China Electronics Huada Technology Company Limited — Proxy Solicitation & Information Statement 2014

Dec 24, 2014

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 Neway Group Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser, the 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.

NEWAY GROUP HOLDINGS LIMITED 中星集團控股有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 00055)

PROPOSED REFRESHMENT OF GENERAL MANDATE TO ISSUE SHARES AND NOTICE OF SPECIAL GENERAL MEETING

Independent Financial Adviser to

the Independent Board Committee and the Independent Shareholders

Kingsway Capital Limited

A letter from the Independent Board Committee is set out on page 12 of this circular and a letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 13 to 22 of this circular.

A notice convening the special general meeting to be held at 11:00 a.m. on Friday, 16 January 2015 at Camomile Room, Lower Level II, Kowloon Shangri-La Hotel, 64 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong is set out on pages SGM-1 to SGM-3 of this circular. Whether or not you intend to attend and vote at the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof to the office of the Company’s branch share registrar and transfer office in Hong Kong, Tricor Secretaries Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjournment thereof should you so wish.

29 December 2014

• For identification purpose only

CONTENT

	Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from the Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Letter from Kingsway. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Notice of the SGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	SGM-1

– i –

DEFINITIONS

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

“AGM”

the annual general meeting of the Company held on 12 September 2014

“associate(s)”

has the meaning as ascribed to it in the Listing Rules

“Bye-laws”

the bye-laws of the Company as amended from time to time

“Board”

the board of Directors

“Company”

Neway Group Holdings Limited, a company incorporated in Bermuda with limited liability, the issued shares of which are listed on the Main Board of the Stock Exchange

“Director(s)”

the director(s) of the Company

“Existing General Mandate”

the general mandate approved and granted to the Directors at the AGM to allot, issue and deal with Shares up to a maximum of 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of the AGM

“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 committee of the Board comprising all independent non-executive Directors, established for the purpose of advising the Independent Shareholders in relation to the Refreshed General Mandate

– 1 –

DEFINITIONS

• “Independent Financial Adviser” or “Kingsway”

• “Independent Shareholders”

• “Latest Practicable Date”

• “Listing Rules”

• “Placing”

• “Refreshed General Mandate”

• “SFO”

• Kingsway Capital Limited, a licensed corporation under the SFO licensed 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 Refreshed General Mandate

• Shareholders other than any controlling Shareholders and their associates or, where there are no controlling Shareholders, any Directors (excluding independent non-executive Directors) and the chief executive of the Company who shall hold Shares as at the date of the SGM and their respective associates

• 22 December 2014, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• the Rules Governing the Listing of Securities on the Stock Exchange

the placing of 244,640,000 Shares to not less than six placees, which Shares were allotted and issued under the Existing General Mandate, details of which are set out in the announcements of the Company dated 25 September 2014 and 7 October 2014

• a general and unconditional mandate proposed to be granted to the Directors at the SGM to exercise the power of the Company to allot, issue or otherwise deal with Shares up to a maximum of 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of passing the relevant resolution

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

– 2 –

DEFINITIONS

“SGM”	the special general meeting of the Company to be held at
	11:00 a.m. on Friday, 16 January 2015 for the purpose of
	considering, and if thought fit, approving the proposed
	grant of the Refreshed General Mandate, the notice of
	which is set out on pages SGM-1 to SGM-3 of this circular
“Share(s)”	ordinary share(s) of nominal value of HK$0.05 each in the
	share capital of the Company
“Shareholder(s)”	the shareholder(s) of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“%”	per cent.

– 3 –

LETTER FROM THE BOARD

NEWAY GROUP HOLDINGS LIMITED 中星集團控股有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 00055)

Executive Directors: Mr. SUEK Ka Lun, Ernie (Chairman) Mr. SUEK Chai Hong (Chief Executive Officer)

Non-executive Directors: Dr. NG Wai Kwan Mr. CHAN Kwing Choi, Warren Mr. WONG Sun Fat

Independent non-executive Directors: Mr. TSE Tin Tai Ms. LUI Lai Ping, Cecily Mr. LEE Kwok Wan

Registered office: Clarendon House Church Street Hamilton, HM11 Bermuda

Principal place of business in Hong Kong: Chung Tai Printing Group Building 11 Yip Cheong Street On Lok Tsuen, Fanling New Territories Hong Kong

Alternate Director:

Mr. LAU Kam Cheong (alternate to Dr. NG Wai Kwan)

29 December 2014

To the Shareholders

Dear Sir/Madam,

PROPOSED REFRESHMENT OF GENERAL MANDATE TO ISSUE SHARES

INTRODUCTION

The purpose of this circular is to provide you with (i) information in respect of the resolution to be proposed at the SGM regarding the proposed grant of the Refreshed General Mandate; (ii) the recommendation of the Independent Board Committee to the Independent Shareholders; (iii) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Refreshed General Mandate; and (iv) notice of the SGM.

• For identification purpose only

– 4 –

LETTER FROM THE BOARD

PROPOSED REFRESHMENT OF GENERAL MANDATE TO ISSUE SHARES

Pursuant to an ordinary resolution passed by the Shareholders at the AGM, the Directors were granted the Existing General Mandate to allot and issue up to 244,642,912 Shares, representing 20% of the issued share capital of the Company as at the date of the AGM. There had not been any refreshment of the Existing General Mandate since the AGM up to the Latest Practicable Date.

