The Board of Directors of Shun Cheong Holdings Limited (the "Company") are pleased to announce the unaudited consolidated results of the Company and its subsidiaries (together, the "Group") for the six months ended 30th September, 1998 as follows:

INTERIM RESULTS (UNAUDITED)

Notes:

(1) Turnover

Turnover comprises (i) the value of revenue certified under long-term installation contracts, (ii) the entire billings of maintenance work orders completed during the period, and (iii) the value of sales of goods in the normal course of business, and is recognised when the merchandise is delivered and the related title has passed to customers or services are rendered.

(2) Taxation

The Company is exempted from taxation in Bermuda until 2016. Hong Kong profits tax has been provided at the rate of 16% (1997: 16.5%) on the estimated assessable profit arising in or derived from Hong Kong. Deferred taxation is provided under the liability method in respect of material timing differences between profit as computed for taxation purposes and profit as stated in the financial statements, to the extent that it is probable that a liability will arise in the foreseeable future. Deferred tax assets are not recognised unless there is certainty that such assets will be realised in the foreseeable future.

Taxation charges comprised:

(3) Earnings per share

The calculation of earnings per share for the six months ended 30th September, 1998 is based on unaudited consolidated profit attributable to shareholders for the period of approximately HK$10,320,000 (1997: HK$10,139,000) and on the weighted average number of 325,041,600 (1997: 323,534,100) shares in issue during the period.

REVIEW OF OPERATION AND BUSINESS PROSPECT

For the six months ended 30th September, 1998, the Group's turnover was HK$237,555,000, a slightly reduction of 8.2% compared to that of the same period last year. However, the unaudited consolidated profit attributed to shareholders for this period was HK$10,320,000, a slightly increase of 1.8%.

As at 30th September, 1998, the Group's contracts on hand of which the aggregated uncompleted contract value is approximately HK$810 million, while that of as at 31st March, 1998 was approximately HK$452 million. The major contracts that have been entered by the Group since 1st April, 1998 are:

- Electrical Installation for proposed Residential Development at STTL 3446 in Area 108, Ma On Shan

- Electrical Rewiring and Reinforcement of Tai Yuen Estate and Kwong Fuk Estate

- Building Services Installation for Two Secondary Schools in Aldrich Bay Reclamation and Chai Wan Estate

- Electrical Installation for Construction of Homantin South Phase 4 at Homantin

- Building Services Installation for Redevelopment of Prison Complex at Tai Lam

- Electrical and HVAC Installation for Improvement Work to Government Dockyard at Stonecutter Islands

- Provision of Airconditioning to Existing Urban Council Indoor Game Hall Phase 4

- Security System Maintenance Term Contract for Housing Authority's Estates, Areas and Buildings

- Electrical Installation for Construction of Public Rental Housing and Home Ownership Scheme Development at Fortune Street Phase 1

- Electrical Installation for Construction of Public Rental Housing and Home Ownership Scheme Development at Fortune Street Phase 2 & 3

- HVAC, Fire Services and Water Pump Installation for Construction of Provisional Urban Council Chai Wan Complex at Chai Wan

The Asian Financial Crisis beginning in last July has extended to the other parts of the world. As a result, it is no longer a simply regional crisis, but one has global economic implication. In Hong Kong, the resulting steep decline in the property and stock market has already led to a contraction of assets values and severely dampened consumer spending. With the rapid depreciation of Asian currencies and the sharp decline on the operating cost in the region, Hong Kong has become one of the most expensive cities in the world in which to do business, and this has affected its competitiveness in attracting foreign capital. It is therefore expected that the domestic economy will be in a prolonged period of adjustment. However, this adjustment is inevitable and necessary to restore Hong Kong as the leading financial and trading center in the Asia Pacific region. Although the domestic economy may take some time to recover, the Government remains fully committed to its long-term policy of providing on average 50,000 units in public housing. Despite the recent contraction of private sector property developments, it is expected that opportunities will still be available, but there will be severe competition for the electrical and mechanical industry during the coming year. Nevertheless, the Group has plans to explore any potential opportunities in the region so as to reduce the impact of the downturn of the domestic economy. The Board remains confident that the Group will continue to perform profitably in the second half of 1998/99.

INTERIM DIVIDEND

In order to retain fund for the Group's working capital, the directors do not recommend the payment of an interim dividend (1997: Nil).

DIRECTORS' INTERESTS IN SHARES

As at 30th September, 1998, the following directors of the Company had or were deemed to have interests under the provisions of the Securities (Disclosure of Interests Ordinance (the "SDI Ordinance") in the Company or any associated corporations thereof (within the meaning of the SDI Ordinance) as recorded in the register kept by the Company pursuant to Section 29 of the SDI Ordinance.

