Alltronics Holdings Limited — Proxy Solicitation & Information Statement 2016

Nov 24, 2016

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Alltronics Holdings Limited, you should at once hand this circular and accompanying form of proxy to the purchaser or transferee, or to the bank, licensed securities dealer, registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

This circular appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of Alltronics Holdings Limited.

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ALLTRONICS HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 833)

PROPOSED ISSUE OF NEW SHARES UNDER SPECIFIC MANDATE AND NOTICE OF EGM

A letter from the Board of the Company is set out on pages 5 to 17 of this circular.

A notice convening an extraordinary general meeting of the Company (the “EGM”) to be held at Unit 2401-02, Admiralty Centre I, 18 Harcourt Road, Hong Kong on 13 December 2016 at 11:00 a.m. is set out on pages 18 to 19 of this circular. A form of proxy for use at the EGM is enclosed herewith. Whether or not you are able to attend and vote at the EGM, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar of the Company in Hong Kong, Tricor Tengis Limited, at 22/F, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM. Completion and return of the form of proxy will not preclude you from attending and voting at the EGM or any adjournment thereof should you so wish and in such event, the instrument appointing a proxy shall be deemed to be revoked.

25 November 2016

CONTENTS

		Pages
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
**LETTER FROM **	THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		18

– i –

DEFINITIONS

In this circular, unless the context otherwise requires, the following words and expressions have the following meanings:

• “Announcement”

• the announcement of the Company dated 31 October 2016 in respect of the proposed Subscription

• “Authorities”

• any governments, courts, arbitral tribunals, governmental, regulatory or official authorities, departments or agencies of any governments, statutory or regulatory bodies, stock exchanges whether in Hong Kong or elsewhere including without limitation the Securities and Futures Commission and the Stock Exchange, and “Authority” means any one of them

• “Beijing Property”

• “Pretty Shopping Centre* 飄亮購物中心” located at Beijing, the PRC

• “Board”

• the board of Directors

• “Business Day(s)”

• a day (excluding Saturday, Sunday or public holiday and any day on which a tropical cyclone warning no. 8 or above is hoisted or remains hoisted between 9:00 a.m. and 12:00 noon and is not lowered at or before 12:00 noon or on which a “black” rainstorm warning is hoisted or remains in effect between 9:00 a.m. and 12:00 noon and is not discontinued at or before 12:00 noon) on which licensed banks in Hong Kong are generally open for business throughout their normal business hours

• “close associates”

• has the meaning ascribed to it under the Listing Rules

• “Company”

• Alltronics Holdings Limited, a company incorporated in the Cayman Islands with limited liability and the issued Shares of which are listed on the Stock Exchange

• “Completion”

• the completion of the allotment and issue by the Company of, and the subscription by the Investor for, the Subscription Shares in accordance with the terms of the Subscription Agreement

• For identification purpose only

– 1 –

DEFINITIONS

• “Completion Date”

• “Conditions”

• “connected persons”

• “Director(s)”

• “EGM”

• “Encumbrances”

• “Group”

• “Hong Kong”

• “Investor”

• “Latest Practicable Date”

• “Listing Rules”

• means (i) a date falling on the fifth Business Days after fulfilment of the Conditions (except for those Conditions which are only capable of being fulfilled on the Completion Date) in the Subscription Agreement unless waived by the Investor in accordance with the Subscription Agreement as agreed by the parties thereto; or (ii) such other date as the parties to the Subscription Agreement may agree in writing

• the conditions precedent for the Completion as set out in the Subscription Agreement

• has the meaning ascribed to it under the Listing Rules

• the director(s) of the Company

• the extraordinary general meeting of the Company to be convened to consider and, if thought fit, to approve the Subscription Agreement and the transactions contemplated thereunder (including the grant of Specific Mandate for the allotment and issue of the Subscription Shares)

• any charge, mortgage, lien, option, equitable right, power of sale, pledge, hypothecation, retention of title, right of pre-emption, right of first refusal or other third-party right or security interest of any kind or an agreement, arrangement or obligation to create any of the foregoing

• the Company and its subsidiaries

• the Hong Kong Special Administrative Region of the PRC

• Wealth Channel Global Limited, a company incorporated in the British Virgin Islands, the investor of the Subscription Shares

• 22 November 2016, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular

• the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

– 2 –

DEFINITIONS

• “Lijiang”