Fund raising activities under the Existing General Mandate

Save for the fund raising activity mentioned below, the Company has not carried out other fund raising activities under the Existing General Mandate since the AGM up to the Latest Practicable Date.

				Actual
				use of proceeds
Date of		Net proceeds	Intended	as at the Latest
announcement	Event	(approximately)	use of proceeds	Practicable Date
25 September 2014 and	Placing of 244,640,000	HK$37 million	It was intended that the net	Not yet utilised.
7 October 2014	new Shares at		proceeds will be utilised as
	HK$0.156 per Share		to about 50% for general
			working capital of the Group
			and as to about 50% for
			potential property investment.

Extent of Existing General Mandate utilised

Subsequent to the completion of the Placing as set out above, there only remained 2,912 Shares issuable under the Existing General Mandate as at the Latest Practicable Date. Such number only represents approximately 0.0002% of the issued Shares as at the Latest Practicable Date.

– 5 –

LETTER FROM THE BOARD

Effects on shareholding structure of the Company

The table below illustrates the shareholding structure of the Company (i) as at the Latest Practicable Date; and (ii) immediately upon the allotment and issue of Shares by the Company pursuant to the Refreshed General Mandate (assuming the Refreshed General Mandate is utilised in full and no further Shares are issued or repurchased by the Company):

Shareholders CNA Company Limited (Note 1) Mr. Suek Chai Hong (Note 2) Mr. Wong Sun Fat (Note 3) Dr. Ng Wai Kwan (Note 2) Public Shareholders Shares to be issued under the Refreshed General Mandate Total: Notes:	(i) As at the Latest Practicable Date No. of Shares Approximate % 398,720,000 27.16 7,000,000 0.48 800,000 0.05 80,000 0.01 1,061,254,560 72.30 – – 1,467,854,560 100.00	(ii) Immediately upon the allotment and issue of Shares by the Company pursuant to the Refreshed General Mandate (assuming the Refreshed General Mandate is utilised in full and no further Shares are issued or repurchased by the Company) No. of Shares Approximate % (Note 4) 398,720,000 22.64 7,000,000 0.40 800,000 0.05 80,000 0.01 1,061,254,560 60.25 293,570,912 16.67 1,761,425,472 100.00	(ii) Immediately upon the allotment and issue of Shares by the Company pursuant to the Refreshed General Mandate (assuming the Refreshed General Mandate is utilised in full and no further Shares are issued or repurchased by the Company) No. of Shares Approximate % (Note 4) 398,720,000 22.64 7,000,000 0.40 800,000 0.05 80,000 0.01 1,061,254,560 60.25 293,570,912 16.67 1,761,425,472 100.00
			100.00

1. CNA Company Limited is beneficially owned by a discretionary trust set up by Mr. Suek Ka Lun, Ernie (“ Mr. Ernie Suek ”), an executive Director and the chairman of the Board, the beneficiaries of which include Mr. Ernie Suek, certain family members of Mr. Ernie Suek and a charitable institution set up in Hong Kong.

2. Mr. Ernie Suek is the nephew of Mr. Suek Chai Hong, an executive Director and the chief executive officer of the Company, and Dr. Ng Wai Kwan, a non-executive Director.

3. Mr. Wong Sun Fat is a non-executive Director.

4. The aggregate percentage may not add up to 100% due to rounding.

– 6 –

LETTER FROM THE BOARD

Reasons for the proposed grant of the Refreshed General Mandate

The Group principally engages in (i) manufacturing and sales of printing products; (ii) trading of printing products; (iii) music and entertainment businesses; (iv) securities trading; and (v) property development and investment.

The Company has been actively diversifying its business in recent years. It is the Company’s plan to invest further in property, money lending, movies making and financial leasing business, as well as other business opportunities.

The Company is evaluating certain property investment opportunities in Hong Kong and is currently studying the business potential of a new type of business relating to online games and mobile applications, which are all in preliminary stage and no binding agreement has been entered into by the Company for such investments as at the Latest Practicable Date. Although the Company has reserved some cash for funding such investments, if such investments materialise, the current funds of the Company will not be sufficient.

As regards the financial leasing business of the Company, the Company has established a new indirect wholly-owned subsidiary, being 上海中星富達融資租賃有限公司 (unofficial English translation being Shanghai Zhongxing Wealthy Financial Leasing Company Limited) (“ SZW Financial Leasing ”) in Shanghai with a registered capital of US$20 million, the details of which were disclosed in the announcement of the Company dated 22 July 2013. As at the Latest Practicable Date, only approximately US$4 million of the registered capital had been paid and the remaining approximately US$16 million is expected to be paid within two years from the date of establishment of SZW Financial Leasing and funded by the Group by way of a combination of equity, debt and/or internal cash resources in the future.

Considering the Group’s working capital requirement and capital commitment for business operations of manufacturing and sales of printing products, trading of printing products, music and entertainment businesses and securities trading and the capture of new opportunities that may arise in the future, in particular in relation to the new business operations (including but not limited to property, money lending and financial leasing businesses), the Board would like to provide flexibility for the Company to raise funds through equity financing. Given that equity financing (i) does not incur any interest expenses on the Group as compared with bank financing; (ii) is less costly and time-consuming than raising funds by way of rights issue or open offer; and (iii) provides the Company with the capability to capture any capital raising and/or prospective investment opportunity as and when it arises, the Board proposes the Refreshed General Mandate shall be granted to the Directors.

