(Incorporated in Bermuda with limited liability) (Stock code: 116)

PRELIMINARY ANNOUNCEMENT OF THE ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2006

The Directors of Chow Sang Sang Holdings International Limited (the “Company”) are pleased to announce the consolidated results of the Company, its subsidiaries and associates (the “Group”) for the year ended 31 December 2006 as follows:

FINANCIAL HIGHLIGHTS 2006 2005 Change HK$’000 HK$’000 Turnover Jewellery retail 2,785,254 2,380,503 17% Other business 4,196,226 3,380,151 24%

6,981,480 5,760,654 21%

Profit attributable to shareholders of the Company 296,838 187,330 58% Basic earnings per share 49.3 cents 31.1 cents

Dividend per share - Final 16.0 cents 12.0 cents - Full Year 23.0 cents 17.0 cents Dividend payout ratio 47% 55%

Equity attributable to shareholders of the Company 2,557,641 2,092,459 22% Equity per share $4.2 $3.5 22%

— 1 — CONSOLIDATED PROFIT AND LOSS ACCOUNT

Year ended 31 December 2006 2005 Note HK$’000 HK$’000 (Restated ) TURNOVER 3 Jewellery retail 2,785,254 2,380,503 Other business 4,196,226 3,380,151

6,981,480 5,760,654

Cost of sales ( 6,009,547 ) (5,014,822 )

Gross profit 971,933 745,832 Other income 62,982 38,503 Selling and distribution costs (512,075 ) (453,008 ) Administrative expenses (157,844 ) (145,988 ) Other gains, net 16,890 37,080 Finance costs (15,190 ) (5,527 ) Share of profits of associates 1,200 165

PROFIT BEFORE TAX 5 367,896 217,057

Tax 6 (61,395 ) (26,670 )

PROFIT FOR THE YEAR 306,501 190,387

Attributable to: Shareholders of the Company 296,838 187,330 Minority interests 9,663 3,057

306,501 190,387

DIVIDENDS 7 Interim 42,134 30,096 Proposed final 96,307 72,230

138,441 102,326

EARNINGS PER SHARE ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY 8 Basic 49.3 cents 31.1 cents

— 2 — CONSOLIDATED BALANCE SHEET As at 31 December 2006 2005 Note HK$’000 HK$’000 NON-CURRENT ASSETS Property, plant and equipment 341,034 342,824 Investment properties 117,050 102,450 Intangible assets 320 320 Other assets 43,233 33,918 Interests in associates 10,652 9,568 Available-for-sale investments 439,972 178,570 Deferred tax assets 2,855 3,902

Total non-current assets 955,116 671,552

CURRENT ASSETS Inventories 1,567,589 1,364,560 Accounts receivable from securities clients 9 241,659 103,353 Accounts receivable 9 113,758 68,553 Prepayments, deposits and other receivables 48,259 70,720 Investments at fair value through profit or loss 12,246 16,716 Available-for-sale investment 7,723 — Derivative financial instruments 3,001 — Tax recoverable 289 3,409 Cash held on behalf of clients 365,579 192,420 Cash and cash equivalents 284,882 175,082

Total current assets 2,644,985 1,994,813

CURRENT LIABILITIES Accounts payable to securities clients 10 504,669 210,417 Accounts payable 10 117,731 54,583 Other payables and accruals 157,168 117,915 Derivative financial instruments 1,111 — Interest-bearing bank borrowings 126,592 97,841 Tax payable 34,325 4,571

Total current liabilities 941,596 485,327

NET CURRENT ASSETS 1,703,389 1,509,486

TOTAL ASSETS LESS CURRENT LIABILITIES 2,658,505 2,181,038 NON-CURRENT LIABILITIES Deferred tax liabilities 56,378 54,979

NET ASSETS 2,602,127 2,126,059

EQUITY Equity attributable to shareholders of the Company Issued capital 150,480 150,480 Reserves 2,310,854 1,869,749 Proposed final dividend 96,307 72,230

2,557,641 2,092,459

Minority interests 44,486 33,600

TOTAL EQUITY 2,602,127 2,126,059 — 3 — Notes:

1. Basis of preparation

These financial statements have been prepared in accordance with Financial Reporting Standards (“HKFRSs”) (which also include Hong Kong Accounting Standards (“HKASs”) and Interpretations) issued by the Hong Kong Institute of Certified Public Accountants, accounting principles generally accepted in Hong Kong and the disclosure requirements of the Hong Kong Companies Ordinance. They have been prepared under the historical cost convention, except for investment properties, certain buildings, derivative financial instruments, debt securities and certain equity investments, which have been measured at fair value. These financial statements are presented in Hong Kong dollars (“HK$”) and all values are rounded to the nearest thousand except when otherwise indicated.

