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 licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional advisers.

If you have sold or transferred all your shares in the Company, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

CHINA FIRST CAPITAL GROUP LIMITED 中國首控集團有限公司

(formerly known as China Vehicle Components Technology Holdings Limited

中國車輛零部件科技控股有限公司 )

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 1269)

MAJOR AND CONNECTED TRANSACTION — DEEMED DISPOSAL RELATING TO SUBSCRIPTION OF EQUITY INTEREST IN A SUBSIDIARY; AND NOTICE OF EXTRAORDINARY GENERAL MEETING

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

Capitalised terms used in this cover page have the same meanings as those defined in this circular.

A letter from the Board is set out on pages 4 to 12 in this circular. A letter from the Independent Board Committee containing its recommendation to the Independent Shareholders is set out on pages 13 to 14 in this circular. A letter from Goldin Financial containing its advice in respect of the Subscription Agreement and the transactions contemplated thereunder) to the Independent Board Committee and the Independent Shareholders is set out on pages 15 to 27 in this circular.

A notice convening the EGM to be held at 10:30 a.m. on Monday, 5 October 2015 at Units 4501-02 & 12-13, 45/F, The Center, 99 Queen’s Road Central, Hong Kong is set out on pages EGM-1 to EGM-2 in this circular.

A form of proxy for use at the EGM is enclosed.

Whether or not you are able to attend the meeting, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to Hong Kong branch share registrar and transfer office of the Company, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong 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. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the meeting or any adjournment thereof should you so wish.

14 September 2015

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . .	13
LETTER FROM GOLDIN FINANCIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
APPENDIX I — FINANCIAL INFORMATION OF THE GROUP . . . . . . . . .	APP I-1
APPENDIX II — GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . .	APP II-1
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1

DEFINITIONS

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

“Announcement”

the announcement of the Company dated 10 August 2015 relating to, among other things, the Subscription Agreement and the transactions contemplated thereunder

“associates”

has the meaning ascribed thereto under the Listing Rules

“Board”
the board of Directors
“Company”

China First Capital Group Limited 中國首控集團有限公司, 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

“Completion”

Completion of the Subscription in accordance with the Subscription Agreement

“connected person(s)”

has the meaning as ascribed thereto under the Listing Rules

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

the extraordinary general meeting of the Company to be convened to consider and, if thought fit, approve the Subscription Agreement and the transactions contemplated thereunder

“Goldin Financial”

Goldin Financial Limited, a corporation licensed to carry out 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 on the terms of the Subscription Agreement and the transactions contemplated thereunder

“Group”

the Company and its subsidiaries

“Hong Kong”

the Hong Kong Special Administrative Region of the PRC

“Independent Board Committee”

an independent board committee of the Board comprising all independent non-executive Directors which has been established to advise the Independent Shareholders on the terms of the Subscription Agreement and the transactions contemplated thereunder

– 1 –

DEFINITIONS

“Independent Shareholders” Shareholders other than (i) Mr. Zhao and his associates; and (ii) any other Shareholders who are required by the Listing Rules to abstain from voting in respect of the resolution(s) relating to the Subscription Agreement and the transactions contemplated thereunder at the EGM
“Latest Practicable Date” 11 September 2015, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange
“Mr. Zhao” Mr. Zhao Zhijun, the executive Director
“Nanyang Cijan” Nanyang Cijan Auto Shock Absorber Co., Ltd. (南陽淅減汽車減振器有限公司), a company established in the PRC with limited liability on 23 June 2005 and an indirect wholly-owned subsidiary of the Company as at the Latest Practicable Date
“PRC” the People’s Republic of China, for the purpose of this circular, excluding Hong Kong, the Macau Special Administrative Region and Taiwan
“SFO” Securities and Future Ordinance (Cap. 571 of the Laws of Hong Kong)
“Share(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company
“Shareholder(s)” holder(s) of the Shares
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“Subscriber” Nanyang Zhiyuan Industrial Limited* (南陽智源實業有限公司), a company established in the PRC with limited liability
“Subscription” the subscription of the Subscription Interest by the Subscriber pursuant to the Subscription Agreement
“Subscription Agreement” the subscription agreement dated 10 August 2015 and entered into between Nanyang Cijan and the Subscriber in relation to the Subscription

– 2 –

DEFINITIONS

“Subscription	Interest”	30% of the equity interest in Nanyang Cijan
“Subscription	Price”	RMB110,000,000
“HK$”		Hong Kong dollars, the lawful currency of Hong Kong
“RMB”		Renminbi, the lawful currency of the PRC
“%”		per cent

For the purpose of this circular, unless otherwise indicated, the exchange rate of RMB1.00 = HK$1.21 has been used, where applicable, for purpose of illustration only and it does not constitute any representation that any amount has been, could have been or may be exchanged at that rate or at any other rate.

For identification purpose only

– 3 –

LETTER FROM THE BOARD

CHINA FIRST CAPITAL GROUP LIMITED 中國首控集團有限公司

(formerly known as China Vehicle Components Technology Holdings Limited 中國車輛零部件科技控股有限公司 )

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 1269)

Executive Directors: Mr. Wilson Sea (Chairman) Mr. Zhao Zhijun (Chief Executive Officer) Mr. Yan Haiting Mr. Wang Wenbo Ms. Yang Weixia Mr. Wang Ping

Registered Office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Independent Non-executive Directors: Mr. Chu Kin Wang, Peleus Mr. Li Zhiqiang Mr. Zhang Jinhua

Principal place of business in Hong Kong: Units 4501–02 & 12–13, 45/F The Center 99 Queen’s Road Central Hong Kong 14 September 2015

To the Shareholders

Dear Sir or Madam,

MAJOR AND CONNECTED TRANSACTION — DEEMED DISPOSAL RELATING TO SUBSCRIPTION OF EQUITY INTEREST IN A SUBSIDIARY; AND NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the Announcement, whereby the Company announced that on 10 August 2015 (after trading hours), Nanyang Cijan (an indirect wholly-owned subsidiary of the Company as at the Latest Practicable Date) and the Subscriber entered into the Subscription Agreement, pursuant to which Nanyang Cijan has agreed to issue, and the Subscriber has agreed to subscribe for, the Subscription Interest at the Subscription Price by way of capital injection into the registered capital of Nanyang Cijan in cash.

– 4 –

LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among other things, (i) further details of the Subscription Agreement and the transactions contemplated thereunder; (ii) the recommendation of the Independent Board Committee in relation to the Subscription Agreement and the transactions contemplated thereunder; (iii) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the Subscription Agreement and the transactions contemplated thereunder, together with the notice of the EGM.

SUBSCRIPTION AGREEMENT

Date: 10 August 2015 Parties: (i) Nanyang Cijan, an indirect wholly-owned subsidiary of the Company as at the Latest Practicable Date
(ii) the Subscriber

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, as at the Latest Practicable Date, the Subscriber was wholly-owned by Mr. Zhao and his spouse and hence a connected person of the Company under Chapter 14A of the Listing Rules.

Subscription

Nanyang Cijan has agreed to issue, and the Subscriber has agreed to subscribe for, 30% of the equity interest in Nanyang Cijan by way of capital injection into its registered capital at the consideration of RMB110 million in cash.

Subscription Price

The Subscription Price was arrived at after arm’s length negotiations among the parties to the Subscription Agreement with reference to (i) the net asset value of Nanyang Cijan of approximately RMB307.90 million as at 30 June 2015; (ii) the weakened financial performance of Nanyang Cijan in recent financial years; and (iii) other factors as set out in “Reasons for and benefits of the Subscription” of this circular.

In assessing the fairness of the Subscription Price, the Company has considered, among other things, the development trend of the automotive manufacturing industry in the PRC, the recent weakened financial position of Nanyang Cijan, the development trend of Nanyang Cijan in particular its increased capital requirements, and the price-to-earnings ratio and price-to-book

– 5 –

LETTER FROM THE BOARD

ratio of comparable companies to Nanyang Cijan on 24 July 2015 (the ratios as of 24 July 2015 were prepared for the Board’s consideration in advance and facilitating negotiations with the Subscriber). The Company have identified companies which (i) are listed on the Stock Exchange; (ii) are principally engaged in the similar businesses as Nanyang Cijan (the “Relevant Businesses”); (iii) recorded at least 50% of their revenues for their respective latest financial year being derived from the Relevant Businesses; and (iv) recorded at least 50% of revenue being generated from the PRC. On this basis, the following comparable companies have been taken into consideration by the Company:

			Price-to-	Price-to-
Comparable	Stock	Relevant principal	earnings	book
companies	code	businesses	ratio	ratio
			(times)(1)	(times)(2)
Jinheng Automotive	872	Design, research and	N/A(3)	2.37
Safety Technology		development,
Holdings Ltd.		manufacture and sale of
		automotive electronic
		products and automotive
		safety spare parts in
		the PRC
Zhejiang Prospect	8273	Manufacture and sale of	N/A(3)	0.68
Co. Ltd.		universal joints for
		automobiles
Zhejiang Shibao	1057	Manufacture and sales of	29.24	0.99
Company Limited		automotive components,
		sales of metal materials,
		electromechanical
		products and electronic
		products, sales of
		automobiles
Huazhong In-Vehicle	6830	Manufacture and sale of	17.40	2.96
Holdings Company		internal and external
Limited		decorative and structural
		automobile parts,
		moulds and tooling,
		casing and liquid tanks
		of air-conditioning or
		heater units and other
		non-automobile products

– 6 –

LETTER FROM THE BOARD

			Price-to-	Price-to-
Comparable	Stock	Relevant principal	earnings	book
companies	code	businesses	ratio	ratio
			(times)(1)	(times)(2)
Minth Group Ltd.	425	Manufacturing and sales of	12.29	1.66
		automobile body parts
Xiezhong International	3663	Manufacturing, sale of	34.93	1.80
Holdings Ltd.		automotive HVAC
		systems and a range of
		automotive HVAC
		components, and
		rendering of services
Shuanghua Holdings	1241	Design, development,	49.22	0.85
Ltd.		manufacture and sale of
		parts of auto
		air-conditioners
		Maximum	49.22	2.96
		Minimum	12.29	0.68
		Average	28.62	1.62
The Subscription(4)			78.68	1.19
The Subscription(5)			14.25	1.19

Notes:

The price-to-earnings ratios of the comparable companies are calculated by dividing respective market capitalisation of the comparable companies on 24 July 2015 by respective profits attributable to owners of the comparable companies as extracted from their respective latest published annual reports/annual results announcements.
The price-to-book ratios of the comparable companies are calculated by dividing respective closing share prices of the comparable companies as quoted on the Stock Exchange on 24 July 2015 by respective net asset values per share calculated based on the information as disclosed in their respective latest published annual/interim reports or annual/interim results announcement.
Price-to-earnings ratio is not applicable as the computed figure is negative.
Price-to-earnings ratio calculated based on the net profit after tax of Nanyang Cijan for the year ended 31 December 2014.
Price-to-earnings ratio calculated based on the adjusted net profit after tax of Nanyang Cijan excluding the material one-off items relating to factory relocation and government grants for the year ended 31 December 2014.

