CMON Limited — M&A Activity 2012

May 17, 2012

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

瀋陽公用發展股份有限公司 Shenyang Public Utility Holdings Company Limited

(a joint stock limited company incorporated in the People’s Republic of China)

(Stock code: 747)

Financial Adviser to the Company

Karl Thomson Financial Advisory Limited

DISCLOSEABLE TRANSACTION

THE ACQUISITION AGREEMENT

The Board is pleased to announce that on 17 May 2012, after trading hours, the Company entered into the Acquisition Agreement with the Vendors, whereby the Vendors have conditionally agreed to sell and the Company has conditionally agreed to purchase, the Sale Shares, representing 90% of the issued share capital of the Target Company and the Shareholders’ Loan for a total consideration of RMB115 million.

Upon Completion of the Acquisition, the Target Company will become a wholly-owned subsidiary of the Company and the financial statements of the Target Company will be consolidated in the accounts of the Group.

IMPLICATION OF LISTING RULES

As the applicable percentage ratios (as defined under the Listing Rules) in respect of the Acquisition exceeds 5% but is less than 25%, the Acquisition constitutes a discloseable transaction of the Company and is subject to reporting and announcement requirements under Chapter 14 of the Listing Rules.

THE ACQUISITION AGREEMENT

Date: 17 May 2012

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Parties:

Purchaser: the Company

• Vendors: (1) Zhongtou Chuangye (Beijing) Investment Holdings Company Limited (中投創業（北京）投資控股有限公司) (the “ First Vendor* ”)

• (2) Shenzhen Zhongzhan Chuangzhan Investment Development Company Limited (深圳市中展創展投資發展有限公司) (the “ Second Vendor* ”)

The Vendors are principally engaged in real estate development and property management business in the PRC. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, each of the Vendors and their respective ultimate beneficial owners is an Independent Third Party. There is no other prior and/or continuing businesses/ transactions entered into between each of the Vendors, its ultimate beneficial owner with the Company, its connected persons and associates.

Assets to be acquired

Pursuant to the Acquisition Agreement, the Purchaser has conditionally agreed to purchase and the Vendor has conditionally agreed to sell the Sale Shares, representing 90% of the issued share capital of the Target Company and the Shareholders’ Loan due from the Target Company to the Vendors. As at the date of this announcement, the Target Company is owned as to 60% by the First Vendor, 30% by the Second Vendor and 10% by the Company. Upon completion of the Acquisition Agreement, the Target Company will become a wholly-owned subsidiary of the Company.

Consideration

The Consideration of RMB115 million was arrived at after arm’s length negotiations among the parties to the Acquisition Agreement and was determined after taking into account: (a) the net assets value of the Sale Shares of approximately RMB9.7 million; and (b) the Shareholders’ Loan of approximately RMB75 million.

The Consideration shall be satisfied in the following manner:–

• (a) RMB15 million shall be paid by the Company to the First Vendor, and RMB13 million shall be paid by the Company to the Second Vendor in 30 Business Days upon signing the Acquisition Agreement, totalling RMB28 million to be paid by the Company in cash; and

• (b) the remaining balance of RMB87 million of which RMB46.56 million shall be paid by the Company to the First Vendor, and RMB40.44 million shall be paid by the Company to the Second Vendor in 90 Business Days upon fulfilling item (ii) of the conditions precedent to the completion of the Acquisition (details as shown below).

• For identification purpose only

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Conditions precedent

Completion shall take place upon all of the following conditions are fulfilled:

• i. the Acquisition being approved by the Board; and

• ii. the procedures of changing the registered shareholders being completed and the new business registration certificate being obtained by the Target Company.

If any of the above conditions has not been fulfilled or waived by the agreement between the parties in six months upon entering into the Acquisition Agreement or such later date as the Vendors and the Purchaser may agree in writing, the obligation of the parties under the Acquisition Agreement shall cease and the Acquisition Agreement shall be terminated.

INFORMATION OF THE TARGET COMPANY

The Target Company is a limited company incorporated in the PRC and is principally engaged in real estate investment and development and property management.

The Target Company is currently engaged in a comprehensive real estate development project in the PRC (the “ Project ”) in which the government indemnificatory houses, residential apartments and commercial properties will be constructed. The Project is located at 中國 廣東省廣州增城市荔城街三聯村 (San Lian Village, Li Cheng Street, Zeng Cheng City, Guangdong Province, the PRC*), with a total land area of approximately 58,090 square meters. In particular, a gross floor area of approximately 26,000 square meters of the Land will be allocated for the construction of government indemnificatory houses whereas the remaining part of the Land will be used for constructing the residential apartments and commercial properties.

The Land was acquired by the Target Company through a bid at a Tender on 1 December 2011. The Target Company has already obtained 建設用地規劃許可證 (planning permit for construction use land*) for the Land. The Project has already been started and is expected to be completed by 31 December 2013.

