Listed Company Information

SPREADPROSPECTS<00572> - Results Announcement

Spread Prospects Holdings Limited announced on 21/09/2005:
(stock code: 00572 )
Year end date: 31/12/2005
Currency: RMB
Auditors' Report: N/A
Interim report reviewed by: Both Audit Committee and Auditors

                                                        (Unaudited )
                                     (Unaudited )       Last
                                     Current            Corresponding
                                     Period             Period
                                     from 01/01/2005    from 01/01/2004
                                     to 30/06/2005      to 30/06/2004
                               Note  ('000      )       ('000      )
Turnover                           : 223,710            190,617           
Profit/(Loss) from Operations      : 59,195             54,463            
Finance cost                       : (2,440)            (1,325)           
Share of Profit/(Loss) of 
  Associates                       : N/A                N/A               
Share of Profit/(Loss) of
  Jointly Controlled Entities      : N/A                N/A               
Profit/(Loss) after Tax & MI       : 49,392             42,063            
% Change over Last Period          : +17.4     %
EPS/(LPS)-Basic (in dollars)       : 0.117              0.109             
         -Diluted (in dollars)     : 0.107              N/A               
Extraordinary (ETD) Gain/(Loss)    : N/A                N/A               
Profit/(Loss) after ETD Items      : 49,392             42,063            
Interim Dividend                   : NIL                NIL
  per Share                                              
(Specify if with other             : N/A                N/A
B/C Dates for 
  Interim Dividend                 : N/A   
Payable Date                       : N/A
B/C Dates for (-)            
  General Meeting                  : N/A   
Other Distribution for             : N/A
  Current Period                     
B/C Dates for Other 
  Distribution                     : N/A   



The Company is incorporated as an exempted company with limited liability 
in the Cayman Islands on 21 October 2002 under the Companies Law of the 
Cayman Islands.  Its shares are listed on the Main Board of The Stock 
Exchange of Hong Kong Limited (the "Stock Exchange").  The Company's 
ultimate holding company is Fu Teng Global Limited ("Fu Teng"), a company 
incorporated in the British Virgin Islands.

The condensed financial statements have been prepared in accordance with 
the applicable disclosure requirements of Appendix 16 to the Rules 
Governing the Listing of Securities on the Stock Exchange and with Hong 
Kong Accounting Standard 34 "Interim Financial Reporting" issued by the 
Hong Kong Institute of Certified Public Accountants (the "HKICPA").


The condensed financial statements have been prepared under the historical 
cost convention except for certain financial instruments, which are 
measured at fair value, as appropriate.

The accounting policies used in the condensed financial statements are 
consistent with those followed in the preparation of the annual financial 
statements of the Company and its subsidiaries (collectively the "Group") 
for the year ended 31 December 2004, except as described below.

In the current period, the Group has applied, for the first time, a number 
of new Hong Kong Financial Reporting Standards ("HKFRS(s)"), Hong Kong 
Accounting Standards ("HKAS(s)") and Interpretations (hereinafter 
collectively referred to as "new HKFRSs") issued by the HKICPA that are 
effective for accounting periods beginning on or after 1 January 2005.  
The adoption of the new HKFRSs has resulted in changes to the Group's 
accounting policies in the following areas that have an effect on how the 
results for the current or prior accounting periods are prepared and 

Share-based payments

In the current period, the Group has adopted HKFRS 2 "Share-based Payment" 
which requires an expense to be recognised where the Group buys goods or 
obtains services in exchange for shares or rights over shares ("equity-
settled transactions").  The principal impact of HKFRS 2 on the Group is 
in relation to the expensing of the fair value of the directors' and 
employees' share options of the Company determined at the date of grant of 
the share options over the vesting period.  Prior to the adoption of HKFRS 
2, the Group did not recognise the financial effect of these share options 
until they were exercised.  As the share options of the Group were granted 
after 7 November 2002 and had vested before 1 January 2005, the Group has 
not applied HKFRS 2 in accordance with the relevant transitional 
provisions.  Accordingly, no comparative figures have been restated.

Financial instruments

In the current period, the Group has applied HKAS 32 "Financial 
Instruments: Disclosure and Presentation" and HKAS 39 "Financial 
Instruments: Recognition and Measurement".  HKAS 32 requires retrospective 
application.  HKAS 39, which is effective for annual periods beginning on 
or after 1 January 2005, generally does not permit to recognise, 
derecognise or measure financial assets and liabilities on a retrospective 
basis.  The principal effects resulting from the implementation of HKAS 32 
and HKAS 39 are summarised below:

