Fufeng Group Limited — Capital/Financing Update 2014

Oct 13, 2014

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.

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Fufeng Group Limited 阜豐集團有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock code: 546)

ANNOUNCEMENT DISCLOSEABLE TRANSACTION ACQUISITION OF LAND IN THE PRC

The Board is pleased to announce that on 12 October 2014, Baoji Ding Feng, a whollyowned subsidiary of the Company, entered into the Confirmation Agreement(s) with the Baoji Land Reserve Centre pursuant to Baoji Ding Feng, pursuant to which Baoji Land Reserve Centre confirmed that Baoji Ding Feng won a bid for the land use right in respect of the Land at the consideration of RMB509.4 million (equivalent to approximately HK$641.8 million**), representing an average selling price of approximately RMB1,877.76 per square meter in terms of total site area through an auction (listing-forsale) organized by Baoji Land Reserve Centre. The Land has a total site area of 406.921 Mu (or approximately 271,280.7 square metres) situated at Gao Xin Jiu Road, East Area, Baoji High-Technology Development Zone, Baoji City, Shaanxi Province, PRC. The Group intends to hold the Land for investment purpose as it continues to evaluate the Group’s future business development and expansion plans in Shaanxi province. As at the date hereof, the Group has not drawn up any concrete development and construction plan for the Baoji Land.

The Acquisition constitutes a discloseable transaction for the Company and is therefore subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

Reference is made to the announcements of the Company (i) dated 7 October 2013 relating to preliminary discussions with the local government of Baoji City, Shaanxi Province regarding the potential relocation of its production plant located in Baoji city (the “ Baoji Plant ”), as the local government has plans to expand the eastern and southern areas of Baoji City for future long term development (the “ Relocation ”); (ii) dated 24 January 2014 pursuant to which, Baoji Ding Feng, a wholly owned subsidiary of the Company, has entered into a framework

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investment agreement (the “ Framework Investment Agreemen t”) with Caijiapo Economic and Technological Development Zone Management Committee of Shaanxi Province (陝西省 蔡家坡經濟技術開發區管理委員會) (the “ Caijiapo Committee ”); (iii) dated 3 September 2014, pursuant to which Baoji Fufeng entered into an agreement with Baoji Land Reserve Centre for the industrial use land of an aggregate area of approximately 569.654 Mu (around 379,769 square metre) situated at Gao Xin Jiu Road, East Area, Baoji High-Technology Development Zone, Baoji City, Shaanxi Province, PRC (the “ Baoji Land ”), pursuant to which the Baoji Land would be returned to Baoji Government and be put up for auction; and (iv) dated 7 October 2014, pursuant to which Baoji Ding Feng has won a bid, subject to the entering into of the Confirmation Agreement and the Land Transfer Contract, for the two plots of land with an aggregate area of approximately 406.921 Mu (or approximately 271,280.7 square metres) situated at Gao Xin Jiu Road, East Area, Baoji High-Technology Development Zone, Baoji City, Shaanxi Province, PRC.

THE LAND AND THE AUCTION (LISTING-FOR-SALE)

Pursuant to the Land being put up for auction (listing-for-sale) by the Baoji Land Reserve Centre, the Board of the Company is pleased to announce that on 12 October 2014, Baoji Ding Feng, a wholly-owned subsidiary of the Company, entered into the Confirmation Agreement(s) with the Baoji Land Reserve Centre pursuant to Baoji Fufeng, pursuant to which Baoji Land Reserve Centre confirmed that Baoji Ding Feng won a bid for the land use right in respect of the Land at the consideration of RMB509.4 million (equivalent to approximately HK$641.8 million**), representing an average selling price of approximately RMB1,877.76 per square meter in terms of total site area through an auction (listing-for-sale) organized by Baoji Land Reserve Centre.

The Land is situated at Gao Xin Jiu Road, East Area, Baoji High-Technology Development Zone, Baoji City, Shaanxi Province, PRC. The total site are of the Land is approximately 406.921 Mu (or approximately 271,280.7 square metres).

The consideration of the Land is RMB509.4 million (equivalent to approximately HK$641.8 million**), representing an average selling price of approximately RMB1,877.76 per square meter in terms of total site area. Pursuant to the terms of the Confirmation Agreement, the security deposit for auction already paid by Baoji Ding Feng (i.e. RMB134.29 million) was automatically applied as a deposit for the consideration of the Land. Baoji Ding Feng is required to enter into the relevant Land Transfer Contract(s) with the Baoji Land Reserve Centre before 31 October 2014, of which the deposit balance would be used for the full settlement of the consideration. The Company has settled the above deposit for the Land from its internal resources.

The consideration for the Acquisition of the Land was arrived at as a result of successful bid by Baoji Ding Feng in the auction (listing-for-sale) process. The bid submitted by Baoji Ding Feng for the Land in aggregate was RMB509.4 million (equivalent to approximately HK$641.8 million**). In deciding to bid at that price, Baoji Ding Feng has taken into account the minimum bid price, land price in the surrounding areas, current property market conditions and development potential of the Land.

