Comba Telecom Systems Holdings Limited — Proxy Solicitation & Information Statement 2018

May 17, 2018

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, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Huanxi Media Group Limited, 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 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.

==> picture [257 x 113] intentionally omitted <==

(Incorporated in Bermuda with limited liability) (Stock Code: 1003)

(1) RE-ELECTION OF DIRECTORS

(2) GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES (3) PROPOSED REFRESHMENT OF SCHEME MANDATE LIMIT UNDER THE SHARE OPTION SCHEME

AND

(4) NOTICE OF ANNUAL GENERAL MEETING

A notice convening the annual general meeting of Huanxi Media Group Limited, (the “ Company ”) to be held at Strategic Financial Relations Limited, 24/F, Admiralty Centre I, 18 Harcourt Road, Hong Kong on 29 June 2018, Friday at 11:00 a.m. is set out on pages 15 to 19 of this circular.

Whether or not you intend to attend and vote at the meeting, you are requested to complete and return the enclosed form of proxy, in accordance with the instructions printed thereon, as soon as possible and in any event not later than forty-eight (48) hours before the time appointed for holding such meeting or any adjournment thereof to Computershare Hong Kong Investor Services Limited, the branch share registrar of the Company in Hong Kong, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting should you so wish.

• for identification purpose only

17 May 2018

CONTENTS

		Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		3
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
2.	Re-election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
3.	General Mandate to Issue Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
4.	General Mandate to Repurchase Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
5.	Refreshment of Scheme Mandate Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
6.	The AGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
7.	Vote by Poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
8.	Closure of Register of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
9.	Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
10.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
APPENDIX I – PARTICULARS OF DIRECTORS PROPOSED
	FOR RE-ELECTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
APPENDIX II – EXPLANATORY STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		11
NOTICE OF ANNUAL GENERAL MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		15

DEFINITIONS

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

“AGM”	the annual general meeting of the Company dated 29 June 2018,
	to consider and, if appropriate, to approve the resolutions
	contained in the notice of the meeting which are set out on pages
	15 to 19 of this circular
“Board”	the board of Directors
“Bye-laws”	the bye-laws of the Company
“close associate(s)”	the meanings ascribed to it under the Listing Rules
“Company”	Huanxi Media Group Limited, a company incorporated in Bermuda
	with limited liability, the Shares of which are listed on the Stock
	Exchange
“Director(s)”	the director(s) of the Company
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the People’s
	Republic of China
“Issue Mandate”	a general and unconditional mandate to be given to the Directors
	to exercise the powers of the Company to allot, issue or deal with
	Shares of an aggregate number of up to twenty per cent of the
	aggregate number of the issued Shares of the Company on the
	date of passing such resolution
“Latest Practicable Date”	14 May 2018, 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
“Refreshment of Scheme	the proposed refreshment of the Scheme Mandate Limit
Mandate Limit”	under the Share Option Scheme at the AGM
“Repurchase Mandate”	a general and unconditional mandate to be given to the Directors
	to exercise the powers of the Company to purchase Shares on the
	Stock Exchange of an aggregate number of up to ten per cent of
	the aggregate number of the issued Shares of the Company on the
	date of passing such resolution

1

DEFINITIONS

“Scheme Mandate Limit”	the total number of Shares which may be allotted and issued upon
	exercise of all options to be granted by the Board under the Share
	Option Scheme to subscribe up to 10% of the Shares in issue as at
	the date of adoption of the Share Option Scheme, if refreshed, the
	total number of Shares which may be allotted and issued upon
	exercise of all options to be granted shall not exceed 10% of the
	Shares in issue as at the date of approval by the Shareholders of
	the refreshed limit
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
“Share Option Scheme”	the share option scheme adopted by the Company on 17 June
	2014
“Share(s)”	ordinary share(s) of HK$0.01 each in the share capital of the
	Company
“Shareholder(s)”	holder(s) of the Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	the Code on Takeovers and Mergers
“HK$”	Hong Kong dollar, the lawful currency of Hong Kong
“%”	per cent.

