THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your securities in GOME Retail Holdings Limited (the “Company”), you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbrokers, licensed securities dealer, registered institution in securities or other agent through whom the sales 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 is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of the Company.

GOME RETAIL HOLDINGS LIMITED

國美零售控股有限公司*

(Incorporated in Bermuda with limited liability)
(Stock Code: 493)

(1) CONTINUING CONNECTED TRANSACTIONS AND

(2) NOTICE OF SGM

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

Capitalised terms used on this cover shall have the same meanings as those defined in this circular, unless the context requires otherwise. A letter from the Board is set out on pages 4 to 20 of this circular and a letter from the Independent Board Committee to the Independent Shareholders is set out on pages 21 to 22 of this circular. A letter from the Independent Financial Adviser, containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 23 to 47 of this circular.

Whether or not you are able to attend the SGM in person, please 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 Investor Services Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong as soon as practicable and in any event not later than 48 hours before the time appointed for holding the SGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjournment thereof should you so wish.

REMINDERS FOR THE SGM

No gift coupon will be distributed at the SGM.
If there is a “black” rainstorm warning or a tropical cyclone warning signal number 8 or above in force at or after 12:30 p.m. on 10 April 2025 and/or the Hong Kong Observatory has announced at or before 12:30 p.m. on 10 April 2025 that either of the above mentioned warnings is to be issued within the next two hours or the extreme conditions as announced by the Hong Kong Special Administrative Government still exists two hours prior to 2:30 p.m. on 10 April 2025, the SGM shall automatically be postponed until further notice.
For identification purpose only.

Hong Kong, 25 March 2025

CONTENTS

Page

Definitions 1
Letter from the Board 4
Letter from the Independent Board Committee 21
Letter from the Independent Financial Adviser 23
Appendix – General Information 48
Notice of SGM 52

– i –

DEFINITIONS

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

“2022 Master Merchandise Purchase Agreement”
the agreement dated 26 November 2021 between GOME Appliance and GOME Fun in relation to the supply of general merchandise (including but not limited to electrical appliances and consumer electronics products) by GOME Fun or the Parent Group to the Group;

“2022 Master Merchandise Supply Agreement”
the agreement dated 26 November 2021 between GOME Appliance and GOME Fun in relation to the supply of general merchandise (including but not limited to electrical appliances and consumer electronics products) by the Group to GOME Fun or the Parent Group;

“2025 Master Merchandise Purchase Agreement”
the agreement dated 23 December 2024 between GOME Appliance and GOME Fun in relation to the supply of general merchandise (including but not limited to electrical appliances and consumer electronics products) by GOME Fun or the Parent Group to the Group;

“2025 Master Merchandise Supply Agreement”
the agreement dated 23 December 2024 between GOME Appliance and GOME Fun in relation to the supply of general merchandise (including but not limited to electrical appliances and consumer electronics products) by the Group to GOME Fun or the Parent Group;

“associate”
has the meaning ascribed to it under Chapter 14A of the Listing Rules;

“Board”
the board of Directors;

“Company”
GOME Retail Holdings Limited, a company incorporated in Bermuda, the shares of which are listed on the main board of the Stock Exchange (stock code: 493);

“connected person(s)”
shall have the same meaning as ascribed to it under the Listing Rules;

“Director(s)”
the director(s) of the Company;

“GOME Appliance”
國美電器有限公司 (GOME Appliance Company Limited*), a wholly-owned subsidiary of the Company;

DEFINITIONS

“GOME Fun”
國美真快樂電子商務有限公司 (GOME Fun E-Commerce Co., Ltd.*), a company incorporated in the PRC with limited liability, a 60% non-wholly owned subsidiary of the Group;

“GOME Holding”
國美控股集團有限公司 (GOME Holding Group Company Limited*), a company established in the PRC, which is owned by the Substantial Shareholder;

“Group”
the Company and its subsidiaries;

“Hong Kong”
the Hong Kong Special Administrative Region of the People’s Republic of China;

“Independent Board Committee”
the independent board committee established by the Board, comprising all the independent non-executive Directors, namely Mr. Wang Gao, Mr. Lui Wai Ming and Mr. Liu Yin Hong, to advise the Independent Shareholders in respect of Relevant CCT Agreements;

“Independent Financial Adviser” or “Ignite Capital”
Ignite Capital (Asia Pacific) Limited, a corporation licensed under the SFO to conduct Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO, being the independent financial adviser appointed to advise the Independent Board Committee and the Independent Shareholders in respect of the Relevant CCT Agreements and the relevant annual caps in relation thereto;

“Independent Shareholders”
the Shareholders who are not required to abstain from voting at the SGM for the relevant resolutions with respect to the Relevant CCT Agreements;

“Independent Third Party(ies)”
independent third party(ies) who is/are not connected person(s) of the Company and is/are independent of and not connected with the Company and Directors, chief executive, controlling shareholders and substantial shareholders of the Company or any of its subsidiaries or their respective associates;

“Latest Practicable Date”
20 March 2025, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular;

– 2 –

DEFINITIONS

"Listing Rules"
the Rules Governing the Listing of Securities on the Stock Exchange;

"Model Code"
the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules;

"Parent Group"
a group of companies (other than the Group) controlled or more than 50% owned by the Substantial Shareholder;

"percentage ratio"
has the meaning ascribed to it under Chapter 14A of the Listing Rules;

"PRC"
the People's Republic of China (for the purposes of this circular, excludes Hong Kong, the Macao Special Administrative Region and Taiwan);

"RMB"
Renminbi, the lawful currency of the PRC;

"Relevant CCT Agreements"
refers to the (i) 2025 Master Merchandise Purchase Agreement, and (ii) 2025 Master Merchandise Supply Agreement, collectively;

"SFO"
the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong);

"SGM"
the special general meeting of the Company to be convened and held at 2:30 p.m. on Thursday, 10 April 2025 at Forum Room I, Basement 2, Regal Hong Kong Hotel, 88 Yee Wo Street, Causeway Bay, Hong Kong or any adjournment thereof (as the case may be), the notice of which is set out on pages 52 to 53 of this circular;

"SKU"
stock keeping unit;

"Shareholders"
shareholders of the Company; and

"Stock Exchange"
The Stock Exchange of Hong Kong Limited.

"Substantial Shareholder" or "Mr. Wong"
Mr. Wong Kwong Yu (黄光裕先生), the substantial shareholder of the Company, who holds approximately 10.28% of the issued share capital of the Company as at the Latest Practicable Date;

LETTER FROM THE BOARD

GOME RETAIL HOLDINGS LIMITED

國美零售控股有限公司*

(Incorporated in Bermuda with limited liability)

(Stock Code: 493)

Executive Directors:
Mr. Zou Xiao Chun
Mr. Ding Jiang Ning
Ms. Wei Ting

Non-executive Director:
Mr. Zhang Da Zhong

Independent Non-executive Directors:
Mr. Wang Gao
Mr. Lui Wai Ming
Mr. Liu Yin Hong

Registered Office:
Victoria Place
1st Floor
31 Victoria Street
Hamilton HM10
Bermuda

Head office:
Suite 2915, 29th Floor
Two International Finance Centre
8 Finance Street, Central
Hong Kong

25 March 2025

To the Shareholders

Dear Sir or Madam,

(1) CONTINUING CONNECTED TRANSACTIONS

AND

(2) NOTICE OF SGM

INTRODUCTION

Reference is made to the announcement of the Company dated 23 December 2024 in relation to, among others, the Relevant CCT Agreements. The purposes of this circular are to provide you with, among other things, (i) further information about the Relevant CCT Agreements; (ii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders in respect of the Relevant CCT Agreements; (iii) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Relevant CCT Agreements; and (iv) a notice of the SGM to consider and, if thought fit, to approve the Relevant CCT Agreements and the transactions contemplated thereunder.

LETTER FROM THE BOARD

THE RELEVANT CCT AGREEMENTS

As the 2022 Master Merchandise Purchase Agreement and the 2022 Master Merchandise Supply Agreement were due to expire on 31 December 2024, on 23 December 2024, the Group entered into, among others, the 2025 Master Merchandise Purchase Agreement and the 2025 Master Merchandise Supply Agreement to enable the Group to continue its existing operations going forward.

(A) 2025 MASTER MERCHANDISE PURCHASE AGREEMENT

Date:

23 December 2024

Parties:

(a) GOME Appliance, a wholly-owned subsidiary of the Company, which is principally engaged in the retailing of electrical appliances and consumer electronics products; and

(b) GOME Fun, a 60% non-wholly-owned subsidiary of the Group, which is principally engaged in the business of providing online retail services. The remaining 40% equity interests of GOME Fun is owned by the Substantial Shareholder. GOME Fun is hence an associate of the Substantial Shareholder and a connected subsidiary of the Company for the purpose of the Listing Rules.

Terms of the 2025 Master Merchandise Purchase Agreement and annual caps

Pursuant to the 2025 Master Merchandise Purchase Agreement, GOME Fun agreed to, and will use its best endeavours to procure members of the Parent Group to, supply general merchandise (including but not limited to electrical appliances and consumer electronics products) to GOME Appliance or any member of the Group pursuant to their requests from time to time, for the period from the date of approval of the 2025 Master Merchandise Purchase Agreement by the Independent Shareholders to 31 December 2027, unless otherwise terminated in accordance with the terms of the 2025 Master Merchandise Purchase Agreement. The annual caps of the transaction amounts (excluding value-added tax) for the three years ending 31 December 2027 shall not exceed RMB1 billion.

The Group is an all-round retail eco-system sharing platform focusing on retail and home services in the PRC. While the Group has traditionally been focusing on the retail of electrical appliances and electronic products, with the transformation and development of the Group's retail strategy in the past few years, the scope of the Group's retail business has expanded to encompass a full range of general merchandise and daily necessities, in addition to the traditional electrical appliances and electronic products.

LETTER FROM THE BOARD

The 2025 Master Merchandise Purchase Agreement is being entered into to improve the efficiency of the Group's procurement functions and enable the Group to utilise the sourcing channels of GOME Fun to source and supply such products to both the online and offline retail platforms of the Group.

For circumstances under which the Group would make purchase from GOME Fun and details and rationale of the arrangement, please refer to the section headed "REASONS FOR ENTERING INTO THE RELEVANT CCT AGREEMENTS" below.

Historical transaction amounts

The historical transaction amounts for the general merchandise purchased under the 2022 Master Merchandise Purchase Agreement for the two financial years ended 31 December 2022 and 2023 and the nine months ended 30 September 2024 are as follows:

	For the year ended 31 December 2022 RMB’million	For the year ended 31 December 2023 RMB’million	For the nine months ended 30 September 2024 RMB’million
Annual caps	28,000.0	35,000.0	45,000.0
(Note 1)
Transaction amounts
(Note 2)	3,385.0	121.2	–

Notes:

For the entire year ended 31 December 2024.
The significant decrease in actual transaction amounts for the year ended 31 December 2023 and the nine months ended 30 September 2024 was mainly attributable to the suspension of supply of goods from certain major suppliers as a result of the debt issues of the Group. In addition to the change in the Group's strategies by focusing on its core business and the streamlining of its business operations. Moreover, the domestic economy faced the combined impact of cyclical and structural adjustments, resulting in a slow recovery. Relative industries such as real estate have not yet come out of the trough, dragging down the demand for home appliance-related industries. Thus the Group's revenue declined rapidly in the period, resulting in the significant drop in the continuing connected transaction amount.

Products supplied under the 2025 Master Merchandise Purchase Agreement will be paid either: (1) in advance as prepayment, (2) at the time of purchase, or (3) within 180 days from the receipt of the products.

LETTER FROM THE BOARD

Basis for determining the purchase price and annual caps of the 2025 Master Merchandise Purchase Agreement

The purchase price under the 2025 Master Merchandise Purchase Agreement will be based on the prevailing market rate of similar merchandise charged by GOME Fun or any member of the Parent Group to independent third parties.

The procurement department of the Group will review the financial records of GOME Fun and members of the Parent Group on a quarterly basis (including samples of invoices issued to independent third parties in relation to the supply of similar merchandise) in the vicinity to ensure the terms offered by GOME Fun or the Parent Group to the Group were similar and not less favorable than terms offered to the independent third parties. Such samples of invoices will be selected by the Group from approximately 30% - 50% of independent third party clients of GOME Fun and the Parent Group and among which, 10% of the relevant invoices with respect to each of such independent third parties will be reviewed. The Group will also obtain quotations from at least two independent suppliers to ensure the terms offered are not less favourable than that are available from independent third parties.

