hmvod Limited — M&A Activity 2017

Jun 19, 2017

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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Trillion Grand Corporate Company Limited 萬泰企業股份有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8103)

SUPPLEMENTAL ANNOUNCEMENT

DISCLOSEABLE TRANSACTION

IN RELATION TO THE ACQUISITION OF 85% OF THE ISSUED SHARE CAPITAL OF FULL WEALTHY INTERNATIONAL LIMITED

Reference is made to the announcement of the Company dated 29 May 2017 in relation to the Acquisition (the “ Announcement ”). Unless otherwise stated, capitalized terms used herein shall have the same meanings as defined to them in the Announcement.

The Board wishes to provide further information in relation to the Acquisition.

FURTHER INFORMATION AND BUSINESS PROSPECTS RELATING TO THE TARGET GROUP

As disclosed in the Announcement, the Target Group is principally engaged in the business of providing multi-media related services and content.

In particular, it offers digital entertainment platform (the “ Entertainment Solutions ”) which enables online subscription service by its customers. The Target Group possesses an extensive media content library and its customers who subscribed for the Entertainment Solutions can view the media content ondemand.

The Target Group has signed long term license contracts with media content suppliers for providing media content. These media content suppliers will licence relevant media content to the Target Group and the Target Group will distribute such content to its customers. Customers of the Target Group includes individual users and cable TV companies. Customers will pay a subscription fee to the service that the Target Group provides.

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As disclosed in the Announcement, for the year ended 31 December 2016, the Operating Entities recorded net loss and net liabilities of HK$31 million and HK$30 million respectively (unaudited). This was mainly due to the loss of customers from a partner while the media content supplier agreements were still in place. However, such incident was a one-off incident and non-recurring in nature.

Nevertheless, the Target Group has recently entered into a cooperation arrangement with a renowned telecommunication provider (the “ Provider ”) with broad customer base in Hong Kong. The customers of the Provider can subscribe the Entertainment Solutions and the Provider has agreed to perform marketing initiatives so that more of its customers will subscribe the Entertainment Solutions. Since its cooperation with the Provider, there has already been a growth of 50% of the number of customers for the Target Group and it is expected that the number of customers will continue to increase.

Meanwhile, the Target Group continues to expand and upgrade the content library by negotiating with different renowned content providers in order to attract more customers to use their services. At the same time, the Target Group continues to secure and strengthen its relationships with both domestic and international media content providers for improving the media content library.

The Target Group also intends to extend its sales to Malaysia and South-East Asia and is currently under negotiation with the PRC video content providers for potential media content exchange to enrich the media content library.

CONSIDERATION AND GUARANTEED PROFIT

In arriving the Consideration, as disclosed in the Announcement, it was determined with reference to, the business development and future prospects of the Target Group, the Guaranteed Profit and the reasons and benefits of the Acquisition as stated in the Announcement.

The Operating Entities were acquired by HMV Digital Group China Limited, whose shares of which are listed on the GEM (Stock code: 8078) at the then price-to-earnings multiple of 12.9 times. Based on the Guaranteed Profit, the Consideration reflects an implied price-to-earnings multiple of 11.5 times, which is lower than 12.9 times. In addition, it is lower than the average of the price-to-earnings ratios of companies listed on the Stock Exchange that has business similar to the business of the Target Group. Those price-to-earnings ratio of the comparable companies ranges from approximately 9.3 to 56.3 times with an average of approximately 36.6 times. As such, the Board considers the Guaranteed Profit to be acceptable.

Given the business development and future prospects of the Target Group as disclosed in the Announcement and further described above and the outlook of the industry, together with the Guaranteed Profit, the Board considers the Acquisition (including the Consideration) to be fair and reasonable.

By order of the Board

Trillion Grand Corporate Company Limited Lau Kelly Executive Director

Hong Kong, 19 June 2017

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

Executive Directors:

Mr. Lau Kelly (Chief Executive Officer)

Mr. Leung Chung Nam

Mr. Wong Kam Kwan

Non-executive Director:

Ms. Jim Ka Man

Independent non-executive Directors:

Dr. Wan Ho Yuen, Terence Ms. Yeung Mo Sheung, Ann

Mr. Hau Chi Kit

This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM 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 announcement 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 announcement misleading.

This announcement will remain on the GEM website at http://www.hkgem.com on the “Latest Company Announcements” page for at least 7 days from the date of its posting and on the website of the Company at http://www.trilliongrand.com.

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