Autohome Inc. - Proxy Solicitation & Information Statement 2010

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Golik Holdings Limited (“ Company ”), you should at once hand this circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or 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.

GOLIK HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1118)

DISCLOSEABLE AND CONNECTED TRANSACTION DISPOSAL OF SHAREHOLDING IN A PRC SUBSIDIARY

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

TANRICH CAPITAL LIMITED

A letter from the board of the Company is set out on pages 5 to 12 of this circular. A letter from the independent board committee of the Company, containing its recommendation to the independent shareholders of the Company is set out on page 13 of this circular. A letter from Tanrich Capital Limited, the independent financial adviser, containing its advice to the independent board committee and the independent shareholders of the Company is set out on pages 14 to 24 of this circular.

18th November, 2010

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
The Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Information on the Group, the Purchaser and the Target Company . . . . . . . .	9
Reasons for and Benefits of the Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Listing Rules Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . .	13
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER . . . . . . . . . . . . . . .	14
APPENDIX – GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25

DEFINITIONS

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

“Agreement” the agreement for the sale and purchase of shareholding (股權權益轉讓協議) dated 1st November, 2010 entered into between the Vendor and the Purchaser in relation to the Disposal;
“Announcement” the announcement of the Company dated 1st November, 2010 in relation to the Agreement, the Disposal and the transaction contemplated thereunder;
“Board” the board of Directors;
“Company”
Golik Holdings Limited, an exempted company incorporated in Bermuda with limited liability, whose issued shares are listed on the Main Board of the Stock Exchange;
“Completion I” the date of completion of the First Sale which shall not be later than 15th December, 2010;
“Completion II”
the date of completion of the Second Sale which shall not be later than 30th September, 2012;
“connected person(s)”
has the meaning ascribed to it under the Listing Rules;
“Consideration”
RMB26,926,968, being the total consideration for the Disposal pursuant to the Agreement;
“Director(s)”
the director(s) of the Company;
“Disposal”
the disposal of the Shareholding Interests pursuant to the terms of the Agreement;
“First Sale”
the sale and purchase of Shareholding A from the Vendor to the Purchaser;
“GIL”
Golik Investments Ltd., a substantial Shareholder and a company wholly and beneficially owned by Mr. Pang;
“Group”
the Company together with its subsidiaries and associated companies;

– 1 –

DEFINITIONS

“HK$”

“HKFRS”
“Hong Kong”
“Independent Board Committee”
“Independent Financial Adviser”
“Independent Shareholder(s)”
“Latest Practicable Date”
“Listing Rules”
“Mr. Pang”
“PRC”
“Purchaser”
Hong Kong dollars, the lawful currency of Hong Kong;

the Hong Kong Financial Reporting Standards;

the Hong Kong Special Administrative Region of the PRC;
the independent committee of the Board, comprising all the independent non-executive Directors, namely Mr. Yu Kwok Kan, Stephen, Mr. Chan Yat Yan and Mr. Lo Yip Tong, established for the purpose of advising the Independent Shareholders on the fairness and reasonableness of the terms of the Agreement, the Disposal and the transaction contemplated thereunder;
Tanrich Capital Limited, a licensed corporation under the SFO and engaged in types 1 and 6 regulated activities and the independent financial adviser appointed by the Board to advise on the terms of the Agreement, the Disposal and the transaction contemplated thereunder;
has the meaning ascribed to it under Chapter 14A of the Listing Rules;
16th November, 2010, being the latest practicable date prior to the printing of this circular for inclusion of certain information in this circular;
the Rules Governing the Listing of Securities on the Stock Exchange;
Mr. Pang Tak Chung, an executive Director and a substantial Shareholder;
the People’s Republic of China;

天津冶金集團中興盛達鋼業有限公司 (Tianjin Metallurgy Group Flourish Steel Industrial Co., Ltd.*), a limited liability company incorporated in the PRC holding a total of 49% of shareholding interests in the registered capital of the Target Company. By virtue of its capacity as substantial shareholder of the Target Company, it is regarded a connected person of the Company;

– 2 –

DEFINITIONS

“RMB”

“Second Sale”
“Service Fee”
“SFO”
“Shareholder(s)”
“Shareholding A”
“Shareholding B”
“Shareholding Interests”
“Share(s)”
“Stock Exchange”
“Target Company”
“Vendor”

Renminbi, the lawful currency of the PRC;

the sale and purchase of Shareholding B from the Vendor to the Purchaser;
a monthly service fee of RMB80,000 payable by the Purchaser to the Vendor during the period from 1st September, 2010 to 30th September, 2012 (both dates inclusive) pursuant to the Agreement;
Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong);
holder(s) of the Share(s);
26% of the shareholding interests held by the Vendor in the Target Company to be sold to the Purchaser in the First Sale;
25% of the shareholding interests held by the Vendor in the Target Company to be sold to the Purchaser in the Second Sale;
Shareholding A and Shareholding B collectively;
ordinary share(s) of nominal value of HK$0.10 each in the issued share capital of the Company;
The Stock Exchange of Hong Kong Limited;
天津高力預一預應力鋼絞綫有限公司 (Tianjin Golik – The First PC Steel Strand Co., Ltd.*), a sino-foreign equity joint venture company incorporated in the PRC, which shareholding is held as to 51% by the Vendor and 49% by the Purchaser;
Charming Hong Kong Limited (創明香港有限公司), a wholly-owned subsidiary of the Company incorporated in Hong Kong with limited liability, holding a total of 51% of shareholding interests in the entire registered capital of the Target Company;

– 3 –

DEFINITIONS

“Written Approval” “%”

a written approval dated 1st November, 2010 jointly issued and signed by a closely allied group of Shareholders, namely, Mr. Pang and GIL, approving the Agreement, the Disposal and the transaction contemplated thereunder; and

per cent.