2

LETTER FROM THE BOARD

==> picture [257 x 113] intentionally omitted <==

(incorporated in Bermuda with limited liability) (Stock Code: 1003)

Executive Directors:

Dong Ping (Chairman) Xiang Shaokun, Steven (Chief Executive Officer)

Non-Executive Directors:

Ning Hao Xu Zheng Gao Zhikai

Independent Non-Executive Directors:

Su Tuong Sing, David Li Xiaolong Wong Tak Chuen

Registered office: Canon’s Court 22 Victoria Street Hamilton HM12 Bermuda

Head office and principal place of business in Hong Kong: 11/F, Far East Finance Centre 16 Harcourt Road Admiralty, Hong Kong

17 May 2018

To the Shareholders

Dear Sir or Madam,

(1) RE-ELECTION OF DIRECTORS

(2) GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES (3) PROPOSED REFRESHMENT OF SCHEME MANDATE LIMIT UNDER THE SHARE OPTION SCHEME AND

(4) NOTICE OF ANNUAL GENERAL MEETING

1. INTRODUCTION

This circular contains information relating to (i) the re-election of the retiring Directors, (ii) the Issue Mandate, (iii) the Repurchase Mandate and (iv) the Refreshment of Scheme Mandate Limit so as to provide all information reasonably necessary to enable the Shareholders to make an informed decision on whether to vote for or against the resolutions proposed at the AGM.

• for identification purpose only

3

LETTER FROM THE BOARD

2. RE-ELECTION OF DIRECTORS

The Directors retiring by rotation in accordance with Bye-law 99 of the Bye-laws are Mr. Su Tuong Sing, David, Mr. Li Xiaolong, Mr. Wong Tak Chuen. All of them will, being eligible, offer themselves for re-election at the AGM. Information on the Directors proposed to be re-elected at the AGM as required to be disclosed under the Listing Rules is set out in Appendix I to this circular.

3. GENERAL MANDATE TO ISSUE SHARES

To facilitate future allotment and issue of Shares by the Directors on behalf of the Company, an ordinary resolution will be proposed at the AGM to grant to the Directors a general and unconditional mandate to allot, issue and deal with, an aggregate number of Shares up to 20% of the issued Shares of the Company as at the date of the passing the proposed resolution of the Issue Mandate.

As at the Latest Practicable Date, the number of Shares of the Company was 2,768,055,408 Shares. Subject to the passing of the resolution approving the Issue Mandate and on the basis that no further Share are issued or repurchased prior to the AGM, the Company would be authorised to allot, issue and deal with up to a maximum of 553,611,081 new Shares.

In addition, if the Repurchase Mandate is granted, a separate ordinary resolution will be proposed at the AGM to extend the number of Shares which may be allotted, issued and dealt with under the Issue Mandate by the number of Shares repurchased under the Repurchase Mandate (being an aggregate number of Shares up to 10% of the issued Shares of the Company as at the date of the grant of the Repurchase Mandate).

4. GENERAL MANDATE TO REPURCHASE SHARES

An ordinary resolution will be proposed at the AGM to grant to the Directors authority to repurchase Shares up to 10% of the number of issued Shares of the Company as at the date of passing the proposed resolution of the Repurchase Mandate. An explanatory statement as required under the Listing Rules to provide the requisite information concerning the Repurchase Mandate is set out in Appendix II to this circular.

5. REFRESHMENT OF SCHEME MANDATE LIMIT

The Share Option Scheme was adopted by the Company pursuant to an ordinary resolution passed in the annual general meeting of the Company on 17 June 2014. Apart from the Share Option Scheme, the Company has no other share option scheme currently in force.

Pursuant to the Share Option Scheme, the maximum number of Shares which may be issued upon exercise of all share options to be granted under the Share Option Scheme and any other share option scheme(s) of the Company shall not exceed 57,713,885 Shares, being 10% of the total number of Shares in issue as at the date of adoption of the Share Option Scheme.

4

LETTER FROM THE BOARD

The Company may refresh the Scheme Mandate Limit by ordinary resolution of the Shareholders at general meeting provided that:

• (a) the Scheme Mandate Limit so refreshed shall not exceed 10% of the total number of Shares in issue as at the date of the Shareholders’ approval of the refreshment of the Scheme Mandate Limit;

• (b) share options previously granted under the Share Option Scheme and any other share option scheme(s) of the Company (including those outstanding, cancelled, or lapsed in accordance with the relevant scheme rules or exercised share options) shall not be counted for the purpose of calculating the Scheme Mandate Limit as refreshed; and

• (c) the total number of Shares which may be issued upon exercise of all outstanding share options granted and yet to be exercised under the Share Option Scheme and any other share option scheme(s) of the Company must not in aggregate exceed 30% of the total number of Shares in issue from time to time.

