Macau E&M Holding Limited — M&A Activity 2006

Aug 2, 2006

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

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(Incorporated in Hong Kong with limited liability) (Stock Code: 604)

DISCLOSEABLE TRANSACTION ACQUISITION OF INTEREST IN AND CONTRIBUTION OF CAPITAL TO HUBEI HUAYIN TRAFFIC DEVELOPMENT COMPANY LIMITED

Financial Adviser to Shenzhen Investment Limited

On 29 July, 2006, the Purchaser being a subsidiary of the Company entered into the Transfer and Capital Contribution Agreement with the Vendor to, subject to fulfillment of the Conditions, (1) acquire the entire equity interest in the Huayin Traffic at an aggregate consideration of RMB661,879,500 (equivalent to approximately HK$636,423,000); and (2) pay capital in the amount of RMB590,700,000 (equivalent to approximately HK$567,981,000) to Huayin Traffic as capital reserve.

The entire registered capital of Huayin Traffic is currently owned by the Vendor. Huayin Traffic in turn holds a 91% equity interest in Jingdong Company, the remaining 9% of the equity interest of which is held by Huayin Group. Jingdong Company is principally engaged in the construction and operation of the Jingdong Expressway in Hubei Province, the PRC. Upon completion of the transfer of the Equity Interest and the Capital Contribution, the entire registered capital of Huayin Traffic will be owned by the Purchaser.

Huayin Traffic, which will become a wholly-owned subsidiary of the Purchaser upon completion of the Acquisition, entered into the New Articles of Association with Huayin Group on 29 July, 2006 to govern the operations and administration of Jingdong Company. Out of the capital of RMB590,700,000 (equivalent to approximately HK$567,981,000) to be contributed by the Purchaser to Huayin Traffic pursuant to the Transfer and Capital Contribution Agreement, an amount of RMB539,630,000 (equivalent to HK$518,875,000) will be contributed by Huayin Traffic to Jingdong Company as additional capital pursuant to the New Articles of Association.

To the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiries, the Vendor, Huayin Group and their respective ultimate beneficial owners are third parties independent of the Company and connected persons of the Company.

1

As the applicable percentage ratios for the transactions contemplated under the Transfer and Capital Contribution Agreement exceed 5% but are less than 25%, such transactions constitute discloseable transactions of the Company under Chapter 14 of the Listing Rules. A circular containing, among others, further details of Transfer and Capital Contribution Agreement will be despatched to shareholders of the Company as soon as practicable.

THE TRANSFER AND CAPITAL CONTRIBUTION AGREEMENT

Date

29 July, 2006

The Parties

• (a) the Vendor

• (b) the Purchaser, a wholly-owned subsidiary of the Company.

Interests to be acquired

The Purchaser shall, subject to fulfillment of the Conditions, (1) acquire the entire equity interest in Huayin Traffic from the Vendor at an aggregate consideration of RMB661,879,500 (equivalent to approximately HK$636,423,000); and (2) pay capital in the amount of RMB590,700,000 (equivalent to approximately HK$567,981,000) to Huayin Traffic as capital reserve. Upon completion of the transfer of the Equity Interest and the Capital Contribution, the entire registered capital of Huayin Traffic will be owned by the Purchaser.

Save as disclosed, the Purchaser has no other financial commitment under the Transfer and Capital Contribution Agreement.

Out of the capital of RMB590,700,000 (equivalent to approximately HK$567,981,000) to be contributed by the Purchaser to Huayin Traffic pursuant to the Transfer and Capital Contribution Agreement, an amount of RMB539,630,000 (equivalent to HK$518,875,000) will be contributed by Huayin Traffic to Jingdong Company as additional capital pursuant to the New Articles of Association, and the balance will be used to repay a shareholder’s loan due from Huayin Traffic to its original shareholder.