For identification purpose only

– 4 –

LETTER FROM THE BOARD

GOLIK HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1118)

Executive Directors: Mr. Pang Tak Chung (Chairman) Mr. Ho Wai Yu, Sammy (Vice Chairman) Mr. John Cyril Fletcher

Independent Non-Executive Directors: Mr. Yu Kwok Kan, Stephen Mr. Chan Yat Yan Mr. Lo Yip Tong

Registered Office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Head Office and Principal Place of Business: Suite 5608, Central Plaza 18 Harbour Road Wanchai Hong Kong 18th November, 2010

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION DISPOSAL OF SHAREHOLDING IN A PRC SUBSIDIARY

INTRODUCTION

Reference is made to the Announcement which states that on 1st November, 2010, the Vendor, a wholly-owned subsidiary of the Company, entered into the Agreement with the Purchaser whereby the Vendor agreed to sell and the Purchaser agreed to acquire the Shareholding Interests at a total consideration of RMB26,926,968, on the terms and subject to the conditions set out in the Agreement. The Disposal shall be carried out in two stages, with the disposal of Shareholding A and Shareholding B taking place no later than 15th December, 2010 and 30th September, 2012 respectively. Upon completion of the Disposal, the Target Company will cease to be a subsidiary of the Company, and be wholly-owned by the Purchaser instead.

The purpose of this circular is to provide further information relating to, amongst other things, (i) details of the Agreement, the Disposal and the transactions contemplated thereunder; (ii) the recommendation of the Independent Board Committee to the Independent Shareholders in relation to the Agreement, the Disposal and the transaction contemplated thereunder; (iii) the advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the Agreement, the Disposal and the transaction contemplated thereunder.

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LETTER FROM THE BOARD

THE AGREEMENT

The principal terms of the Agreement are as follows:

Date

1st November, 2010

Parties

(1) The Vendor (a wholly-owned subsidiary of the Company); and
(2) The Purchaser (a substantial shareholder of the Target Company, holding 49% of shareholding interests in the Target Company’s entire registered capital as at the date hereof) whose ultimate beneficial owner is the municipal government of Tianjin of the PRC.

Asset to be disposed of under the Agreement

The Shareholding Interests, being the entire stake of the Vendor in the Target Company, representing 51% of the entire registered capital of the Target Company.

Consideration

The total consideration payable to the Vendor by the Purchaser for the acquisition of the Shareholding Interests is RMB26,926,968 (equivalent to approximately HK$31,216,054). The Consideration shall be paid by three installments as follows:

RMB1,000,000 shall be payable in cash by the Purchaser to the Vendor upon the signing of the Agreement;
RMB12,727,474 shall be payable in cash by the Purchaser to the Vendor upon Completion I; and
RMB13,199,494 shall be payable in cash by the Purchaser to the Vendor upon Completion II.

The Consideration was determined after arm’s length negotiations between the parties, taking into account the net asset value of the Target Company as at 31st August, 2010.

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LETTER FROM THE BOARD

Payment Terms and Conditions Precedent

(1) First Sale

According to the Agreement, completion of the First Sale is conditional upon the fulfillment of the following conditions precedent or waiver of the same by the relevant party:

payment of a deposit in the sum of RMB1,000,000 by the Purchaser to the Vendor on the date of signing of the Agreement;
the requisite transfer documents for the purpose of completing the examination and approval formalities in the PRC having been duly executed;
the requisite consents and approvals for discharging the relevant obligations under the Agreement and the duties pertinent to the First Sale having been obtained;
the joint venture agreement and the articles in respect of the Target Company having been amended to reflect the change of shareholding of the parties subsequent to the First Sale, including the change of representation on the board of directors of the Target Company (namely, the number of directors representing the Vendor on the board of the Target Company to be reduced to no more than 2 persons) and the existing chairman and legal representative of the Target Company to be replaced by a person nominated by the Purchaser; and
the necessary approval having been obtained from the Target Company and the relevant PRC examination and approval authorities in respect of: (i) the amendments to the joint venture agreement and the articles of the Target Company; (ii) the transfer of Shareholding A pursuant to the First Sale; and (iii) the appointment of persons nominated by the Purchaser as directors, legal representative and senior officer(s) of the Target Company (if applicable).

Once the above conditions precedent have been fulfilled, the Purchaser shall further pay to the Vendor a sum of RMB12,727,474, being the balance of the consideration for the First Sale on Completion I. Completion for the First Sale shall take place on a date not later than 15th December, 2010.

(2) Second Sale

Following completion of the First Sale, the Second Sale shall take place subject to the fulfillment of the following conditions precedent or waiver of the same by the relevant party:

the requisite transfer documents for the purpose of completing the examination and approval formalities in the PRC having been duly executed;

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LETTER FROM THE BOARD

the requisite consents and approvals for discharging the relevant obligations under the Agreement and duties pertinent to the Second Sale and having been obtained;
the articles of the Target Company having been amended to record the following: (i) change in shareholding pursuant to the Second Sale; (ii) change in the nature of the Target Company from a sino-foreign joint venture enterprise to a domestic company; and (iii) resignation of directors nominated by the Vendor;
the necessary approval of the board of directors of the Target Company having been obtained in respect of the following: (i) the amendment of the articles of the Target Company to effect the amendments set out in the preceding paragraph; (ii) the transfer of Shareholding B pursuant to the Second Sale; and (iii) the appointment of new directors, legal representative and other senior officer(s) (if applicable) nominated by the Purchaser; and
the necessary approval having been obtained from the relevant PRC examination and approval authorities in respect of: (i) the amendment to the articles of the Target Company; (ii) the transfer of Shareholding B pursuant to the Second Sale; and (iii) application for change submitted by the Target Company (if applicable).

Upon the satisfaction of the conditions precedent as set out above, the Purchaser shall pay to the Vendor consideration for the Second Sale on Completion II, being a sum in the amount of RMB13,199,494. Completion for the Second Sale shall take place on a date not later than 30th September, 2012.

Upon completion of the Disposal, the Target Company will cease to be a subsidiary of the Company, and be wholly-owned by the Purchaser instead.