2. Impact of new and revised HKFRSs

The Group has adopted the following new and revised HKFRSs for the first time for the current year’s financial statements. Except for in certain cases, giving rise to new and revised accounting policies and additional disclosures, the adoption of these new and revised standards has no material effect on these financial statements.

HKAS 21 Amendment Net Investment in a Foreign Operation HKAS 27 Amendment Consolidated and Separate Financial Statements: Amendments as a consequence of the Companies (Amendment) Ordinance 2005 HKAS 39 & HKFRS 4 Financial Guarantee Contracts Amendments

The principal changes in accounting policies are as follows:

(a) HKAS 21 - The Effects of Changes in Foreign Exchange Rates

Upon the adoption of the HKAS 21 Amendment regarding a net investment in a foreign operation, all exchange differences arising from a monetary item that forms part of the Group’s net investment in a foreign operation are recognised in a separate component of equity in the consolidated financial statements irrespective of the currency in which the monetary item is denominated. This change has had no material impact on these financial statements as at 31 December 2006 or 31 December 2005.

(b) HKAS 39 & HKFRS 4 Amendments - Financial Guarantee Contracts

This amendment has revised the scope of HKAS 39 to require financial guarantee contracts issued that are not considered insurance contracts, to be recognised initially at fair value and to be remeasured at the higher of the amount determined in accordance with HKAS 37 “Provisions, Contingent Liabilities and Contingent Assets” and the amount initially recognised less, when appropriate, cumulative amortisation recognised in accordance with HKAS 18 “Revenue”. The adoption of this amendment has had no material impact on these financial statements.

The Group has not applied the following new and revised HKFRSs, that have been issued but are not yet effective, in these financial statements.

HKAS 1 Amendment Capital Disclosures1 HKFRS 7 Financial Instruments: Disclosures1 HKFRS 8 Operating Segments2 HK(IFRIC)-Int 7 Applying the Restatement Approach under HKAS 29 Financial Reporting in Hyperinflationary Economies3 HK(IFRIC)-Int 8 Scope of HKFRS24 HK(IFRIC)-Int 9 Reassessment of Embedded Derivatives5 HK(IFRIC)-Int 10 Interim Financial Reporting and Impairment6 HK(IFRIC)-Int 11 HKFRS 2 - Group and Treasury Share Transactions7 HK(IFRIC)-Int 12 Service Concession Arrangements8

— 4 — 1 Effective for annual periods beginning on or after 1 January 2007 2 Effective for annual periods beginning on or after 1 January 2009 3 Effective for annual periods beginning on or after 1 March 2006 4 Effective for annual periods beginning on or after 1 May 2006 5 Effective for annual periods beginning on or after 1 June 2006 6 Effective for annual periods beginning on or after 1 November 2006 7 Effective for annual periods beginning on or after 1 March 2007 8 Effective for annual periods beginning on or after 1 January 2008

The Group is in the process of making an assessment of the impact of these new and revised HKFRSs upon initial application. So far, it has concluded that while the adoption of the HKAS 1 Amendment, HKFRS 7 and HKFRS 8 may result in new or amended disclosures, these new and revised HKFRSs are unlikely to have a significant impact on the Group’s results of operations and financial position.

3. Turnover

Turnover represents the net invoiced value of goods sold, after allowances for returns, trade discounts and value-added tax; commission on securities and commodities broking and rental income earned during the year. Revenue from the following activities has been included in turnover: Group 2006 2005 HK$’000 HK$’000

Sale of goods 6,919,461 5,721,613 Commission on securities and commodities broking 54,040 31,450 Gross rental income 7,979 7,591

6,981,480 5,760,654

— 5 — 4. Segment information (a) Business segments The following table presents revenue, profit and certain asset, liability and other segment information for the Group’s business segments for the years ended 31 December 2006 and 2005. Group Manufacture and Wholesale of retail of jewellery precious metals Other business Eliminations Consolidated 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 (Restated ) (Restated ) Segment revenue: Sales to external customers 2,785,254 2,380,503 4,041,210 2,932,144 155,016 448,007 — — 6,981,480 5,760,654 Intersegment sales 150,177 178,640 233,547 195,766 754 1,065 (384,478 ) (375,471 ) — — Other income from external sources 17,415 13,399 1 1 25,960 13,298 — — 43,376 26,698 Other intersegment income 3,601 3,613 — — 128 113 (3,729 ) (3,726 ) — — Total 2,956,447 2,576,155 4,274,758 3,127,911 181,858 462,483 (388,207 ) (379,197 ) 7,024,856 5,787,352