FINANCIAL INFORMATION OF THE TARGET COMPANY

Since the Target Company was established in October 2011, the financial information for the year ended 31 December 2010 is not applicable. For the year ended 31 December 2011, the Target Company recorded no turnover and the net loss for the year was RMB233,958. As shown in the unaudited statement of financial position of the Target Company as at 31 March 2012, the net assets of the Target Company amounted to approximately RMB9,749,955 which consist of the total assets of the Target Company of approximately RMB100,252,460 and the Shareholders’ Loan together with other account payables of approximately RMB90,502,505.

• For identification purpose only

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REASONS FOR THE ACQUISITION

As at the date of this announcement, the Group is principally engaged in development, sale and leasing of real estate in the PRC. In recent years, the PRC government has been accelerating the development of the country’s indemnificatory housing projects in order to improve the housing conditions for low-income families and control over the price hike of the property market. It is anticipated that increasing the supply of indemnificatory housing is one of the long term housing policy carried out by the PRC government, the Company believes that the supports from the PRC government will be helpful in completing and future marketing of the Project.

Moreover, the Directors consider that the Project is a good opportunity for the Group to expand its existing business since the Project is located at one of the major cities in Guangdong Province with good future development which also help to diversify the sources of income for the Company. In view of such favorable terms and conditions, the Board is of the view that the Project is in the benefit of the Company.

In light of the above, the Directors (including the independent non-executive Directors) are of the view that the Acquisition is in the interest of the Group and the terms and conditions of the Acquisition Agreement are on normal commercial terms, which are fair and reasonable, and are in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATION OF THE ACQUISITION

As the applicable percentage ratios (as defined under the Listing Rules) in respect of the Acquisition exceeds 5% but is less than 25%, the Acquisition constitutes a discloseable transaction of the Company and is subject to reporting and announcement requirements under Chapter 14 of the Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following respective meanings.

“Acquisition”	the proposed acquisition of the Sale Shares by the
	Purchaser pursuant to the Acquisition Agreement
“Acquisition Agreement”	the acquisition agreement dated 17 May 2012 entered
	into between the Purchaser and the Vendors for the
	Acquisition
“associate(s)”	has the meaning ascribed to it under the Listing Rules
“Board”	the board of Directors
“Business Day”	a day (other than a Saturday or Sunday) on which licensed
	banks are open general for business in Hong Kong
“Company” or “Purchaser”	Shenyang Public Utility Holdings Company Limited, also
	the purchaser of the Acquisition Agreement

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“connected person”	has the meaning ascribed to it in the Listing Rules
“Consideration”	consideration for the Acquisition, being RMB115 million
“Director(s)”	means the directors of the Company
“Group”	the Company and its subsidiaries
“H-Share(s)”	Ordinary share(s) of RMB1 each in the share capital of
	the Company
“Hong Kong”	the Hong Kong Special Administrative Region of the
	People’s Republic of China
“Independent Third Party(ies)”	the independent third party(ies) who is/are, to the best of
	the Directors’ knowledge, information and belief having
	made all reasonable enquiry, independent of the Company
	and its connected persons (as defined under the Listing
	Rules)
“Land”	the land with a total land area of approximately 58,090
	square meters situated at中國廣東省廣州增城市荔城街
	三聯村(San Lian Village, Li Cheng Street, Zeng Cheng
	City, Guangdong Province, the PRC*) where the Project
	will be constructed
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“PRC”	the People’s Republic of China
“Sale Shares”	90% of the issued share capital of the Target Company
	to be purchased by the Purchaser and disposed by the
	Vendors according to the Acquisition Agreement
“Shareholder(s)”	holder(s) of the H-Shares
“Shareholders’ Loan”	Approximately RMB75 million being the aggregate
	amount due from the Target Company to the Vendors as
	at the Completion Date
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Target Company”	Guangzhou Zhongzhan Investment Holdings Company
	Limited* (廣州市中展投資控股有限公司)

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“Tender” public tender (掛牌出讓) for the sale of the land use rights of the Land held by the Bureau of Land Resources and housing management of Zeng Cheng City* (增城市國土 資源和房屋管理局), a local government authority of the PRC

“Vendors” Zhongtou Chuangye (Beijing) Investment Holdings Company Limited ( 中投創業（北京）投資控股有限公 司 ) and Shenzhen Zhongzhan Chuangzhan Investment Development Company Limited ( 深圳市中展創展投 資發展有限公司 ), being the vendors of the Acquisition Agreement

“RMB” Renminbi, the lawful currency of the PRC “%” per cent.

• For identification purpose only

By Order of the Board Shenyang Public Utility Holdings Company Limited An Mu Zong Chairman

Shenyang, PRC 17 May 2012

As at the date of this announcement, the executive directors of the Company are Mr. An Mu Zong, Mr. Wang Zai Xing, Mr. Alex Chow Ka Wo and Mr. Wang Hui, the non-executive directors are Mr. Bao Yi Qiang and Mrs. Zhang Lei Lei, the independent non-executive directors are Mr. Cai Lian Jun, Mr. Wong Kai Tat, Mr. Chan Ming Sun Jonathan and Mr. Wei Jie Sheng.

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