China First Capital Group Limited — Proxy Solicitation & Information Statement 2021

Jul 27, 2021

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in China First Capital Group Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1269)

(1) PROPOSED SHARE CONSOLIDATION, (2) PROPOSED CHANGE IN BOARD LOT SIZE,

AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

Financial Adviser

First Capital International Finance Limited

A notice convening the EGM of China First Capital Group Limited, to be held at Units 4501–02 & 12–13, 45/F, The Center, 99 Queen’s Road Central, Hong Kong on Wednesday, 18 August 2021 at 10:00 a.m. is set out on pages EGM-1 to EGM-2 of this circular. Whether or not you are able to attend the meeting, you are advised to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to China First Capital Group Limited’s Hong Kong branch share registrar and transfer office, Tricor Investor Services Limited, at Level 54, 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.

PRECAUTIONARY MEASURES FOR THE EXTRAORDINARY GENERAL MEETING

To safeguard the health and safety of Shareholders and to prevent the spreading of the COVID-19 pandemic, the following precautionary measures will be implemented at the EGM:

(1) Compulsory temperature screening/checks

(2) Submission of health declaration forms

(3) Wearing of surgical face mask

(4) No provision of refreshments or drinks

Attendees who do not comply with the precautionary measures referred to in (1) to (3) above may be denied entry to the EGM venue, at the absolute discretion of the Company as permitted by law. For the health and safety of the Shareholders, the Company would like to encourage the Shareholders to exercise their right to vote at the EGM by appointing the chairman of the EGM as their proxy and to return their forms of proxy by the time specified above, instead of attending the EGM in person.

27 July 2021

CONTENTS

		Page
Precautionary measures for the EGM	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	i
Expected timetable . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	iii
Definitions . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Proposed Share Consolidation .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Proposed Change in Board Lot Size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		9
Reasons for the Proposed Share Consolidation and the Change in
Board Lot Size . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Extraordinary General Meeting	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Recommendation . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Responsibility of Directors . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		EGM-1

PRECAUTIONARY MEASURES FOR THE EGM

With the outbreak and spreading of the COVID-19 pandemic and the heightened requirements for the prevention and control of its spreading, to safeguard the health and safety of the Shareholders who might be attending the EGM in person, the Company will implement the following precautionary measures at the EGM.

Voting by proxy in advance of the EGM: The Company does not in any way wish to diminish the opportunity available to the Shareholders to exercise their rights and to vote, but is conscious of the pressing need to protect Shareholders from possible exposure to the COVID-19 pandemic. For the health and safety of the Shareholders, the Company would like to encourage the Shareholders to exercise their right to vote at the EGM by appointing the chairman of the EGM as their proxy instead of attending the EGM in person. Physical attendance is not necessary for the purpose of exercising Shareholder rights. Completion and return of the form of proxy will not preclude the Shareholders from attending and voting in person at the EGM or any adjournment thereof should they subsequently so wish.

The deadline to submit completed forms of proxy is at 10:00 a.m. on Monday, 16 August 2021. Completed forms of proxy must be returned to the Company’s Hong Kong branch share registrar and transfer office, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

Shareholders are strongly encouraged to cast their votes by submitting a form of proxy appointing the chairman of the EGM as their proxy.

To safeguard the health and safety of the Shareholders who might be attending the EGM in person, the Company will also implement the following measures at the EGM:

• (1) Compulsory temperature screening/checks will be carried out on every attendee at the main entrance of EGM venue. Any person with a body temperature above the reference range quoted by the Department of Health from time to time, or is exhibiting flu-like symptoms may be denied entry into the EGM venue and be requested to leave the EGM venue.

• (2) Every attendee will have to submit a completed health declaration form prior to entry into the EGM venue. The completed and signed form must be ready for collection at the main entrance of EGM venue to ensure prompt and smooth processing.

• (3) Every attendee will be required to wear a surgical face mask throughout the EGM and to sit at a distance from other attendees. Please note that no masks will be provided at the EGM venue and attendees should bring and wear their own masks.

• (4) No refreshments or drinks will be provided to attendees at the EGM.

Attendees are in addition requested to observe and practise good personal hygiene at all times. To the extent permitted by law, the Company reserves the right to deny entry into the EGM venue or require any person to leave the EGM venue so as to ensure the health and safety of the attendees at the EGM.

