Wang On Group Limited — Share Issue/Capital Change 2002

May 3, 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.

WANG ON GROUP LIMITED

(Incorporated in Bermuda with limited liability)

PLACING OF EXISTING SHARES AND

SUBSCRIPTION OF NEW SHARES

UNDER GENERAL MANDATE

Placing Agent

KINGSTON SECURITIES LIMITED

On 2 May 2002, the Vendors entered into the Placing Agreement with the Placing Agent and the Subscription Agreement with the Company. Pursuant to the Placing Agreement, the Vendors conditionally agreed to place, through the Placing Agent, 1,635,000,000 Placing Shares to independent investors at a price of HK$0.02 per Share. The Placing Shares are placed by the Placing Agent on a fully underwritten basis. According to the Subscription Agreement, the Vendors conditionally agreed to subscribe for 1,950,000,000 Subscription Shares at a price of HK$0.02 per Share.

The Placing Shares represent about 16.57% and the Subscription Shares represent 19.77% of the Company's existing issued share capital of 9,864,365,596 Shares. The Placing Shares represent about 13.84% and the Subscription Shares represent about 16.51% of the Company's issued share capital of 11,814,365,596 Shares as enlarged by the Subscription of 1,950,000,000 Shares. The net proceeds from the Subscription amount to about HK$36.5 million. The Directors presently intend to apply such net proceeds to the purchase of properties for investment purpose and/or for the Group's retails business under the brand name "Wai Yuen Tong" and for general working capital of the Group. However, no concrete plans has been formulated up to the date of this announcement.

The Subscription is conditional upon the Stock Exchange granting listing of, and permission to deal in, the Subscription Shares.

THE PLACING AGREEMENT

Placing Agreement

The Placing Agreement was entered into between the Vendors and the Placing Agent on 2 May 2002. Pursuant to this agreement, the Vendors agreed to place, through the Placing Agent, an aggregate of 1,635,000,000 Placing Shares to independent investors at a price of HK$0.02. The Placing Shares are to be placed by the Placing Agent on a fully underwritten basis.

Placing Agent

Kingston Securities Limited is the Placing Agent and will receive a placing commission of 4.0% on the gross proceeds of the Placing. The Placing Agent is independent of and not connected with the directors, chief executive or substantial shareholders of the Company or any of its subsidiaries, or any of their respective associates (as defined in the Listing Rules).

Placees

Not fewer than six placees (which are required to be independent individual, corporate and/or institutional investors) and their ultimate beneficial owners who will be independent of and not connected with the Company nor with the directors, chief executive or substantial shareholders of the Company, and any of their subsidiaries or any of their respective associates (as defined in the Listing Rules). None of the placee will become a substantial Shareholder immediately following the completion of the Placing.

Placing price

The price of the Placing Shares of HK$0.02 was determined after arm's length negotiation and on usual commercial terms and (i) represents a discount of 16.67% to the closing price of HK$0.024 per Share as quoted on the Stock Exchange on 2 May 2002, being the date of this announcement; and (ii) represents a discount of 14.16% to the average closing price of about HK$0.0233 per Share as quoted on the Stock Exchange for the last ten trading days ended 2 May 2002, being the date of this announcement.

The Placing Shares

1,635,000,000 Shares are to be placed, representing about 16.57% of the Company's existing issued share capital of 9,864,365,596 Shares and about 13.84% of the Company's issued share capital of 11,814,365,596 Shares as enlarged by the Subscription.

Completion

Completion shall take place on the third business day after the date of this announcement.

THE SUBSCRIPTION AGREEMENT

Subscription Agreement

On 2 May 2002, the Company and the Vendors entered into the Subscription Agreement in which the Company conditionally agreed to allot and issue, and the Vendors conditionally agreed to subscribe for an aggregate of 1,950,000,000 Subscription Shares at a price of HK$0.02 per Share.

The Subscriber

The Vendors hold an aggregate 1,635,857,379 Shares in the Company as at the date of this announcement, representing about 16.59% of the Company's issued share capital. Upon completion of the Placing and the Subscription, the Vendors will hold an aggregate of about 16.51 % of the then issued share capital of the Company.

Price of the Subscription Shares

The price of the Subscription Shares of HK$0.02 per Share, being equivalent to the price of the Placing Shares, was determined after arm's length negotiation and on usual commercial terms.

The Subscription Shares

1,950,000,000 new Shares are to be subscribed, representing 19.77% of the Company's existing issued Share of 9,864,365,596 Shares and about 16.51% of the Company's issued share capital of 11,814,365,596 Shares as enlarged by the Subscription.

Conditions

Completion of the Subscription Agreement is conditional upon the completion of the Placing and the listing of, and permission to deal in, all the Subscription Shares being granted by the Stock Exchange.

Completion

The Subscription is to be completed within 14 days after the date of entering of the Placing Agreement, i.e. on or before 15 May 2002.

APPLICATION FOR LISTING

Application will be made by the Company to the listing committee of the Stock Exchange for the grant of the listing of and permission to deal in the Subscription Shares.

GENERAL MANDATE

The Subscription Shares will be issued pursuant to the general mandate to allot, issue and deal with Shares granted to the Directors of the Company by resolution of its Shareholders passed at the Company's special general meeting held on 28 February 2002.