(i) Interest in the Company

Notes:

a. Chinney Investments, Limited (a company listed on The Stock Exchange of Hong Kong Limited ("SEHK")) of which Chinney Holdings Limited has beneficial interest, held 82,840,000 shares of the Company. Mr. Wang Sai Wing, James is a director of and has beneficial interest in Chinney Holdings Limited.

b. New World Trading Limited, a company beneficially and wholly owned by Mr. Kwok Shun On, held 48,750,000 shares of the Company.

c. Yau Lee Investment Limited, a company wholly owned by, Yau Lee Holdings Limited, which is a company listed on the SEHK in which Mr. Wong Ip Kuen has beneficial interest, held 48,750,000 shares of the Company.

(ii) Interest in a subsidiary

Yau Lee Investment Limited (a company in which Mr. Wong Ip Kuen is indirectly interested, see also Note c above) held 1,000,000 non-voting deferred shares of $1 each in Shun Cheong Electrical Engineering Company Limited, a company wholly owned by the Company.

Save as disclosed above, the Company has no notice of any interests to be recorded under Section 29 of the SDI Ordinance as at 30th September, 1998.

Save as disclosed above, at no time during the period was the Company or any of its subsidiaries a party to any arrangements to enable any of the Company's directors or members of its management to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

DIRECTORS' INTERESTS IN CONTRACTS

Save as disclosed below, no contracts of significance in relation to the Group's business to which the Company or any of its subsidiaries was a party and in which any of the Company's directors or members of its management had a material interest, whether directly or indirectly. subsisted at the end of the period or any time during the period.

Particulars of significant transactions between the Group and related companies are summarised below:

a.

* Shun Cheong Electrical Products Factory Limited is a company in which Mr. Kwok Shun On and Ms. Kwok Lai Sheong, Melissa, directors of the Company, have indirect beneficial interest.

b. During the period, Yau Lee Construction Limited ("Yau Lee"), a company wholly owned by Yan Lee Investment Limited, a shareholder of the Company and a company in which Mr. Wong Ip Kuen, director of the Company, is indirectly interested, has sub-contracted certain parts of its building contracts to the Group. For the period ended 30th September, 1998, the amount of progress billing received and receivable from Yau Lee was approximately HK$40.4 million (1997: HK$16.8 million).

In the opinion of the directors of the Company, all the above transactions were undertaken in the normal course of business and were conducted on normal commercial terms on an arm's length basis.

SUBSTANTIAL SHAREHOLDERS

As at 30th September, 1998, the following persons (other than directors or chief executive of the Company) had or were deemed to have interests in the Company under the provision of the SDI Ordinance as recorded in the register kept by the Company under Section 16(1) of the SDI Ordinance.

Notes:

a. Details of the shareholdings in Chinney Investments, Limited, a company listed on the SEHK, are set out in Note a of the Section "Directors' interests in shares".

b. New World Trading Limited is a company beneficially and wholly owned by Mr. Kwok Shun On.

c. Yau Lee Investment Limited is a wholly owned subsidiary of Yau Lee Holdings Limited, a company listed on the SEHK. Accordingly, the interests of these two companies in the Company overlap. Details of the shareholdings in Yau Lee Holdings Limited are set out in Note c of the Section "Directors' interests in shares".

Save as disclosed above, the Company has no notice of any interests to be recorded under Section 16(l) of the SDI Ordinance as at 30th September, 1998.

CODE OF BEST PRACTICE

None of the directors is aware of information that would reasonably indicate that the Company is not, or was not for any part of the accounting period covered by the interim report, in the compliance with the Code of Best Practice, as set out in Appendix 14 of the Listing Rules of The Stock Exchange of Hong Kong Limited except that two independent non-executive directors are not appointed for a specific term as they are subject to retirement by rotation and re-election at Annual General Meetings in accordance with Bye-law 99(A).

THE YEAR 2000 ISSUE

The Group has adopted the definition of Year 2000 compliance as promulgated by the British Standard Institute which, in simple terms, means neither performance nor functionality is affected by dates prior to, during and after the year 2000.

The Group has completed assessments on both computer hardware and software to ensure Year 2000 compliance. Any modifications, replacement, hardware and software upgrades being led and supervised by a key management staff are already on schedule and to be completed by end March 1999.

The total estimated costs of the plan for Year 2000 compliance will be less than HK$1 million. The amount incurred upto 30th September, 1998 was immaterial and a HK$200,000 was committed as at 30th September, 1998 in respect of Year 2000 modification costs. The costs would be recorded either as assets and amortized or as operating expenses according to the Group's underlying accounting policies. It is expected that the modification costs do not have material effect on its financial position or results of operations.

The Group has also reduced its potential exposure to the Year 2000 problem relating to our business and operation by including wording for all our newly signed subcontract documents and purchase contracts to the effect that all equipment supplied and installed shall be Year 2000 compliance.

The Group believes Year 2000 issues has no significant impact on the Group's business operation.

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES

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

On behalf of the Board
James Sai Wing Wong
Chairman

Hong Kong, 1st December, 1998

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