The existing Scheme Mandate Limit is 230,855,540 Shares, being 10% of the Shares in issue as at the date of passing the resolution at the special general meeting of the Company held on 16 December 2015 to refresh the Scheme Mandate Limit. From the date of the refreshment of the Scheme Mandate Limit at the special general meeting of the Company on 16 December 2015 to the Latest Practicable Date, the number of Shares to be issued upon exercise of the share options granted, exercised, lapsed and not yet granted is as follows:

	Number of Shares to be	Issued Upon Exercise of
Share Options	Share Options	Share Options	Share Options
Granted	Exercised	Lapsed/Cancelled	Not Yet Granted
130,700,000	–	–	–

Since the date of the adoption of the Share Option Scheme and as at the Latest Practicable Date, the Company has granted options carrying right to subscribe for an aggregate of 130,700,000 Shares under the Share Option Scheme. Save as disclosed in this circular, there are 130,700,000 outstanding options granted under the Share Option Scheme or any other scheme(s) of the Company which remain unexercised, as at the Latest Practicable Date, representing approximately 4.72% of the total issued Shares as at the Latest Practicable Date. Unless the Scheme Mandate Limit is refreshed, only up to 100,155,540 Shares may be issued pursuant to the grant of options under the Share Option Scheme, representing only approximately 3.62% of the issued Shares of the Company as at the Latest Practicable Date.

5

LETTER FROM THE BOARD

Assuming no Shares are issued and/or repurchased by the Company between the Latest Practicable Date and the date of the AGM, the maximum number of Shares which may be issued upon the exercise of all the options to be granted under the Scheme Mandate Limit as refreshed will be 276,805,540 Shares, representing 10% of the issued Shares of the Company as at the date of approval of the Refreshment of Scheme Mandate Limit by the Shareholders at the AGM which do not include options that are outstanding, cancelled or lapsed as at the date of the AGM. When aggregated with 130,700,000 Shares that may be issued under 130,700,000 outstanding options granted (amounting to 407,505,540 Shares which represents approximately 14.72% of the total number of Shares in issue as at the Latest Practicable Date), is within the said limit of 30% of the total number of Shares in issue from time to time as required under the Share Option Scheme.

The Board considers that it is in the interests of the Company to refresh the Scheme Mandate Limit so as to provide the Company with the flexibility of granting further options under the Share Option Scheme and to provide incentives to, and recognise the contributions of, the Group’s employees and other selected grantees which the Board considers to be in the interests of the Company and the Shareholders as a whole. The Board therefore seeks the approval of the Shareholders at the AGM to refresh the Scheme Mandate Limit.

The Refreshment of Scheme Mandate Limit is conditional upon:

• (a) the passing of an ordinary resolution to approve the Refreshment of Scheme Mandate Limit by the Shareholders at the AGM; and

• (b) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Shares (representing a maximum of 10% of the Shares in issue as at the date of the AGM approving the Refreshment of Scheme Mandate Limit) which may fall to be issued pursuant to the exercise of options granted under the refreshed Scheme Mandate Limit.

Application will be made to the Stock Exchange for the granting of the listing of, and permission to deal in, the Shares to be issued pursuant to the exercise of options to be granted under the refreshed Scheme Mandate Limit.

6. THE AGM

A notice convening the AGM is set out in this circular. A form of proxy for use at the AGM is enclosed in this circular. Whether or not you intend to attend and vote at the meeting, you are requested to complete and return the enclosed form of proxy, in accordance with the instructions printed thereon, as soon as possible and in any event not later than forty-eight (48) hours before the time appointed for holding the AGM or any adjournment thereof to Computershare Hong Kong Investor Services Limited, the branch share registrar of the Company in Hong Kong, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting should you so wish.

6

LETTER FROM THE BOARD

7. VOTE BY POLL

Chairman of the AGM will demand all the resolutions set out in the notice of the AGM to be voted by way of poll in accordance with Bye-law 70 of the Bye-laws. Explanation of the detailed procedures for conducting a poll will be provided to the Shareholders at the AGM.

8. CLOSURE OF REGISTER OF MEMBERS

The register of members of the Company will be closed from 25 June 2018, Monday to 29 June 2018, Friday (both day inclusive), during such period no transfer of the Shares of the Company will be registered. In order to qualify for the attendance and vote at the AGM, all transfer accompanied by the relevant share certificates must be lodged with Computershare Hong Kong Investor Services Limited, the branch share registrar of the Company in Hong Kong, at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 4:30 p.m. on 22 June 2018, Friday.

9. 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.

10. RECOMMENDATION

The Directors consider that (i) the proposed re-election of retiring Directors, (ii) the Issue Mandate, (iii) the Repurchase Mandate and (iv) the Refreshment of Scheme Mandate Limit are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the resolutions to be proposed at the AGM.