The proposed annual cap amounts of the 2025 Master Merchandise Purchase Agreement were determined after taking into consideration the following items:

i. the historical transaction amounts of merchandise supplied under the 2022 Master Merchandise Purchase Agreement to the Group;
ii. the expected demand of the Group for products that may be supplied by GOME Fun and the Parent Group; and
iii. the gradual stabilisation of the PRC retail market and the Group's operations.

In addition, the annual caps for the 2025 Master Merchandise Purchase Agreement (and similarly for the 2025 Master Merchandise Supply Agreement) have been set at the current level after taking into consideration of the following:

i. The expected demand for the procurement/supply of products by the Group for the three years ending 31 December 2027. The annual cap represents a decrease of approximately 98% from the annual caps of the procurement/supply transactions for 2024.
ii. The Group's revenue in 2023 and the nine months ended 30 September 2024 decreased significantly due mainly to the suspension of supply of goods from certain major suppliers as a result of the debt issues of the Group, the change in the Group's strategies by focusing on its core business and the streamlining of its business operations and the sluggish economic conditions in the PRC.

LETTER FROM THE BOARD

iii. Through the efforts of the Group in resolving its debt issues and the stimulus policies introduced by the PRC Government on consumption, and the improvement in the PRC economy, it is expected that the results of the Group will improve and support the requirements of the procurement/supply services.

iv. The management has optimised the strategic layout of the Group and actively promoted the debt restructuring work. The Company has made positive progress in resolving its debt issues, with preliminary agreements with a number of major suppliers. Suppliers that have previously suspended supplying goods to the Group due to outstanding debt will gradually restored the arrangements with the Group and resume the supply of products to the Group once the debt settlement agreement is signed. It is expected that sales will recover significantly as a result. The management has also complied with policy directions and trends, optimised strategic layout, focused its resources, vigorously developed new marketing models based on live broadcasts, and promoted the expansion of light asset businesses such as franchising, reduce risks and costs overall, and increase benefits and efficiency. The Company's exploration over the past year has achieved positive results. In 2025, against the background of consumption recovery driven by national policies, related businesses are expected to grow; In addition, the GOME Automobile project has been officially released at the end of 2024, and the smart car experience hall is ready for launch. Driven by the country's encouragement of automobile consumption and related subsidy policies, the Company is confident of the prospects in the automobile business.

v. At the macro level, stimulated by the continuous introduction and expansion of national policies, the PRC's economy is entering a stage of bottoming out and rebounding. According to the latest preliminary calculations from the National Bureau of Statistics, there was an increase of approximately 5% in the GDP of the PRC in 2024 over the previous year at constant prices, with the growth rate in the fourth quarter reached 5.4%, compared with 4.7% and 4.6% in the second and third quarters, and higher than the 5.3% in the first quarter, demonstrating a V-shaped recovery. Although the economy in 2025 faces the threat of high tariffs from the new U.S. administration, new national policies will likely be introduced to mitigate such impacts. The Central Economic Work Conference at the end of 2024 has made it clear that fiscal and monetary relaxing policies will be adopted in 2025, and "extraordinary counter-cyclical adjustment" was indicated. In addition, 2025 is the final year of the country's "14th Five-Year Plan". Governments at all levels would ensure that their basic economic tasks are completed, it is therefore expected that the macroeconomic level in 2025 will enjoy the largest policy benefit in recent years.

LETTER FROM THE BOARD

vi. At the industry level, expanding domestic demand and promoting consumption will become the top priority of the national stimulus policy in 2025, and the consumer industry is expected to get out of the trough. In the context of the current intensifying competition between China and the U.S., the importance of domestic demand to the domestic economy continues to be highlighted, and policy-level stimulus to expand domestic demand has gradually increased and begun to be implemented. The 2024 trade-in and other stimulus policies have achieved very positive results: according to data from the National Bureau of Statistics, the total retail sales of consumer goods in the 4th quarter of 2024 increased by 3.8% year-on-year. In the 4th quarter, the total retail sales of household appliances and audio-visual equipment, furniture, automobiles, construction and decoration materials by units increased the total retail sales of consumer goods in the PRC by about 1 percentage point, and the growth rate of durable consumer goods such as home appliances improved significantly, with the average growth rate jumping by more than 30% in the 4th quarter. In 2025, the PRC will clearly continue the relevant stimulus policies, and the scope and intensity of the policies is expected to be further increased. The scale and coverage of trade-in categories, and the scale and scope of consumer coupons will be further improved. On 20 January 2025, a new round of consumer subsidies has been launched. New purchase subsidies for mobile phones and other electronic products, new energy vehicles and other durable goods have been implemented one after another. It is expected that after the National People's Congress meeting in March, more promotion and clearer measures will be introduced. Consumption policies have been introduced. In addition, the policies towards the real estate industry have changed, and various regions have begun to vigorously encourage and support residents to purchase properties. The recovery of the real estate industry will also drive a rebound in home appliances and other related consumption.

vii. Against these backgrounds, although the historical utilisation rate of the procurement/supply transactions have been low in 2023 and the nine months ended 30 September 2024, the annual cap for the 2025 Master Merchandise Purchase Agreement (and similarly for the 2025 Master Merchandise Supply Agreement) has been set based on the expected demand for procurement/supply of products by the Group.

LETTER FROM THE BOARD

expansion of new stores. The management expects that (i) the sales target for the existing stores will gradually recover to a sales level which is approximately 70% of the historical average annual sales per store for the two financial years of 2021 and 2022 (the "Average Sales Per Store"), the financial years before the Group encountering the debt issues; (ii) the plans to open 480 to 640 new stores through franchising and franchise-like joint venture cooperation. Such light-asset model expansion will strategically cover the Northeast, Northern, Central and Southwest regions of the PRC, with approximately 120 to 160 new stores in each of the regions. Annual sales of these new stores are estimated to gradually reached 50% of Average Sales Per Store in the year ending 31 December 2027; and (iii) the proposed annual cap in respect of the procurement/supply of products by the Group was calculated on the abovementioned basis.

As the revenue of the Group for the year ended 31 December 2023 and the nine months ended 30 September 2024 had experienced a significant decrease, the proposed annual cap represents over 100% of the revenue of the Company for the year ended 31 December 2023. Notwithstanding this, the Board is of the view that the transactions contemplated do not represent a material reliance on the Parent Group for the following reasons:

(a) The transactions under the 2025 Master Merchandise Purchase Agreement (and similarly for the 2025 Master Merchandise Supply Agreement) are mostly related to the Group and GOME Fun utilising the procurement channels of each other in order to enable the Group (including GOME Fun) to source products efficiently and supply such products to both the online and offline platforms of the Group. As GOME Fun is a 60% owned subsidiary and forms a part of the Group's operation with its results consolidated with that of the Group, the procurement and supply transactions should be regarded as an internal and integral arrangement between members of the Group. The connected transaction only arises through the Controlling Shareholder's 40% interest in GOME Fun, thus rendering it a connected subsidiary for the purpose of Chapter 14A of the Listing Rules.

(b) The suppliers of the Group are made up by many manufacturers or distributors, and the customers of the Group's products are primarily individual consumers. Transactions between the Group and GOME Fun accounted for approximately RMB5,796.7 million, RMB3,367.9 million, RMB121.1 million and nil, representing approximately 12.39%, 17.73%, 20.40% and 0% of the total purchase of the Group for the three years ended 31 December 2021, 2022 and 2023, and the nine months ended 30 September 2024; and approximately RMB4,643.9 million, RMB3,036.0 million, RMB297.6 million and RMB64.5 million, representing approximately 9.08%, 14.82%, 31.51% and 21.96% of the total revenue of the Group for the three years ended 31 December 2021, 2022 and 2023, and the nine months ended 30 September 2024.

10 -

LETTER FROM THE BOARD

(c) Actual transactions between the Group and the Parent Group under such procurement/supply arrangement had been minimal, forming approximately 0.45% of the procurement of the Group under such connected procurement arrangement or approximately 0.064% of the total procurement of the Group for the three years ended 31 December 2021, 2022 and 2023 and the nine months ended 30 September 2024. Similarly, supplies of products to the Parent Group only accounted for approximately 0.33% of such connected supply arrangement or approximately 0.05% of the total revenue of the Group for the three years ended 31 December 2021, 2022 and 2023 and the nine months ended 30 September 2024. As such, neither the Group nor the Parent Group is mutually dependent on each other for the supply/purchase of products for their respective business operations. Given that the Group is not dependent on the Parent Group for the supply/purchase of products, any potential change to the relationship with the Parent Group will unlikely result in a material adverse change to the business operation of the Group.

(d) As GOME Fun is a consolidated subsidiary of the Group and the transactions between the Group and GOME Fun are internal to the Group, and transactions with the Parent Group under such procurement/supply arrangement had been minimal and is expected to remain at a similar level going forward, the Board does not consider that there is a material reliance by the Group on the support of the Parent Group.

(e) In addition, the expected improvement in the Group's performance as discussed above will result in the annual cap accounting for a significantly less proportion of the Group's operation results and thereby lessen any alleged "reliance" impact.

The Directors (excluding the independent non-executive Directors, whose views will be given after considering the advice from the Independent Financial Adviser) are of the view that the terms of the 2025 Master Merchandise Purchase Agreement and the transactions contemplated thereunder (including the annual caps) are fair and reasonable, on normal commercial terms and will be conducted in the ordinary and usual course of business of the Group and in the interests of the Company and its Shareholders as a whole.

11 -

LETTER FROM THE BOARD

(B) 2025 MASTER MERCHANDISE SUPPLY AGREEMENT

Date:

23 December 2024

Parties:

(a) GOME Appliance, a wholly-owned subsidiary of the Company; and
(b) GOME Fun, a 60% non-wholly-owned subsidiary of the Group.

Terms of the 2025 Master Merchandise Supply Agreement and annual caps

Pursuant to the 2025 Master Merchandise Supply Agreement, GOME Appliance agreed to, and will procure any member of the Group to, supply general merchandise (including but not limited to electrical appliances and consumer electronics products) to GOME Fun or members of the Parent Group pursuant to their requests from time to time, for the period from the date of approval of the 2025 Master Merchandise Supply Agreement by the Independent Shareholders to 31 December 2027, unless otherwise terminated in accordance with the terms of the 2025 Master Merchandise Supply Agreement. The annual caps of the transaction amounts (excluding value-added tax) for the three years ending 31 December 2027 shall not exceed RMB1 billion.

GOME Fun is a 60% owned subsidiary of the Company and is an important component of the Group's online retail platform, engaging in online retail business and local life services. Although GOME Fun's prior focus was on general merchandise, it now includes electrical appliances and electronic products in its business scope in order to achieve a more balanced development.

The 2025 Master Merchandise Supply Agreement is being entered into to improve the efficiency of the procurement functions of GOME Fun and enable it to utilise the sourcing channels of Group to supply such products to the online customers.

For circumstances under which the Group would supply products to GOME Fun and details and rationale of the arrangement, please refer to the section headed "REASONS FOR ENTERING INTO THE RELEVANT CCT AGREEMENTS" below.

LETTER FROM THE BOARD

Historical transaction amounts

The historical transaction amounts for the general merchandise supplied under the 2022 Master Merchandise Supply Agreement for the two financial years ended 31 December 2022 and 2023 and the nine months ended 30 September 2024 are as follows:

| | For the year ended 31 December 2022
RMB’million | For the year ended 31 December 2023
RMB’million | For the nine months ended 30 September 2024
RMB’million |
| --- | --- | --- | --- |
| Annual caps | 30,000.0 | 40,000.0 | 50,000.0
(Note 1) |
| Transaction amounts
(Note 2) | 3,047.4 | 297.8 | 64.5 |

Notes:
1. For the entire year ended 31 December 2024.
2. Please refer to Note 2 on page 6 above for the reasons of under-utilisation of the annual caps for the year ended 31 December 2023 and the nine months ended 30 September 2024.

Products supplied under the 2025 Master Merchandise Supply Agreement will be paid either: (1) in advance as prepayment, (2) at the time of purchase, or (3) within 180 days from the receipt of the products.

Basis for determining the selling price and annual caps of the 2025 Master Merchandise Supply Agreement

The selling price under the 2025 Master Merchandise Supply Agreement will be based on the prevailing market rate of similar merchandise charged by GOME Appliance or the Group to independent third parties.

To ensure the terms offered by GOME Fun or the Parent Group to the Group were similar and not less favorable than terms offered to the independent third parties, the procurement department of the Group will review and benchmark prices offered under the 2025 Master Merchandise Supply Agreement with the prices offered by the Group to independent third party customers for similar products in the vicinity.