– 7 –

LETTER FROM THE BOARD

Based on the total number of issued Shares as at the Latest Practicable Date (i.e. 1,467,854,560 Shares) and assuming that there is no change in the issued share capital of the Company prior to the date of the SGM, the Refreshed General Mandate, if granted, will allow the Directors to allot and issue up to 293,570,912 new Shares.

As at the Latest Practicable Date, the Directors had no intention to utilise the Refreshed General Mandate, if granted, to allot and issue Shares but may do so in the future if (i) there is an increased demand in the Group’s working capital requirement and capital commitment for business operations of manufacturing and sales of printing products, trading of printing products, music and entertainment businesses and securities trading; and (ii) new business opportunities arise in the future that cannot be met by internal cash resources and requires additional funding.

The Refreshed General Mandate, if granted, will expire at the earliest of: (a) the conclusion of the next annual general meeting of the Company; (b) the end of the period within which the Company is required by the Bye-laws or any applicable laws to hold its next annual general meeting; and (c) when revoked or varied by an ordinary resolution of the Shareholders in a general meeting prior to the next annual general meeting of the Company.

SGM

The SGM will be held at 11:00 a.m. on Friday, 16 January 2015 at Camomile Room, Lower Level II, Kowloon Shangri-La Hotel, 64 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong for the Independent Shareholders to consider and approve, if thought fit, the proposed grant of the Refreshed General Mandate. The notice of the SGM is set out on pages SGM-1 to SGM-3 of this circular.

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, 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. As such, the resolution set out in the notice of the SGM will be voted on by way of poll.

As the proposed grant of the Refreshed General Mandate is to be proposed to the Shareholders before the Company’s next annual general meeting, pursuant to the Listing Rules, this proposal is subject to the Independent Shareholders’ approval by way of poll at the SGM. According to Rule 13.36(4) of the Listing Rules, any controlling Shareholders and their associates or, where there are no controlling Shareholders, Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting in favour of the resolution to approve the proposed grant of the Refreshed General Mandate.

– 8 –

LETTER FROM THE BOARD

As there is no controlling Shareholder, the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates, holding in aggregate of 454,040,000 Shares, will abstain from voting in favour of the resolution to approve the proposed grant of the Refreshed General Mandate at the SGM.

Mr. Ernie Suek, an executive Director and the chairman of the Board, and his associates are in aggregate holding and entitled to exercise control over the voting rights in respect of 398,720,000 Shares (representing approximately 27.16% of the issued Shares) as at the Latest Practicable Date.

Mr. SUEK Chai Hong, an executive Director and the chief executive officer of the Company, and his associates are in aggregate holding and entitled to exercise control over the voting rights in respect of 38,240,000 Shares (representing approximately 2.61% of the issued Shares) as at the Latest Practicable Date.

Mr. WONG Sun Fat, a non-executive Director of the Company, and his associate are in aggregate holding and entitled to exercise control over the voting rights in respect of 820,000 Shares (representing approximately 0.06% of the issued Shares) as at the Latest Practicable Date.

Dr. NG Wai Kwan, a non-executive Director of the Company, and his associate are in aggregate holding and entitled to exercise control over the voting rights in respect of 16,260,000 Shares (representing approximately 1.11% of the issued Shares) as at the Latest Practicable Date.

As at the Latest Practicable Date, the Directors (excluding the independent non-executive Directors) and the chief executive of the Company and their respective associates had indicated that they have no intention to vote against the resolution to approve the proposed grant of the Refreshed General Mandate at the SGM.

The Independent Board Committee, comprising Mr. TSE Tin Tai, Ms. LUI Lai Ping, Cecily and Mr. LEE Kwok Wan, all being independent non-executive Directors, has been established to advise the Independent Shareholders on the proposed grant of the Refreshed General Mandate. Kingsway Capital Limited has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the proposed grant of the Refreshed General Mandate.

– 9 –

LETTER FROM THE BOARD

You will find enclosed a form of proxy for use at the SGM. Whether or not you are able to attend the SGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time of the SGM to the office of the Company’s branch share registrar and transfer office in Hong Kong, Tricor Secretaries Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong. Completion and return of the form of proxy will not preclude you from attending and voting at the SGM in person should you so wish, and in such case, the form of proxy previously submitted shall be deemed to be revoked.

Save as disclosed in this circular, at the Latest Practicable Date, there were no other persons who are required to abstain from voting in favour of the resolution for approving the proposed grant of the Refreshed General Mandate at the SGM.

RECOMMENDATION

Your attention is drawn to the letter of recommendation from the Independent Board Committee set out on page 12 of this circular and the letter of advice from the Independent Financial Adviser set out on pages 13 to 22 of this circular, which contains, among other matters, its advice to the Independent Board Committee and the Independent Shareholders in relation to the proposed grant of the Refreshed General Mandate and the principal factors considered by it in arriving at its recommendation.

The Independent Board Committee, having taken into account the advice of the Independent Financial Adviser, is of the opinion that the proposed grant of the Refreshed General Mandate is fair and reasonable so far as the Independent Shareholders are concerned and is in the best interests of the Company and the Shareholders and accordingly recommends the Independent Shareholders to vote in favour of the resolution relating to the proposed grant of the Refreshed General Mandate to be proposed at the SGM.

