Guangzhou Investment Press Release - Interim Results

The analysis of the Group s contribution to operating profit by principal activities and markets is as follows:

Results Highlights

In the first half of 2001, the Group s cement and newsprint businesses both performed satisfactorily due to expansion of capacity and sales which offset lower profits from the toll road and property businesses. Toll road business was affected by temporary factors such as prohibition of access of overloaded trucks by local governments. Property business achieved higher sales area but profit was affected by changing product mix.

In the first half of 2001, the Group s turnover grew to HK$1,734,760,000, representing a 22 per cent increase mainly driven by the expanding cement and newsprint businesses. Overall gross profit increased by 33 per cent to HK$641,941,000 due to decline of certain raw material prices and higher efficiency of the industrial businesses. Although selling, administrative and other operating expenses were increased due to overall expansion of the Group s businesses, profit attributable to shareholders amounting to HK$46,420,00 still increased satisfactorily by 22 per cent compared with the same period in 2000.

Interim Dividend

The Board has resolved not to declare any interim dividend.

Future Strategy and Prospects

Looking ahead, the Group intends to expand business of property development in Guangzhou which will have great potential with continuous economic development of China, particularly in Southern China. The Group s goal is to develop as a leading property developer in this region. In addition, management of existing operating businesses will be strengthened to deliver satisfactory returns to shareholders. Although the external economic environment is experiencing some uncertainty, the Group believes that economic performance of China, especially southern China, will remain relatively resilient.

Contact: Sophia Yan, Executive Director of Guangzhou Investment Co. Ltd. (Tel: 2116 8022 ; Fax: 2598 7688)