• “Material Adverse Effect (or Change)”

• “PRC”

• “Share(s)”

• “Shareholder(s)”

• “Specific Mandate”

• “Stock Exchange”

• “Subscription”

• “Subscription Agreement”

• “Subscription Price”

• “Subscription Share(s)”

• “Trading Day(s)”

• Lijiang Investment Holdings Limited, a company incorporated in the British Virgin Islands

• any event, circumstance, occurrence, fact, condition, change or effect that is materially adverse to the business, operations, financial condition, management, properties, assets or liabilities of any member of the Group; or adversely affecting the ability of the Company to perform any of its obligations hereunder or to consummate the transactions contemplated in the Subscription Agreement

• The People’s Republic of China, which for the purpose of this circular, shall exclude Hong Kong, Macau Special Administrative Region of the PRC and Taiwan

• share(s) of HK$0.01 each in the share capital of the Company

• holder(s) of the issued Share(s)

• the specific mandate to be sought from the Shareholders at the EGM to authorise the Directors to allot, issue and deal in the Subscription Shares

• The Stock Exchange of Hong Kong Limited

• the subscription for the Subscription Shares by the Investor pursuant to the Subscription Agreement

• the agreement dated 31 October 2016 entered into between the Company and the Investor in relation to the Subscription

• the subscription price of HK$1.49 per Subscription Share

• an aggregate of 23,437,980 Shares to be subscribed by the Investor pursuant to the Subscription Agreement

• a day on which the Stock Exchange is open for dealing business in Hong Kong

– 3 –

DEFINITIONS

“HK$”	Hong Kong dollars, the lawful currency of Hong
	Kong
“%”	per cent

– 4 –

LETTER FROM THE BOARD

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ALLTRONICS HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 833)

Executive Directors: Mr. Lam Yin Kee (Chairman and Chief Executive) Ms. Yeung Po Wah Ms. Liu Jing Mr. Lam Chee Tai, Eric Mr. So Kin Hung

Non-executive Directors: Mr. Fan, William Chung Yue

Independent Non-executive Directors: Mr. Pang Kwong Wah Mr. Yau Ming Kim, Robert Mr. Yen Yuen Ho, Tony

Registered office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Principal place of business in Hong Kong: Unit 408, 4th Floor Citicorp Centre 18 Whitfield Road Hong Kong

25 November 2016

To the Shareholders

Dear Sir or Madam,

PROPOSED ISSUE OF NEW SHARES UNDER SPECIFIC MANDATE AND NOTICE OF EGM

INTRODUCTION

Reference is made to the Announcement, in which the Board announced that on 31 October 2016 (after trading hours of the Stock Exchange), the Company entered into the Subscription Agreement with the Investor, pursuant to which the Investor has conditionally agreed to subscribe for, and the Company has conditionally agreed to allot and issue, a total of 23,437,980 Subscription Shares at the Subscription Price of HK$1.49 per Subscription Share.

The Subscription Agreement and the transactions contemplated thereunder (including the grant of the Specific Mandate for the allotment and issue of the Subscription Shares) are subject to Shareholder’s approval at the EGM.

– 5 –

LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among others, (i) further information relating to the Subscription Agreement and the transactions contemplated thereunder (including the grant of the Specific Mandate for the allotment and issue of the Subscription Shares); and (ii) the notice convening the EGM.

SUBSCRIPTION OF NEW SHARES UNDER SPECIFIC MANDATE

On 31 October 2016 (after trading hours of the Stock Exchange), the Company entered into the Subscription Agreement with the Investor, pursuant to which the Investor has conditionally agreed to subscribe for, and the Company has conditionally agreed to allot and issue, a total of 23,437,980 Subscription Shares at the Subscription Price of HK$1.49 per Subscription Share. Principal terms of the Subscription Agreement are summarised below:

The Subscription Agreement

Date: 31 October 2016 (after trading hours of the Stock Exchange)

Parties:

Issuer: the Company; and Investor: Wealth Channel Global Limited

The Investor is a company incorporated in the British Virgin Islands whose principal business is investment holding. The Investor is a wholly-owned subsidiary of Diamond Path International Investments Limited, a company incorporated in the British Virgin Islands with limited liability. Diamond Path International Investments Limited is a wholly-owned subsidiary of Huarong Investment Stock Corporation Limited (“Huarong Investment”, previously known as Chun Sing Engineering Holdings Limited), a company incorporated in the Cayman Islands with limited liability, the issued shares of which are listed on the Stock Exchange (stock code: 2277).

