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                                                                     EXHIBIT 4.2
                                                                TO ANNUAL REPORT
                                                                    ON FORM 20-F

                              LAND LEASE AGREEMENT

                                     between

                        Guangzhou Railway (Group) Company

                                  (the Lessor)

                                        &

                        Guangshen Railway Company Limited

                                  (the Lessee)

                             Date: November 15, 2004

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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Clause   Heading
------   -------
<S>      <C>
1.       Land for Lease

2.       Lease Term

3.       Rent and Payment of Rent

4.       Facilities to the Land

5.       Delivery of the Leased Land

6.       Rights and Obligations of the Lessor

7.       Rights and Obligations of the Lessee

8.       Representations and Warranties of the Lessor

9.       Termination of the Agreement

10.      Breach of the Agreement

11.      Force Majeure

12.      Governing Law

13.      Dispute Resolution

14.      Registration and Expenses

15.      Effectiveness and Miscellaneous
</TABLE>

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THIS AGREEMENT is made on November 15, 2004 in Shenzhen

BETWEEN

   (1)   Guangzhou Railway (Group) Company (the "Lessor"); and

   (2)   Guangshen Railway Co., Ltd. (the "Lessee")

WHEREAS:

      1.    The Lessor is a state owned enterprise incorporated in the People's
            Republic of China ("PRC") with its registered address at No. 151
            Zhongshan Yilu, Guangzhou, PRC, and the business license number
            4400001007908.

      2.    According to the approval and authorization from the State Council
            and the Ministry of Land and Resources, the Lessor has acquired the
            right to use the land set forth in Schedule One ("Schedule One
            Land") to this Agreement in the manner of operating under the
            government authorization and transfer of the right to use
            state-owned land;

      3.    The Lessee is a company incorporated in PRC with its registered
            address at No. 1052 Hepinglu, Shenzhen, PRC, and the business
            license number 19241166-3.

      4.    The Lessor hereby agrees to lease and the Lessee agrees to accept
            the right to use the Schedule One Land.

NOW IT IS HEREBY AGREED as follows:

1     LAND FOR LEASE

      1.1 The land for lease is the land listed in Schedule One with altogether
   200 pieces of land and the overall area of 28,194,642.31 square meters.

      1.2 In case of any increase or decrease of the leased land during the
   lease term, the two parties shall enter into a supplementary agreement
   regarding the changes.

2     LEASE TERM

      2.1 The lease term shall be twenty (20) years, which will start upon the
   effective date of this Agreement.

      2.2 Unless otherwise for the reasons of force majeure events which are
   unanticipated, unavoidable or uncontrollable, when the lease term expires,
   the Lessee is entitled to renew the

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   lease term in accordance with the terms and conditions under this Agreement
   and the Lessor shall not refuse the Lessee's request of renewal.

3  RENT AND PAYMENT OF RENT

      3.1 In accordance with the negotiation between the two parties and with
   reference to the value of the right to use the land determined in the Report
   on the Evaluation of the Land Assets given by the Beijing Pan-China Assets
   Appraisal Co., Ltd, the rent shall be amortized within fifty (50) years. The
   rent shall not be more than RMB 74 million per year.

      3.2 The Lessor shall pay the rent in quarter within fifteen (15) days
   before the end of the prior quarter without prior notification.

      3.3 Except the rent under this Agreement and expenses resulting from
   breach of this Agreement by the Lessee, the Lessor undertakes that the Lessee
   shall not be liable for any other fees for any reasons (including any taxes
   which shall be paid by the Lessor), unless otherwise provided by law.

4  FACILITIES TO THE LAND

      4.1 Within the lease term, the Lessor shall be liable for the maintenance
   of all the facilities to the land.

5  DELIVERY OF THE LEASED LAND

      5.1 The Lessor shall finish all the formalities relating to getting the
   permission of leasing the Schedule One Land no later than the commencement
   date of the lease term provided herein, and deliver such land to the Lessee.

6  RIGHTS AND OBLIGATIONS OF THE LESSOR

      6.1 The Lessor is entitled to the following rights:

         6.1.1 Claiming rent under the term provided herein;

         6.1.2 Supervise the use of the land by the Lessee to ensure the Lessee
      makes rational use of the land pursuant to law and the provisions under
      this Agreement. The Lessee shall actively cooperate the Lessor in its
      supervision.

