Convenience Retail Asia registers seventh consecutive quarter growth in turnover and profit amid challenging retail environment

Mainland China expansion on track ... opening of first store in Guangzhou scheduled in November

Hong Kong, 31 October 2002 - Convenience Retail Asia Limited ("CRA" or "the Group"; SEHK: 8052), operator of the Circle K convenience store in Hong Kong and China, announced its seventh consecutive quarter growth in both turnover and profit for the third quarter ended 30 September 2002.

For the three-month period ended 30 September 2002, CRA recorded a turnover increase of 5% to HK$366.8 million when compared to the same period in 2001. The increase was primarily from sales at new stores. As at 30 September 2002, CRA has a total of 157 stores (Q3 2001: 141 stores).

With better category management, higher income from volume rebates and sales of phone cards, the Group was able to improve gross margin and other income despite the tough operating environment. The Group's net profit for the third quarter rose to HK$20.8 million, representing an increase of 3 % over the same period last year. Earnings per share were 3.1 HK cents.

Commenting on the Group's performance, Dr. Victor K. Fung, Chairman of CRA, said, "We are pleased to note a modest growth in our turnover and profit, especially in a challenging retail environment. This has proven that our business model holds up well in continued difficult economic conditions."

Mr. Richard Yeung, Chief Executive Officer of CRA, added, "The global economic downturn had a negative impact on our business. However, our robust financial and operations structure enables us to continue to achieve satisfactory results."

China Update

CRA obtained the official approval of a business license from the Central Government. The first store in Guangzhou is scheduled to commence for business on 17 November 2002. This will mark a major step in the Group's expansion plan in China. Additional stores are under construction. The Group has also finalized the plan to expedite store growth in the Southern China market in 2003.

Top Recognitions

During the period under review, CRA was selected as one of the 200 Best Small Companies for 2002 by Forbes Global Magazine. In addition, CRA also won the 2002 Service & Courtesy Award from the Hong Kong Retail Management Association for the Supermarket/Convenience Store Category.

Mr. Yeung said, "We are delighted to win the awards, especially the 200 Best Small Companies which acknowledged the world's 200 best small companies with outstanding performance over the past twelve months. The criteria used to scan candidates are tough. Growth notwithstanding, profitability and relative stock price strength were also a must. Of 20,000 companies, only one per cent of them made the grade."

"Our commitment to remain customer-focused means we continue to deploy resources to enhance our service quality and provide customers with the most satisfactory shopping experience in our shops."

Business Outlook

The poor consumer sentiments in Hong Kong will continue to pose challenges to retailers in all sectors. Looking ahead, Mr. Yeung said, "Our efforts will be focused on minimizing the adverse impact of the weak retail environment by improving operational efficiency and implementing more creative promotions."

Mr. Yeung concluded, "The market will continue to be difficult, but we remain confident in the future prospects of our business. We are well positioned to cope with the challenges ahead. Our Hong Kong operations will continue to provide profitability and sustainable growth to support our expansion in China. It is our belief that the China operations will generate substantial contributions to the Group in the future."

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 157 company-owned-and-managed stores in Hong Kong as of 30 September 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.

For media inquiry, please contact:

Convenience Retail Asia Limited

Third Quarterly Results
For the Period Ended 30 September 2002

HIGHLIGHTS

• The seventh consecutive quarter of turnover and profit growth despite the challenging retailing environment in Hong Kong.

• Number of stores in Hong Kong increased by 6 to 157 during the quarter, representing an increase of 16 stores when compared to 141 stores as at 30 September 2001.

• Eight new store openings are in progress either under renovation or with leases committed in Hong Kong.

• Obtained the official approval for the Company's operation in Guangzhou from the Central Government, opening of first store is scheduled for 17 November 2002.

• Strong cash position with HK$398 million cash on hand and no bank borrowings as at 30 September 2002.

• The outlook for Hong Kong's economy is still quite uncertain and if retail spending continues to decline, the Group's profit growth may be adversely impacted.

Convenience Retail Asia Limited

Unaudited Consolidated Profit & Loss Account