LETTER FROM THE BOARD

The proposed annual cap amounts of the 2025 Master Merchandise Supply Agreement were determined after taking into consideration the following items:

i. the historical transaction amounts of merchandise supplied under the 2022 Master Merchandise Supply Agreement;

ii. the expected demand of GOME Fun or the Parent Group for products that may be supplied by the Group; and

iii. the gradual stabilisation of the PRC retail market and the Group's operations.

Please also refer to the disclosure in the paragraph headed "Basis for determining the purchase price and annual caps of the 2025 Master Merchandise Purchase Agreement" under the section headed "(A) 2025 MASTER MERCHANDISE PURCHASE AGREEMENT" above for the consideration in setting the annual cap of the 2025 Master Merchandise Supply Agreement at the current level.

As discussed in the section headed "Basis for determining the purchase price and annual caps of the 2025 Master Merchandise Purchase Agreement" above, it is expected that the supply of goods by the suppliers of the Group will be gradually restored once the debt settlement agreements are being signed. In light of the expectation of restoring the supply of goods by the suppliers, the management expects that the online sales of the Group would gradually recover. The Company has set an online sales target of approximately RMB1.7 billion to RMB2.1 billion for the three years ending 31 December 2027 (the "Online Sales Target"). To achieve such target, it is expected that GOME Fun would purchase up to approximately 50% of its merchandises from GOME Appliance, which is approximate the proposed annual cap of RMB1 billion for the 2025 Master Merchandise Supply Agreement. The Online Sales Target was determined after taking into consideration: (i) the online platform and application have been developed for years and annual active online buyers have reached over 16 million at its peak; (ii) the Group has been putting more effort and resources into short videos, transformation of its live streaming business through establishing cooperation with Multi-channel Network companies and online celebrities and setting up of new media accounts on other platforms to attract more trendy youngsters the join the GOME Fun application of the Group; and (iii) SKUs for all product categories of the Group reached over 2 million and supply of merchandises are expected to restore gradually in light of the debt settlements.

The Directors (excluding the independent non-executive Directors, whose views will be given after considering the advice from the Independent Financial Adviser) are of the view that the terms of the 2025 Master Merchandise Supply Agreement and the transactions contemplated thereunder (including the annual caps) are fair and reasonable, on normal commercial terms and will be conducted in the ordinary and usual course of business of the Group and in the interests of the Company and its Shareholders as a whole.

14 -

LETTER FROM THE BOARD

INTERNAL CONTROL POLICY FOR CONTINUING CONNECTED TRANSACTIONS

In order to ensure that the continuing connected transactions of the Group are being conducted in a fair and reasonable manner, and are in line with the prevailing market rates, the Group adopts the following internal control methods and procedures:

(a) The finance center of the Company will conduct regular checks on a quarterly basis to review and assess whether the transactions contemplated under the relevant continuing connected transactions are being conducted in accordance with the terms of the relevant agreement and they will also regularly, on a monthly basis, update the market price for the purpose of considering if the price charged for a specific transaction is fair and reasonable and in accordance with the pricing policy of the Group:

(i) to determine the prevailing market rate, the Group will obtain quotations from at least two independent suppliers of similar services to set the reference market price. If there is no quotations nor information to determine the prevailing market rate, the Group will determine the prevailing market rate by reference to the average price of similar products previously purchased/supplied by the Group, and on normal commercial terms which are not less favourable than that are available from independent third parties. In addition, the management team of the Group will gather market intelligence from time to time (on a regular monthly basis and/or prior to price negotiation) by way of research and investigation to ascertain the quality of the products/services compared to similar products/services in the market and the reference price of each type of transactions in the market;

(ii) the management team of the Group will review, monitor and benchmark on a monthly basis with the average industry prices in respect of the sales of the products/provision of the services;

(iii) the Company will also conduct regular quarterly reviews of the sales, costs of sales and expenses of the products/services and ensure the transactions are within the annual caps;

(iv) the Group will also work closely with customers/suppliers to obtain information on the demand and inventory situation, and the Company would then adjust or negotiate the prices of the products/services when necessary to ensure price fairness.

(b) The Company will monitor and conduct periodic half-yearly reviews of the continuing connected transactions of the Company, to consider the (i) effective implementation of the pricing policies and the payment methods, evaluation of balances of annual caps; and (ii) management weaknesses, and recommendation of

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LETTER FROM THE BOARD

improvement measures to ensure that the internal control measures in respect of the continuing connected transactions remain complete and effective and where any weaknesses are identified, the Company will take measures to address them as soon as practicable.

(c) The Company will designate the head of the finance center of the Company to oversee the implementation and review of the internal control measures in relation to the Continuing Connected Transactions.

(d) The independent non-executive directors of the Company will review the transactions contemplated under the continuing connected transactions of the Company pursuant to Listing Rule 14A.55, and confirm in the annual report whether the transactions have been entered in the ordinary and usual course of business of the Group; on normal commercial terms or better; and according to the agreement governing the transactions on terms that are fair and reasonable and in the interests of the Company's shareholders as a whole.

The independent auditor of the Group will also conduct an annual review on the pricing terms and annual caps of the continuing connected transactions in accordance with Listing Rule 14A.56.

REASONS FOR ENTERING INTO THE RELEVANT CCT AGREEMENTS

Supply and purchase services

GOME Fun is a non-wholly owned subsidiary of the Group. As it is owned as to 40% by the Substantial Shareholder, it is an associate of the Substantial Shareholder and a connected subsidiary of the Company and the transactions between the Group and GOME Fun are deemed as connected transactions for the Company for the purpose of the Listing Rules.

The Group is currently an all-round retail eco-system sharing platform focusing on retail and home services in the PRC, with the range of general merchandise covering household appliances, outdoor and sporting goods, food and wine, clothing, home decoration, daily necessities, mother care and baby goods and beauty and personal care products. GOME Fun is an important component of the Group's online platform, engaging in online retail business and local life services. Each of the Group and GOME Fun has its own procurement channels and suppliers. Prior to the Group's strategic transformation, the Group's retail business focuses primarily on electrical appliances and electronic products, and the proportion of general merchandise was relatively low. As the Group undergoes strategic transformation, the scope of the Group's procurement will expand and increase the proportion of merchandise other than electrical appliances and electronic products. Whereas GOME Fun, as opposed to its previous strategy of focusing on general merchandise, will procure more electrical appliances and electronic products to achieve a balanced development. As the retail strategy of the Group evolves, online and offline retails will integrate and the range of merchandise will also complement each other more comprehensively.

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LETTER FROM THE BOARD

The 2025 Master Merchandise Purchase Agreement and the 2025 Master Merchandise Supply Agreement were entered into to improve the efficiency of the Group's procurement of products and enable the Group and GOME Fun to source products from their own or the other party's suppliers and supply such products to both the online and offline retail platforms of the Group to allow the Group (through GOME Appliance, its wholly-owned subsidiary, and GOME Fun) to capture the demand of all potential online and offline customers. Hence, the products (which are the subject of each of the 2025 Master Merchandise Purchase Agreement and the 2025 Master Merchandise Supply Agreement) include the full range of products currently and to be offered by the relevant subsidiary. It is expected that GOME Appliance will be supplying mainly electrical appliances and electronic products under the 2025 Master Merchandise Supply Agreement; while GOME Fun will be supplying mainly general merchandise under the 2025 Master Merchandise Purchase Agreement. As such, the products supplied by/to GOME Fun to/from GOME Appliance may be of the same but under different brand names or different model numbers.

The products supplied by the Group's offline retail stores and the online platform are the same. This strategy is in line with many other international retailers. The same product will be supplied from the same ultimate manufacturer. GOME Appliance will, based on the method explained above, be able to source the product at the lowest price. The prices charged under the 2025 Master Merchandise Purchase Agreement and the 2025 Master Merchandise Supply Agreement will not be higher than the price charged by independent suppliers on similar terms for the same or similar products.

Apart from ensuring the Group could capture all potential customers through its online and offline platforms, the other main purpose of the 2025 Master Merchandise Purchase Agreement and the 2025 Master Merchandise Supply Agreement is to ensure that the Group (whether through GOME Appliance, its wholly-owned subsidiary, or GOME Fun) obtains the relevant products at the lowest cost possible (on similar terms) and on normal or better commercial terms. Before placing any order of goods, the procurement department of the Group would source a product from the supplier in order to obtain the best terms for the Group. Then, it would use the subsidiary that could negotiate the best terms and also preferred by the supplier (e.g. small goods suppliers usually prefer GOME Fun while large electrical appliances goods suppliers usually prefer GOME Appliance, or in some cases, different models from the same supplier) to enter into the relevant supply agreements. Hence, the relevant product is sourced at the lowest cost (on similar terms) to the Group as a whole, and before making a purchase, the relevant subsidiary is subject to the internal controls set out in the section above headed "INTERNAL CONTROL POLICY FOR CONTINUING CONNECTED TRANSACTIONS".

Through the above procedures, the relevant subsidiary will be able to obtain the best term under the 2025 Master Merchandise Purchase Agreement and the 2025 Master Merchandise Supply Agreement available to it for the purchase of the relevant product. As such, the pricing of the products will be fair and reasonable and on normal commercial terms or better. The arrangement will minimise the occurrence of shortage of products and lower purchase costs and is essential for the operation and development of the Group.

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LETTER FROM THE BOARD

INFORMATION ON THE PARTIES TO THE RELEVANT CCT AGREEMENTS

The Company is a company incorporated in Bermuda, the shares of which are listed on the main board of the Stock Exchange.

The Group continued to focus on its core retail business, activate the "Home • Living" omni-retail ecosystem, actively and extensively explore a variety of procurement channels and methods, and focus on the retail of home appliances, consumer electronic products, groceries and various types of daily necessities. It also promoted offline upgrades and strengthened new operating methods such as online live streaming. In addition, it accelerated the development of franchising business and the GOME Automobile Experience Hall commenced its operation, creating new growth opportunities.

GOME Fun is principally engaged in providing online retail services and is owned as to 60% by the Group and as to 40% by the Substantial Shareholder.

GOME Holding is principally engaged in industrial investment, strategic investment and new business investment and is 100% ultimately owned by the Substantial Shareholder.

LISTING RULES IMPLICATIONS

As (i) GOME Holding is owned by the Substantial Shareholder and is a connected person of the Company, and (ii) GOME Fun is owned as to 60% by the Group and 40% by the Substantial Shareholder, GOME Fun is an associate of the Substantial Shareholder and a connected subsidiary of the Company, transactions between the Group and each of GOME Holding and GOME Fun constitutes connected transaction for the Company.

As the highest applicable percentage ratios (other than profits ratio) in respect of the annual caps under each of the Relevant CCT Agreements are respectively expected to exceed 5% on an annual basis, the transactions contemplated under these agreements will be subject to the reporting, annual review, announcement, circular (including independent financial advice) and Independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

BOARD APPROVAL

At the Board meeting held to approve the Relevant CCT Agreements, Mr. Zou Xiao Chun (who is a Director originally nominated in 2010 by the Substantial Shareholder's associate) is considered to be interested in the transactions contemplated under the Relevant CCT Agreements, and have abstained from voting at the Board meeting in respect of the resolutions proposed to approve such agreements. Save as disclosed, none of the Directors was required to abstain from voting on the relevant Board resolutions.

18 -

LETTER FROM THE BOARD

INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER

An Independent Board Committee (comprising all the independent non-executive Directors) has been established to advise the Independent Shareholders on the Relevant CCT Agreements and the transactions contemplated respectively thereunder (including the annual caps). Ignite Capital has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

SGM

The SGM will be held to consider and, if thought fit, approve the Relevant CCT Agreements and the transactions contemplated thereunder (including the annual caps).

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll, except where the chairman of the SGM, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. Therefore, all resolutions proposed at the SGM shall be voted by poll.

As at the Latest Practicable Date, the Substantial Shareholder holds 4,923,506,602 Shares, representing approximately 10.28% of the issued share capital of the Company. The Substantial Shareholder shall abstain from voting on the proposed resolutions to approve the Relevant CCT Agreements and the transactions contemplated thereunder.

Save for the above, to the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, none of the other Shareholders is required to abstain from voting on the resolutions in respect of the Relevant CCT Agreements to be proposed at the SGM.

An announcement on the poll results will be published by the Company after the SGM in the manner prescribed under Rule 13.39(5) of the Listing Rules.