Accordingly, the Directors (including the independent non-executive Directors) consider that the proposed grant of the Refreshed General Mandate is fair and reasonable and is in the best interests of the Company and the Shareholders as a whole. Therefore, the Directors (including the independent non-executive Directors) recommend the Independent Shareholders to vote in favour of the relevant resolution to be proposed at the SGM.

– 10 –

LETTER FROM THE BOARD

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 document misleading.

Yours faithfully,

For and on behalf of the Board NEWAY GROUP HOLDINGS LIMITED SUEK Ka Lun, Ernie

Chairman

– 11 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

NEWAY GROUP HOLDINGS LIMITED 中星集團控股有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 00055)

29 December 2014

To the Independent Shareholders

Dear Sir/Madam,

PROPOSED REFRESHMENT OF GENERAL MANDATE TO ISSUE SHARES

We have been appointed as the Independent Board Committee to advise the Independent Shareholders in connection with the proposed grant of the Refreshed General Mandate, details of which are set out in the circular of the Company to the Shareholders dated 29 December 2014 (“ Circular ”), of which this letter forms part. Terms defined in the Circular shall have the same meanings when used herein unless the context otherwise requires.

Having considered the advice of Independent Financial Adviser in relation thereto as set out in the Circular, we are of the view that the proposed grant of the Refreshed General Mandate is fair and reasonable so far as the Independent Shareholders are concerned and that the proposed grant of the Refreshed General Mandate is in the interests of the Company and the Shareholders as a whole.

Accordingly, we recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the SGM to approve the proposed grant of the Refreshed General Mandate.

Yours faithfully,

Independent Board Committee Mr. TSE Tin Tai Ms. LUI Lai Ping, Cecily Mr. LEE Kwok Wan Independent Independent Independent non-executive Director non-executive Director non-executive Director

• For identification purpose only

– 12 –

LETTER FROM KINGSWAY

The following is the full text of the letter of advice from the Independent Financial Adviser setting out its advice to the Independent Board Committee and the Independent Shareholders in relation to the proposed grant of the Refreshed General Mandate for inclusion in this circular.

Kingsway Capital Limited

7/F, Tower One Lippo Centre, 89 Queensway, Hong Kong Tel. No.: (852) 2283-1830 Fax No.: (852) 2283-7722

29 December 2014

To: The Independent Board Committee and the Independent Shareholders of Neway Group Holdings Limited

Dear Sir/Madam,

PROPOSED REFRESHMENT OF GENERAL MANDATE TO ISSUE SHARES

INTRODUCTION

We refer to our engagement as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the refreshment of the Existing General Mandate, the details of which are set out in the letter from the Board (the “ Letter from the Board ”) contained in the circular (the “ Circular ”) of the Company to the Shareholders dated 29 December 2014, of which this letter forms part. Terms used in this letter have the same meanings as defined in the Circular unless the context otherwise requires.

Pursuant to Rule 13.36(4) of the Listing Rules, refreshment of the Existing General Mandate will be subject to the Independent Shareholders’ approval by way of an ordinary resolution at the SGM. As there is no controlling Shareholder, the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates, holding in aggregate of 454,040,000 Shares, will abstain from voting in favour of the resolution to approve the proposed grant of the Refreshed General Mandate at the SGM. As at the Latest Practicable Date, the Directors (excluding the independent non-executive Directors) and the chief executive of the Company and their respective associates had indicated that they have no intention to vote against the resolution to approve the proposed grant of the Refreshed General Mandate at the SGM. The

– 13 –

LETTER FROM KINGSWAY

Independent Board Committee comprising Mr. Tse Tin Tai, Ms. Lui Lai Ping, Cecily and Mr. Lee Kwok Wan, all being independent non-executive Directors, has been established to advise whether the refreshment of the Existing General Mandate is fair and reasonable so far as the Company and the Independent Shareholders are concerned and is in the interest of the Company and the Independent Shareholders as a whole and to advise the Independent Shareholders on how to vote. We, Kingsway Capital Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

BASIS OF OUR ADVICE

In formulating our opinion, we have relied on the information, opinion and representations contained or referred to in the Circular and the information, opinion and representations provided to us by the management of the Company and the Directors. We have assumed that all information and representations contained or referred to in the Circular and all information and representations which have been provided by the management of the Company and the Directors, for which they are solely and wholly responsible, were true, accurate and complete at the time when they were made and continue to be so as at the date of the SGM. We have also assumed that all statements of belief, opinion and intention of the Directors as set out in the Letter from the Board were reasonably made after due and careful inquiry. 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 representations contained in the Circular. The Directors collectively and individually accept full responsibility for the accuracy of the information in the Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, opinions expressed in the Circular have been arrived at after due and careful consideration and there are no other facts the omission of which would make any statement in the Circular misleading. We consider that we have been provided sufficient information to enable us to reach an informed view regarding the refreshment of the Existing General Mandate, and to justify reliance on the accuracy of the information contained in the Circular so as to provide a reasonable basis of our opinions. We have not, however, carried out any independent verification on the information provided to us by the Directors, nor have we conducted an independent in-depth investigation into the business and affairs of the Group.

This letter is issued for the use of the Independent Board Committee and the Independent Shareholders solely in connection with their consideration of the refreshment of the Existing General Mandate, 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.