Yours faithfully, For and on behalf of the Board of Huanxi Media Group Limited Xiang Shaokun, Steven

Executive Director and Chief Executive Officer

7

APPENDIX I PARTICULARS OF DIRECTORS PROPOSED FOR RE-ELECTION

The particulars of the Directors proposed for re-election at the AGM are set out as follows:

1. Mr. Su Tuong Sing, David (“Mr. Su”)

Mr. Su, aged 46, was appointed as an independent non-executive Director on 2 September 2015. Mr. Su is also the chairman of the remuneration committee, the chairman of the nomination committee and a member of the audit committee of the Company. Mr. Su is a managing partner at Matrix Partners China, a venture capital firm specializing in, early and growth stage investments and focused primarily on internet, mobile, software and medical technology investments. Mr. Su, through Matrix Partners China and other investment vehicles, has been investing in China for the past 15 years and his investments include Baidu Inc. (NASDAQ Symbol: BIDU), China Kanghui Holdings Inc. (NYSE Symbol: KH), AAC Technologies Holdings Inc. (stock code: 2018), Bona Film Group Limited (NASDAQ Symbol: BONA), DiDi-Kuaidi, Shanghai Kingnet Technology Co. Ltd, and Reach Surgical, Inc.. Prior to joining Matrix Partners China, Mr. Su was a co-founder and general partner of TDF Capital and KPCB China Fund, both of which are venture capital firms specializing in early and growth stage investments. Prior to joining the venture capital industry, Mr. Su worked at Lotus Development, IBM Software Company for seven years and he had made significant contributions to Lotus’s overall software and services business in the Greater China region. Mr. Su started his career at Port of Singapore Authority, responsible for information system development and management. Mr. Su graduated from Nanyang Technological University with a Bachelor Degree in Computer Engineering.

Pursuant to the service agreement entered into between the Company and Mr. Su, Mr. Su’s appointment is for a term of 2 years and shall be subject to retirement by rotation and re-election in accordance with the bye-laws of the Company and the Listing Rules. Mr. Su is entitled to receive an annual remuneration of HK$240,000. His remuneration is determined by the Board with reference to his experience and the prevailing market rate.

8

APPENDIX I PARTICULARS OF DIRECTORS PROPOSED FOR RE-ELECTION

2. Mr. Li Xiaolong (“Mr. Li”)

Mr. Li, aged 52, was appointed as an independent non-executive Director on 2 September 2015. Mr. Li is a member of the remuneration committee and a member of the nomination committee of the Company. Mr. Li has more than 20 years of experience in the industry of information technology and telecommunications. He is the founder and chairman of Net 263 Ltd. (Shenzhen Stock Exchange Code: 002467), a company based in Beijing and which provides integrated communication services for medium-and small-sized enterprises and professionals. Since September 2004, Mr. Li was the director and general manager of Net 263 Ltd., and since August 2006, the director of Net 263 Ltd. He was an independent director at E-Commerce China Dangdang Inc. (NYSE Symbol: DANG) from December 2010 to October 2016, and an independent director at Kongzhong Corp. (NASDAQ Symbol: KZ) from 2012 to May 2017. Mr. Li studied Computer Science at Beijing Industry University. Mr. Li attended the undergraduate program in software engineering in Beijing University of Technology. In January 2013, Mr. Li was appointed as a committee member of the telecommunications and economic experts of the Ministry of Industry and Information Technology.

As at the Latest Practicable Date, Mr. Li was deemed to be interested in 8,850,000 Shares (being 8,850,000 Shares held by Panfaith Investments Limited (a company wholly owned by Mr. Li)) within the meaning of Part XV of the SFO.

Pursuant to the service agreement entered into between the Company and Mr. Li, Mr. Li’s appointment is for a term of 2 years and shall be subject to retirement by rotation and re-election in accordance with the bye-laws of the Company and the Listing Rules. Mr. Li is entitled to receive an annual remuneration of HK$240,000. His remuneration is determined by the Board with reference to his experience and the prevailing market rate.

9

APPENDIX I PARTICULARS OF DIRECTORS PROPOSED FOR RE-ELECTION

3. Mr. Wong Tak Chuen (“Mr. Wong”)

Mr. Wong, aged 53, joined the Company as an independent non-executive director on 10 April 2014. Mr. Wong is the chairman of the audit committee. Mr. Wong is a fellow member of both Hong Kong Institute of Certified Public Accountants and Association of Chartered Certified Accountants in the United Kingdom, as well as a member of the Institute of Chartered Accountants in England and Wales. He has over 20 years of experience in auditing, financial management, mergers and acquisitions gained from certain senior finance related positions in an international accounting firm in Hong Kong, companies listed in Hong Kong and a company listed in the United States of America. He is currently the chief financial officer of a public company in Hong Kong and a company listed on the GEM Board of the Stock Exchange. Mr. Wong has been (i) an independent non-executive director of Eternity Investment Limited (stock code: 764, a company listed on the Main Board of the Stock Exchange) since 7 November 2011; (ii) an independent nonexecutive director of Man Sang International Limited (stock code: 938, a company listed on the Main Board of the Stock Exchange) since 12 July 2016; and (iii) an independent non-executive director of China Healthwise Holdings Limited (stock code: 348, a company listed on the Main Board of the Stock Exchange) since 11 October 2016.