FORM OF PROXY

A form of proxy for the SGM is enclosed herewith. Whether or not you intend to attend and vote at the SGM in person, you are requested to complete the form of proxy and return it to the Company's branch share registrar in Hong Kong, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong in accordance with the instructions printed thereon as soon as practicable but in any event no later than 48 hours before the time appointed for holding the SGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or at any adjournment thereof should you so wish.

LETTER FROM THE BOARD

CLOSURE OF SHAREHOLDERS' REGISTER

For the purpose of determining the list of shareholders who are entitled to attend and vote at the SGM, those whose names appear as shareholders on the register of members of the Company as at the close of business on Wednesday, 9 April 2025. In order to qualify to attend and vote at the SGM, all instruments of transfer together with the relevant share certificate(s) must be lodged with the Company's branch share registrar in Hong Kong, Tricor Investor Services Limited, at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong for registration no later than 4:30 p.m. on Wednesday, 9 April 2025.

RECOMMENDATIONS

Your attention is drawn to (i) the letter from the Independent Board Committee as set out on pages 21 to 22 of this circular which contains the recommendation of the Independent Board Committee to the Independent Shareholders regarding the proposed resolutions to approve the Relevant CCT Agreements and the transactions contemplated thereunder; and (ii) the letter from the Independent Financial Adviser as set out on pages 23 to 47 of this circular which contains its advice to the Independent Board Committee and the Independent Shareholders in respect of the fairness and reasonableness of the terms of the Relevant CCT Agreements and the transactions contemplated thereunder.

The Independent Board Committee, having taken into account (among other things) the advice of the Independent Financial Adviser, is of the view that the terms of the Relevant CCT Agreements and the transactions contemplated thereunder (including the annual caps) are fair and reasonable, on normal commercial terms or better and will be conducted in the ordinary and usual course of business of the Group and in the interests of the Company and its Shareholders as a whole. Accordingly, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the relevant resolutions to be proposed at the SGM in respect of the approval of the Relevant CCT Agreements and the transactions contemplated thereunder.

The Directors (including the independent non-executive Directors, after considering the advice from the Independent Financial Adviser) are of the view that the Relevant CCT Agreements and the transactions contemplated thereunder (including the annual caps) are fair and reasonable, on normal commercial terms or better and will be conducted in the ordinary and usual course of business of the Group and in the interests of the Company and its Shareholders as a whole and therefore recommends you to vote in favour of the ordinary resolution to be proposed at the SGM.

GENERAL INFORMATION

Your attention is drawn to the appendix headed "General Information" to this circular.

Yours faithfully

By order of the Board

GOME Retail Holdings Limited

ZHANG Da Zhong

Chairman

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of the letter of recommendation, prepared for the purpose of incorporation in this circular, from the Independent Board Committee to the Independent Shareholders in respect of approving the Relevant CCT Agreements and the transactions contemplated thereunder (including the annual caps therefor).

回美

GOME RETAIL HOLDINGS LIMITED

國美零售控股有限公司*

(Incorporated in Bermuda with limited liability)

(Stock Code: 493)

25 March 2025

To the Independent Shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTIONS

We refer to the circular dated 25 March 2025 (the "Circular") issued by the Company to the Shareholders of which this letter forms part. Unless the context requires otherwise, capitalised terms used in this letter shall have the same meanings as defined in the Circular.

We have been appointed by the Board as the Independent Board Committee to advise the Independent Shareholders as to whether, in our opinion, the terms of the Relevant CCT Agreements and the transactions contemplated thereunder are fair and reasonable, on normal commercial terms or better and in the ordinary and usual course of business of the Group and in the interests of the Company and its Shareholders as a whole, and how the Independent Shareholders should vote at the SGM, after taking into account the recommendation of the Independent Financial Adviser.

Ignite Capital (Asia Pacific) Limited has been appointed by the Board as the Independent Financial Adviser to advise the Independent Board Committee and Independent Shareholders in connection with each of the Relevant CCT Agreements and the transactions contemplated thereunder. Details of the advice from the Independent Financial Adviser, together with the reasons for its opinion, the key assumptions made and the factors taken into consideration in forming its opinion, are set out in its letter from the Independent Financial Adviser on pages 23 to 47 of the Circular.

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Your attention is also drawn to the letter from the Board set out on pages 4 to 20 of the Circular and the general information set out in the appendix of the Circular.

Having considered the information as set out in the letter from the Board, the terms and conditions of the Relevant CCT Agreements and the transactions contemplated thereunder, the factors and reasons considered by, and the opinion of the Independent Financial Adviser as set out in its letter of advice, we are of the view that the terms of the Relevant CCT Agreements and the transactions contemplated thereunder are fair and reasonable, on normal commercial terms or better and will be conducted in the ordinary and usual course of business of the Group and in the interests of the Company and its Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolutions in relation to the approval of Relevant CCT Agreements and the transactions contemplated thereunder to be proposed at the SGM.

Yours faithfully

For and on behalf of the

Independent Board Committee

Mr. Wang Gao
Independent
Non-executive Director

Mr. Lui Wai Ming
Independent
Non-executive Director

Mr. Liu Yin Hong
Independent
Non-executive Director

22 -

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the full text of a letter of advice from Ignite Capital to the Independent Board Committee and the Independent Shareholders in respect of the continuing connected transactions contemplated under the Relevant CCT Agreements and their respective annual caps, which has been prepared for the purpose of inclusion in this circular.

Unit A, 15th Floor, CMA Building

64-65 Connaught Road Central

Central, Hong Kong

25 March 2025

To: The Independent Board Committee and the Independent Shareholders of GOME Retail Holdings Limited

Dear Sirs or Madams,

RENEWAL OF CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our engagement as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in connection with the (i) the 2025 Master Merchandise Purchase Agreement and the 2025 Master Merchandise Supply Agreement and the transactions contemplated thereunder (including their respective annual caps) ("Continuing Connected Transactions"), details of which are set out in the letter from the Board (the "Letter from the Board") contained in the circular of the Company to the Shareholders dated 25 March 2025 (the "Circular"), of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as those defined in the Circular unless otherwise defined or the context requires otherwise.

On 23 December 2024, the Company entered into, (among other things), the following Relevant CCT Agreements in respect of the Continuing Connected Transactions of the Company for the three financial years from 1 January 2025 to 31 December 2027:

(i) the 2025 Master Merchandise Purchase Agreement in relation to the supply of general merchandise (including but not limited to electrical appliances and consumer electronics products) by GOME Fun to the Group ("Merchandise Purchase Transaction");

(ii) the 2025 Master Merchandise Supply Agreement in relation to the supply of general merchandise (including but not limited to electrical appliances and consumer electronics products) by the Group to GOME Fun ("Merchandise Supply Transaction").

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As the highest applicable percentage ratios (other than profits ratio) in respect of the annual caps under each of the Relevant CCT Agreements are respectively expected to exceed 5% on an annual basis, the transactions contemplated under these agreements will be subject to the reporting, annual review, announcement, circular (including independent financial advice) and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

THE INDEPENDENT BOARD COMMITTEE

The Independent Board Committee, comprising all the independent non-executive Directors, (namely Mr. Wang Gao, Mr. Lui Wai Ming and Mr. Liu Yin Hong), has been established to advise the Independent Shareholders as to whether the terms of the Relevant CCT Agreements and the relevant annual caps in relation to the Continuing Connected Transactions thereunder are entered into in the ordinary and usual course of business of the Company, on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole. We, Ignite Capital, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

OUR INDEPENDENCE

As at the Latest Practicable Date, we did not have any relationship with, or interest in, the Group, GOME Fun, GOME Holding or any of their respective connected persons and close associates or other parties that could reasonably be regarded as relevant to our independence. During the past two years immediately prior to this letter, we have not: (i) acted in the capacity as a financial adviser or as an independent financial adviser to the Company; (ii) provide any services to the Company; or (iii) had any relationship with the Company. Apart from normal independent financial advisory fee paid or payable to us in connection with the current appointment, no arrangements exist whereby we had received or will receive any fees or benefits from the Group, GOME Fun, GOME Holding or any other parties that could reasonably be regarded as relevant to our independence. Accordingly, we consider ourselves independent pursuant to Rule 13.84 of the Listing Rules.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

BASIS OF OUR OPINION

In formulating our opinion and recommendation to the Independent Board Committee and the Independent Shareholders, we have reviewed, (amongst other things):

(i) the Company's interim report (the "2024 Interim Report") for the six months ended 30 June ("1H") 2024;

(ii) the Company's annual reports for the four years ended 31 December ("FY") 2020 (the "2020 Annual Report"), 2021 (the "2021 Annual Report"), 2022 (the "2022 Annual Report") and 2023 (the "2023 Annual Report");

(iii) the 2025 Master Merchandise Purchase Agreement;

(iv) the 2025 Master Merchandise Supply Agreement;

(v) the circular of the Company dated 7 January 2022 (the "2022 Circular");

(vi) other information as set out in the Circular.

We have relied on the truth, accuracy and completeness of the statements, information, opinions and representations contained or referred to in the Circular and the information and representations made to us by the Company, the Directors and the management of the Group (collectively, the "Management"). We have assumed that all information and representations contained or referred to in the Circular and provided to us by the Management, (for which they are solely and wholly responsible), are true, accurate and complete in all material respects and not misleading nor deceptive at the time when they were provided or made and will continue to be so up to the Latest Practicable Date. Shareholders will be notified of material changes as soon as possible, if any, to the information and representations provided and made to us after the Latest Practicable Date and up to (and including) the date of the SGM.

We have also assumed that all statements of belief, opinion, expectation and intention made by the Management in the Circular were reasonably made after due enquiries and careful consideration and there are no other facts not contained in the Circular, the omission of which make any such statement contained in the Circular misleading. We have no reason to suspect that any relevant information has been withheld, or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the opinions expressed by the Management, which have been provided to us.

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. However, we have not carried out any independent verification of the information provided by the Management, nor have we conducted any independent investigation into the business, financial conditions and affairs of the Group or its future prospects.

25 -

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Directors jointly and severally accept full responsibility for the accuracy of the information disclosed and confirm, having made all reasonable enquiries that to the best of their knowledge and belief, there are no other facts not contained in this letter, the omission of which would make any statement herein misleading.

This letter is issued to the Independent Board Committee and the Independent Shareholders solely in connection for their consideration of the terms of the Relevant CCT Agreements and the transactions contemplated thereunder (including the annual caps) and except for its inclusion in the Circular, is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purposes without our prior written consent.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion in respect of the terms of the Relevant CCT Agreements and the transactions contemplated thereunder (including the annual caps), we have taken into consideration the following principal factors and reasons:

1. Background of the Transactions

As stated in the Letter from the Board, as the 2022 Master Merchandise Purchase Agreement and the 2022 Master Merchandise Supply Agreement were due to expire on 31 December 2024. On 23 December 2024, the Group entered into, among others, the 2025 Master Merchandise Purchase Agreement and the 2025 Master Merchandise Supply Agreement to enable the Group to continue its existing operations going forward.

2. Information on the Parties to the Relevant CCT Agreements

2.1 The Company

The Company is a company incorporated in Bermuda, the shares of which are listed on the main board of the Stock Exchange.

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

2.2 GOME Fun

GOME Fun, a 60% non-wholly-owned subsidiary of the Group, which is principally engaged in the business of providing online retail services. The remaining 40% equity interests of GOME Fun is owned by the Substantial Shareholder. GOME Fun is hence an associate of the Substantial Shareholder and a connected subsidiary of the Company for the purpose of the Listing Rules.

2.3 GOME Appliance

GOME Appliance, a wholly-owned subsidiary of the Company, which is principally engaged in the retailing of electrical appliances and consumer electronics products.

3. The Reasons for entering into of the Relevant CCT Agreements

As discussed in the Letter from the Board, the Group is currently an all-round retail eco-system sharing platform focusing on retail and home services in the PRC, with the range of general merchandise covering household appliances, outdoor and sporting goods, food and wine, clothing, home decoration, daily necessities, mother care and baby goods and beauty and personal care products. GOME Fun is an important component of the Group's online platform, engaging in online retail business and local life services. Each of the Group and GOME Fun has its own procurement channels and suppliers. Prior to the Group's strategic transformation, the Group's retail business focuses primarily on electrical appliances and electronic products, and the proportion of general merchandise was relatively low. As the Group undergoes strategic transformation, the scope of the Group's procurement will expand and increase the proportion of merchandise other than electrical appliances and electronic products. Whereas GOME Fun, as opposed to its previous strategy of focusing on general merchandise, will procure more electrical appliances and electronic products to achieve a balanced development. As the retail strategy of the Group evolves, online and offline retails will integrate and the range of merchandise will also complement each other more comprehensively.