      6.2 The Lessor shall assume the following obligations:

         6.2.1 Dispose formalities with respect to acquiring permission of
      leasing the land in accordance with provisions under this Agreement;

         6.2.2 Assume all taxes, levies in relation to the right to use the land
      occurred during the lease term, unless otherwise provided by law;

         6.2.3 Fully perform its obligations under the land use agreement;

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         6.2.4 If necessary, the Lessor shall provide the Lessee with the
      relevant certificate documents for the use of the Schedule One Land by the
      Lessee, such as projects of construction and installation.

         6.2.5 The title of the buildings constructed by the Lessee on the
      Schedule One Land during the lease term shall belong to the Lessee, and
      the Lessor shall assist the Lessee in the disposal of the relevant
      certificates or license.

         6.2.6 During the lease term, the Lessor shall not transfer, lease or
      mortgage the Schedule One Land to a third party, or establish any third
      party interest on such land to limit or affect the Lessee's use of the
      land.

         6.2.7 Provide relevant materials to the Lessee and assist the Lessee to
      dispose the formalities of registering the title of the buildings on the
      Schedule One Land or change of such registration with the relevant
      authorities.

7  THE RIGHTS AND OBLIGATIONS OF THE LESSEE

      7.1 The Lessee is entitled to the following rights:

         7.1.1 to use the land in compliance with the terms and conditions of
      this Agreement;

         7.1.2 build various buildings pursuant to the provided purpose for the
      land use;

         7.1.3 the Lessee is entitled to lease, mortgage and transfer the
      buildings it constructs on the Schedule One Land and is also entitled to
      receive proceeds generated from such disposal.

      7.2 The Lessee shall assume the following obligations:

         7.2.1 The Lessor shall pay the rent on time in accordance with this
      Agreement. In case of overdue payment, the Lessee shall pay the Lessor a
      daily liquidated compensation equivalent to 0.03% of the rent payable.

         7.2.2 All construction and other activities the Lessee conducts on the
      Schedule One Land shall be in compliance with laws and regulations of the
      People's Republic of China;

         7.2.3 In the event of laying down various pipelines through the
      Schedule One Land for public interests, the government shall obtain
      consent from the Lessee, and the Lessee shall not refuse without any
      reasons, but the entity carrying out such construction shall make
      reasonable compensation to the Lessee. If such construction act damages
      seeded strips, passageway or pipelines, the entity cutting through the
      land shall be liable for the repair of such damage. The cutting through by
      various pipelines laid down for public interests shall not impede the
      construction and the finished buildings.

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         7.2.4 The Lessee shall ensure that the management personnel, policemen,
      firemen ambulancemen and the relevant equipments and vehicles of the
      government or the Lessor may enter the Schedule One Land and the buildings
      thereto without any trouble to conduct public affairs or emergency
      services;

         7.2.5 In the event that the construction or operation activities of the
      Lessee damages the surrounding environment and the underground facilities,
      which makes the state, enterprises or individuals suffer losses, the
      Lessee shall be liable for the compensation.

         7.2.6 The Lessee shall not develop, dug or occupy any other land
outside the Schedule One Land without authorization. In case of provisional use
of the land or road outside the Schedule One Land, the Lessee must obtain the
approval from the competent government authorities or the user of such land or
road, and make necessary payment.

8  REPRESENTATIONS AND WARRANTIES OF THE LESSOR

      8.1 The Lessor hereby provides representations, warranties and
   undertakings to the Lessee as follows:

         8.1.1 The Lessor has the right to use the state owned Schedule One Land
      and has met the conditions of leasing such land;

         8.1.2 By and upon the execution date of this Agreement, the Lessor has
      not put any mortgage or any other restrictions to limit the right to use
      the Schedule One Land.

      8.2 The Lessor shall fully indemnify the Lessor for any losses or expenses
   incurred to the Lessee arising from any untruth, misleading or violation of
   such statements, warranties and undertakings.