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LETTER FROM THE BOARD

(3) Provision of Service

Under the Agreement, the Purchaser has agreed to pay the Vender the Service Fee as remuneration for its participation in the day-to-day management of the Target Company during the period from 1st September, 2010 to 30th September, 2012 (both dates inclusive). The Purchaser shall pay the Service Fee to the Vendor in such sum and on the last working day of the specified month as stipulated below:

Payment Date February 2011 August 2011 February 2012 August 2012 September 2012 Total:	Amount Payable	Amount Payable
		RMB480,000 RMB480,000 RMB480,000 RMB480,000 RMB80,000
		RMB2,000,000

Other Relevant Terms

The Vendor and the Purchaser have agreed under the Agreement to procure the Target Company to distribute all its undistributed profits (as recorded in the audited accounts for the year ended 31st December, 2009) in proportion to their existing shareholding ratios of 51% and 49% respectively. Pursuant to the said distribution of dividends, the Vendor and the Purchaser shall respectively be entitled to receive RMB8,064,709 and RMB7,748,446.

In addition, the Vendor undertakes to waive its entitlement to profit sharing from the Target Company accruing from Shareholding B after completion of the First Sale; all such profit or dividend arising from Shareholding B shall remain with the Target Company.

INFORMATION ON THE GROUP, THE PURCHASER AND THE TARGET COMPANY

The Group is principally engaged in the manufacturing and sale of steel and metal products and building construction materials.

The Purchaser is a limited liability company incorporated in the PRC, which business is principally in the manufacturing and sale of metallurgic products.

The Target Company was incorporated in the PRC as a sino-foreign equity joint venture company, which shareholding is held as to 51% by the Vendor and 49% by the Purchaser. The Target Company principally engages in the business of manufacturing and sale of pre-stressed steel wires.

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LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF THE DISPOSAL

The audited financial information (prepared in accordance with HKFRS) of the Target Company for the two years ended 31st December, 2008 and 31st December, 2009 respectively, are set out below:

Revenue Profit before taxation and extraordinary items Profit after taxation and extraordinary items	For the year ended 31st December,
	2009 2008 RMB RMB 558,342,847 554,504,092 14,739,114 14,427,372 12,938,503 10,721,448

The unaudited net asset value (prepared in accordance with HKFRS) of the Target Company as at 31st August, 2010 amounted to approximately RMB52,840,000, and the unaudited net asset value of the Target Company according to the PRC management accounts of the Target Company as at 31st August, 2010 is RMB52,798,000.

The PRC central government’s recent encouragement on infrastructure development in the PRC has attracted newcomers to the pre-stressed steel wire business, as a result of which the supply has far exceeded the demand for this product. The Board considers that market competition has become increasingly keen and intense and is unlikely to be remunerative in the long run; it therefore decides to dispose of the business for better utilization of resources among the Group’s core businesses to enhance shareholders’ value.

The Board believes that the Disposal will enable the Group to better allocate and focus its resources on high value-added product development, such as elevator wire rope products. Wire rope products will remain as one of the major core businesses of the Group.

Based on the unaudited financial information (prepared in accordance with HKFRS) of the Target Company as at 31st August, 2010 and assuming completion of the Agreement, an unaudited gain at the Group of approximately HK$7,560,000 is expected to be generated from the Disposal, which is calculated with reference to the consideration of RMB26,926,968 and the total Service Fee of RMB2,000,000 less the carrying value attributable to the Shareholding Interests as at 31st August, 2010 and related consolidation adjustments. The Shareholders and investors of the Group should note that the exact financial effects of the Disposal on the Group as a whole are subject to audit.

According to the Board, the net proceeds of the Disposal will be used as general working capital and there are no plans for any acquisition at the moment.

None of the Directors has a material interest in the Agreement and the transaction contemplated thereunder or is required to abstain from voting on the Board resolution for considering and approving the same.

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LETTER FROM THE BOARD

The Board (including the independent non-executive Directors) considers that the terms of the Agreement and the transaction contemplated thereunder to be fair and reasonable and in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

As at the Latest Practicable Date, the Purchaser holds more than 10% of the registered capital of the Target Company. Since the Target Company is a subsidiary of the Company, the fact that the Purchaser is a substantial shareholder of the Target Company renders it a connected person of the Company and the transaction contemplated under the Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. Also, as each of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) is more than 5% but below 25%, the transaction contemplated under the Agreement also constitutes a discloseable transaction.

In the light of the above, the transaction contemplated under the Agreement is subject to the reporting and announcement requirements and the independent shareholders’ approval of the Company under the Listing Rules.

As no Shareholders is required to abstain from voting if the Company were to convene a general meeting to approve the Agreement, the Disposal and the transaction contemplated thereunder, on 1st November, 2010, a closely allied group of Shareholders, namely, Mr. Pang and GIL, which as at the Latest Practicable Date, are holding 147,924,708 Shares and 195,646,500 Shares respectively (representing an aggregate of approximately 61.14% of the entire issued share capital of the Company and having the right to attend and vote at such general meeting), has given to the Company the Written Approval. As such, an application for waiver of the Shareholders’ meeting has been made to the Stock Exchange for, and the Stock Exchange has granted to the Company, a waiver from strict compliance with the requirement to hold a general meeting to approve the Agreement, the Disposal and the transaction contemplated thereunder on the basis of the Written Approval given in accordance with Rule 14A.43 of the Listing Rules.

An Independent Board Committee has been formed to advise the Independent Shareholders with respect to the terms of the Agreement, the Disposal and the transaction contemplated thereunder. The Company has appointed the Independent Financial Adviser to make recommendations to the Independent Board Committee and the Independent Shareholders regarding the same.

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LETTER FROM THE BOARD

RECOMMENDATION

Having noted and considered the reasons stated under the section captioned “Reasons for and Benefits of the Disposal”, the Directors (including the independent non-executive Directors whose views have been set out in this circular on page 13 after taking into account of the advice of the Independent Financial Adviser) consider that the terms of the Agreement, the Disposal and the transaction contemplated thereunder are on normal commercial terms, in the ordinary and usual course of business, fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors (including the independent non-executive Directors) recommend the Independent Shareholders to support, and if a physical shareholders’ meeting were to be held, to vote in favour of the relevant resolution(s) to approve the Agreement, the Disposal and the transaction contemplated thereunder.