Having considered that (i) the merchandises to be purchased and supplied under the Relevant CCT Agreements are in line with the principal businesses of the Group and GOME Fun; (ii) the Merchandise Purchase Transaction and Merchandise Supply Transaction not only could offer an additional procurement and sale channel for both the Group and GOME Fun, but

27 -

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

also could strengthen the capability of the Group and GOME Fun to offer full range of products to their customers; and (iii) the long history of the mutually beneficial collaboration between the Group and GOME Fun, we are of the view that the entering into the Relevant CCT Agreements are in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole.

Industry Outlook

In order to evaluate the fairness and reasonableness of the proposed annual caps under the Relevant CCT Agreements, we have discussed with the Management and they are of the view that both offline and online retail market of electrical appliances, consumer electronic products and general merchandises in the PRC have shown a gradual recovery growth and will maintain the growth trend in the longer term. We have carried out our independent work to verify the growth of the aforesaid market. Based on data published by the National Bureau Statistics of China, PRC's total retail sales of social consumer goods in 2024 reached RMB48,789.5 billion, representing a year-on-year growth rate of approximately 3.5%, from RMB47,149.5 billion during the same period of the previous year. We also noted that PRC's retail sales of household appliances and audio-video equipment in 2024 increased by 12.3% compared with the same period of the previous year. Furthermore, PRC's online retail sales in 2024 reached RMB15,522.5 billion, representing a year-on-year growth rate of 7.2%.

According to "Economic and Financial Outlook Report 2025" which was published by Bank of China Research Institute in November 2024, the gross domestic product growth rate is expected to be approximately 5% for 2025, while consumption will be the main engine of economic growth, which will benefit the retail sales of social consumer goods.

Furthermore, we also noted that a series of policies and measures have been implemented in 2024 and early 2025 by the PRC government to stimulate retail consumption and deregulate the real estate market aiming to further boost the domestic demand and support the economic recovery, which include but not limited to: (i) issued action plans to continue promoting large-scale upgrades and the replacement of old household appliances, extending the subsidies into 12 categories of household appliances; (ii) implemented subsidies for the purchase of new digital products including mobile phones, tablets and smart watch and bracelets; (iii) promulgated clear and effective deregulation policies for the real estate market to increase transaction volume of the real estate market; and (iv) issued "Measures Regarding Creating New Consumption Scenarios and Cultivating New Growth Drivers for Consumption" to further cultivate and strengthen new growth drivers for consumption.

In light of the above, we concur with the Management that both the offline and online retail market for the sales of electrical appliances, consumer electronic products and general merchandise in the PRC would be positive in the long term.

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

4. Principal terms of the Relevant CCT Agreements

4.1 2025 Master Merchandise Purchase Agreement

Date

23 December 2024

Parties:

(a) GOME Appliance, a wholly-owned subsidiary of the Company, which is principally engaged in the retailing of electrical appliances and consumer electronics products; and

Terms of the 2025 Master Merchandise Purchase Agreement and annual caps:

Pursuant to the 2025 Master Merchandise Purchase Agreement, GOME Fun agreed to, and will use its best endeavors to procure any member of the Parent Group to, supply general merchandise (including but not limited to electrical appliances and consumer electronics products) to GOME Appliance or any member of the Group pursuant to their requests from time to time, for the period from the date of approval of the 2025 Master Merchandise Purchase Agreement by the Independent Shareholders to 31 December 2027, unless otherwise terminated in accordance with the terms of the 2025 Master Merchandise Purchase Agreement. The annual caps of the transaction amounts (excluding value-added tax) for the three years ending 31 December 2027 shall not exceed RMB1 billion.

According to the 2025 Master Merchandise Purchase Agreement, we noted that the supply of general merchandise is based on market approach, which is determined by the prevailing market rate of similar merchandise charged by GOME Fun or any member of the Parent Group to independent third parties. According to the internal control procedures set out in the section below headed "5. Internal control policy for Continuing Connected Transactions", with the consideration of (i) the relevant management personnel of the Company will regularly, on a monthly basis, update the market price conducted under the relevant continuing connected transaction; (ii) the Group will obtain quotations from at least two independent suppliers of similar products to set the reference market price; (iii) the Management will, review, monitor and benchmark on a monthly basis, with the average industry prices in respect of the provision of the services; and (iv) the Group's internal control procedures to be discussed below, we are of the view that the basis for price determination under the 2025 Master Merchandise Purchase Agreement is fair and reasonable.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Based on the above observation, the pricing policy offered by GOME Fun for the Merchandise Purchase Transaction is no less favourable to the Group than those offered by the independent third-party suppliers.

Historical transaction amounts

To assess the reasonableness of the annual caps for the 2025 Master Merchandise Purchase Agreement, we have reviewed the historical transaction amounts for the general merchandise purchased under the 2022 Master Merchandise Purchase Agreement for the two financial years ended 31 December 2022 and 2023 and the nine months ended 30 September 2024 ("9M2024"), details of which are set out as follow:

Table 1: The annual caps and the historical actual transaction amounts of the 2022 Master Merchandise Purchase Agreement for FY2022, FY2023 and FY2024

| | FY2022
RMB’ million | FY2023
RMB’ million | FY2024
RMB’ million |
| --- | --- | --- | --- |
| Annual caps | 28,000.0 | 35,000.0 | 45,000.0
(Note 1) |
| Transaction amounts
(Note 2) | 3,385.0 | 121.2 | – |
| Utilisation rate | 12.1% | 0.3% | – (up to 9M2024) |

Notes:
1. For the entire year ended 31 December 2024.
2. The significant decrease in actual transaction amounts for the year ended 31 December 2023 and the nine months ended 30 September 2024 was mainly attributable to the suspension of supply of goods from certain major suppliers as a result of the debt issues of the Group. In addition to the change in the Group's strategies by focusing on its core business and the streamlining of its business operations. Moreover, the domestic economy faced the combined impact of cyclical and structural adjustments, resulting in a slow recovery. Relative industries such as real estate have not yet come out of the trough, dragging down the demand for home appliance-related industries. Thus the Group's revenue declined rapidly in the period, resulting in the significant drop in the continuing connected transaction amount.

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As illustrated above, the historical actual transaction amounts contemplated under the 2022 Master Merchandise Purchase Agreement recorded a decrease by approximately 96.4% from approximately RMB3,385.0 million for FY2022 to approximately RMB121.2 million for FY2023 and no transaction amount for 9M2024. The utilisation rates for the existing annual caps for FY2022, FY2023 and 9M2024 were approximately 12.1%, 0.3% and nil respectively.

Based on the discussion with the Management, the main reason for the significant decrease in the actual transaction amounts of the Merchandise Purchase Transaction in FY2023 and 9M2024 was mainly attributable to the significant drop in the revenue of the Group for the same period. As stated in the 2023 Annual report, the domestic economy was affected by various factors such as the internal and external environment, and the slow pace of recovery. In addition, upstream industries, such as real estate market, were in an overall downturn, and home appliance-related industries were dragged down. Coupled with the debt distress caused by the pandemic and other factors in the previous year, the operations of the Group encountered unprecedented difficulties with declining revenue and a debt crisis. As disclosed in the 2024 Interim report, the recovery of the domestic economy was still slow, while the real estate market declined significantly. The income growth of local governments and households slowed down. The economy entered a deleveraging cycle. Due to the declining willingness to consume, home appliances and other related industries were affected and the downturn continued. Compounded by the impact of its own debt issues, the revenue of the Group continued to decrease. As a result, the sales revenue of the Group for FY2023 was approximately RMB647 million, declined by 96.3% as compared with RMB17,444 million for FY2022. The sales revenue of the Group for 6M2024 further decreased by approximately 59.3% year-on-year.

According to our discussion with the Management and as discussed in the 2024 Interim Report, although the Group was still in a difficult situation, the Management has remained positive and the Group is committed to resolve its debt issues, optimise and upgrade new business model strategies and actively explore new business and growth drivers during 1H2024.

Resolving Debt issues

During the six-month period ended 30 June 2024 ("1H2024"), the Group worked diligently to resolve its debt issues, and continued to gradually rebuild relationships with its suppliers and payment service providers through negotiating debt-for-equity swaps and expanding franchise models. It continued to negotiate with banks about proposals regarding loan buybacks and loan renewals. The Group also relieved its cash flow pressure by selling and disposing of long-term assets such as logistics bases.

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Optimising and Upgrading New Business Model Strategies

The Group continued to use live streaming as the fulcrum to promote the development of its main business, explore new increments and consolidate online business through short videos, live streaming and other marketing models. On the other hand, it actively promoted the asset-light franchise joint venture cooperation model. During 1H2024, franchise joint venture cooperation entered the substantive stage of operation and achieved rapid development, attracting investors from all over the world. Dozens of contracts had been signed, and the signing process of nearly 100 companies was in progress.

Development and Progress of New Businesses

While promoting the transformation of its existing businesses, the Group has been actively considering reforms and making progress, exploring new opportunities and creating a new growth curve. During 1H2024, among the planned new businesses, GOME Automobile Experience Hall had entered the substantial operational stage and received good feedbacks from the market.

Furthermore, as discussed in the above section headed "Industry Outlook", we consider that both the offline and online retail market for the sales of electrical appliances, consumer electronic products and general merchandise in the PRC would be positive in the long term.

Having considered the above, in particular the commitment of the Group to resolve its debt issues, optimisation of the new business model strategies and development of new businesses, the Management is of the view, which we concur, that although the historical transaction amounts were decreasing, it is in the interests of the Group to maintain a reasonable level of proposed annual caps for the 2025 Master Merchandise Purchase Agreement so as to accommodate the potential future recovery of the operations of the Group.

Basis for determining the purchase price and annual caps of the 2025 Master Merchandise Purchase Agreement

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Table 2: The proposed annual caps of the 2025 Master Merchandise Purchase Agreement for FY2025, FY2026 and FY2027

| | FY2025
million | FY2026
million | FY2027
million |
| --- | --- | --- | --- |
| Annual caps (RMB) | 1,000 | 1,000 | 1,000 |

As stated in the Letter from the Board, the proposed annual cap amounts of the 2025 Master Merchandise Purchase Agreement were determined after taking into consideration the following items:

i. The expected demand for the procurement/supply of products by the Group in the three years ending 31 December 2027. The annual cap represents a decrease of approximately 98% from the annual caps of the procurement/supply transactions for 2024.
ii. The Group's revenue in 2023 and the nine months ended 30 September 2024 have decreased significantly due mainly to the suspension of supply of goods from certain major suppliers as a result of the debt issues of the Group, the change in the Group's strategies by focusing on its core business and the streamlining of its business operations and the sluggish economic conditions in the PRC.
iii. Through the efforts of the Group in resolving its debt issues and the stimulus policies introduced by the PRC Government on consumption, and the improvement in the PRC economy, it is expected that the results of the Group will improve and support the requirements of the procurement/supply services.
iv. The Management has optimised the strategic layout of the Group and actively promoted the debt restructuring work. The Company has made positive progress in resolving its debt issues, with preliminary agreements with a number of major suppliers. Suppliers that have previously suspended supplying goods to the Group due to outstanding debt will gradually restore the arrangements with the Group and resume the supply of products to the Group once the debt settlement agreement is signed. It is expected that sales will recover significantly as a result. The management has also complied with policy directions and trends, optimised strategic layout, focused its resources, vigorously developed new marketing models based on live broadcasts, and promoted the expansion of light asset businesses such as franchising, reduce

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risks and costs overall, and increase benefits and efficiency. The Company's exploration over the past year has achieved positive results. In 2025, against the background of consumption recovery driven by national policies, related businesses are expected to grow; In addition, the GOME Automobile project has been officially released at the end of 2024, and the smart car experience hall is ready for launch. Driven by the country's encouragement of automobile consumption and related subsidy policies, the Company is confident of the prospects in the automobile business.