– 7 –

LETTER FROM THE BOARD

As demonstrated above, the price-to-earning ratios of the Subscription of (i) approximately 78.68 times fall above the range of the comparable companies; and (ii) approximately 14.25 times fall within the range of and is below the average as represented by the comparable companies. As also demonstrated above, the price-to-book ratios of the Subscription of approximately 1.19 times fall within the range and is below the average as represented by the comparable companies.

The Company considers that the Subscription Price is fair and reasonable.

Conditions precedent

Completion is subject to the satisfaction and (as the case may be) waiver of the following conditions precedent:

(1) the Independent Shareholders have approved the Subscription Agreement and the transactions contemplated thereunder at general meeting of the Company;
(2) Nanyang Cijan having obtained from the relevant government authorities in the PRC all the relevant approvals for the Subscription and the transactions contemplated thereunder; and
(3) the representations and warranties given by the Subscriber under the Subscription Agreement are true and accurate in all material respects from the date of the Subscription Agreement to the date of Completion.

Nanyang Cijan may in writing waive condition (3) above prior to the Completion.

If any of the above conditions precedent is not satisfied on or before 31 December 2015 (or such other date as may be agreed by the parties to the Subscription Agreement), the Subscription Agreement shall be terminated and, save for any antecedent breach, the rights and obligations of each of the parties to the Subscription Agreement shall cease and determine.

Completion

Completion shall take place within fourteen (14) days following the satisfaction and (as the case may be) waiver of the above conditions precedent (or at such other date as may be agreed by the parties to the Subscription Agreement).

The Subscription Price shall be payable in full by the Subscriber by cash on Completion.

Following the payment of the Subscription Price by the Subscriber, Nanyang Cijan shall complete the necessary registration procedures with the relevant authorities in the PRC and provide the necessary documents to the Subscriber confirming that it is the owner of the Subscription Interest.

INFORMATION OF NANYANG CIJAN

Nanyang Cijan is a company established in the PRC with limited liability and is principally engaged in the research and development, design, manufacturing and sale of various automobile shock absorbers.

– 8 –

LETTER FROM THE BOARD

Pursuant to the Subscription Agreement, the registered capital of Nanyang Cijan will be increased from HK$170,000,000 (which was contributed by the Group) to RMB264,853,000 (equivalent to HK$320,472,130). Upon the issue of the Subscription Interest, the equity interest of Nanyang Cijan will be held as to 70% by the Group and 30% by the Subscriber.

Set out below is the unaudited financial information of Nanyang Cijan for the two years ended 31 December 2014:

	For the year ended 31 December	For the year ended 31 December
	2013	2014
	RMB’000	RMB’000
Turnover	634,171	830,704
Net profit before tax	54,169	7,112
Net profit after tax	44,714	4,663

As at 30 June 2015, the unaudited net assets of Nanyang Cijan was approximately RMB307.90 million.

For the year ended 31 December 2013 and 2014, the Group’s revenue amounted to RMB634.17 million and RMB830.70 million, respectively, and the Group’s profit amounted to RMB39.30 million and RMB2.56 million, respectively. For the year ended 31 December 2013 and 2014, the revenue of the Group’s was entirely contributed by Nanyang Cijan which also significantly contributed to the Group’s net profit.

Based on the information available to the Company, (i) the earning attributable to the owners of the Company will be reduced by 30% in relation to the profit or loss of Nanyang Cijan after completion of the capital injection to Nanyang Cijan by the Subscriber; and (ii) given the deemed disposal will not change the Company's controlling interest in Nanyang Cijan, the Subscription will be treated as an equity transaction and no gain or loss is expected to be incurred by the Group upon completion of the Subscription.

Upon the issue of the Subscription Interest, the Group and the Subscriber will own 70% and 30% of the equity interest of Nanyang Cijan, respectively. Nanyang Cijan will become a non-wholly owned subsidiary of the Company but its financial information will remain to be consolidated in the accounts of the Company. The Company currently does not have any plan to dispose of its equity interest in Nanyang Cijan. Nanyang Cijan currently does not have any plan to issue further equity interest which may further dilute the Company’s equity interest in Nanyang Cijan.

APPLICATION OF PROCEEDS FROM THE SUBSCRIPTION

Nanyang Cijan intends to use proceeds from the Subscription as to RMB60 million for repayment of bank borrowings of Nanyang Cijan; RMB30 million for payment of accounts payable of Nanyang Cijan with a view to obtaining better terms for purchases; and RMB20 million for purchase of raw materials to cater for expansion in production.

– 9 –

LETTER FROM THE BOARD

INFORMATION OF THE SUBSCRIBER

The Subscriber is a company established in the PRC in May 2015 and is an investment holding company.

REASONS FOR AND BENEFITS OF THE SUBSCRIPTION

The Company is an investment holding company. The Group is principally engaged in the research and development, design, manufacturing and sale of various automobile shock absorbers.

Since late 2014, the Group has been paying close attention to the slowdown of the growth of the automotive manufacturing industry in the PRC. The more demanding technology requirements, raising costs and increasing competition have squeezed the profit margin of the automotive components manufacturing industry. In order to facilitate the diversification of the Group’s businesses and further expand its asset portfolio and revenue sources, the Group began to develop new businesses such as investment immigration consulting services and financial consulting services.

It is expected that the gearing ratio of the Group will be improved upon the Completion since the Group will gain additional funds from the proceeds of the Subscription. The Group will be able to allocate more resources to the diversification of the Group into the businesses of investment migration advisory services and financial consultancy and advisory services (as announced by the Company on 31 December 2014 and 16 April 2015) and create more value to the Shareholders.

Having considered the above factors, the Directors (including the independent non-executive Directors), consider that the Subscription Agreement and the transactions contemplated thereunder are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

Following the issue of the Subscription Interest, the equity interest of the Group in Nanyang Cijan will be reduced from 100% to 70%, the Subscription therefore constitute a deemed disposal of the Group’s equity interest in Nanyang Cijan under Rule 14.29 of the Listing Rules.

As the highest of the relevant applicable percentage ratios for the Subscription as a deemed disposal are more than 25% but less than 75%, the Subscription constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is subject to the reporting, announcement and shareholders’ approval requirements.

– 10 –

LETTER FROM THE BOARD

As the Subscriber is wholly-owned by Mr. Zhao and his spouse and hence is a connected person of the Company, the Subscription constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules and is subject to the reporting, announcement, annual review and independent shareholders’ approval requirements.

ESTABLISHMENT OF INDEPENDENT BOARD COMMITTEE AND APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER

The Board has established an Independent Board Committee comprising all independent non-executive Directors to advise the Independent Shareholders on the terms of the Subscription Agreement and the transactions contemplated thereunder and to advise the Independent Shareholders on how to vote on the relevant resolutions in the EGM taking into account the recommendations of Goldin Financial.

The Independent Board Committee has approved the appointment of Goldin Financial as the independent financial adviser of the Company to advise the Independent Board Committee and the Independent Shareholders on the terms of the Subscription Agreement and the transactions contemplated thereunder, and to advise the Independent Shareholders on how to vote on the relevant resolutions in the EGM.

EGM

The EGM will be held at 10:30 a.m. on Monday, 5 October 2015 at Units 4501-02 & 12-13, 45/F, The Center, 99 Queen’s Road Central, Hong Kong, at which an ordinary resolution will be proposed to consider and, if thought fit, approve the Subscription Agreement and the transactions contemplated thereunder. The notice of the EGM is set out on pages EGM-1 to EGM-2 in this circular and a form of proxy for use at the EGM is enclosed.

The resolution to be put to vote at the EGM will be taken by way of poll in accordance with the Listing Rules.

Mr. Zhao and his associates, who were interested in 16,800,000 Shares as at the Latest Practicable Date, will abstain from voting at the EGM regarding the Subscription Agreement and the transactions contemplated thereunder. In addition, Mr. Zhao has abstained from voting on the relevant resolutions of the Board.

Whether or not you are able to attend the meeting, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the Hong Kong branch share registrar and transfer office of the Company, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong 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. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the meeting or any adjournment thereof should you so wish.

RECOMMENDATION

Your attention is drawn to the letter from the Independent Board Committee set out on pages 13 to 14 in this circular which contains its recommendation to the Independent Shareholders as to voting at the EGM in relation to the Subscription Agreement and the transactions contemplated thereunder.

– 11 –

LETTER FROM THE BOARD

Your attention is also drawn to the letter from Goldin Financial set out on pages 15 to 27 in this circular which contains its advice to the Independent Board Committee and the Independent Shareholders as regards to the Subscription Agreement and the transactions contemplated thereunder.

The Directors (including the independent non-executive Directors) consider that Subscription Agreement and the transactions contemplated thereunder are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Independent Shareholders to vote in favour of the resolution(s) to be proposed at the EGM to approve the Subscription Agreement and the transactions contemplated thereunder.

You are advised to read the letter from the Independent Board Committee and the letter from Goldin Financial mentioned above before deciding how to vote on the resolution(s) to be proposed at the EGM.

ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendices to this circular.

Yours faithfully, By order of the Board of China First Capital Group Limited Wilson Sea Chairman

– 12 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

CHINA FIRST CAPITAL GROUP LIMITED 中國首控集團有限公司

(formerly known as China Vehicle Components Technology Holdings Limited 中國車輛零部件科技控股有限公司 )

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 1269)

14 September 2015

To the Independent Shareholders,

Dear Sir or Madam,

MAJOR AND CONNECTED TRANSACTION — DEEMED DISPOSAL RELATING TO SUBSCRIPTION OF EQUITY INTEREST IN A SUBSIDIARY

We refer to the circular of the Company dated 14 September 2015 (the “ Circular ”) of which this letter forms part. Capitalised terms defined in the Circular have the same meanings when used herein unless the context otherwise requires.