ADDITIONAL INFORMATION

Your attention is drawn to the letter from the Independent Board Committee, the letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders and the general information contained in the appendix to this circular.

Yours faithfully, By Order of the Board Golik Holdings Limited Pang Tak Chung Chairman

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

GOLIK HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 1118)

18th November, 2010

To the Independent Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION DISPOSAL OF SHAREHOLDING IN TIANJIN GOLIK – THE FIRST PC STEEL STRAND CO., LTD.

We refer to the circular of the Company dated 18th November, 2010 (“ Circular ”), of which this letter forms part. Unless the context requires otherwise, terms used in this letter shall have the meanings given to them in the definition section of the Circular.

We have been appointed by the Board to consider and to advise you on the terms of the Agreement, the Disposal and the transaction contemplated thereunder, as to the fairness and reasonableness and to recommend whether or not the Independent Shareholders should approve the same. In this connection, Tanrich Capital Limited has been appointed as an independent financial adviser to advise you and us in this regard. Details of the advice of the Independent Financial Adviser, together with the principal factors and reasons the Independent Financial Adviser has taken into consideration in giving such advice, are set out on pages 14 to 24 of the Circular. Your attention is also drawn to the letter from the Board in the Circular and the additional information set out in the appendix thereto.

Having considered the terms of the Agreement and taking into account the independent advice of the Independent Financial Adviser, in particular the principal factors, reasons and recommendation as set out in its letter, we consider the terms of the Agreement, the Disposal and the transactions contemplated thereunder to be fair and reasonable so far as the interests of the Independent Shareholders are concerned and to be in the interests of the Company and the Shareholders as a whole. We therefore recommend the Independent Shareholders to support, and if a physical shareholders’ meeting were to be held, to vote in favour of, the relevant resolution(s) to approve the Agreement, the Disposal and the transactions contemplated thereunder.

Yours faithfully, For and on behalf of the Independent Board Committee of GOLIK HOLDINGS LIMITED Yu Kwok Kan, Stephen Chan Yat Yan Lo Yip Tong

Independent Non-executive Directors

– 13 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the text of a letter of advice from Tanrich Capital Limited to the Independent Board Committee and the Independent Shareholders in relation to the proposed discloseable and connected transaction for the purpose of incorporation into the circular.

Tanrich Capital Limited 16/F Central Plaza, 18 Harbour Road, Wanchai, Hong Kong.

18th November, 2010

To the Independent Board Committee and the Independent Shareholders of Golik Holdings Limited

Dear Sirs,

DISCLOSEABLE AND CONNECTED TRANSACTION

INTRODUCTION

We refer to our appointment as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in relation to the Disposal, details of which are set out in the “Letter from the Board”, on pages 5 to 12 of the circular of the Company dated 18th November, 2010 (the “Circular”). Capitalised terms used in this letter shall have the same meanings as defined in the Circular of which this letter forms part.

On 1st November, 2010, the Vendor and the Purchaser concluded negotiations in relation to the Disposal and the parties thereto entered into the Agreement, whereby the Vendor agreed to sell and the Purchaser agreed to purchase the Shareholding Interests at a total consideration of RMB26,926,968.

The Target Company is a non wholly-owned subsidiary of the Company, in which the Company, through the Vendor, owns 51% and the Purchaser owns 49% of the entire registered capital of the Target Company. Upon completion of the Disposal, the Target Company will cease to be a subsidiary of the Company, and be wholly-owned by the Purchaser instead.

As at the date of the Announcement, the Purchaser held more than 10% of the registered capital of the Target Company. Since the Target Company is a subsidiary of the Company, the fact that the Purchaser is a substantial shareholder of the Target Company renders it a connected person of the Company and the transaction contemplated under the Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. Also, as each of the applicable percentage ratios (as defined in Rule 14.07 of the

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Listing Rules) is more than 5% but below 25%, the transaction contemplated under the Agreement constitutes a discloseable transaction. In the light of the above, the transaction contemplated under the Agreement is subject to the reporting and announcement requirements and the Independent Shareholders’ approval of the Company under the Listing Rules.

As no Shareholder is required to abstain from voting if the Company were to convene a general meeting to approve the Disposal, the Agreement and the proposed transactions. On 1st November, 2010, a closely allied group of Shareholders, namely, Mr. Pang and Golik Investments Ltd. (a company wholly owned by Mr. Pang), hold 147,924,708 Shares and 195,646,500 Shares respectively as at the date of the Announcement (representing an aggregate of approximately 61.14% of the entire issued share capital of the Company and having the right to attend and vote at such general meeting), had given to the Company their written approval for the Disposal, the Agreement and the proposed transaction. As such, an application for waiver of the Shareholders’ meeting was made to the Stock Exchange pursuant to Rule 14A.43 of the Listing Rules. The waiver has been granted on 3rd November, 2010.

The Independent Board Committee comprising: (i) Mr. Yu Kwok Kan, Stephen, (ii) Mr. Chan Yat Yan; and (iii) Mr. Lo Yip Tong, being the independent non-executive Directors of the Company, has been formed to advise the Independent Shareholders whether the Disposal is fair and reasonable, and in the interests of the Company and the Independent Shareholders as a whole.

BASIS OF OUR OPINION

In formulating our opinion and recommendations, we have relied on the statements, information, opinions, facts and representations contained or referred to in the Circular and the information and representations as provided to us by the Directors. We have assumed that all information and representations that have been provided by the Directors, for which they are solely and wholly responsible, are true and accurate in all material respects as at the date of the Circular.

We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Circular were reasonably made after due enquiry and careful consideration. We have no reason to suspect that any material facts or information have 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 Company, its advisers and/or the Directors, which have been provided to us.

The Directors have collectively and individually accepted full responsibility for the accuracy of the information contained in the Circular and have confirmed, having made all reasonable enquiries, which to the best of their knowledge and belief, there are no other facts the omission of which would make any statement in the Circular misleading.

We are independent from, and are not associated with the Company nor their respective substantial shareholders or connected person(s), as defined under the Listing Rules and, accordingly, are considered eligible to give independent advice.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion to the Independent Board Committee and the Independent Shareholders in relation to the Disposal, we have taken the following principal factors and reasons into consideration:

Background of the Disposal

Information of the Group

The Group is principally engaged in the manufacturing and sale of steel and metal products and building construction materials.

