For Immediate Release Press Release

China Resources Enterprise To Increase Stakes in CR Vanguard and Suguo

[, 5 December, 2004] Resources Enterprise, Limited (or ‘The Company’) (HKEx Stock Code: 0291) today announced that it had entered into an acquisition agreement with (Holdings) Company Limited (or ‘CR Holdings’) and China Resources Co., Ltd on 3 December, 2004 for the effective acquisition of 35% interests in business (or ‘CR Vanguard’) and an 11.5% interest in Suguo Co., Ltd (or ’Suguo’). Total consideration of about HK$660.3 million, which represents the aggregate investment costs of China Resources Company Group’s interests in CR Vanguard and Suguo to be acquired, will be satisfied by the issuance of 57,971,905 new shares in the Company to CR Holdings. Upon completion of the acquisition, CR Vanguard will be wholly owned by the Company while Suguo will be 85% owned by the Company, with the remaining 15% being owned by Foodstuffs Co., Ltd.

Compared with the aggregate combined net asset value of CR Vanguard and Suguo as at 30 September, 2004, adjusted for the subsequent increases in the registered share capital of CR Vanguard, as attributable to the interests to be acquired of approximately RMB387.4 million, the consideration represents a premium of about 81.3%. With reference to the aggregate combined turnover of CR Vanguard and Suguo for the year ended 31 December, 2003 as attributable to the interests to be acquired of approximately RMB1,716.9 million, the consideration represents a price to sales multiple of about 0.41.

The issue price of the new shares at HK$11.39 per share, being the average closing price of the shares as at the date of the acquisition agreement and the four trading days immediately preceding the date of the acquisition agreement, represents approximately a 1.0% discount to the closing share price as at 3 December, 2004. The shares being issued represent approximately 2.7% of the issued share capital of the Company as at 3 December, 2004, or of the enlarged share capital of the Company immediately following the issuance of the new shares.

The Company’s Chairman Mr. Frank Ning remarked, “The further consolidation of our stakes in CR Vanguard and Suguo will enable us to maximize the synergies derived from centralized management, with further cut in administrative expenses, stronger bargaining power over suppliers as well as supply chain and distribution network being utilized to their full potential. We strongly believe that by streamlining the group structure of the two retailing platforms that have spearheaded the robust growth of the Company will ultimately lead to better profitability and growth prospect in the long run. With the China Resources Enterprise, Limited 39/F China Resources Building, 26 Harbour Road, Wanchai, Hong Kong

Tel: (852) 2827 1028 Fax: (852) 2598 8453 Website: www.cre.com.hk A Hong Kong Listed Member of CR Holdings

strong backup from our parent company towards the retail-led distribution strategy, we have full confidence in a promising future of our retailing business.”

Completion of the acquisition is conditional upon the passing of a resolution at an EGM by the independent shareholders and approval from relevant PRC regulatory authorities. Upon such approval, the Company will be among the first batch of retailers to benefit from the liberalization of the mainland retailing market under the WTO.

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About China Resources Enterprise, Limited

China Resources Enterprise, Limited is listed on the Hong Kong Stock Exchange and is also traded on SEAQ International of the London Stock Exchange. It is also one of the constituent stocks of the Hang Seng Index in Hong Kong and Hang Seng London Reference Index. The Group has a well-diversified portfolio of businesses in both Hong Kong and the Chinese Mainland, with principal activities being retail, beverage, food processing and distribution, textile and petroleum distribution.

For further information, please contact: Mr. Francis Kwong Executive Director China Resources Enterprise, Limited Tel: +852 2829 9816 Fax: +852 2598 8453 Email: [email protected]

For detail information, please refer to Hong Kong Economic Journal, The Standard or the corporate web site at www.cre.com.hk or irasia’s website at www.irasia.com/listco/hk/chinaresources on 6 December, 2004.

China Resources Enterprise, Limited 39/F China Resources Building, 26 Harbour Road, Wanchai, Hong Kong

Tel: (852) 2827 1028 Fax: (852) 2598 8453 Website: www.cre.com.hk A Hong Kong Listed Member of CR Holdings