We have been appointed by the Board as members of the Independent Board Committee to advise the Independent Shareholders in respect of the Subscription Agreement and the transactions contemplated thereunder and to recommend whether or not the Independent Shareholders should vote on the resolutions to be proposed at the EGM to approve the Subscription Agreement and the transactions contemplated thereunder.

Goldin Financial has been appointed as the independent financial adviser of the Company to advise the Independent Board Committee and the Independent Shareholders in this regard.

We wish to draw your attention to the “Letter from the Board” set out in the Circular and the “Letter from Goldin Financial” set out in the Circular to the Independent Board Committee and the Independent Shareholders which contains Goldin Financial’s advice to us in relation to the Subscription Agreement and the transactions contemplated thereunder.

– 13 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having taken into account the principal reasons and factors considered by, and the advice of, Goldin Financial as set out in its letter of advice to you and us on pages 15 to 27 of the Circular, we are of the opinion that the Subscription Agreement and the transactions contemplated thereunder are on normal commercial terms, are in the interests of the Independent Shareholders and the terms of which are fair and reasonable insofar as the Independent Shareholders are concerned. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Subscription Agreement and the transactions contemplated thereunder.

Yours faithfully,

Mr. Li Zhiqiang Independent non-executive Director

For and on behalf of the Independent Board Committee of China First Capital Group Limited Mr. Zhang Jinhua Independent non-executive Director

Mr. Chu Kin Wang, Peleus Independent non-executive Director

– 14 –

LETTER FROM GOLDIN FINANCIAL

The following is the full text of the letter from Goldin Financial setting out the advice to the Independent Board Committee and the Independent Shareholders in respect of the Subscription Agreement and the transactions contemplated thereunder which has been prepared for the purpose of inclusion in this circular.

==> picture [182 x 42] intentionally omitted <==

Goldin Financial Limited

23rd Floor Two International Finance Centre 8 Finance Street Central, Hong Kong

14 September 2015

To: the Independent Board Committee and

the Independent Shareholders of China First Capital Group Limited (formerly known as China Vehicle Components Technology Holdings Limited)

Dear Sirs,

MAJOR AND CONNECTED TRANSACTION — DEEMED DISPOSAL RELATING TO SUBSCRIPTION OF EQUITY INTEREST IN A SUBSIDIARY

INTRODUCTION

We refer to our appointment as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the Subscription Agreement and the transactions contemplated thereunder, details of which are contained in the announcement of the Company dated 10 August 2015 (the “Announcement”) and in the letter from the board (the “Letter from the Board”) of the circular of the Company dated 14 September 2015 (the “Circular”) to the Shareholders, of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

On 10 August 2015 (after trading hours), Nanyang Cijan (an indirect wholly-owned subsidiary of the Company as at the Latest Practicable Date) and the Subscriber entered into the Subscription Agreement, pursuant to which Nanyang Cijan has agreed to issue, and the Subscriber has agreed to subscribe for, the Subscription Interest at the Subscription Price by way of capital injection into the registered capital of Nanyang Cijan in cash.

Upon the issue of the Subscription Interest, the Group and the Subscriber will own 70% and 30% of the equity interest in Nanyang Cijan, respectively, and Nanyang Cijan will become a non-wholly owned subsidiary of the Company.

Following the issue of the Subscription Interest, the equity interest of the Group in Nanyang Cijan will be reduced from 100% to 70%, the Subscription therefore institutes a deemed disposal of the Group’s equity interest in Nanyang Cijan under Rule 13.29 of the Listing Rules.

– 15 –

LETTER FROM GOLDIN FINANCIAL

THE INDEPENDENT BOARD COMMITTEE

The Independent Board Committee comprising Mr. Chu Kin Wang, Peleus, Mr. Li Zhiqiang, and Mr. Zhang Jinhua, being the independent non-executive Directors, has been formed to advise the Independent Shareholders in relation to the Subscription Agreement and the transactions contemplated thereunder.

We, Goldin Financial, have been appointed by the Company as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in relation to the Subscription Agreement and the transaction contemplated thereunder and to make recommendations as to, among others, whether the terms of the Subscription Agreement and the transactions contemplated thereunder are fair and reasonable so far as the Independent Shareholders are concerned, are in the interests of the Company and the Shareholders as a whole, and as to voting in respect of the relevant resolutions at the EGM. Our appointment has been approved by the Independent Board Committee.

Apart from normal professional fees for our services to the Company in connection with the engagements described above, no other arrangement exists whereby we will receive any fees and/or benefits from the Group. We are not aware of any relationships or interests between us and the Group, the Subscriber or any of their respective substantial shareholders, directors or chief executive, or any of their respective associates as at the Latest Practicable Date. We are independent under Rule 13.84 of the Listing Rules to act as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in connection with the Subscription Agreement and the transactions contemplated thereunder.

BASIS OF OUR ADVICE

In formulating our opinion and recommendations, we have reviewed, inter alia, the Announcement, the Subscription Agreement, the financial statements of the Company for the year ended 31 December 2014 (the “Annual Report 2014”) and the interim results announcement of the Company for the six month ended 30 June 2014 (the “Interim Results Announcement”). We have also reviewed certain information provided by the management of the Company relating to the operations, financial conditions and prospects of the Group. We have also (i) considered such other information, analyses and market data which we deemed relevant, and (ii) conducted verbal discussions with the management of the Company regarding the terms of the Subscription Agreement, the businesses and future outlook of the Group. We have taken reasonable steps to ensure that such information and statements, and any representation made to us, which we have relied upon in formulating our opinions, are true, accurate and complete in all material respects as of the date hereof and the Shareholders will be notified of any material changes (if any) as soon as possible.

– 16 –

LETTER FROM GOLDIN FINANCIAL

The Directors jointly and severally accept full responsibility for the accuracy of the information contained in the Circular and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in the Circular have been arrived at after due and careful consideration and there are no other facts not contained in the Circular, the omission of which would make any statement herein or in the Circular misleading. We consider that we have been provided with, and we have reviewed, all currently available information and documents which are available under present circumstances to enable us to reach an informed view regarding the terms of, and reasons for entering into, the Subscription Agreement to justify reliance on the accuracy of the information contained in the Circular so as to provide a reasonable basis of our opinion. We have no reasons to suspect that any material information has been withheld by the Directors or management of the Company, or is misleading, untrue or inaccurate. We have not, however, for the purpose of this exercise, conducted any independent detailed investigation or audit into the business or affairs or future prospects of the Group. Our opinion is necessarily based on financial, economic, market and other conditions in effect, and the information made available to us, at the Latest Practicable Date.

This letter is issued for the information for the Independent Board Committee and the Independent Shareholders solely in connection with their consideration of the Subscription Agreement and the transactions contemplated thereunder, except for its inclusion in the Circular, is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purposes, without our prior written consent.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinions and recommendations in respect of the Subscription Agreement and the transactions contemplated thereunder to the Independent Board Committee and the Independent Shareholders, we have taken into account the following principal factors and reasons:

1. Background information of the Group

The Company is an investment holding company. The Group is principally engaged in the research and development, design, manufacturing and sale of various automobile shock absorbers. Set out below are certain audited financial information of the Group for the two years ended 31 December 2013 and 2014 as extracted from the Annual Report 2014 and certain unaudited financial information of the Group for the six months ended 30 June 2014 and 2015, as extracted from the Interim Results Announcement:

Table 1: Financial highlights of the Group

	For the year	For the year	For the six months	For the six months
	ended 31 December		ended 30 June
	2013	2014	2014	2015
	(audited)	(audited)	(unaudited)	(unaudited)
	RMB’000	RMB’000	RMB’000	RMB’000
Revenue	634,171	830,704	343,252	470,636
Profit/(Loss) for
the year/period	39,295	2,557	12,143	(11,102)

– 17 –

LETTER FROM GOLDIN FINANCIAL

	As at 31	December	As at 30 June
	2013	2014	2015
	(audited)	(audited)	(unaudited)
	RMB’000	RMB’000	RMB’000
Non-current assets	683,817	677,403	709,579
Current assets	501,588	666,980	709,940
Current liabilities	655,080	797,127	887,249
Net current liabilities	(153,492)	(130,147)	(177,309)
Net assets	386,861	389,374	382,066

For the year ended 31 December 2014

For the year ended 31 December 2014, the Group recorded revenue of approximately RMB830.70 million, representing an increase of approximately 30.99% compared to approximately RMB634.17 million recorded in the previous year. Based on the Annual Report 2014, the increase in revenue for the year ended 31 December 2014 as compared with the previous year was attributable to (a) an increase of approximately RMB185.68 million or approximately 32.84% in sales income derived from the domestic original equipment manufacturer market (the “OEM Market”) for the year ended 31 December 2014 over the previous year resulting from a growth of approximately 29.82% in unit sales of shock-absorbers in the domestic OEM Market; and (b) an increase of approximately RMB10.85 million or approximately 15.78% in sales income derived from after-sales market over the previous year, and such an increase was mainly driven by the growth in sales volume.

For the year ended 31 December 2014, profit for the year recorded a drop of approximately 93.49% from approximately RMB39.30 million in the year ended 31 December 2013 to approximately RMB2.56 million in the year ended 31 December 2014. The decrease in the Group’s net profit was mainly because the increased income and investment returns recorded by the Group during the year ended 31 December 2014 were offset by the rise of financial expenses and depreciation cost, especially by the large provisions for asset impairment made at the end of the year ended 31 December 2014 for relocation of plant area. The finance costs soared approximately 131.72% from approximately RMB13.65 million in the previous year to approximately RMB31.63 million in the year ended 31 December 2014. Such increase was mainly due to the cease of capitalization of finance costs related to production capacity expansion project in the year ended 31 December 2014 while approximately RMB14.85 million had been capitalized as properties under development in the year ended 31 December 2013. Besides, the other income and expenses, other gains and losses plunged from a gain of approximately RMB31.17 million in the previous year to a loss of approximately RMB16.99 million in the year ended 31 December 2014. Such decrease was mainly due to the following factors: (i) Nanyang Cijan was relocated to new plant area and approximately RMB33.68 million

– 18 –

LETTER FROM GOLDIN FINANCIAL

of impairment provision for certain production facilities in the old plant area and idle plants, ancillary facilities and office buildings after the relocation was made; (ii) government grants received by Nanyang Cijan for this period decreased by approximately RMB9.32 million compared with the year ended 31 December 2013; and (iii) the Group has gained investment return of approximately RMB4.06 million in long-term investment fund in the year ended 31 December 2014.