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The counterparty in the Acquisition is the Baoji Land Reserve Centre, which is a PRC governmental body responsible for, among other things, the tendering, auction and listingfor-sale of rights to use state-owned land in Baoji city, Shaanxi Province. To be best of the Directors’ knowledge, information and belief having made all reasonable enquiry, the Baoji Land Reserve Centre is a third party independent of the Company and connected persons of the Company.

REASONS FOR AND BENEFITS OF THE ACQUISITION

The Directors believe that the Acquisition represents a good opportunity to repurchase an old property of the Company, where the Baoji Plant was situated, at a reasonable price. Upon completion of the auction and the Land Transfer Contract, the usage of the Land will be changed from industrial to commercial, of which the Directors expect the valuation of the Land could be enhanced. The Group intends to hold the Land for investment purpose as it continues to evaluate the Group’s future business development and expansion plans in Shaanxi province. As at the date hereof, the Group has not drawn up any concrete development or construction plan for the Land.

The Group is also expecting that the remaining plots of the Baoji Land will be put up for auction (listing-for-sale) some time in the future, however the Group has not been informed by the Baoji Land Reserve Centre or the Local Government regarding its concrete timetable or the exact size of land to be put up for sale. Nonetheless, subject to the assessment of the then market situation and the terms of such auction, the Group will consider enter such bidding for the remaining part of the Baoji Land should the opportunity come. The Company will keep the market informed of such progress (if any) in compliance with the Listing Rules.

The Directors consider that the terms and conditions of the Acquisition are fair and reasonable and in the interests of the Company and its shareholders as a whole.

GENERAL

The Acquisition constitutes a discloseable transaction for the Company under the Listing Rules as the relevant percentage ratios pursuant to Chapter 14 of the Listing Rules are more than 5% and less than 25%.

DEFINITIONS

In this announcement, unless the context requires otherwise, the following terms have the meanings set out below:

“Acquisition” the acquisition of the land use right in respect of the Baoji Land by Junan Company under the auction (listing-forsale) process

“Baoji Fufeng” Baoji Fufeng Biotechnologies Company Limited* (寶雞阜 豐生物科技有限公司), a PRC incorporated company and a wholly owned subsidiary of the Company

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“Baoji Ding Feng” Baoji Ding Feng Property Investment Limited (寶雞鼎 豐置業有限公司), a PRC incorporated company and a wholly owned subsidiary of the Company “Baoji Land Reserve Centre” Baoji High-Technology Development Zone Land Reserve Centre (寶雞高新技術產業開發區土地儲備中心)

• “Board”

the board of Directors of the Company

• “Company” Fufeng Group Limited (Stock Code: 546), a company incorporated in Cayman Islands with limited liability, the shares of which are listed on the main board of the Stock Exchange

• “Confirmation Agreements” the two confirmation agreements (成交確認書) entered into between the Baoji Land Reserve Centre and Baoji Fufeng dated 12 October 2014 in relation to the results of the bid made by Baoji Fufeng for the land use right in respect of the Land

• “connected person(s)” has the meaning ascribed thereto in the Listing Rules “Director(s)” the director(s) of the Company “Group” the Company and its subsidiaries

• “HK$”

• Hong Kong dollar, the legal currency of Hong Kong

• “Hong Kong”

• the Hong Kong Special Administrative Region of the PRC

• “Land” Two plots of land with an aggregate area of approximately 406.921 Mu (or approximately 271,280.7 square metres) situated at Gao Xin Jiu Road, East Area, Baoji HighTechnology Development Zone, Baoji City, Shaanxi Province, PRC

• “Land Transfer Contracts” two contracts for the transfer of land use right of two plots of state-owned construction land (國有建設用地 使用權出讓合同) in respect of the land use rights of the Land to be entered into between the Baoji Land Reserve Centre as transferor and Baoji Fufeng as transferee for a consideration of RMB RMB509.4 million (equivalent to approximately HK$641.8 million**)

• “Listing Rules”

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

“Local Government” local government of Baoji City, Shaanxi Province, the PRC

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“PRC”

the People’s Republic of China

“RMB” Renminbi, the legal currency of the PRC “Stock Exchange” The Stock Exchange of Hong Kong Limited

By order of the Board Fufeng Group Limited Li Xuechun Chairman

Hong Kong, 12 October 2014

• The English names of the PRC entities referred to in this announcement are transliterations from their Chinese names and are for identification purposes only, and should not be regarded as the official English name(s) of such Chinese name(s). If there is any inconsistency, the Chinese name shall prevail.

• ** In this announcement, for the purpose of illustration only, amounts quoted in RMB have been converted into HK$ at the rate of RMB1.00 to HK$1.26. Such exchange rate has been used, where applicable, for the purpose of illustration only and does not constitute a representation that any amounts were or may have been exchanged at this or any other rates or at all.

As at the date of this announcement, the executive directors of the Company are Mr. Li Xuechun, Mr. Wang Longxiang, Mr. Feng Zhenquan, Mr. Xu Guohua, Mr. Li Deheng, Mr. Chen Yuan and Mr. Li Guangyu and the independent non-executive directors of the Company are Mr. Choi Tze Kit, Sammy, Mr. Chen Ning, Mr. Liang Wenjun and Ms. Zheng Yu.

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