The share placement represents 17.5% of the Company's existing issued share capital of 400 million shares, or 14.09% of the enlarged issued capital after subscription. The placing price of HK1.83 represents an 8.5% discount to the closing price of HK$2.0 of the Company's shares on July 28, 2005, or a 9.36% discount to the average closing price of HK$2.019 for the 10 trading days prior to July 28, 2005. Subsequent to the placing and subscription, the equity interest held by the Company's controlling shareholders will be reduced from 40.59% to 35.30%.

The net proceeds from the subscription is estimated at HK$120.1 million, of which HK$38.01 million will be used to finance the Group's share of capital injection to the JV, HK$58.07 million will be allocated for the purchase of prime time television drama programmes from major Mainland TV stations in form of reimbursement receivables to investors and the remaining balance of HK$24.02 million will be used as working capital of the Company.

This fund raising exercise of Qin Jia Yuan has been completed successfully with 70 million shares already placed to professional and institutional investors.

Dr Leung Anita Fung Yee Maria, CEO of Qin Jia Yuan, said: "Investors in the new shares are almost entirely investment funds. We planned to place 60 million new shares initially but in view of the overwhelming responses from professional and institutional investors, the Board decided to increase the placement to 70 million shares. We believe that the investment funds are highly optimistic towards the vast advertising market in the Mainland. Professional statistics indicated that TV advertising spending accounted for 76% of advertising spending for all media in the past 3 years, and it stood at RMB260 billion in 2004, of which advertising expenditure for TV drama series exceeded RMB100 billion. This indicates the tremendous business potential. The fund raising exercise targets specifically at the growing advertising business. Since the listing of the Group, market practitioners have already accepted and recognized the Group's unique business model. In addition, the Company's performances and dividend policy in 2004 and the first half of 2005, plus analysts' reports on the Group's business, have strengthened investors' confidence in the Group."

Dr Leung added: "The Group's business in advertising for syndication programmes for the past decade will remain and this fund raising exercise has been activated for the formation of the JV which will allow the Group to participate directly in the advertising business in the PRC, and to achieve a share in the growing advertising market for the TV dramas. In addition, Qin Jia Yuan can also further expand its customer base of Mainland and international advertisers from its core, and complement customers' requirements more flexibly to place their advertising spots in prime time TV drama slots in major television stations. This will help broaden the Group's revenue base and complements the existing production of synchronization TV programmes."

Tianjin QJY Advertising is a licenced advertising agency in China and has been an exclusive partner of the Group in the business of syndication programmes (mainly TV drama series) for years. It has certain rights to place advertisement in several major television channels in China during the airtime of a television platform known as "Qin Jia Yuan Drama Time". The registered capital of the JV will be HK$54.30 million and will be contributed as to HK$38.01 million by the Group and as to HK$16.03 million by Tianjin QJY. The Group will hold 70% interest of the JV . The Group will have the preferential right to acquire from Tianjin QJY the 30% shareholding in the JV, enabling the JV to become a 100% wholly owned subsidiary of the Group.

Application has been made by the Company to the Stock Exchange for resumption of trading from 9:30pm on Monday, August 1, 2005.

About Qin Jia Yuan
Qin Jia Yuan Media Services Company Limited (HKEx: 2366) is a China-focused one-stop shop for TV media services, providing integrated programme, distribution, advertising and marketing and public relations services to production houses, advertising agencies and advertisers. The Group was listed on the main board of the Stock Exchange of Hong Kong on June 30, 2004 following a successful initial public offering. Its strategic shareholders include Aegis Group plc, a public company listed on the London Stock Exchange and one of the world's five largest media groups

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