Convertible notes

HKAS 32 requires an issuer of a compound financial instrument (that 
contains both financial liability and equity components) to separate the 
compound financial instrument into its liability and equity components on 
its initial recognition and to account for these components separately.  
In subsequent periods, the liability component is carried at amortised 
cost using the effective interest method.  The principal impact of HKAS 32 
on the Group is in relation to the convertible notes issued by the Company 
on 13 December 2004.  Previously, certain portion of the convertible notes 
was considered to constitute equity component and therefore recognised as 
a capital reserve.  Deferred tax liabilities thereon were also recognised. 
 According to HKAS 32, the conversion option should be classified as 
equity component only if the option can be converted by exchanging a fixed 
amount of cash or another financial asset for a fixed number of the 
entity's own equity instruments.  During the current period, the Group re
-visited the terms of the convertible notes and determined that the 
convertible notes does not contain any equity components because the 
conversion price for the convertible notes is subject to change and the 
convertible notes cannot be converted into a fixed number of the Company's 
shares.  Instead the convertible notes contain an embedded conversion 
option which is not closely related to the host contract and is required 
to be separately accounted for under HKAS 39.  Because HKAS 32 requires 
retrospective application, comparative figures have been restated to 
derecognise the capital reserve and the corresponding deferred tax 
liabilities (see note 3 for the financial impact).


From 1 January 2005 onwards, all derivatives that are within the scope of 
HKAS 39 are required to be carried at fair value at each balance sheet 
date regardless of whether they are deemed as held for trading or 
designated as effective hedging instruments.  Under HKAS 39, derivatives 
(including embedded derivatives separately accounted for from the host 
contracts) are deemed as held-for-trading financial assets or financial 
liabilities, unless they qualify and are designated as effective hedging 
instruments.  The Group has applied the relevant transitional provisions 
in HKAS 39.  The conversion option embedded in the convertible notes is 
separately accounted for and measured at fair value as at 1 January 2005, 
and the Group recognised the fair value amounting to RMB1,016,000 (see 
note 3 for the financial impact).  During the current period, there is no 
material change in the fair value of the derivative financial instrument.

Owner-occupied leasehold interest in land

In previous periods, owner-occupied leasehold land and buildings were 
included in property, plant and equipment and measured using the cost 
model.  In the current period, the Group has applied HKAS 17 "Leases".  
Under HKAS 17, the land and buildings elements of a lease of land and 
buildings are considered separately for the purposes of lease 
classification, unless the lease payments cannot be allocated reliably 
between the land and buildings elements, in which case, the entire lease 
is generally treated as a finance lease.  To the extent that the 
allocation of the lease payments between the land and buildings elements 
can be made reliably, the leasehold interests in land are reclassified to 
prepaid lease payments under operating leases, which are carried at cost 
and amortised over the lease term on a straight line basis.  This change 
in accounting policy has been applied retrospectively (see note 3 for the 
financial impact).


The cumulative effects of the application of the new HKFRSs as at 31 
December 2004 and 1 January 2005 are summarised below:

At      Adjust-         Reclassi-   At                          At
31.12.  ments           fication    31.12       Adjustments     1.1.2005
2004                    	    .2004   
RMB'000 RMB'000         RMB'000     RMB'000     RMB'000         RMB'000
ally                    (Note)      (Restated)                  (Restated)

Non-current assets
  Property, plant and equipment
128,010 (2,110)         -               125,900 -               125,900
Prepaid lease payments
-       2,063           -               2,063   -               2,063
Current assets
  Other receivables, deposits and
10,856  -               (2,067)         8,789   -               8,789
  Prepaid lease payments
-       47              2,067           2,114   -               2,114
Non-current liabilities
  Convertible notes
(30,784) (1,016)        -               (31,800) 1,016          (30,784)
Derivative financial instruments
-       -               -               -       (1,016)         (1,016)
Deferred tax liability
(178)   178             -               -       -               -   
Total effects on assets and liabilities
107,904 (838)           -               107,066 -               107,066

Capital and reserves
  Capital reserve
861     (861)           -               -       -               -   
Accumulated profits
185,947 23              -               185,970 -               185,970
Total effects on equity
186,808 (838)           -               185,970 -               185,970

Note:   It represents the reclassification of the prepaid lease payments 
under other operating leases which were previously included in the other 
receivables, deposits and prepayments.


The calculation of the basic and diluted earnings per share is based on 
the following data:

                                Six months ended 30 June
                                        2005    2004
                                        RMB'000 RMB'000

Net profit for the period for the purposes of basic
  earnings per share                    49,392  42,063
Effect of dilutive potential ordinary shares:
  Interest on convertible notes         892
Net profit for the period for the purposes of
          diluted earnings per share    50,284

                                      Six months ended 30 June
                                        2005            2004
Number of shares:

Weighted average number of ordinary shares for
  the purposes of basic earnings per share
                                        422,800,000     386,536,264
Effect of dilutive potential ordinary shares:
  Convertible notes                     45,777,427

Weighted average number of ordinary shares for
  the purposes of diluted earnings per share

        The computation of diluted earnings per share does not assume the 
exercise of the Company's outstanding share options as the exercise price 
of these options is higher than the average market price for the Company's 
shares for both periods.