China Energy Storage Technology Development Limited — Capital/Financing Update 2017

Oct 13, 2017

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.

This announcement appears for information purpose only and does not constitute an invitation or offer to acquire, purchase, or subscribe for securities.

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CHINA HEALTHCARE ENTERPRISE GROUP LIMITED 華 夏 健 康 產 業 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1143)

SUBSCRIPTION OF NEW SHARES UNDER GENERAL MANDATE

SHARE SUBSCRIPTION

On 13 October 2017 (after trading hours), the Company entered into the Subscription Agreement with the Subscriber pursuant to which the Subscriber has conditionally agreed to subscribe for and the Company has conditionally agreed to issue a total of 990,000,000 Subscription Shares at a price of HK$0.3 per Subscription Share.

The Subscription Shares represent approximately 19.98% of the existing issued share capital of the Company as at the date of this announcement and approximately 16.65% of the issued share capital of the Company as enlarged by the Subscription Shares. The Subscription Price is equal to the closing price of the Shares as at the date of the Subscription Agreement and a premium of approximately 70.65% to the average closing price of the Shares for the last five consecutive trading days prior to the date of the Subscription Agreement. The net proceeds of the Share Subscription, after deduction of the relevant expenses, are estimated to be of approximately HK$295 million.

WARNING

Shareholders and potential investors of the Company should note that the Completion is subject to fulfilment of the conditions under the Subscription Agreement. As the Share Subscription may or may not complete, Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares and if there is any doubt about their positions, they should consult their professional advisers.

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SHARE SUBSCRIPTION

On 13 October 2017 (after trading hours), the Company entered into the Subscription Agreement with the Subscriber pursuant to which the Subscriber has conditionally agreed to subscribe for and the Company agreed to issue a total of 990,000,000 Subscription Shares at a price of HK$0.3 per Subscription Share.

The Subscription Agreement

Date: 13 October 2017 Issuer: The Company. The Group is principally engaged in (i) electronic manufacturing services; (ii) marketing and distribution of communications products; (iii) trading and selling of medical equipments; and (iv) securities and other assets investments. Subscriber: Keywan Global Limited, a company incorporated in the British Virgin Islands with limited liability which is legally and beneficially owned as to 100% by Mr. He Xiaoming. The Subscriber is an investment holding company. To the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiries, the Subscriber and its ultimate beneficial owner, and their associates are parties independent of and not connected with (i) the Company and the Directors, chief executive or substantial shareholders of the Company or any of their respective associates; and (ii) the parties to the sale and purchase agreement dated 11 October 2017 entered into between 華氏管理諮詢(深圳)有限公司 (Huashi Management Consultancy (Shenzhen) Limited*) and 蘭州科天投資控股股份有限 公司 (Lanzhou Scisky Investment CMI Holding Company Limited*), in relation to the Group’s proposed acquisition of a polyurethane condom business.

Number of the 990,000,000 new Shares under the Subscription Agreement, Subscription Shares: representing (i)19.98% of the existing issued share capital of the Company as at the date of this announcement; (ii) approximately 16.65% of the issued share capital of the Company as enlarged by the Subscription Shares.

The Subscription Shares

The Subscription Shares, when issued and fully paid, will rank pari passu among themselves and with Shares in issue at the time of issue and allotment of the Subscription Shares.

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The Subscription Shares will be issued pursuant to the General Mandate granted to the Directors at the annual general meeting of the Company held on 29 May 2017. The Directors were authorised to allot and issue up to 991,062,280 Shares pursuant to the General Mandate. As at the date of this announcement, the General Mandate has not yet been utilized. The Share Subscription is not subject to any further approval by the shareholders of the Company.

The Company will apply to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Subscription Shares.

Subscription Price

HK$0.3 per Subscription Share, which was arrived at after arm’s length negotiation among the Company and the Subscriber with reference to the prevailing market price of the Shares.

The Subscription Price represents:

• (i) the closing price of HK$0.3 per Share as quoted on the Stock Exchange on 13 October 2017, being the date of the Subscription Agreement; and

• (ii) a premium of approximately 70.65% to the average closing price of approximately HK$0.1758 per Share as quoted on the Stock Exchange for the last five consecutive trading days prior to the date of the Subscription Agreement.

The gross proceeds from the Share Subscription is HK$297 million. The Company will bear the costs and expenses in connection with the Share Subscription and the net proceeds from the Share Subscription is estimated to be approximately HK$295 million. As a result, the net price per Subscription Share will be approximately HK$0.298.

Conditions

Completion is conditional upon, among other things, the following conditions precedent having been fulfilled on or before 13 November 2017 (or such other date as the parties thereto the Subscription Agreement may agree in writing):

1. the Listing Committee of the Stock Exchange having granted the listing of and permission to deal in all the Subscription Shares;

2. all other Consents of the Stock Exchange, the SFC and any other applicable governmental or regulatory authorities or any other third party which are required or appropriate for the entering into and the implementation of the Subscription Agreement having been given; and all applicable statutory and legal obligations, all applicable securities regulations and all requirements of the applicable authorities having been complied with; and

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1. the Shares remaining listed and traded on the Stock Exchange at all times from the date of the Subscription Agreement up to the Completion Date, save for any temporary suspension not exceeding seven consecutive trading days (other than any temporary suspension relating to the clearance of any announcement in respect of the Subscription Agreement), or such longer period as the Subscribers may accept; and no indication being received on or before the Completion Date from the Stock Exchange and/or the SFC to the effect that the listing of the Shares or the Subscription Shares (as the case may be) on the Stock Exchange will or may be withdrawn or objected to (or conditions will or may be attached thereto) as a result of the Completion or in connection with the terms of the Subscription Agreement.

