Hang Lung Group Limited — M&A Activity 2004

May 18, 2004

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

PCCW Limited

(Incorporated in Hong Kong with limited liability)

Stock code: 0008

Announcement

This announcement is to clarify certain market rumours relating to the possible disposal of the fixed line telecommunications business of PCCW Limited

PCCW Limited (the “Company”) wishes to confirm that it is involved in confidential discussions with China Network Communications Group Corporation (“CNC”), the second largest fixed line telecommunications operator in China, in relation to strategic and business co-operation opportunities. These strategic and business co-operation opportunities include, but are not limited to, joint ventures relating to certain assets of the Company which may include CNC taking an equity interest in PCCW-HKT Telephone Limited, a wholly-owned subsidiary of the Company. The discussions are continuing but no definitive agreement or letter of intent has yet been signed by the parties and there can be no assurance that any such agreement or letter of intent will be signed. Further announcements will be made as and when appropriate.

Investors are urged to exercise caution when dealing in the shares or other securities of the Company.

	By Order of the Board Hubert Chak Company Secretary

Hong Kong, May 18, 2004

The directors of the Company as at the date of this announcement are as follows:

Executive Directors:

Li Tzar Kai, Richard (Chairman);

So Chak Kwong, Jack (Deputy Chairman and Group Managing Director);

Yuen Tin Fan, Francis (Deputy Chairman); Peter Anthony Allen; Alexander Anthony Arena;

Michael John Butcher; Chung Cho Yee, Mico; Lee Chi Hong, Robert

Non-Executive Directors:

Sir David Ford, KBE, LVO; The Hon Raymond George Hardenbergh Seitz

Independent Non-Executive Directors:

Prof Chang Hsin-kang; Dr Fung Kwok King, Victor; Dr The Hon Li Kwok Po, David, GBS, JP;

Sir Roger Lobo, CBE, JP; Aman Mehta

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