Segment results 302,616 172,994 8,985 6,908 48,737 22,920 — — 360,338 202,822

Interest income 11,175 5,837 Dividend income 8,431 5,968 Gain on disposal of available-for-sale investments — 15,765 Unallocated expenses (7,348 ) (7,973 ) Finance costs (5,900 ) (5,527 ) Share of profits of associates 1,200 165 Profit before tax 367,896 217,057 Tax (61,395 ) (26,670 ) Profit for the year 306,501 190,387

Assets and liabilities Segment assets 2,289,971 1,910,764 26,844 41,180 1,161,264 940,523 (376,663 ) (495,193 ) 3,101,416 2,397,274

Interests in associates 10,652 9,568 Unallocated assets 488,033 259,523 Total assets 3,600,101 2,666,365

Segment liabilities (389,670 ) (408,245 ) (17,582 ) (34,490 ) (741,240 ) (429,162 ) 376,663 495,193 (771,829 ) (376,704 )

Unallocated liabilities (226,145 ) (163,602 ) Total liabilities (997,974 ) (540,306 ) Other segment information: Depreciation 40,794 36,377 151 50 862 1,248 — — 41,807 37,675 Net loss on disposal of derivative financial instruments 22,084 — — — — — — — 22,084 — Gain on disposal of an owner-occupied property — (11,429 ) — — — — — — — (11,429 ) Gain on disposal of an investment property — — — — — (1,502 ) — — — (1,502 ) Net fair value gains on investment properties — — — — (14,600 ) (8,400 ) — — (14,600 ) (8,400 ) Capital expenditure 38,542 55,690 — 478 1,753 302 — — 40,295 56,470

— 6 — (b) Geographical segments

The following table presents revenue and certain asset and expenditure information for the Group’s geographical segments for the years ended 31 December 2006 and 2005.

Group Hong Kong and Mainland China Elsewhere Eliminations Consolidated 2006 2005 2006 2005 2006 2005 2006 2005 2006 2005 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 (Restated ) (Restated ) Segment revenue: Sales to external customers 6,409,365 5,378,419 503,029 285,705 69,086 96,530 — — 6,981,480 5,760,654

Other segment information: Segment assets 2,493,809 2,061,069 693,087 403,669 74,660 90,762 (160,140 ) (158,226 ) 3,101,416 2,397,274

Interests in associates 10,652 9,568 Unallocated assets 488,033 259,523

Total assets 3,600,101 2,666,365

Capital expenditure 12,668 32,042 25,413 20,160 2,214 4,268 — — 40,295 56,470

5. Profit before tax

The Group’s profit before tax is arrived at after charging/(crediting):

2006 2005 HK$’000 HK$’000

Cost of inventories sold 6,009,547 5,014,822 Write-down of inventories to net realisable value 16,290 1,974 Depreciation 41,807 37,675 Minimum lease payments under operating leases for leasehold land and buildings 139,376 127,360 Interest income (28,783) (12,284) Dividend income from listed investments (8,193) (5,656) Dividend income from unlisted investments (604) (810) Gain on disposal of an owner-occupied property# — (11,429) Gain on disposal of an investment property# — (1,502) Gain on disposal of available-for-sale investments# — (15,765) Gain on disposal of investments at fair value through profit or loss (1,852) (1,130) Net loss on disposal of derivative financial instruments∆ 22,084 — Net fair value gains on investment properties# (14,600) (8,400) Net fair value losses/(gains) on investments at fair value through profit or loss# (400) 16 Net fair value gains on derivative financial instruments - transactions not qualifying as hedges# (1,890) —

# These balances are included in “Other gains, net” on the face of the consolidated profit and loss account.

∆ The net loss on disposal of derivative financial instruments has included the net loss on disposal of bullion contracts of HK$23,549,000, which is included in “Cost of sales” on the face of the consolidated profit and loss account.

