent as such member could exercise.
A form of proxy for use at the meeting is enclosed.
The instrument appointing a proxy and (if required by the board of directors of the Company) the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power of authority, shall be delivered to 7th Floor, Paul Y. Centre, 51 Hung To Road, Kwun Tong, Kowloon, Hong Kong not less than forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote or, and in default the instrument of proxy shall not be treated as valid.
In accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the resolution will be determined by way of a poll.

– 43 –

AI assistant

Guoxia Technology Co., Ltd. — Proxy Solicitation & Information Statement 2006

50736_rns_2006-04-21_1878c3b4-905c-4698-b2d7-72e43008a9a8.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

WING ON TRAVEL (HOLDINGS) LIMITED

ISSUE OF CONVERTIBLE EXCHANGEABLE NOTES AND CONNECTED TRANSACTION

Financial adviser to Wing On Travel (Holdings) Limited

SOMERLEY LIMITED

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

WING ON TRAVEL (HOLDINGS) LIMITED

ISSUE OF CONVERTIBLE EXCHANGEABLE NOTES AND CONNECTED TRANSACTION

INTRODUCTION

LETTER FROM THE BOARD

SUBSCRIPTION AGREEMENTS

Parties to the Subscription Agreements:

Subscribers:

LETTER FROM THE BOARD

Conditions of the Subscription Agreements:

LETTER FROM THE BOARD

Completion:

PRINCIPAL TERMS OF THE NOTES

LETTER FROM THE BOARD

LETTER FROM THE BOARD

REASONS FOR THE ISSUE OF THE NOTES AND USE OF PROCEEDS

SHAREHOLDING STRUCTURE OF WING ON

LETTER FROM THE BOARD

DILUTION EFFECT ON SHAREHOLDERS

LETTER FROM THE BOARD

SUMMARY OF EQUITY FUND RAISING ACTIVITIES OF WING ON IN THE PAST TWELVE MONTHS

LISTING RULES IMPLICATIONS

SGM

PROCEDURE FOR DEMANDING A POLL

LETTER FROM THE BOARD

RECOMMENDATION

FURTHER INFORMATION

WING ON TRAVEL (HOLDINGS) LIMITED

CONNECTED TRANSACTION RELATING TO THE PROPOSED ISSUE OF CEL NOTES

LETTER FROM GUANGDONG SECURITIES

CONNECTED TRANSACTION RELATING TO THE PROPOSED ISSUE OF THE CEL NOTES

LETTER FROM GUANGDONG SECURITIES

PRINCIPAL FACTORS AND REASONS CONSIDERED

A. Background information

(a) For the financial year ended 31 December 2004

(b) For the financial year ended 31 December 2005

LETTER FROM GUANGDONG SECURITIES

B. Reasons for the issue of the Notes

C. Alternative means of financing

(a) Debt financing from bank borrowings

(b) Other equity financing

D. Principal terms of the CEL Notes under the CEL Subscription Agreement

(a) Conversion price and interest rate

LETTER FROM GUANGDONG SECURITIES

Conversion Price

LETTER FROM GUANGDONG SECURITIES

(II) Comparables

LETTER FROM GUANGDONG SECURITIES

Interest

(b) Redemption

LETTER FROM GUANGDONG SECURITIES

(c) Exchange Rights

(d) Maturity, transferability, voting and ranking

LETTER FROM GUANGDONG SECURITIES

E. Summary of Equity Fund Raising Activities of the Company in the Past Twelve Months

F. Effects of the Notes

(a) Effect on the net tangible asset value and on the liquidity and the cash position

LETTER FROM GUANGDONG SECURITIES

(b) Effect on the gearing ratio

(c) Dilution effect on the shareholding of the Independent Shareholders

LETTER FROM GUANGDONG SECURITIES

G. Recommendation

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

(a) Interests of Directors or chief executive of the Company

(b) Interests of Shareholders discloseable pursuant to the SFO

(i) Interests in the Shares

GENERAL INFORMATION

Guoxia Technology Co., Ltd. Proxy Solicitation & Information Statement 2006