EASYKNIT INTERNATIONAL HOLDINGS LIMITED

(incorporated in Bermuda with limited liability)
(Stock Code: 1218)
DISCLOSEABLE TRANSACTIONS

The Company has acquired and disposed of listed China Railway Shares since 3
December 2007.
For the Investments and separately for the Disposals, one of the results of the
percentage ratio tests under Chapter 14 of the Listing Rules exceeds 5% but is less
than 25%. The Investments and the Disposals therefore, constitute separate
discloseable transactions of the Company under Rule 14.06(2) of the Listing Rules.
A circular providing the information required under the Listing Rules will be
dispatched to shareholders in due course after the publication of this
announcement.
If Further Investments/Disposals when aggregated with the Investments or
Disposals, as the case may be, constitute a major or other type of notifiable
transaction under the Listing Rules, the Company will comply with the relevant
requirements of the Listing Rules.
THE INVESTMENTS

Between 3 December 2007 to 21 January 2008, the Company, through its
wholly-owned subsidiary, acquired from the market an aggregate of 2,521,000 China
Railway Shares (representing approximately 0.0118% of the issued share capital of
China Railway, based on its issued share capital of 21,299,900,000 China Railway
Shares announced by China Railway on 11 December 2007).
The total consideration paid for these 2,521,000 China Railway Shares was
HK$24,049,580 (exclusive of transaction costs) which was satisfied in cash from
internal resources of the Company. The consideration for each purchase represented
the then market price of the China Railway Shares.
As the aggregate price of the Investments exceeded one of the 5% limits of the
“consideration test” together they constituted a discloseable transaction of the
Company for the purposes of Rule 14.06(2) of the Listing Rules.
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THE DISPOSALS
On 20 December 2007 and 11 January 2008, the Company, through its wholly-owned
subsidiary, disposed through the market of an aggregate of 1,421,000 China Railway
Shares (representing approximately 0.0067% of the issued share capital of China
Railway, based on its issued share capital of 21,299,900,000 shares announced by
China Railway on 11 December 2007). The total consideration received for these
1,421,000 China Railway Shares was HK$13,294,519 (exclusive of transaction
costs). The consideration for each disposal represented the then market prices of the
China Railway Shares. The Group is expected to record a gain (unaudited) of
approximately HK$804,000 from the Disposals and such gain will be used in the
Group’s general working capital.
As the aggregate value of the Disposals exceeded one of the 5% limits of the
“consideration test” they constituted a discloseable transaction of the Company for
the purposes of Rule 14.06(2) of the Listing Rules.
REASONS FOR THE INVESTMENTS/DISPOSALS
The Company principal businesses are in garment sourcing and export, property
investments and development, investment in securities and loan financing.
The directors of the Company consider that the Investments and Disposals could
enhance the returns on cash for the Company. The source of funding for the
Investments was internal cash resources of the Company. Taking into account the
track record of China Railway, the Company considered that the Investments had
potential. The Disposals were made in light of uncertain market conditions. The
Investments were purchased and the Disposals were made at market prices and the
Board (including the independent non-executive directors) believes that the
Investments and the Disposals were fair and reasonable and in the interests of the
shareholders of the Company as a whole.
CURRENT HOLDING