Pursuant to the service agreement entered into between the Company and Mr. Wong, Mr. Wong’s appointment is for a term of 2 years and shall be subject to retirement by rotation and re-election in accordance with the bye-laws of the Company and the Listing Rules. Mr. Wong is entitled to receive an annual remuneration of HK$240,000. His remuneration is determined by the Board with reference to his experience and the prevailing market rate.

As at the Latest Practicable Date, save as disclosed above, the above retiring Directors have no interest in the Shares within the meaning of Part XV of the SFO, has not held any other directorships in any public listed companies in the past three years, were not connected with any Directors, senior management or substantial or controlling shareholders of the Company (as defined in the Listing Rules) and there is no other information to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Listing Rules and there are no matters that need to be brought to the attention of the Shareholders.

10

EXPLANATORY STATEMENT

APPENDIX II

This explanatory statement, as required under Rule 10.06(1)(b) of the Listing Rules, serves to provide the Shareholders with information reasonably necessary to enable them to make an informed decision on whether to vote for or against the resolution approving the Repurchase Mandate.

1. SHARE CAPITAL

As at the Latest Practicable Date, there were a total of 2,768,055,408 Shares in issue. Subject to the passing of the resolution approving the Repurchase Mandate and on the basis that no further Shares are issued or repurchased prior to the AGM, the Company would be authorised to repurchase up to a maximum of 276,805,540 Shares.

2. REASONS FOR REPURCHASES

The Directors believe that the Repurchase Mandate is in the best interests of the Company and the Shareholders. Repurchase may, depending on market conditions and funding arrangement at the time, result in enhancement of the net assets value and/or earnings per Share and will only be made when the Directors consider that such repurchase will benefit the Company and the Shareholders.

3. FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with the memorandum of association, Bye-laws, the Listing Rules and the applicable laws of Bermuda.

As compared with the financial position disclosed in the latest published audited financial statements of the Company as at 31 December 2017, there might have adverse impact on the working capital or gearing position of the Company in the event that the Repurchase Mandate was to be exercised in full. However, the Directors do not propose to make any repurchase to the extent that would have a material adverse effect on the working capital requirement or gearing level of the Company which, in the opinion of the Directors, are from time to time appropriate for the Company.

4. EFFECT OF THE TAKEOVERS CODE

If a Shareholder’s proportionate interest in the voting rights of the Company increases as a result of repurchase of Shares pursuant to the Repurchase Mandate, such increase will be treated as an acquisition for the purposes of the Takeovers Code. Accordingly, a Shareholder or group of Shareholders acting in concert, depending on the level of increase of the Shareholder’s voting right at the time, could obtain or consolidate control of the Company and may become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code.

11

EXPLANATORY STATEMENT

APPENDIX II

As at the Latest Practicable Date, the following Shareholders are interested in more than 10% of the Shares then in issue:

				In the event that
				the Repurchase
			Approximate	Mandate is
			percentage of	exercised in full,
			shareholding	the approximate
			as at the Latest	percentage of
Name of Shareholders	Capacity	Number of Shares	Practicable Date	shareholding
Newwood Investments	Beneficial owner and interests of a	1,438,494,354	51.97%	57.74%
Limited (“Newwood”)	party to an agreement required to	(Notes 1 to 2)
	be disclosed under section 317 of
	the SFO
Numerous Joy Limited	Beneficial owner	92,342,216	3.34%	3.71%
(“Numerous Joy”)		(Notes 1 & 3)
Dong Ping (“Mr. Dong”)	Beneficial owner, interests of	1,438,494,354	51.97%	57.74%
	controlled corporation and a party	(Notes 1 to 3)
	to an agreement required to be
	disclosed under section 317 of the
	SFO
Pacific Wits Limited	Beneficial owner and interests of a	1,438,494,354	51.97%	57.74%
(“Pacific Wits”)	party to an agreement required to	(Notes 1, 2 & 4)
	be disclosed under section 317 of
	the SFO
Ning Hao (“Mr. Ning”)	Interests of controlled corporation	1,438,494,354	51.97%	57.74%
	and a party to an agreement	(Notes 1, 2 & 4)
	required to be disclosed under
	section 317 of the SFO
Tairong Holdings Limited	Beneficial owner and interests of a	1,438,494,354	51.97%	57.74%
(“Tairong”)	party to an agreement required to	(Notes 1, 2 & 5)
	be disclosed under section 317 of
	the SFO
Xu Zheng (“Mr. Xu”)	Interests of controlled corporation	1,438,494,354	51.97%	57.74%
	and a party to an agreement	(Notes 1, 2 & 5)
	required to be disclosed under
	section 317 of the SFO

