HONG KONG, September 5 /PRNewswire/ --

- Aim to be the Largest Hong Kong Listed Non-State Owned Coal Mining
Company in the PRC

Kiu Hung International Holdings Limited ("Kiu Hung International" or the
"Company"; HKEx: 381) today announced its acquisition of the entire equity
interest in Tongliao City Heng Yuan Mining Company Limited ("Heng Yuan")
which owns (i) the mining rights and operation facilities and properties of
the Huanghuashan Coal Mine and (ii) the exploration rights of the Bayanhushuo
Coalfield with a total consideration of HK$840 million (subject to
adjustments (Note)).

Huanghuashan Coal Mine is located in Tongliao City of Inner Mongolia of
the PRC. Heng Yuan owns the mining license (certificate no.1500000510445) and
relevant operating facilities and properties of the coal mine. Pursuant to a
reserve assessment report compiled by Team 472 of the Inner Mongolia Bureau
of Coal Field Geology in 2004, Huanghuashan Coal Mine has estimated coal
reserves of approximately 5.42 million tonnes in a site area of 1.71 km2. The
coal type of Huanghuashan Coal Mine is anthracite coal and the current market
price at pit is approximately RMB250 per tonne.

Bayanhushuo Coalfield is located in Xilinguolemeng of Inner Mongolia.
Heng Yuan owns the exploration license (certificate no. 1525000510130) of the
coal mine. Heng Yuan has appointed Team 104 of the Inner Mongolia Bureau of
Coal Field Geology to perform exploration works for the coalfield and the
general exploration stage is expected to be completed by the end of September
2007. Based on the progressive results of the exploration, the amount of the
coal reserves in the Bayanhushuo Coalfield is estimated to be more than 
300 million tonnes in a site area of 51.34 km2. The coal type of Banyanhushuo
Coalfield is high quality thermal coal and the current market price at pit is
approximately RMB190 per tonne.

Mr. Joseph Hui, Chairman of Kiu Hung International, said, "By acquiring
these two additional coal mines, we will become the largest Hong Kong listed
non-state owned coal mining company in the PRC in terms of proven coal
reserves with exponential growth potential. Upon completion of the
acquisition, we will operate 3 coal mines with total coal reserves of over
400 million tonnes (including the existing coal mine of Mingrunfeng)."

"The market shall understand that the Huanghuashan Coal Mine will be
ready for commercial exploitation immediately upon completion of the
acquisition. It will make immediate contribution to the Company's coal mining
business," added Mr. Hui.

Assuming no adjustment has to be made, the total consideration of 
HK$840 million shall be satisfied by (i) HK$160 million of cash, (ii) 
HK$420 million by the issue of 600 million consideration shares and (iii) 
HK$260 million by the issue of convertible notes with a conversion price of 
HK$0.70 per conversion share.

Note: For details of the adjustment mechanism, please refer to the
announcement on the website of Hong Kong Exchanges and Clearing Limited at
www.hkex.com.hk under "Latest Listed Company Information".

About Kiu Hung International

Kiu Hung International Holdings Limited (HKEx: 381) is an investment
holding company. Its subsidiaries are principally engaged in the design and
manufacture of a wide range of toys, decorative gifts, decorative flags and
garden products and the Group is also an authorised manufacturer for the 
2008 Beijing Olympic toy products.

In 2007, Kiu Hung International has diversified into the energy and
natural resources business by acquiring the Guerbanhada coal mine in the
Inner Mongolia Autonomous Region of the PRC. The coal mine covers a site area
of approximately 24.91 km2 and has estimated coal reserves of 106 million
tonnes as being assessed by Steffen Robertson and Kirsten (Australasia) Pty
Ltd ("SRK Consulting"). In September 2007, Kiu Hung International announced
its acquisitions of two additional coal mines in the Inner Mongolia
Autonomous Region of the PRC with total coal reserves of over 305 million
tonnes.

Contact:

    ACA Financial PR

    Eric Yip
    Tel:   +852-2801-0036
    Email: eric.yip@aca.com.hk

    Pansy Leung
    Tel:   +852-2801-0021
    Email: pansy.leung@aca.com.hk