Brainhole Technology Limited — Capital/Financing Update 2023

Jun 27, 2023

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

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BRAINHOLE TECHNOLOGY LIMITED 脑洞科技有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2203)

(1) DISCLOSEABLE TRANSACTION IN RELATION TO ACQUISITION OF LISTED SECURITIES; AND

(2) DISCLOSEABLE TRANSACTION IN RELATION TO DISPOSAL OF LISTED SECURITIES

The Board announces that the Company has entered into the following transactions involving acquisition and disposal of listed securities.

Acquisition of XPeng Shares

On 26 June 2023 (after trading hours of the Stock Exchange), the Company has acquired an aggregate of 111,000 XPeng Shares through the open market at an aggregate consideration of approximately US$1.2 million (equivalent to approximately HK$8.9 million) (excluding transaction costs).

Disposal of Li Auto Shares

On 26 June 2023 (after trading hours of the Stock Exchange), the Company has disposed of an aggregate of 34,000 Li Auto Shares through the open market at an aggregate consideration of approximately US$1.2 million (equivalent to approximately HK$9.0 million) (excluding transaction costs).

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LISTING RULES IMPLICATION

Acquisition of XPeng Shares

As one or more of the applicable percentage ratios (as defined in the Listing Rules) in respect of the Acquisition of XPeng Shares exceed 5% but all are less than 25%, the Acquisition of XPeng Shares constitutes a discloseable transaction on the part of the Company and is subject to the announcement and reporting requirements under Chapter 14 of the Listing Rules.

Disposal of Li Auto Shares

As one or more applicable percentage ratio(s) (as defined under the Listing Rules) in respect of the Disposal of Li Auto Shares exceed 5% but all are less than 25%, the Disposal of Li Auto Shares constitutes a discloseable transaction on the part of the Company and is subject to the announcement and reporting requirements under Chapter 14 of the Listing Rules.

The Board announces that the Company has entered into the following transactions involving acquisition and disposal of listed securities.

Acquisition of XPeng Shares

On 26 June 2023 (after trading hours of the Stock Exchange), the Company has acquired an aggregate of 111,000 XPeng Shares through the open market at an aggregate consideration of approximately US$1.2 million (equivalent to approximately HK$8.9 million) (excluding transaction costs). The average price (excluding transaction costs) for the acquisition of each XPeng Share was approximately US$10.36 (equivalent to approximately HK$80.62). The aggregate consideration of approximately US$1.2 million (equivalent to approximately HK$8.9 million) (excluding transaction costs) was financed by the Group’s existing internal financial resources.

As the Acquisition of XPeng Shares was conducted in the open market, the identities of the counterparties of the acquired XPeng Shares cannot be ascertained. To the best knowledge, information and belief of the Directors and having made all reasonable enquiries, the counterparties and the ultimate beneficial owner(s) of the counterparties of the acquired XPeng Shares are Independent Third Parties.

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Disposal of Li Auto Shares

On 26 June 2023 (after trading hours of the Stock Exchange), the Company has disposed of an aggregate of 34,000 Li Auto Shares through the open market at an aggregate consideration of approximately US$1.2 million (equivalent to approximately HK$9.0 million) (excluding transaction costs), which are receivable in cash on settlement. The average price (excluding transaction costs) for the disposal of each Li Auto Share was approximately US$33.89 (equivalent to approximately HK$263.69).

As the Disposal of Li Auto Shares was conducted in the open market, the identities of the counterparties of the disposed Li Auto Shares cannot be ascertained. To the best knowledge, information and belief of the Directors and having made all reasonable enquiries, the counterparties and the ultimate beneficial owner(s) of the counterparties of the disposed Li Auto Shares are Independent Third Parties.

INFORMATION ON XPENG AND LI AUTO

XPeng

XPeng is an exempted company incorporated in Cayman Islands with limited liability and a holding company with no material operations of its own. XPeng conducts their operations primarily through their PRC subsidiaries. XPeng designs, develops, manufactures, and markets smart electric vehicles that appeal to the large and growing base of technology-savvy middle-class consumers. The XPeng Group is also involved in providing after-sales services to their customers.

