Alltronics Holdings Limited — Proxy Solicitation & Information Statement 2016

Sep 28, 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 16 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 20 October 2016 at 11:00 a.m. is set out on pages 17 to 18 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.

29 September 2016

CONTENTS

		Pages
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
**LETTER FROM **	THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		17

– i –

DEFINITIONS

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

• “Acquisition”

• the acquisition by the Company of the Sale Share pursuant to the Acquisition Agreement

• “Acquisition Agreement”

• the sale and purchase agreement in relation to the Acquisition dated 19 September 2016 entered into between the Vendor, the Guarantor and the Purchaser

• “Announcement”

• the announcement of the Company dated 17 August 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, being the principal asset of the Target Group upon completion of the Acquisition

• “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

– 1 –

DEFINITIONS

• “Completion”

• “Completion Date”

• “Conditions”

• “connected persons”

• “Director(s)”

• “EGM”

• “Encumbrances”

• “Group”

• “Guarantor”

• “Hong Kong”

• 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

• 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

• Mr. Gu Qi, being the ultimate beneficial owner of the Vendor and the guarantor to guarantee the due and punctual performance of the Vendor of its obligation under the Acquisition Agreement, an Independent Third Party

• the Hong Kong Special Administrative Region of the PRC

– 2 –

DEFINITIONS

• “Independent Third Party(ies)”

• “Investor”

• “Latest Practicable Date”

• “Listing Rules”

• “Material Adverse Effect (or Change)”

• “Mr. Gu”

• “Purchaser”

• “PRC”

• “Sale Share”

• “Share(s)”

• any person or company and their respective ultimate beneficial owner(s) which, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, are third parties independent of the Company and its connected persons

• Lijiang Investment Holdings Limited, a company incorporated in the British Virgin Islands, the investor of the Subscription Shares

• 26 September 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

• 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

• Mr. Gu Qi (顧琦), an Independent Third Party, being the Guarantor and ultimate beneficial owner of the Vendor

• Sino Growth Holdings Limited, a company incorporated in the British Virgin Islands with limited liability and a wholly owned subsidiary of the Company

• 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

• the entire issued share capital of the Target Company owned by the Vendor

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

– 3 –

DEFINITIONS

• “Shareholder(s)”

• holder(s) of the issued Share(s)

• “Specific Mandate”

• 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

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Subscription”

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

• “Subscription Agreement”

• the agreement dated 17 August 2016 entered into between the Company and the Investor in relation to the Subscription

• “Subscription Price”

• the subscription price of HK$1.49 per Subscription Share

• “Subscription Share(s)”

• an aggregate of 52,562,020 Shares to be subscribed by the Investor pursuant to the Subscription Agreement

• “Target Company”

• Bonroy Limited, a company incorporated in Samoa with limited liability and is a wholly owned subsidiary of Bonroy International Group Limited, and its principal business being investment holding

• “Target Group”

• the Target Company and its subsidiaries

• “Trading Day(s)”

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

• “Vendor”

• Bonroy International Group Limited, a company incorporated in Samoa with limited liability, and its principal business being investment holding and is ultimately beneficially owned by Mr. Gu

• “HK$”

• Hong Kong dollars, the lawful currency of Hong Kong

• “RMB”

• Renminbi, the lawful currency of the PRC

• “%”

• per cent

• For identification purpose only

– 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

29 September 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 17 August 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 52,562,020 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 17 August 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 52,562,020 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: 17 August 2016 (after trading hours of the Stock Exchange) Parties: Issuer: the Company; and Investor: Lijiang Investment Holdings Limited

The Investor is a company incorporated in the British Virgin Islands. The principal activity of the Investor is investment holding. The Investor is a wholly owned subsidiary of China Huarong International Holdings Limited.

China Huarong International Holdings Limited (“Huarong International”) is a wholly owned subsidiary of China Huarong Asset Management Co., Ltd. (Stock Code: 2799) (“China Huarong”). The principal activity of Huarong International is investment holding and it is mainly responsible for overseas investment business of China Huarong, including business and asset acquisition and asset management. Huarong International also invests in IPOs, rights issues and placements by listed companies in Hong Kong.

The Investor will become a substantial shareholder and a strategic investor of the Company after Completion. Based on the interim results announcement of China Huarong for the six months ended 30 June 2016, as of 30 June 2016, the total assets of Huarong International was RMB88,569.3 million and the profit before tax for the first half of 2016 was RMB2,694.4 million. Relying on the strong financial position of Huarong International and China Huarong, and their prominent background and business connections in the PRC and Hong Kong, the Directors believe that this will help the Group to explore more business opportunities in the PRC and in Hong Kong. With Huarong International 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 the PRC and in Hong Kong, at comparatively more favorable terms, to finance any of its future investment opportunities, if required.