Set out below is a summary of the audited consolidated financial information of the Group for the two years ended 31st December, 2008 and 31st December, 2009 as extracted from the Company’s annual report for the year ended 31st December, 2009 and the unaudited consolidated financial information of the Group for the six months ended 30th June, 2010 as extracted from the Company’s interim report for the six months ended 30th June, 2010 and the interim report for the six months ended 30th June, 2009:

Revenue Profit for the year/period Profit attributable to the shareholders of the Company	For the six months ended 30th June, 2010 2009 HK$’000 HK$’000 1,573,439 1,378,538 58,590 33,839 52,731 27,395	For the year ended 31st December,
		2009 2008 HK$’000 HK$’000 2,933,396 3,546,116 84,546 50,682 65,318 42,183

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Net assets attributable to the shareholders of the Company	As at 30th June, 2010 2009 HK$’000 HK$’000 615,691 553,923	As at 31st December,
		2009 2008 HK$’000 HK$’000 592,824 536,039

Audited consolidated results for the year ended 31st December, 2008

For the year ended 31st December, 2008, the Group’s revenue totalled HK$3,546,116,000, representing an increase of around 30% on 2007. Revenue growth was mostly due to the substantial increase in most commodity prices across the board during the first three quarters of the year. Excluding these factors, the Group’s operations have remained fairly stable over the course of the year together with modest growth. After the deduction of non-controlling interests, profit attributable to the shareholders of the Company is approximately HK$42,183,000, a relative increase of 53% to prior year. Although there is an increase in profit, the outcome fell short of expectations due to the financial crisis in the fourth quarter that paved the way to a rapidly deteriorating global economy and pushing down commodity prices significantly, in particular steel products. Accordingly, provisions for impairment of inventory at year-end for steel products had been allowed for by the Group.

Audited consolidated results for the year ended 31st December, 2009

For the year ended 31st December, 2009, the Group’s revenue was HK$2,933,396,000, which is a fall of 17% over 2008. The contraction in revenue was due mainly to the softened demand for building construction materials in Hong Kong and the significant reduction of the average prices for steel products over the previous year. After the deduction of non-controlling interests, profit attributable to the shareholders of the Company is HK$65,318,000, which is an increase of 55% over prior year.

Unaudited consolidated results for the six months ended 30th June, 2010

For the six months ended 30th June, 2010, the Group’s revenue was HK$1,573,439,000, representing an increase of 14% against the same period last year. After the deduction of non-controlling interests, the profit attributable to the shareholders of the Company for the half year amounted to HK$52,731,000, an increase of 92% compared to the previous period, within which an extraordinary gain in fair value of HK$5,300,000 against an investment property owned by the Group during the period. Excluding the extraordinary gain, the Group’s operating profit generated from the core businesses had increased by 73% compared to the same period last year.

Information of the Target Company

The Target Company is a sino-foreign equity joint venture company incorporated in the PRC and is a non wholly-owned subsidiary of the Company. It engages in the business of manufacturing and sale of pre-stressed steel wires.

– 17 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Set out below is a table of the audited financial information (prepared in accordance with HKFRS) of the Target Company for the two years ended 31st December, 2008 and 31st December, 2009, respectively:

Revenue Profit before taxation and extraordinary items Profit after taxation and extraordinary items	For the year ended 31st December,
	2009 2008 RMB RMB 558,342,847 554,504,092 14,739,114 14,427,372 12,938,503 10,721,448

The unaudited net asset value (prepared in accordance with HKFRS) of the Target Company as at 31st August, 2010 amounted to approximately RMB52,840,000.

According to the audited financial information (prepared in accordance with HKFRS) of the Target Company, the revenue and the profit after taxation and extraordinary items recorded approximately RMB558.3 million and RMB12.9 million, respectively, representing an increase of 0.69% and 20.68%, respectively, over the previous year.

Reasons for the Disposal

As discussed with the Directors, the Company considers ceasing the pre-stressed steel wires business is in the interest of the Company. The PRC central government’s recent encouragement on infrastructure development in the PRC has attracted newcomers to the pre-stressed steel wire business, as a result of which the supply has far exceeded the demand for this product. The Board considers that market competition has become increasingly keen and intense and is unlikely to be remunerative in the long run; it therefore decides to dispose the business for better utilization of resources among the Group’s core businesses to enhance shareholders’ value.

Pre-stressed steel products are widely used in the high-tech product iron and steel fields and the building construction industry, and the products are mainly used in large-scale irrigation works, bridges, expressways and railway projects in the PRC. We acknowledge the open tender policy imposed by the local authorities for all the large-scale construction projects which lead us to affirm the cut-throat pricing strategy adapted by most players in the industry. In addition, there are market studies showing that the demand for irrigation works, expressways and railway constructions will not be as robust as it was in 2005 and 2008, when the central government of the PRC was speeding up the infrastructure phase to stimulate internal spending. As such, we concur with the Director’s view on disposing the business for better utilization of resources among the Group’s core businesses to enhance shareholders’ value.

Having considered that (i) the fierce competition in the pre-stressed steel wire industry; (ii) the deteriorating financial performance of the Target Company, as the profit after taxation has recorded a significant drop of approximately 78% for the eight months ended 31st August, 2010 in comparison with the same period last year in accordance with the

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

PRC management accounts of the Target Company; and (iii) an opportunity to record an unaudited gain of approximately HK$7.56 million from the Disposal, we are of the view that the Disposal will provide a good platform to the Group to enhance its core business and better allocate its resources on high value-added product development, such as elevator wire rope products. Wire rope products will remain as one of the major core businesses of the Group. Based on the foregoing, we are of the view that the Disposal is in the interests and is fair and reasonable to the Company and Independent Shareholders as a whole.

Principal terms of the Agreement

Subject Asset

The Shareholding Interests, being the entire stake of the Vendor in the Target Company, representing 51% of the entire registered capital of the Target Company.

