HC Group Inc. — Capital/Financing Update 2020

Dec 2, 2020

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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HC GROUP INC. 慧聰集團有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 02280)

CONNECTED TRANSACTION IN RELATION TO PROVISION OF LOAN TO CHONGQING MICRO-CREDIT

PROVISION OF THE LOAN

On 2 December 2020, Beijing Huicong, a wholly-owned subsidiary of the Company, entered into the Loan Agreement with Chongqing Micro-Credit, a non-wholly owned subsidiary of the Company, pursuant to which Beijing Huicong agreed to grant to Chongqing Micro-Credit an unsecured loan in the principal amount up to RMB50,000,000, bearing interest at a rate of 8% per annum for a period of one (1) year commencing from the drawdown date.

LISTING RULES IMPLICATIONS

Chongqing Micro-Credit is indirectly owned by Digital China as to 30%. As at the date of this announcement, Digital China and its associates held approximately 19.37% of the total issued shares of the Company. Digital China is thus a substantial Shareholder and a connected person of the Company at the issuer level. Therefore, Chongqing Micro-Credit is a connected subsidiary of the Company under the Listing Rules, and the transaction contemplated under the Loan Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

As the highest applicable percentage ratio (as defined under Rule 14.07 of the Listing Rules) (other than the profits ratio) in respect of the Loan is more than 0.1% but less than 5%, the Loan Agreement is only subject to the reporting and announcement requirements but is exempt from the circular and independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

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THE LOAN AGREEMENT

On 2 December 2020, Beijing Huicong, a wholly-owned subsidiary of the Company, entered into the Loan Agreement with Chongqing Micro-Credit, a non-wholly owned subsidiary of the Company, pursuant to which Beijing Huicong agreed to grant to Chongqing Micro-Credit an unsecured loan in the principal amount up to RMB50,000,000, bearing interest at a rate of 8% per annum for a period of one (1) year commencing from the drawdown date.

The principal terms of the Loan Agreement are summarised as follows:

	annum for a period of one (1) year commencingprincipal terms of the Loan Agreement are sum	annum for a period of one (1) year commencingprincipal terms of the Loan Agreement are sum	from the drawdown date.	from the drawdown date.	from the drawdown date.	from the drawdown date.
			marised as fo	llows:
Date:Lender:Borrower:Principal amounTerm:Interest:Purpose of the LRepayment:	e:	2 December 2020
	der:rower:	Beijing Huicong, a whoChongqing Micro-CredCompany	lly-owned subit, a non-wh	sidiary of theolly owned s	Companyubsidiary of t
	cipal amoun	t:Up to RMB50,000,00Borrower in one or mor	0 (which me tranches)	ay be draw	n down by t
	m:rest:	One (1) year commenci8% per annum	ng from the d	rawdown date
	pose of the L	oan:The Loan shall be usedCredit only.	for daily op	eration of Ch	ongqing Mic

The Loan will be funded by internal resources of the Group.

INFORMATION ON THE GROUP, BEIJING HUICONG AND CHONGQING MICROCREDIT

The Group endeavours to become the leading industrial internet groups in the PRC. By focusing on and integrating advantageous resources, the Group has upgraded its organisational structure, with its business composed of three segments, namely the business groups of technology-driven new retail, smart industries, and platform and corporate services. Beijing Huicong is a wholly-owned subsidiary of the Company and is principally engaged in the provision of business information in the PRC.

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Chongqing Micro-Credit is a company established in the PRC and is indirectly owned as to 70% by the Company and 30% by Digital China, a company listed on the main board of the Stock Exchange (stock code: 00861) principally engaged in the provision of information technology, supply chain, internet based integrated information technology platform construction and operation and institutional financial services, through its wholly-owned subsidiary. Chongqing Micro-Credit is principally engaged in development and operation of the micro-credit internet financing business in the PRC and development of micro-finance products such as trade finance, personal credit and guaranteed loan.

REASONS FOR AND THE BENEFITS OF PROVISION OF THE LOAN

Chongqing Micro-Credit is an indirect 70%-owned subsidiary of the Company. The provision of the Loan will enhance the working capital of Chongqing Micro-Credit and enable Chongqing Micro-Credit to expand its business, which will in turn have a positive effect on the Group’s financial results.

The terms of the Loan Agreement (including the interest rate) were arrived at by the parties at after arm’s length negotiations, having taken into account (i) the funding requirement of Chongqing Micro-Credit for its business operation, (ii) the Group’s financing costs, (iii) the prevailing market interest rate in the PRC, and (iv) the commercial practice in the PRC. The Directors (including the independent non-executive Directors) consider that the terms of the Loan Agreement were entered into on normal commercial terms or better, and are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

Chongqing Micro-Credit is indirectly owned by Digital China as to 30%. As at the date of this announcement, Digital China and its associates held approximately 19.37% of the total issued shares of the Company. Digital China is thus a substantial Shareholder and a connected person of the Company at the issuer level. Therefore, Chongqing Micro-Credit is a connected subsidiary of the Company under the Listing Rules, and the transaction contemplated under the Loan Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

As the highest applicable percentage ratio (as defined under Rule 14.07 of the Listing Rules) (other than the profits ratio) in respect of the Loan is more than 0.1% but less than 5%, the Loan Agreement is only subject to the reporting and announcement requirements but is exempt from the circular and independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

None of the Directors has a material interest in the transactions contemplated under the Loan Agreement and none of them is required to, or has abstained from voting on the relevant board resolutions to approve the Loan Agreement.