– i –

PRECAUTIONARY MEASURES FOR THE EGM

Due to the constantly evolving COVID-19 pandemic situation, the Company may be required to change the EGM arrangements at short notice. Shareholders should check the Company’s website at www.cfcg.com.hk for further announcements and updates on the EGM arrangements.

Appointment of proxy by non-registered Shareholders: Non-registered Shareholders whose Shares are held through banks, brokers, custodians or the Hong Kong Securities Clearing Company Limited should consult directly with their banks or brokers or custodians (as the case may be) to assist them in the appointment of proxy.

If Shareholders have any questions relating to the EGM, please contact Tricor Investor Services Limited, the Company’s Hong Kong branch share registrar and transfer office, as follows:

Level 54, Hopewell Centre 183 Queen’s Road East Hong Kong Telephone: (852) 2980 1333 Facsimile: (852) 2810 8185 Email: is-enquiries@hk.tricorglobal.com

– ii –

EXPECTED TIMETABLE

The expected timetable for the implementation of the Share Consolidation and the Change in Board Lot Size is as follows:

Event

2021

Latest date and time for lodging transfer documents in order to qualify for attending and voting at the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Thursday, 12 August Closure of the register of members of the Company to determine the entitlement to attend and vote at the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . From Friday, 13 August to Wednesday, 18 August (both days inclusive) Latest date and time for lodging the proxy forms for the EGM . . . . . . . . . . . . . . . 10:00 a.m. on Monday, 16 August Expected date and time of the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10:00 a.m. on Wednesday, 18 August Publication of announcement of poll results of the EGM . . . . . . . . . . . . Wednesday, 18 August

The following events are conditional on the fulfilment of the conditions for the implementation of the Share Consolidation:

Event 2021 Effective date of the Share Consolidation . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 20 August First day of free exchange of existing share certificates for new share certificates for the Consolidated Shares . . . . . . . . . . . . . . . . Friday, 20 August Dealing in the Consolidated Shares commences . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Friday, 20 August Original counter for trading in the Existing Shares in board lots of 2,000 Existing Shares temporarily closes . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Friday, 20 August Temporary counter for trading in the Consolidated Shares in board lots of 400 Consolidated Shares (in the form of existing share certificates) opens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Friday, 20 August

– iii –

EXPECTED TIMETABLE

Event 2021
Original counter for trading in the Consolidated Shares in
board lots of 10,000 Consolidated Shares (in the form of
new share certificates) re-opens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on
Friday, 3 September
Parallel trading in the Consolidated Shares (in the form of
new share certificates and existing share certificates) commences . . . . . . . . . . . . 9:00 a.m. on
Friday, 3 September
Designated broker starts to stand in the market to provide
matching services for odd lots of the Consolidated Shares . . . . . . . . . . . . . . . . . 9:00 a.m. on
Friday, 3 September
Designated broker ceases to stand in the market to provide
matching services for odd lots of the Consolidated Shares . . . . . . . . . . . . . . . . . 4:00 p.m. on
Friday, 24 September
Temporary counter for trading in the Consolidated Shares in
board lots of 400 Consolidated Shares (in the form of
existing share certificates) closes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:10 p.m. on
Friday, 24 September
Parallel trading in the Consolidated Shares (in the form of
new share certificates and existing share certificates) ends . . . . . . . . . . . . . . . . . 4:10 p.m. on
Friday, 24 September
Last day for free exchange of existing share certificates
for new share certificates for the Consolidated Shares . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on
Tuesday, 28 September
All the above times and dates refer to Hong Kong local times and dates. The expected
timetable for the Share Consolidation and the Change in Board Lot Size set out above is subject to,
among other things, the results of relevant resolution of the EGM and is therefore indicative only
and may be subject to change, and any such change will be further announced by the Company as
and when appropriate.

