Differ Group Auto Limited — M&A Activity 2021

Nov 14, 2021

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.

DIFFER GROUP HOLDING COMPANY LIMITED 鼎豐集團控股有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 6878)

VOLUNTARY ANNOUNCEMENT

LETTER OF INTENT IN RESPECT OF THE POSSIBLE ACQUISITION OF THE TARGET COMPANY

Reference is made to the voluntary announcement of Differ Group Holding Company Limited (the “ Company ”, together with its subsidiaries, the “ Group ”) dated 31 August 2021 in relation to, among other matters, the entering into of a strategic cooperation agreement with 四川竹子汽車銷售有限公司(transaliterated in English as Sichuan Zhuzi Automobile Sales Company Limited) (“ Sichuan Zhuzi Automobile ” or the “ Target Company ”).

THE POSSIBLE ACQUISITION

The Board is pleased to announce that on 13 November 2021, the Company entered into a non-legally binding letter of intent (“ LOI ”) with the potential vendors (the “ Vendors ”), who are independent of and not connected with the Company and its connected persons, in relation to the possible acquisition (the “ Possible Acquisition ”) of the entire equity interest in Sichuan Zhuzi Automobile.

Subject matter

Pursuant to the LOI, the Company intends to acquire and the Vendors intend to dispose of the entire equity interest in the Target Company subject to further negotiation.

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Non-competition undertaking

Pursuant to the LOI, the Vendors consent, warrant and covenant that they (and any of their associates) will not compete with the existing or future business of the Target Company. In addition, the Vendors will, and will procure each of the directors, senior management and major employees to enter into an employment contract and a deed of non-competition with the Target Company, to warrant that they will not engage in any business which competes with the Target Company during their employment. The core management team of the Target Company will remain in the Target Company after completion of the Possible Acquisition.

Due diligence

The Company will commence the due diligence review on, among others, the assets, liabilities, contingent liabilities, material contracts, litigation and arbitration matters of the Target Company after the execution of the LOI.

Parties to the LOI shall negotiate for the terms of the formal agreement. If the formal agreement is not entered into within six months from the date of the LOI, the LOI will cease and determine.

INFORMATION OF THE TARGET COMPANY

The Target Company is a limited liability company incorporated in the People’s Republic of China (the “ PRC ”) in April 2015. As advised by the Vendors, the Target Company is a major automobile dealership in the southwest PRC and has been offering a wide range of high quality and premium automobiles to its customers through its online platform (namely Bamboo Buy a Car 竹子買車) based on its automobile business network with automobile dealers and manufacturers. The Target Company also possesses sophisticated financing network with the local PRC banks for customers to obtain financing services for their purchase of automobiles.

REASONS FOR THE POSSIBLE ACQUISITION

The Group is principally engaged in the (i) asset management business (including (a) property development and investment and (b) distressed assets, equities investment and fund management); (ii) provision of financial related services (including financial lease services, express loan services, consultancy services, guarantee services and the security brokerage services); (iii) commodity trading business; and (iv) online automobile e-commerce business.

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The Group has been actively working on the development of online e-commerce platform in the automobile industry in the PRC. The Company considers that the online automobiles platform of the Target Company and its customer base in the southwest of the PRC will be complimentary to the Group existing online automobiles platform which is based in the northeast of the PRC and will expand the Group’s client base and geographical coverage. Further, the sophisticated financing network of the Target Company in the sale and purchase of automobiles will be an asset in furtherance of the development of automobiles of the Group. Hence, the Directors considered that, if the Possible Acquisition materialises, it would be conducive for the Group’s development of a comprehensive automobile platform to provide premium automobiles and all-rounded services to its customers.

As more time is required for negotiating the terms of the formal agreement, the parties entered into the LOI.

The Board wishes to emphasize that the LOI is not legally binding and the Possible Acquisition may or may not proceed. Shareholders and potential investors are urged to exercise caution when dealing in the securities of the Company. Further announcement in respect of the Possible Acquisition will be made as and when appropriate in compliance with the Listing Rules.

By order of the Board of Differ Group Holding Company Limited Hong Mingxian Chairman and Executive Director

Hong Kong, 13 November 2021

As at the date of this announcement, the executive Directors are Mr. HONG Mingxian and Mr. NG Chi Chung; the non-executive Directors are Mr. CAI Huatan and Mr. WU Qinghan; and the independent non-executive Directors are Mr. CHAN Sing Nun, Mr. LAM Kit Lam and Mr. CHEN Naike.

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