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phones and other electronic products, new energy vehicles and other durable goods have been implemented one after another. It is expected that after the National People's Congress meeting in March, more promotion and clearer measures will be introduced. Consumption policies have been introduced. In addition, the policies towards the real estate industry have changed, and various regions have begun to vigorously encourage and support residents to purchase properties. The recovery of the real estate industry will also drive a rebound in home appliances and other related consumption.

viii. As noted above, the Group has been proactively resolving its debt issues and has reached preliminary agreements with a number of major suppliers. It is expected that the supply of goods by these suppliers to the Group will be gradually restored once the debt settlement agreements are being signed. In light of the expectation of restoring the supply of goods by its suppliers, the Company has set an offline sales target of approximately RMB3.2 billion to RMB3.9 billion for the three years ending 31 December 2027. To achieve such offline sales target, GOME Appliance expects to purchase up to 25% of the respective merchandises from GOME Fun and the Parent Group, which is approximate to the proposed annual cap of RMB1 billion for the three years ending 31 December 2027. Such sales target is determined by the management based on the expected recovery of the sales for existing stores and the expansion of new stores. The management expects that (i) the sales target for the existing stores will gradually recover to a sales level which is approximately 70% of the historical average annual sales per store for the two financial years of 2021 and 2022 (the "Average Sales Per Store"), the financial years before the Group encountering the debt issues; (ii) the plans to open 480 to 640 new stores through franchising and franchise-like joint venture cooperation. Such light-asset model expansion will strategically cover the Northeast, Northern, Central and Southwest regions of the PRC, with approximately 120 to 160 new stores in each of the regions. Annual sales of these new stores are estimated to gradually reached 50% of Average Sales Per Store in the year ending 31 December 2027; and (iii) the proposed annual cap in respect of the procurement/supply of products by the Group was calculated on the abovementioned basis.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

According to the discussion with the Management, we note that one of the main reasons for the significant decrease in the revenue of the Group, and thus the historical transaction amounts for the Merchandise Purchase Transactions, for FY2023 and 1H2024 was the suspension of supply of goods from certain major suppliers as a result of the debt issues of the Group. The Group has been proactively resolving its debt issues and has reached preliminary agreements with a number of major suppliers. It is expected that the supply of goods by these suppliers to the Group will be gradually restored once the debt settlement agreements are being signed. In light of the expectation of restoring the supply of goods by its suppliers, the Company has set an offline sales target of approximately RMB3.2 billion to RMB3.9 billion for the three years ending 31 December 2027 (the "Offline Sales Target"). To achieve the Offline Sales Target, GOME Appliance expects to purchase up to 25% of the respective merchandises from GOME Fun and the Parent Group, which is approximate to the proposed annual caps of RMB1 billion for each of the three years ending 31 December 2027. We further understand from the Management that the Offline Sales Target is determined based on the recovery of the existing stores and the expansion of new stores. In order to understand and assess the basis for deriving and calculation of the Offline Sales Target and the proposed annual caps in respect of the 2025 Master Merchandise Purchase Agreement, we have obtained and reviewed sales target meeting documents (including the corresponding computation worksheets). Based on our view, we note that (i) the sales target for the existing stores (the "Existing Stores Sales Target") is set based on the Average Sales Per Store; (ii) the Management plans (the "Restoration Plan") to open 480 to 640 new stores through franchising and franchise-like joint venture cooperation (the "Planned Stores"). Such light-asset model expansion will strategically cover the Northeast, Northern, Central and Southwest regions of the PRC, with approximately 120 to 160 new stores in each of the regions. Annual sales of these stores are estimated to gradually reached 50% of Average Sales Per Store in the year ending 31 December 2027; and (iii) the proposed annual cap in respect of the 2025 Master Merchandise Purchase Agreement was calculated based on the abovementioned basis.

In assessing the fairness and reasonableness of the Existing Stores Sales Target, we have (i) obtained and compared the offline sales revenue and number of stores for FY2021 and FY2022 against the corresponding figures as disclosed in the annual reports of the Company for FY2021 and FY2022, and recomputed the Average Sales Per Store; (ii) obtained the list of new stores opened in FY2019 (the "2019 New Stores") and the annual sales data of the corresponding 2019 New Stores in FY2021, assessed and noted that the average annual sales per the 2019 New Stores reached 50% of the Average Sales Per Store after two years of respective store opening (i.e. in FY2021), which forms the basis of and supports the gradual recovery of sales level of the existing stores of the Group to 70% of the Average Sales Per Store in three years (i.e. for the year ending 31 December 2027); and (iii) recomputed the calculation of the Existing Stores Sales Target under the corresponding computation worksheet of the sales target meeting documents. On the other hand, when assessing the fairness and reasonableness of the Restoration Plan, we have: (i) with regards to the opening of 480 to 640 Planned Stores by the Group under the Restoration Plan, reviewed and considered the store data in relation to the numbers of new stores being opened by the Group in FY2020 and FY2021, and noted that the Group were

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able to open, on the average, more than 800 stores in each of the FY2020 and FY2021 respectively, covering the above mentioned regions in the PRC; (ii) reviewed the Restoration Plan prepared by the Management and noted that the Company has sufficient capital for the opening of the Planned Stores through franchising model and franchise-like joint venture cooperation; (iii) reviewed the above-mentioned corresponding annual sales data of the 2019 New Stores and noted that such stores reached over 50% of the Average Sales Per Store after two years of opening, which forms the basis of the estimation of annual sales of the Planned Stores to reached 50% of the Average Sales Per Store in three years (i.e. in the year ending 31 December 2027); and (iv) recomputed the calculation of the estimation of annual sales for the Planned Stores under the corresponding computation worksheet of the sales target meeting documents. In light of the above and having considered that, as discussed in the above-section headed "Industry Outlook", both the offline and online retail market for the sales of electrical appliances, consumer electronic products and general merchandise in the PRC would be positive in the long term., we are of the view that the basis for deriving the Offline Sales Target is reasonable.

In addition, as mentioned in the above section headed "4.1 2025 Master Merchandise Purchase Agreement – Historical transaction amounts", the operations of the Group encountered unprecedented difficulties with declining revenue and a debt crisis in FY2023 and 9M2024. In order to assess the average level of the historical transaction amounts of the Merchandise Purchase Transaction before the Group encountering such unprecedented difficulties (i.e. FY2023), apart from the historical transaction amount for FY2022, we have also considered the historical transaction amounts for three years ended 31 December 2021 under the 2019 Master Merchandise Purchase Agreement (as defined in the 2022 Circular), details of which are set out as follow:

Table 3: The historical actual transaction amounts of the 2019 Master Merchandise Purchase Agreement for FY2019, FY2020 and FY2021

| | FY2019
RMB' million | FY2020
RMB' million | FY2021
RMB' million |
| --- | --- | --- | --- |
| Transaction amounts | 3,938.0 | 2,083.1 | 5,822.0 |

Sources: Annual reports of the Company

We noted that the average historical transaction amounts of the Merchandise Purchase Transaction for the four years ended 31 December 2022 is approximately RMB3,807.0 million, which is substantial higher than the proposed annual caps of RMB1,000 million for the three years ending 31 December 2027.

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Having considered that (i) it is in the interests of the Group to maintain a reasonable level of proposed annual caps for the 2025 Master Merchandise Purchase Agreement so as to accommodate the potential future recovery of the operations of the Group, as discussed in the above section headed "4.1 2025 Master Merchandise Purchase Agreement – Historical transaction amounts"; (ii) both the offline and online retail market for the sales of electrical appliances, consumer electronic products and general merchandise in the PRC would be positive in the long term; (iii) the basis for deriving the Offline Sales Target and the proposed annual caps for the 2025 Master Merchandise Purchase Agreement; and (iv) the proposed annual caps of the 2025 Master Merchandise Purchase Agreement are substantial lower than the average historical transaction amounts of the Merchandise Purchase Transaction for the four years ended 31 December 2022, we are of the view that the annual caps are fair and reasonable so far as the Independent Shareholders are concerned.

Nevertheless, Independent Shareholders should note that the annual caps relate to future events and was determined by the Management based on assumption (including the current estimate of the demand of the Continuing Connected Transactions). It does not represent a forecast of turnover to be generated from the transactions contemplated under the Relevant CCT Agreements. Consequently, we express no opinion as to how closely the actual transactions amounts in comparison to the annual caps.

4.2 2025 Master Merchandise Supply Agreement

Date:

23 Dec 2024

Parties:

(a) GOME Appliance, a wholly-owned subsidiary of the Company; and
(b) GOME Fun, a 60% non-wholly-owned subsidiary of the Group.

Terms of the 2025 Master Merchandise Supply Agreement and annual caps:

Pursuant to the 2025 Master Merchandise Supply Agreement, GOME Appliance agreed to, and will procure any member of the Group to, supply general merchandise (including but not limited to electrical appliances and consumer electronics products) to GOME Fun or any member of the Parent Group pursuant to their requests from time to time, for the period from the date of approval of the 2025 Master Merchandise Supply Agreement by the Independent Shareholders to 31 December 2027, unless otherwise terminated in accordance with the terms of the 2025 Master Merchandise Supply Agreement. The annual caps of the transaction amounts (excluding value-added tax) for the three years ending 31 December 2027 shall not exceed RMB1 billion.

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According to the 2025 Master Merchandise Supply Agreement, we noted that the supply of general merchandise is based on market approach, which is determined by the prevailing market rate of similar merchandise charged by GOME Appliance or the Group to independent third parties. According to the internal control procedures set out in the section below headed "5. Internal control policy for Continuing Connected Transactions", with the consideration of (i) the relevant management personnel of the Company will regularly, on a monthly basis, update the market price conducted under the relevant continuing connected transaction; (ii) the Group will make reference to the quotations provided to at least two independent customers of similar products to set the reference market price; (iii) the management team of the Group will, review, monitor and benchmark with the average industry prices on a monthly basis, in respect of the provision of the products; and (iv) the Group's internal control procedures to be discussed below, we are of the view that the basis for price determination under the 2025 Master Merchandise Supply Agreement is fair and reasonable.

Based on the above observation, the pricing policy offered by GOME Appliance for the Merchandise Supply Transaction is no less favourable to the Group than those offered to the independent third-party customers.

Historical transaction amounts

To assess the reasonableness of the annual caps for the 2025 Master Merchandise Supply Agreement, we have reviewed the historical transaction amounts for the general merchandise supplied under the 2022 Master Merchandise Supply Agreement for the two financial years ended 31 December 2022 and 2023 and for 9M2024, details of which are set out as follow:

Table 4: The annual caps and the historical actual transaction amounts of the 2022 Master Merchandise Supply Agreement for FY2022, FY2023 and FY2024

| | FY2022
RMB’ million | FY2023
RMB’ million | FY2024
RMB’ million |
| --- | --- | --- | --- |
| Annual caps | 30,000.0 | 40,000.0 | 50,000.0 |
| Transaction amounts | 3,047.4 | 297.8 | 64.5 (Note 1) |
| Utilisation rate
(Note 2) | 10.2% | 0.7% | 0.1% |

Notes:
1. For the entire year ended 31 December 2024.
2. Please refer to Note 2 to the Table 1 above for the reasons of under-utilisation of the annual caps for the year ended 31 December 2023 and the nine months ended 30 September 2024.

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As illustrated above, the historical actual transaction amounts contemplated under the 2022 Master Merchandise Supply Agreement recorded a decrease by approximately 90.2% from approximately RMB3,047.4 million for FY2022 to approximately RMB297.8 million for FY2023 and further decreased to approximately RMB64.5 million for 9M2024. The utilisation rates for the existing annual caps for FY2022 and FY2023 were approximately 10.2% and 0.7% respectively. The historical actual transaction amounts of the Merchandise Supply Transaction for 9M2024 is representing approximately 0.1% of the existing annual cap of RMB50,000 million for FY2024. Should the historical actual transaction amount of the Merchandise Supply Transaction for 9M2024 be annualised, the projected transaction amount for FY2024 would be approximately RMB86 million and the utilisation rate would be 0.2%.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Having considered the above, in particular the commitment of the Group to resolve its debt issues, optimisation of the new business model strategies and development of new businesses, the Management is of view, which we concur, that although the historical transaction amounts were decreasing, it is in the interests of the Group to maintain a reasonable level of proposed annual caps for the 2025 Master Merchandise Supply Agreement so as to accommodate the potential future recovery of the operations of the Group.

Basis for determining the selling price and annual caps of the 2025 Master Merchandise Supply Agreement

To ensure the terms offered by GOME Fun or the Parent Group to the Group were similar and not less favorable than terms offered to the independent third parties, the internal control unit of the procurement department of the Group will review and benchmark prices offered under the 2025 Master Merchandise Supply Agreement with the prices offered by the Group to independent third party customers for similar products in the vicinity.

As disclosed in the Letter from the Board, the table below sets out the proposed annual caps of the 2025 Master Merchandise Supply Agreement for FY2025, FY2026 and FY2027.

Table 5: The proposed annual caps of the 2025 Master Merchandise Supply Agreement for FY2025, FY2026 and FY2027

| | FY2025
million | FY2026
million | FY2027
million |
| --- | --- | --- | --- |
| Annual caps (RMB) | 1,000 | 1,000 | 1,000 |

The proposed annual cap amounts of the 2025 Master Merchandise Supply Agreement were determined after taking into consideration in following items:

i. the historical transaction amounts of merchandise supplied under the 2022 Master Merchandise Supply Agreement;

ii. the expected demand of GOME Fun or the Parent Group for products that may be supplied by the Group; and

iii. the gradual stabilisation of the PRC retail market and the Group's operations.