– iv –

DEFINITIONS

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

• “Board”

the board of Directors

• “Business Day”

has the meaning ascribed to it under the Listing Rules

• “CCASS”

Central Clearing and Settlement System, a securities settlement system used within the Hong Kong Exchanges and Clearing Limited market system

• “CCASS Operational Procedures”

the Operational Procedures of HKSCC in relation to CCASS, containing the practices, procedures and administrative requirements relating to operations and functions of CCASS, as from time to time

• “Chairman”

• the chairman of the Board

• “Change in Board Lot Size”

the change in board lot size of the Shares for trading on the Stock Exchange from 2,000 Existing Shares to 10,000 Consolidated Shares

• “Co-CEO”

the co-chief executive officer of the Company

• “Companies Act”

the Companies Act of the Cayman Islands (as amended, supplemented or otherwise modified from time to time)

• “Company”

China First Capital Group Limited, a company incorporated in the Cayman Islands with limited liability whose issued shares are listed on the Main Board of the Stock Exchange with stock code of 1269

• “Consolidated Share(s)”

• ordinary share(s) of HK$0.10 each in the share capital of the Company upon the Share Consolidation becoming effective

• “Convertible Bond(s)”

• the convertible bonds issued by the Company with the outstanding principal amount of HK$770,000,000. For further information, please refer to the announcements of the Company dated 4 December 2017, 14 December 2017 and 13 December 2019

• “Director(s)”

• director(s) of the Company

– 1 –

DEFINITIONS

• “EGM” or “Extraordinary General Meeting”

• the extraordinary general meeting of the Company to be convened and held at Units 4501–02 & 12–13, 45/F, The Center, 99 Queen’s Road Central, Hong Kong at 10:00 a.m. on Wednesday, 18 August 2021, or where the context so admits, any adjournment thereof

• “Existing Share(s)” ordinary share(s) of HK$0.02 each in the share capital of the Company prior to the Share Consolidation becoming effective

• “General Rules of CCASS” the terms and conditions regulating the use of CCASS, as may be amended or modified from time to time and where the context so permits, shall include the CCASS Operational Procedures

• “Group” the Company and its subsidiaries

• “HK$” Hong Kong dollar, the lawful currency of Hong Kong

• “HKSCC”

• Hong Kong Securities Clearing Company Limited

• “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China

• “Latest Practicable Date” 20 July 2021, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• “Listing Committee” the listing sub-committee of the board of directors of the Stock Exchange

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

• “New Share Option Scheme” the new share option scheme adopted by the Company on 9 June 2021

• “RMB”

• Renminbi, the lawful currency of the People’s Republic of China

• “Share(s)” the Existing Share(s) and/or the Consolidated Share(s), as the case may be

• “Share Consolidation”

the proposed consolidation of every five (5) issued and unissued Existing Shares into one (1) Consolidated Share

– 2 –

DEFINITIONS

“Share Option(s)”	the option(s) to subscribe for new shares of the Company
	granted under the Share Option Scheme
“Share Option Scheme”	the share option scheme adopted by the Company on 19
	October 2011 and terminated on 9 June 2021
“Shareholder(s)”	the holder(s) of the issued Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited

– 3 –

LETTER FROM THE BOARD

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

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1269)

Executive Directors: Dr. Wilson Sea (Chairman) Mr. Zhao Zhijun (Co-CEO) Dr. Zhu Huanqiang (Co-CEO)

Independent Non-executive Directors: Mr. Chu Kin Wang, Peleus Dr. Du Xiaotang Mr. Loo Cheng Guan

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

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

27 July 2021

To the Shareholders

Dear Sir or Madam,

(1) PROPOSED SHARE CONSOLIDATION, (2) PROPOSED CHANGE IN BOARD LOT SIZE, AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the announcement of the Company dated 9 July 2021, in relation to the Share Consolidation and the Change in Board Lot Size.

The purpose of this circular is to provide you with information on the Share Consolidation and the Change in Board Lot Size and information reasonably necessary to enable you to make an informed decision on whether to vote for or against the resolution to be proposed at the EGM for the approval of the Share Consolidation.

– 4 –

LETTER FROM THE BOARD

PROPOSED SHARE CONSOLIDATION

The Board proposes to implement the Share Consolidation on the basis that every five (5) issued and unissued Existing Shares of par value of HK$0.02 each in the share capital of the Company be consolidated into one (1) Consolidated Share of par value of HK$0.10 each.

Conditions for the proposed Share Consolidation

The Share Consolidation is conditional upon:

• (i) the passing of an ordinary resolution by the Shareholders at the EGM to approve the Share Consolidation;

• (ii) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Consolidated Shares upon the Share Consolidation becoming effective; and

• (iii) the compliance with all relevant procedures and requirements under the laws of Cayman Islands (where applicable) and the Listing Rules to effect the Share Consolidation.