As at 31 December 2014, the Group’s net current liabilities decreased to approximately RMB130.15 million from approximately RMB153.49 million as at 31 December 2013, representing a drop of approximately RMB23.34 million. Such improvement in net current liabilities position was primarily due to increase in bank deposit at the end of year ended 31 December 2014 as a result of cash flow increment in operating activities arising from the rise in revenue and issuance of corporate bonds in the year ended 31 December 2014. The net assets of the Group amounted to approximately RMB389.37 million, increased by approximately 0.65% from approximately RMB386.86 million as at 31 December 2013.

For the six months ended 30 June 2015

For the six months ended 30 June 2015, the Group recorded revenue of approximately RMB470.64 million, representing an increase of approximately 37.11% compared to approximately RMB343.25 million recorded in the previous corresponding period. Based on the Interim Results Announcement, the increase in revenue for the six months ended 30 June 2015 as compared with the previous corresponding period was attributable to an increase of approximately RMB131.03 million or approximately 42.39% in sales income derived from the OEM Market for the six months ended 30 June 2015 over the previous corresponding period resulting from the Group’s continuous efforts in developing new products and customers and coping with simultaneous product development with existing automobile manufacturers.

For the six months ended 30 June 2015, the Group recorded loss for the period of approximately RMB11.10 million while the Group recorded profit for the period of approximately RMB12.14 million for the previous corresponding period. According to the Interim Results Announcement, such loss for the period of the Group was mainly due to the fact that the increased income of the shock absorber business of the Group during the period were offset by the expenses, especially the increase of provision of receivables and inventory for specific customers, as well as the increase of operational and promotional expenses for migration advisory and financial consultancy services. The finance costs increased significantly by 27.31% from RMB16.55 million in the corresponding period of 2014 to approximately RMB21.07 million for the six months ended 30 June 2015. Such increase was mainly due to an increase in required working capital for shock absorber manufacturing business expansion and commencement of several business including immigration and financial consultancy services during the period, which resulted in the increase of relevant finance costs. Besides, the other income and expenses, other gains and losses changed from a gain of RMB13.47 million in the corresponding period of 2014 to a loss of RMB11.39 million for the six months ended 30 June 2015. Such decrease was

– 19 –

LETTER FROM GOLDIN FINANCIAL

mainly due to the following factors: (i) the government grant received by Nanyang Cijan for the period decreased by approximately RMB5.36 million compared with that of the corresponding period of 2014; and (ii) the provision of receivables and inventory for the period increased approximately by RMB24.40 million, which offset by the investment return increased by approximately RMB2.94 million earned from long-term investment funds of the Group compared with that of the corresponding period of 2014.

As at 30 June 2015, the Group’s net current liabilities amounted to approximately RMB177.31 million, while the net assets of the Group amounted to approximately RMB382.07 million.

Although the Group’s revenue recorded an increase for the six months ended 30 June 2015 comparing with the previous corresponding period, given that (i) the Group recorded a decrease of approximately 93.49% in profit for the year ended 31 December 2014 compared with the previous year and loss for the six months ended 30 June 2015; and (ii) the Group recorded net current liabilities as at 31 December 2014 and as at 30 June 2015, we understand that the financial performance of the Group is relatively weak.

2. Background of and reasons for the entering into of the Subscription Agreement

Information of Nanyang Cijan

Nanyang Cijan is a company established in the PRC and is principally engaged in the research and development, design, manufacturing and sale of various automobile shock absorbers.

Pursuant to the Subscription Agreement, the registered capital of Nanyang Cijan will be increased from HK$170,000,000 (which was contributed by the Group) to RMB264,853,000 (which is equivalent to HK$320,472,130). Upon the issue of the Subscription Interest, the equity interest of Nanyang Cijan will be held as to 70% by the Group and 30% by the Subscriber.

Set out below is the unaudited financial information of Nanyang Cijan for the two years ended 31 December 2014:

Table 2: Financial highlights of Nanyang Cijan

			For the year ended 31 December	For the year ended 31 December
			2013	2014
			RMB’000	RMB’000
Net	profit	before tax	54,169	7,112
Net	profit	after tax	44,714	4,663

As at 30 June 2015, the net assets of Nanyang Cijan was approximately RMB307.90 million.

– 20 –

LETTER FROM GOLDIN FINANCIAL

Upon our enquiry with the management of the Company and based on the information of Nanyang Cijan available to us, we were given to understand that the significant underperformance of the financial performance of Nanyang Cijan for the year ended 31 December 2014 as compared to the previous year was mainly attributable to the material one-off items relating to impairment provision for certain production facilities in the old plant area and idle plants, ancillary facilities and office buildings due to factory relocation of Nanyang Cijan of approximately RMB33.68 million and receipt of government grant of Nanyang Cijan of approximately RMB12.60 million.

Information of the Subscriber

The Subscriber is a company incorporated in the PRC and is an investment holding company.

Reasons for and benefits of the entering into of the Subscription Agreement

Despite the profitable track record of Nanyang Cijan in recent years, since late 2014, the Group has been paying close attention to the slowdown of the growth of the automotive manufacturing industry in the PRC. As advised by the management of the Company, the more demanding technology requirements, raising costs and increasing competition have squeezed the profit margin of the automotive components manufacturing industry. With reference to the statistics released by the National Bureau of Statistics of the PRC for 2014, the annual increment of automotive manufacturing and sale units in the PRC amounted to only approximately 7.26% and approximately 6.86%, which both dropped from approximately 14.76% and approximately 13.87% respectively as compared to that of the previous year. As announced by the China Association of Automobile Manufacturers (中國汽車工業協會), an organization founded in Beijing in 1987 with the approval of the Ministry of Civil Affairs of the PRC, in January 2015 that taking into account the slowdown in the PRC economic growth and on the assumption of absence of automotive stimulus program and/or policy other than the existing ones, the unit growth of automotive in the PRC would be 7.00% in 2015, which declined from 8.00% to 10.00% as estimated for 2014. Considering such estimation could serve as an indication in respect of the future growth rate of automotive in the PRC given the background of the China Association of Automobile Manufacturers and the aforesaid basis in arriving such estimation, it is expected that the historical rising trend of manufacturing and sales business of automobile industry would gradually slow down. Nevertheless, for the first eight months in 2015, both numbers of automotive manufacturing and sale units in the PRC dropped slightly as compared to the previous corresponding period, and the automotive manufacturing and sale units in August 2015 also recorded decreases of approximately 8.4% and approximately 3% respectively, both as compared to the previous corresponding month. Furthermore, the automobile industry in the PRC has been competitive due to the rising labour and raw material costs and the improving technology requirements.

– 21 –

LETTER FROM GOLDIN FINANCIAL

As noted from the Interim Results Announcement, the current liabilities of the Group as at 30 June 2015 was approximately RMB887.25 million, which comprised trade and other payables of approximately RMB460.02 million and borrowings of approximately RMB386.40 million. However, the current assets of the Group as at 30 June 2015 of approximately RMB709.94 million, which comprised trade and other receivables of approximately RMB430.09 million, inventories of approximately RMB112.60 million and bank balances (including restricted) and cash of approximately RMB131.98 million, which was approximately RMB177.31 million less than the current liabilities of the Group as at 30 June 2015. Given that (i) the Group’s net current liabilities position as at 31 December 2014 and as at 30 June 2015; (ii) all short-term debts are due within the next 12 months; (iii) an immediate cash flow would be generated upon Completion and (iv) the cash flow generated would improve the working capital of the Group, we are of the view that the entering into of the Subscriptions Agreement and the transactions contemplated thereunder would strengthen the financial position of the Group.

Following the issue of the Subscription Interest, Nanyang Cijan will become a non-wholly owned subsidiary of the Group, which will enable the Group to benefit from the potential turnaround of Nanyang Cijan while lowering the working capital required on the part of the Group for the business operation of Nanyang Cijan. As stated in the Letter from the Board, Nanyang Cijan intends to use proceeds from the Subscription as to RMB60 million for repayment of bank borrowings of Nanyang Cijan; RMB30 million for payment of accounts payable of Nanyang Cijan with a view to obtaining better terms for purchases; and RMB20 million for purchase of raw materials to cater for expansion in production. Hence it is expected that the Subscription will strengthen the financial flexibility of Nanyang Cijan by broadening its capital sources. On the other hand, the issue of Subscription Interest could serve as an incentive to Mr. Zhao, being the general manager of Nanyang Cijan, for retaining and further motivating him to devote himself to the development of Nanyang Cijan which is beneficial to the long-term growth of Nanyang Cijan.

Considering that (i) the Group’s financial performance for the recent financial years, in particular the weakened profitability for the year ended 31 December 2014 and the six months ended 30 June 2015, and the net current liabilities position as at 31 December 2014 and as at 30 June 2015 as discussed above; (ii) the uncertainty in the future prospect of Nanyang Cijan given the declining growth and the competitive environment of manufacturing and sales of automobile industry in the PRC; (iii) the net proceeds from the Subscription would strengthen the financial position of the Nanyang Cijan by broadening its capital sources; (iv) the entering into of the Subscription Agreement enables the Group to maintain the potential turnaround of the Nanyang Cijan upon the Completion while lowering the working capital required on the part of the Company for the business operation of Nanyang Cijan; and (v) the issue of New Shares could serve as an incentive to Mr. Zhao, being the existing management of Nanyang Cijan, to retain and further motivate him to devote himself to developing Nanyang Cijan which is beneficial to the long-term growth of Nanyang Cijan, we are of the view that the entering into of the Subscription Agreement and the transactions contemplated thereunder is fair and reasonable and is in the interests of the Group and the Shareholders as a whole.

– 22 –

LETTER FROM GOLDIN FINANCIAL

3. Principal terms of the Subscription Agreement

Consideration for the Subscription

Pursuant to the Subscription Agreement, the Subscription Price for the Subscription Interest is RMB110 million.

Comparison with comparable companies

In assessing the fairness and reasonableness of the Subscription Agreement and the transactions contemplated thereunder, we have adopted both the price-to-earnings ratio approach and the price-to-book ratio approach. Given that Nanyang Cijan recorded net profits during the two financial years ended 31 December 2014, we therefore consider that the price-to-earnings ratio analysis is an appropriate method to evaluate the Subscription Price, since price-to-earnings ratio analysis has been considered as a suitable valuation approach for the assessment of the value of businesses with an established and profitable history. Although it is noted that the size of the net asset value may not have direct linkage to the earnings potential, it is considered the price-to-book ratio analysis adds to the depth of the scope in our analysis.