Huarong Investment and its subsidiaries are principally engaged in the foundation and substructure construction business in Hong Kong. As set out in the annual report of Huarong Investment for the year ended 31 March 2016 and the voluntary announcement dated 26 August 2016 issued by Huarong Investment, it is the strategy of Huarong Investment to diversify its business operations. With the support of China Huarong International Holdings Limited (“China Huarong”) by the provision of the loans in a total principal amount of US$300 million (equivalent to approximately HK$2,340 million), Huarong Investment intends to expand its business operations to money lending, finance lease and other future investment opportunities which may arise from time to time. As at the Latest Practical Date, Huarong Investment is owned as to 27.99% by China Huarong indirectly.

– 6 –

LETTER FROM THE BOARD

Relying on the strong financial position and business connections of China Huarong and Huarong Investment in the PRC and in Hong Kong, the Directors believe that the Subscription will help the Group to explore more business opportunities in the PRC and in Hong Kong. With the Investor as a strategic investor of the Company, the Directors believe that this will also enhance the Group’s borrowing power and fund raising ability in Hong Kong, at comparatively more favorable terms, to finance any of its future investment opportunities, if required.

As at the Latest Practicable Date, the Investor has no intention to appoint any person as a Director of the Company.

The Investor is 100% owned by Diamond Path International Investments Limited. Diamond Path International Investments Limited is 100% owned by Huarong Investment, which is 27.99% owned by China Huarong indirectly. China Huarong is the sole shareholder of Lijiang, which entered into a subscription agreement with the Company on 17 August 2016 and holds 10.47% of the entire issued share capital of the Company as at the Latest Practicable Date.

After reviewing the announcement dated 30 August 2016 of the Company regarding its interim financial results for the 6 months ended 30 June 2016 and as referred by China Huarong, Huarong Investment approached the Company and negotiated the potential investment opportunity with the Company in October 2016.

Save for the above, the subscription by Lijiang pursuant to the subscription agreement dated 17 August 2016 entered into between the Company and Lijiang and the Subscription are not connected to each other in any way and there is no obligation or agreement between the Company and Huarong Investment in relation to the Subscription.

To the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiries, as at the Latest Practicable Date, the Subscription does not constitute a connected transaction since the Investor is not a connected person of the Company pursuant to the Listing Rules. Before entering into of the Subscription Agreement, neither the Investor nor its close associates has any interests in any Shares.

To the best knowledge of the Directors, the Company is not aware of any agreement, arrangement, understanding or undertaking (whether formal or informal and whether express or implied) that has been entered into between China Huarong and Huarong Investment with respect to the Subscription.

Immediately upon completion of the Subscription, assuming there is no other change in the share capital of the Company from the Latest Practicable Date up to the Completion Date, the Investor will be interested in approximately 4.46% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares.

– 7 –

LETTER FROM THE BOARD

The Subscription Shares

23,437,980 new Subscription Shares representing approximately 4.67% of the existing issued share capital of the Company as at the Latest Practicable Date and approximately 4.46% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares.

The aggregate nominal value of the Subscription Shares is HK$234,379.80.

Subscription Price

Pursuant to the Subscription Agreement, the Investor shall pay to the Company the total subscription money pursuant to the Subscription Agreement on the Completion Date.

The Subscription Price of HK$1.49 per Subscription Share represents:

• (i) a discount of approximately 47.16% to the closing price of HK$2.820 per Share as quoted on the Stock Exchange on the date of the Subscription Agreement;

• (ii) a discount of approximately 46.94% to the average closing price of approximately HK$2.808 per Share as quoted on the Stock Exchange for the last five consecutive Trading Days immediately prior to the date of the Subscription Agreement; and

• (iii) a discount of approximately 46.21% to the closing price of HK$2.770 per Share as quoted on the Stock Exchange on the Latest Practicable Date.

The net Subscription Price, after deduction of relevant expenses (including but not limited to legal expenses and disbursements) incidental to the Subscription of approximately HK$0.3 million, is estimated to be approximately HK$1.48 per Subscription Share.