The Share Consolidation is expected to become effective on the second Business Day immediately following the fulfillment of the above conditions.

Effects of the Share Consolidation

As at the Latest Practicable Date, the authorised share capital of the Company is HK$1,000,000,000 divided into 50,000,000,000 Existing Shares with par value of HK$0.02 each, of which 5,720,692,000 Existing Shares have been allotted and issued as fully paid or credited as fully paid.

Upon the Share Consolidation becoming effective and assuming that there are no changes to the authorised share capital of the Company and no Existing Shares will be issued or repurchased from the Latest Practicable Date until the date when the Share Consolidation becomes effective, the authorised share capital of the Company will become HK$1,000,000,000 divided into 10,000,000,000 Consolidated Shares with par value of HK$0.10 each, of which 1,144,138,400 Consolidated Shares will be in issue as fully paid or credited as fully paid.

Upon the Share Consolidation becoming effective, the Consolidated Shares shall rank pari passu in all respects with each other.

Other than the expenses to be incurred in relation to the Share Consolidation, the implementation of the Share Consolidation will not alter the underlying assets, business operations, management or financial position of the Company or the shareholdings, proportionate interests or rights of the Shareholders, save for any fractional Consolidated Shares to which the Shareholders would otherwise be entitled.

– 5 –

LETTER FROM THE BOARD

Listing application

An application will be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and the permission to deal in, the Consolidated Shares to be issued upon the Share Consolidation becoming effective.

Subject to the granting of listing of, and permission to deal in, the Consolidated Shares on the Stock Exchange, as well as compliance with the stock admission requirements of the HKSCC, upon the Share Consolidation becoming effective, the Consolidated Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Consolidated Shares on the Stock Exchange or such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second settlement day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. All necessary arrangements will be made for the Consolidated Shares to be admitted into CCASS established and operated by HKSCC.

None of the Existing Shares are listed or dealt in on any other stock exchanges other than the Stock Exchange, and at the time when the Share Consolidation becoming effective, the Consolidated Shares in issue will not be listed or dealt in on any stock exchange other than the Stock Exchange, and no such listing or permission to deal is being or is proposed to be sought.

Fractional entitlement to the Consolidated Shares

Fractional Consolidated Shares arising from the Share Consolidation, if any, will be disregarded and will not be issued to the Shareholders but all such fractional Consolidated Shares will be aggregated and, if possible, sold for the benefit of the Company. Fractional Consolidated Shares will only arise in respect of the entire shareholding of a holder of the Existing Shares regardless of the number of share certificates held by such holder.

Matching services for odd lot holdings

In order to facilitate the trading of odd lots of the Consolidated Shares arising from the Share Consolidation, the Company will appoint a securities firm, being First Capital Securities Limited, to provide matching service, on a best efforts basis, to those Shareholders who wish to acquire odd lots of the Consolidated Shares to make up a full board lot, or to dispose of their holding of odd lots of the Consolidated Shares. Shareholders who wish to take advantage of this facility should contact the dealing department of First Capital Securities Limited at Unit 4512, 45/F, The Center, 99 Queen’s Road Central, Central, Hong Kong or at telephone number (852) 3166 6817 from 9:00 a.m. on Friday, 3 September 2021 to 4:00 p.m. on Friday, 24 September 2021 (both days inclusive).

Shareholders holding odd lots of the Consolidated Shares should note that the matching of the sale and purchase of odd lots of the Consolidated Shares is not guaranteed. Shareholders who are in any doubt about the odd lots matching arrangement are recommended to consult their own professional advisers.

– 6 –

LETTER FROM THE BOARD

Exchange of share certificates

Subject to the Share Consolidation becoming effective, which is currently expected to be on Friday, 20 August 2021, being the second Business Day immediately after the date of the EGM, the Shareholders may on or after Friday, 20 August 2021 and until Tuesday, 28 September 2021 (both days inclusive), submit existing share certificates for the Existing Shares (in the colour of blue) to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong, during business hours to exchange for new share certificates for the Consolidated Shares (in the colour of orange) at the expense of the Company.

It is expected that the new share certificates for the Consolidated Shares will be available for collection within 10 Business Days after submission of the existing share certificates to the Company’s branch share registrar in Hong Kong for exchange.