Consideration

The Consideration was determined after arm’s length negotiations between the Vendor and the Purchaser based on the assessed value of Jingdong Company as at the Valuation Date of RMB2,950,000,000 (equivalent to approximately HK$2,836,538,000) assuming that Jingdong Expressway was a Complete Road on the Valuation Date, while making deductions on account of the following:–

• (i) Huayin Traffic holds 91% of the equity interest in Jingdong Company;

• (ii) the Purchaser will hold 100% of the total equity interest in Huayin Traffic after acquisition of the Equity Interest and the Capital Contribution;

• (iii) after the Acquisition, all liabilities of Huayin Traffic as at the Valuation Date will be attributed to the Equity Interest acquired by the Purchaser;

• (iv) while Jingdong Expressway was not a Complete Road as at the Valuation Date but was still under construction, the total cost of construction of Jingdong Expressway was estimated at RMB2,342,847,200 (equivalent to approximately HK$2,252,738,000).

2

On the above basis, the Vendor and the Purchaser regard the Consideration to represent the value of the Equity Interest assuming that Jingdong Expressway was a Complete Road as at the Valuation Date. The Consideration was based on the earnings ability of Jingdong Company (as reflected in its assessed value) and not on the net asset value of Huayin Traffic.

Warranties by the Vendor

As the essential factors upon which the Consideration was based, the Vendor confirms and warrants to the Purchaser various matters (the “Consideration Factors”) including (but not limited to):–

• (i) Jingdong Expressway shall totally complete its construction and pass the testing for delivery not later than 30 September, 2006 (such deadline may be extended up to 31 October, 2006 for delay caused by significant unforeseen events), and shall pass the testing for construction completion by government departments within three years after the Delivery Date and reaches the standard of “Complete Road”;

• (ii) the total liabilities of Jingdong Company as at the Delivery Audited Accounts Date (after deducting its bank balances, cash and accounts receivables as at the Delivery Date) will not exceed RMB1,572,847,200 (equivalent to approximately HK$1,512,353,000) and Huayin Traffic and Jingdong Company shall not have any accounts receivables as at the Delivery Date;

• (iii) the total construction costs of Jingdong Expressway shall not exceed RMB2,342,847,200;

• (iv) Jingdong Expressway will be open to traffic and collect toll fees before 30 September, 2006 and after Jingdong Expressway has been approved to open for traffic, Jingdong Company shall have an independent and complete right of toll and the toll fees shall not be lower than similar expressways in Hubei Province;

• (v) any present construction defects of Jingdong Expressway shall be the responsibility of the contractors and Jingdong Company shall not be required to bear any costs;

• (vi) Jingdong Expressway will, on Construction Completion Date, have achieved the standard of a Complete Road;

• (vii) the former shareholders of Huayin Traffic which transferred their equity interests in Huayin Traffic to the Vendor will not assert any right or demand due to the payment for such equity interest not yet paid by the Vendor other than by way of debt due from the Vendor; and

• (viii) no legal approval obstacles are anticipated for Jingdong Company to obtain complete and independent land use rights certificates and building ownership certificates for the Jingdong Expressway and its ancillary facilities and all the related formalities and expenses shall be undertaken by the Vendor.

The Vendor shall compensate the Purchaser, Huayin Traffic or Jingdong Company (as the case may be) for damages or losses caused by breaches of any of the warranties under the Consideration Factors.

Delivery Audit

Within six months after the Delivery Date, Huayin Traffic shall appoint a firm of PRC registered accountants of international repute to carry out audit on Huayin Traffic and Jingdong Company and to prepare the Delivery Audited Accounts in accordance with PRC GAAP.

3

If the actual amount of the costs and expenses of Jingdong Company for construction of Jingdong Expressway according to the Delivery Audited Accounts exceeds the estimated amount, the excessive amount shall be reimbursed by the Vendor to Huayin Traffic or Jingdong Company. If such actual amount of costs and expenses is lower than the estimated amount, the discrepancy multiplied by 91% shall be repaid by the Purchaser to the Vendor. There is no interest on such amounts which may be reimbursed or repaid.

