2 nd Quarter 2003 Results Presentation A member of the Li & Fung (Retailing) Group 28 July 2003

Hong Kong Total Retail Sales Value Year-on-year % Change * Source: HKSAR, Census and Statistics Department Jan-May 2003 :- 7% 2002 Total :- 4%

2 nd Quarter 2003 Result Presentation Agenda  2 nd Quarter 2003 Financial Results Highlights  2003 Update & Outlook  Questions & Answers

2 nd Quarter 2003 Financial Results Highlights Group Turnover – 2 nd Quarter No. of Stores : (HK) (China) (China) + 10%

2 nd Quarter 2003 Financial Results Highlights 144 Comparable Stores Sales - 1%

144 Comparable Stores Sales 2nd Quarter 2003 vs. 2nd Quarter 2002 Product Category  Cigarette %  Non-food %  Packaged Drinks & Beer %  Packaged Ice Cream - 8.7%

2 nd Quarter 2003 Financial Results Highlights Group Turnover – June YTD No. of Stores : (HK) (China) (China) + 9%

2 nd Quarter 2003 Financial Results Highlights Group Net Profit – 2 nd Quarter + 2% * Restated for Income Tax Effect Per SSAP No.12 * * *

2 nd Quarter 2003 Financial Results Highlights Group Net Profit – June YTD - 9% * Restated for Income Tax Effect Per SSAP No.12 * * *

2 nd Quarter 2003 Financial Results Highlights Net Profit as % of Sales – 2 nd Quarter - 0.3% * Restated for Income Tax Effect Per SSAP No.12 * * *

2 nd Quarter 2003 Financial Results Highlights Net Profit as % of Sales – June YTD - 0.6% * Restated for Income Tax Effect Per SSAP No.12 * * *

2 nd Quarter 2003 Financial Results Highlights Basic Earnings Per Share – 2 nd Quarter * Restated for Income Tax Effect Per SSAP No.12 * * *

2 nd Quarter 2003 Financial Results Highlights Basic Earnings Per Share – June YTD Cent * Restated for Income Tax Effect Per SSAP No.12 * * *

2 nd Quarter 2003 Financial Results Highlights 2 nd Qtr nd Qtr 2003 Changes Group Turnover (HK$ Million) % Group Net Profit (HK$ Million) 16.3 * % Net Profit as % of Sales 4.7% * 4.4% - 0.3% Basic Earnings Per Share 2.5 Cents * 2.5 Cents - Dividend Cent Cent * Restated for Income Tax Effect Per SSAP No.12

Why 2 nd Quarter 2003 Results? Lower Gross Margin/Other Income - 1%

Why 2nd Quarter 2003 Results? Lower Expenses as % of Sales Expenses as % of Sales 2003 vs  Store Operating Expenses - HK 0.8Lower - China - China(0.3)Higher  Distribution (0.3)Higher  Administrative Expenses (0.2)Higher  China Start-up Expenses 0.4Lower 0.4Lower

Why 2 nd Quarter 2003 Results? Net Profit By Market 2 nd Qtr nd Qtr 2003 Changes (HK$ M) Hong Kong Market China Market (1.2)(2.1)(0.9) Total

2003 Update & Outlook

2003 Update & Outlook Circle K Hong Kong  SARS Impact Minor  Higher Unemployment & Deflation  Hong Kong Retail Sales Improving But Lower Than 2002’s  Growing Pressure on Comparable Store Sales & Gross Margin  Rental & Labour Cost to Decrease

2003 Update & Outlook Circle K Hong Kong Tactics Defensive Tactics  Lower Product Costs & Pricing  Maintain Gross Margin  Reduce Operating Expenses  New Store Opening Only with Right Economics

2003 Update & Outlook Circle K Hong Kong Tactics Offensive Tactics  More Aggressive Promotions:  Micro-wave Lunch Boxes  Tie-in Promotions with Coca-Cola  Increase STF (Speed, Tidiness & Friendliness) Gap Versus Competition  Localization of Stores  “Hot & In” Counters in Commercial Areas

2003 Update & Outlook Circle K Store Growth Hong Kong  Beginning of Year 166  Opened So Far (as at 28 July 2003) + 9  Under Construction / Committed + 6  Target Store Number at End of the Year 190

2003 Update & Outlook Circle K China  Strategies of Differentiation and Hard to Copy Very Important  “Hot & In” Right Strategy  Increasing Customer Preference & Weekly Sales  Need Improvement in Category Management & Marketing/Promotion  Harder to Find Good Sites with Right Size & Right Rental

2003 Update & Outlook Circle K China Benefits of CEPA 1.Wholly-owned Enterprise 2.Prefectural & County Cities 3.Lower Qualifying Requirements 4.Flexibility & Efficiency

2003 Update & Outlook Circle K China  Add Resources and Expedite Store Development  Review & Refine Business Model to Cut Down on Investment & Sizing  10 – 15 Stores by Year End  Developing A Smaller Store Model  Uphold Strategies  Available for Franchising  Quickly Build No. of Outlets  Add Expertise in Category Management

2003 Update & Outlook  Tough Hong Kong Market Conditions  Profitability and Cash Flow from Operations Still Healthy  China Strategies on Track But Need to Refine Model & Speed Up Expansion  Uncertain Profitability Outlook for 2 nd Half 2003