As disclosed in the paragraphs under the section headed “Information of Nanyang Cijan”, the audited net profit after tax of Nanyang Cijan for the year ended 31 December 2014 was approximately RMB4.66 million, whereas the Subscription Price is RMB110 million and upon the issue of the Subscription Interest, the Group and the Subscriber will own 70% and 30% of the registered capital of Nanyang Cijan, respectively. Therefore, the price-to-earnings ratio (“P/E Ratio A”) of Nanyang Cijan is approximately 78.68 times, which is calculated based on the Subscription Price for 30% of the enlarged registered capital of Nanyang Cijan and the audited net profit after tax of Nanyang Cijan for the year ended 31 December 2014. Besides, upon our enquiry with the management of the Company and based on the information of Nanyang Cijan available to us, we were given to understand that the significant underperformance of the financial performance of Nanyang Cijan for the year ended

– 23 –

LETTER FROM GOLDIN FINANCIAL

31 December 2014 as compared to the previous year was mainly attributable to the material one-off items relating to impairment provision for certain production facilities in the old plant area and idle plants, ancillary facilities and office buildings due to factory relocation of Nanyang Cijan of approximately RMB33.68 million and receipt of government grant of the Nanyang Cijan of approximately RMB12.60 million. As such, the price-to-earnings ratio based on the adjusted net profit after tax excluding the aforesaid one-off items (“P/E Ratio B”) is also considered to serve as a reference in our analysis. Therefore, the P/E Ratio B of Nanyang Cijan is approximately 14.25 times, which is calculated as the Subscription Price of RMB110.0 million divided by 30% of the adjusted net profit after tax for the year ended 31 December 2014 of approximately RMB25.74 million.

The price-to-book ratio (“P/B Ratio”) of Nanyang Cijan is approximately 1.19 times, calculated as the Subscription Price of RMB110 million divided by 30% of the sum of the audited net assets of Nanyang Cijan as at 30 June 2015 of approximately RMB307.90 million.

When selecting the peers for the purpose of comparison, we have, on a best effort basis, identified companies which (i) are listed on the Stock Exchange; (ii) are principally engaged in the similar businesses as Nanyang Cijan, including but not limited to, the research and development, design, manufacturing and/or sale of automobile parts (the “Relevant Businesses”); (iii) recorded at least 50% of their revenues for their respective latest financial year being derived from the Relevant Businesses; and (iv) recorded at least 50% of revenue being generated from the PRC, which we considered as comparable to Nanyang Cijan in terms of its business nature and forming representative samples (“Comparables”). It should be noted that the operations and prospects of Nanyang Cijan are not exactly the same as the Comparables although the Comparables are engaged in similar lines of businesses as Nanyang Cijan and we have not conducted any in-depth investigation into the businesses and operations of the Comparables. To the best of our knowledge, effort and endeavour, we consider that the list of the Comparables is an exhaustive list based on the aforesaid selection criteria. The results of our findings are set out below:

Table 3: Summary of Comparables

		Price-to-earnings	Price-to-earnings	Price-to-book
	Stock	Relevant principal	ratio	ratio
Comparables	code	businesses	(times)	(times)
			(Note 1)	(Note 2)
Jinheng Automotive	872	Design, research and	N/A	2.30
Safety Technology		development, manufacture	(Note 3)
Holdings Ltd.		and sale of automotive
		electronic products and
		automotive safety spare
		parts in the PRC

– 24 –

LETTER FROM GOLDIN FINANCIAL

			Price-to-earnings	Price-to-book
	Stock	Relevant principal	ratio	ratio
Comparables	code	businesses	(times)	(times)
			(Note 1)	(Note 2)
Zhejiang Prospect Co.	8273	manufacture and sale of	N/A	0.64
Ltd. – H Shares		universal joints for	(Note 3)
		automobiles
Zhejiang Shibao	1057	manufacture and sales of	30.21	1.02
Company Limited		automotive components,
		sales of metal materials,
		electromechanical
		products and electronic
		products, sales of
		automobiles
Huazhong In-Vehicle	6830	the manufacture and sale of	25.66	4.36
Holdings Company		internal and external
Limited		decorative and structural
		automobile parts, moulds
		and tooling, casing and
		liquid tanks of
		air-conditioning or heater
		units and other
		non-automobile products
Minth Group Ltd.	425	manufacturing and sales of	12.12	1.64
		automobile body parts
Xiezhong International	3663	manufacturing, sale of	33.85	1.75
Holdings Ltd.		automotive HVAC systems
		and a range of automotive
		HVAC components, and
		rendering of services
Shuanghua Holdings	1241	design, development,	54.13	0.93
Ltd.		manufacture and sale of
		parts of auto
		air-conditioners
		Maximum	54.13	4.36
		Minimum	12.12	0.64
		Average	31.19	1.81
The Subscription			78.68	1.19
(Note 4)

– 25 –

LETTER FROM GOLDIN FINANCIAL

			Price-to-earnings	Price-to-book
	Stock	Relevant principal	ratio	ratio
Comparables	code	businesses	(times)	(times)
			(Note 1)	(Note 2)
The Subscription			14.25	1.19
(Note 5)

Notes:

The price-to-earnings ratios of the Comparables are calculated by dividing respective market capitalisations of the Comparables as at the date of the Subscription Agreement by respective profits attributable to owners of the Comparables as extracted from their respective latest published annual reports/annual results announcements;
The price-to-book ratios of the Comparables are calculated by dividing respective closing share prices of the Comparables as quoted on Stock Exchange as at the date of the Subscription Agreement by respective net asset values per share calculated based on the information as disclosed in their respective latest published annual/interim reports or annual/interim results announcement;
Price-to-earnings ratio is not applicable as the computed figure is negative;
Price-to-earnings ratio calculated based on the net profit after tax of Nanyang Cijan for the year ended 31 December 2014; and
Price-to-earnings ratio calculated based on the adjusted net profit after tax of Nanyang Cijan excluding the material one-off items relating to factory relocation and government grants for the year ended 31 December 2014.

According to the Table 3, the price-to-earnings ratios of the Comparables range from approximately 12.12 times to approximately 54.13 times, with an average of approximately 31.19 times. The P/E Ratio A of approximately 78.68 times therefore falls above the aforesaid range while the P/E Ratio B of approximately 14.25 times falls within the range and is below the average as represented by the Comparables.

The price-to-book ratios of the Comparables range from approximately 0.64 times to approximately 4.36 times, with an average of approximately 1.81 times. The P/B Ratio of approximately 1.19 times falls within the range and is below the average as represented by the Comparables.

Despite the P/E Ratio B, which is calculated based on the adjusted net profit after tax of Nanyang Cijan excluding the material one-off items, and the P/B Ratio falls below the average as represented by the Comparables, taking into account that (i) both the P/E Ratio B and the P/B Ratio fall within the ranges of price-to-earnings ratios and price-to-book ratios of the Comparables, respectively; (ii) the P/E Ratio A, which is calculated based on the audited net profit after tax of Nanyang Cijan, falls above the ranges of price-to-earnings ratios of the Comparables; (iii) the Group’s financial performance for the recent financial years, in particular the weakened profitability for the year ended 31 December 2014 and net current liabilities position as at 31 December 2014 as discussed above; (iv) the uncertainty in the future prospect of Nanyang Cijan given the declining growth and the competitive environment of

– 26 –

LETTER FROM GOLDIN FINANCIAL

manufacturing and sales of automobile industry in the PRC; (v) the net proceeds from the Subscription would strengthen the financial position of the Nanyang Cijan by broadening its capital sources; (vi) the entering into of the Subscription Agreement enables the Group to maintain the potential turnaround of the Nanyang Cijan upon the Completion while lowering the working capital required on the part of the Company for the business operation of Nanyang Cijan; and (vii) the issue of New Shares could serve as an incentive to Mr. Zhao, being the existing management of Nanyang Cijan, to retain and further motivate him to devote himself to developing Nanyang Cijan which is beneficial to the long-term growth of Nanyang Cijan, we consider that the Subscription Price is fair and reasonable so far as the Independent Shareholders are concerned, and is in the interests of the Company and the Shareholders as a whole.

4. Financial impacts of the Subscription

Effects on net asset value

As at 30 June 2015, the net asset of the Company amounted to approximately RMB382.07 million. Upon the issue of the Subscription Interest, Nanyang Cijan and the Subscriber will own 70% and 30% of the registered capital of Nanyang Cijan, respectively, and Nanyang Cijan will remain as a subsidiary of the Company, hence the financial information of the Nanyang Cijan will remain to be consolidated in the accounts of the Company upon Completion. Based on the existing information available to the Company, with no material gain or loss, it is expected that there will not be material changes on net asset value.

Effects on earnings

Upon the issue of the Subscription Interest, Nanyang Cijan and the Subscriber will own 70% and 30% of the registered capital of Nanyang Cijan, respectively, and Nanyang Cijan will remain as a subsidiary of the Company, save for the expenses relating to the Subscription, it is expected there will be no immediate and material effect on the earnings of the Group.

Effects on gearing ratio and working capital

According to the Interim Results Announcement, as at 30 June 2015, the gearing ratio of the Group, illustrated as a percentage of total borrowings and bills payable divided by total assets, was approximately 43.9%. It is expected that the gearing ratio of the Group will decrease upon the Completion, implying a healthier financial condition since the Group will gain additional cash from the net proceeds of the Subscription upon the Completion.

Besides, according to the Interim Results Announcement, the Group’s trade receivables and trade payables amounted to approximately RMB316.14 million and RMB289.01 million respectively as at 30 June 2015. As the net proceeds from the Subscription Agreement will improve the Group’s cash position, it is expected that the working capital of the Group would be improved immediately after the Completion.

– 27 –

LETTER FROM GOLDIN FINANCIAL

RECOMMENDATION

Having considered the above principal factors and reasons, we are of the view that the terms of the Subscription Agreement and the transactions contemplated thereunder are on normal commercial terms, fair and reasonable so far as the Company and Independent Shareholders are concerned, and the entering into of the Subscription Agreement is in the interests of the Company and the Shareholders as a whole. Accordingly, we advise the Independent Board Committee to advise the Independent Shareholders, to vote in favour of the ordinary resolutions to be proposed for approving the Subscription Agreement and the transactions contemplated thereunder at the EGM.

