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ZHONG HUA INTERNATIONAL HOLDINGS LIMITED
(Incorporated in Bermuda with limited liability)

UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE, 2001

The Board of Directors (the "Directors") of Zhong Hua International Holdings Limited (the "Company") is pleased to announce that the unaudited consolidated results of the Company and its subsidiaries (collectively the "Group") for the six months ended 30 June, 2001 (the "Interim Results"), together with the comparative figures for the corresponding period in 2000 as follows:

                                         For the six months ended 30 June,
                                                      2001            2000
                                               (Unaudited)     (Unaudited)
                                  Note             HK$'000         HK$'000

TURNOVER                                           129,339          57,280
Cost of sales                                      (67,185)        (25,737)
                                              ------------    ------------
Gross profit                                        62,154          31,543
Other revenue                                       16,734             749
Selling and distribution costs                      (7,613)         (3,886)
Administrative expenses                            (16,273)        (15,023)
Other operating expenses                                 -             (95)
                                              ------------    ------------
PROFIT FROM OPERATING ACTIVITIES    3               55,002          13,288
Finance costs                       4               (1,315)             (8)
                                              ------------    ------------
PROFIT BEFORE TAX                                   53,687          13,280
Tax                                 5              (15,610)         (5,657)
                                              ------------    ------------
PROFIT BEFORE MINORITY INTERESTS                    38,077           7,623
Minority interests                                     (75)              3
                                              ------------    ------------
NET PROFIT FROM ORDINARY
  ACTIVITIES ATTRIBUTABLE TO
  SHAREHOLDERS                                      38,002           7,626
                                              ============    ============
Interim dividend per share                        0.2 cent        0.8 cent
                                              ============    ============
EARNINGS PER SHARE - BASIC          6           1.28 cents       0.26 cent
                                              ============    ============

Notes:

1. ACCOUNTING POLICIES

The unaudited interim financial statements are prepared in accordance with Hong Kong Statement of Standard Accounting Practice ("SSAP") 25 "Interim Financial Reporting" issued by the Hong Kong Society of Accountants except that the comparative amounts for the consolidated Cash Flow Statement have not been presented as the Company has taken advantage of the transitional provision set out in the Main Board Listing Rules of The Stock Exchange of Hong Kong Limited (the "Listing Rules"). The accounting policies and basis of preparation used in the preparation of the interim financial statements are the same as those used in the Group's audited financial statements for the year ended 31 December 2000, except in relation to SSAP 9 (revised) "Events after the Balance Sheet Date" and SSAP 30 "Business Combinations".

Following the adoption of SSAP 9 (revised), whereby dividends proposed after the balance sheet date should not be recognised as a liability at the balance sheet date, the final dividend proposed for the year ended 31 December 2000 of HK$7,152,000, classified as a current liability at 31 December 2000, has been reclassified and shown as the shareholders' equity. There is no impact on the profit and loss account as a result of this change.

The principal impact of adopting SSAP 30 is the disclosure of goodwill as an asset in the balance sheet and the amortisation of this goodwill over its estimated useful life to the profit and loss account.

2. SEGMENTAL INFORMATION

A analysis of the Group's turnover and contribution to profit before tax by operating activity is as follows:

                                                    Contribution to profit
                                     Turnover             before tax
                                For the six months    For the six months
                                   ended 30 June,        ended 30 June,
                                  2001        2000        2001        2000
	                   (Unaudited) (Unaudited) (Unaudited) (Unaudited)
                               HK$'000     HK$'000     HK$'000     HK$'000

By operating activity:
  Sale and pre-sale
    of properties              127,523      54,917      60,338      29,180
  Property investment            1,816       2,363       1,816       2,363
                              --------    --------    --------    --------
                               129,339      57,280      62,154      31,543
                              ========    ========
Other revenue:
  Sale and pre-sale
    of properties                                          530         738
  Property investment                                      452          11
  Investment holding                                    15,752           -
                                                      --------    --------
                                                        16,734         749
                                                      --------    --------
Expenses:
  Selling and distribution
    costs:
      Sale and pre-sale
        of properties                                   (7,613)     (3,886)
                                                      --------    --------
  Administrative expenses:
    Sale and pre-sale 
      of properties                                    (15,626)    (14,542)
    Property investment                                   (647)       (481)
                                                      --------    --------
                                                       (16,273)    (15,023)
                                                      --------    --------
  Other operating expenses:
    Sale and pre-sale 
      of properties                                          -         (95)
                                                      --------    --------
                                                             -         (95)
                                                      --------    --------
  Finance costs:
    Sale and pre-sale 
      of properties                                     (1,143)         (8)
    Property investment                                   (172)	         -
                                                      --------    --------
                                                        (1,315)         (8)
                                                      --------    --------
Profit before tax                                       53,687      13,280
                                                      ========    ========

The Group's turnover and contribution to profit before tax are principally derived from operations in Mainland China and accordingly, an analysis of such activities by geographical area of operations is not shown.

