CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED
ANNOUNCES RESULT FOR 1996

THE CHAIRMAN'S LETTER FOR 1996

20 March, 1997 -- Hong Kong

To our shareholders
I am pleased to report that 1996 was an outstanding year for Cheung Kong Infrastructure Holdings Limited (CKI), in terms of net profit, earnings per share and dividend. Our net profit was HK$886 million, 56% over that of last year. The results were better than the profit forecast of not less than HK$728 million made during the initial public offering in July.

The Board of Directors is recommending a final dividend of HK$0.16 per share for 1996, substantially higher than the final dividend of HK$0.08 per share indicated in the initial public offering prospectus.* This dividend payment reflects our intention to reward shareholders in a meaningful manner while retaining appropriate cash to fund future growth.

Our first year as a publicly listed company was a year of many solid achievements:

- Addition of 24 PRC infrastructure projects and investment of HK$3.3 billion in 1996.
- Investments in 25 toll roads and bridges and 2,200 MW of power plants in China at the end of 1996.
- The completion of HK$9.4 billion limited recourse financing for the Zhuhai Power Plant.
- Record profit achieved by the infrastructure materials businesses, which received prestigious quality and productivity awards from the Hong Kong Productivity Council and Hong Kong Industry Department, as well as international awards from Europe.
- We are the largest Hong Kong-listed integrated infrastructure company with a market capitalisation of HK$28 billion at the end of 1996 (HK$45 billion as of 18th March, 1997).

The results for 1996 reflect our success. Additions to our infrastructure portfolio continued at a rapid pace. At the end of 1996, the Group committed to invest an aggregate HK$6.6 billion in 32 projects, which ranks us as one of the largest infrastructure investors in China. Profit contribution from the infrastructure businesses increased 51% from last year. The infrastructure materials businesses posted a 40% increase in profit contribution, and maintained their market leading positions in Hong Kong.

Our business is infrastructure, and the challenge is to capture opportunities in China's infrastructure sector. With an average GDP growth of 12% from 1991 to 1995, China is one of the world's fastest-growing economies. It has also been one of the world's most popular destinations for foreign direct investment during the same period. This rapid growth gives rise to an urgent, massive demand for infrastructure investment.

According to the World Bank's estimate in 1996, China needs US$750 billion, or 7.4% of its GDP, for infrastructure over the next ten years. China has acknowledged the importance of private sector participation, and has formulated policies to encourage foreign investors to take an active role.

We are responding to this challenge with enthusiasm and confidence. We believe CKI is one of the few companies capable of providing for China's infrastructure sector, as a total package, capital, credibility, experience and expertise. Our business activity in China began many years ago, and we are capitalising on our experience and knowledge gained from many years of operating in the same businesses in Hong Kong. Today, we have established a solid track record, an excellent reputation and strong relationships across China.

The infrastructure business in China has grown significantly in recent years, both in size and sophistication. We believe an infrastructure company needs to be more than a mere provider of capital. CKI is now a value-adding investor firmly intertwined with our partners in their long term, total development. We believe our unique strengths have positioned CKI in a favourable position to capitalise on this tremendous opportunity.

Looking to the future, the reorganisation of the Cheung Kong Group, which took effect from March 1997, highlights the importance of infrastructure within a streamlined group structure. With the acquisition of Hongkong Electric Holdings Limited, our power portfolio has expanded significantly. Today, we have interests in power plants with a total installed capacity of 5,305 MW. Also, our financing capacity will increase, with an enhanced recurring income and capital base. Given a favourable operating environment, strong fundamental strengths, sound financial position and competent management, we will aggressively pursue infrastructure projects in China.

I would like to offer my sincere thanks to the staff of CKI for their hard work. 1996 was an eventful and successful year for the Company. Our efforts have set us firmly on the route to another successful year in 1997.

Li Tzar Kuoi, Victor
Chairman

Hong Kong, 20th March, 1997

* This increase should be viewed in the context that the number of shares entitled to the 1996 final dividend has been increased to 2,254 million shares, following the issue of 886 million new shares to Hutchison Whampoa Limited for the purchase of 35.01% of Hongkong Electric Holdings Limited.

CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31ST DECEMBER 1996

	Note	1996 HK$ million	1995 HK$ million
Turnover		3,041	2,339
Profit before taxation		971	597
Taxation	2	( 87 )	( 29 )
Profit after taxation		884	568
Minority interests		2	1
Profit attributable to shareholders		886	569
Dividends	3	( 361 )	-
Profit for the year retained		525	569
Earnings per share	4	HK $0.75	HK$0.55
Dividends per share		HK $0.16	-

Notes:

1. Group reorganisation and basis of preparation
   The Company was incorporated in Bermuda on 28th May 1996 as a wholly-owned subsidiary of Cheung Kong (Holdings) Limited. In preparing for the listing of the Company's shares on The Stock Exchange of Hong Kong Limited ("Stock Exchange"), the Company and its subsidiary companies comprising the Group were reorganised ("Reorganisation") in July 1996, pursuant to the terms of the restructuring agreement as set out in the prospectus of the Company dated 4th July 1996 ("the Prospectus"). The Company has become a listed company on the Stock Exchange since 17th July 1996 after completion of the placing and new issue of shares as more fully described in the Prospectus.

   For accounting purpose, the Group has been treated as a continuing entity and accordingly the profit and loss accounts have been prepared on the basis as if the present group structure had been in existence throughout the two years ended 31st December 1996. Results of subsidiary companies acquired after the Reorganisation are included as from their respective dates of acquisitions.
    