Consideration

The total consideration payable to the Vendor by the Purchaser for the acquisition of the Shareholding Interests is RMB26,926,968 (equivalent to approximately HK$31,216,054), which was determined after arm’s length negotiations between the parties, taking into account of the net asset value of the Target Company as at 31st August, 2010.

Payment Terms and Conditions Precedent

(1) First Sale

According to the Agreement, completion of the First Sale is conditional upon the fulfillment of the following conditions precedent or waiver of the same by the relevant party:

payment of a deposit in the sum of RMB1,000,000 by the Purchaser to the Vendor on the date of signing of the Agreement;
the requisite transfer documents for the purpose of completing the examination and approval formalities in the PRC having been duly executed;
the requisite consents and approvals for discharging the relevant obligations under the Agreement and the duties pertinent to the First Sale having been obtained;
the joint venture agreement and the articles in respect of the Target Company having been amended to reflect the change of shareholding of the parties subsequent to the First Sale, including the change of representation on the board of directors of the Target Company (namely, the number of directors representing the Vendor on the board of the Target Company to be reduced to no more than 2 persons) and the existing chairman and legal representative of the Target Company to be replaced by a person nominated by the Purchaser; and

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

the necessary approval having been obtained from the Target Company and the relevant PRC examination and approval authorities in respect of: (i) the amendments to the joint venture agreement and the articles of the Target Company; (ii) the transfer of Shareholding A pursuant to the First Sale; and (iii) the appointment of persons nominated by the Purchaser as directors, legal representative and senior officer(s) of the Target Company (if applicable).

(2) Second Sale

Following completion of the First Sale, the Second Sale shall take place subject to the fulfillment of the following conditions precedent or waiver of the same by the relevant party:

the requisite transfer documents for the purpose of completing the examination and approval formalities in the PRC having been duly executed;
the requisite consents and approvals for discharging the relevant obligations under the Agreement and duties pertinent to the Second Sale and having been obtained;
the articles of the Target Company having been amended to record the following: (i) change in shareholding pursuant to the Second Sale; (ii) change in the nature of the Target Company from a sino-foreign joint venture enterprise to a domestic company; and (iii) resignation of directors nominated by the Vendor;
the necessary approval of the board of directors of the Target Company having been obtained in respect of the following: (i) the amendment of the articles of the Target Company to effect the amendments set out in the preceding paragraph; (ii) the transfer of Shareholding B pursuant to the Second Sale; and (iii) the appointment of new directors, legal representative and other senior officer(s) (if applicable) nominated by the Purchaser; and
the necessary approval having been obtained from the relevant PRC examination and approval authorities in respect of: (i) the amendment to the articles of the Target Company; (ii) the transfer of Shareholding B pursuant to the Second Sale; and (iii) application for change submitted by the Target Company (if applicable).

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(3) Provision of Service

Under the Agreement, the Purchaser has agreed to pay the Vendor the Service Fee as remuneration for its participation in the day-to-day management of the Target Company during the period from 1st September, 2010 to 30th September, 2012 (both dates inclusive). The Purchaser shall pay the Service Fee to the Vendor in such sum and on the last working day of the specified month as stipulated below:

Payment Date February 2011 August 2011 February 2012 August 2012 September 2012 Total:	Amount Payable	Amount Payable
		RMB480,000 RMB480,000 RMB480,000 RMB480,000 RMB80,000
		RMB2,000,000

Other Relevant Terms

Market Comparison

For the purpose of further assessing the fairness and reasonableness of the Consideration, we have carried out market comparison for our analysis, namely the price to earning approach (“PER”) and the net asset value approach (“P/B Ratio”). According to our best knowledge, we could not identified any company listed on the Stock Exchange which are engaged in business similar to the Target Company. As such, we have identified 5 companies listed on the Stock Exchange which are engaged in the industry for reference (the “Comparables”). Shareholders should note that the business, operation and prospect of the Company are not the same as the Comparables and we have not conducted any in-depth investigation into business and operations of the Comparables. In this context, the Comparables are provided for a general reference only.

– 21 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

			Market
Stock	Company name	Principal business	Capitalisation	PER	P/B Ratio
			approx.
			HK$’ million
103	Shougang Concord	Manufacturing of steel cords; and	1,921	10.96	0.92
	Century Holdings	processing and trading of copper
	Limited	and brass products
581	China Oriental Group	Manufacture and sales of iron and	9,052	5.91	1.00
	Co. Limited	steel products
697	Shougang Concord	Manufacture and sale of steel	10,709	7.65	1.21
	International	products; vessel chartering and
	Enterprises Co.	the leasing of floating cranes;
	Limited	trading of steel products and iron
		ore; mining, processing and sale of
		iron ore; and management services
		business.
1001	Van Shung Chong	Stockholding and trading of	414	4.96	0.63
	Holdings Limited	construction materials such as
		steel products, sanitary wares,
		kitchen cabinets, home furniture
		and plastic resins and installation
		work of kitchen cabinets
1116	Mayer Holdings	Manufacturing and trading of steel	400	8.86	0.84
	Limited	pipes, steel sheets and other
		products made of steel, property
		investment and leasing of aircrafts
		for rental purposes
			Maximum	10.96	1.21
			Minimum	4.96	0.63
			Average	7.67	0.92