— 7 — 6. Tax

Hong Kong profits tax has been provided at the rate of 17.5% (2005: 17.5%) on the estimated assessable profits arising in Hong Kong during the year. Taxes on profits assessable elsewhere have been calculated at the rates of tax prevailing in the jurisdictions in which the Group operates, based on existing legislation, interpretations and practices in respect thereof. Group 2006 2005 HK$’000 HK$’000 Group: Current - Hong Kong Charge for the year 49,576 25,234 Overprovision in prior years (736) (465) Current - Elsewhere 10,096 2,998 Deferred 2,459 (1,097)

Total tax charge for the year 61,395 26,670

7. Dividends 2006 2005 HK$’000 HK$’000 Interim - HK7.0 cents (2005: HK5.0 cents) per ordinary share 42,134 30,096 Proposed final - HK16.0 cents (2005: HK12.0 cents) per ordinary share 96,307 72,230

138,441 102,326

The proposed final dividend for the year is subject to the approval of the Company’s shareholders at the forthcoming annual general meeting.

8. Earnings per share attributable to shareholders of the Company

The calculation of basic earnings per share is based on the profit for the year attributable to shareholders of the Company of HK$296,838,000 (2005: HK$187,330,000), and the weighted average number of 601,920,000 (2005: 601,920,000) ordinary shares in issue during the year.

Diluted earnings per share for the years ended 31 December 2006 and 2005 have not been presented as no diluting events existed during these years.

9. Accounts receivable from securities clients/Accounts receivable

Jewellery retail The Group’s sales are normally made on cash basis. Credit card receivables from financial institutions in respect of retail sales are aged within one month. There are wholesale customers who have been given credit periods ranging from 15 to 45 days.

Wholesale of diamonds The Group normally grants credit periods of up to 60 days to its trade customers.

Wholesale of precious metals The Group’s precious metals wholesale is normally conducted on cash basis.

— 8 — Securities and commodities broking Securities deals are settled two days after the trade date, and commodities deals are normally settled on cash basis. Group 2006 2005 HK$’000 HK$’000

Trade and credit card receivables 102,028 59,227 Trade receivables from futures clearing house 11,730 9,326

Accounts receivable 113,758 68,553 Accounts receivable from securities clients 241,659 103,353

355,417 171,906

An aged analysis of the accounts receivable from securities clients and accounts receivable as at the balance sheet date, based on the invoice date, is as follows:

Group 2006 2005 HK$’000 HK$’000

Current to 30 days 252,152 93,318 31 to 60 days 13,920 8,945 Over 60 days 16,225 12,612

282,297 114,875 Margin clients accounts receivable* 73,120 57,031

355,417 171,906

Apart from the accounts receivable balance arising from the ordinary course of business of dealing in securities, the remaining balances are non-interest-bearing.

* The margin clients accounts receivable are secured by the underlying pledged securities, are repayable on demand and bear interest at commercial rates. No aged analysis is disclosed as, in the opinion of the directors, an aged analysis is not relevant in view of the nature of the business of securities margin financing.

10. Accounts payable to securities clients/Accounts payable

Group 2006 2005 HK$’000 HK$’000

Trade payables 112,606 47,643 Trade payables to securities clearing house 5,125 6,940

Accounts payable 117,731 54,583 Accounts payable to securities clients 504,669 210,417

622,400 265,000

— 9 — An aged analysis of the accounts payable to securities clients and accounts payable as at the balance sheet date, based on the invoice date, is as follows:

Group 2006 2005 HK$’000 HK$’000

Current to 30 days 99,152 48,327 31 to 60 days 14,933 6,197 Over 60 days 3,646 59

117,731 54,583 Cash clients accounts payable# 491,415 203,200 Margin clients accounts payable* 13,254 7,217

622,400 265,000

# Included in the cash clients accounts payable arising from the ordinary course of business of dealing in securities was an amount of approximately HK$343,581,000 (2005: HK$177,336,000) representing those clients’ undrawn monies/excess deposits placed with the Group. As at 31 December 2006, the cash clients accounts payable included an amount of HK$2,896,000 (2005: HK$5,371,000) in respect of securities transactions undertaken for the accounts of certain directors. The balances are repayable on demand and bear interest at commercial rates. No aged analysis is disclosed as, in the opinion of the directors, an aged analysis is not meaningful in view of the nature of the business of dealing in securities.

* The margin clients accounts payable are repayable on demand and bear interest at commercial rates. No aged analysis is disclosed as, in the opinion of the directors, an aged analysis is not relevant in view of the nature of the business of securities margin financing.