EFFECTS ON SHAREHOLDING STRUCTURE

	Before Placing		After Placing but		After Placing
	and Subscription		before Subscription		and Subscription
	(approximately)		(approximately)		(approximately)
Caister Limited (Note 1)	2.21%		2.21%		1.84%
Tang Ching Ho (Note 2)	0.60%		0.60%		0.50%
Yau Yuk Yin (Note 3)	0.60%		0.60%		0.50%
Vendors
Tang Mui Fong (Note 4)	4.01%		0.004%		3.97%
Tang Mui Fun (Note 5)	10.05%		0.004%		10.03%
Yau Yuk Tong (Note 6)	2.53%		0.0004%		2.52%
Placees	-		16.57%		13.84%
Public	80.00%		80.00%		66.80%
	100.00%		100.00%		100.00%

Notes:

1. Caister Limited is wholly and beneficially owned by Tang Ching Ho

2. Tang Ching Ho is the chairman of the Company

3. Yau Yuk Yin is the wife of Tang Ching Ho

4. Tang Mui Fong is the sister of Tang Ching Ho

5. Tang Mui Fun is the sister of Tang Ching Ho

6. Yau Yuk Tong is the brother-in-law of Tang Ching Ho

USE OF PROCEEDS

The Company will bear all costs and expenses in connection with the Placing and the Subscription. The net proceeds amounts to about HK$36.5 million. The Directors presently intend to apply such net proceeds to the purchase of properties for investment purpose and/or for the Group's retails business under the brand name "Wai Yuen Tong" and for general working capital of the Group. However, no concrete plans has been formulated up to the date of this announcement.

As stated in the Company's circular (the "Circular") dated 6 February 2002 issued in connection with a rights issue (the "Rights Issue") of the Company, the Company conducted several placings of Shares in 2001. The amount of proceeds regarding such placings were disclosed in Ciruclar and the utilisation of which, as confirmed by the Directors, were in accordance with the intended use as mentioned in the relevant announcements regarding such placings of Shares. As mentioned in the Circular, the net proceeds of about HK$191 million from the Rights Issue were intended to be used as follow: (i) about HK$40 million for improvement of the Group's pharmaceutical production facilities; (ii) about HK$26 million for the acquisition of property; (iii) about HK$15 million for repayment of the Group's indebtedness; (iv) about HK$35 million for future investment in new businesses and (iv) about HK$75 million for the Group's working capital. The Directors have confirmed that the net proceeds from the Rights Issue has been utilised according to the Group's intended use as aforesaid and no material deviation regarding the use of such proceeds has been recorded up to the date of this announcement.

REASONS FOR THE PLACING AND THE SUBSCRIPTION

The Directors consider that the Placing and the Subscription represent an opportunity to raise capital for the Company while broadening the shareholder base and the capital base of the Company.

GENERAL

The Group is principally engaged in the management and sub-licensing of Chinese wet markets, shopping centers and car parks; manufacture and sales of Chinese medicines, herbs, and other healthcare products; provision of building related contracting services; provision of project management and agency services; and property investment. The Directors consider the terms of the Placing Agreement and the Subscription Agreement to be fair and reasonable and in the interests of the Company and the Shareholders as a whole. The Subscription Shares will rank, upon issue, equally with the existing Shares.

TERMS AND DEFINITION

" Board"	the board of Directors
"Company"	Wang On Group Limited, a company incorporated in Bermuda with limited liability and the shares of which are listed on the Stock Exchange
"Director(s)"	director(s) including independent non-executive director(s) of the Company
"Hong Kong"	Hong Kong Special Administration Region of the People's Republic of China
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock Exchange
"Placing"	the placing of 1,635,000,000 Shares which are beneficially owned by the Vendors pursuant to the Placing Agreement
"Placing Agent"	Kingston Securities Limited, a dealer registered under the Securities Ordinance (Chapter 333 of the Laws of Hong Kong)
"Placing Agreement"	an unconditional agreement entered into between the Vendors and the Placing Agent dated 2 May 2002 in relation to the Placing
'Placing Shares"	a total of 1,635,000,000 Shares which are beneficially owned by the Vendors, to be placed pursuant to the Placing Agreement
"Shares"	ordinary shares of HK$0.01 in the share capital of the Company
"Shareholder(s)"	holders of the Shares
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"Subscription"	the subscription for the Subscription Shares pursuant to the Subscription Agreement
"Subscription Agreement"	a conditional agreement entered into between the Company and the Vendors dated 2 May 2002 in relation to the Subscription
"Subscription Shares"	a total of 1,950,000,000 new Shares which are to be subscribed by the Vendors pursuant to the Subscription Agreement
"Vendors"	Tang Mui Fong, Tang Mui Fun and Yau Yuk Tong, who respectively hold about 4.01%, 10.05% and 2.53% of the issued share capital of the Company as at the date of this announcement and will respectively hold about 3.97%, 10.03% and 2.52% of the issued share capital of the Company as enlarged by the Subscription
"HK$"	Hong Kong dollars, the lawful currency of Hong Kong
"%"	per cent.

By Order of the Board

Wang On Group Limited

Tang Ching Ho

Chairman and Managing Director

Hong Kong, 2 May 2002

Please also refer to the published version of this announcement in the Hong Kong iMail Post dated 3/5/2002