Notes:

1. On 14 April 2015, the Company and nine subscribers, namely Newwood, Numerous Joy, Pacific Wits, Tairong, Wise Dragon International Limited, Gold Shine Investment Company Limited, Dayunmony Investment Corporation, Concept Best Limited and Reorient Global Limited (the “ Subscribers ”) entered into a subscription agreement (the “ Subscription Agreement ”), pursuant to which the Company has conditionally agreed to allot and issue, and the Subscribers have conditionally agreed to subscribe for, a total of 1,701,416,556 new Shares (the “ Subscription Shares ”) at an issue price of HK$0.4 per Share (the “ Subscription ”). Details in relation to the Subscription are set out in the Company’s circular dated 5 August 2015. The Subscription had been approved by the independent shareholders of the Company at the Company’s special general meeting held on 28 August 2015 and the Subscription Shares were alloted to the Subscribers on 2 September 2015.

12

EXPLANATORY STATEMENT

APPENDIX II

1. On 14 April 2015, Mr. Dong, Newwood, Pacific Wits, Mr. Ning, Tairong and Mr. Xu entered into a shareholders agreement (the “ Shareholders Agreement ”), which sets forth certain rights and obligations of each of the parties in respect of the governance of the Company following completion of the Subscription. Newwood is therefore deemed to be interested in all the Shares in which Mr. Dong, Pacific Wits and Tairong are interested by virtue of section 317 of the SFO.

2. Newwood and Numerous Joy are wholly owned by Mr. Dong. Pursuant to the Subscription Agreement, Newwood and Numerous Joy subscribed for 461,711,082 and 92,342,216 new Shares respectively upon completion of the Subscription, Mr. Dong Ping also holds 4,490,000 Shares and 2,700,000 share options of the Company as at the Latest Practicable Date, the above interests represent an interest totaling approximately 20.28% of the issued Shares as at the Latest Practicable Date. Mr. Dong is also a party to the Shareholders Agreement, is therefore deemed to be interested in all the Shares in which Newwood, Pacific Wits and Tairong are interested by virtue of section 317 of the SFO.

In the event that the Directors exercise in full the power to repurchase Shares in accordance with the Repurchase Mandate and assuming there is no change in the issued share capital of the Company at the AGM, the total percentage interest of (i) Newwood and Numerous Joy (based on their respective interest in 461,711,082 and 92,342,216 Shares), (ii) Mr. Dong’s interest in 4,490,000 Shares and Mr. Dong’s interest in the share options of the Company would be approximately 22.53%.

1. Pacific Wits is wholly owned by Mr. Ning. Pursuant to the Subscription Agreement, Pacific Wits subscribed for 438,625,528 new Shares upon completion of the Subscription, representing interest of approximately 15.85% of the issued Shares as at the Latest Practicable Date. Mr. Ning and Pacific Wits are also the parties to the Shareholders Agreement, are therefore deemed to be interested in all the Shares in which Mr. Dong, Newwood and Tairong are interested by virtue of section 317 of the SFO.

2. In the event that the Directors exercise in full the power to repurchase Shares in accordance with the Repurchase Mandate and assuming there is no change in the issued share capital of the Company at the AGM, the total percentage interest of Pacific Wits (based on its interest in 438,625,528 Shares) would be approximately 17.61%.

3. Tairong is wholly owned by Mr. Xu. Pursuant to the Subscription Agreement, Tairong subscribed for 438,625,528 new Shares upon completion of the Subscription, representing interest of approximately 15.85% of the issued Shares as at the Latest Practicable Date. Mr. Xu and Tairong are also the parties to the Shareholder Agreement, are therefore deemed to be interested in all the Shares in which Mr. Dong, Newwood and Pacific Wits are interested by virtue of section 317 of the SFO.

4. In the event that the Directors exercise in full the power to repurchase Shares in accordance with the Repurchase Mandate and assuming there is no change in the issued share capital the Company at the AGM, the total percentage interest of Tairong (based on its interest in 438,625,528 Shares) would be approximately 17.61%.

Based on the information above, in the event that the Directors exercise the proposed Repurchase Mandate in full, the increase in above shareholdings in the Company would not give rise to an obligation to make a mandatory offer under the Takeovers Code.

