Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

CHUN WO DEVELOPMENT HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 711) (Warrant Code: 1032)

DISCLOSEABLE TRANSACTION DISPOSAL OF PROPERTY

The Board is pleased to announce that on 5 January 2013, the Vendor, an indirect wholly-owned subsidiary of the Company entered into the Provisional Agreement with the Purchaser, pursuant to which the Vendor has agreed to sell and the Purchaser has agreed to purchase the Property at a consideration of HK$50,000,000 subject to and upon the terms of the Provisional Agreement. A gain in an estimated sum of HK$10,800,000 is expected to accrue to the Group as a result of the Disposal.
As one or more of the applicable percentage ratios in respect of the Disposal is more than
5% but less than 25%, the Disposal constitutes a discloseable transaction for the Company and accordingly, is subject to the announcement requirement but exempt from the
Shareholders' approval requirement under Chapter 14 of the Listing Rules.

THE PROVISIONAL AGREEMENT Date : 5 January 2013 Vendor : Chun Wo Construction and Engineering Company Limited Purchaser : Paretto Investment Limited

To the best of the Directors' knowledge, information and belief having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner are third parties independent of the Company and its connected persons (as defined in the Listing Rules).

- 1 -

THE PROPERTY

The Property is located at Workshop C, 5/F., and Cooling Tower Space No. 6, 4/F., Nos.
760-762 Cheung Sha Wan Road, Kowloon, Hong Kong, which is a premises for industrial use of a total gross floor area of approximately 12,762 square feet. The Property is currently being leased out.
The asset to be disposed of by the Vendor is its entire interest in the Property. The Purchaser agrees to purchase the Property on an "as is" basis subject to existing tenancy as set out in the Provisional Agreement.
The Vendor shall prove and give good title to the Property in accordance with sections 13 and
13A of the Conveyancing and Property Ordinance (Cap. 219 of the Laws of Hong Kong).

CONSIDERATION

The Consideration is HK$50,000,000 and payable in cash by the Purchaser to the Vendor or any other payment arrangements as agreed by both parties in the following manner:
(i) HK$1,000,000 has been paid by the Purchaser to the Vendor's solicitors as stakeholder as initial deposit ("Initial Deposit") and partial payment of the Consideration upon signing of the Provisional Agreement;
(ii) HK$4,000,000 shall be payable to the Vendor's solicitors as stakeholder as further deposit ("Further Deposit") and partial payment of the Consideration, being balance of
10% of the Consideration on or before 18 January 2013; and
(iii) the remaining balance of HK$45,000,000 (the "Balance Consideration") shall be payable on or before 28 March 2013.
The Vendor's solicitors may release the Initial Deposit and Further Deposit to the Vendor provided that the Balance Consideration is sufficient to discharge the existing legal charge or mortgage in relation to the Property.

Forfeiture of deposits

In the event that the Purchaser shall fail to complete the purchase of the Property in accordance with the terms and conditions of the Provisional Agreement, the Vendor may forfeit the Initial Deposit and the Further Deposit without prejudice to the Vendor's other rights and remedies including specific performance. The Vendor shall also be entitled, at its sole discretion, to sell the Property to anyone as it may think fit.
In the event that the Vendor shall fail to complete the sale of the Property in accordance with the terms and conditions of the Provisional Agreement, the Vendor shall immediately refund the Initial Deposit and Further Deposit to the Purchaser. The Purchaser may, in addition to or in lieu of damages, seek specific performance of the Provisional Agreement.

- 2 -

Basis of determining the Consideration

The Consideration was determined after arm's length negotiations between the Vendor and the Purchaser, taking into account the recent prevailing market conditions of the property market in Hong Kong.

COMPLETION

Pursuant to the Provisional Agreement, a Formal Agreement shall be signed on or before 18
January 2013. Completion of the sale and purchase of the Property shall take place on or before the Completion Date.

INFORMATION ON THE COMPANY AND THE GROUP

The principal business activity of the Company is investment holding. The Group is principally engaged in civil engineering, electrical and mechanical engineering, foundation and building construction work, property development, property investment, professional services (including provision of security and property management services) and other activities.

INFORMATION ON THE PURCHASER

As informed by the Purchaser, the principal business activity of the Purchaser is property investment.

