FINANCIAL HIGHLIGHTS Six months ended 30th June, 1999 Turnover amounted to HK$625,997,000 Profit attributable to shareholders reached HK$118,110,000 Earnings per share were HK$0.12 An interim dividend of HK3 cents per share was declared

MARKET OVERVIEW

• In the first half of 1999, Guangzhou City recorded a 12% economic growth rate, the highest amongst major cities in China;

• Secondary property market has attained marked increases in transaction area and transaction value as compared to corresponding period last year;

• Guangzhou Municipal Government has tightened the land supply through public tenders and auctions;

• Approved pre-sale areas of commodity properties which reflected the market supply, recorded a decrease of 43.27% during the first half of 1999 over the same period last year;

• Pre-sale floor areas and transaction value of commodity properties in Guangzhou City slightly decreased by 7.75% and 7.55% respectively in the first six months of 1999. The main reason for the decrease can be attributed to the contraction of institutional buyers as compared to the same period last year; however, buying forces of individual purchasers continued to grow steadily.

SALES PERFORMANCE AND PROJECT PROGRESSES

• During the period under review, the Group achieved property sales of approximately RMB 608,000,000, representing approximately 120,000 sq.m., or approximately 1,160 residential units;

• The Group completed gross floor areas ("GFA") of 134,000 sq. m. and had another 881,000 sq.m. under construction which will be ready for occupancy in the second half of 1999 or in the year 2000;

• Gallopade Park Phase 1: 12 mid-rise blocks in occupancy in February 1999; Fairview Garden Phase 1: 16 mid-rise blocks in occupancy in August 1999;

• A total of other 13 high-rise blocks and 70 mid-rise blocks in Gallopade Park Phases 2 and 3, Fairview Garden Phase 2, Huajing New City Phases 6A and 6B, Grandview Place and Regal Court have already attained top-out stages;

• The Group has established itself as one of the largest and top-selling property developers in Guangzhou City.

PROSPECT

• 1999 will be a year of opportunities co-existing with challenges. The welfare housing policy will be replaced by monetary subsidy scheme after 1999;

• Government policies in regard to land supply are expected to better regulate the property market;

• The successive reduction in interest rates and the proactive mortgage policy should further stimulate the local housing demand;

• The Group will accelerate the project progresses, and is currently carrying out negotiations to replenish its land bank with quality sites;

• With a valuable and sizeable landbank, an established reputation in the Guangzhou property market, together with its focused and effective marketing strategies, the Group should be able to strengthen its dominant position in the marketplace and to achieve satisfactory returns.

INTERIM RESULTS

The Board of Directors of Hopson Development Holdings Limited (the "Company") is pleased to announce the unaudited consolidated results of the Company and its subsidiaries (collectively the "Group") for the six months ended 30th June, 1999 as set out below:

                                                     For the six months
                                                      ended 30th June,
                                                     1999          1998	
                                        Notes     HK$'000       HK$'000	
Turnover                                  1       625,997       621,843	
                                                 ========      ========
Profit before taxation                            246,010       223,884	
Taxation                                  2      (122,974)      (69,762)
                                                 --------      --------
Profit after taxation                             123,036       154,122	
Minority interests                                 (4,926)      (10,750)
                                                 --------      --------
Profit attributable to shareholders               118,110       143,372	
                                                 ========      ========
Earnings per share                        3				
   - Basic                                        HK$0.12       HK$0.18
   - Diluted                                      HK$0.12           N/A

Notes:

(1) Turnover

Turnover comprised (i) sale/pre-sale of properties under development for sale, which is recognised over the entire period of construction in respect of properties under development for sale, the pre-sale activities and construction work of which has progressed to a stage when the ultimate realisation of profit can be reasonably determined. Business taxes are levied at 5% of gross turnover and the turnover figure shown on the consolidated profit and loss account is presented net of business taxes. The total estimated profit is apportioned over the entire period of construction to reflect the progress of the development. On this basis, profit recognised on the pre-sold portion of the properties is calculated by reference to the proportion of construction costs incurred at the end of the period to the estimated total construction costs on completion with due allowance for contingencies. The profit so recognised is restricted to the amount of instalments received and (ii) sale of completed properties held for sale which is recognised upon completion of sale and purchase agreement. The profit recognised is restricted to the amount of instalments received.