Out of the estimated total construction costs of Jingdong Expressway of RMB2,342,847,200 (equivalent to approximately HK$2,252,738,000) to be borne by Jingdong Company, Jingdong Company had incurred construction costs of RMB2,101,885,000 (equivalent to approximately HK$2,021,043,000) as at 31 March, 2006 (according to the unaudited consolidated management accounts of Huayin Traffic). If according to the Delivery Audited Accounts, the actual total construction expenses of Jingdong Expressway exceeds the budget and the excessive amount has not been reimbursed by the Vendor, the additional capital which Huayin Traffic is required to put in to the Jingdong Expressway project through Jingdong Company shall be borne by the Vendor and Huayin Group.

Construction Completion Audit

Within 30 Working Days after the Construction Completion Audited Accounts Date, Huayin Traffic shall appoint a firm of PRC registered accountants of international repute to carry out audit on Huayin Traffic and Jingdong Company respectively to prepare and deliver the Construction Completion Audited Accounts in accordance with PRC GAAP.

If according to the Construction Completion Audited Accounts, there occurs to Jingdong Company any adverse change to the Consideration Factors, the Vendors shall compensate for such change by payment in cash to Jingdong Company to the extent such adverse change can be remedied by cash payment. The Vendor shall within 30 Working Days from the Construction Completion Audited Accounts Date take all effective measures to remedy any other adverse changes which cannot be remedied by cash payment and which cause significant legal obstacles or risks to the legality, stability or continuation of the business operation of Jingdong Company. If the Vendor fails to carry out the effective remedy within such timeframe, the Purchaser may request the Vendor to repurchase the Equity Interest at an amount equal to the relevant installment of the Transfer Amount and Contribution Capital paid plus not less than 10% of return for the period from the date of payment of such amounts to the date of payment of the repurchase amount and less the amount of actual return received by the Purchaser from Huayin Traffic from the First Payment Date to the date of payment of the repurchase amount.

Toll Income of Jingdong Expressway

Jingdong Company shall engage a firm of PRC registered accountants of international repute to carry out audit on the toll income of Jingdong Expressway during the period from 1 February, 2007 to 31 January, 2008 (the “Specific Operation Period”) within 30 days from 1 February, 2008. If the toll income of Jingdong Expressway during the Specific Operation Period does not reach RMB140,000,000 (equivalent to approximately HK$134,615,000), the Vendor shall return RMB200,825,400 (equivalent to approximately HK$193,101,000) out of the Transfer Amount to the Purchaser within 30 days from the issue of the audit report. The Specific Operation Period may be extended if the required toll income is not reached due to force majeure events.

The Vendor shall procure that Huayin Group executes a pledge agreement in respect of its 9% equity interest in Jingdong Company in favour of the Purchaser to secure the payment obligations of the Vendor referred to above (the “Pledge Agreement”).

4

Conditions Precedent for the Payment Obligations of the Purchaser

The obligation of the Purchaser to pay any installment of the Transfer Amount to the Vendor and the Capital Contribution to Huayin Traffic is subject to fulfillment (or waiver by the Purchaser in writing) of the following Conditions:–

• (i) the execution of the New Articles of Association by Huayin Group and Huayin Traffic, and approval by the shareholders in general meeting of Jingdong Company of the New Articles of Association taking effect on the First Payment Date;

• (ii) the issue of a business licence to Huayin Traffic by the Administration for Industry and Commerce for Hubei Province without changing the fundamental terms of the Transfer and Capital Contribution Agreement and the new articles of association of Huayin Traffic in substance;

• (iii) obtaining of a confirmation letter from a lending bank of Jingdong Company (a) agreeing to the Acquisition and (b) agreeing to continue the loan agreements with Jingdong Company and not to call for early repayment of the loans;

• (iv) that there has been no breach by the Vendor of its representations, warranties and undertakings in the Transfer and Capital Contribution Agreement up to the date of fulfillment of all the Conditions;

• (v) the issue of this announcement and a circular to shareholders by the Company in respect of the Acquisition and the Capital Contribution in compliance with the laws of Hong Kong and the Listing Rules.