11. Comparative amounts

During the year, the Group considered it more appropriate to reclassify certain expenses and segment information in order to better reflect the underlying nature and allow a more appropriate presentation of the Group’s results. The principal changes consist of the reclassifications of certain sale-related expenses from administrative expenses to selling and distribution costs; and the fair values of non-current listed equity investments from the business segment “Other business” and the geographical segment “Hong Kong and Macau” to unallocated assets. Accordingly, the relevant comparative amounts of selling and distribution costs and administrative expenses on the face of the consolidated profit and loss account and segment information as set out in note 4 to the financial statements have been reclassified to conform with the current year’s presentation.

MANAGEMENT DISCUSSION AND ANALYSIS

The Group’s Results

In 2006 Chow Sang Sang Group achieved a total turnover of HK$6,981 million, increasing 21% over 2005. Profit attributable to shareholders went up 58% to HK$297 million. Earnings per share increased to HK49.3 cents from HK31.1 cents in 2005.

The impetus for the upswing came from the Group’s jewellery business, which benefited from both strong sales of gem-set jewellery and trading-in of gold. Contribution from stock and future broking made significant progress, and wholesale of precious metals also brought higher earnings.

Overview

The Group is engaged in three businesses: jewellery retail in Hong Kong, Mainland China, and Macau (“Greater China”); wholesale of precious metals and brokerage of stock and futures in Hong Kong.

Chow Sang Sang Jewellery Company Limited together with some of its fellow subsidiaries operate, at the end of 2006, 86 jewellery shops under the name “Chow Sang Sang” in the mainland, and 34 shops in Hong Kong. They also operate 8 jewellery shops under the name “Emphasis Jewellery” in Hong

— 10 — Kong, one in Macau and 20 in Taiwan. Chow Sang Sang also owns and manages the jewellery shop “Midtown Jewelry” in Hong Kong Disneyland.

The retail network in China now covers some 40 cities. It consists entirely of shops owned and operated by the Group. In order to afford better and more effective brand management, the Group has made it a policy not to issue franchises or licences.

The shops are managed through four regional centres located at Qingdao, Shanghai, , and Xian, with area offices in Beijing and as well. Manufacturing is done mainly in owned facilities in Qingdao, Shunde and Hong Kong and bolstered by other suppliers in China and Hong Kong with finished goods or items made to custom design and specification.

Besides jewellery designed in-house, the Group offers customers a wide selection of international brands, such as Stefan Hafner, The Love Diamond, Elara, DTC Forevermark and Marco Bicego. Teams of merchandisers regularly visit Europe and Japan to search the market for new additions.

Selected shops in Hong Kong and China carry Rolex and Tudor watches as official agents. The Group is licensed by the respective owners of intellectual properties such as Disney and Hello Kitty to use them for design and marketing in territories in Greater China.

Since 2005 Chow Sang Sang has been one of 93 worldwide “Sightholders” of the Diamond Trading Company in London, from whom it buys rough diamonds directly. Rough diamonds bought from that company and other sources are polished by contractors in Mainland China. The purpose of buying rough diamonds is to add a channel to the Group’s supply of polished diamond that it needs in its jewellery manufacturing. The Group does not intend to develop a diamond polishing and wholesale business per se.

World Commercial Sales Company Limited is engaged in the wholesale of gold, platinum and palladium in Hong Kong, its clients being downstream users of the metals. The business, operating under a policy of minimising risks by taking little or no positions on the metals and extending no credits, is high in turnover but low on margin. It is a valuable facility to the jewellery business which is of course a large user of the metals.

Chow Sang Sang Securities Limited and Chow Sang Sang Futures Limited together maintain 8 offices in Hong Kong as well as internet trading platforms for stocks and futures. The companies aim at a small niche market of retail clients, providing professional personalised service while leveraging on the Group’s branding and network. To this end, management puts due emphasis on control, risk management and technology.

Jewellery Retail

Of the Group’s total turnover, 40% came from retail of jewellery as compared to 41% in 2005. Turnover rose 17% to HK$2,785 million, and operating profits increased 75% to HK$303 million.

Hong Kong & Macau

Shops in Hong Kong and Macau accounted for 80% of the jewellery turnover. Turnover was HK$2,214 million, 11% over that of 2005.