– 14 –

LETTER FROM KINGSWAY

The Independent Shareholders should note that, within the past two years up to the Latest Practicable Date, we, Kingsway, were engaged as an independent financial adviser by the Company in connection with a connected transaction concerning non-exercise of put option and a connected and major transaction concerning put option as detailed in the circulars of the Company dated 2 September 2013 and 24 January 2014. Given (i) our independent role in that engagements; and (ii) our fees associated with that engagements represented an insignificant percentage of the revenue of our parent group, we consider that engagement would not affect our independence to form our opinion in respect of the transactions completed under the refreshment of Existing General Mandate.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In giving our recommendations to the Independent Board Committee and the Independent Shareholders, we have taken into consideration the following principal factors and reasons:

Existing General Mandate

At the annual general meeting of the Company held on 12 September 2014, the Shareholders approved, among other things, an ordinary resolution for granting to the Directors the Existing General Mandate to allot and issue not more than 244,642,912 Shares, being 20% of the entire issued share capital of the Company of 1,223,214,560 Shares as at the date of passing of the relevant resolution.

As disclosed in the announcement dated 7 October 2014, the Company completed a placing (the “ Placing A ”) of new shares, the details of which are set out in the announcement of the Company dated 25 September 2014. Pursuant to the Placing A, a total of 244,640,000 Shares were allotted and issued under the Existing General Mandate, representing approximately 100.0% of the aggregate number of Shares which may be allotted and issued under the Existing General Mandate. The net proceeds of approximately HK$37 million were intended to be utilised as to about 50% for general working capital of the Group and as to about 50% for potential property investment. The aforesaid proceeds remained unutilised as at the Latest Practicable Date.

In addition to the aforesaid fundraising activity, we noted that the Company was also involved in another fundraising activity within the past twelve months immediately prior to the Latest Practicable Date. As disclosed in the announcement dated 28 August 2014, the Company completed a placing (“ Placing B ”) of new shares, the details of which are set out in the announcement of the Company dated 15 August 2014. Pursuant to the Placing B, a total of 203,860,000 Shares were allotted and issued under the previous general mandate. The net proceeds of approximately HK$32.2 million were intended to provide general working capital for the Group to meet any future development and obligations. The aforesaid proceeds form part of the Group’s cash balance as at 30 September 2014.

– 15 –

LETTER FROM KINGSWAY

Save as and except the above, the Company had not conducted any other equity fund raising activities in the past twelve months immediately preceding the Latest Practicable Date.

Proposed Refreshment of Existing General Mandate to Issue and Allot Shares

In order to maintain financial flexibility to raise further capital for funding the operations of the Group and its future business development, the Directors propose to seek approval from the Independent Shareholders at the SGM at which an ordinary resolution will be proposed for granting the Directors the general mandate to allot and issue Shares not exceeding 20% of the issued share capital of the Company as at the date of passing the relevant ordinary resolution at the SGM. As at the Latest Practicable Date, the Company had an aggregate of 1,467,854,560 Shares in issue. Subject to the passing of the ordinary resolution for the approval of the refreshment of the Existing General Mandate and on the basis that no further Shares are issued and/or repurchased by the Company between the Latest Practicable Date and the date of the SGM, the Company would be allowed to allot and issue up to 293,570,912 Shares, being 20% of the total number of Shares in issue as at the Latest Practicable Date.

As at the Latest Practicable Date, the Company has not made any refreshment of the Existing General Mandate since the AGM and there are no outstanding options, warrants, convertible securities or other rights to subscribe for Shares.

The Refreshed General Mandate will expire at the earliest of (a) the conclusion of the next annual general meeting of the Company; (b) the date by which the next annual general meeting of the Company is required to be held by law or by the Bye-Laws; or (c) the date upon which such authority is revoked or varied by an ordinary resolution of the Shareholders in a general meeting of the Company prior to the next annual general meeting of the Company.

Reasons for the Refreshment of the Existing General Mandate

The Group principally engages in (i) manufacturing and sales of printing products; (ii) trading of printing products; (iii) music and entertainment businesses; (iv) securities trading; and (v) property development and investment.

– 16 –

LETTER FROM KINGSWAY

As disclosed in the interim results announcement of the Company for the six months ended 30 September 2014 (“ Period ”) dated 28 November 2014 (the “ Interim Results 2014/15 ”), the Group recorded a total revenue of approximately HK$297 million and a gross profit of approximately HK$46 million, representing a decrease in revenue of approximately 17.3% or approximately HK$62 million and a decrease in gross profit of approximately 48.7% or approximately HK$44 million respectively over the same period last year. Gross margin dropped by 9.5 percentage points to 15.5% from 25.0% for the same period last year. The Group incurred a loss of approximately HK$20 million during the Period mainly due to the decrease in revenue from the manufacturing and sales of printing products business, which was attributable to the decline in export sales partially offset by an increase in domestic sales coupled with an increase in material costs, an increase in staff costs, and continuing appreciation of Renminbi.

As at 30 September 2014, the Group had net assets of approximately HK$839 million and net current assets of approximately HK$446 million. The current assets of the Group as at 30 September 2014 were approximately HK$587 million (of which approximately HK$282 million was attributable to inventories and record masters, properties under development for sale, trade and other receivables). The Group did not rely on bank borrowings to finance its operation. The gearing ratio, calculated as the Group’s total borrowings divided by shareholders’ fund was 2.2% as of 30 September 2014. Nonetheless, during the year ended 31 March 2014 (“ Financial Year 2014 ”), the Group incurred net cash outflow from operating activities of approximately HK$11 million, net cash outflow from investment activities of approximately HK$22 million, and a total net cash outflow of approximately HK$15 million.