3. PROFIT FROM OPERATING ACTIVITIES

Profit from operating activities is arrived after charging/
(crediting) the following items:

                                         For the six months ended 30 June,
                                                      2001            2000
                                               (Unaudited)     (Unaudited)
                                                   HK$'000         HK$'000

Cost of inventories sold                            67,185          25,737
Depreciation                                         1,558             910
Interest income                                        (31)           (274)
Gain on disposal of subsidiaries                   (15,752)              -
                                              ============    ============

4. FINANCE COSTS

                                         For the six months ended 30 June,
                                                      2001            2000
                                               (Unaudited)     (Unaudited)
                                                   HK$'000         HK$'000

Interest expenses on bank loans wholly
  repayable within five years                        5,815           6,401
Less: Interest capitalised                          (4,500)         (6,393)
                                              ------------    ------------
                                                     1,315               8
                                              ============    ============

5. TAX

                                         For the six months ended 30 June,
                                                      2001            2000
                                               (Unaudited)     (Unaudited)
                                                   HK$'000         HK$'000

The Company and its subsidiaries in
  Mainland China, other than Hong Kong              15,610           5,657
                                              ============    ============

Mainland China tax has been calculated on the taxable income of subsidiaries operating in Mainland China at the applicable rates. No provision for deferred tax has been made as the Directors consider that a liability is not expected to crystallise in the foreseeable future.

6. EARNINGS PER SHARE

The calculation of basic earnings per share is based on the net profit attributable to shareholders of HK$38,002,000 (2000: HK$7,626,000) and the weighted average number of 2,980,016,725 shares (2000: 2,980,016,725 shares) in issue during the period under review. The weighted average number of shares outstanding for the six months ended 30 June 2001 and 2000 has been retrospectively adjusted for the effect of the subdivision of shares with effect from 9 August 2001. Diluted earnings per share for the six months ended 30 June 2001 and 2000 has not been calculated as no diluting events existed during these period.

INTERIM DIVIDEND

The Directors have resolved to declare an interim dividend of HK0.2 cent per share for the six months ended 30 June 2001 (after subdivision of shares on 9 August 2001) to the shareholders whose names appear on the Register of Members of the Company on Wednesday, 21 November 2001.

CLOSURE OF REGISTER OF MEMBERS

The register of the members of the Company will be temporarily closed from Tuesday, 20 November 2001 to Wednesday, 21 November 2001, both days inclusive, during which period no transfer of shares can be effected. In order to qualify for the interim dividend, all completed transfer forms, accompanied by the relevant share certificates, must be lodged with the Company's share registrar in Hong Kong. Tengis Limited at 4/F, Hutchison House, 10 Harcourt Road, Central, Hong Kong for registrartion not later than 4:00 p.m. on Monday, 19 November 2001.

REVIEW OF RESULTS

The Directors are pleased to report that the Group recorded a turnover of HK$129,339,000, net profit from ordinary activities attributable to shareholders of HK$38,002,000, and basic earnings per share of HK$0.0128 for the six months ended 30 June 2001 (the "Period"). These figures represented increases of approximately 126%, 398% and 392% respectively when compared to a turnover of HK$57,280,000, net profit from ordinary activities attributable to shareholders of HK$7,626,000 and basic earnings per share of HK$0.0026 (adjusted upon subdivision of shares on 9 August 2001) for the six months ended 30 June 2000. The interim results of the Group are unaudited but have been reviewed by the Audit Committee of the Company.

BUSINESS REVIEW

The Group's turnover mainly comprised pre-sale of Phase III of the residential units currently under construction from Haizhu Peninsula Garden in Guangzhou, the People's Republic of China (the "PRC") and sale of completed units from Gang Yu Square in Chongqing, the PRC, together with rental income generated from the commercial podiums located in Guangzhou and Chongqing.

The improved results of the Group for the Period were mainly attributable to the satisfactory pre-sale of Phase III of Haizhu Peninsula Garden, and the gain arising from the disposal of subsidiaries during the Period. The construction of the superstructure of Phase III of Haizhu Peninsula Garden has been completed and it is anticipated that the residential units in Phase III will be available in move-in condition in early 2002. It is expected that the turnover for the Group will increase significantly upon completion of Phase III of Haizhu Peninsula Garden.

The Group has diversified into other business areas with a view to widen its business scope and to provide the Group with additional source of revenue. Apart from the core business of property development and investment, the Group is also engaged in the businesses of the sale of online English learning courses to corporate customers in the region of the PRC including Hong Kong and Macau, and the provision of exclusive technology consultancy services to ("Fei Yue") for the setting up and development of call centers and the operation of the phone banking payment gateway in Guangdong Province excluding Shenzhen.

Upon the PRC's pending entry to the World Trade Organisation and the successful bid for the 2008 Olympic Games in Beijing, it is anticipated that the demand for English learning courses will increase dramatically and it is expected that the sale of online English learning courses will generate additional revenue for the Group in near future.