If any of the Conditions is not fulfilled within six months from the date of the Transfer and Capital Contribution Agreement, unless the Vendor and the Purchaser agrees to extend the deadline for fulfillment of the Conditions, the Transfer and Capital Contribution Agreement shall be terminated. Each of the parties shall bear its own costs in connection with the Transfer and Capital Contribution Agreement and no party shall be obliged to the other for any liability or loss.

After fulfillment (or waiver by the Purchaser in writing) of all of the Conditions, the Purchaser shall make payment of the Consideration by way of three installments as follows:–

	Amount	Payment Date
First installment	RMB261,054,100 of the Transfer	Within 10 Working Days of the date of
	Amount plus the amount of	fulfillment (or waiver by the Purchaser in
	Capital Contribution	writing) of all of the Conditions
Second installment	RMB200,000,000 of the Transfer	Subject to the contribution of additional
	Amount	capital by Huayin Group to Jingdong
		Company under the New Articles of
		Association as mentioned below, within
		2 months after the First Payment Date
Third installment	RMB200,825,400 of the Transfer	Provided that the Pledge Agreement has
	Amount	been executed and registered in the register
		of shareholders of Jingdong Company,
		within 2 months after the date of payment
		of the second installment (subject to a grace
		period of three months)

5

The Vendor originally owned a 20% equity interest in Huayin Traffic, and acquired a 20% equity interest in Huayin Traffic from Huayin Group in March, 2006 and a 60% equity interest in Huayin Traffic from Guangdong Jiasheng in July, 2006 at the face value of the registered capital being acquired as a restructuring arrangement. The Purchaser shall effect payment of the first installment of the Transfer Amount by paying RMB22,000,000 (equivalent to approximately HK$21,154,000) to Huayin Group and RMB66,000,000 (equivalent to approximately HK$63,462,000) to Guangdong Jiasheng to which the Vendor owes such amounts for those previous transfers of equity interest in Huayin Traffic, and the balance of RMB173,054,100 (equivalent to approximately HK$166,398,000) to the Vendor. Notwithstanding the considerations for the acquisition of equity interests in Huayin Traffic by the Vendor have not yet been paid, the Company has obtained PRC legal opinion that since such equity interests have been registered in the name of the Vendor and the original shareholders have agreed to waive their rights in respect of those equity interest, the Vendor has now obtained complete legal title to the Equity Interest.

From the date of registration of the entire equity interest in Huayin Traffic in the name of the Purchaser and pending payment of the Transfer Amount and the Capital Contribution by the Purchaser, the Equity Interest shall be pledged to the Vendor as security for such payments. The Equity Interest shall be released from pledge proportionately accordingly to the following schedule:–

Upon payment of the first installment	68% of the total Equity Interest shall be released from
	pledge
Upon payment of the second installment	16% of the total Equity Interest shall be released from
	pledge
Upon payment of the third installment	16% of the total Equity Interest shall be released from
	pledge

Transitional Arrangements

During the period from the date of the Transfer and Capital Contribution Agreement to the First Payment Date, each of the Vendor and the Purchaser shall appoint two persons to form a transitional team to handle all matters in connection with the daily operations and technical matters of Huayin Traffic, Jingdong Company and Jingdong Expressway. The transitional team shall have the full right of knowledge, and each member of the team may make recommendations, in respect of daily operations of Huayin Traffic and Jingdong Company and the construction of Jingdong Expressway.

The Purchaser shall be in charge of the daily operations, repair and maintenance and management of Jingdong Expressway from the First Payment Date up to the date of issue of the Delivery Audited Accounts, with necessary assistance from the Vendor. During the period from the Delivery Date to the Construction Completion Date, if any damages occur to Jingdong Expressway or Jingdong Company is being claimed by third parties due to design, quality, material, or construction defects arising before the Delivery Date, Jingdong Company shall claim against the responsible party (including but not limited to the designers, contractors and suppliers), and any deficiency in remedies shall be reimbursed by the Vendor.