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DEFINITIONS

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

ociate(s)”has the meanings ascribed to it under the Listing Rulesjing Huicong” ore “Lender”北京慧聰互聯信息技術有限公司(Beijing Huicong InternetInformation Technology Co., Ltd*), a wholly-owned subsidiaryof the Companyard”the board of Directorsongqing Micro-Credit”the “Borrower”重慶神州數碼慧聰小額貸款有限公司(Chongqing DigitalChina Huicong Micro-Credit Co., Ltd.*), a company establishedin the PRC with limited liability, and is indirectly owned as to70% by the Company and 30% by Digital China through theirrespective wholly-owned subsidiariesmpany”HC Group Inc., a company incorporated with limited liability	ociate(s)”has the meanings ascribed to it under the Listing Rulesjing Huicong” ore “Lender”北京慧聰互聯信息技術有限公司(Beijing Huicong InternetInformation Technology Co., Ltd*), a wholly-owned subsidiaryof the Companyard”the board of Directorsongqing Micro-Credit”the “Borrower”重慶神州數碼慧聰小額貸款有限公司(Chongqing DigitalChina Huicong Micro-Credit Co., Ltd.*), a company establishedin the PRC with limited liability, and is indirectly owned as to70% by the Company and 30% by Digital China through theirrespective wholly-owned subsidiariesmpany”HC Group Inc., a company incorporated with limited liability	ociate(s)”has the meanings ascribed to it under the Listing Rulesjing Huicong” ore “Lender”北京慧聰互聯信息技術有限公司(Beijing Huicong InternetInformation Technology Co., Ltd*), a wholly-owned subsidiaryof the Companyard”the board of Directorsongqing Micro-Credit”the “Borrower”重慶神州數碼慧聰小額貸款有限公司(Chongqing DigitalChina Huicong Micro-Credit Co., Ltd.*), a company establishedin the PRC with limited liability, and is indirectly owned as to70% by the Company and 30% by Digital China through theirrespective wholly-owned subsidiariesmpany”HC Group Inc., a company incorporated with limited liability	ociate(s)”has the meanings ascribed to it under the Listing Rulesjing Huicong” ore “Lender”北京慧聰互聯信息技術有限公司(Beijing Huicong InternetInformation Technology Co., Ltd*), a wholly-owned subsidiaryof the Companyard”the board of Directorsongqing Micro-Credit”the “Borrower”重慶神州數碼慧聰小額貸款有限公司(Chongqing DigitalChina Huicong Micro-Credit Co., Ltd.*), a company establishedin the PRC with limited liability, and is indirectly owned as to70% by the Company and 30% by Digital China through theirrespective wholly-owned subsidiariesmpany”HC Group Inc., a company incorporated with limited liability
under the laws of the Cayman Islands, the Shares of which arelisted on the main board of the Stock Exchangenected person(s)”has the meaning ascribed to it under the Listing Rulesital China”Digital China Holdings Limited (神州數碼控股有限公司*), acompany incorporated in Bermuda with limited liability, theissued shares of which are listed on the main board of the StockExchange (stock code: 00861)ector(s)”directors of the Companyup”the Company and its subsidiaries”
ng Kongthe Htin Rules”the R	ong Kong Specialules Governin th	dministrative Regie Listin of Secu	onities on the Stock
g Excha	gnge	g
n”a loa	n of RMB50,000,	000 granted by t	he Lender to the
Borro	wer pursuant to the	Loan Agreement
n Agreement”the l	oan agreement da	ted 2 December	2020 and entered
into b	etween the Lender	and the Borrowe	r in relation to the
provi	sion of the Loan

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“PRC” the People’s Republic of China, and for the purpose of this announcement, excludes Hong Kong, Macau Special Administrative Region of the People’s Republic of China and Taiwan

“Share(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company

• “Shareholder(s)” the shareholder(s) of the Company

“Stock Exchange” The Stock Exchange of Hong Kong Limited

• “substantial shareholder” has the meaning ascribed to it under the Listing Rules “RMB” Renminbi, the lawful currency of the PRC

“%” per cent

By order of the Board HC GROUP INC. Liu Jun Chairman

Hong Kong, 2 December 2020

As at the date of this announcement, the Board comprises:

• Mr. Liu Jun (Executive Director and Chairman)

• Mr. Zhang Yonghong (Executive Director and Chief Executive Officer)

• Mr. Liu Xiaodong (Executive Director and President)

• Mr. Guo Fansheng (Non-executive Director)

• Mr. Sun Yang (Non-executive Director)

• Mr. Lin Dewei (Non-executive Director)

• Mr. Zhang Ke (Independent non-executive Director)

• Mr. Zhang Tim Tianwei (Independent non-executive Director)

• Ms. Qi Yan (Independent non-executive Director)

• For identification purposes only

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