Sources: the website of the Stock Exchange and Bloomberg

Price to earning approach

With reference to the total consideration of RMB26,926,968 for the acquisition of the Shareholding Interests, and the audited profit after taxation of the Target Company for the year ended 31st December, 2009 of RMB12,938,503, the implied PER of the Target Company is 4.08 times. The PER of the Comparables ranges from approximately 4.96 times to approximately 10.96 times, with an average of approximately 7.67 times. The implied PER of the Target Company of approximately 4.08 times falls below the range and the average PER of the Comparables.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As discussed with the Directors, we have made enquiries as to the future business of the Group and the prospect of the Target Company. We came to an understanding that the Group would like to better allocate and focus its resources on high value-added product and its core businesses. The Directors also expressed their concerns in continuing its operations in the pre-stressed steel wires business in the PRC, in the wake of fierce competition and the aggressive pricing nature in the industry which we concur as we believe the demand for the pre-stressed steel products will not remain robust. Although the implied PER of the Disposal is lower than those Comparables, we consider the consideration of the Disposal is fair and reasonable after taking into account that (i) the bleak future of the Target Company, as the profit after taxation of the Target Company for the eight months ending 31st August, 2010 amounted to approximately RMB1.63 million, representing a decrease of approximately 78% in comparison with the same period last year, according to the PRC management accounts of the Target Company; (ii) it is difficult to find a buyer in this niche market without the consent of the Purchaser; (iii) the Target Company contributed insignificant income to the Group; (iv) there is not much synergy between the core businesses of the Company and the Target Company; (v) subject to audit, the Group is expected to record an unaudited gain of approximately HK$7.56 million from the Disposal; (vi) the disposal would provide additional general working capital to the Group and (vii) the consideration was arrived at after arm’s length negotiation between the parties of the Agreement. As such we consider the consideration and payment terms of the Agreement are on normal commercial terms, and are fair and not unreasonable to the Company and independent Shareholders as a whole.

Net asset value approach

The total consideration of the Disposal is RMB26,926,968. As set out in the Letter from the Board, the unaudited net asset value (prepared in accordance with HKFRS) of the Target Company amounted to approximately RMB52,840,000 as at 31st August, 2010. The Shareholding Interests, being the entire stake of the Vendor in the Target Company, representing a 51% stake of the entire registered capital of the Target Company, therefore represents approximately 1.0 times of the net asset value of the Target Company.

As illustrated in the above table, the P/B Ratio as implied by the consideration for the Disposal, being 1.0 times, lies above the average P/B Ratio of the Comparables and within the range of the P/B Ratio of the Comparables from approximately 0.63 times to approximately 1.21 times.

We consider the consideration of the Disposal is fair and reasonable and in the interests of the Company and Shareholders as a whole after taking into account that (i) the P/B Ratio implied by the consideration for the Disposal is higher than the average P/B Ratio of the Comparables; (ii) it is difficult to find a buyer in this niche market without the consent of the Purchaser and (iii) the Disposal provides a good opportunity to the Group to realize an unaudited gain of approximately HK$7.56 million and sell out its non-core business.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Potential financial effects of the Disposal on the Group

Please be advised that the figures and financial impacts shown in this section are for illustrative purposes only.

Earnings

Upon Completion, the Group will not hold any interest in the Target Company and the members of which will cease to be subsidiaries of the Group. The earnings of the Target Company will be deconsolidated from the Company’s consolidated statement of comprehensive income.

Net assets and working capital

Upon Completion, the Target Company will cease to be subsidiaries of the Group. As such, the net assets and working capital of the Target Company will be deconsolidated from the Company’s consolidated statement of financial position and the Consideration will be booked to the consolidated net assets and consolidated working capital of the Company. As stated in the letter from the Board, subject to review of the Company’s auditors, the gain from Disposal is expected to be approximately HK$7.56 million with reference to the consideration of RMB26,926,968 and the total Service Fee of RMB2,000,000 less the carrying value attributable to the Shareholding Interests as at 31st August, 2010 and related consolidation adjustments. The Shareholders and investors of the Group should note that the exact financial effects of the Disposal on the Group as a whole are subject to audit. Based on the foregoing, we are of the view that the Disposal is fair and reasonable and in the interests of the Independent Shareholders and the Company as a whole.

RECOMMENDATION

Having taken into consideration the principal factors and reasons set out above, we are of the view that (i) the Disposal is on normal commercial terms and in the ordinary and usual course of business of the Group; (ii) the terms of the Disposal are fair and reasonable; and (iii) the Disposal is in the interests of the Company and the Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the Agreement, the transactions contemplated thereunder at the general meeting.

Yours faithfully, For and on behalf of Tanrich Capital Limited Vincent Chung

Director

– 24 –

APPENDIX

GENERAL INFORMATION

RESPONSIBILITY STATEMENT

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

DISCLOSURE OF INTERESTS

Directors’ and chief executive’s interests and short positions in shares, underlying shares and debentures of the Company and its associated corporations

As at the Latest Practicable Date, the interests and short positions of each Director and chief executive of the Company in the Shares, underlying shares and debentures of the Company or any of its associated corporation (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he was taken or deemed to have under such provisions of SFO); or were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers to be notified to the Company and the Stock Exchange are as follows:

(a) Long positions in Shares as at the Latest Practicable Date:

Directors Mr. Pang (Note 1) Mr. Ho Wai Yu, Sammy Mr. John Cyril Fletcher	Number of ordinary shares held Personal interests Held by controlled corporation Total % of issued shares 147,924,708 195,646,500 343,571,208 61.14% 2,000 – 2,000 0.00% 270,000 – 270,000 0.05%

Note 1:

The 195,646,500 shares are held by GIL which is wholly owned by Mr. Pang. Mr. Pang is also a director of GIL.

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APPENDIX

GENERAL INFORMATION

(b) Long positions in shares in associated corporations as at the Latest Practicable Date:

	Associated	Number of
	corporations in	shares or amount
	which shares or	of equity	Class and/or
	equity interests are	interests held or	description of
Director	held or interested	interested	shares
Mr. Pang	Golik Metal	25,850 (Note 2)	Non-voting
	Industrial		deferred shares
	Company Limited

Note 2:

Out of the 25,850 shares, 5,850 shares are held by Mr. Pang personally and 20,000 shares are held by World Producer Limited which is wholly owned by Mr. Pang. Mr. Pang is also a director of World Producer Limited.

Save as disclosed above, none of the Directors and chief executive of the Company had any interest and short position in the Shares, underlying shares and debentures of the Company or any of its associated corporation (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he was taken or deemed to have under such provisions of the SFO); or were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers to be notified to the Company and the Stock Exchange as at the Latest Practicable Date.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and chief executive of the Company is a director or employee of a company which has an interest or short position in the Shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

Directors’ interest in service contracts

As at the Latest Practicable Date, none of the Directors had entered or was proposing to enter into a service contract with any member of the Group (excluding contracts expiring or determinable within one year without payment of compensation (other than statutory compensation)).

