Convenience Retail Asia's half year results
maintain satisfactory growth despite adverse retail environment

Hong Kong, 29 July 2002 - Convenience Retail Asia Limited ("CRA" or "the Group"; SEHK: 8052), operator of the Circle K convenience store in Hong Kong and China, announced satisfactory growth in both turnover and profit for the second quarter ended 30 June 2002.

For the three-month period ended 30 June 2002, CRA recorded a sales turnover increase of 5% to HK$343.4 million when compared to the same period in 2001. The increase came primarily from sales at new stores. A 6% decrease in sales at comparable stores (stores in existence throughout first and second quarters of 2001 and 2002) was recorded.

The Group's net profit for the quarter rose by 9% to HK$19.8 million from HK$18.1 million achieved in the same period in the previous year. Increase in store sales and higher gross margins and other income combined to contribute to the satisfactory increase. Earnings per share for the second quarter increased by a moderate 7% from 2.8 HK cents reported in 2001 to 3.0 HK cents this year.

For the six months ended 30 June 2002, the Group recorded a turnover of HK$666 million and a net profit of HK$31.8 million, representing increases of 6% and 8% respectively when compared to the results for the same period in 2001.

Commenting on the performance, Dr. Victor K. Fung, Chairman of CRA, said, "Adverse retail environment resulting from the current economic downturn in Hong Kong has posed a tremendous challenge to our business. We are very pleased to see satisfactory growth for the Group despite rising unemployment, continuous deflation and declining consumer confidence and spending in the past quarter."

Mr. Richard Yeung, Chief Executive Officer of CRA, commented, "The first six months of the year saw an uphill battle to maintain sales and traffic growth in a highly unfavourable retail environment. With a customer-driven strategy, increased productivity and a lot of hard work, the Group has been able to counteract some of the negative market trends and maintain a modest sales growth for the chain."

In May, the Group's store-opening program in Hong Kong hit the 150-store milestone. As of 30 June 2002, the Group owned and managed 151 Circle K stores in Hong Kong, compared to 132 stores at the end of the second quarter 2001.

China Update

The application for business licenses is now in its final stages with the Beijing Government and the Group's China team plans to open the first batch of stores in Guangzhou before the end of 2002. This is slightly behind the original schedule due to the unforeseen need to bring in a new local joint venture partner in Guangzhou. The negotiation and documentation for the change in equity structure took longer than expected, causing a delay in the process.

Business Outlook

It is generally expected that the sluggish economic environment and impaired consumer confidence in Hong Kong will continue to pose serious challenges to retailers in all sectors. According to Mr. Yeung, in the face of tough conditions, CRA will continue with its strategy of quality growth while further consolidating its brand positioning as the consumer's preferred convenience store chain. This can be done by providing superior customer services, better store environments, more value for the dollar and aggressive promotions.

"We expect the Hong Kong operation of Circle K will continue to provide profitability, sustain quality growth and serve as the showcase for brand building. The China operation will require investment and resources for aggressive growth and future expansion. Financially, we expect to see some volatility in the rate of profit growth in the coming six months due to the uncertainty in the Hong Kong retail market and the increase in start-up costs in Southern China," Mr. Yeung concluded.

About CRA
Convenience Retail Asia is engaged in the operation of one of the leading convenience store chains in Hong Kong under the brand name of Circle K. The Circle K store chain comprises 151 company-owned-and-managed stores in Hong Kong as of 30 June 2002. Major initiatives are planned for expansion into the southern part of the Mainland of China.
CRA corporate Web site: www.cr-asia.com

About Li & Fung Retailing
Li & Fung (Retailing) Limited, the holding company of Convenience Retail Asia, was formed in 1985 as a company wholly-owned by Li & Fung (1937) Limited. There are two chains within the retailing group: Circle K and Toys "R" Us. The retailing group's business extends from Hong Kong to Taiwan, Singapore, and Malaysia, with plans for expansion into the Mainland of China and other South East Asian countries.

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Convenience Retail Asia Limited

Half Year Results
For the Period Ended 30 June 2002

• Satisfactory growth in turnover and profitability despite adverse retail environment in Hong Kong.

• Number of stores in Hong Kong increased by three to 151 during the quarter, an increase of 19 stores compared to 132 stores as at 30 June 2001.

• Ten new store openings in progress, either under construction or with leases committed.

• Awaiting official approval of business licences from Central Government and expect to open first batch of Southern China stores before year end.

• Anticipating volatility in the rate of profit growth in the coming six months due to uncertainty in the Hong Kong retail market and increase in start-up costs in Southern China.

• Strong cash position with HK$382 million cash on hand and no bank borrowings as at 30 June 2002.
  

Convenience Retail Asia Limited

Unaudited Consolidated Profit & Loss Account