Completion is expected to take place on or before the fifth Business Day after all the conditions precedent of the Subscription Agreement having been fulfilled (or such other date as the parties thereto the Subscription Agreement may agree in writing). The Share Subscription is not subject to Shareholders’ approval.

Effects of the Share Subscription

The below table demonstrates the effect of the Share Subscription on the shareholding structure of the Company:

Name of the ShareholdersPower Port Holdings Limited (Note 1)Empire Group Global Limited (Note 2)Partners Special Investments FundSP2 (Note 3)The SubscriberPublic ShareholdersTotal	As at the date of thisannouncementNumber ofShares%1,516,340,00030.60718,600,00014.50738,400,00014.90001,981,971,40040.004,955,311,400100.00	Immediately upon completionof the Share SubscriptionNumber ofShares%1,516,340,00025.50718,600,00012.09738,400,00012.42990,000,00016.651,981,971,40033.345,945,311,400100.00	Immediately upon completionof the Share SubscriptionNumber ofShares%1,516,340,00025.50718,600,00012.09738,400,00012.42990,000,00016.651,981,971,40033.345,945,311,400100.00
			100.00

Note:

1. 1,516,340,000 ordinary shares are held by Power Port Holdings Limited, a company incorporated in the British Virgin Islands whose entire issued share capital is held by Mr. Yang Zhihui.

2. 718,600,000 ordinary shares are held by Empire Group Global Limited, a company incorporated in the British Virgin Islands whose entire issued share capital is held by China Huarong International Holdings Limited.

3. 738,400,000 ordinary shares are held by Partners Special Investments Fund SP2, a company incorporated in the British Virgin Islands whose entire issued share capital is held by Azaleas Investment Holding Limited, which in turn is wholly controlled by China Huarong International Holdings Limited.

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Reasons for the Share Subscription and the use of proceeds

The Board considers that the Share Subscription will further strengthen the capital base of the Company and will improve its credit fundamentals. The net proceeds of the Share Subscription, after deduction of the relevant expenses, are estimated to be of approximately HK$295 million, which is intended to be used by the Company to finance the proposed acquisition of a polyurethane condom business as announced on 11 October 2017 and/or the general working capital of the Group. It is the original plan of the Board to finance the said acquisition by internal resources and/or debt financing. Nevertheless, based on the prevailing market condition, the Board considers that it should from time to time consider different financing methods which is favourable to the Group. The Directors (including the independent non-executive Directors) are of the view that the Share Subscription is in the interests of the Company and the Shareholders as a whole.

Fund raising exercise of the Company within 12 months prior to the date of this announcement

The Company has not conducted any fund raising activities in the past twelve months immediately before the date of this announcement.

WARNING

Shareholders and potential investors of the Company should note that the Completion is subject to fulfilment of the conditions under the Subscription Agreement. As the Share Subscription may or may not complete, Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Shares and if there is any doubt about their positions, they should consult their professional advisers.

DEFINITION

In this announcement, unless the context otherwise requires, the following terms shall have the following meanings:

• ‘‘associate(s)’’ has the meaning ascribed thereto under the Listing Rules ‘‘Board’’ the board of Directors ‘‘Business Day’’ a day (other than a Saturday, Sunday and public holiday) on which banks are generally open for business in Hong Kong

• ‘‘Company’’ China Healthcare Enterprise Group Limited, a company incorporated in the Cayman Islands with limited liability and the securities of which are listed on the Main Board of the Stock Exchange

• ‘‘Completion’’ the completion of the Subscription Agreement ‘‘Completion Date’’ the actual date of completion of the Share Subscription pursuant to the Subscription Agreement

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‘‘Consent(s)’’ including any license, consent, approval, authorization, permission, waiver, order or exemption ‘‘Director(s)’’ director(s) of the Company ‘‘General Mandate’’ the general mandate granted to the Directors at the annual general meeting of the Company held on 29 May 2017 to allot or otherwise deal with the unissued Shares ‘‘Group’’ the Company and its subsidiaries ‘‘HK$’’ Hong Kong dollar, the lawful currency of Hong Kong ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the People’s Republic of China ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange ‘‘SFC’’ the Securities and Futures Commission ‘‘Share(s)’’ ordinary share(s) of HK$0.001 each in the share capital of the company ‘‘Share Subscription’’ the subscription for the Subscription Shares by the Subscriber pursuant to the Subscription Agreement ‘‘Shareholder(s)’’ the holder(s) of issued Shares ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘Subscriber’’ Keywan Global Limited, a company incorporated in the British Virgin Islands with limited liability ‘‘Subscription Agreement’’ the subscription agreement entered into on 13 October 2017 between the Company and the Subscriber ‘‘Subscription Price’’ HK$0.3 per Subscription Share with nominal value of HK$0.001 each ‘‘Subscription Shares’’ an aggregate of 990,000,000 new Shares to be issued under the Subscription Agreement ‘‘%’’ per cent

By order of the Board China Healthcare Enterprise Group Limited Gong Shaoxiang Chairman and Executive Director

Hong Kong, 13 October 2017

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As at the date of this announcement, the Board comprises Mr. Gong Shaoxiang (Chairman), Mr. Lee Chi Hwa Joshua and Mr. Duan Chuanhong as executive Directors, Mr. Cao Yuyun as non-executive Director and Mr. Bao Jinqiao, Mr. Wong Chun Hung and Mr. Leung Pok Man as independent non-executive Directors.

• For identification purpose only

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