From the First Payment Date to the payment of the second installment of the Transfer Amount, the Purchaser shall appoint two persons nominated by the Vendor as directors of Huayin Traffic and procure that three persons nominated by the Vendor be appointed as directors of Jingdong Company (and as members of the liquidation committee if Huayin Traffic or Jingdong Company is dissolved). From the payment of the second installment up to the payment of the third installment of the Transfer Amount, the Purchaser shall appoint one person nominated by the Vendor as a director of Huayin Traffic and procure that two persons nominated by the Vendor be appointed as directors of Jingdong Company (and as members of the liquidation committee if Huayin Traffic or Jingdong Company is dissolved).

6

From the First Payment Date to the payment of the third installment of the Transfer Amount, the Purchaser shall procure that Huayin Traffic appoint a person nominated by the Vendor as the deputy finance general manager of Jingdong Company.

Guarantee

Huayin Group and Guangdong Jiasheng have executed a letter of guarantee in favour of the Purchaser in respect of the obligations, liabilities, representations, undertakings and warranties of the Vendor under the Transfer and Capital Contribution Agreement.

The Company has executed a letter of guarantee in favour of the Vendor in respect of the obligations, liabilities, representations, undertakings and warranties of the Purchaser under the Transfer and Capital Contribution Agreement.

THE NEW ARTICLES OF ASSOCIATION OF JINGDONG COMPANY

Date

29 July, 2006

The Parties

• (a) Huayin Group

• (b) Huayin Traffic

Huayin Traffic, which will become a wholly-owned subsidiary of the Purchaser upon completion of the Acquisition, entered into the New Articles of Association to govern the operations and administration of Jingdong Company.

Scope of Business

The scope of business of Jingdong Company shall be the investment in and development of traffic business, operation of roads and bridges, ancillary services of the Jingdong Expressway

Registered Capital

Registered capital: RMB100,000,000 (equivalent to approximately HK$96,154,000 million)

Contributions to the Registered Capital

• (a) As to RMB9,000,000 (equivalent to approximately HK$8,654,000) by Huayin Group, representing 9% of the total registered capital of Jingdong Company; and

• (b) As to RMB91,000,000 (equivalent to approximately HK$87,500,000) by Huayin Traffic, representing 91% of the total registered capital of Jingdong Company

The registered capital of Jingdong Company in the amount of RMB100,000,000 has been fully paid up. Huayin Group and Huayin Traffic shall contribute additional capital to Jingdong Company in the form of capital reserve in the aggregate amount of RMB593,000,000 (equivalent to approximately HK$570,192,000), which shall be contributed by Huayin Group as to RMB53,370,000 (equivalent to approximately HK$51,317,000) and by Huayin Traffic as to RMB539,630,000 (equivalent to approximately HK$518,875,000).

7

The Board of Directors

The board of directors of Jingdong Company shall consist of nine directors, one of whom shall be appointed by Huayin Group and eight of whom shall be appointed by Huayin Traffic. The chairman of the board shall be the director nominated by Huayin Traffic.

The quorum of board meetings shall be two-thirds of the directors. Apart from (1) business plans, investment proposals and fund raising proposals; (2) budget, investment and settlement; (3) proposals for profit distribution and making up of losses; (4) internal management organisations; and (5) basic management systems which shall be unanimously approved by all directors at a board meeting, resolutions of the board shall be passed by over half of the directors attending the meeting.

Pre-emption Rights

Any parties to the New Articles of Association wishing to transfer all or part of its equity interest in Jingdong Company shall be subject to pre-emption rights of the other shareholder. Any shareholder proposing to transfer its equity interest in Jingdong Company shall give notice of the same to the other shareholder. If the pre-emption rights of the other shareholder are not exercised within 10 Working Days of the notice, the offering shareholder may within 3 months from the date of the notice transfer to a third party the equity interest at a price not lower than that stated in the notice.

