JD Logistics, Inc. — Capital/Financing Update 2014

May 14, 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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(Stock Code: 1172)

DISCLOSEABLE TRANSACTION DISPOSAL OF PROPERTY HOLDING COMPANIES

The Directors announce that on 14 May 2014 after trading hours, the Vendor, a whollyowned subsidiary of the Company, entered into the Disposal Agreement with the Purchaser for the disposal of the Sale Shares and the Sale Loan at a consideration of approximately HK$78.2 million (subject to adjustment). Completion of the Disposal shall take place on or before 21 May 2014.

As the applicable percentage ratios calculated under Chapter 14 of the Listing Rules exceed 5% but are less than 25%, the Disposal constitutes a discloseable transaction of the Company and is subject to announcement requirement under Chapter 14 of the Listing Rules.

INTRODUCTION

The Directors announce that on 14 May 2014 after trading hours, the Vendor, a whollyowned subsidiary of the Company, entered into the Disposal Agreement with the Purchaser for the disposal of the Sale Shares and the Sale Loan at a consideration of approximately HK$78.2 million (subject to adjustment).

THE DISPOSAL AGREEMENT

Date: 14 May 2014.

The Vendor: Midas Printing Limited, a wholly-owned subsidiary of the Company.

• For identification purpose only

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The Guarantor: Midas International Holdings Limited, guaranteeing certain obligations of the Vendor pursuant to the Disposal Agreement.

The Purchaser:

Redwood China Logistics Fund Limited Partnership.

Assets to be disposed:

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner(s) are third parties independent of the Company and its connected person(s) (as defined under the Listing Rules) and are not connected persons of the Company. The assets to be disposed of by the Vendor comprise the Sale Shares (being the entire issued share capital of Success Gain beneficially owned by the Vendor) and the Sale Loan (being the entire shareholder’s loan owing by Success Gain to the Vendor on the date of completion of the Disposal).

The sole asset of Success Gain is its interest in the entire equity interest of the PRC Subsidiary. The major asset of the PRC Subsidiary is its interest in the Land. The consolidated net assets of the Success Gain Group (before deduction of the shareholder’s loan owing to the Vendor of approximately HK$20.9 million) as at 30 September 2013 amounted to approximately HK$49.7 million. Both the consolidated net loss before and after taxation and extraordinary items of the Success Gain Group for the year ended 31 March 2013 amounted to approximately HK$1.7 million. Both the consolidated net loss before and after taxation and extraordinary items of the Success Gain Group for the fifteen months ended 31 March 2012 amounted to approximately HK$2.2 million.

• Consideration and payment terms:

• The consideration for the disposal of the Sale Shares and Sale Loan is approximately HK$78.2 million (subject to adjustment).

The consideration is approximately equal to the consolidated net assets of the Success Gain Group (before deduction of the Sale Loan) as calculated from the management accounts of the Success Gain Group as at the date of this announcement (‘‘Management Accounts’’) adjusting for the market value of the Land as agreed by the parties to the Disposal Agreement after taking into account market prices of similar properties in nearby areas.

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The consideration of approximately HK$78.2 million (subject to adjustment) pursuant to the Disposal Agreement will be payable in the following manner:

• (a) a deposit of approximately HK$19.6 million (‘‘Deposit’’) was paid by the Purchaser to the Vendor upon signing of the Disposal Agreement; and

• (b) the remaining balance of approximately HK$58.6 million will be paid by the Purchaser to the Vendor on completion, which is expected to take place on or before 21 May 2014.

The Vendor will procure that the Management Accounts be audited by the existing auditors of Success Gain (‘‘Audited Accounts’’) subsequent to the completion of the Disposal. Depending on whether the consideration is required to be adjusted upward or downward, the Purchaser would be (i) required to pay to the Vendor the amount of the adjusted consideration (which shall be calculated based on the difference in the net asset value as shown in the Audited Accounts and in the Management Accounts) (‘‘Adjusted Consideration’’) or (ii) paid by the Group the amount of the Adjusted Consideration, in all events within 5 business days after the date of receipt of the Audited Accounts by the Purchaser. On the basis of information currently available and to the best of the Directors’ knowledge, information and belief, the amount of the Adjusted Consideration (if any) would not be material.

If completion of the Disposal does not take place due to the default of the Purchaser, the Vendor shall be entitled to rescind the Disposal Agreement by notice in writing to the Purchaser and shall be entitled to forfeit the Deposit as agreed liquidated damages. If the defaulting party is the Vendor, the Vendor shall forthwith after receiving written refund notice from the Purchaser refund to the Purchaser the Deposit (together with accrued interest) as full and final settlement of all claims by the Purchaser in connection with the Disposal Agreement.

Upon completion of the Disposal Agreement, Success Gain and the PRC Subsidiary will cease to be wholly-owned subsidiaries of the Group.

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Warranties and representations:

The Vendor has given certain warranties and representations in favour of the Purchaser in respect of the financial positions of the Success Gain Group up to the completion of the Disposal for a maximum period of 18 months from the date of completion of the Disposal.