The Subscription Price was arrived at after arm’s length negotiations between the Company and the Investor with reference to, among other matters, the subscription price of HK$1.49 pursuant to the subscription agreement dated 17 August 2016 entered into between the Company and Lijiang, the prevailing market prices of the Shares and the prominent background and market position of China Huarong and Huarong Investment. To assess the fairness and reasonableness of the Subscription Price, the Directors have also taken into consideration of (i) the Group’s diversification strategy; and (ii) the strength of the Investor as a strategic investor of the Company as detailed in the section headed “Reasons for and the benefits of the Subscription and use of proceeds” in this circular. The Company had also made reference to the price-to-earnings (“P/E”) ratio and the price to book (“P/B”) ratio of other comparable companies listed on the Stock Exchange which are also principally engaged in industrial manufacturing business. Based on the Company’s latest published annual financial statements for the year ended 31 December 2015 and latest published unaudited interim financial information for the 6 months ended 30 June 2016, and the closing share price of HK$2.820 on the date of the Subscription Agreement,

– 8 –

LETTER FROM THE BOARD

the P/E ratio and P/B ratio of the Company are approximately 26.23 times and approximately 3.42 times respectively. The P/E ratio and P/B ratio of the Company calculated using the Subscription Price of HK$1.49 per Share will become approximately 13.86 times and approximately 1.81 times respectively. The implied P/E ratio and P/B ratio of the Company as calculated based on the Subscription Price are comparable to the P/E ratios and P/B ratios of the three comparable companies (PAX Global Technology Limited (stock code: 327), Jolimark Holdings Limited (stock code: 2028) and Computime Group Limited (stock code: 320)) (i) with their issued shares listed on the Stock Exchange, (ii) with similar business in industrial manufacturing business, (iii) with similar market capitalisation, and (iv) with similar size of operation (annual revenue being less than HK$4 billion), which range from approximately 7.98 times to 12.11 times and approximately 0.76 times to 1.83 times respectively.

The Subscription Price represents a premium of approximately 80.83% over the unaudited net assets value per Share of HK$0.824 as at 30 June 2016. The Subscription Price of HK$1.49 also represents a P/E ratio of approximately 13.86 times based on the audited earnings per share of HK$0.1075 for the year ended 31 December 2015, which is reasonable and fair in comparison with the three comparable companies listed on the Stock Exchange.

The Company has also considered that the Investor has conditionally agreed to subscribe for 23,437,980 new Shares, which is much larger than the normal average daily trading volume of the Shares in the Stock Exchange. The Company agreed to grant a special bulk purchase discount to the Investor to subscribe for such a large number of new shares in one time.

Based on the above consideration, the Company considered that the Subscription Price is fair and reasonable. The Directors consider that the Subscription Price and the terms of the Subscription Agreement are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

Conditions of the Subscription

Completion of the Subscription shall be subject to and conditional upon the fulfilment (or waiver) of the following Conditions:

• (A) the current listing of the Shares on the Stock Exchange not having been withdrawn and the Shares continuing to be traded on the Stock Exchange at all times (except for suspensions of trading required under the Listing Rules and which, in each occasion, does not last for more than ten (10) consecutive Trading Days (save for any suspension for the purpose of clearing any announcement and/or circular regarding the subscription of the Subscription Shares and the Subscription Agreement)) from the date of the Subscription Agreement to the Completion Date;

• (B) the listing of, and permission to deal in, all the Subscription Shares being granted by the Listing Committee of the Stock Exchange (the “Listing Approval”) and the Listing Approval not having been revoked prior to the Completion Date;

– 9 –

LETTER FROM THE BOARD

• (C) the Company being in full compliance with the public float requirements under the Listing Rules (i.e. 25% of the total issued shares being held by public) immediately following the completion of the subscription of the Subscription Shares;

• (D) the passing by the requisite majority required under the Listing Rules of the Shareholders at the EGM (excluding any Shareholder who are required to abstain from voting by reason of applicable provisions in the Listing Rules) of a resolution for the approval of the Company’s entering into of the Subscription Agreement and the grant of the Specific Mandate to the Board for the purposes of the allotment and issuance of the Subscription Shares and such other resolutions reasonably considered necessary or desirable in the context of applicable laws and regulations by any of the parties to the Subscription Agreement for the implementation of the transactions contemplated thereunder, on terms reasonably satisfactory to the Investor;