The following financial information is extracted from the published documents of the XPeng Group:

	For the year ended	For the year ended	For the year ended	For the year ended
	31 December	2021	31 December	2022
	(audited)		(audited)
	RMB’000	HK$’000	RMB’000	HK$’000
Revenues	20,988,131	23,716,588	26,855,119	30,346,284
Net (loss)	(4,863,096)	(5,495,298)	(9,138,972)	(10,327,038)

Based on XPeng’s published documents, the XPeng Group has an audited consolidated net assets value of approximately RMB42,147 million (equivalent to approximately HK$47,626 million) as at 31 December 2021 and RMB36,911 million (equivalent to approximately HK$41,709 million) as at 31 December 2022.

Based on XPeng’s published documents, the XPeng Group has an unaudited consolidated net asset value of approximately RMB34,454 million (equivalent to approximately HK$38,933 million) as at 31 March 2023.

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Li Auto

Li Auto is a Cayman Islands holding company with no equity ownership in the VIEs and its subsidiaries. Li Auto conducts its operations through its PRC subsidiaries, VIEs and their respective subsidiaries in the PRC. Li Auto is a leader in the new energy vehicle market of the PRC. Li Auto Group designs, develops, manufactures, and sells premium smart electric vehicles.

The following financial information is extracted from the published documents of Li Auto Group:

	For the year ended	For the year ended	For the year ended	For the year ended
	31 December	2021	31 December	2022
	(audited)		(audited)
	RMB’000	HK$’000	RMB’000	HK$’000
Revenue	27,009,779	30,521,050	45,286,816	51,174,102
(Loss) before income tax expenses	(152,812)	(172,678)	(2,159,355)	(2,440,071)
Net (loss)	(321,455)	(363,244)	(2,032,348)	(2,296,553)

Based on Li Auto’s published documents, the Li Auto Group has an audited consolidated net assets value of approximately RMB41,064 million (equivalent to approximately HK$46,402 million) as at 31 December 2021 and RMB45,186 million (equivalent to approximately HK$51,060 million) as at 31 December 2022.

Based on Li Auto’s published documents, the Li Auto Group has an unaudited consolidated net asset value of approximately RMB46,632 million (equivalent to approximately HK$52,694 million) as at 31 March 2023.

REASONS FOR AND BENEFITS OF THE ACQUISITION OF XPENG SHARES

The Group is principally engaged in the manufacturing and trading of semiconductors, broadband infrastructure construction and the provision of integrated solution for smart domain application (including smart home, smart campus and smart communities).

The Group believes that technological innovation is an important engine for future economic development, and it can also drive the emerging applications in the smart living sector. The Group always hopes to leverage our own advantages in the field of smart technology to actively diversify the investments in the field of innovative technologies, in order to facilitate the technological development and create greater value for the Shareholders.

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XPeng is a leading smart electric vehicles company in the PRC. The Board holds positive views towards the financial performance and future prospect of XPeng. The Group considers that the Acquisition of XPeng Shares is a good opportunity to acquire attractive investment and to expand its investment portfolio with quality assets, which will enhance investment return for the Group.

As the Acquisition of XPeng Shares was made in the open market at prevailing market prices, the Directors are of the view that the terms of the Acquisition of XPeng Shares are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

REASONS FOR AND BENEFITS OF THE DISPOSAL OF LI AUTO SHARES

As a result of the Disposal of Li Auto Shares, the Group is expected to recognise a gain of approximately US$0.1 million (equivalent to approximately HK$0.5 million) being the difference between the consideration received from the Disposal of Li Auto Shares and the acquisition cost of disposed Li Auto Shares. The Group considers that the Disposal of Li Auto Shares represents an opportunity to allow the Group to reallocate the resources and investment portfolio. The Group has applied all the proceeds from the Disposal of Li Auto Shares of approximately US$1.2 million (equivalent to approximately HK$9.0 million) for the consideration for the Acquisition of XPeng Shares.