13

EXPLANATORY STATEMENT

APPENDIX II

5. SHARE PRICES

The highest and lowest prices at which the Shares were traded on the Stock Exchange in each of the previous twelve months prior to the Latest Practicable Date were as follows:

	Price per Share	Price per Share
	Highest	Lowest
	HK$	HK$
2017
May	2.24	2.00
June	2.24	1.95
July	2.17	1.93
August	2.03	1.94
September	2.21	1.98
October	2.59	2.02
November	2.53	2.03
December	2.09	1.58
2018
January	1.97	1.65
February	1.80	1.50
March	2.10	1.45
April	2.16	1.84
May (up to the Latest Practicable Date)	2.03	1.82

6. GENERAL

None of the Directors, nor to the best of their knowledge having made all reasonable enquiries, any of their close associates (as defined in the Listing Rules) has any present intention to sell any of the Shares to the Company in the event that the Repurchase Mandate is approved by the Shareholders.

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the power of the Company to make repurchases pursuant to the Repurchase Mandate and in accordance with the Listing Rules and the laws of Bermuda.

The Company has not purchased any Shares (whether on the Stock Exchange or otherwise) in the six months immediately preceding the Latest Practicable Date.

No core connected person (as defined in the Listing Rules) of the Company has notified the Company that he/she/it has a present intention to sell Shares to the Company, or has undertaken not to do so, in the event that the Repurchase Mandate is approved by Shareholders.

14

NOTICE OF ANNUAL GENERAL MEETING

==> picture [257 x 114] intentionally omitted <==

(Incorporated in Bermuda with limited liability) (Stock Code: 1003)

NOTICE IS HEREBY GIVEN that the annual general meeting of Huanxi Media Group Limited (the “ Company ”) will be held at Strategic Financial Relations Limited, 24/F, Admiralty Centre I, 18 Harcourt Road, Hong Kong on 29 June 2018, Friday at 11:00 a.m. for the purpose of transacting the following business:

1. to receive and consider the audited financial statements and the reports of the directors (the “ Director(s) ”) and the independent auditors of the Company for the year ended 31 December 2017.

2. (a) to re-elect Mr. Su Tuong Sing, David as an independent non-executive Director;

3. (b) to re-elect Mr. Li Xiaolong as an independent non-executive Director;

4. (c) to re-elect Mr. Wong Tak Chuen as an independent non-executive Director; and

5. (d) to authorise the board of Directors (the “ Board ”) to fix the remuneration of the Directors.

6. to re-appoint Deloitte Touche Tohmatsu as an auditor of the Company and to authorise the Board to fix its remuneration.

And as special business, to consider and, if thought fit, pass with or without modification the following resolutions as ordinary resolutions:

1. “ THAT :

2. (a) subject to paragraph (c) of this resolution, the exercise by the Directors during the Relevant Period (as defined below) of all the powers of the Company to allot, issue and deal with additional shares of the Company (the “ Shares ”) and to make or grant offers, agreements and options (including bonds, warrants, debentures, notes and any other securities which carry rights to subscribe for and are convertible into Shares) which would or might require the exercise of such power, subject to and in accordance with all applicable laws, be and is hereby generally and unconditionally approved;

3. for identification purpose only

15

NOTICE OF ANNUAL GENERAL MEETING

• (b) the approval in paragraph (a) of this resolution shall authorise the Directors during the Relevant Period to make or grant offers, agreements and options (including bonds, warrants, debentures, notes and any other securities which carry rights to subscribe for and are convertible into Shares) which would or might require the exercise of such power after the end of the Relevant Period;

• (c) the aggregate number of Shares allotted or to be allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the Directors pursuant to the approval in paragraph (a) of this resolution, otherwise than pursuant to (i) a Rights Issue (as defined below); (ii) any issue of Shares upon the exercise of rights of subscription or conversion under the terms of any securities which are convertible into Shares; (iii) the exercise of options granted under the share option scheme or similar arrangement of the Company; or (iv) an issue of shares as scrip dividends pursuant to the bye-laws of the Company from time to time, shall not exceed 20% of the aggregate number of Shares of the Company in issue as at the date of passing of this resolution and the said approval shall be limited accordingly; and

• (d) for the purpose of this resolution:

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

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

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

• (iii) the revocation or variation of the authority given under this resolution by an ordinary resolution of the shareholders of the Company in general meeting; and

“ Rights Issue ” means an offer of shares open for a period fixed by the Directors to holders of shares of the Company or any class thereof on the register on a fixed record date in proportion to their then holdings of such shares or class thereof (subject to such exclusion or other arrangements as the directors may regard to any legal restrictions under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory outside Hong Kong).”