Pledging of Equity Interest

None of the shareholders of Jingdong Company may pledge or use its equity interest as security without approval by resolution of the shareholders.

Repurchase of Equity Interest

Any shareholder which has voted at a general meeting against a resolution in respect of any of the following matters may in the event of such matter request Jingdong Company to repurchase its equity interest at a reasonable price:–

• (1) Jingdong Company has made profits for 5 consecutive years and fulfills the requirements under the Company Law of the PRC for profits distribution but has not distributed its profits to its shareholders for 5 consecutive years;

• (2) Merger or separation of Jingdong Company or transfer by Jingdong Company of its principal assets;

• (3) Upon expiry of the term of business of Jingdong Company (being 5 November, 2037) or under other circumstances for dissolution provided in the New Articles of Association but the shareholders in general meeting pass resolutions to extend the continuance of Jingdong Company.

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Corporate Structure before and after completion of the Acquisition

Before completion of the Acquisition

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----- Start of picture text -----

Vendor
100%
Huayin Traffic Huayin Group
91% 9%
Jingdong Company
After completion of the Acquisition
Company
100%
Purchaser
100%
Huayin Traffic Huayin Group
91% 9%
Jingdong Company
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INFORMATION ON THE ASSETS TO BE ACQUIRED

Huayin Traffic is a limited liability company established in the PRC on 9 September, 2005. It is an investment holding company and its sole investment is 91% equity interest in Jingdong Company. Jingdong Company has obtained approval by the Hubei Provincial Government of its right to operate the Jingdong Expressway for 34 years from September, 2003, and will apply to the Hubei Provincial Government for the right to charge toll fees for the Jingdong Expressway upon its completion.

Huayin Traffic has a total registered share capital of RMB110,000,000 (equivalent to approximately HK$105,769,000). The total registered capital in of Huayin Traffic is held by the Vendor at present and will be held by the Purchaser after completion of the Acquisition.

The unaudited consolidated total asset value and the unaudited consolidated net asset value of Huayin Traffic as at 31 March, 2006, according to the unaudited consolidated management accounts of Huayin Traffic for the three months up to 31 March, 2006, amounted to approximately RMB2,456,000,000 (equivalent to approximately HK$2,361,538,000) and approximately RMB105,842,000 (equivalent to approximately HK$101,771,000).

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Huayin Traffic does not have any turnover or profit up to the date of this announcement as the Jingdong Expressway (which is owned by Jingdong Company and the only investment indirectly held by Huayin Traffic) is still under construction. Huayin Traffic incurred an unaudited consolidated loss (both before and after taxation and extraordinary items) of approximately RMB38,661 (equivalent to approximately HK$37,174) from 9 September, 2005 (the date of establishment) to 31 December, 2005 and an unaudited consolidated loss (both before and after taxation and extraordinary items) of approximately RMB4,158,000 (equivalent to approximately HK$3,998,000) for the three months ended 31 March, 2006.

REASONS FOR AND THE BENEFITS OF THE ACQUISITION

The Acquisition is in line with the Group’s business of investment in and management of infrastructure facilities. The Jingdong Expressway owned by Jingdong Company is the Hubei section of the principal national traffic way from Er Lian Hao Te（二連浩特）to Guangzhou and has a privileged geographical location. In addition, Hubei Province has rapid economic development and is the core region in the central of China. Jingdong Company has a long term operating right in respect of the Jingdong Expressway for 34 years (with about 31 years remaining). The Directors consider that the investment in Jingdong Expressway will bring good return to the Group. Pursuant to the Transfer and Capital Contribution Agreement, the Vendor warrants that the construction of Jingdong Expressway will be completed for traffic not later than the end of October, 2006. The Group can therefore avoid the risk associated with long construction period for roads. The Directors anticipate that Jingdong Expressway will bring a stable cash flow to the Group when it becomes open to traffic, and will increase the profitability of the Group.