As the Disposal of Li Auto Shares was made in the open market at prevailing market price, the Directors are of the view that the terms of the Disposal of Li Auto Shares are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

IMPLICATIONS UNDER THE LISTING RULES

Acquisition of XPeng Shares

As one or more of the applicable percentage ratios (as defined in the Listing Rules) in respect of the Acquisition of XPeng Shares exceed 5% but all are less than 25%, the Acquisition of XPeng Shares constitutes a discloseable transaction on the part of the Company and is subject to the announcement and reporting requirements under Chapter 14 of the Listing Rules.

Disposal of Li Auto Shares

As one or more applicable percentage ratio(s) (as defined under the Listing Rules) in respect of the Disposal of Li Auto Shares exceed 5% but all are less than 25%, the Disposal of Li Auto Shares constitutes a discloseable transaction on the part of the Company and is subject to the announcement and reporting requirements under Chapter 14 of the Listing Rules.

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DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:

“Acquisition of XPeng	acquisition of 111,000 XPeng Shares by the Company as disclosed in
Shares”	this announcement
“Board”	the board of Directors of the Company
“Company”	Brainhole Technology Limited, a company incorporated in the Cayman
	Islands with limited liability, the issued Shares of which are listed on
	the Main Board of the Stock Exchange (stock code: 2203)
“connected person(s)”	has the meaning ascribed to it under the Listing Rules
“Director(s)”	the director(s) of the Company
“Disposal of Li Auto	disposal of 34,000 Li Auto Shares by the Company as disclosed in this
Shares”	announcement
“Group”	the Company and its subsidiaries
“Hong Kong”	means the Hong Kong Special Administrative Region of the PRC
“Independent Third	third party(ies) independent of and not connected with the Company
Party(ies)”	and its connected persons and is not acting in concert (as defined in the
	Codes on Takeovers and Mergers and Share Buy-backs) with any of the
	connected persons of the Company or any of their respective associates
	(as defined under the Listing Rules)
“Li Auto”	Li Auto Inc., a Cayman Islands holding company whose American
	depository shares are listed on Nasdaq (stock code: LI)
“Li Auto Group”	Li Auto and its subsidiaries
“Li Auto Share(s)”	American depository share(s) of Li Auto
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
“Nasdaq”	National Association of Securities Dealers Automated Quotations Stock
	Market

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“PRC”	the People’s Republic of China
“RMB”	Renminbi, the lawful currency of the PRC
“Shareholders”	holder(s) of the Share(s)
“Share(s)”	ordinary share(s) in the issued share capital of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“United States”	the United States of America
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“US$”	United States dollars, the lawful currency of the United States
“XPeng”	XPeng Inc., an exempted company incorporated in Cayman Islands with
	limited liability whose American depository shares are listed on New
	York Stock Exchange (stock code: XPEV)
“XPeng Group”	XPeng and its subsidiaries
“XPeng Share(s)”	American depository share(s) of XPeng
“%”	per cent.
	By order of the Board
	Brainhole Technology Limited
	Zhang Liang Johnson
	Chairman and Executive Director

Hong Kong, 27 June 2023

For the purpose of this announcement, all amounts denominated in US$ has been translated (for information only) into HK$ using the exchange rate of US$1.00: HK$7.78 and all amounts denominated in RMB has been translated (for information only) into HK$ using the exchange rate of RMB1: HK$1.13. Such translations shall not be construed as a representation that amounts of US$ and RMB were or may have been converted.

As at the date of this announcement, the Board comprises Mr. Zhang Liang Johnson and Ms. Wan Duo as executive Directors and Mr. Xu Liang, Mr. Chen Johnson Xi and Ms. Zhang Yibo as independent nonexecutive Directors.

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