In 2006, a new shop was opened at Shatin Centre and the one at New Town Plaza Shatin was relocated within the mall. The opening of the shop at Skyplaza, Terminal 2 of the Hong Kong International Airport, was delayed and took place in the first quarter of 2007. Emphasis Jewellery opened a new shop at Taikoo Shing in March and one at Telford Plaza in November. During the year, one Chow Sang Sang shop was closed upon the expiration of its lease.

The price of gold went on a continuous climb from December 2005 until May 2006, at which time it took a plunge from the peak. Regaining some ground it remained volatile at relatively high levels to the end of the year. As detailed in the Group’s Interim Report 2006, during the first half of the year gross profit shot up thanks to better margins and to gains on the recycling of gold sold back by customers. As was expected, selling by customers abated as the price of gold went off peak, but both inflow and outflow remained brisk throughout the year, the latter being fuelled by demand for bridal ornaments. — 11 — Third quarter 2006 was unremarkable, but thanks to the surging economy in Hong Kong and the stream of shoppers from the mainland, performance in the last quarter was so strong turnover registered an increase of 24% over 2005. Benefiting from a HK$18 million advertising campaign launched in August, sales of diamonds, branded and non-branded, were gratifying, having gone up 23% year on year. At the same time, sales of jewellery priced HK$100,000 and up increased 28%.

Emphasis Jewellery is positioned as a boutique of jewellery in eclectic styles, with focus on character and exclusivity. Turnover of the Emphasis Jewellery shops increased 39% from 2005. Although Emphasis Jewellery contributes relatively small profits it is making satisfactory progress as it fulfils its mission as a “trend-setter”. Its shop in Central was cited in the volume Cool Shops Hong Kong, and its poster advertisements won gold and silver in the 2006 annual poster awards organised by the MTR.

Both Emphasis Jewellery and Chow Sang Sang had one sales representative each named by Diamond Trading Company as Forevermark Service Ambassadors of the Year, with the one from Emphasis Jewellery taking the top honour as champion. The company had invited the Ambassadors to visit their facilities in England.

The main items of expenditure remained shop rentals and personnel emoluments. Renewal of leases during the year saw increases averaging 16%. Basic salaries were modestly adjusted up 2% at the beginning of the year but strong turnover over the entire year drove up profit-based bonus awards. Overall, personnel emoluments increased 12% over 2005.

Capital expenditure for the year was mostly incurred in opening of new shops and renovation of existing ones. The total amount was HK$11 million.

Mainland China

The turnover in China advanced 76% to HK$502 million, contributing 18% of the total jewellery retail, up from the 12% in 2005.

Major contributors of gross profit were the shops in Beijing, Shanghai, Guangzhou and Xian. However, other cities such as Fuzhou and Jinan also boasted individual shops whose gross profits reached “championship level” during the year.

In 2006, 25 new shops were opened, bringing the total to 86. Shops were opened for the first time in the cities Tianjin, Hefei, Chengdu, Kunshan, Kunming, Xuzhou, Guiyang and Ningbo.

The pleasing growth, we believe, can be attributed to several factors: our frontline staff have matured as our training efforts bore fruit; we have enhanced our recognition in the mainland as the network grows; and our sales, marketing and product teams have been tuned to work together effectively.

Capital expenditure in the year amounted to HK$25 million, the bulk of which went to the opening of new shops.

Taiwan

Turnover of Emphasis Jewellery in Taiwan decreased by 28% to HK$69 million, accounting for 2% of the total (2005: 4%).

Our loss in Taiwan widened as the retail sector continued to be impacted by political turmoil and cutthroat competition. We are redoubling our efforts in changing the product mix and consolidating the store network.

Wholesale of Precious Metals

As the prices of gold and platinum hovered at high levels, turnover rose 38% to HK$4,041 million, bring in operating profit of HK$9 million, being a 30% increase over 2005.

Profit margin tends to be low and vary widely according to demand and supply. World Commercial Sales Company Limited, our wholesale arm, enjoys felicitous relationships with several suppliers, especially one that is a major player in platinum, giving us an edge over our competition. — 12 — Securities and Futures Broking

The stock market in Hong Kong continued its buoyancy throughout the year, with the Hang Seng Index closing above 20,000 for the first time ever in December.

Riding on the active market, our transaction volume reached HK$22 billion, as compared to HK$12 billion in 2005. The growth is in line with the market and is better than the average performance of Group C brokers. Commission income and operating profit were HK$54 million (+72%) and HK$31 million (+147%) respectively.