Directors’ interests in competing businesses

As at the Latest Practicable Date, so far as the Directors are aware, none of the Directors or their respective associates (as defined in the Listing Rules) was directly or indirectly interested in any business that constituted or may constitute a competing business of the Group.

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APPENDIX

GENERAL INFORMATION

Directors’ interests in assets and/or arrangement

None of the Directors had any direct or indirect interests in any assets which have been since 31st December, 2009 (being the date to which the latest published audited consolidated accounts of the Company was made up) 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. Also, none of the Directors is materially interested in any contract or arrangement which is significant in relation to the business of the Group subsisting as at the Latest Practicable Date.

Substantial Shareholder’s interests

As at the Latest Practicable Date, so far as known to the Directors and the chief executive of the Company, persons other than the Directors or chief executive of the Company, who had an interest or short position in the Shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Division 2 and 3 of Part XV of the SFO, or who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group are as follows:

Long positions in Shares and underlying shares of equity derivatives of the Company as at the Latest Practicable Date:

			Approximate %
		Number of	of total issued
		underlying	Shares as at
		shares of equity	the Latest
Name of Shareholder	Name of Shares	derivatives	Practicable Date
GIL (Note 3)	195,646,500	–	34.82%

Note 3:

GIL is wholly owned by Mr. Pang and of which he is also director.

Save as disclosed above, so far as known to the Directors and chief executive of the Company, there were no other persons other than the Directors or chief executive of the Company, who had an interest or short position in the Shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group as at the Latest Practicable Date.

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APPENDIX

GENERAL INFORMATION

EXPERT AND CONSENT

The following is the qualification of the expert who has given opinion or advice which are contained in this circular:

Name

Qualification

Tanrich Capital Limited

A licensed corporation under the SFO and engaged in types 1 and 6 regulated activities

The Independent Financial Adviser has given and has not withdrawn its consent to the issue of this circular with the inclusion of its letter and/or references to its name in the form and context in which they respectively appear.

The Independent Financial Adviser has no direct or indirect interests in any assets which have been since 31st December, 2009 (being the date to which the latest published audited consolidated accounts of the Company was made up) 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.

As at the Latest Practicable Date, the Independent Financial Adviser did not have any shareholding in any member of the Group and did not have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31st December, 2009 (being the date to which the latest published audited consolidated accounts of the Company were made up).

LITIGATION

As at the Latest Practicable Date, so far as the Directors are aware, neither the Company nor any subsidiaries was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was pending or threatened against the Company or any of its subsidiaries.

MISCELLANEOUS

(a) The company secretary of the Company is Mr. Ho Wai Yu, Sammy, who is a fellow member of the Association of Chartered Certified Accountants, an associate member of the Hong Kong Institute of Certified Public Accountants and a full member of the Chartered Management Institute in the United Kingdom.

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APPENDIX

GENERAL INFORMATION

(b) The registered office of the Company is at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda and the head office and principal place of business of the Company in Hong Kong is at Suite 5608, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong.
(c) The English text of this circular shall prevail over the Chinese text in case of any inconsistency.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at Suite 5608, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong during the normal business hours from the date of this circular up to and including 10th December, 2010:

(a) the letter from the Independent Financial Adviser, the text of which is set out on pages 14 to 24 of this circular;
(b) the letter from the Independent Board Committee, the text of which is set out on page 13 of this circular;
(c) the Agreement; and
(d) a copy of this circular.

– 29 –

AI assistant

Autohome Inc. — Proxy Solicitation & Information Statement 2010

50646_rns_2010-11-18_eaee5ed6-8145-4dc3-a47d-cbbe9bb8c8e4.pdf

GOLIK HOLDINGS LIMITED

DISCLOSEABLE AND CONNECTED TRANSACTION DISPOSAL OF SHAREHOLDING IN A PRC SUBSIDIARY

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

TANRICH CAPITAL LIMITED

DEFINITIONS

GOLIK HOLDINGS LIMITED

DISCLOSEABLE AND CONNECTED TRANSACTION DISPOSAL OF SHAREHOLDING IN A PRC SUBSIDIARY

INTRODUCTION

THE AGREEMENT

Date

Parties

Asset to be disposed of under the Agreement

Consideration

Payment Terms and Conditions Precedent

(3) Provision of Service

Other Relevant Terms

INFORMATION ON THE GROUP, THE PURCHASER AND THE TARGET COMPANY

REASONS FOR AND BENEFITS OF THE DISPOSAL

LISTING RULES IMPLICATIONS

RECOMMENDATION

ADDITIONAL INFORMATION

GOLIK HOLDINGS LIMITED

DISCLOSEABLE AND CONNECTED TRANSACTION DISPOSAL OF SHAREHOLDING IN TIANJIN GOLIK – THE FIRST PC STEEL STRAND CO., LTD.

DISCLOSEABLE AND CONNECTED TRANSACTION

INTRODUCTION

BASIS OF OUR OPINION

PRINCIPAL FACTORS AND REASONS CONSIDERED

Background of the Disposal

Information of the Group

Information of the Target Company

Reasons for the Disposal

Principal terms of the Agreement

Subject Asset

Consideration

Payment Terms and Conditions Precedent

(3) Provision of Service

Other Relevant Terms

Market Comparison

Price to earning approach

Net asset value approach

Potential financial effects of the Disposal on the Group

Earnings

Net assets and working capital

RECOMMENDATION

RESPONSIBILITY STATEMENT

DISCLOSURE OF INTERESTS

Directors’ and chief executive’s interests and short positions in shares, underlying shares and debentures of the Company and its associated corporations

Directors’ interest in service contracts

Directors’ interests in competing businesses

Directors’ interests in assets and/or arrangement

Substantial Shareholder’s interests

EXPERT AND CONSENT

Name

Qualification

MATERIAL ADVERSE CHANGE

LITIGATION

MISCELLANEOUS

DOCUMENTS AVAILABLE FOR INSPECTION

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Autohome Inc. Proxy Solicitation & Information Statement 2010