9  TERMINATION OF THE AGREEMENT

      9.1 The Agreement shall be terminated if any of the following events
   occur:

         9.1.1 The lease term expires and the Lessee does not renew the
      Agreement;

         9.1.2 The Lessee terminates this Agreement before the expiration of the
      lease term (including dissolution, insolvency of the Lessee);

         9.1.3 The two parties to this Agreement agree to terminate before the
      expiration of the lease term;

         9.1.4 Upon the expiration of the lease Agreement, the Agreement is not
      renewed not for the reason of the Lessor;

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      9.2 After the termination of this Agreement, the Lessee shall return the
   Schedule One Land to the Lessor after disposing all the buildings, affiliated
   articles, equipments and facilities on the land.

      9.3 If the Lessee is not liable for the termination of this Agreement
   before the expiration of the lease term and the Lessor takes back the
   Schedule One Land, the Lessor shall compensate a fee equivalent to the left
   value with deduction of the depreciation charges to all the buildings,
   affiliated articles, equipments and facilities.

10 BREACH OF THE AGREEMENT

      10.1 The Lessor shall be regarded as breach of this Agreement in case of

         10.1.1 not delivering the Schedule One Land to the Lessee upon the time
      provided in this Agreement;

         10.1.2 any other violation of any terms under this Agreement;

      10.2 The Lessee shall be regarded as breach of this Agreement in case of

         10.2.1 not paying the rent upon the time provided in this Agreement;

         10.2.2 any other violation of any terms under this Agreement.

      10.3 The breaching party shall pay liquidated damages to the other party
   in accordance with the provisions under this Agreement. In case of the
   liquidated damages cannot cover the losses suffered by the party who does not
   breach the Agreement, the breaching party shall indemnify the actual losses
   resulting from such breach of Agreement.

11 FORCE MAJEURE

      11.1 In case of inability of one party or both parities to perform this
   Agreement because of force majeure events during the enforcement of this
   Agreement, the party unable to perform its obligations shall not be liable
   for the breach of Agreement, but such party affected by the force majeure
   events shall immediately notify the other party and provide the relevant
   proving documents notarized by the local notary agency where the force
   majeure events occur.

12 GOVERNING LAW

      12.1 The establishment, effectiveness, interpretation, performance and
   dispute resolution of this Agreement shall all be in accordance with the laws
   of the People's Republic of China.

13 DISPUTE RESOLUTION

      13.1 During the performance of this Agreement, in case of any disputes
   arising, the parties shall first resolve the dispute by negotiation. Should
   the dispute not be resolved by

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   negotiation, either party might seek litigation to the People's Court where
   the Schedule One Land locates.

14 REGISTRATION AND EXPENSES

      14.1 The two parties shall dispose the registration formalities for land
   lease with the competent authority of land and resources within thirty (30)
   days as of the effective date of this Agreement.

      14.2 The registration fee shall be paid in accordance with the relevant
   regulations.

15 EFFECTIVENESS AND MISCELLANEOUS

      15.1 This Agreement shall become effective after satisfying the following
   conditions:

         (1) Legal or authorized representatives from both parties execute on
             this Agreement;

         (2) The Lessee has performed the voting procedure for affiliated
             transaction and obtained permission to this Agreement from the
             shareholders or exemption to the transactions involved in this
             Agreement from the Hong Kong Stock Exchanges;

         (3) The domestic initial issuing of A shares has been approved and all
             the funds raised have been remitted to the account of the Lessees;

         (4) The Agreement for the Sale and Purchase of the Railway Operation
             Assets between Guangshen Co., Ltd and Guangzhou Railway Yangcheng
             Railway Company has come into effect and the act of purchasing the
             assets and operation has begun.

      15.2 The "day" herein in this Agreement means business day, excluding
   Saturday, Sunday and public holidays.

      15.3 The schedule to this Agreement is an integral part to this Agreement
   and has the same legal effect as this Agreement.

      15.4 As for matters not included in this Agreement, the two parties shall
   enter into a supplementary agreement after negotiation. The supplementary
   agreement must be registered with the local competent land authority.

      15.5 This Agreement shall be executed on five counterparts, and each
   counterpart is original. Each party holds two counterparts and the other one
   shall be filed with the land administrative authority.

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LESSOR: Guangzhou Railway (Group) Company

LEGAL OR AUTHORIZED REPRESENTATIVE:

LESSEE: Guangshen Railway Co., Ltd.

LEGAL OR AUTHORIZED REPRESENTATIVE:

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