Yours faithfully, For and on behalf of Goldin Financial Limited

Billy Tang Director

Note: Mr. Billy Tang is a licensed person registered with the Securities and Futures Commissions and a responsible officer of Goldin Financial to carry out type 6 (advising on corporate finance) regulated activity under the SFO (Chapter 571 of the Laws of Hong Kong). He has over 10 years of experience in the corporate finance industry.

For the purpose of this letter, unless otherwise specified, conversion of RMB into HK$ is based on the approximate exchange rate of RMB1.00 = HK$1.21. This exchange rate is for the purpose of illustration only and does not constitute a representation that any amounts in HK$ and RMB have been, could have been or may be converted at such rate or any other exchange rate.

for identification purpose only

– 28 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. INDEBTEDNESS STATEMENT

As at 31 July 2015, which is the latest practicable date for the purpose of determining the amount of indebtedness, the Group had outstanding interest-bearing short-term and long-term unguaranteed borrowings in the total amount of approximately RMB527 million, of which RMB157 million are secured by certain property, plant and equipment, land use rights and cash deposits of the Group.

A total amount of approximately RMB104 million bank deposits were pledged to banks to secure bills payable issued to suppliers of the Group as at 31 July 2015.

Save as disclosed above and otherwise mentioned in this circular, except and apart from intragroup liabilities, the Group did not have any debt securities issued and outstanding or agreed to be issued, borrowings or other similar indebtedness, liabilities under acceptances (other than normal trade bills), acceptance credits, debentures, mortgages, charges, finance leases or hire purchase commitments, guarantees or material contingent liabilities as at 31 July 2015.

2. WORKING CAPITAL

The Directors are of the opinion that, after taking into account (1) the financial resources currently available to the Group including its internally generated funds and banking facilities, and (2) the proceeds to be derived from the proposed Subscription, the Group will have sufficient working capital for its present requirements that is for at least the next twelve months following the date of this circular.

3. MATERIAL CHANGE

The Directors confirm that there has been no material change in the financial or trading position or outlook of the Group since 31 December 2014, being the date to which the latest published audited consolidated financial statements of the Company were made up, up to and including the Latest Practicable Date.

4. BUSINESS TREND AND FINANCIAL AND TRADING PROSPECTS OF THE GROUP

Engaged in the research and development, design, manufacturing and sale of various automobile shock-absorbers, the Group has over 50 years of experience in the automobile industry. After years of development, the Group has become a leading independent supplier of automobile shock-absorbers in the PRC and established stable long-term business relationships with leading automobile manufacturers in the PRC, including FAW-Volkswagen, Chery, Haima Auto, Dongfeng Automobile, Beijing Automobile, Changan Automobile, Chongqing Lifan, Geely, Jianghuai Automobile, SAIC Motor, Dongfeng Peugeot.

In 2014, the automobile industry of China maintained a sustainable growth. According to the statistics from China Association of Automobile Manufacturers, the sales volume of automobiles in the PRC increased by 6.9% to 23,490,000 units on a year-on year basis, reflecting that growth rate was 7 percentage points less compared to 2013.

– APP I-1 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

As disclosed in the Company’s annual report 2014, the Group’s revenue increased by 31.0% to RMB830.7 million from RMB634.2 million in 2013, of which the revenue from the OEM market rose by 32.8% to RMB751.1 million from RMB565.4 million in 2013. Revenue generated from the automobile aftermarket increased by 15.7% to RMB79.6 million from RMB68.8 million in 2013. Such increase was primarily due to the Group’s continuous efforts in improving the production capacity and developing new products simultaneously to meet the needs of automobile manufacturers and the increase of sales resulted from the increasing demand for the after-sales market.

For the year ended 31 December 2014, the Company’s net profit dropped by 93.4% from RMB39.3 million in 2013 to RMB2.6 million in 2014. The decrease in the Group’s net profit was mainly because the increased income and investment returns recorded by the Group during this year were offset by the rise of financial expenses and depreciation cost, especially by the large provisions for asset impairment made at the end of this period for relocation of plant area.

As stated in the Annual Report 2014, the Directors expect the Chinese economy will continue to grow steadily under the “New Normality” in 2015, and the industry structure of automobile industry in China will continue to optimise and upgrade with promising prospects. The Group will keep abreast with the market trend and expand its various businesses. At the same time, the Group will implement proper risk control, maintain its cost advantage and continuously upgrade its research and development and technology standards in order to strengthen its corporate competitiveness.

Meanwhile, the Group has been paying close attention to the slowdown of the growth of the Chinese auto-making industry. The more demanding technology requirements, raising costs and increasing competition will squeeze the profit margin of the automotive components manufacture industry. In order to facilitate the diversification of the Group’s businesses and further expand its asset portfolio and revenue sources, and thus maximising shareholders’ value, the Group has also begun to develop new businesses such as investment immigration consulting services as well as financial consulting services.

The Group’s efforts in developing its new businesses are summarised below:

On 31 December 2014, the Group announced the acquisition of a company which, through its subsidiaries, is committed to providing comprehensive wealth management and investment services to customers in Hong Kong, Mainland China and other major markets. One of the subsidiaries of the acquired group is licensed by the SFC to carry out Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management) regulated activities. This acquisition will build a new platform to help accelerate the pace of the Group’s new business development. The acquisition was completed on 8 June 2015.
On 16 April 2015, the Group entered into an agreement to purchase two migration advisory service companies based in Shenzhen to build a comprehensive migration and investment services industrial chain platform, and provide value-added services including comprehensive migration investment products, wealth management and asset portfolio management to high net-worth customers. The acquisition was completed on 3 June 2015.

– APP I-2 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

On 18 April 2015, the Group entered into two memoranda of understanding with two vendors in respect of the acquisition of a group of companies which are principally engaged in international remittance, foreign exchange and payment settlement business and the provision of various community financial service products in Canada, Hong Kong, the PRC and the United Kingdom as a further step in building its comprehensive financial services platform and creating synergies with the Group’s new business of investment immigration consultancy services and financial consulting services. As at the Latest Practicable Date, the Group was still conducting due diligence on the target, and the acquisition had not been completed.
On 24 April 2015, the Company entered into a memorandum of understanding in respect of the acquisition 100% equity interest of 深圳中科藍天投資有限公司 (Shenzhen CAS Blue Sky Investment Limited), which is a new energy project investment company principally engaged in photo thermal, photovoltaics and wind power project development and operation, with a view to further diversifying the Group’s industrial investment and broadening its income stream. As at the Latest Practicable Date, the Group was still conducting due diligence on the target, and the acquisition had not been completed.

In the future, the Group would also actively identify and explore other investment and business opportunities to broaden its assets and revenue base.

In 2015, the Directors are cautiously optimistic about the Group’s prospect, and will continue to closely monitor the Group’s business operations and financial performance. As to the Group’s automotive shock-absorber manufacture business, the Directors will endeavour to optimise its working capital structure, reduce the indebtedness level and decrease the financing cost with a view to enhancing the profit level. On the other hand, the Group will continue to develop the new business of investment immigration consulting services and financial consulting services. In the short term, the Company intends to establish its business platform and build up its business network by acquiring established enterprises in the industries. If the new businesses is able to commence commercial operations in the second half of 2015 as planned, the Directors believe they will be able to improve the operating results and financial performance of the Group in the short to medium term.

– APP I-3 –

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. 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.

2. DISCLOSURE OF INTERESTS

(a) Directors and the chief executives of the Company

As at the Latest Practicable Date, so far as is known to any Director, the interests and short positions of each Directors or chief executives of the Company in the Shares, underlying shares or debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which (i) 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 (ii) were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein; or (iii) were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules were as follows:

			Approximate
			percentage of
		Number of	issued share
Name of Director	Type of interest	Shares held	capital
Mr. Wilson Sea(1)	Interest of controlled	101,566,000	26.45%
	corporation
Mr. Zhao(2)	Interest of controlled	16,800,000	4.4%
	corporation
Wang Wenbo	Beneficial owner	1,200,000	0.3%
Yang Weixia	Beneficial owner	960,000	0.3%

Notes:

Wealth Max Holdings Limited beneficially owns 101,566,000 Shares. Mr. Wilson Sea, who wholly and beneficially owns Wealth Max Holdings Limited, is deemed to be interested in those Shares owned by Wealth Max Holdings Limited under the SFO.
Plenty Venture Holdings Limited beneficially owns 16,800,000 Shares. Mr. Zhao, who wholly and beneficially owns Plenty Venture Holdings Limited, is deemed to be interested in those Shares owned by Plenty Venture Holdings Limited under the SFO.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors, chief executives of the Company and their associates had any interests or short positions in the

– APP II-1 –

GENERAL INFORMATION

APPENDIX II

Shares, underlying shares or debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which (i) 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 (ii) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules.

(b) Interests of substantial Shareholders

As at the Latest Practicable Date, according to the register kept by the Company pursuant to section 336 of SFO, and so far as is known to the Directors or chief executive of the Company, the following persons (other than a Director or a chief executive of the Company) had, or was deemed or taken to have, an interest or short position in the Shares or underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO or who were directly or indirectly interested in 5% or more of the nominal value of any class of share capital, including options in respect of such capital, carrying voting rights to vote in all circumstances at general meeting of any member of the Group:

			Approximate
			percentage of
		Number of	issued share
Name of Shareholder	Type of interest	Shares held	capital
Wealth Max Holdings	Beneficial owner	101,566,000	26.45%
Limited(1)
Lily Wang(2)	Interest of spouse	101,566,000	26.45%

Notes:

Wealth Max Holdings Limited is wholly and beneficially owned by Mr. Wilson Sea.
Lily Wang is the spouse of Mr. Wilson Sea, and is thus deemed to be interested in those Shares which Mr. Wilson Sea has interest under the SFO.

Save as disclosed above and so far as is known to the Directors or chief executive of the Company, there is no person (other than a Director or chief executive of the Company) who, as at the Latest Practicable Date, had an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, was, directly or indirectly, interested in 5% or more of the nominal value of any class of share capital, including options in respect of such capital, carrying rights to vote in all circumstances at general meeting of any other member of the Group.

