Hong Kong, January 21, 2002 - Victory City International Holdings Limited (SEHK: 539) today announces that it has signed a letter of intent with Beijing Tsinghua Science Park Development Center ("Tsinghua Science Park") to purchase 25% of shareholding interest in Zhangjiajie Tsinghua Science Park Green Pharmaceutical Company Limited. ("Green Pharmaceutical") under Tsinghua Science Park for a total consideration of RMB 8 million. The investment capital will be mainly used to complete the medium testing and trial production work in the quick extraction of puerarin for pharmaceutical purpose with a view of gradual expansion in its production to pave way for the formal introduction of it as a commercial product in the market. The full investment consideration will be paid wholly in cash.

Tsinghua Science Park, situated at Zhong Guan Cun, Beijing, is a wholly owned enterprise unit of Tsinghua University with a registered capital exceeding RMB 100 million and a total asset worth RMB 1 billion. Green Pharmaceutical was established on May 9, 2002 and is mainly involved in the extraction of plants for their natural live ingredients and to utilize their medicinal effects to develop pharmaceutical products.

Modern medical science has established that puerarin has the following therapeutical effects, such as lowering of blood pressure, slowing of heart rates, dilation of coronary artery, inhibition of arteriosclerosis and has a marked therapeutic effect for coronary arteries diseases. According to a medical and pharmaceutical market survey in 2000, puerarin has become the first choice medication for clinical therapeutic uses for treatment of coronary artery diseases.

Mr Wang Yuangong, Deputy Director of Tsinghua Science Park Development Center and Deputy Director of Green Pharmaceutical: "In recent years, puerarin has been widely used for treating various ailments such as hypertension, coronary diseases, angina and myocardial ischaemia etc. Green Pharmaceutical has the self-developed patent technology for extracting the essence of puerarin at low cost. We have already completed our preliminary testing for the extracting technology and plan to commence the medium testing and trial production in March 2002."

Green Pharmaceutical's production base is located at Hunan Province's Zhangjiajie which is not only famous for its tourism but also as a production base for Chinese medicine at a national level, boasting at least 6 varieties of the wild puerarin with a production potential reaching 6,000 tons annually.

Mr Chen Tien Tui, Managing Director of Victory City International: "The Group is very pleased to invest in the high technology pharmaceutical business under the leadership of Tsinghua Science Park. Our management aims at strengthening the potential growth of the Group and will continue to identify core business related expansion opportunities with particular interest in other high growth potential business development from Tsinghua Science Park."

The Group has the pleasure to announce the appointment of Mr Chan Wing Luk as the Group's Consultant. Mr Chan is a well-known financial guru and strategic investment consultant in Hong Kong with more than 28 years of experience in the field. Mr Chan has also invested in the Group with a 5% shareholding.

Mr Li Ming Hung, Chairman of Victory City International: "We are proud to be associated with Mr Chan Wing Luk as our company investor. We hope that as our Group's appointed consultant and with his experience in the investment field, Mr Chan will provide professional opinion for our future development."

Mr Chan Wing Luk: "Through my role as a consultant, I hope to have better understanding of the Group's business operation and development and be able to provide opinion on various investment plans and corporate management issues, which will hopefully assist the Group in its business development."

Victory City International Holdings Limited (SEHK: 539) is one of Hong Kong's major manufacturer of knitted fabrics with production facilities in Xinhui City, Guangdong Province covering an area of over 2 million square feet. The Group's principal business operations are in the areas of fabric knitting, bleaching, dyeing, finishing services and sales. For the year ended March 31, 2001, the Group recorded profits attributable to shareholders for the sum of HK$23,872,000 and an increase of 23.7% in turnover compared to the same period last year to HK$603,468,000.

Issued by :
Victory City International Holdings Limited

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