Liquidity and Capital Requirement

As at 30 September 2014, the Company had short-term deposits and cash and cash equivalents approximately HK$265 million, which included the net proceeds raised from Placing B. As mentioned above, subsequent to 30 September 2014, the Company has completed Placing A. The net proceeds of approximately HK$37 million received from Placing A was still unutilised as at the Latest Practicable Date. We also noted from the announcement dated 21 November 2014 that the Company has entered into an agreement to dispose of Marble Arch Investments Limited. The sales proceeds amounted to approximately HK$28 million which will be reinvested in other potential projects with higher return on investment.

– 17 –

LETTER FROM KINGSWAY

We have reviewed the cash and cash equivalent figure as of 30 September 2014 together with the subsequent net cash inflow/outflow provided by the Directors, and understand that the Company intends to apply the available cash balances towards (i) the operating expenses of the Group; (ii) financing the new business operations (including but not limited to property, money lending and financial leasing businesses); and (iii) funding future transactions and/or other potential investments opportunities that may arise from time to time in the future.

As advised by the Director, it is expected that the total working capital requirement and capital commitment for manufacturing and sales of printing products, trading of printing products, music and entertainment businesses and securities trading for the next 12 months will be approximately HK$193 million. Furthermore, the Company has been actively diversifying business in recent years. It is the Company’s plan to invest further in property, money lending, movies making and financial leasing business, as well as other business opportunities.

Property development and investment business is a new business segment introduced by the Group during the Financial Year 2014. As disclosed in the annual report for the year ended 31 March 2014 (“ Annual Report 2014 ”) and Interim Results 2014/15, the Group completed two acquisitions during the Financial Year 2014, one of which involved a non wholly-owned subsidiary in Qingyuan and the other one involved an available-for-sale investment in Chengdu. For the two acquisitions, one involved 四川英華房地產有限公司 (“ 英華房地產 ”), which is classified as an available-for-sale investment of the Group, and the other one involved 清遠市中清房地產開發有限公司 (“ 中清房地產 ”), a non wholly-owned subsidiary of the Group. The construction work on the land held by 英華房地產 commenced in May 2014 and the pre-sales of residential units is expected to commence by the end of December 2014. As advised by the Directors, the business of 英華房地產 is carried on in cooperation with experienced domestic property developers in the PRC. Shareholders’ fundings are in place and others funding requirements are supported by bank borrowing. As for 中清房地產, it holds the land use rights of two parcels of commercial land in Qingyuan. On 18 June 2014, the Company, initiated civil proceedings against 中清房地產 for, among other matters, the repayment of the shareholder’s loan it contributed in the amount of RMB23,479,330 (“ Litigation ”). As advised by the Directors, the development plan for the plot land held by 中清房地產 would depend on the outcome of the Litigation. Apart from the projects mentioned above, the Group would continue to seek further investment opportunities with favourable investment return in the future. It is noted that 50% of the proceeds from

– 18 –

LETTER FROM KINGSWAY

Placing A will be applied towards potential property investment. We have reviewed the documents provided by the Company and understand the Company is actively evaluating certain property investment opportunities in Hong Kong. Furthermore, we noted from the Interim Results 2014/15, the Group had plans to operate a mini warehouse business, where the relevant renovation work is in progress. The Directors confirmed that the Group will set aside certain amount of cash resources for this purpose.

To further broaden the income base of the Group and provide more financial solutions to manufacturing customers, the Group had forayed into money lending and financial leasing businesses in the previous year. As disclosed in the announcement dated 11 December 2013 and Annual Report 2014, the Group commenced the money lending business in Hong Kong through a wholly-owned subsidiary, Grand Prospects Finance International Limited (“ Grand Prospects ”) during the Financial Year 2014. Grand Prospects is a licensed money lender in Hong Kong under the Money Lenders Ordinance (Chapter 163 of the Laws of Hong Kong). Further, as disclosed in the announcement dated 22 July 2013 and the Annual Report 2014, the Group had established a new indirect wholly-owned subsidiary, 上海中星富達 融資租賃有限公司 (“ 中星富達 ”), in Shanghai with a registered capital of US$20 million, of which only approximately US$4 million has been paid up as at the Latest Practicable Date. It is expected the unpaid portion of the registered capital (“ Unpaid Capital ”) will be funded by the Group by way of a combination of equity, debt and/or internal cash resources in the future. The business scope of 中星富達 includes financial leasing, leasing services, acquisition, maintenance and disposal of properties for lease in the PRC and/or abroad, and provision of consultation and guarantee for lease transactions. The Group had commenced operations of both businesses on a small-scale in the previous financial year to familiarise itself with the business. The Group is targeting to further develop both businesses and is actively seeking potential transactions with high returns and of acceptable level of risk.

The Company also reserved some cash for investment in other business opportunities. This is consistent with the diversification strategy of the Group with a view to providing steady returns as well as fruitful growth to its shareholders, as disclosed in the Annual Report 2014. The Group will also continue to seek other high potential projects in the PRC and overseas in a cautious manner. We have reviewed the information given by the Directors and understand the Company is currently studying the business potential of a new type of business relating to online games and mobile applications. But as confirmed by the Directors, the Group will also consider other business opportunities should they arise in the future.