The Company now holds a total of 1,100,000 China Railway Shares (representing
approximately 0.0051% of the issued share capital of China Railway, based on its
issued share capital of 21,299,900,000 shares announced by China Railway on 11
December 2007) at an average acquisition price of approximately HK$10.55 per
China Railway Share (exclusive of transaction costs). The remaining Investments of
1,100,000 China Railway Shares will be booked as short term investments by the
Company.
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INFORMATION ON CHINA RAILWAY
China Railway is a company incorporated in the PRC with limited liability and its
shares are listed on the main board of the Stock Exchange. According to information
published by it, China Railway holds the largest integrated construction group in the
PRC and in Asia and offers a full range of construction-related services, including
infrastructure construction, survey, design and consulting services and engineering
equipment and component manufacturing.
According to an illustrative statement of unaudited pro forma adjusted net tangible
assets attributable to the equity holders of China Railway prepared in accordance
with Rule 4.29 of the Listing Rules for the purpose of illustrating the effect of a
global offering of China Railway Shares as if it had taken place on 30 June 2007, and
based on the net tangible assets attributable to the equity holders of China Railway
as at 30 June 2007, set out in its prospectus dated 23 November 2007 and adjusted
as described in that prospectus the unaudited net tangible assets attributable to the
equity shareholders of China Railway was RMB21,909 million. On this basis:-
a. the unaudited net tangible assets of China Railway attributable to the aggregate
2,521,000 China Railway Shares in the total Investments is approximately
RMB2.585 million;
b. the unaudited net tangible assets of China Railway attributable to the 1,100,000
China Railway Shares now held by the Company is approximately RMB1.117
million; and
c. the unaudited net tangible assets of China Railway attributable to the aggregate
1,421,000 China Railway Shares in the two Disposals is approximately
RMB1.468 million.
According to the same prospectus, China Railway’s total revenue was RMB153.6
billion for the year ended 31 December 2006 and RMB72.5 billion for the six months
ended 30 June 2007, and profit attributable to the equity holders of China Railway
for the same periods was RMB2,046 million and RMB643 million respectively. For
the year ended 31 December 2005 and 31 December 2006, China Railway’s published
profit before taxation was RMB750 million and RMB3,387 million respectively,
while its published profit after taxation and extraordinary items and before minority
interests was RMB460 million and RMB2,739 million respectively.
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GENERAL
As the Investments and the Disposals were made through the market, the Company
is not aware of the identities of the vendors or the buyers of the China Railway Shares
and, to the best of the knowledge of the directors having made all reasonable
enquiries, the vendors in the Investments in and the buyers in the Disposals of China
Railway Shares are third parties independent of the Company and connected persons
(as defined in the Listing Rules) of the Company, its subsidiaries and their respective
associates.
A circular providing the information required under the Listing Rules will be
dispatched to shareholders in due course after the publication of this announcement.
If Further Investments/Disposals are made that when aggregated with the Investments
or Disposals, as the case may be, constitute a major or other type of notifiable
transaction under the Listing Rules, the Company will comply with the relevant
requirements of the Listing Rules.
At the date of this announcement, the Board comprises Mr. Kwong Jimmy Cheung
Tim and Ms. Lui Yuk Chu as executive directors, Mr. Tse Wing Chiu, Ricky as
non-executive director and Mr. Wong Sui Wah, Michael, Mr. Tsui Chun Kong and Mr.
Jong Koon Sang as independent non-executive directors.
TERMS USED IN THIS ANNOUNCEMENT

In this announcement the following terms have the following meanings:-
“Board” the board of directors of the Company
“China Railway” China Railway Group Limited, whose shares are listed
on the main board of the Stock Exchange (Stock code:
390)
“China Railway Shares” shares of RMB1.00 each in the share capital of China
Railway which are listed on the Stock Exchange and
traded in Hong Kong dollars
“Company” Easyknit International Holdings Limited, an exempted
company incorporated in Bermuda with limited liability,
the shares of which are listed on the Stock Exchange
“Disposals” the disposals by the Company through the market of an
aggregate of 1,421,000 China Railway Shares on 20
December 2007 and 11 January 2008
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“Further Investments/
Disposals”
further investments by the Company in, or disposals by
it of, China Railway Shares as the case may be
“Group” the Company and its subsidiaries
“Hong Kong” Hong Kong Special Administrative Region of the
People’s Republic of China
“HK$” Hong Kong dollars, the lawful currency of Hong Kong
“Investments” the investments by the Company by acquisition from the
market of an aggregate of 2,521,000 China Railway
Shares during the period from 3 December 2007 to 21
January 2008
“Listing Rules” the Rules Governing the Listing of Securities on the
Stock Exchange
“RMB” Renminbi, the lawful currency of the People’s Republic
of China
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“&#%8221; percentage
For and on behalf of
Easyknit International Holdings Limited
Kwong Jimmy Cheung Tim
President and Chief Executive Officer
Hong Kong, 29 January 2008

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