– 6 –

LETTER FROM THE BOARD

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

To the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiries, as at the Latest Practicable Date, each of the Investor and its ultimate beneficial owners was an Independent Third Party. Before entering into of the Subscription Agreement, neither the Investor nor its close associates has any interests in any Shares.

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 become a substantial shareholder of the Company and will be interested in approximately 10.47% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares.

The Subscription Shares

52,562,020 new Subscription Shares representing approximately 11.69% of the existing issued share capital of the Company as at the Latest Practicable Date and approximately 10.47% 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$525,620.20.

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 50.17% to the closing price of HK$2.990 per Share as quoted on the Stock Exchange on the date of the Subscription Agreement;

• (ii) a discount of approximately 50.07% to the average closing price of approximately HK$2.984 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 48.44% to the closing price of HK$2.890 per Share as quoted on the Stock Exchange on the Latest Practicable Date.

– 7 –

LETTER FROM THE BOARD

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$0.4 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 prevailing market prices of the Shares and the prominent background and market position of the holding company of the Investor. 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 Huarong International 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 the closing share price of HK$2.99 on the date of the Subscription Agreement, the P/E ratio and P/B ratio of the Company are approximately 27.81 times and approximately 3.629 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 9.40 times to 11.13 times and approximately 0.774 times to 2.044 times respectively.

The Subscription Price represents a premium of approximately 85.32% over the audited net assets value per Share of HK$0.804 as at 31 December 2015; and 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 52,562,020 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.

– 8 –

LETTER FROM THE BOARD

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 five (5) consecutive Trading Days (save for any suspension for the purpose of clearing any announcement 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;

• (C) 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;

• (D) (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

– 9 –

LETTER FROM THE BOARD

• (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 (C)) at any time by notice in writing to the Company.

In the event that the Conditions are not fulfilled or waived by the Investor on or before 20 December 2016 (or such other date as the Investor may notify in writing), 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.

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.

Public float

As disclosed in the Announcement, the Company noted that immediately after Completion, assuming there being no change in the shareholding structure of the Company from the date of the Announcement upon the Completion, the Investor will become a substantial shareholder of the Company and the Company’s public float may fall below the minimum 25% as required by Rule 8.08(1)(a) of the Listing Rules.

– 10 –

LETTER FROM THE BOARD

In this regard, Mr. Lam Yin Kee (“Mr. Lam”), an executive Director and a controlling shareholder of the Company, has indicated to the Board that he was prepared to dispose of not less than 9,282,705 Shares, representing approximately 2.06% of the existing issued share capital of the Company, for the purpose of ensuring the compliance with the minimum float as required under Rule 8.08(1)(a) of the Listing Rules before Completion. Subsequently and up to the Latest Practicable Date, Mr. Lam had disposed of an aggregate of 9,800,000 Shares through the Stock Exchange and as a result, the shareholding of Mr. Lam and his associates decreased to approximately 56.20% of the issued share capital of the Company as at the Latest Practicable Date and approximately 50.32% of the issued share capital of the Company as enlarged by the allotment and issue of the Subscription Shares.

As at the Latest Practicable Date, Mr. Lam had no intention to further dispose of his interest in the Company.

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 three (3) Business Days from the date of receipt of a request from the Investor of rectification of such breach, omission or failure;

• (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 five (5) 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 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;

– 11 –

LETTER FROM THE BOARD

• (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 (C), 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.

CHANGES IN SHAREHOLDING STRUCTURE

The changes in 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) Investor Public Shareholders	As at the Latest Practicable Date Number of Shares Approximate % 252,708,290 56.20 1,677,060 0.37 69,172,000 15.39 – – 126,062,850 28.04 449,620,200 100.00	Immediately after the completion of the Subscription Number of Shares Approximate % 252,708,290 50.32 1,677,060 0.33 69,172,000 13.78 52,562,020 10.47 126,062,850 25.10 502,182,220 100.00	Immediately after the completion of the Subscription Number of Shares Approximate % 252,708,290 50.32 1,677,060 0.33 69,172,000 13.78 52,562,020 10.47 126,062,850 25.10 502,182,220 100.00
			100.00

– 12 –

LETTER FROM THE BOARD

Notes:

1. Mr. Lam Yin Kee, chairman and executive director of the Company, has personal interests in 8,408,290 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.