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As discussed in the above section headed "Basis for determining the purchase price and annual caps of the 2025 Master Merchandise Purchase Agreement", it is expected that the supply of goods by the suppliers of the Group will be gradually restored once the debt settlement agreements are being signed. According to the Management, in light of the expectation of restoring the supply of goods by its suppliers and its online sales may be gradually recovered, the Company has set an online sales target of reaching approximately RMB1.7 billion to RMB2.1 billion in the year ending 31 December 2027 (the "Online Sales Target"). To achieve the Online Sales Target, GOME Fun expects to purchase up to approximately 50% of the respective merchandises from GOME Appliance, which is approximate to the proposed annual cap of RMB1 billion in respect of the 2025 Master Merchandise Supply Agreement. We have obtained and compared the historical transaction amounts of merchandises purchased by GOME Fun from the GOME Appliance against the sales amounts of GOME Fun for FY2022, FY2023 and 1H2024, and noted that over 50% of the merchandises sold by GOME Fun were purchased from GOME Appliance. Meanwhile, in assessing the fairness and reasonableness of basis for determining the Online Sales Target, we have: (i) obtained and reviewed the sales target meeting documents, (including the corresponding computation worksheets); (ii) analysed and noted that online sales contributed approximately 35% to 46% to the total sales of the Group for FY2023 and 1H2024 (the "Online Sales Contribution"); (iii) recomputed the Online Sales Target, which was derived based on the low end of the Online Sales Contribution of approximately 35% of the total sales target (including offline and online sales) of the Group for the three years ending 31 December 2027; (iv) obtained and analysed the historical revenue breakdown of the Group, and noted that (a) the average online sales revenue of the Group was over RMB 1 billion; and (b) online sales revenue of the Group once exceeded RMB 1.5 billion, for the three years ended 31 December 2021; (v) considered, in particular, the recent policies and subsidies implemented by the PRC government to continue promoting large-scale upgrades and the replacement of old household appliances, extending the subsidies into 12 categories of household appliances, and for the purchase of new digital products; and (vi) considered the statistics illustrated in the above-section headed "Industry Outlook" showing that both the offline and online retail market for the sales of electrical appliances, consumer electronic products and general merchandise in the PRC would be positive in the long term. In addition, based on the discussion with the Management, we further understand that the Online Sales Target was determined after taking into consideration: (i) the online platform and application has been developed for years and annual active online buyers have reached over 16 million at its peak; (ii) the Group has been putting more effort and resources into short videos, transformation of its live streaming business through establishing cooperation with Multi-channel Network companies and online celebrities and setting up of new media accounts on other platforms to attract more trendy youngsters the join the application of the Group; and (iii) SKUs for all product categories of the Group reached over 2 million and supply of merchandises are expected to restore gradually in light of the debt settlements. In light of the above, we are of the view that the basis for deriving the Online Sales Target is reasonable.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As mentioned in the above section headed "4.1 2025 Master Merchandise Purchase Agreement – Historical transaction amounts", the operations of the Group encountered unprecedented difficulties with declining revenue and a debt crisis in FY2023 and 9M2024. In order to assess the average level of the historical transaction amounts of the Merchandise Supply Transaction before the Group encountering such unprecedented difficulties (i.e. FY2023), apart from the historical transaction amount for FY2022, we have also considered the historical transaction amounts for three years ended 31 December 2021 under the 2019 Master Merchandise Supply Agreement (as defined in the 2022 Circular), details of which are set out as follow:

Table 6: The historical actual transaction amounts of the 2019 Master Merchandise Supply Agreement for FY2019, FY2020 and FY2021

| | FY2019
RMB’ million | FY2020
RMB’ million | FY2021
RMB’ million |
| --- | --- | --- | --- |
| Transaction amounts | 5,334.7 | 3,012.8 | 4,659.0 |

Sources: Annual reports of the Company

We noted that the average historical transaction amounts of the Merchandise Supply Transaction for the four years ended 31 December 2022 is approximately RMB4,013.5 million, which is substantial higher than the proposed annual caps of RMB1,000 million for the three years ending 31 December 2027.

Having considered that (i) it is in the interests of the Group to maintain a reasonable level of proposed annual caps for the 2025 Master Merchandise Supply Agreement so as to accommodate the potential future recovery of the operations of the Group, as discussed in the above section headed "4.2 2025 Master Merchandise Supply Agreement - Historical transaction amounts"; (ii) both the offline and online retail market for the sales of electrical appliances, consumer electronic products and general merchandise in the PRC would be positive in the long term; (iii) the basis for deriving the Online Sales Target and the proposed annual caps for the 2025 Master Merchandise Supply Agreement; and (iv) the proposed annual caps of the 2025 Master Merchandise Supply Agreement are substantial lower than the average historical transaction amounts of the Merchandise Supply Transaction for the four years ended 31 December 2022, we are of the view that the annual caps are fair and reasonable so far as the Independent Shareholders are concerned.

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

5. Internal control policy for Continuing Connected Transactions

With reference to the Letter from the Board, in order to ensure that the continuing connected transactions of the Group are being conducted in a fair and reasonable manner, and are in line with the prevailing market rates, the Group adopts the following internal control methods and procedures:

(i) to determine the prevailing market rate, the Group will obtain quotations from at least two independent suppliers of similar services to set the reference market price. If there is no quotations nor information to determine the prevailing market rate, the Group will determine the prevailing market rate by reference to the average price of similar products previously purchased/supplied by the Group, and on normal commercial terms which are no less favourable than that are available from independent third parties. In addition, the management team of the Group will gather market intelligence from time to time (on a regular monthly basis and/or prior to price negotiation) by way of research and investigation to ascertain the quality of the products/services compared to similar products/services in the market and the reference price of each type of transactions in the market;

(ii) the management team of the Group will review, monitor and benchmark on a monthly basis, with the average industry prices in respect of the sales of the products/provision of the services;

(iii) the Group will also work closely with customers/suppliers to obtain information on the demand and inventory situation, and the Company would then adjust or negotiate the prices of the products/services when necessary to ensure price fairness;

(iv) the Company also conducts regular quarterly reviews of the sales, costs of sales and expenses of the products/services and ensures the transactions are within the annual caps;

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(b) The Company will conduct periodic half-yearly audit reviews of the continuing connected transactions of the Company, to consider the (i) effective implementation of the pricing policies and the payment methods, evaluation of balances of annual caps; and (ii) management weaknesses, and recommendation of improvement measures to ensure that the internal control measures in respect of the continuing connected transactions remain complete and effective and where any weaknesses are identified, the Company will take measures to address them as soon as practicable.

The independent auditor of the Group will also conduct an annual review on the pricing terms and annual caps of the continuing connected transactions in accordance with Listing Rule 14A.56.

We have independently assessed the fairness and reasonableness of the pricing mechanism by obtaining and randomly reviewing 22 samples of purchase and supply records and documents of the Continuing Connected Transactions (the "Sample Transactions") for the two financial years ended 31 December 2023 and for the nine months ended 30 September 2024 (the "Review Period"). We have compared the prices of the products purchased or supplied by the Group under the Sample Transactions with the prices charged by other independent suppliers or customers for the similar products, and noted that the prices charged or paid by GOME Fun under the Sample Transactions were no less favourable to the Group than those offered by the respective independent suppliers and customers. We considered our approach of applying the sample selection criteria and the sample sizes of Samples Transactions is appropriate on the following bases: (i) the method of randomly selecting samples is a common methodology applied by financial advisory peers; (ii) each of the Merchandise Purchase Transaction and the Merchandise Supply Transaction has 11 Sample Transactions covering all the quarters during the Review Period. As confirmed by the Management that there was no Merchandise Purchase Transaction in the second and third quarters of FY2024, we therefore randomly obtained and reviewed 2 more Sample Transactions in the first quarter of FY2024 as the replacement; and (iii) we noted no failure of compliance with the pricing mechanism of the Continuing Connected Transactions for all the Sample Transactions, hence we did not expand our sample size further. We are also of the view that the Sample Transactions represent an exhaustive list of samples based on the relevant selection criteria, which are comparable to the Continuing Connected Transactions and are representative, fair and reasonable.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In addition, based on the discussion with the Management, we note that the Company had engaged the independent auditors of the Company to report on the Group's continuing connected transactions in relation to the Relevant CCT Agreements (the "Historical Transactions") in accordance with Hong Kong Standard on Assurance Engagements 3000 (Revised) "Assurance Engagements Other Than Audits or Reviews of Historical Financial Information" and with reference to Practice Note 740 "Auditor's Letter on Continuing Connected Transactions under the Hong Kong Listing Rules" issued by the Hong Kong Institute of Certified Public Accountants. According to the 2022 Annual Report and 2023 Annual Report, the independent auditors of the Company have confirmed to the Board that the Continuing Connected Transactions for the two years ended 31 December 2023:

(i) had been approved by the Board;
(ii) were in accordance with the pricing policies of the Group where such transactions involved the provision of goods or services by the Group;
(iii) have been entered into in accordance with the relevant agreements governing such transactions; and
(iv) have not exceed the respective caps.

We further noted that the independent non-executive Directors of the Company have also reviewed the Continuing Connected Transactions and confirmed that either the Continuing Connected Transactions were entered into either on normal commercial terms or on terms not less favourable to the Group than terms available to or from independent third parties for FY2022 and FY2023. Based on the above, we are of the view that the implementation of the above internal control procedures can ensure that the pricing and terms of the Relevant CCT Agreements can be on normal commercial terms, fair and reasonable, and (in particular, no less favourable to the Group than those offered by the independent third party suppliers and customers) and that the relevant Continuing Connected Transactions are conducted as agreed in the CCT Agreements and in compliance with Chapter 14A of the Listing Rules.

In light of the above, we consider that: (i) the market approach adopted by the Group as the pricing policy for the Continuing Connected Transactions are fair and reasonable; (ii) for the pricing standards of the products and services under the Continuing Connected Transactions, the relevant prices are no less favourable than the prices or those offered by/to independent third parties; and (iii) the Group has adopted sufficient internal control measures to ensure the terms of the Relevant CCT Agreements are on normal commercial terms or better and the annual caps will not be exceed., we are of the view that the pricing standards stipulated under the Relevant CCT Agreements are fair and reasonable so far as the Independent Shareholders are concerned.

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OPINION AND RECOMMENDATION

We have considered the above principal factors and reasons and, in particular, having taken into account the following in arriving at our opinion:

(i) the entering into the Relevant CCT Agreements is in the ordinary course of business of the Company;

(ii) the terms of the Continuing Connected Transactions are fair and reasonable and in the interests of the Company and Shareholders as a whole;

(iii) the determination of the proposed annual caps for each of the Continuing Connected Transactions are fair and reasonable;

(iv) the pricing mechanism for the Continuing Connected Transactions contemplated under each of the Relevant CCT Agreements are fair and reasonable; and

(v) the Company has adopted sufficient internal control measures to govern the continuing connected transactions of the Group.

Having considered the above, we are of the view that the Continuing Connected Transactions were entered into in the ordinary and usual course of business of the Company on normal commercial terms, the terms of the Continuing Connected Transactions and the relevant proposed annual caps are fair and reasonable, and in the interest of the Company and the Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend, and we ourselves recommend, the Independent Shareholders to vote in favour of the resolutions in relation to the Continuing Connected Transactions to be proposed at the SGM.

Yours faithfully,

For and on behalf of

Ignite Capital (Asia Pacific) Limited

Li Lan

Dicky Tin

Managing Director

Director

Mr. Li Lan is a Managing Director of Ignite Capital and is licensed under the SFO as a Responsible Officer to conduct Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities. Mr. Li has over 18 years of corporate finance experience in Hong Kong and has participated in and completed various financial advisory and independent financial advisory transactions.

Mr. Dicky Tin is a Director of Ignite Capital and is licensed under the SFO as a licensed person to conduct Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities. Mr. Tin has over 18 years of investment banking and corporate finance experience in Hong Kong and has participated in and completed various initial public offerings, corporate financial advisory and independent financial advisory transactions.