Thereafter, share certificates for the Existing Shares will be accepted for exchange only upon payment of a fee of HK$2.50 (or such other amount as may from time to time be specified by the Stock Exchange) by the Shareholders for each share certificate for the Existing Shares submitted for cancellation or each new share certificate issued for the Consolidated Shares, whichever the number of share certificates cancelled or issued is higher.

Subject to and upon the Share Consolidation becoming effective, after close of business on Friday, 24 September 2021, trading will only be in Consolidated Shares. Share certificates for the Existing Shares will continue to remain good evidence of legal title and may be exchanged for share certificates for the Consolidated Shares at any time but will not be accepted for delivery, trading, settlement and registration purposes.

Adjustments in relation to other securities of the Company

As at the Latest Practicable Date, the Company has outstanding Share Options entitling the holders thereof to subscribe for a total of 50,000,000 Existing Shares under the Share Option Scheme.

The Share Option Scheme, with a term of 10 years, would have expired on 18 October 2021. Therefore, the Company terminated the Share Option Scheme and adopted the New Share Option Scheme on 9 June 2021. No share option has been granted under the New Share Option Scheme since it was adopted.

Save as disclosed above, the Company does not have any other derivatives, options, warrants, other securities or conversion rights or other similar rights which are convertible or exchangeable into, any Existing Shares or Consolidated Shares, as at the Latest Practicable Date.

– 7 –

LETTER FROM THE BOARD

Adjustments to Outstanding Share Options

Upon the Share Consolidation becoming effective, pursuant to the terms and conditions of the Share Option Scheme, the exercise price and the number of Shares to be issued upon full exercise of the outstanding Share Options granted under the Share Option Scheme will be adjusted in the following manner:

Date of grant Exercise period 16 June 2020 16 June 2020 to 15 June 2030	As at the Latest Practicable Date Exercise price per Existing Share Number of outstanding Share Options (HK$) HK$0.30 per Existing Share 50,000,000 Existing Shares	Immediately after the Share Consolidation becoming effective
		Exercise price per Consolidated Share Adjusted number of outstanding Share Options (HK$) HK$1.50 per Consolidated Share 10,000,000 Consolidated Shares

The 50,000,000 Share Options granted under the Share Option Scheme is granted to BAOKANG HOLDINGS LIMITED, a company incorporated under the laws of the British Virgin Islands with limited liability and owned solely by Dr. Wang Hui, the chief financial officer of the Company and the brother-in-law of Dr. Wilson Sea, who is the chairman of the Board and an executive Director. Such Share Options may be exercisable at any time from 16 June 2020 to 15 June 2030.

The exercise price of HK$0.30 per Existing Share was determined by being higher than the following three prices:

• (i) HK$0.200, being the closing price of the Shares as stated in the daily quotations sheet of the Stock Exchange on 16 June 2020;

• (ii) HK$0.1954, being the average closing price of the Shares as stated in the daily quotations sheets of the Stock Exchange for the five consecutive trading days immediately preceding 16 June 2020; and

• (iii) HK$0.02, being the nominal value of the Existing Shares.

For further details, please refer to the announcement of the Company dated 16 June 2020.

Adjustments to the New Share Option Scheme

The maximum number of Shares which may be issued pursuant to the New Share Option Scheme will be adjusted from 502,689,200 Existing Shares as at the Latest Practicable Date to 100,537,840 Consolidated Shares immediately after the Share Consolidation becoming effective.

– 8 –

LETTER FROM THE BOARD

Save for the above adjustments, all other terms and conditions of (i) the outstanding Share Options granted under the Share Option Scheme, and (ii) the New Share Option Scheme remain unchanged.

The auditor of the Company has reviewed the calculations and confirmed to the Directors in writing that the calculation is accurate and the above adjustments are in accordance with the terms and conditions of the outstanding Share Options and the New Share Option Scheme upon the Share Consolidation becoming effective.

Convertible Bonds

The Convertible Bonds of total outstanding principals of HK$770,000,000 as at the Latest Practicable Date matured on 13 December 2019. As at the Latest Practicable Date, the Company is in negotiation with the bondholder regarding the amendment of the terms and conditions of the Convertible Bonds, including but not limited to an extension of its maturity date (the “ Amendment ”). Bondholder of the Convertible Bonds therefore cannot convert the same into Shares as at the Latest Practicable Date. The Company will publish announcement(s) on the Amendment and adjustment to the Convertible Bonds as and when appropriate. For further information, please refer to the announcements of the Company dated 4 December 2017, 14 December 2017 and 13 December 2019.

