For the half year ended 30 June 2000, turnover of the Group amounted to HK$327,545,000 (1999: HK$291,962,000), representing a growth of 12.2% compared to the same period of last year. The unaudited consolidated interim profit attributable to shareholders amounted to HK$160,875,000 (1999: HK$10,757,000) which is 14 times increase over the same period of last year. Earnings per share were HK$6.25 cents (1999: HK$0.47 cents) which is 12.3 times increase over the same period of last year. Guangzhou Honda Automobile Co. Ltd., the core business of the Group, had produced 12,180 units of the Accord sedans, the sales of which had achieved a growth of 318.41% over the same period of last year. Sales of the Accord sedans amounted to 12,055 units, representing a growth of 319.89% over the same period of last year.

Whilst quality assurance is emphasized, Guangzhou Honda in the first half of this year has steadily raised the domestic component content level. The Accord sedans manufactured by Guangzhou Honda have been assessed and appraised by the Honda Motor's international accreditation team as top quality production amongst all Honda Motor's overseas factories. In February this year, Guangzhou Honda passed the State's inspection on its capacity to produce 30,000 sedans annually. Based on its two existing 2.3 VTi-E and 2-3 VTi-L products range, Guangzhou Honda launched the new environmental friendly sedans 2.0EXi in March this year. In April 2000, the Guangzhou Honda Accord sedans successfully passed the collision test and met both the State and international standards. Also the Guangzhou Honda Accord sedan has attained the low emission standard requirement upon examination by the relevant regulatory authority of the State. In June 2000, upon the stringent assessment by PRC's quality accreditation experts on automobiles, Guangzhou Honda was officially certified as having passed the ISO 9002 certification. The "four-in-one"franchisee shops network has a total of 40 shops covering all the provincial municipalities nation-vide, providing sale and after-sale services for Guangzhou Honda's customers. In June this year, the production and sales volume of Guangzhou Honda's sedans had been ranked as the top position amongst Honda Motor's factories in the Asia Pacific region. Guangzhou Honda's sedans market share in the PRC sedan market in 1999 was 1.75% and has increased to 4.27% in 2000. Also Guangzhou Honda has been in the leading position in mid to high-end sedan market in PRC. Guangzhou Honda's development has been on the right track.

Shareholders from both the Chinese and the Japanese side have unanimously approved the plan for the medium and long term development of Guangzhou Honda which aims at improving the work efficiency, ensuring product quality, increasing the products variety, expanding the scale of production and heightening its integration capability. All these will lead to a wider scope of development for Guangzhou Honda and to position itself to brace the challenge brought about by competition from overseas. In order to meet the strong market demand, investments on technological revamp will be speeded up on the basis that the normal production will not be affected, with a view to raising the annual production plan, striving to exceed the production target of 30,000 sedans this year and to laying the foundation for an even larger scale of production and sales for next year. In this respect, the Group will consider to raise funds from external sources at appropriate time in order to cope with the rapid growth of Guangzhou Honda and the Group's other auto manufacturing business. Whilst the Group is endeavoring to develop Guangzhou Honda and to restructure its other auto manufacturing business, efforts and plans are also being made to increase the sale services business and spare parts production business.

Denway Motors Limited
4th September 2000

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