With Fei Yue successfully obtained service contracts with major telecommunication and public utility companies to serve as their phone bill payment service provider in Guangdong Province excluding Shenzhen and with Fei Yue's exclusive cooperation agreement with GNET () for the operation and management of a phone payment system for a term of fifteen years commencing from 28 September 2000, technology consultancy fee income arising from services rendered to Fei Yue is expected to increase in near future.

FINANCIAL REVIEW

Liquidity and Financial Resources

The Group generally financed its businesses with internally generated cash flows and banking facilities. Cash and bank balances for the Group as at 30 June 2001 amounted to HK$54,278,000 (31 December 2000: HK$8,491,000) while interest-bearing bank loans and borrowings for the Group amounted to HK$190,129,000 (31 December 2000: HK$187,334,000). The cash position of the Group had improved as a result of the satisfactory sale and pre-sale of the Group's properties during the Period.

The Group's gearing ratio as at 30 June 2001 was 0.35 (31 December 2000: 0.41), calculated based on the Group's total debts of HK$619,168,000 (31 December 2000: HK$561,627,000) over total assets of HK$1,783,564,000 (31 December 2000: HK$1,393,558,000).

Currency Structure

The Group had limited exposure to foreign exchange rate fluctuations as most of its transactions, including borrowings, were mainly conducted in Hong Kong dollars or Renminbi and the exchange rates of these currencies were relatively stable throughout the Period.

Pledge of Assets

The Group had utilized bank loan facilities amounting to approximately HK$190,129,000 (31 December 2000: HK$187,334,000) as at 30 June 2001. The bank loans were secured by certain of the Group's investment properties, properties under development and completed properties for sales.

Contingent Liabilities

As at 30 June 2001, guarantees given for mortgage loans granted by banks to certain purchasers of the Group's properties amounted to HK$330,932,000 (31 December 2000: HK$242,383,000).

Material Acquisitions and Disposals of Subsidiaries

On 6 April 2001, the Group entered into a conditional agreement for the acquisition of 100% equity interest in I-Action Agents Limited for a consideration of HK$320,000,000. The principal activities of I-Action Agents Limited and its subsidiaries are engaged in the provision of technology consultancy services for the operation of the phone banking payment gateway. The consideration was to be satisfied by the disposal of the Group's 49% interest in Ample Dragon Limited. The principal activities of Ample Dragon Limited and its subsidiaries are mainly engaged in property development and investment in the PRC.

Details of the acquisition and the disposal of subsidiaries have been set out in a circular of the Company dated 31 May 2001. The transaction was completed on 28 June 2001 and the profit arising from the disposal had been reflected in the Group's profit and loss account for the Period.

Employee and Remuneration Policy

The Group employed approximately 92 full time staff in Hong Kong and the PRC as at 30 June 2001. Employees are remunerated according to the nature of their job and market trend, with built-in merit components incorporated in the annual increment to reward and motivate individual performance. In the PRC, the Group provides staff welfare and bonuses to its employees in accordance with the prevailing labour law. In Hong Kong, other staff benefits include medical schemes, mandatory provident fund schemes and employee share option scheme.

POST BALANCE SHEET EVENTS

Subsequent to the balance sheet date on 9 August 2001, the Company had passed an ordinary resolution to approve that every share of HK$0.10 in the issued and unissued share of the Company was subdivided into five shares of HK$0.02 each. The authorised share capital of the Company remained unchanged at HK$120,000,000 divided into 6,000,000,000 shares of HK$0.02 each after the subdivision.

Details of the subdivision of shares have been set out in a circular of the Company dated 17 July 2001.

PROSPECTS

The Directors consider that the property development and investment business in the PRC will continue to remain as one of the Group's principal activities. With the expected completion of Phase III of Haizhu Peninsula Garden and the improved sentiment with regard to property market in the PRC, the Directors are optimistic that revenue generating from the property development and investment business will continue to increase for year 2001.

With the Group gaining excess into the vast consumer services market in the PRC via the provision of online English learning services and phone banking payment services, the Directors expect that the Group will benefit significantly from the economic growth in the PRC upon pending entry to the World Trade Organisation and the 2008 Beijing Olympic Games.

The Directors will continue to evaluate attractive investment opportunities with aims to maximize shareholders' return.

CODE OF BEST PRACTICE

In the opinion of the Directors, the Company has complied with the Code of Best Practice as set out in Appendix 14 of the Listing Rules throughout the period under review. The Company appointed three non-executive directors of the Company as members of the Audit Committee. It was established on 11 May 1999 to assist the Board of Directors in fulfilling its duties by reviewing and supervising the Company's financial reporting process and internal controls.

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

During the six months ended 30 June 2001, neither the Company nor any of its subsidiaries purchased, sold or redeemed any listed securities of the Company.

DISCLOSURE OF INFORMATION ON THE WEBSITE OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE "STOCK EXCHANGE")

A detailed Interim Results announcement containing all the information required by paragraphs 46(1) to 46(6) of Appendix 16 to the Listing Rules will be published on the website of the Stock Exchange in due course.



On behalf of the Board
Ho Tsam Hung
Chairman

Hong Kong, 17 September 2001


Source: Zhong Hua International Holdings Limited
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