During the year, financing to clients for 55 initial public offerings (“IPO”) subscriptions generated a net revenue of HK$4.5 million but at a shrunken percentage rate that reflected how competition from banks continue to erode our profitability. Our overall commission rate went down to 0.21% from last year’s 0.23%.

Investments

Properties

The Group holds properties mainly for its own use as office, jewellery shops and factory premises. Rental income from investment properties stood at HK$8 million, less than 1% of the Group’s overall turnover.

Shares in Hong Kong Exchanges and Clearing Limited

Shares in Hong Kong Exchanges and Clearing Limited (“HKEC”), received as distribution from the merger of the stock and futures exchanges in 2000, are being held by the Group as available-for-sale investments. As at 1 January 2006 and 31 December 2006, the Group held 4,953,500 shares of HKEC and the unrealised gain on the holding amounted to HK$421 million (2005: HK$159 million).

Finance

Financial Position and Liquidity

The Group centralises funding for all its operations through the corporate treasury based in Hong Kong, which is also given the management of the Group’s gold and foreign exchange holdings. This policy achieves better control of treasury operations and lower average cost of funds.

As at 31 December 2006, the Group had net cash and cash equivalents of HK$285 million, and total undrawn bank and other credit facilities of approximately HK$685 million. The Group generates strong recurring cashflow from its core jewellery business.

The Group’s policy is to obtain financing on an unsecured basis whenever possible. Total borrowings as at 31 December 2006 amounted to HK$127 million, which was unsecured and repayable in one year. The Group has a low gearing ratio of 5%, based on net debt of HK$127 million and shareholders’ equity of HK$2,558 million. As at 31 December 2006, the current ratio was 2.8, based on current assets of HK$2,645 million and current liabilities of HK$942 million. Most of the cash is deposited in the leading banks of Hong Kong in either HK dollar or US dollar.

Foreign Exchange Risk Management

The Group considers its foreign currency exposure insignificant. The Group has foreign currency exposure in Renminbi (“RMB”), New Taiwan dollars, Euro and Japanese Yen. Currency risks are managed by partly financing non-Hong Kong dollar assets with loans denominated in the relevant currency. As at 31 December 2006, total foreign currency borrowings excluding RMB borrowings amounted to approximately HK$7 million (2005: HK$5 million). RMB loans at year end amounted to RMB100 million (2005: RMB76 million) and are used for the operations in Mainland China.

Most of the Group’s assets and liabilities, revenues and payments are in HK dollar and US dollar.

— 13 — Charges on assets

The Company guarantees banking and other facilities granted to its subsidiaries. Some of the Group’s banking facilities are secured by certain items of properties with a net carrying value of HK$153 million (2005: HK$142 million), and listed equity investments of HK$298 million (2005: HK$87 million). As at 31 December 2006, the Group’s total bank loan and gold loan amounted to HK$127 million (2005: HK$98 million) and HK$118 million (2005: HK$116 million), respectively.

Human Resources

The Group employs 2,639 persons total in the territories it operates. During the year it phased in a unified system of sales awards based on gross profits and bonus schemes based on adjusted net profits. Allocation of the awards and bonuses is tied to performance appraisal. The entire system is geared to give incentive to employees to upgrade their productivity.

The Group continued to allocate considerable resources to training and development, especially to employees in Mainland China. In order to nurture frontline managers for the expanding network, mainland employees have been given numerous opportunities to engage in exchange with their Hong Kong counterparts.

Outlook

Although the stock market showed signs of overheat and has taken some retreats in the first quarter, the prospect is still positive as a significant number of IPO is said to be lined up for the year. The brokerage business is expected to continue its steady, if small by comparison, contribution to profits.

The strong jewellery sales of the 2006 Christmas season continued past the Chinese New Year, both in Hong Kong and in Mainland China. Indications are such that both economies will enjoy healthy expansion in 2007, thus providing growth opportunities to our jewellery business.

In Hong Kong, our shop at 628 Nathan Road is due to be expanded in the second half to approximately two times its present area, allowing us to provide an unprecedented shopping experience to mainland visitors. A store at Elements, a mall that is uniquely a part of a vast complex of offices, 5 and 6-star hotels and residential towers situated on top of a huge transport hub in , will offer customers upmarket jewellery in luxurious ambience. An Emphasis Jewellery shop will open at Queensway Plaza in the second quarter.

