For Immediate Release

(Hong Kong, 28 June 1999) Shui On Construction and Materials Limited ("SOCAM") announced that for the year ended 31 March 1999, profit attributable to shareholders rose to HK$408 million, an increase of 30% over that of the 1997/98 financial year. This represented earnings per share of HK$1.57, an increase of 30% over the previous year. Turnover amounted to HK$5,376 million, 14% higher than the year before.

The Directors recommended the payment of a final dividend of HK$1.00 per share to shareholders. This together with the interim dividend of HK$0.40 per share gives a total of HK$1.40 per share for the 1998/99 financial year.

Mr Vincent Hong Sui Lo, Chairman of SOCAM, attributed the Group's highly satisfactory results to the company's focus on its core businesses, commitment to improving its capabilities with innovative construction methods, and the hard work and dedication of its experienced management team and staff.

"Our efforts were directed only at those markets, industries and products in which we could excel. Our people's commitment to providing customers with products and services of the highest quality, reliability and value for money, and their willingness to adopt innovative production and construction techniques, had continued to contribute to the success of SOCAM in the past year. Our profit margins continued to improve through effective cost control and good project management."

Turnover for the Construction Division of the Group remained high as a result of the acceleration of public housing programmes. During the year the Division completed, or was in the final stage of progress, five contracts representing a total of 6,780 public housing units. The construction work of the Tseung Kwan O Private Sector Participation Scheme (PSPS) development, which was won by the Group in July 1998, made good progress since the commencement of works and is two months ahead of schedule.

The Division's continued commitment to safety management enabled it to win in the past year the Hong Kong Housing Authority's prestigious "Best Building Works Contractor" Award for the 7th consecutive year, the "Safety Training" Award for the 5th consecutive year, as well as nine other "Best Building Works Site" Awards. Two of the Division's sites also won the "Considerate Contractors Site" Awards from the Works Bureau.

Since 1 April 1998, the Construction Division has been awarded eight public housing contracts, the total value of which amounted to HK$7.8 billion, representing 11,200 units upon completion.

At 31 May 1999, the Construction Division's contracts on hand and outstanding works totalled approximately HK$14.3 billion and HK$9.2 billion respectively, substantially higher than the HK$9.3 billion and HK$6.9 billion recorded on 31 May 1998.

The Construction Materials Division also recorded a steady performance during the year. Massive public housing programmes and infrastructure works enabled Ken On Concrete to maintain a high level of activities. The trading volume of bulk and bagged cement also remained stable.

The Division's cement joint venture in Chongqing has been operating smoothly and profitably, with demand often outweighing supply during the year. A second new rotary kiln is now under construction and is expected to boost the total production capacity of the operation to one million tonnes per annum upon completion.

Looking ahead, SOCAM anticipates strong profit growth in the coming year, and the high dividend policy is expected to be maintained, barring unforeseen circumstances.

"The Hong Kong SAR Government has repeatedly stated that it will continue its efforts to provide sufficient public housing to meet the strong demand of the growing population in Hong Kong. As a leading contractor of public housing, our Construction Division can expect further growth in the foreseeable future. We will also continue to actively tender for PSPS contracts, as well as competing for major contracts of the Architectural Services Department and those from major institutions," said Mr Lo.

"The Hong Kong SAR Government's infrastructure projects as well as its public housing programme are expected to generate steady demand for construction materials. There is also likely to be a rising demand for high quality cement in the Chinese Mainland in the years ahead with its housing reforms and massive infrastructure development. Longer term prospects for our Chinese Mainland operations are highly promising," Mr Lo concluded.

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, the United States, Beijing, Guangzhou and, in particular, Shanghai where it has a land bank of 3.5 million square metres of buildable space in very centrally located sites.

The full text of this release/ announcement/ report can be accessed through the Internet at:
http://www.shuion.com and http://www.irasia.com/listco/hk/shuion

Media Enquiries:

Ronny Pang	2879 1860
Corporate Communications Department Shui On Construction and Materials Limited

• The Construction Division achieved strong profit growth due to improved profit margin from contracts and effective cost control.

• Construction works of the Private Sector Participation Scheme project in Tseung Kwan O, awarded in July 1998, was progressing ahead of schedule.

• Construction contracts secured during the year reached a record level of HK$8.6 billion. The gross and outstanding values of construction contracts on hand at 31 May 1999 maintained at high levels of HK$14.3 billion and HK$9.2 billion respectively.

• Demand for concrete, aggregates and cement of the Construction Materials Division remained stable amid an increasingly competitive market environment with declining prices.

Prospects

• Strong profit growth is expected for the coming year with the current dividend policy maintained, barring unforeseen circumstances.

• The Construction Division is well poised to capitalise on the increase in construction activity in the public sector in Hong Kong.

• With increased housing construction and infrastructural works in Hong Kong and the Chinese Mainland, steady demand for the Group's construction materials is expected to be maintained.

• The second 300,000-tonne rotary kiln at the cement plant in Chongqing, when completed towards end of this year, will increase the annual production capacity to one million tonnes and contribute to the Group's future profitability growth.