PegBio Co., Ltd. — Share Issue/Capital Change 2002

May 29, 2002

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.

HUNG FUNG GROUP HOLDINGS LIMITED

(incorporated in Bermuda with limited liability)

RESULTS OF THE OPEN OFFER

The Directors announce that a total of 6 valid applications had been received for a total of 605,605,640 Offer Shares up to 4:00 p.m. on 27th May, 2002, being the latest time for the application and payment for the Offer Shares. Approximately 15.0% of the 4,025,905,140 Offer Shares offered under the Open Offer was subscribed.

The Underwriting Agreement has become unconditional. Based on the above subscription results, the Open Offer was under-subscribed by 3,420,299,500 Offer Shares and Vision Century Group Limited ("Vision Century") as underwriter of the Open Offer has procured the subscription for such Offer Shares in accordance with the terms of the Underwriting Agreement. The aggregate shareholding of Vision Century in the Company thus increases from approximately 48.3% to 51.8% immediately following completion of the Open Offer.

Reference is made to the press announcement of Hung Fung Group Holdings Limited (the "Company") dated 22nd February, 2002 and the Prospectus sent to the shareholders of the Company dated 13th May, 2002 regarding the Open Offer. Capitalised terms used in this announcement have the same meanings ascribed to them in the Prospectus unless the context otherwise requires.

RESULTS OF THE OPEN OFFER

The Directors announce that, up to 4:00 p.m. on Monday, 27th May, 2002, being the latest time for the application and payment for the Offer Shares, a total of 6 valid applications had been received for a total of 605,605,640 Offer Shares. As a result, approximately 15.0% of the total number of 4,025,905,140 Offer Shares under the Open Offer was subscribed.

UNDER-SUBSCRIPTION OF THE OFFER SHARES

Based on the subscription results of the Open Offer referred to above, the Open Offer was under-subscribed by 3,420,299,500 Offer Shares ("Shortfall Offer Shares"). As at the date of completion of the Compromise Agreement and the Subscription Agreement, Vision Century was interested in 3,000,000,000 Shares, representing approximately 48.3% of the then issued share capital of the Company. Vision Century has agreed to underwrite the Offer Shares and accordingly has procured the subscription for the Offer Shares not taken up. Vision Century has taken up an aggregate of 2,300,299,500 Shortfall Offer Shares and the remaining balance of 1,120,000,000 Shortfall Offer Shares were taken up by sub-underwriters, who are independent third parties as defined under the Listing Rules, and parties procured by the sub-underwriters. The taking up of the Shortfall Offer Shares by the sub-underwriters were notified by the Underwriter pro rata to their respective sub-underwriting commitment in accordance with their respective sub-underwriting agreements. The certificates for the Offer Shares are expected to be despatched on or before Monday, 3rd June, 2002. Dealings in the Offer Shares will commence on Wednesday, 5th June, 2002.

SHAREHOLDING IN THE COMPANY

The following is a summary of the shareholding in the Company before and after completion of the Open Offer:

Shareholding before Shareholding

Shareholder completion of upon completion

the Open Offer of the Open Offer

Shares % Shares %

Vision Century 3,000,000,000 48.3 5,300,299,500 51.8

Public 3,203,936,760 51.7 4,929,542,400 48.2

Total 6,203,936,760 100.0 10,229,841,900 100.0

By Order of the Board

Lo Ming Chi, Charles

Chairman

Hong Kong, 29th May, 2002

The directors of the Company jointly and severally accept full responsibility for the accuracy of the information contained in this announcement and confirm, having made all reasonable enquiries, that to the best of their knowledge, the opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any in this announcement misleading.

"Please also refer to the published version of this announcement in the Hong Kong i-mail"