KONG Wah Holdings is setting up a joint venture worth 93.88 million yuan (about HK$88.4 million) in Tianjin to manufacture consumer electronic products as a further move to expand its presence in China. Kong Wah, which owns 51 per cent of the venture, will pay about 23.94 million yuan in cash and a further 23.94 million yuan by issuing 19.45 million new shares at HK$1.658 a share. The share issue is subject to Hongkong stock exchange approval. If such approval is not obtained, Kong Wah will pay cash for its interest. The 50-year joint venture, with a registered capital of 120 million yuan, is 49 per cent owned by Tianjin Greatwall Electronic Corp. A new joint venture company, Tianjin Greatwall Group, will be formed and will acquire from Tianjin Greatwall Electronic assets including a 279,000 square metre plant, machinery and land use rights for 93.88 million yuan. The Chinese partner will contribute assets such as factory premises and machinery for its 49 per cent stake. Tianjin Greatwall Electronic has agreed not to dispose of the Kong Wah shares for at least two years. Kong Wah has guaranteed that Tianjin Greatwall Electronic will earn a premium of at least 20 per cent of the issue price of $1.658 per Kong Wah share within three years or it will make up the difference. The issue of 19.45 million shares represents about 1.8 per cent of the existing issued share capital of Kong Wah.