PROPOSED CHANGE IN BOARD LOT SIZE

As at the Latest Practicable Date, the Existing Shares are traded on the Stock Exchange in the board lot size of 2,000 Existing Shares. The Board proposes to change the board lot size for trading on the Stock Exchange from 2,000 Existing Shares to 10,000 Consolidated Shares per board lot, conditional upon the Share Consolidation becoming effective.

Based on the closing price of HK$0.050 per Existing Share (equivalent to the theoretical closing price of HK$0.25 per Consolidated Share) as at the Latest Practicable Date, (i) the value of each existing board lot of Existing Shares is HK$100; (ii) the value of each board lot of 2,000 Consolidated Shares would be HK$500 on the assumption that the Share Consolidation becomes effective; and (iii) the value of each board lot of 10,000 Consolidated Shares would be HK$2,500 on the assumption that the Change in Board Lot Size has also become effective.

The Change in Board Lot Size will not result in any change in relative rights of the Shareholders.

REASONS FOR THE PROPOSED SHARE CONSOLIDATION AND THE CHANGE IN BOARD LOT SIZE

According to Rule 13.64 of the Listing Rules, where the market price of the securities of an issuer approaches the extremities of HK$0.01 or HK$9,995.00, the Stock Exchange reserves the right to require the issuer either to change the trading method or to proceed with a consolidation or splitting of its securities. The “Guide on Trading Arrangements for Selected Types of Corporate Actions” issued by the Hong Kong Exchanges and Clearing Limited on 28 November 2008 and updated on 1 October 2020 has further stated that (i) market price of the shares at a level less than HK$0.10 each will be considered as trading at extremity as referred to under Rule 13.64 of the

– 9 –

LETTER FROM THE BOARD

Listing Rules; and (ii) taking into account the minimum transaction costs for a securities trade, the expected value per board lot should be greater than HK$2,000.

The Existing Shares have been trading not exceeding HK$0.30 each and a board lot of the Existing Shares have been traded below HK$2,000 for all times during the past 12 months. The Board considers that the proposed Share Consolidation and the Change in Board Lot Size, resulting in a theoretical price HK$0.25 per Consolidated Share and HK$2,500 per board lot of 10,000 Consolidated Shares (based on the closing price of HK$0.050 per Existing Share as at the Latest Practicable Date), would enable the Company to avoid the occurrence of non-compliance with the trading requirements under the Listing Rules. The proposed Share Consolidation will increase the nominal value of the Shares and will reduce the total number of Shares currently in issue. As such, it is expected that the Share Consolidation will bring about a corresponding upward adjustment in the trading price of the Shares. Further, the Share Consolidation and the Change in Board Lot Size would reduce the overall transaction and handling costs of dealings in the Shares as a proportion of the market value of each board lot, since most of the banks/securities houses will charge a minimum transaction fee for each securities trade. It is also hoped that the Share Consolidation and the Change in Board Lot Size will make investing in the Shares more attractive to a broader range of investors, in particular to institutional investors whose house rules might otherwise prohibit or restrict trading in securities that are priced below a prescribed floor, and thus help to further broaden the shareholder base of the Company.

In view of the above reasons, the Board considers that the Share Consolidation and the Change in Board Lot Size are justifiable notwithstanding the potential costs and the impact arising from the creation of odd lots to the Shareholders. Accordingly, the Board is of the view that the Share Consolidation and the Change in Board Lot Size are beneficial to and in the interests of the Company and the Shareholders as a whole.

As at the Latest Practicable Date, the Company has no intention to carry out other corporate actions in the next 12 months which may have an effect of undermining or negating the intended purpose of the Share Consolidation, and the Company does not have any concrete plan to conduct any fundraising activities in the next 12 months. However, the Board cannot rule out the possibility that the Company will conduct debt and/or equity fund raising exercises when suitable fundraising opportunities arise in order to support future development of the Group. The Company will make further announcement(s) in this regard in accordance with the Listing Rules as and when appropriate.

Shareholders and potential investors should note that the Share Consolidation is conditional upon satisfaction of the conditions set out in this circular. Accordingly, the Share Consolidation and the Change in Board Lot Size may or may not proceed.

Shareholders and potential investors are advised to exercise caution when dealing in the Shares. If they are in any doubt, they should consult their professional advisers.