REASONS FOR AND BENEFITS OF THE DISPOSAL

Having considered the revitalizing property market condition, the Directors consider that the Disposal is a good opportunity for the Company to realise its long-term investment. The proceeds from the Disposal will enable the Company to reduce its long-term borrowings and to be used by the Group for pursuing investment opportunities in property and business development.
The Directors (including independent non-executive Directors of the Company) consider that the Provisional Agreement is entered into after arm's length negotiations and the terms therein are in accordance with the normal practice in the property market and the Disposal is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

POSSIBLE FINANCIAL EFFECT OF THE DISPOSAL

Taking into account the carrying value of HK$39,200,000 at 31 March 2012 of the Property, upon completion, a gain in the estimated sum of HK$10,800,000 before tax and expenses is expected to accrue to the Group as a result of the Disposal and the rental income will be decreased by approximately HK$1,822,824 per annum.
The net profit (loss) before taxation attributable to the Property for the financial years ended
31 March 2011 and 2012 were approximately HK$(997,092) and HK$1,030,566 respectively. The net profit (loss) after taxation attributable to the Property for the financial years ended 31
March 2011 and 2012 were approximately HK$(997,092) and HK$1,030,566 respectively.

- 3 -

USE OF PROCEEDS

The Company intends to use part of the net sale proceeds from the Disposal to repay certain bank borrowings and release the related mortgage on the Property and the remaining balance to be used by the Group for pursuing investment opportunities in property and business development.

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Disposal is more than 5% but less than 25%, the Disposal constitutes a discloseable transaction for the Company and accordingly, is subject to the announcement requirement but exempt from the Shareholders' approval requirement under Chapter 14 of the Listing Rules.

DEFINITIONS

In this announcement, the following expressions have the following meanings unless the context requires otherwise:
"Board" the board of Directors of the Company
"Company" Chun Wo Development Holdings Limited, a company incorporated in Bermuda with limited liability, whose shares are listed on the main board of the Stock Exchange
"Completion" completion of the Disposal in accordance with the terms and conditions of the Provisional Agreement and the Formal Agreement
"Completion Date" a date on or before 28 March 2013
"Consideration" the consideration for the Disposal pursuant to the Provisional
Agreement
"Director(s)" the director(s) of the Company
"Disposal" the disposal of the Property by the Vendor to the Purchaser subject and upon the terms and conditions of the Provisional Agreement and the Formal Agreement
"Formal Agreement" the formal agreement for sale and purchase to be entered into between the Vendor and the Purchaser on or before 18 January
2013 pursuant to the Provisional Agreement
"Group" the Company and its subsidiaries
"Hong Kong" the Hong Kong Special Administrative Region of the People's
Republic of China
"Listing Rules" the Rules Governing the Listing of Securities on the Stock
Exchange

- 4 -

"Property" Workshop C, 5/F., and Cooling Tower Space No. 6, 4/F., Nos.
760-762 Cheung Sha Wan Road, Kowloon, Hong Kong
"Provisional Agreement" the provisional agreement for sale and purchase in relation to the Property entered into between the Vendor and the Purchaser on 5 January 2013
"Purchaser" Paretto Investment Limited
"Share(s)" ordinary shares of HK$0.10 each in the capital of the Company
"Shareholders" holders of the Shares
"Stock Exchange" The Stock Exchange of Hong Kong Limited
"Vendor" Chun Wo Construction and Engineering Company Limited, an indirect wholly-owned subsidiary of the Company
"HK$" Hong Kong dollars, the lawful currency of Hong Kong
"%" per cent
By Order of the Board Pang Yat Ting, Dominic Chairman
Hong Kong, 7 January 2013

As at the date of this announcement, the executive directors of the Company are Mr. Pang Yat Ting, Dominic, Mr. Pang Yat Bond, Derrick, Mr. Kwok Yuk Chiu, Clement and Madam Li Wai Hang, Christina and the independent non-executive directors of the Company are Mr. Au Son Yiu, Mr. Chan Chiu Ying, Alec, Mr. Hui Chiu Chung, Stephen JP and Mr. Lee Shing See GBS, OBE, JP.

- 5 -

distributed by