• (E) (i) all approval, authorization, consent, license, permission, waiver, order or exemption, registration, filings, confirmations, clearances, rulings and decisions by the Authorities or the bankers or creditors of the Company, or any other third party that are necessary or appropriate for or in connection with the transactions contemplated under the Subscription Agreement having been obtained;

• (ii) no notice, order, judgment, action or proceeding of any person having been served, issued, made or filed which restrains, prohibits or makes unlawful, or which seeks to restrain, prohibit or make unlawful, any transaction contemplated by the Subscription Agreement or which is likely to materially and adversely affect the right of the Investor either to own the legal and beneficial title to the Subscription Shares, free from Encumbrances, or to exercise its rights under the Subscription Agreement;

• (iii) the warranties given by the Company under the Subscription Agreement remaining true and accurate in all material respects and not misleading in any material respect; and

• (iv) no Material Adverse Effect (or Change) has occurred or is likely to occur on or before the Completion Date.

The Investor may, in its sole discretion, waive one or more of the Conditions (except for Conditions (B) and (D)) at any time by notice in writing to the Company.

– 10 –

LETTER FROM THE BOARD

In the event that the Conditions are not fulfilled or waived by the Investor on or before 31 January 2017 (or such other date as the Investor may notify in writing) (the “Long Stop Date”), the Subscription Agreement shall terminate immediately thereafter and be of no further effect and each party to the Subscription Agreement shall not have any claim against or liability or obligation to the other party under the Subscription Agreement save for any antecedent breach. If the Company and the Investor intend to extend the Long Stop Date, the Company shall seek approval from the Shareholders for the extension.

As at the Latest Practicable Date, none of the Conditions has been fulfilled or waived.

Completion of the Subscription

Completion of the Subscription will take place on the Completion Date (or such other date and time as may be agreed between the parties to the Subscription Agreement).

The Company expects that the Completion will take place within two weeks after the date of the EGM.

Ranking of the Subscription Shares

The Subscription Shares, when allotted and issued, will rank equally in all respects among themselves and with the Shares in issue on the date of allotment and issue of the Subscription Shares.

Specific Mandate to issue the Subscription Shares

The Subscription Shares will be allotted and issued pursuant to the Specific Mandate to be sought at the EGM.

Application for listing

Application will be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Subscription Shares.

Termination

If at any time prior to the Completion:

• (i) the Company commits or has committed any material breach of or omits or fails or has omitted or failed to observe any of its material obligations or undertakings expressed to be assumed by it under the Subscription Agreement or the transactions contemplated therein in any material aspect, which breach, omission or failure is not rectified by the Company within ten (10) Business Days from the date of receipt of a request from the Investor of rectification of such breach, omission or failure;

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LETTER FROM THE BOARD

• (ii) any of the warranties given by the Company under the Subscription Agreement is not true and accurate or is misleading in any material respect;

• (iii) a Material Adverse Effect (or Change) has occurred;

• (iv) the Shares cease to be listed and traded (except for suspensions of trading required under the Listing Rules and which, in each occasion, does not last more than ten (10) consecutive Trading Days (or such other period as may be agreed by the parties to the Subscription Agreement, and save for any suspension for the purpose of clearing any announcement and/or circular regarding the Subscription and the Subscription Agreement)) on the Stock Exchange;

• (v) the Stock Exchange indicates that the listing of the Shares on the Stock Exchange may be withdrawn following the Completion;

• (vi) any of the approval, authorization, consent, license, permission, waiver, order or exemption, registration, filings, licences, confirmations, clearances, rulings or decisions by the Authorities or the bankers or creditors of any of the Group companies, or any other third-party that are material for or in connection with the transactions contemplated under the Subscription Agreement are not obtained, or if obtained, are revoked;

• (vii) any notice, order, judgment, action or proceeding is served, issued or made which restrains, prohibits or makes unlawful any transaction contemplated in the Subscription Agreement or which is likely to materially and adversely affect the right of the Investor to own the legal and beneficial title to the Subscription Shares, free from Encumbrances; or

• (viii) at the general meeting of the Company held pursuant to Condition (D), any of the relevant resolutions referred to therein were not passed by the requisite majority of the Shareholders as required under the Listing Rules,

then and in any such case, the Investor may terminate the Subscription Agreement without further liability to the Company by giving notice in writing to the Company, which notice may be given at any time on or before 12:00 noon (Hong Kong time) on the Completion Date.