– APP II-2 –

GENERAL INFORMATION

APPENDIX II

3. SERVICE CONTRACTS

Details of the service contracts in force for the Directors are set out below:

Name of Director Term of service Remuneration

(Note)

Executive Directors

Wilson SEA A term of three years Annual emolument of HK$1,200,000, commencing from 1 which is determined and adjustable by January 2015, and the Board with reference to his duties renewable automatically and responsibilities and subject to for successive terms of review from time to time. one year. Upon completion of every 12 months of service, a discretionary management bonus of an amount to be recommended by the remuneration committee of the Board and as approved by the majority of the Board shall be payable.
YAN Haiting A term of three years Annual emolument of HK$1,400,000, commencing from 1 which is determined and adjustable by January 2015, and the Board with reference to his duties renewable automatically and responsibilities and subject to for successive terms of review from time to time. one year. Upon completion of every 12 months of service, a discretionary management bonus of an amount to be recommended by the remuneration committee of the Board and as approved by the majority of the Board shall be payable.

– APP II-3 –

GENERAL INFORMATION

APPENDIX II

Name of Director	Term of service	Remuneration
	(Note)
WANG Ping	A term of three years	Annual emolument of HK$200,000, which
	commencing from 1 April	is determined and adjustable by the
	2014, and renewable	Board with reference to his duties and
	automatically for	responsibilities and subject to review
	successive terms of one	from time to time.
	year.
		Upon completion of every 12 months of
		service, a discretionary management
		bonus of an amount to be recommended
		by the remuneration committee of the
		Board and as approved by the majority
		of the Board shall be payable.

ZHAO Zhijun, WANG	A term of three years	No fixed annual emolument.
Wenbo, YANG Weixia	commencing from 22
	November 2014, and	Upon completion of every 12 months of
	renewable automatically	service, a discretionary management
	for successive terms of	bonus of an amount to be recommended
	one year.	by the remuneration committee of the
		Board and as approved by the majority
		of the Board shall be payable.

Independent non-executive Directors

CHU Kin Wang, Peleus,	A term of three years	Annual remuneration of HK$180,000,
LI Zhiqiang, ZHANG	commencing from 22	subject to review from time by the
Jinhua	November 2014.	remuneration committee of the Board.

Note: All Directors are subject to retirement by rotation and re-election at the annual general meeting in accordance with the requirements of the Articles of Association of the Company.

Save as aforesaid, as at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with the Company or any or its subsidiaries or associated companies: which is not expiring or determinable by the Company within one year without payment of compensation other than statutory compensation.

4. MATERIAL CONTRACTS

As at the Latest Practicable Date, the following contracts (not being contracts entered into in the ordinary course of business carried on or intended to be carried on by the Group) were entered into by members of the Group within two years immediately preceding the Latest Practicable Date which were or may be material:

(i) the Subscription Agreement;

– APP II-4 –

GENERAL INFORMATION

APPENDIX II

(ii) an underwriting agreement dated 4 May 2015 entered into between the company and Wealth Max Holdings Limited as underwriter in relation to a proposed open offer in the proportion of one offer share for every one share held on the record date;
(iii) a deed of termination dated 6 July 2015 entered into between the Company and Wealth Max Holdings Limited in relation to the termination of the underwriting agreement referred to in (ii) above;
(iv) a sale and purchase agreement dated 16 April 2015 entered into between an independent third party (as vendor) and China First Capital International Holdings Limited (首控國際控股有限公司) (as purchaser) in respect of the conditional acquisition of 65% equity interest in 深圳冠橋移民諮詢有限公司 (Shenzhen Crown Bridge Immigration Consultancy Service Limited) and 51% equity interest in 深圳君拓移民諮詢服務有限公司 (Shenzhen Juntour Immigration Consultancy Limited) at an aggregate consideration of RMB5.8 million;
(v) a sale and purchase agreement dated 31 December 2014 entered into between Mr. He Yaobin (as vendor, being a nephew of Mr. Sea) and the Company (as purchaser), pursuant to which the Company agreed to purchase, and Mr. He agreed to sell, the entire issued share capital of First Capital Group Limited (首控集團有限公司) and a shareholder’s loan of HK$5,000,000 at an aggregate consideration of HK$7,138,443; and
(vi) an amended and restated exempted limited partnership agreement dated 18 November 2013 and entered into among First Capital Fund Management Co. Ltd., First Capital Fund Management Co., Ltd (首控基金管理有限公司) and First Bridge Limited, pursuant to which First Bridge Limited would invest HK$83 million in First Capital Automotive Component Industry M&A Fund L.P.

5. INTERESTS IN THE GROUP’S ASSETS OR CONTRACTS OR ARRANGEMENTS SIGNIFICANT TO THE GROUP

As at the Latest Practicable Date, save for the Subscription Agreement, none of the Directors had any interest, directly or indirectly, in any asset which had been, since 31 December 2014 (being the date to which the latest published audited financial statements of the Company were 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, save for the Subscription Agreement, none of the Directors was materially interested in any contract or arrangement entered into by any member of the Group which was subsisting as at the Latest Practicable Date and which was significant in relation to the business of the Group.

– APP II-5 –

GENERAL INFORMATION

APPENDIX II

6. COMPETING INTERESTS

As at the Latest Practicable Date, save for Mr. Zhao will through the subscriber own 30% equity interest in Nanyang Cijan pursuant to the Subscription, none of the Directors and their respective associates had any directly or indirectly interest in a business which competes or may compete with the business of the Group.

7. MATERIAL LITIGATION

As at the Latest Practicable Date, none of the members of the Group was engaged in any litigation, arbitration or claim of material importance and no litigation, arbitration or claim of material importance is known to the Directors to be pending or threatened by or against any member of the Group.

8. EXPERT AND CONSENT

The following is the qualifications of the expert who has been named in this circular or has given opinions, letters or advice contained in this circular:

Name

Qualification

Goldin Financial A corporation licensed to carry out Type 6 (advising on corporate finance) regulated activities under the SFO

As at the Latest Practicable Date, the above expert did not have any shareholding, directly or indirectly, in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscriber for shares in any member of the Group; did not have any interest, direct or indirect, in any asset which since 31 December 2014, the date to which the latest published audited financial statements of the Company were made up, had been acquired or disposed of by or leased to any member of the Group or was proposed to be acquired or disposed of by or leased to any member of the Group.

The letter or report of the above expert is given as of the date of this circular for incorporation herein. The above expert has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter or report and/or references to its name, in the form and context in which they appear in this circular.

9. MISCELLANEOUS

(a) The registered office of the Company is situated at Cricket Square, Hutchins Drive P.O. Box 2681, Grand Cayman, KY1-1111 Cayman Islands.
(b) The principal place of business of the Company in the PRC is at Xipingtou Industrial Park, Xichuan County, Henan Province, the PRC.
(c) The principal place of business of the Company in Hong Kong is at Units 4501–02 & 12–13, 45/F, The Center, 99 Queen’s Road Central, Hong Kong .

– APP II-6 –

GENERAL INFORMATION

APPENDIX II

(d) The Hong Kong share registrar and transfer office of the Company is Tricor Investor Services Limited of Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(e) The company secretary of the Company is HUNG Man Yuk, Dicson (洪旻旭) .

HUNG Man Yuk, Dicson (洪旻旭) aged 39, has been the company secretary and authorised representative of the Group since 1 March 2012. Mr. Hung has extensive experience in accounting, financial control and compliance. Mr. Hung obtained a master’s degree in finance from The Curtin University of Technology in November 2002. He was admitted a member of Hong Kong Institute of Certified Public Accountants in July 2004 and a fellow member of the Association of Chartered Certified Accountants in November 2006. He is also a member of the Hong Kong Institute of Directors. Mr. Hung has also been appointed executive of several other listed companies, including qualified accountant, chief financial officer and company secretary of Zhongtian International Limited (Stock Code: 2379) from 2007 to 2008, company secretary of Come Sure Group (Holdings) Limited (Stock Code: 794) from July 2010 to January 2015 and China Tian Lun Gas Holdings Limited (Stock Code: 1600) from October 2010 to date.

(f) The Company has established an audit committee with written terms of reference in compliance with the Listing Rules. The primary duties of the audit committee are to review and supervise the financial reporting process and internal control systems of the Group. As at the Latest Practicable Date, the audit committee comprised Mr. CHU Kin Wang, Peleus (Chairman of the audit committee), Mr. LI Zhiqiang and Mr. ZHANG Jinhua. Biographical details of the members of the audit committee are set forth below:

CHU Kin Wang, Peleus (朱健宏) , aged 50, was appointed as an independent non-executive director of the Company in October 2011. Mr. Chu has over 20 years of experience in corporate finance, audit, accounting and taxation.

Mr. Chu holds or has held the directorships of the following companies which are or were listed on the Stock Exchange:

	Stock		Period of
Company name	code	Current position	directorship
Chinese People Holdings	681	Executive director, vice	December 2008 to
Company Limited		president	date
(中民控股有限公司)
Eyang Holdings (Group)	117	Independent non-executive	April 2007 to date
Co., Limited (宇陽控股		director
（集團）有限公司)

– APP II-7 –

GENERAL INFORMATION

APPENDIX II

	Stock		Period of
Company name	code	Current position	directorship
Huayu Expressway Group Limited	1823	Independent non-executive	May 2009 to date
(華昱高速集團有限公司)		director
Flyke International Holdings Ltd.	1998	Independent non-executive	February 2010 to
(飛克國際控股有限公司)		director	date
EDS Wellness Holdings	8176	Independent non-executive	March 2012 to date
Limited		director
Telecom Service One	8145	Independent non-executive	April 2013 to date
Holdings Limited		director
(電訊首科控股有限公司)
National Agricultural Holdings	1236	Independent non-executive	June 2015 to
Limited (國農控股有限公司)		director	September 2015
Mastermind Capital Limited	905	Executive director	September 2005 to
(慧德投資有限公司) (known as			March 2007
Haywood Investments Limited
during the relevant period)
Sustainable Forest Holdings Limited	723	Independent non-executive	January 2008 to
(永保林業控股有限公司)		director	August 2010
(known as Bright Prosperous
Holdings Limited (晉盈控股有限
公司) during the relevant period)

He was also the company secretary of Sun Century Group Limited (太陽世紀集團有限公司), during the relevant period know as Hong Long Holdings Limited (鴻隆控股有限公司) (stock code: 1383), a company listed on the Main Board of the Stock Exchange, responsible for corporate finance, financial reporting and compliance and company secretarial matters from 2008 to 2010.