– 10 –

LETTER FROM THE BOARD

EXTRAORDINARY GENERAL MEETING

Set out on pages EGM-1 to EGM-2 of this circular is a notice convening the EGM to consider and, if appropriate, to approve the resolution relating to the Share Consolidation.

A form of proxy for use at the EGM is enclosed. Whether or not you are able to attend the EGM, you are advised to complete and return the form of proxy in accordance with the instructions printed thereon to the Company’s Hong Kong branch share registrar and transfer office, Tricor Investor Services Limited, at Level 54, 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 EGM or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. Accordingly, the resolution to be considered and, if thought fit, approved at the EGM will be voted by way of poll by the Shareholders.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, none of the Shareholders has a material interest in the Share Consolidation and accordingly, no Shareholders are required to abstain from voting on the relevant ordinary resolution to be proposed at the EGM.

Closure of register of members

The register of members of the Company will be closed from Friday, 13 August 2021 to Wednesday, 18 August 2021, both days inclusive, during this period no transfer of Shares will be registered. In order to qualify for attending and voting at the EGM, all share transfers accompanied by the relevant share certificates must be lodged with the Company’s Hong Kong branch share registrar and transfer office, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:30 p.m. on Thursday, 12 August 2021, for registration.

RECOMMENDATION

The Board considers that the Share Consolidation is in the best interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the relevant resolution to be proposed at the EGM.

– 11 –

LETTER FROM THE BOARD

RESPONSIBILITY OF DIRECTORS

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 contained herein or this circular misleading.

Yours faithfully,

For and on behalf of the Board of China First Capital Group Limited Wilson Sea

Chairman and Executive Director

– 12 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [117 x 35] intentionally omitted <==

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

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1269)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the “ EGM ”) of China First Capital Group Limited (the “ Company ”) will be held at Units 4501–02 & 12–13, 45/F, The Center, 99 Queen’s Road Central, Hong Kong on Wednesday, 18 August 2021 at 10:00 a.m. for the following purposes:

ORDINARY RESOLUTION

“ THAT subject to and conditional upon the granting by The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) of the approval for the listing of, and permission to deal in, the ordinary shares of the Company consolidated in the manner as set out in paragraph (a) of this resolution below (the “ Share Consolidation ”):

• (a) with effect from the second business day immediately following the date on which this resolution is passed or the above condition is fulfilled (whichever is later):

• (i) every five (5) issued and unissued ordinary shares of par value of HK$0.02 each in the share capital of the Company be consolidated into one (1) share of par value of HK$0.10 each (each a “ Consolidated Share ”), such Consolidated Share(s) shall rank pari passu in all respects with each other and have the rights and privileges and be subject to the restrictions in respect of ordinary shares contained in the constitutional documents of the Company; and

• (ii) all fractional Consolidated Shares will be disregarded and not be issued to the shareholders of the Company but all such fractional Consolidated Shares will be aggregated and, if possible, sold for the benefit for the Company; and

– EGM-1 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

• (b) the board (the “ Board ”) of directors (the “ Directors ”, each a “ Director ”) of the Company be and are hereby authorised to do all such acts and things and execute all such documents, including under seal where applicable, as they consider necessary, desirable or expedient to give effect to the foregoing arrangements for the Share Consolidation.”

By order of the Board China First Capital Group Limited Wilson Sea Chairman and Executive Director

Hong Kong, 27 July 2021

Notes:

• (1) Any Shareholder entitled to attend and vote at the EGM 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 Company’s Hong Kong branch share registrar and transfer office, Tricor Investor Services Limited, at Level 54, 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) The register of members of the Company will be closed from Friday, 13 August 2021 to Wednesday, 18 August 2021, both days inclusive, during this period no transfer of Shares will be registered. In order to qualify for attending and voting at the EGM, all share transfers accompanied by the relevant share certificates must be lodged with the Company’s Hong Kong branch share registrar and transfer office, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:30 p.m. on Thursday, 12 August 2021, for registration.

• (4) As at the date of this notice, the executive Directors are Dr. Wilson Sea, Mr. Zhao Zhijun and Dr. Zhu Huanqiang; and the independent non-executive Directors are Mr. Chu Kin Wang, Peleus, Dr. Du Xiaotang and Mr. Loo Cheng Guan.

– EGM-2 –