(2) Taxation

Taxation comprised (i) provisions for Hong Kong profits tax at the rate of 16% (1998: 16%) and PRC enterprise income tax at 33% on the profits of companies within the Group for financial reporting purposes, adjusted for income and expenses items which are not assessable or deductible for taxation purposes; (ii) provisions for land appreciation tax at progressive rates ranging from 30% to 60% on the balance of the proceeds received on transfer of real properties after deducting certain deductible items; and (iii) provisions for deferred taxation, at the current tax rate, in respect of significant timing differences arising from the use of different bases of recognition of revenues and expenses for financial reporting and tax purposes.

(3) Earnings per share

The calculation of basic earnings per share is based on the unaudited consolidated profit attributable to shareholders for the six months ended 30th June, 1999 of HK$118,110,000 (six months ended 30th June, 1998: HK$143,372,000) and the weighted average of 1,000,000,000 shares (six months ended 30th June, 1998: 791,666,667 shares) in issue during the period.

The calculation of the diluted earnings per share was based on the unaudited consolidated profit attributable to shareholders for the six months ended 30th June, 1999 of approximately HK$118,110,000 and the diluted weighted average number of approximately 1,002,916,667 shares in issue during the period. It has been calculated after taking into account of outstanding share options as of 30th June, 1999. The effect of the dilutive potential ordinary shares resulting from the outstanding share options on the weighted average number of shares in issue during the period was 2,916,667 shares, which were deemed to be issued at no consideration if all outstanding share options had been exercised on the date the options were granted. The diluted earnings per share for the six months ended 30th June, 1998 were not shown as there were no share options being granted during the period.

(4) Comparative figures

Certain of the 1998 comparative figures have been reclassified to conform to the current period's presentation.

The Group's Sales Performance The breakdown of property sales for the period under review is as follows: Sales/ Contracted Sales Pre-sale GFA (RMB million) ('000 sq. m.) Gallopade Park 343 70 Fairview Garden 155 29 Huajing New City 103 20 Others 7 1 Total 608 120

INTERIM DIVIDEND

The Board of Directors has declared an interim dividend of HK3 cents per share for the six months ended 30th June, 1999 to be paid to shareholders whose names appear on the register of members of the Company at the close of business on 20th October, 1999. The relevant dividend warrants will be despatched to shareholders on 10th November, 1999.

CLOSURE OF REGISTER OF MEMBERS

The register of members of the Company will be closed from 13th October, 1999 to 20th October, 1999 both days inclusive, during which period no transfer of shares will be registered. In order to qualify for the interim dividend, all transfer documents accompanied by the relevant share certificates must be lodged with the Company's Hong Kong share registrars, Central Registration Hong Kong Limited, Shops 1712-1716, Hopewell Centre, 183 Queen's Road East, Hong Kong not later than 4:00 p.m. on 12th October, 1999.

AUDIT COMMITTEE

The Company has established an Audit Committee consisting of three independent non-executive directors of the Company. Its principal duties include the review and supervision of the Group's financial reporting process and internal controls.

YEAR 2000 COMPLIANCE

As reported in the 1998 Annual Report, the Group was progressing well in handling the Year 2000 issue. The compliance work has now been completed on schedule with all the accounting and other systems tested to be fully Y2K compliant in June 1999. Contingency plans covering critical systems have been established to minimise the impact of any potential disruption in the unlikely event of its occurance.

The total costs incurred on this project amounting to HK$299,958 are within the budget authorised by the Directors and are capitalised or charged to profit and loss account according to accounting policies adopted by the Group.

CODE OF BEST PRACTICE

None of the Directors is aware of any information which would reasonably indicate that the Company is not, or was not for any part of the six months ended 30th June, 1999, in compliance with the Code of Best Practice as set out in Appendix 14 of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited except that the independent Non-executive Directors were not appointed for a specific term. However, all Directors save the Chairman, Deputy Chairmen, and Managing Director are subject to retirement by rotation in accordance with the Bye-Laws of the Company.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

During the period under review, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities.

By Order of the Board
Chu Mang Yee
Chairman
20th September, 1999, Hong Kong

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