Based on the information given to us by the Directors, we noted that, considering the Group’s working capital requirement, its plan to further invest in property projects, the paying up of Unpaid Capital and other potential investments, the Group’s cash resources will almost be fully utilised.

– 19 –

LETTER FROM KINGSWAY

Having considered the anticipated internally-generated funds and available banking facilities, the Directors confirm that the Group has adequate resources to meet its future capital expenditure and working capital requirements. However, in order to capture new opportunities that may arise in the future, in particular in relation to the new business operations (including but not limited to property, money lending and financial leasing businesses), the Directors are of the view that it is desirable to maintain flexibility in terms of fund raising to finance such future opportunities before the next annual general meeting, notwithstanding the high level of existing cash balances of the Group.

In considering the funding alternatives available to the Group, the Company will take into account factors such as funding cost, the time that may be taken to obtain the funding, as well as prevailing market sentiment and conditions.

In view of the fact that debt financing would impose interest burden and repayment obligations upon the Group and may be subject to lengthy due diligence and negotiations with the banks with reference to the Group’s profitability, financial position, capital structure and the financial market condition at that time, there is uncertainty over the availability of alternative financing. On the other hand, the Directors consider equity financing by way of rights issue or open offer which provides the Shareholders with a pre-emptive pro rata right to participate as an alternative. However, such exercise usually involves a more lengthy process and a lot of administrative work. Accordingly, the Company proposes to refresh the Existing General Mandate to provide the Company with an equity fund raising alternative which is less time consuming. The Directors consider that the proposed refreshment of the Existing General Mandate, which allows the Company to raise capital by responding more efficiently if market conditions become favourable, is in the best interests of the Company and the Shareholders as a whole. Furthermore, as detailed in the parargraph headed “Potential Dilution to Independent Shareholders’ Shareholdings” below, upon full utilisation of the Refreshed General Mandate, shareholdings of all Shareholders will be diluted to the same extent and hence we are in the opinion the potential dilution effect is acceptable.

With regard to the above, notwithstanding that the Group had net current assets of approximately HK$446 million and cash balances of approximately HK$265 million as at 30 September 2014 and unutilised net proceeds from two placings of approximately HK$69.2 million as at the Latest Practicable Date (of which approximately HK$32.2 million form part of the cash balances as at 30 September 2014), having considered (i) the fact that non-cash current assets of the Group consisted mainly of inventories, properties under development, trade and other receivables; (ii) the fact that the Group recorded a loss and an overall net cash outflow as well as net cash outflow in operating activities for the Financial Year 2014 and the Period; (iii) the working capital requirement and capital commitment for business operations of manufacturing and sales of printing products, trading of printing products, music and entertainment businesses and securities trading for the next 12 months

– 20 –

LETTER FROM KINGSWAY

of approximately HK$193 million; (iv) the flexibility to capture new business opportunities when they arise; and (v) the uncertainty over availability of alternative financing; we concur with the Directors that the refreshment of the Existing General Mandate is reasonable in that it would provide a flexible source of equity financing as and when considered necessary and feasible.

Potential Dilution to Independent Shareholders’ Shareholdings

The table below sets out the shareholding structure of the Company (i) as at the Latest Practicable Date; and (ii) for illustrative purpose, upon full utilisation of the Refreshed General Mandate (assuming no further Shares are issued or repurchased by the Company):

Shareholders CNA Company Limited (Note 1) Mr. Suek Chai Hong (Note 2) Mr. Wong Sun Fat (Note 3) Dr. Ng Wai Kwan (Note 2) Public Shareholders Shares to be issued under the refreshed Existing General Mandate Total	As at the Latest Practicable Date Number of Approximate Shares % 398,720,000 27.16 7,000,000 0.48 800,000 0.05 80,000 0.01 1,061,254,560 72.30 – – 1,467,854,560 100.00	Upon full utilisation of the Refreshed General Mandate to be granted to the Directors (assuming no other Shares are issued or repurchased by the Company) Number of Approximate Shares % (Note 4) 398,720,000 22.64 7,000,000 0.40 800,000 0.05 80,000 0.01 1,061,254,560 60.25 293,570,912 16.67 1,761,425,472 100.00

– 21 –

LETTER FROM KINGSWAY

Notes:

1. CNA Company Limited is beneficially owned by a discretionary trust set up by Mr. Suek Ka Lun, Ernie (“ Mr. Ernie Suek ”), an executive Director and the chairman of the Board, the beneficiaries of which include Mr. Ernie Suek, certain family members of Mr. Ernie Suek and a charitable institution set up in Hong Kong.

2. Mr. Ernie Suek is the nephew, of Mr. Suek Chai Hong, an executive Director and the chief executive officer of the Company, and Dr. Ng Wai Kwan, a non-executive Director.

3. Mr. Wong Sun Fat is a non-executive Director.

4. The aggregate percentage may not add up to 100% due to rounding.

The table above illustrates that the shareholding of the public Shareholders in the Company would decrease from approximately 72.3% to approximately 60.3% upon full utilisation of the Refreshed General Mandate assuming no further Share(s) is/are issued or repurchased by the Company after the Latest Practicable Date up to the date of the SGM.

Taking into consideration the benefits of the refreshment of the Existing General Mandate as discussed above and the fact that the shareholdings of all Shareholders will be diluted to the same extent, we consider that the potential dilution effect to shareholding of the existing Independent Shareholders upon full utilisation of the Refreshed General Mandate is acceptable.