INFORMATION ON THE LAND

The Land is located at Suifengnian Village, Shatian Town, Dongguan, Guangdong Province (廣東省東莞巿沙田鎮穗豐年村), the PRC with a site area of 77,641.7 sq.m.. The Land is for industrial usage and factory premises and dormitories with gross floor area of about 120,000 sq.m. can be built on the Land. As at the date of this announcement, apart from minor construction works being carried out to build a dormitory with gross floor area of about 2,400 sq.m., the Land is undeveloped.

REASONS FOR AND BENEFITS OF THE DISPOSAL

Taking into account the anticipated printing demand, the Directors consider that the existing production facilities at Boluo, Huizhou and Changan, Dongguan, the PRC are sufficient for the requirement of the Group in the coming years. Accordingly, as stated in the interim report of the Company for the six months ended 30 September 2013, the Group is exploring alternate usage plan for the Land, including disposal of the Land to third parties, so as to maximize its value to the Shareholders.

The Directors consider that the current market presents a good opportunity for the Group to realise its investment in the Land through the disposal of the Sale Shares and the Sale Loan pursuant to the Disposal Agreement. The net proceeds from the Disposal, after deducting the estimated expenses, of approximately HK$77.4 million will be applied as general working capital of the Group. Accordingly, the Disposal will enable the Group to increase its working capital, and will improve the liquidity and strengthen the overall financial position of the Group.

On the basis of the consolidated net assets of the Success Gain Group as at 30 September 2013, the completion of the Disposal will generate a net gain of approximately HK$21.4 million for the Group after taking into account the estimated expenses and taxation in relation to the Disposal. However, the exact amount of the net gain on the Disposal can only be determined at the date of completion of the Disposal.

The terms of the Disposal Agreement were arrived at after arm’s length negotiation between the parties and the Directors consider that the terms of the Disposal Agreement are on normal commercial terms, fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

IMPLICATIONS UNDER THE LISTING RULES

As the applicable percentage ratios calculated under Chapter 14 of the Listing Rules exceed 5% but are less than 25%, the Disposal constitutes a discloseable transaction of the Company and is subject to announcement requirement under Chapter 14 of the Listing Rules.

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INFORMATION ABOUT THE GROUP AND THE PURCHASER

The principal business activities of the Group are manufacturing and trading of printed products, and the development and operation of cemetery. The principal business activity of the Purchaser is investment holding.

DEFINITIONS

• ‘‘Company’’ Midas International Holdings Limited (Stock Code: 1172), a company incorporated in the Cayman Islands with limited liability and the shares of which are listed on the Main Board of the Stock Exchange

• ‘‘Directors’’ directors of the Company ‘‘Disposal’’ disposal of the Sale Shares and the Sale Loan by the Vendor to the Purchaser pursuant to the Disposal Agreement

• ‘‘Disposal Agreement’’ the agreement dated 14 May 2014 and entered into between the Vendor, the Company and the Purchaser in relation to the Disposal

• ‘‘Group’’ the Company and its subsidiaries

‘‘HK$’’	Hong Kong dollars, the lawful currency of Hong Kong
‘‘Hong Kong’’	Hong Kong Special Administrative Region of the PRC
‘‘Land’’	a piece of land located at Suifengnian Village, Shatian
	Town, Dongguan, Guangdong Province, the PRC
‘‘Listing Rules’’	the Rules Governing the Listing of Securities on the Stock
	Exchange
‘‘PRC’’	People’s Republic of China
‘‘PRC Subsidiary’’	Dongguan Da Hua Printing Company Limited# (東莞大華印
	刷有限公司), a wholly-owned subsidiary of Success Gain
	and a company established in the PRC with limited liability
‘‘Purchaser’’	Redwood China Logistics Fund Limited Partnership, an
	exempted partnership established in Singapore with limited
	liability
‘‘Sale Loan’’	the entire amount of shareholder’s loan due from Success
	Gain to the Vendor at completion of the Disposal
	Agreement, which as at the date of this announcement was
	approximately HK$20.9 million
‘‘Sale Shares’’	two shares of Success Gain, representing the entire issued
	share capital of Success Gain

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‘‘Shareholders’’

shareholders of the Company

• ‘‘Stock Exchange’’

The Stock Exchange of Hong Kong Limited

‘‘Success Gain’’

Success Gain Investment Limited, a wholly-owned subsidiary of the Vendor and a company incorporated in Hong Kong with limited liability

• ‘‘Success Gain Group’’

Success Gain and the PRC Subsidiary

• ‘‘Vendor’’

Midas Printing Limited, a wholly-owned subsidiary of the Company and a company incorporated in Hong Kong with limited liability

• ‘‘sq.m.’’

square metre.

• English translation only

By order of the Board of Midas International Holdings Limited Richard Hung Ting Ho Chairman and Managing Director

Hong Kong, 14 May 2014

As at the date of this announcement, Mr. Richard Hung Ting Ho, Miss Candy Chuang Ka Wai and Mr. Geoffrey Chuang Ka Kam are Executive Directors, Mr. Dominic Lai is a NonExecutive Director, Mr. Abraham Shek Lai Him, Dr. Eddy Li Sau Hung and Mr. Yau Chi Ming are Independent Non-Executive Directors of the Company.

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