In Mainland China, at the end of the first quarter of 2007 the number of shops stands at 90 and it will pass 100 in the middle of the year. Shops will be set up for the first time in cities such as Urumqi and Lanzhou, and more will be opened alongside existing one in cities such as Chongqing, Wuhan, Harbin, Fuzhou and Beijing.

In order to increase profitability and to enhance our brand image, we have launched a major effort to increase the ratio of designs developed and produced in-house while continuing to source proprietary and exclusive designs from other manufacturers.

As our network in Mainland China expands, our supply chain management is put to the test at the same time as our investments in infrastructure and advertising achieve higher efficiency. At our production centres we are building up capacity as well as technical capability. We are constantly honing our logistical procedures in order to shorten lead times without impinging on system robustness or security.

In order to meet the demands of the expanding retail network, the intranet system for shop management will receive a major hardware upgrade aimed at providing faster response and higher capacity. At the same time, soft- and hardware upgrades on the human resource management system will be implemented so as to extend its application Group wide.

Our retail strategy is, simply put, to reach the hearts of our customers by the sincerity and geniality of our staff, and the excellence and quality of our jewellery.

— 14 — DIVIDENDS

The Directors have recommended the payment of a final dividend of HK16.0 cents (2005: HK12.0 cents) per ordinary share to shareholders whose names appear on the register of members of the Company on 16 May 2007. The final dividend will be paid on 5 June 2007 following approval thereof at the forthcoming Annual General Meeting to be held on 16 May 2007. Together with the interim dividend of HK7.0 cents (2005: HK5.0 cents) per ordinary share paid by the Company, the total dividend per ordinary share for the year will be HK23.0 cents (2005: HK17.0 cents).

CLOSURE OF REGISTER

The register of members of the Company will be closed from Monday, 14 May 2007 to Wednesday, 16 May 2007, both days inclusive, during such period no transfer of shares will be registered. To ensure the entitlement to the final dividend, shareholders are reminded to lodge their transfer documents accompanied by the relevant share certificates with the Company’s branch share registrars, Tengis Limited at 26/F Tesbury Centre, 28 Queen’s Road East, Hong Kong, not later than 4:00 p.m. on Friday, 11 May 2007.

PURCHASE, REDEMPTION OR SALE OF LISTED SECURITIES OF THE COMPANY

Neither the Company, nor any of its subsidiaries, purchased, redeemed or sold any of the Company’s listed securities during the year.

CORPORATE GOVERNANCE

The Company has complied with the Code on Corporate Governance Practices as set out in Appendix 14 of the Rules Governing the Listing of Securities (the “Listing Rules”) on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) throughout the year ended 31 December 2006.

REVIEW OF FINANCIAL STATEMENTS

The Audit Committee has reviewed the Group’s consolidated financial statements for the year ended 31 December 2006, including the accounting principles and practices adopted by the Group, in conjunction with the Company external auditors. The financial information set out in the preliminary announcement represents an extract from these consolidated financial statements and have been reviewed by the Company’s auditors, Ernst and Young.

MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) as set out in Appendix 10 of the Listing Rules as the Company’s code of conduct regarding Directors’ securities transactions. Upon specific enquiries, all Directors confirmed their compliance with the required standard as set out in the Model Code throughout the year ended 31 December 2006.

PUBLICATION OF INFORMATION ON THE EXCHANGE’S WEBSITE

The annual report of the Company, which will contain all the information required by the Listing Rules, will be published on the website of the Stock Exchange (www.hkex.com.hk) and the Company (www.chowsangsang.com) in due course. Printed copies will be sent to shareholders on or about 20 April 2007.

ANNUAL GENERAL MEETING

The annual general meeting of the Company will be held at 4/F Chow Sang Sang Building, 229 Nathan Road, Kowloon, Hong Kong on Wednesday, 16 May 2007 at 2:30 p.m. Notice of the annual general meeting will be published and issued in due course.

— 15 — BOARD OF DIRECTORS

As at the date of this announcement, the executive directors of the Company are Dr. CHOW Kwen Lim, Mr. Vincent CHOW Wing Shing, Dr. Gerald CHOW King Sing and Mr. Winston CHOW Wun Sing; the non-executive directors are Mr. CHOW Kwen Ling, Mr. Stephen TING Leung Huel and Mr. CHUNG Pui Lam; and the independent non-executive directors are Dr. CHAN Bing Fun, Mr. LEE Ka Lun and Mr. LO King Man.

By Order of the Board Chow Kwen Lim Chairman

Hong Kong, 28 March 2007

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

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