16

NOTICE OF ANNUAL GENERAL MEETING

1. “ THAT :

2. (a) subject to paragraph (b) of this resolution, the exercise by the Directors during the Relevant Period (as defined below) of all the powers of the Company to repurchase the Shares on The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) or any other stock exchange on which the Shares may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and the Rules Governing the Listing of Securities on the Stock Exchange, be and is hereby generally and unconditionally approved;

3. (b) the aggregate number of the Shares which may be repurchased by the Company pursuant to the approval in paragraph (a) of this resolution shall not exceed 10% of the aggregate number of Shares of the Company in issue as at the date of passing of this resolution and the said approval shall be limited accordingly; and

4. (c) for the purpose of this resolution, “ Relevant Period ” means the period from the date of passing of this resolution until whichever is the earliest of:

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

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

   • (iii) the revocation or variation of the authority given under this resolution by an ordinary resolution of the shareholders of the Company in general meeting.”

5. “ THAT conditional upon the passing of resolutions number (4) and (5) above, the general mandate granted to the directors to allot, issue and deal with any additional Shares pursuant to resolution number (4) be and is hereby extended by the addition thereto of the total number of Shares which may be purchased by the Company under the authority granted pursuant to resolution number (5), provided that such amount of Shares so purchased shall not exceed 10% of the total number of Shares of the Company in issue as at the date of passing this resolution.”

17

NOTICE OF ANNUAL GENERAL MEETING

1. “ THAT , subject to and conditional upon the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, additional shares of HK$0.01 each in the capital of the Company to be issued pursuant to the exercise of options which may be granted under the Refreshed Limit (as defined below) of the share option scheme adopted by the Company on 17 June 2014 (the “ Share Option Scheme ”), the refreshment of the general limit in respect of the grant of options to subscribe for Shares under the Share Option Scheme be and is hereby approved provided that:

2. (a) the total number of Shares which may be allotted and issued upon the exercise of all options to be granted under the Share Option Scheme and any other share option schemes of the Company under the limit as refreshed hereby shall not exceed 10% of the total number of Shares in issue as at the date of passing this resolution (the “ Refreshed Limit ”);

3. (b) options previously granted under the Share Option Scheme and any other share option schemes of the Company (including those outstanding, cancelled, lapsed or exercised in accordance with the terms of the Share Option Scheme or any other share option schemes of the Company) will not be counted for the purpose of calculating the Refreshed Limit;

4. (c) the Directors be and are hereby unconditionally authorised to do all such acts and things and execute all such documents, including under seal where applicable, as they consider necessary or expedient to give effect to the foregoing arrangement; and

5. (d) such increase in the Refreshed Limit shall in no event result in the number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the Share Option Scheme and any other schemes of the Company exceed 30% of the Shares in issue from time to time.”

By order of the Board

Huanxi Media Group Limited Xiang Shaokun, Steven Executive Director and Chief Executive Officer

Hong Kong, 17 May 2018

18

NOTICE OF ANNUAL GENERAL MEETING

Notes:

1. A member entitled to attend and vote at the annual general meeting is entitled to appoint one or more proxies to attend and vote on his behalf. The proxy need not be a member of the Company. If more than one proxy is appointed, the appointment shall specify the number of shares in respect of which each such proxy is appointed.

2. Where there are joint registered holders of any share, any one of such persons may vote at the meeting, either personally or by proxy, in respect of such share as if he were solely entitled thereto; but if more than one of such joint holders be present at the meeting personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof.

3. In order to be valid, a form of proxy, together with any power of attorney or other authority (if any) under which it is signed, or a certified copy of such power or authority, must be deposited to Computershare Hong Kong Investor Services Limited, the branch share registrar of the Company in Hong Kong, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof.

4. The register of members of the Company will be closed from 25 June 2018, Monday to 29 June 2018, Friday (both day inclusive), during such period no transfer of the Shares of the Company will be registered. In order to qualify for the attendance and vote at the AGM, all transfer accompanied by the relevant share certificates must be lodged with Computershare Hong Kong Investor Services Limited, the branch share registrar of the Company in Hong Kong, at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 4:30 p.m. on 22 June 2018, Friday.

5. Whether or not you intend to attend and vote at the meeting, you are requested to complete and return the form of proxy. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting should you so wish.

6. Particulars of the directors proposed for re-election are set out in Appendix I to this circular which this notice forms part.

7. As at the date hereof, the board of directors of the Company comprises Mr. Dong Ping (Chairman) and Mr. Xiang Shaokun, Steven (Chief Executive Officer) as executive directors, Mr. Ning Hao, Mr. Xu Zheng and Mr. Gao Zhikai as non-executive directors, and Mr. Su Tuong Sing, David, Mr. Li Xiaolong and Mr. Wong Tak Chuen as independent non-executive directors.

19