In the event that the Investor terminates the Subscription Agreement in accordance with the above ground(s), all obligations of each of the parties under the Subscription Agreement shall cease and determine and no party to the Subscription Agreement shall have any claim against any other party in respect of any matter arising out of or in connection with the Subscription Agreement except for any antecedent breach of any obligation thereunder.

– 12 –

LETTER FROM THE BOARD

CHANGES IN SHAREHOLDING STRUCTURE

The changes of the shareholding structure of the Company as a result of the Subscription (assuming that there are no other changes to the shareholding structure of the Company from the Latest Practicable Date to the Completion Date) are as follows:

Shareholders Mr. Lam Yin Kee and his associates (Note 1) Mr. Lam Chee Tai, Eric (Note 2) Ms. Liu Jing (Note 3) Lijiang (Note 4) Investor (Note 4) Public Shareholders	As at the Latest Practicable Date Number of Shares Approximate % 247,358,290 49.26 1,677,060 0.33 69,172,000 13.77 52,562,020 10.47 – – 131,412,850 26.17 502,182,220 100.00	Immediately after the completion of the Subscription Number of Shares Approximate % 247,358,290 47.06 1,677,060 0.32 69,172,000 13.16 52,562,020 10.00 23,437,980 4.46 131,412,850 25.00 525,620,200 100.00	Immediately after the completion of the Subscription Number of Shares Approximate % 247,358,290 47.06 1,677,060 0.32 69,172,000 13.16 52,562,020 10.00 23,437,980 4.46 131,412,850 25.00 525,620,200 100.00
			100.00

Notes:

1. Mr. Lam Yin Kee, chairman and executive director of the Company, has personal interests in 3,058,290 Shares. 244,300,000 Shares are owned by Profit International Holdings Limited, a company incorporated in the British Virgin Islands and is owned as to 95% by Mr. Lam Yin Kee and 5% by Ms. Yeung Po Wah. Ms. Yeung Po Wah is an executive director of the Company and the spouse of Mr. Lam Yin Kee.

2. Mr. Lam Chee Tai, Eric is an executive director of the Company and the son of Mr. Lam Yin Kee and Ms. Yeung Po Wah.

3. Ms. Liu Jing is an executive director of the Company.

4. China Huarong holds 100% shares in Lijiang and holds 27.99% shares in Huarong Investment, which indirectly holds 100% shares in the Investor.

– 13 –

LETTER FROM THE BOARD

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

Set out below is the fund raising activity conducted by the Company in the past 12 months immediately prior to the Latest Practicable Date:

Date of		Net proceeds	Intended use of net	Actual use of net proceeds as at the
announcement	Event	(approximately)	proceeds	Latest Practicable Date
20 November	Placing of up to	HK$127.84 million	General working capital of	As intended and had been applied as
2015	69,172,000 Shares		the Group	additional general working capital
	under general			for the Group’s principal business,
	mandate			such as for the payment of purchases
				and operating costs and overheads
17 August	Issuing of	HK$77.9 million	(i) The Group’s electronics	(a) Approximately HK$1 million has
2016	52,562,020 Shares		business	been applied as additional working
	under specific		in the PRC	capital of the Group, including
	mandate			salary and wages and other
			(ii) The Group’s LED energy	operating expenses;
			saving business in the PRC
				(b) approximately HK$20 million,
			(iii) Repayment of	representing approximately 26% of
			outstanding bank	the remaining unutilized proceeds,
			borrowings	will be applied to the Group’s
				electronics business in the PRC;
			(iv) General working capital
			of the Group	(c) approximately HK$10 million,
				representing approximately 13% of
				the remaining unutilized proceeds,
				will be applied to the Group’s LED
				energy saving business in the PRC;
				(d) approximately HK$20 million,
				representing approximately 26% of
				the remaining unutilized proceeds,
				will be applied to the repayment of
				outstanding bank borrowings; and
				(e) approximately HK$26.9 million,
				representing approximately 35% of
				the remaining unutilized proceeds,
				will be applied to the working
				capital of the Group.

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LETTER FROM THE BOARD

REASONS FOR AND THE BENEFITS OF THE SUBSCRIPTION AND USE OF PROCEEDS

The Group is principally engaged in manufacturing and trading of electronic products, components for electronic products, biodiesel products; and provision of energy saving business solutions.