The Directors (including the independent non-executive Directors) consider that the Transfer and Capital Contribution Agreement and the New Articles of Association were entered into on normal commercial terms after arm’s length negotiations, and the terms are fair and reasonable and in the interest of the Company and its shareholders taken as a whole.

GENERAL

The Group is principally engaged in property development, property investment and management, infrastructure investment, provision of transportation services, manufacture and sale of industrial and commercial products.

The Vendor is principally engaged in industrial investment, investment consultancy and property development.

Huayin Group is principally engaged in the construction and operational management of infrastructure facilities.

To the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiries, the Vendor, Huayin Group and their respective ultimate beneficial owners are third parties independent of the Company and connected persons of the Company. The Vendor is a shareholder of Huayin Group which holds 20% of its equity interest.

As the applicable percentage ratios for the transactions contemplated under the Transfer and Capital Contribution Agreement exceed 5% but are less than 25%, such transactions constitute discloseable transactions for the Company under Chapter 14 of the Listing Rules.

A circular containing, among others, details of the Transfer and Capital Contribution Agreement will be despatched to the shareholders of the Company as soon as practicable.

10

DEFINITIONS

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

“Acquisition”	the acquisition of the entire Equity Interest by the Purchaser from the
	Vendor as contemplated under the Transfer and Capital Contribution
	Agreement
“Board”	the board of Directors
“Capital Contribution”	the payment by the Purchaser of capital in the amount of RMB590,700,000
	to Huayin Traffic as capital reserve pursuant to the Transfer and Capital
	Contribution Agreement
“Company”	Shenzhen Investment Limited, a company incorporated in Hong Kong
	with limited liability, whose shares are listed on the Stock Exchange
“Complete Road”	a road which has been completed in construction and has passed through
	testing for completion of construction and complied with technical
	standards of Traffic Department, and the quality of construction has
	reached a good standard or above as shown in the certificate of testing
	and acceptance upon completion of road construction
“Conditions”	the conditions upon which obligations of the Purchaser to pay the
	Consideration and the Capital Contribution are subject
“Consideration”	the aggregate consideration for the acquisition of the Equity Interest in
	the amount of RMB661,879,500 (equivalent to HK$636,423,000) and for
	the Capital Contribution in the amount of RMB590,700,000 (equivalent
	to HK$567,981,000)
“Construction	the date Jingdong Expressway passes testing by government departments
Completion Date”	for completion of construction, which shall not be earlier than two years
	after the Delivery Date and not later than three years after the Delivery
	Date
“Construction Completion	the audited financial statements of Huayin Traffic and Jingdong Company
Audited Accounts”	as at the Construction Completion Audited Accounts Date to be issued
	within 30 Working Days after the Construction Completion Date
“Construction Completion	if the Construction Completion Date falls between 1st to 15th of a month,
Audited Accounts Date”	the last calendar day of the previous month; if the Construction Completion
	Date falls between 16th to the end of the month, the last calendar day of
	the month
“Delivery Date”	the date Jingdong Expressway enters the trial operation period
“Delivery Audited	the audited financial statements of Huayin Traffic and Jingdong Company
Accounts”	as at the Delivery Audited Accounts Date to be issued within 6 months
	after the Delivery Date

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• “Delivery Audited if the Delivery Date falls between 1st to 15th of a month, the last calendar Accounts Date” day of the previous month; if the Delivery Date falls between 16th to the end of the month, the last calendar day of the month

• “Director(s)” director(s) of the Company “Equity Interest” an amount of RMB110,000,000 in the registered capital of Huayin Traffic, representing the entire equity interest in Huayin Traffic to be acquired by the Purchaser from the Vendor as contemplated under the Transfer and Capital Contribution Agreement

• “First Payment Date” or the date of payment by the Purchaser of the first installment of the “Completion Date” Transfer Amount to the Vendor and the Capital Contribution to Huayin Traffic

