Sun Media Group buys China Sports Media Ltd.

Emerging Markets Economy, May 24, 2004

Sun Media Group Holdings Ltd. announced on May 21 in Hong Kong that it has signed a legally binding memorandum to purchase 60% of FRD Holdings Inc. for HK$50 million, along with an agreement to purchase 100% of China Sports Media Ltd. for HK$42 million. They also announced that they would submit a request to the General Meeting of Shareholders to approve their proposed name change to Sun Sports Media Group Ltd.

As part of the agreements, FRD and China Sports have to make guaranteed profits of HK$18 million and HK$20 million, respectively, within a two-year period. The Organizing Committee of F1 Shanghai Run further forecasted thatthe advertising revenue, resulting from FRD's participation in China's F1 Shanghai Run, would exceed RMB200- 300 million in the coming two or three years.

All these will contribute to the potential for China Sports to increase future profits. As Executive Vice Chairman of the F1 Shanghai Run Commission, FRD will join in efforts to host the first race in the China Auto Field Tournament on June 6 with other Asian and domestic event organizers and market promoters, with some of F1's best known faces such as Michael Schumacher expected to take part in the event. Also, China Sports, through its Agreement on Profit Sharing Based on Bottom Profit Guaranteed with the Shanghai Circuit will act as an agent for a number of large-scale activities and advertisements, such as F1 Baby, which are related to the China Run of Global F1 Grand Prix and China Auto Field Tournament. In addition, they will also gain the right to sell tickets abroad.