The gross proceeds from the Subscription is approximately HK$34.9 million. The net proceeds, after deducting all relevant costs and expenses, will be approximately HK$34.6 million. The Company intends to use the net proceeds from the Subscription as follows:

• (i) as to approximately HK$20.0 million for repayment of outstanding bank borrowings; and

• (ii) the remaining balance of approximately HK$14.6 million as general working capital for the Group’s principal business and for future investment opportunities should the same arise.

The Directors have taken into consideration the following factors:

(i) The Group’s diversification strategy

It is the intention of the Board to diversify the Group’s business by the generation of stable return and cash flows to the Group. The Company believes that having the Investor as a strategic investor, it would bring more valuable resources to the Group, including low cost financing advantage and other investment opportunities and therefore could contribute to and accomplish the Group’s long-term development strategy.

(ii) Strength of Huarong Investment as a strategic investor

As mentioned above, the Investor is an indirectly wholly-owned subsidiary of Huarong Investment, which intends to expand its business operations to money lending, finance lease and other future investment opportunities which may arise from time to time. Relying on the background and business connections of China Huarong and Huarong Investment in the PRC and in Hong Kong, the Directors believe that the Subscription will help the Group to explore more business opportunities in the PRC and in Hong Kong. With Huarong Investment as a strategic investor of the Company, the Directors believe that this will also enhance the Group’s borrowing power and fund raising ability in Hong Kong, at comparatively more favorable terms, to finance any of its future investment opportunities, if required.

(iii) Financing alternatives

The Company has considered other forms of fund raising exercise such as rights issue and debt financing.

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LETTER FROM THE BOARD

As debt financing normally requires a pledge of the Company’s assets as collateral to the creditors, the Directors consider that it is not a preferred method of fund raising.

Further, the Directors considered that rights issue generally requires higher cost to administer and arrange for the nil-paid rights trading, printing services and for reviewing the provisional allotment letters and other necessary documents, including the time for the Company to liaise with the parties involved in the rights issue such as the share registrar, the underwriter, and its professional advisers. The estimated cost of rights issue would be in the range of 1.5% to 2% of the gross proceeds. For example, if the gross proceeds is approximately HK$34.9 million, the net proceeds will be in the range of approximately HK$34.2 million to approximately HK$34.4 million. Therefore, the Directors consider that rights issue is less preferred when compared to direct subscription by an investor.

The Directors consider that the Subscription represents an opportunity for the Company to raise additional funding for the Group’s business operation and it will also strengthen the capital base and financial position for the Group’s future business developments and broaden the Shareholder base of the Company. The Subscription will also provide an opportunity for the Group to leverage on the business connection and expertise of Huarong Investment to enhance the further development of the Group’s business in the PRC and in Hong Kong. In addition, the Directors consider that the Subscription is a preferred method of fund raising as compared with other equity fund raising exercises and debt financing exercises based on the time and costs involved.

The Directors consider that the Subscription Agreement are entered into upon normal commercial terms following arm’s length negotiations between the Company and the Investor and that the terms of the Subscription Agreement are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

Saved for the proposed acquisition of the Beijing Property as stated in the announcement of the Company dated 19 September 2016, the Company has not entered into any discussion, negotiation, agreement, arrangement, understanding or undertaking (whether formal or informal, express or implied) with China Huarong, Huarong Investment or other parties on any acquisition of new business or assets, or disposals of the Company’s existing business or assets.

NOTICE OF EGM

Set out on pages 18 to 19 of this circular is a notice convening the EGM which will be held at Unit 2401-02, Admiralty Centre I, 18 Harcourt Road, Hong Kong on 13 December 2016 at 11:00 a.m. at which ordinary resolution will be proposed to consider and, if thought fit, to approve, among other things, the Subscription Agreement and the transactions contemplated thereunder (including the grant of the Specific Mandate for the allotment and issue of the Subscription Shares). Voting at the EGM will be taken by poll in accordance with the Listing Rules.

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LETTER FROM THE BOARD

A form of proxy for use at the EGM is also enclosed with this circular. Whether or not you are able to attend and vote at the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar of the Company in Hong Kong, Tricor Tengis Limited at 22/F, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding of the EGM or any adjournment thereof. Completion and delivery of the form of proxy will not preclude Shareholders from attending and voting in person at the EGM if they so wish.