• “Group” the Company and its subsidiaries from time to time “Guangdong Jiasheng” 廣東嘉盛投資有限公司 (Guangdong Jiasheng Investment Co. Ltd.), a limited liability company established under the laws of the PRC and a former shareholder of Huayin Traffic

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC

• “Huayin Group” 湖北華銀實業集團有限公司 (Hubei Huayin Enterprise Group Company Limited), a limited liability company established under the laws of the PRC and a shareholder of Jingdong Company

• “Huayin Traffic” 湖北華銀交通開發有限公司 (Huayin Traffic Development Company Limited), a limited liability company established under the laws of the PRC wholly-owned by the Vendor as at the date of this announcement

• “Jingdong Company” 湖北荊東高速公路建設開發有限公司 (Hubei Jingdong Expressway Construction and Development Company Limited), a limited liability company established under the laws of the PRC which owns and operates the Jingdong Expressway

• “Jingdong Expressway” the dual four lane expressway under construction beginning at the south bank of Jingzhou Yangzi River Bridge（荊州長江大橋）and ending at Dongyuemiao at the border between Hunan and Hubei Province（湘鄂邊 界處東岳廟）, with a total distance of 62.9 kilometers (consisting of 58.4 kilometers of main lane and 4.5 kilometers of connecting lanes), exclusively constructed and operated by Jingdong Company, together with its ancillary facilities and service districts

• “Listing Rules” The Rules Governing the Listing of Securities on the Stock Exchange

• “New Articles of the new articles of association of Jingdong Company entered into by Association” Huayin Traffic and Huayin Group on 29 July, 2006

• “PRC”

• The People’s Republic of China

• “Purchaser” 深業控股（深圳）有限公司 (Shum Yip Investment (Shezhen) Limited), a limited liability company incorporated under the laws of the PRC and a wholly-owned subsidiary of the Company

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“Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Transfer and Capital the agreement dated 29 July, 2006 entered into between the Vendor and Contribution Agreement” the Purchaser for the acquisition of the Equity Interest from the Vendor and making of the Capital Contribution to Huayin Traffic by the Purchaser

• “Transfer Amount” the amount of RMB661,879,500 payable by the Purchaser to the Vendor under the Transfer and Capital Contribution Agreement for the Acquisition

• “Valuation Date” 31 December, 2005 “Vendor” 廈門東方金龍投資有限公司(Xiamen Dongfang Jinglong Investment Co. Ltd.), a limited liability company established under the laws of the PRC and a shareholder of Huayin Traffic

• “Working Day” any day other than Saturdays, Sundays and statutory holidays in the PRC “HK$” Hong Kong dollars, the lawful currency of Hong Kong “RMB” Renminbi, the lawful currency of the PRC “%” per cent

For the purposes of this announcement, the exchange rate at HK$1 = RMB1.04 has been used, where applicable, for purpose of illustration only and does not constitute a representation that any amount has been, could have been or may be exchanged at any particular rate on the date or dates in question or any other date.

In this announcement, English names of PRC established companies are unofficial English translation of the official Chinese names. In case of inconsistencies, the Chinese name shall prevail.

By Order of the Board Shenzhen Investment Limited Mr. Zhang Yijun Director

Hong Kong, 1 August, 2006

As at the date of this announcement, the board of directors of the Company comprises nine executive Directors, namely, Mr. Hu Aimin, Mr. Zhang Yijun, Ms. Zhao Gesheng, Mr. Xiao Rihai, Ms. Zhao Mingfeng, Mr. Liang Kaiping, Mr. Liu Weijin, Mr. Zhang Huaqiao and Mr. Tam Ping Lung and three non-executive Directors namely Mr. Lee Yip Wah, Peter, Mr. Hu Zuoyuan and Dr. Wu Jiesi and three independent non-executive Directors namely Mr. Wong Po Yan, Mr. Wu Wai Chung, Michael and Mr. Li Wai Keung.

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

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