RECOMMENDATION

Having taken into account the principal factors and reasons referred to the above, we are of the opinion that the terms of the grant of refreshment of the Existing General Mandate are fair and reasonable so far as the Independent Shareholders are concerned and the grant of refreshment of the Existing General Mandate is in the interests of the Company and the Shareholders as a whole.

Accordingly, we would recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the ordinary resolution(s) to be proposed at the SGM to approve the refreshment of the Existing General Mandate.

Yours faithfully, For and on behalf of Kingsway Capital Limited Alex Chu Liu Kam Yin Executive Director Director

Note: Mr. Alex Chu and Ms. Liu Kam Yin have been responsible officers of Type 6 (advising on corporate finance) regulated activity under the SFO since 2004 and 2008 respectively. They have been participated in the provision of independent financial advisory services for various connected transactions involving companies listed in Hong Kong.

– 22 –

NOTICE OF SGM

NEWAY GROUP HOLDINGS LIMITED 中星集團控股有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 00055)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the special general meeting of Neway Group Holdings Limited (“ Company ”) will be held at 11:00 a.m. on Friday, 16 January 2015 at Camomile Room, Lower Level II, Kowloon Shangri-La Hotel, 64 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong to consider and, if thought fit, pass the following resolution as an ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT :

• (a) the general mandate granted to the directors of the Company (“ Directors ”) to allot, issue and deal with the unissued shares of the Company pursuant to an ordinary resolution passed at the annual general meeting of the Company held on 12 September 2014 be and is hereby revoked (without prejudice to any valid exercise of such general mandate prior to the passing of this resolution);

• (b) subject to the following provisions of this resolution, the exercise by the Directors during the Relevant Period (as defined below) of all the powers of the Company to allot, issue and deal with additional shares of HK$0.05 each in the share capital of the Company (“ Shares ”), and to make or grant offers, agreements and options (including warrants, bonds and debentures convertible into Shares) which would or might require the exercise of such powers, subject to and in accordance with all applicable laws, be and is hereby generally and unconditionally approved;

• (c) the approval in paragraph (b) of this resolution shall authorise the Directors during the Relevant Period (as defined below) to make or grant offers, agreements and options (including warrants, bonds and debentures convertible into Shares) which would or might require the exercise of such powers after the end of the Relevant Period (as defined below);

• For identification purpose only

SGM – 1

NOTICE OF SGM

• (d) the aggregate nominal amount of share capital of the Company allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the Directors pursuant to the approval in paragraph (b) of this resolution, otherwise than pursuant to (i) a Rights Issue (as defined below); (ii) the exercise of the conversion rights attaching to any convertible securities issued by the Company; (iii) the exercise of warrants to subscribe for Shares; (iv) the exercise of options granted under any share option scheme or similar arrangement for the time being adopted by the Company; or (v) an issue of Shares in lieu of the whole or part of a dividend on Shares in accordance with the bye-laws of the Company (“ Bye-laws ”); shall not exceed 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of the passing of this resolution, and the said approval shall be limited accordingly; and

• (e) for the purposes of this resolution:

“ Relevant Period ” means the period from the passing of this resolution until whichever is the earliest of

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the Bye-laws or any applicable laws of Bermuda to be held; or

• (iii) the date on which such mandate is revoked or varied by an ordinary resolution of the shareholders of the Company in general meeting.

“ Rights Issue ” means an offer of Shares open for a period fixed by the Directors to the holders of Shares or any class of Shares whose names appear on the registers of members of the Company on a fixed record date in proportion to their then holdings of such Shares as at that date (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory applicable to the Company).”

On behalf of the Board

NEWAY GROUP HOLDINGS LIMITED SUEK Ka Lun, Ernie Chairman

Hong Kong, 29 December 2014

SGM – 2

NOTICE OF SGM

Registered office: Clarendon House Church Street Hamilton, HM11 Bermuda

Principal Place of Business in Hong Kong: Chung Tai Printing Group Building 11 Yip Cheong Street On Lok Tsuen, Fanling New Territories Hong Kong

Notes:

1. A member entitled to attend and vote at the special general meeting convened by the above notice is entitled to appoint one or more proxy to attend and, subject to the provisions of the bye-laws of the Company, to vote on his/ her behalf. A proxy need not be a member of the Company, but must be present in person at the special general meeting to represent the member. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed.

2. In order to be valid, the form of proxy must be deposited together with a power of attorney or other authority, if any, under which it is signed or a certified copy of that power or authority, at the Company’s branch share registrar and transfer office in Hong Kong, Tricor Secretaries Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for holding the meeting or adjourned meeting. Completion and return of the form of proxy will not preclude a member of the Company from attending and voting in person at the special general meeting or any adjournment thereof, should he/she so wish and in such case, the form of proxy previously submitted shall be deemed to be revoked.

3. As at the date of this notice, the directors of the Company are Mr. SUEK Ka Lun (Chairman) and Mr. SUEK Chai Hong (Chief Executive Director) being the executive directors; Dr. NG Wai Kwan, Mr. CHAN Kwing Choi, Warren and Mr. WONG Sun Fat being the non-executive directors; and Mr. TSE Tin Tai, Ms. LUI Lai Ping, Cecily and Mr. LEE Kwok Wan being the independent non-executive directors; and Mr. LAU Kam Cheong being the alternate director to Dr. NG Wai Kwan.

SGM – 3