For identification purpose only

APPENDIX

GENERAL INFORMATION

1. 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 nor deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Interests of Directors

As at the Latest Practicable Date, so far as the Directors or chief executive of the Company were aware of, none of the Directors, Chief Executive or their respective associates had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept under Section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

(b) Interests of substantial Shareholders

As at the Latest Practicable Date, so far as the Directors or chief executive of the Company were aware of, persons (other than Directors or chief executive of the Company) who had interests or short positions in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company pursuant to Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company under Section 336 of the SFO, were as follows:

Name of Shareholder	Nature	Number of ordinary Shares held	Approximate % of shareholding
Mr. Wong (Note 1)	Interest in controlled corporation	4,923,506,602	10.28
Ms. Du Juan (Note 2)	Interest in controlled corporation	4,923,506,602	10.28
Shinning Crown Holdings Inc. (Note 3)	Beneficial owner	3,315,899,938	6.92

APPENDIX

GENERAL INFORMATION

Notes:

Of these 4,923,506,602 Shares, 3,315,899,938 Shares are held by Shinning Crown Holdings Inc., 1,200,000,000 Shares are held by Element Assets Management Limited, 160,000,000 Shares are held by Hillwood Assets Management Limited, 246,706,664 Shares are held by Smart Captain Holdings Limited (all the above companies are 100% beneficially owned by Mr. Wong, the Substantial Shareholder) in the capacity as trustee of a family trust established by Mr. Wong; and 900,000 Shares are held by Ms. Du Juan, the spouse of Mr. Wong.
The aforesaid Shares that Mr. Wong and Ms. Du Juan are deemed to be interested refer to the same parcel of Shares.
Shinning Crown Holdings Inc. is 100% beneficially owned by Mr. Wong.

Save as disclosed above, the Company has not been notified of any other interest representing 5% or more of the share and recorded in the register required to be kept under Section 336 of the SFO as at the Latest Practicable Date.

DIRECTOR'S INTERESTS IN COMPETING BUSINESS

As at the Latest Practicable Date, none of the Director of the Company was interested in any business (other than those businesses where the Directors were appointed as directors to represent the interests of the Company and/or any member of the Group) which were considered to compete or were likely to compete, whether directly or indirectly, with the businesses of the Group.

DIRECTORS' INTERESTS IN ASSETS

As at the Latest Practicable Date, none of the Directors had any interest, direct or indirect, in any assets which had been acquired or disposed of by, or leased to, any member of the Group or were proposed to be acquired or disposed of by, or leased to, any member of the Group since 31 December 2023 (being the date to which the latest published audited consolidated financial statements of the Company were made up).

DIRECTORS' SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with any member of the Group which is not expiring or determinable by such member of the Group within one year without payment of compensation (other than statutory compensation).

DIRECTOR'S INTERESTS IN CONTRACTS OR ARRANGEMENTS

As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement which was significant in relation to the business of the Group.

APPENDIX

GENERAL INFORMATION

7. MATERIAL ADVERSE CHANGE

Since the publication of the last financial results of the Group for the year ended 31 December 2023, the external environment continued to be tensed, the industry landscape was challenging which posed uncertainties over the pace of economic recovery. With limited working capital and reduced retail network, the Group experienced a decline in its business operation scale, with sales revenue of the Group declined significantly from the last reporting period.

Due to the decrease in revenue and increase in joint and several liabilities from subsidiaries ruled bankrupt by the courts, impairment losses on financial assets, penalty interest on overdue debts, etc., the Group's loss attributable to owners of the parent during the Reporting Period is expected to increase significantly from the last reporting period.

As at the Latest Practicable Date, the Group has significant amount of overdue interest-bearing bank and other borrowings, and as at 31 December 2024, the Group was involved in a total of 772 pending lawsuits. The Group has been in active negotiations with relevant banks and interested parties on, amongst others, change of contractual terms or extension of the loan tenor, with an aim to reach mutually agreed settlement terms.

Save as disclosed above, the Directors were not aware of any material adverse change in the financial or business position of the Group since 31 December 2023 (the date to which the latest published audited consolidated financial statements of the Company were made up).

8. EXPERT AND CONSENT

The following is the qualification of the expert or professional adviser who has given its opinion or advice contained in this circular:

Name	Qualification
Ignite Capital (Asia Pacific) Limited	a licensed corporation to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under SFO

As at the Latest Practicable Date, the above expert:

(a) has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name, in the form and context in which it appears;

(b) did not have any shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group; and

50 -

APPENDIX

GENERAL INFORMATION

(c) did not have any direct or indirect interest in any assets which had been since 31 December 2023 (the date to which the latest published audited consolidated financial statements of the Company were made up), acquired, disposed of by, or leased to any member of the Group or were proposed to be acquired or disposed of by, or leased to any member of the Group.

9. DOCUMENTS ON DISPLAY

Copies of the following documents will be published on the Company's website (www.gome.com.hk) and the Stock Exchange's website (www.hkexnews.hk) from the date of this circular up to and including the date of the SGM:

(a) the 2025 Master Merchandise Purchase Agreement;

(b) the 2025 Master Merchandise Supply Agreement;

(c) the letter from the Board, the text of which is set out in the section headed "Letter from the Board" of this circular;

(d) the letter from the Independent Board Committee, the text of which is set out in the section headed "Letter from the Independent Board Committee" of this circular;

(e) the letter of advice from Ignite Capital (Asia Pacific) Limited, the text of which is set out in the section headed "Letter from the Independent Financial Adviser" of this circular;

(f) the written consent of Ignite Capital (Asia Pacific) Limited as referred to in the section headed "Expert and Consent" in this appendix; and

(g) this circular.

10. MISCELLANEOUS

This circular and the accompanying proxy form have been prepared in both English and Chinese. In the event of discrepancies, the English text of this circular shall prevail over the Chinese text.

NOTICE OF SGM

GOME RETAIL HOLDINGS LIMITED

國美零售控股有限公司*

(Incorporated in Bermuda with limited liability)

(Stock Code: 493)

NOTICE OF SPECIAL GENERAL MEETING

AND

CLOSURE OF SHAREHOLDERS' REGISTER

NOTICE IS HEREBY GIVEN that a special general meeting (the "Special General Meeting" or "SGM") of GOME Retail Holdings Limited (the "Company") will be held on Thursday, 10 April 2025, at 2:30 p.m. at Forum Room I, Basement 2, Regal Hong Kong Hotel, 88 Yee Wo Street, Causeway Bay, Hong Kong, to consider and, if thought fit, approve (with or without modifications), the following resolutions as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

"THAT the 2025 Master Merchandise Purchase Agreement, (a copy of which is produced at the meeting and marked “A” and initialed by the chairman of the meeting for the purpose of identification), and the transactions contemplated thereby (including the annual caps thereunder) be and is hereby approved and confirmed and any one director of the Company be and is hereby authorised to do all such acts or things and sign all documents deemed necessary by him/her for the purpose of giving effect to the 2025 Master Merchandise Purchase Agreement and the transactions contemplated thereunder."
"THAT the 2025 Master Merchandise Supply Agreement, (a copy of which is produced at the meeting and marked “B” and initialed by the chairman of the meeting for the purpose of identification), and the transactions contemplated thereby (including the annual caps thereunder) be and is hereby approved and confirmed and any one director of the Company be and is hereby authorised to do all such acts or things and sign all documents deemed necessary by him/her for the purpose of giving effect to the 2025 Master Merchandise Supply Agreement and the transactions contemplated thereunder."

For identification purpose only

NOTICE OF SGM

CLOSURE OF SHAREHOLDERS' REGISTER

By order of the Board
GOME Retail Holdings Limited
Zhang Da Zhong
Chairman

Hong Kong, 25 March 2025

Principal place of business in Hong Kong:
Suite 2915, 29th Floor
Two International Finance Centre
8 Finance Street, Central
Hong Kong

Notes:

Any member of the Company entitled to attend and vote at the SGM is entitled to appoint another person as his proxy to attend and vote instead of him. A member who is holder of two or more shares of the Company may appoint more than one proxy to attend and vote instead of him/her. A proxy need not be a member of the Company.
A form of proxy for use at the SGM is enclosed herewith.
The form of proxy must be signed by you or your attorney duly authorised in writing or, in the case of a corporation, must be under its seal or the hand of an officer or attorney duly authorised.
The form of proxy and the power of attorney or other authority, (if any), under which it is signed or a notarially certified copy thereof must be lodged at the Company's branch share registrar in Hong Kong, Tricor Investor Services Limited at 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong, not later than 48 hours before the time appointed for holding the SGM or any adjourned meeting (as the case may be) and in default the proxy shall not be treated as valid. Completion and return of the form of proxy shall not preclude members from attending and voting in person at the SGM or at any adjourned meeting (as the case may be) should they so wish.
Where there are joint registered holders of any share, any one of such persons may vote at any meeting, (either in person or by proxy), in respect of such share as if he/she was solely entitled thereto; but if more than one of such joint holders be present at the meeting in person or by proxy, the vote of one of the said persons so present whose name stands first on the register of members in respect of such share shall be accepted to the exclusion of the votes of the other joint holders.
As at the date of this notice, the Board comprises Mr. Zou Xiao Chun, Mr. Ding Jiang Ning and Ms. Wei Ting as executive directors, Mr. Zhang Da Zhong as non-executive director and Mr. Wang Gao, Mr. Lui Wai Ming and Mr. Liu Yin Hong as independent non-executive directors.
Words and expressions that are not expressly defined in this notice shall bear the same meaning as that defined in the circular dated 25 March 2025 published by the Company.

AI assistant

APT Satellite Holdings Limited — Proxy Solicitation & Information Statement 2025

49643_rns_2025-03-25_5165e03b-ac39-4807-b65b-9eb25bbc9866.pdf

GOME RETAIL HOLDINGS LIMITED

國美零售控股有限公司*

(1) CONTINUING CONNECTED TRANSACTIONS AND

(2) NOTICE OF SGM

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

REMINDERS FOR THE SGM

GOME RETAIL HOLDINGS LIMITED

國美零售控股有限公司*

INTRODUCTION

THE RELEVANT CCT AGREEMENTS

(A) 2025 MASTER MERCHANDISE PURCHASE AGREEMENT

Terms of the 2025 Master Merchandise Purchase Agreement and annual caps

Historical transaction amounts

Notes:

(B) 2025 MASTER MERCHANDISE SUPPLY AGREEMENT

Terms of the 2025 Master Merchandise Supply Agreement and annual caps

Historical transaction amounts

Basis for determining the selling price and annual caps of the 2025 Master Merchandise Supply Agreement

INTERNAL CONTROL POLICY FOR CONTINUING CONNECTED TRANSACTIONS

REASONS FOR ENTERING INTO THE RELEVANT CCT AGREEMENTS

Supply and purchase services

INFORMATION ON THE PARTIES TO THE RELEVANT CCT AGREEMENTS

LISTING RULES IMPLICATIONS

BOARD APPROVAL

INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER

SGM

FORM OF PROXY

CLOSURE OF SHAREHOLDERS' REGISTER

RECOMMENDATIONS

GENERAL INFORMATION

回美

GOME RETAIL HOLDINGS LIMITED

CONTINUING CONNECTED TRANSACTIONS

RENEWAL OF CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

THE INDEPENDENT BOARD COMMITTEE

OUR INDEPENDENCE

BASIS OF OUR OPINION

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background of the Transactions

2. Information on the Parties to the Relevant CCT Agreements

2.1 The Company

2.2 GOME Fun

2.3 GOME Appliance

3. The Reasons for entering into of the Relevant CCT Agreements

Industry Outlook

4. Principal terms of the Relevant CCT Agreements

4.1 2025 Master Merchandise Purchase Agreement

Historical transaction amounts

Resolving Debt issues

Optimising and Upgrading New Business Model Strategies

Development and Progress of New Businesses

Basis for determining the purchase price and annual caps of the 2025 Master Merchandise Purchase Agreement

4.2 2025 Master Merchandise Supply Agreement

Historical transaction amounts

Basis for determining the selling price and annual caps of the 2025 Master Merchandise Supply Agreement

5. Internal control policy for Continuing Connected Transactions

OPINION AND RECOMMENDATION

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

(a) Interests of Directors

(b) Interests of substantial Shareholders

7. MATERIAL ADVERSE CHANGE

8. EXPERT AND CONSENT

9. DOCUMENTS ON DISPLAY

10. MISCELLANEOUS

GOME RETAIL HOLDINGS LIMITED

國美零售控股有限公司*

NOTICE OF SPECIAL GENERAL MEETING

CLOSURE OF SHAREHOLDERS' REGISTER

ORDINARY RESOLUTIONS

CLOSURE OF SHAREHOLDERS' REGISTER

Notes:

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APT Satellite Holdings Limited Proxy Solicitation & Information Statement 2025