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTH

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

				Actual use of net
Date of		Net proceeds	Intended use of	proceeds as at the
announcement	Event	(approximately)	net proceeds	Latest Practicable Date
20 November	Placing of up to	HK$127.84	General	As intended and had
2015	69,172,000	million	working	been applied as
	Shares under		capital of the	additional general
	general		Group	working capital for
	mandate			the Group’s principal
				business

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$78.3 million. The net proceeds, after deducting all relevant costs and expenses, will be approximately HK$77.9 million. The Company intends to use the net proceeds from the Subscription as follows:

• (i) as to approximately HK$20 million for expansion of the Group’s electronics business in the PRC;

• (ii) as to approximately HK$10 million for investment in the Group’s LED energy saving business in the PRC;

• (iii) as to approximately HK$20 million for repayment of outstanding bank borrowings; and

– 13 –

LETTER FROM THE BOARD

• (iv) the remaining balance of approximately HK$27.9 million as general working capital for the Group’s principal business and for future investment opportunities should the same arise.

As disclosed in the announcement of the Company dated 19 September 2016, the Purchaser entered into the Acquisition Agreement with the Vendor and the Guarantor in relation to the Acquisition. The Company will not apply the net proceeds from the Subscription to finance the business of the Target Group, if the Acquisition proceeds to complete.

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 property related or other investment opportunities and therefore could contribute to and accomplish the Group’s long-term development strategy.

(ii) Strength of Huarong International as a strategic investor

As mentioned above, the Investor is a wholly owned subsidiary of Huarong International, which has actively invested in a number of listed companies in Hong Kong in recent years, through IPOs, rights issues and placements. The Investor will become a substantial shareholder and a strategic investor of the Company after Completion. Based on the interim results announcement of China Huarong for the six months ended 30 June 2016, as of 30 June 2016, the total assets of Huarong International was RMB88,569.3 million and the profit before tax for the first half of 2016 was RMB2,694.4 million. Relying on the strong financial position of Huarong International and China Huarong, and their prominent background and business connections in the PRC and Hong Kong, the Directors believe that this will help the Group to explore more business opportunities in the PRC and in Hong Kong. With Huarong International 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 the PRC and in Hong Kong, at comparatively more favorable terms, to finance any of its future investment opportunities, if required.

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 the Investor given the prominent background and market position of the holding company of the Investor in the PRC. It is believed that this will help enhance the further development of the Group’s business in the PRC market, in terms of both the scope and scale of the business. 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.

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LETTER FROM THE BOARD

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.

UPDATES ON THE ACQUISITION

Reference is made to the announcement of the Company dated 19 September 2016 in relation to the Acquisition. The Company wishes to update the Shareholders and the potential investors of the Company that as at the Latest Practicable Date, the Company was preparing the circular in relation to the Acquisition, which will contain, among other things, further details of the Acquisition, the financial information of the Target Company and the Target Group, a valuation report on the Beijing Property issued by the independent property valuer, LCH (Asia-Pacific) Surveyors Limited, other information as required under the Listing Rules and a notice convening the EGM to be held to consider and, if thought fit, approve the Acquisition Agreement together with the transactions contemplated thereunder. The circular will be despatched to the Shareholders in due course.

UPDATES ON THE COMPANY’S BUSINESS PLAN AND STRATEGY

The Group has no intention to change its primary focus of the existing businesses of industrial manufacturing and provision of energy saving solutions. However, the Directors will explore other investment opportunities, including but not limited to, property investment opportunity, if it is in the interest of the Company and the Shareholders as a whole and will provide a stable revenue stream and cash flows to the Group. The Group acquired a commercial property located at Citicorp Centre, 18 Whitfield Road, Hong Kong, which was completed in January 2016. The said property is used as the permanent head office of the Group in Hong Kong. It is the intention of the Group to diversify the Group’s investment into property investments in the PRC to enhance the property investment portfolio of the Group. Having closely monitored the market environment and business prospects of the property investment business, and having assessed the relevant business risks and potential returns with a view to maximizing returns to Shareholders, the Board considers that it would be in the interest of the Company and its Shareholders as a whole for the Group to expand into the property investment business by way of acquiring the Beijing Property. The Board considers that the Acquisition will strengthen the property investment into the principal activities of the Group. The Board is also confident that the Acquisition would strengthen the Group’s financial position and diversify its income stream in the long run. Upon completion of the Acquisition, the property investment will be a new segment of the business of the Group. The Company has no intention to develop other new businesses at present. The Company also has no intention to dispose of or to terminate or to scale down the operations of the existing principal businesses of the Group.

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LETTER FROM THE BOARD

NOTICE OF EGM

Set out on pages 17 to 18 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 20 October 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.

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.

To the best knowledge, information and belief of the Directors, having made all reasonable enquiries, as at the Latest Practicable Date, none of the Shareholders had a material interest in 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 as such, none of the Shareholders will be required to abstain from voting in respect of the relevant resolution to be proposed at the EGM.

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 20 October 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 17 August 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 Lijiang Investment Holdings Limited as investor (the “Investor”) in respect of the issue of a total of 52,562,020 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, 29 September 2016

Registered office: Head office and principal place Cricket Square of 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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