2. Taxation
   

   	1996 HK$ million	1995 HK$ million
   The Group:   Hong Kong
   Profits tax	91	26
   Deferred tax	( 5 )	1
   Overseas	1	2
   Total	87	29

   Hong Kong profits tax is provided at the rate of 16.5 per cent (1995:16.5 per cent) on the estimated assessable profits for the year after setting off available tax relief from losses brought forward. Overseas taxation is provided for at the applicable rates of taxation in the relevant foreign jurisdiction on the estimated assessable income arising for the year.

   Deferred taxation is accounted for at the current rate of taxation in respect of material timing differences between profit as computed for taxation purposes and profit as stated in the accounts to the extent that a liability or an asset is expected to be crystallised in the foreseeable future.
    

3. Dividends
   As stated in the Prospectus, no interim dividend was declared by the Company. The final dividend is calculated on the basis of HK$0.16 per share on 2,254,209,945 shares in issue, after taking into account the issue of 886,209,945 new shares of the Company to Hutchison Whampoa Limited for the purchase of 707,295,862 shares in Hongkong Electric Holdings Limited after the year end.
    
4. Earnings per share
   The calculation of earnings per share is based on the profit attributable to shareholders of HK$886 million (1995:HK$569 million) and on the weighted average number of 1,184,977,077 shares (1995:1,026,000,000 shares) in issue and deemed to have been issued during the year. The shares issued under the Reorganisation were deemed to have been in issue since 1st January 1995.
    
5. Comparative figures
   Certain comparative figures have been reclassified to conform with the current year's presentation.
    

PURCHASE, SALE OR REDEMPTION OF SHARES

The Company has not redeemed any of its shares during the year. Neither the Company nor any of its subsidiaries has purchased or sold any of the Company's shares during the year.

FINANCIAL HIGHLIGHTS

	1996
Profit attributable to shareholders	HK$ 886 million	Up 56%
Earnings per share	HK$ 0.75	Up 36%
Final dividend per share	HK$ 0.16	-

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Shareholders of the Company will be held at the Ballroom, 1st Floor, The Harbour Plaza, 20 Tak Fung Street, Hunghom, Kowloon, Hong Kong on Thursday, 15th May, 1997 at 12:15 p.m. for the following purposes:

1. To receive and consider the audited Financial Statements, the Managing Director's Report and the Reports of the Directors and Auditors for the year ended 31st December, 1996.
2. To declare a final dividend.
3. To elect Directors.
4. To appoint Auditors and authorise the Directors to fix their remuneration.
5. To consider and, if thought fit, pass with or without amendments, the following resolutions as Ordinary Resolutions:

ORDINARY RESOLUTIONS

1. THAT a general mandate be and is hereby unconditionally given to the Directors to issue and dispose of additional shares not exceeding twenty per cent of the existing issued share capital of the Company at the date of the said Resolution until the next Annual General Meeting.
2. THAT:-
   1. subject to paragraph (b) below, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase shares of HK$1.00 each in the capital of the Company in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited or of any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;
   2. the aggregate nominal amount of shares of the Company to be repurchased by the Company pursuant to the approval in paragraph (a) above shall not exceed ten per cent of the aggregate nominal amount of the share capital of the Company in issue at the date of this Resolution, and the said approval shall be limited accordingly; and
   3. for the purposes of this Resolution, "Relevant Period" means the period from the passing of this Resolution until whichever is the earliest of:-

      1.	the conclusion of the next Annual General Meeting of the Company;
      2.	the expiration of the period within which the next Annual General Meeting of the Company is required by law to be held; and
      3.	the date on which the authority set out in this Resolution is revoked or varied by an ordinary resolution of the shareholders in general meeting.

3. THAT the general mandate granted to the Directors to issue and dispose of additional shares pursuant to Ordinary Resolution (i) set out in the notice convening this meeting be and is hereby extended by the addition thereto of an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company under the authority granted pursuant to Ordinary Resolution (ii) set out in the notice convening this meeting, provided that such amount shall not exceed ten per cent of the aggregate nominal amount of the issued share capital of the Company at the date of the said Resolution.

By Order of the Board
Eirene Yeung
Company Secretary

Hong Kong, 20th March, 1997

Notes:

1. Any Member entitled to attend and vote at the meeting is entitled to appoint proxy to attend and vote in his stead. A proxy need not be a Member of the Company.
2. The Register of Members will be closed from Thursday, 8th May, 1997 to Thursday, 15th May, 1997, both days inclusive, during which period no transfer of shares will be effected. In order to qualify for the proposed final dividend, all share certificates with completed transfer forms either overleaf or separately, must be lodged with the Company's Branch Registrars, Central Registration Hong Kong Limited, Hopewell Centre, 17th Floor, 183 Queen's Road East, Hong Kong, not later than 4:00 p.m. on Wednesday, 7th May, 1997.
3. Concerning item 5(i) above, the Directors wish to state that they have no immediate plans to issue any new shares of the Company. Approval is being sought from the Members as a general mandate for the purposes of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ("the Listing Rules").
4. Concerning item 5(ii) above, the Directors are not aware of any consequences which may arise under the Takeover Code as a result of any repurchase of shares of the Company. The Explanatory Statement containing the information necessary to enable the shareholders to make an informed decision on whether to vote for or against the resolution to approve the repurchase by the Company of its own shares, as required by the Listing Rules, will be set out in a separate letter from the Company to be enclosed with the 1996 Annual Report.

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