Mr. Chu graduated from the University of Hong Kong with a master’s degree in business administration. Mr. Chu is a fellow member of the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants. Mr. Chu is also an associate member of both the Institute of Chartered Secretaries and Administrators and the Hong Kong Institute of Company Secretaries.

LI Zhiqiang (李志強) , aged 52, was appointed as an independent non-executive director of the Company in October 2011. He has been the legal advisor of the General Office of the CPC Central Military Commission since 1994 and an executive director and the president of Shougang Holdings Limited (首鋼控股有限公司) since 2004. In 2006, he was a director of Sino Life Insurance Co., Ltd. (中國生命人壽保險股份有限公司) and vice chairman in 2008, and chairman of China

– APP II-8 –

GENERAL INFORMATION

APPENDIX II

International Cultural Media Co., Ltd. (中國國際文化交流傳媒有限公司) since 2006. He was also appointed as the chairman and secretary to the Communist Party Committee of Shougang Yili Steel Co., Ltd. (首鋼伊犁鋼鐵有限公司) in 2010. Mr. Li graduated from Euromed Marseille Ecole de Management with a doctoral degree of management and is currently the academician of the World Academy of Productivity (世界生產力科學院).

ZHANG Jinhua (張進華) , aged 50, was appointed as an independent non-executive director of the Company in October 2011. Mr. Zhang has over 25 years of experience in automobile industry. He is currently the head of secretary (秘書長) to Society of Automotive Engineers of China (中國汽車工程學會) and has been serving as the deputy head of secretary (副秘書長) and later the head of secretary to Society of Automotive Engineers of China and the head of secretary to China Automotive Industry Technology Progress Rewarding Fund (中國汽車工業科技進步獎勵基金會) since 2009. From 1988 to 2009, Mr. Zhang served as an assistant to the head, deputy head (副所長) and head (所長) and deputy president (副主任) to the president assistant centre (主任助理中心) of the Automotive Technology Information Institute (汽車技術情報研究所) of China Automotive Technology & Research Center (中國汽車技術研究中心). Mr. Zhang graduated from the Jilin Industrial University (吉林工業大學) (later renamed as Jilin University (吉林大學)) with a bachelor’s degree in automotive application in 1988.

(g) In the event of inconsistency, the English text of this circular and the accompanying form of proxy shall prevail over the Chinese text.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours from 9:00 a.m. to 5:00 p.m. on any business day (except Saturdays, Sundays and public holidays) at Units 4501–02 & 12–13, 45/F, The Center, 99 Queen’s Road Central, Hong Kong within 14 days from the date of this circular:

(a) this circular;
(b) the memorandum and articles of association of the Company;
(c) the annual reports of the Company containing audited consolidated financial statements of the Company for the two financial years ended 31 December 2013 and 2014;
(d) the letter from the Board to the Shareholders, the text of which is set out in the section headed “Letter from the Board” in this circular;
(e) the letter of recommendation from the Independent Board Committee to the Independent Shareholders, the text of which is set out in the section headed “Letter from the Independent Board Committee” in this circular;
(f) the letter of advice from Goldin Financial to the Independent Board Committee and the Independent Shareholders, the text of which is set out in the section headed “Letter from Goldin Financial” in this circular;

– APP II-9 –

GENERAL INFORMATION

APPENDIX II

(g) the service contracts referred to in the paragraph headed “Service contracts” in this appendix;
(h) the material contracts referred to in the paragraph headed “4. Material contracts” in this appendix; and
(i) the written consents referred to in the paragraph headed “8. Expert and consent” in this appendix.

– APP II-10 –

NOTICE OF EGM

CHINA FIRST CAPITAL GROUP LIMITED 中國首控集團有限公司

(formerly known as China Vehicle Components Technology Holdings Limited 中國車輛零部件科技控股有限公司 )

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 1269)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “ Meeting ”) of China First Capital Group Limited (the “ Company ”) will be held at 10:30 a.m. on Monday, 5 October 2015 at Units 4501–02 & 12–13, 45/F, The Center, 99 Queen’s Road Central, Hong Kong for the purposes of considering and, if thought fit, passing the following resolution:

ORDINARY RESOLUTION

“ THAT the execution, delivery and performance of the subscription agreement dated 10 August 2015 and entered into between Nanyang Cijan Auto Shock Absorber Co., Ltd. (南陽淅減汽車減振器有限公司) and Nanyang Zhiyuan Industrial Limited (南陽智源實業有限公司) (the “ Subscription Agreement ”) and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified; and any one Director be and is hereby authorised to sign and execute such documents and do all such acts and things incidental to the Subscription Agreement and the transactions contemplated thereunder or as he considers necessary, desirable or expedient in connection with the implementation of or giving effect to the Subscription Agreement and the transactions contemplated thereunder (including make such variations to the terms of the Subscription Agreement as they may in their discretion consider to be appropriate, necessary or desirable and in the interests of the Company and its shareholders) or this resolution.

By Order of the Board of China First Capital Group Limited Wilson Sea Chairman

Hong Kong, 14 September 2015

For identification purpose only

– EGM-1 –

NOTICE OF EGM

Notes:

(1) Any Shareholder entitled to attend and vote at the Meeting is entitled to appoint another person as his proxy to attend and vote instead of him. A Shareholder who is the holder of two or more Shares may appoint more than one proxy to attend on the same occasion. A proxy need not be a Shareholder.
(2) In order to be valid, a form of proxy and the power of attorney (if any) or other authority (if any) under which it is signed, or a certified copy of such power or authority, must be deposited at the Hong Kong branch share registrar and transfer office of the Company, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time fixed for holding the meeting or any adjournment thereof.
(3) Delivery of the form of proxy will not preclude a Shareholder from attending and voting in person at the meeting convened and in such event, the form of proxy shall be deemed to be revoked.
(4) In the case of joint registered holders of any Share, any one of such joint registered holders may vote at the meeting, either in person or by proxy, in respect of such Share as if he/she were solely entitled thereto, but if more than one of such joint registered holders be present at the meeting, the vote of the senior who tenders a vote either personally or by proxy shall be accepted to the exclusion of the votes of the other joint registered holders and, for this purpose, seniority shall be determined by the order in which the names stand in the register in respect of the joint holding.
(5) As at the date of this notice, the Company’s executive Directors are Mr. Wilson Sea, Mr. Zhao Zhijun, Mr. Yan Haiting Mr. Wang Wenbo, Ms. Yang Weixia and Mr. Wang Ping, the Company’s independent non-executive Directors are Mr. Chu Kin Wang, Peleus, Mr. Li Zhiqiang and Mr. Zhang Jinhua.

– EGM-2 –

AI assistant

China First Capital Group Limited — Proxy Solicitation & Information Statement 2015

49812_rns_2015-09-14_559f792c-fb05-4f8a-a5a8-3c9abe27d0f6.pdf

CHINA FIRST CAPITAL GROUP LIMITED 中國首控集團有限公司

MAJOR AND CONNECTED TRANSACTION — DEEMED DISPOSAL RELATING TO SUBSCRIPTION OF EQUITY INTEREST IN A SUBSIDIARY; AND NOTICE OF EXTRAORDINARY GENERAL MEETING

CONTENTS

DEFINITIONS

CHINA FIRST CAPITAL GROUP LIMITED 中國首控集團有限公司

MAJOR AND CONNECTED TRANSACTION — DEEMED DISPOSAL RELATING TO SUBSCRIPTION OF EQUITY INTEREST IN A SUBSIDIARY; AND NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

LETTER FROM THE BOARD

SUBSCRIPTION AGREEMENT

Subscription

Subscription Price

LETTER FROM THE BOARD

LETTER FROM THE BOARD

Conditions precedent

Completion

INFORMATION OF NANYANG CIJAN

APPLICATION OF PROCEEDS FROM THE SUBSCRIPTION

INFORMATION OF THE SUBSCRIBER

REASONS FOR AND BENEFITS OF THE SUBSCRIPTION

LISTING RULES IMPLICATIONS

ESTABLISHMENT OF INDEPENDENT BOARD COMMITTEE AND APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER

EGM

RECOMMENDATION

LETTER FROM THE BOARD

ADDITIONAL INFORMATION

CHINA FIRST CAPITAL GROUP LIMITED 中國首控集團有限公司

MAJOR AND CONNECTED TRANSACTION — DEEMED DISPOSAL RELATING TO SUBSCRIPTION OF EQUITY INTEREST IN A SUBSIDIARY

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Yours faithfully,

Goldin Financial Limited

MAJOR AND CONNECTED TRANSACTION — DEEMED DISPOSAL RELATING TO SUBSCRIPTION OF EQUITY INTEREST IN A SUBSIDIARY

INTRODUCTION

THE INDEPENDENT BOARD COMMITTEE

BASIS OF OUR ADVICE

LETTER FROM GOLDIN FINANCIAL

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background information of the Group

LETTER FROM GOLDIN FINANCIAL

For the six months ended 30 June 2015

2. Background of and reasons for the entering into of the Subscription Agreement

Information of Nanyang Cijan

LETTER FROM GOLDIN FINANCIAL

Information of the Subscriber

Reasons for and benefits of the entering into of the Subscription Agreement

3. Principal terms of the Subscription Agreement

Comparison with comparable companies

LETTER FROM GOLDIN FINANCIAL

LETTER FROM GOLDIN FINANCIAL

4. Financial impacts of the Subscription

Effects on net asset value

Effects on earnings

Effects on gearing ratio and working capital

RECOMMENDATION

Billy Tang Director

1. INDEBTEDNESS STATEMENT

2. WORKING CAPITAL

3. MATERIAL CHANGE

4. BUSINESS TREND AND FINANCIAL AND TRADING PROSPECTS OF THE GROUP

APPENDIX I

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

(a) Directors and the chief executives of the Company

APPENDIX II

(b) Interests of substantial Shareholders

3. SERVICE CONTRACTS

Name of Director Term of service Remuneration

4. MATERIAL CONTRACTS

5. INTERESTS IN THE GROUP’S ASSETS OR CONTRACTS OR ARRANGEMENTS SIGNIFICANT TO THE GROUP

6. COMPETING INTERESTS

7. MATERIAL LITIGATION

8. EXPERT AND CONSENT

Qualification

9. MISCELLANEOUS

10. DOCUMENTS AVAILABLE FOR INSPECTION

CHINA FIRST CAPITAL GROUP LIMITED 中國首控集團有限公司

China First Capital Group Limited Proxy Solicitation & Information Statement 2015