(Hong Kong, 2 May 2001) Shui On Construction and Materials Limited ("SOCAM", stock code: 983) today announced its investment in Rui Hong Xin Cheng ("RHXC"), a quality domestic residential development project in Shanghai. This strategic move not only helps SOCAM immediately establish a substantial foothold in the property market in Shanghai, but also paves the way for the company to achieve its aim to become a leading developer of major development projects in the Chinese Mainland.

Rui Hong Xin Cheng was previously a joint venture project between Shui On Properties Ltd ("SOP", a privately owned business of SOCAM's Chairman Mr. Vincent H.S. Lo), which owned a 99% stake, and Shanghai Zhong Hong (Group) Company Limited. Construction of the project started in 1996 and was expected to be completed in 15 years. The remaining four residential blocks in the first phase of the project will continue to be developed by SOP, while subsequent phases will be developed by SOCAM. SOCAM plans to invest RMB1.4 billion in the second phase alone, which is currently intended for a site located on top of the Metro station scheduled to be completed by the end of 2003.

"With more than 16,000 residential units to be built over the next 10 years, RHXC will provide continuous growth for SOCAM in the future," said Mr. Vincent H.S. Lo, Chairman of SOCAM. "SOCAM is well positioned to expand into the property market in Shanghai as its sister company SOP has already built up an excellent reputation in this market over the past 16 years and RHXC has already established itself as a prestigious domestic housing development in Shanghai. Moreover, under the Shanghai municipal government's urban redevelopment scheme, RHXC now enjoys various benefits that help lower the development cost, which makes it an attractive investment for SOCAM. With SOCAM's solid experience in building large residential estates in Hong Kong and a rising property market in Shanghai, we are highly confident of RHXC's future success."

Located in the Hong Kou district in Pu Xi, RHXC is a 40-hectare residential development close to the Bund and the central business area. When the Metro station located on-site opens in late 2003, transportation will be even more convenient. The entire RHXC development comprises a total gross floor area of about 1.42 million square metres of high-rise residential buildings, 250,000 square metres of shopping mall and 50,000 square metres of amenities.

Mr. Lo added, "With the economy improving and welfare housing being abolished, we believe the demand for housing will continue to grow in Shanghai, especially in the middle to high-end market. Similar to people in Hong Kong, the people in Shanghai see owning their own flats crucial for improving their quality of life."

The first phase of RHXC, which remains under SOP, comprises 11 high-rise residential blocks and amenities on 42,000 square metres of land. Over 80% of the units in the seven blocks already completed have been sold or rented. All units come with quality finishing as well as modern kitchen and bathroom facilities. Flats range from 70 to 150 square metres in size, with an overall space efficiency of 80%. The average price of units sold to date is RMB 6,700 per square metre. Among the buyers and residents, 66% are managers or professionals, 78% had tertiary education or above, and 76% are aged under 40.

SOCAM plans to invest around RMB 1.4 billion in the second phase of the development, which will include an underground car park, shopping centre, clubhouse as well as residential blocks on a site area of about 52,000 square meters, with a gross building area of 230,000 square meters. The shopping centre will be directly linked to the Metro station scheduled to be completed by end of 2003.

To attain long-term growth, SOCAM has been proactively seeking suitable investment opportunities. In March 2001, the company launched AsiaMaterials.com, a business-to-business trading portal for building materials. With an electronic trading platform, an offline network of service centres which serve clients at strategic locations, and a wide range of horizontal services, it offers one-stop services for buyers and suppliers worldwide. AsiaMaterials.com will help SOCAM expand into the global construction materials market while RHXC will establish the company's presence in the Shanghai property market.

Shui On Construction and Materials Limited, a member of the Shui On Group, was listed on the Hong Kong Stock Exchange in 1997. Apart from SOCAM, the Shui On Group has a separate, non-listed property arm with investments in Hong Kong, Beijing, Guangzhou and Shanghai.