Given that Lijiang is wholly-owned by China Huarong, Lijiang, which is interested in 52,562,020 Shares (representing approximately 10.47% of the existing issued share capital of the Company as at the Latest Practicable Date), and its concert parties will abstain from voting on the resolutions at the EGM in relation to the Subscription Agreement and the transactions contemplated thereunder.

RECOMMENDATION

The Directors consider that the terms of the Subscription Agreement, the transactions contemplated thereunder and the granting of the Specific Mandate are on normal commercial terms, and are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

The Board (including the independent non-executive Directors) considers that the resolution proposed in the notice of the EGM is in the best interests of the Company and the Shareholders and therefore recommends the Shareholders to vote in favour of the relevant resolution to be proposed at the EGM.

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

Yours faithfully, For and on behalf of the Board Alltronics Holdings Limited Lam Yin Kee Chairman

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NOTICE OF EGM

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ALLTRONICS HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 833)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (“Meeting”) of Alltronics Holdings Limited (the “Company”) will be held at Unit 2401-02, Admiralty Centre I, 18 Harcourt Road, Hong Kong on 13 December 2016 at 11:00 a.m. for the purpose of considering and, if thought fit, passing with or without modifying the following resolution which will be proposed as an ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT :

• (a) the subscription agreement dated 31 October 2016 (the “Subscription Agreement”) (a copy of which has been produced to the meeting and marked “A” and initialled by the chairman of the meeting for the purpose of identification) and entered into between the Company as issuer and Wealth Channel Global Limited as investor (the “Investor”) in respect of the issue of a total of 23,437,980 new shares (the “Subscription Shares”) of the Company and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified;

• (b) subject to fulfilment of the conditions precedent set out in the Subscription Agreement, the allotment and issue of the Subscription Shares in accordance with the terms and conditions of the Subscription Agreement be and is hereby approved;

• (c) the directors of the Company (the “Directors”) be and are hereby granted a specific mandate (the “Specific Mandate”) to exercise the powers of the Company to allot and issue the Subscription Shares pursuant to the terms and conditions of the Subscription Agreement, where such Subscription Shares shall rank equally in all respects among themselves and with all fully paid ordinary shares of the Company in issue as at the date of allotment and issue. The Specific Mandate is in addition to, and shall not prejudice nor revoke any general or special mandate(s) which has/have been granted or may from time to time be granted to the Directors prior to the passing of this resolution; and

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NOTICE OF EGM

• (d) any director of the Company be and is hereby authorised to do such acts and things, to sign and execute all such further documents (in case of execution of documents under seal, to do so by any two directors of the Company or any director of the Company together with the secretary of the Company) and to take such steps as he/she may consider necessary, appropriate, desirable or expedient to give effect to or in connection with the Subscription Agreement or any transactions contemplated thereunder and all other matters incidental thereto or in connection therewith, and to agree to and make such variations, amendments or waivers of any of the matters relating thereto or in connection therewith.”

By Order of the Board Alltronics Holdings Limited Lam Yin Kee Chairman

Hong Kong, 25 November 2016

Registered office: Head office and principal place of Cricket Square business in Hong Kong: Hutchins Drive Unit 408, 4th Floor P.O. Box 2681 Citicorp Centre Grand Cayman KY1-1111 18 Whitfield Road Cayman Islands Hong Kong

Notes:

1. A member of the Company who is entitled to attend and vote at the Meeting convened by the above notice is entitled to appoint a proxy to attend and vote on his behalf.

2. A proxy need not be a member of the Company but must attend in person to represent the member.

3. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed.

4. In order to be valid, the form of proxy (enclosed under the circular of the Company dated the same date of this notice) together with any power of attorney or other authority under which it is signed, or a certified copy of such power of attorney or authority, must be deposited with the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited, at 22/F, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time fixed for holding the Meeting, or any adjournment thereof. Delivery of the form of proxy shall not preclude a member of the Company from attending and voting in person at the meeting and in such event, the instrument appointing a proxy shall be deemed to be revoked.

As at the date of this notice, the Board of the Company comprises Mr. Lam Yin Kee, Ms. Yeung Po Wah, Ms. Liu Jing, Mr. Lam Chee Tai, Eric and Mr. So Kin Hung as executive Directors; Mr. Fan, William Chung Yue as non-executive Director; and Mr. Pang Kwong Wah, Mr. Yau Ming Kim, Robert and Mr. Yen Yuen Ho, Tony as independent non-executive Directors.

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