PegBio Co., Ltd. — Capital/Financing Update 2005

Feb 4, 2005

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(Incorporated in Bermuda with limited liability) (Stock Code: 1141)

DESPATCH OF PROSPECTUS DOCUMENTS AND ADJUSTMENT TO THE CONVERSION PRICE OF THE CONVERTIBLE BONDS

Printed copies of the prospectus, the application form and excess application form in relation to the Open Offer were despatched on 4th February, 2005 to the Qualifying Shareholders. The latest time for acceptance and payment in respect of the Offer Shares is 4:00 p.m. on Friday, 18th February, 2005.

Pursuant to the terms of the Convertible Bonds, the conversion price of the Convertible Bonds has been adjusted from HK$0.2432 per Share to HK$0.2228 per Share as a result of the Open Offer.

Reference is made to the announcement made by Xin Corporation Limited dated 14th January, 2005 in relation to an open offer of new Shares on the basis of one Offer Share for every two Shares held (the “Announcement”). Capitalised terms used herein have the same meanings ascribed thereto in the Announcement.

DESPATCH OF PROSPECTUS DOCUMENTS

Following the registration and filing of the Prospectus Documents and other related documents with the Registrar of Companies in Hong Kong and the Registrar of Companies in Bermuda (as appropriate), the Directors announce that printed copies of the Prospectus Documents were despatched on 4th February, 2005 to the Qualifying Shareholders whose names appeared on the register of members of the Company on the Record Date of 4th February, 2005. There were no Excluded Shareholders on the Record Date.

Qualifying Shareholders are reminded that the latest time for acceptance and payment in respect of the Offer Shares is 4:00 p.m. on Friday, 18th February, 2005. Details of the procedures for acceptance and payment thereof and the expected timetable for the Open Offer are set out in the Prospectus Documents.

It should be noted that the Open Offer is conditional on, among other things, the Underwriting Agreement not being terminated by the Underwriter in accordance with the terms of the Underwriting Agreement. Details of the circumstances under which the Underwriter may terminate the Underwriting Agreement are set out in the Prospectus Documents. Any Shareholders or other persons dealing in such Shares up to the date on which all conditions to which the Open Offer is subject are fulfilled (which is expected to be 4:00 p.m. on Wednesday, 23rd February, 2005) will accordingly bear the risk that the Open Offer may not become unconditional and may not proceed.

ADJUSTMENT OF CONVERSION PRICE OF THE CONVERTIBLE BONDS

Pursuant to the terms of the Convertible Bonds, the conversion price of the Convertible Bonds has been adjusted from HK$0.2432 per Share to HK$0.2228 per Share as a result of the Open Offer with effect from Friday, 28th January, 2005.

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Hong Kong, 4th February, 2005

As at the date of this announcement, the Board comprises Mr. Lo Ming Chi, Charles (Chairman), Mr. Yu Wai Man, Mr. Wilson Ng, Mr. Ng Wee Keat, Mr. Ng Teow Leng and Mr. Ng Eng Leng as executive directors and Mr. Wong Kwok Tai, Mr. Lau Pok Lam and Mr. Ko Kwong Woon, Ivan as independent non-executive directors.

* For identification only

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