Major Shareholder:

• The Capital Group ¡V 59.9% interest

The Group is a large property developer in Beijing, focusing primarily on developing quality/high-end office buildings and commercial properties and medium to high-end residential properties. As at 30 April, 2003, our property development portfolio comprised 27 projects with a total site area of approximately 2,878,109 sq.m. Which if fully developed, would amount to a total GFA of approximately 3,357,033 sq.m. All of our projects are in Beijing and, based on our current land bank portfolio, our future developments are located in northern Beijing, such as the Central Business District, Lido/Yansha area, Madianqiao, Finance Street, Zhongguancun and Olympics Village.

The Group is currently developing a number of properties, including certain hotels, which The Group intend to hold as long-term investments. Going forward, The Group intends to have property investments as one of our core businesses. Currently, The Group has associated companies involved in real estate marketing consultancy and agency and property management business.

The Group is a subsidiary of the Capital Group, a state-owned limited liability company under the supervision of the Beijing Municipal Government. Since its establishment in 1995, the Capital Group has been actively engaged in sectors such as finance, land and property development, infrastructure, and high technology businesses. The Capital Group has played a significant role in the long-term development of Beijing by undertaking projects to develop the city's infrastructure, including transport and environmental protection.

The Group believes that the relationship with the Beijing Municipal Government is beneficial to our Group's operations. Prior to joining our Group, two of the Directors, Liu Xiaoguang and Wang Qi, held senior positions at various departments of the Beijing Municipal Government. Through years of expansion, we have now become a large property developer with capabilities to undertake large scale projects promoted by the Beijing Municipal Government.

The Directors believe that the Group has the following competitive advantages:

• The Group is a large property developer in Beijing and are well-positioned to benefit from Beijing's long-term economic growth
• The controlling shareholder's long-standing and well-established relationship with the Beijing Municipal Government facilitates our successful operation
• The financial and commercial demands of large-scale developments present a high entry barrier to less established developers
• The sizeable future developments will enhance long-term development opportunities for our Group
• The size and track record provide us with a competitive advantage in negotiating construction cost and financing terms

• We believe that our relationship with the Beijing Municipal Government is beneficial to the Group's operations, but such relationship may not continue.
• Legal and regulatory changes relating to the way we conduct our pre-sales and our customers' ability to obtain bank mortgages may adversely affect our cash flow and results of operations.
• The ability to realise on undertakings we have obtained from third parties to enable us to develop potential developments is subject to land use rights of such developments being obtained by such third parties and our being able to agree the terms of participation.
• We may be unable to effectively manage our growth.
• The limited operating history as a separate entity makes it difficult for you to evaluate our business and prospects.

The Group has adopted a strategy of developing our position as one of the premier property companies in Beijing in terms of the quality of our products. The Group intend to strengthen and consolidate public recognition of "Beijing Capital Land"as a brand name standing for quality property projects. Such public recognition will enable us to obtain a premium for our projects.

To ensure a high standard of quality, The Group oversee various stages of the development process led by our associated companies and other subcontractors, including project site selection, feasibility study preparation, government approvals, project design and construction, supervision over the progress and financial planning of projects and marketing of completed projects and properties available for pre-sale. The Group believe that our active involvement in the development process helps to ensure the quality and punctual delivery of premises to end-users. The Group will also continue to devote our resources to after-sales service, such as property management, to enhance the competitiveness of our business.

The Board believes the development of quality large-scale projects at choice locations will enable the Group to obtain a premium for the projects. The Group therefore intend to undertake large-scale developments which are part of the overall city planning of Beijing. Through the close relationship between the Beijing Municipal Government and the Capital Group, The Group have reached understandings with various parties that The Group shall have the priority to develop the land situated (i) above and adjacent to the Metro Line No. 5 stations, (ii) within the green-belt zone of certain parts of the Third Ring Road and the Fifth Ring Road; and (iii) within Zhongguancun Science Park. In addition to these potential developments, Phase I of Beijing International Business Park, adjacent to the Central Business District is also part of our future developments. These large-scale developments are all major projects in Beijing's long-term development plan.

In our experience, the higher margin activities within the property development cycle are, broadly, evaluating the feasibility of a project, securing the property development rights and marketing the properties which The Group have developed. The Group focuses our resources on such activities, which The Group generally carries out in-house. In our experience, as the construction activity of the property development cycle tends to attract lower returns, the Group outsource our construction work to independent third party contractors, whilst supervising their work to maintain quality control.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$709.4 million (based on the offer price HK$1.49 per share). The Group at present intends to apply the net proceeds as follows: