Jiyi Holdings Limited — Proxy Solicitation & Information Statement 2019

May 10, 2019

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a licensed securities dealer, registered institution in securities, a bank manager, solicitor, professional accountant or other professional advisers.

If you have sold or transferred all your shares in Jiyi Household International Holdings Limited (the ‘‘Company’’), you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or the licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for the contents of this circular, 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 circular.

This circular is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

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Jiyi Household International Holdings Limited 集一家居國際控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1495)

PROPOSED ISSUE OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Capitalised terms used in this cover page shall have the same meanings as those defined in the section headed ‘‘Definitions’’ in this circular.

A letter from the Board is set out on pages 4 to 22 of this circular.

A notice convening the EGM to be held at Conference Room, 6/F, Overseas Trust Bank Building, 160 Gloucester Road, Wanchai, Hong Kong at 10:00 a.m. on Thursday, 30 May 2019 is set out on pages EGM-1 to EGM-3 of this circular. A form of proxy for use at the EGM is also enclosed. Whether or not you intend to attend the EGM, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to Computershare Hong Kong Investor Services Limited on 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, as soon as possible and in any event not later than 48 hours before the time appointed for holding the EGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof (as the case may be) should you so wish.

14 May 2019

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1

– i –

DEFINITIONS

In this circular, unless the context otherwise requires, the following terms or expressions shall have the following meanings:

• ‘‘Announcement’’

the announcement of the Company dated 22 April 2019 in relation to, among other matters, the Subscriptions

• ‘‘Board’’

the board of Directors

• ‘‘Business Day’’

for the purpose of the Subscription Agreements, a day (excluding Saturdays) on which banks are generally open for business in Hong Kong; and for all other purposes, a day on which the Stock Exchange is open for transaction of business

• ‘‘Closing Date’’

means a date within fifteen business day after the fulfilment of the conditions precedent of the respective Subscription Agreements or such other date as the Company and the Subscribers may agree in writing

• ‘‘Company’’

Jiyi Household International Holdings Limited（集一家居 國際控股有限公司）, an exempted company incorporated in the Cayman Islands with limited liability

• ‘‘connected person’’

has the meaning ascribed to it under the Listing Rules

• ‘‘Conversion Price’’

• HK$1.0 per Conversion Share, being the initial price for conversion of the Convertible Bonds, which is subject to the adjustments pursuant to the terms and conditions of the Convertible Bonds

• ‘‘Conversion Shares’’

the Shares to be issued upon the exercise of the conversion rights attaching to the Convertible Bonds

• ‘‘Convertible Bonds’’

the convertible bonds with an aggregate principal amount of HK$102,100,000 to be issued by the Company to the Subscribers pursuant to the Subscription Agreements

– 1 –

DEFINITIONS

‘‘EGM’’

the extraordinary general meeting of the Company to be convened and held at which resolution(s) will be proposed to consider, and, if thought fit, approve the transactions contemplated under the Subscription Agreements, including, among others, the issue of the Convertible Bonds and the allotment and issue of Conversion Shares under the Specific Mandate, notice of which will be contained in a circular to be despatched to the Shareholders

• ‘‘Group’’ the Company and its subsidiaries

• ‘‘Hong Kong’’

• the Hong Kong Special Administrative Region of the People’s Republic of China

• ‘‘Independent Third Party(ies)’’ any person or company and their respective ultimate beneficial owner(s) (if applicable) who, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, are third parties independent of the Company and its connected persons

• ‘‘HK$’’

• Hong Kong dollar, the lawful currency of Hong Kong

• ‘‘Last Trading Day’’

• Thursday, 18 April 2019, being the last full trading day for the Shares before entering into the Subscription Agreements

• ‘‘Latest Practicable Date’’ Thursday, 9 May 2019, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular

• ‘‘Listing Committee’’ has the meaning ascribed thereto in the Listing Rules

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

• ‘‘PRC’’

• the People’s Republic of China, which for the purpose of this circular, excludes Hong Kong, the Macau Special Administrative Region and Taiwan

• ‘‘SFC’’

• the Securities and Futures Commission of Hong Kong

• ‘‘SFO’’

• the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

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DEFINITIONS

• ‘‘Share(s)’’ ordinary share(s) of the Company

• ‘‘Shareholder(s)’’ holder(s) of the Shares

• ‘‘Specific Mandate’’ the specific mandate to be sought from Shareholders at the EGM to approve the issue of the Convertible Bonds and the allotment and issue of the Conversion Shares

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

• ‘‘Subscribers’’

• eight (8) subscribers of the Convertible Bonds and each of them is an Independent Third Party (each a ‘‘Subscriber’’)

• ‘‘Subscription’’ the subscription of the Convertible Bonds by the Subscribers pursuant to the terms and conditions of the Subscription Agreements

• ‘‘Subscription Agreements’’ the conditional subscription agreements all dated 22 April 2019 and entered into between the Company and each of the Subscribers in relation to the subscription of the Convertible Bonds

• ‘‘Takeovers Code’’ the Hong Kong Code on Takeovers and Mergers

• ‘‘%’’ per cent

The English text of this circular, the notice of the EGM and accompanying form of proxy shall prevail over their respective Chinese text in case of inconsistency.

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LETTER FROM THE BOARD

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Jiyi Household International Holdings Limited 集一家居國際控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1495)

Executive Directors: Ms. Hou Wei (Chairlady) Mr. Liu Xianxiu Mr. Yang Baikang

Non-executive Directors: Mr. Hou Bo

Registered Office: Clifton House 75 Fort Street P.O. Box 1350 Grand Cayman KY1-1108 Cayman Islands

Independent non-executive Directors: Mr. Ye Yihui Mr. Ho Hin Yip Mr. Hou Lianchang

Head office and principal place of business in Hong Kong: Room 1405, 14/F. Jubilee Centre 18 Fenwick Street Wanchai, Hong Kong

14 May 2019

To the Shareholders

Dear Sir/Madam

PROPOSED ISSUE OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE AND NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

The Company has announced on 22 April 2019 regarding the Subscription and issue of the Convertible Bonds. The purpose of this circular is to provide you with further information regarding the Subscription and Convertible Bonds and the notice of EGM for the purpose of considering and, if thought fit, approving the resolution relating to the Subscription and issue of the Convertible Bonds.

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LETTER FROM THE BOARD

SUBSCRIPTION AGREEMENTS

On 22 April 2019, the Company entered into eight (8) Subscription Agreements with the Subscribers respectively, pursuant to which the Company has conditionally agreed to issue and the Subscribers has respectively and conditionally agreed to subscribe for the Convertible Bonds in the aggregate principal amount of HK$102,100,000.

Date

22 April 2019

Parties

The Company has entered into eight (8) Subscription Agreements in total, on principally the same terms (except for the amounts of the Convertible Bonds to be subscribed by each of the Subscribers respectively), with each of the Subscribers respectively.

To the best knowledge, information and belief of the Directors, and having made all reasonable enquiries, each of the Subscribers and their respective ultimate beneficial owners (as the case maybe) are Independent Third Parties.

Conditions precedent

Completion of each of the Subscription Agreements is conditional upon the fulfilment or waiver (as the case may be) of the followings:

• (a) the Listing Committee of the Stock Exchange granting the listing of and permission to deal in, the Conversion Shares, and such listing and permission not subsequently being revoked;

• (b) the representations and warranties of the Subscriber in the Subscription Agreement being true, accurate, complete and not misleading in all material respects as at the Closing Date, and that no material information or facts in all material respects have been omitted or withheld at as at the Closing Date;

• (c) each of the Subscriber having obtained all necessary consent and approval (if any) for the transactions contemplated under the respective Subscription Agreement;

• (d) the resolutions duly passed by the Directors and the Shareholders approving, inter alia, the Subscription Agreements and the transactions contemplated thereunder, including the approval of the Specific Mandate at the EGM; and

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LETTER FROM THE BOARD

• (e) the Company having obtained all necessary consents and approvals from the Directors and/or third parties in respect of the entering into and signing of the Subscription Agreements and the transactions contemplated thereunder, having made all necessary filings and registrations, and in accordance with and in compliance with all applicable laws or regulations.

If the above conditions under any of the Subscription Agreements are not fulfilled or waived (as the case may be) on or before the Long Stop Date, such Subscription Agreement(s) shall lapse and become null and void and both the Company and the Subscriber(s) will be released from all obligations under Subscription Agreement (save for duty of non-disclosure and liabilities for any antecedent breaches thereof), while the completion of each Subscription Agreement is not interconditional on each other and the lapse of any Subscription Agreement(s) will not affect the completion of the other Subscription Agreement(s). As at the Latest Practicable Date, none of the conditions have been fulfilled except for condition (c) above.

Completion

Completion shall take place within the tenth (10th) business day after the conditions precedent of the Subscription Agreement are fulfilled or waived (or such other date as may be agreed between the respective parties).

Principal terms of the Convertible Bonds

Issuer: the Company Principal amount: HK$102,100,000 Maturity date: The Convertible Bonds shall mature on the date falling eighteenth (18th) month after the date of issue thereof. As the Subscriber and the Company may mutually agree, such maturity date could be extended to the date falling second (2nd) anniversary of the date of issue thereof Interest: The Convertible Bonds shall bear interest at rate of 6% per annum from the date of issue (inclusive of such date) until the maturity date, payable quarterly

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LETTER FROM THE BOARD

Conversion Price:

The initial Conversion Price of the Convertible Bonds shall be HK$1.0 (subject to any adjustment to the Conversion Price), the Company may appoint its auditors in obtaining professional advice on the adjustment of the Conversion Price and the basis of the conversion in order to ensure holders of the Convertible Bonds are entitled to an equal proportion of the conversion rights.

The Conversion Price of HK$1.0 per Conversion Share represents:

• (i) a premium of 1% over the closing price of HK$0.99 per Share as quoted on the Stock Exchange on 18 April 2019, being the latest trading date prior to the date of the Subscription Agreements; and

• (ii) a premium of 1.8% over the average of the closing prices of the Shares as quoted on the Stock Exchange for the last five (5) consecutive trading days up to and including 18 April 2019 of HK$0.982 per Share.

The Conversion Price was arrived at after arm’s length negotiations between the Company and the Subscribers, taking into account of, among others, the recent trading performance of the Shares. The Directors consider that the Conversion Price and the terms and conditions of the Subscription Agreements and the Convertible Bonds are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

• Adjustment to the Conversion Price:

The Conversion Price will be subject to adjustments upon the occurrence of the following events:

• (a) If and whenever the Shares by reason of any consolidation, subdivision or reclassification become of a different nominal amount, the Conversion Price shall be adjusted by multiplying the initial Conversion Price in force immediately before such alteration by the following fraction:

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where:

• A = the nominal amount of one Share immediately after such alteration; and

B = the nominal amount of one Share immediately before such alteration.

Such adjustment shall become effective on the date the alteration takes effect. Reclassification hereby means the alteration of share class to the effect that the nominal amount of the Shares is changed.

• (b) If and whenever the Company shall issue any Shares credited as fully paid to the Shareholders by way of capitalisation of profits or reserves (except any Shares issued in lieu of the whole or any part of any cash dividend being a dividend which the Shareholders concerned would or could otherwise have received) and which would not have constituted a capital distribution, the Conversion Price shall be adjusted by multiplying the initial Conversion Price in force immediately before such issue by the following fraction:

A

B

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LETTER FROM THE BOARD

where:

A = the aggregate nominal amount of the issued Shares immediately before such issue; and

B = the aggregate nominal amount of the issued Shares immediately after such issue.

Such adjustment shall become effective on the date of issue of such Shares or if a record date is fixed therefor, immediately after such record date.

In the case of an issue of Shares by way of a scrip dividend where the current market price of such Shares exceeds 120% of the amount of the cash dividend or the relevant part thereof and which would not have constituted a capital distribution, the Conversion Price shall be adjusted by multiplying the initial Conversion Price in force immediately before the issue of such Shares by the following fraction:

A B

where:

A = the aggregate nominal amount of the issued Shares immediately before such issue of Shares by way of scrip dividend; and

B = the aggregate nominal amount of the issued Shares immediately after such issue of Shares by way of scrip dividend.

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LETTER FROM THE BOARD

• (c) If and whenever the Company shall pay or make any capital distribution to the Shareholders, the Conversion Price shall be adjusted by multiplying the initial Conversion Price in force immediately before such capital distribution by the following fraction:

A - B

A

where:

A = the current market price of one Share on the date on which the capital distribution is publicly announced; and

B = the fair market value on the date of such announcement of the portion of the capital distribution attributable to one Share.

Such adjustment shall become effective on the date that such capital distribution is actually made or if a record date is fixed therefor, immediately after such record date.

• (d) If and whenever the Company shall issue Shares to all Shareholders as a class by way of rights, or issue or grant to all Shareholders as a class by way of rights, options, warrants or other rights to subscribe for, purchase or otherwise acquire any Shares, in each case at less than 95% of the current market price per Share on the date of the announcement of the terms of the issue or grant, the Conversion Price shall be adjusted by multiplying the initial Conversion Price in force immediately before such issue or grant by the following fraction:

A + B

A + C

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LETTER FROM THE BOARD

where:

A = the number of Shares in issue immediately before such announcement;

B = the number of Shares which the aggregate amount (if any) payable for the Shares issued by way of rights or for the options or warrants or other rights issued or granted by way of rights and for the total number of Shares comprised therein would subscribe for, purchase or otherwise acquire at such current market price per Share; and

C = the aggregate number of Shares issued or, as the case may be, comprised in the issue or grant.

Such adjustment shall become effective on the date of issue of such Shares or issue or grant of such options, warrants or other rights (as the case may be) or where a record date is set, the first date on which the Shares are traded ex-rights, ex-options or ex-warrants, as the case may be.

• (e) If and whenever the Company shall issue any securities (other than Shares or options, warrants or other rights to subscribe for, purchase or otherwise acquire Shares) to all Shareholders as a class by way of rights or grant to all Shareholders as a class by way of rights, options, warrants or other rights to subscribe for, purchase or otherwise acquire any securities (other than Shares or options, warrants or other rights to subscribe for, purchase or otherwise acquire Shares), the Conversion Price shall be adjusted by multiplying the initial Conversion Price in force immediately before such issue or grant by the following fraction:

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A

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LETTER FROM THE BOARD

where:

A = the current market price of one Share on the date on which such issue or grant is publicly announced; and

B = the fair market value on the date of such announcement of the portion of the rights attributable to one Share.

Such adjustment shall become effective on the date of issue of the securities or grant of such rights, options or warrants (as the case may be) or where a record date is set, the first date on which the Shares are traded exrights, ex-options or ex-warrants, as the case may be.

• (f) If and whenever the Company shall issue any securities (which carry rights of conversion into, or exchange or subscription for, new Shares upon conversion) is made to any person at a consideration per Share which is less 95% of the current market price, the Conversion Price shall be adjusted by multiplying the initial Conversion Price in force immediately before such issue or grant by the following fraction:

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A = the number of Shares in issue immediately before such issue;

B = the number of Shares which the aggregate consideration receivable by the Company for the Shares to be issued would purchase at the current market price; and

C = the maximum number of Shares to be issued on the exercise of such rights of subscription at the initial Conversion Price.

Such adjustment shall become effective on the date of issue of such Shares or issue or grant of such options, warrants or other rights (as the case may be).

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LETTER FROM THE BOARD

• (g) If and whenever there shall be any modification of the rights of conversion, exchange or subscription attaching to any such securities so that the consideration per Share is less than 95% of the current market price on the date of announcement of the proposals for such modification, the Conversion Price shall be adjusted by multiplying the initial Conversion Price in force immediately before such modification by the following fraction:

A + B

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A = the number of Shares in issue immediately before such modification;

B = the number of Shares which the aggregate consideration receivable by the Company for the Shares to be issued on conversion or exchange or on exercise of the right of subscription attached to the securities so modified would purchase at such current market price or, if lower, the existing conversion, exchange or subscription price of such securities; and

C = the maximum number of Shares to be issued on conversion or exchange of such securities or on the exercise of such rights of subscription attached thereto at the modified conversion, exchange or subscription price or rate.

Such adjustment shall become effective on the date of modification of the rights of conversion, exchange or subscription attaching to such securities.

• (h) If and whenever the Company or any of its subsidiaries or any other person issues, sells or distributes any securities in connection with an offer pursuant to which the Shareholders generally are entitled to participate in arrangements whereby such securities may be acquired by them, the Conversion Price shall be adjusted by multiplying the initial Conversion Price in force immediately before such issue by the following fraction:

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A

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LETTER FROM THE BOARD

where:

A = the current market price of one Share on the date on which such issue is publicly announced; and

B = the fair market value on the date of such announcement of the portion of the rights attributable to one Share.

Such adjustment shall become effective on the date of issue of the securities.

• (i) If the Company or the Subscribers determines that an adjustment should be made to the Conversion Price as a result of one or more events or circumstances not referred to in the precedent paragraphs, the Company or the Subscribers shall, at the Company’s expense, consult an independent investment bank, to determine as soon as practicable what adjustment (if any) to the Conversion Price is fair and reasonable to take account thereof, if the adjustment would result in a reduction in the Conversion Price, and the date on which such adjustment should take effect and upon such determination by the independent investment bank such adjustment (if any) shall be made and shall take effect in accordance with such determination.

No adjustment shall be made to the Conversion Price where such adjustment would be less than one percent (1%) of the Conversion Price then in effect.

No adjustment will be made to the Conversion Price when Shares or other securities are issued, offered or granted to employees of the Company pursuant to any share option scheme or when Shares are issued pursuant to the outstanding convertible bonds issued by the Company prior to the date of the Subscription Agreement.

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LETTER FROM THE BOARD

Conversion Shares:

• Based on the initial Conversion Price of HK$1.0 per Conversion Share and assuming full conversion of the Convertible Bonds at the Conversion Price, the Convertible Bonds will be convertible into 102,100,000 Conversion Shares, which represents (i) approximately 14.77% of the totally issued share capital of the Company as at the Latest Practicable Date; and (ii) approximately 12.87% of the totally issued share capital of the Company as to be enlarged by the allotment and issue of the Conversion Shares upon full conversion of the Convertible Bonds, assuming there is no further issue or repurchase of the Shares before the exercise of the conversion rights in full.

The allotment and issuance of the Conversion Shares are subject to the granting of the Specific Mandate by the Shareholders at the EGM.

Form and denomination:

• The Convertible Bonds will be issued in registered form in the denomination of the amount to be subscribed by each of the Subscriber in Hong Kong dollars.

Transferability:

Subject to the terms and conditions of the Convertible Bonds, the Convertible Bonds can be transferred by the holders of the Convertible Bonds. Any transfer of the Convertible Bonds shall be made in compliance with all applicable requirements under the Listing Rules, Takeovers Code and all applicable laws and regulations.

• Conversion period and restrictions:

Subject to the terms and conditions of the Convertible Bonds, holders of the Convertible Bonds shall have the right to convert the whole or part of the principal amount of the Convertible Bonds into Conversion Shares at any time during the conversion period. The conversion period of the Convertible Bonds are as follows:

• (a) a maximum of not more than one-third of the principal amount of the Convertible Bonds held by such bondholder may be converted into Conversion Shares from the twelfth (12th) month after the issue of the Convertible Bonds;

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LETTER FROM THE BOARD

• (b) a maximum of not more than one-third of the principal amount of the Convertible Bonds held by such bondholder may be converted into Conversion Shares from the fourteenth (14th) month after the issue of the Convertible Bonds;

• (c) all the remaining of the principal amount of the Convertible Bonds held by such bondholder may be converted into Conversion Shares from the sixteenth (16th) month after the issue of the Convertible Bonds.

If any conversion of the Convertible Bonds would result in:

• (a) triggering a mandatory offer under the Takeovers Code on the part of the holder and/or any party(ies) acting in concert (as defined in the Takeovers Code) with it; or

• (b) the Company not being able to satisfy the public shareholding requirement (i.e. 25% public float, or any other percentages as may be specified by the Listing Rules from time to time) under the Listing Rules;

The number of Conversion Shares to be issued under such conversion shall be subject to the maximum number of Shares that can be issued by the Company to the extent that the Company reasonably believes that the allotment and issue of such number of Shares will not (i) trigger a mandatory offer under the Takeovers Code; and/or (ii) result in the Company not being able to satisfy the public shareholding requirement. The remaining conversion rights attached to the holder(s) of such Convertible Bonds will be suspended until the Company is able to allot and issue additional new Shares to satisfy such remaining conversion rights of the holder(s) of such Convertible Bonds without triggering the mandatory offer under the Takeovers Code or in compliance with the public float requirement (as the case may be).

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LETTER FROM THE BOARD

Redemption:

The Company may, at any time prior to the maturity date, redeem all or part of the outstanding Convertible Bonds at the price of 100% of the outstanding principal amount of the Convertible Bonds together with the interest for the period from the redemption date to the maturity date at the rate of 6% per annum, by giving a prior notice of not less than thirty (30) days to the holder(s) of such Convertible Bonds subject to the terms and conditions of the Convertible Bonds.

Any Convertible Bonds outstanding on the maturity date shall be redeemed by the Company subject to the terms and conditions of the Convertible Bonds.

Any or all of the Convertible Bonds being redeemed or converted shall be cancelled immediately. Certificates of all cancelled Convertible Bonds should be delivered to the Company or other parties designated by the Company.

Ranking:

• The payment obligations of the Company under the Convertible Bonds shall, save for such exceptions as may be provided by applicable legislation, at all times rank at least equally with all its other present and future unsecured and unsubordinated obligations. The Conversion Shares issued upon conversion of the Convertible Bonds will in all respects rank pari passu with other Shares in issue on the date of allotment and issue of such Conversion Shares.

Voting:

The holders of the Convertible Bonds will not be entitled to attend or vote at any meetings of the Company by reason only of being the holders of the Convertible Bonds.

Listing:

Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares. No application will be made for listing of, or permission to deal in, the Convertible Bonds on the Stock Exchange or any other stock exchange.

Specific Mandate to issue the Conversion Shares

The Conversion Shares will be allotted and issued pursuant to the Specific Mandate proposed to be sought from the Shareholders at the EGM.

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LETTER FROM THE BOARD

INFORMATION ON THE SUBSCRIBERS

According to the information provided by the Subscribers and to the best knowledge, information and belief of the Directors having made reasonable enquiries:

• (i) As to the backgrounds of each of the Subscribers, one of them is a company (the ‘‘ Corporate Subscriber ’’ ) named 青 島 榮 世 開 元 商 貿 有 限 公 司 (Qingdao Rongshikaiyuan Trading Company Limited*) and incorporated in PRC with limited liability, being principally engaged in wholesales and retails of metal fittings and electronic equipments, of which the ultimate beneficial owner is an individual named Zhang Zongai（張宗愛）. The rest of the Subscribers are individuals of different occupations including merchant, fund manager, lawyer, director and officer;

• (ii) as at the Latest Practicable Date, each of the Subscribers (including the Corporate Subscriber) and their ultimate beneficial owners (as the case maybe) are Independent Third Parties;

• (iii) before entering into of the Subscription Agreements, except as disclosed above, neither the Subscribers nor their respective associates have any other interests in the Shares or any business dealings with the Group; and

• (iv) Save for the Corporate Subscriber, none of the Subscribers will become a substantial shareholder of the Company upon conversion of the relevant Convertible Bonds held by him/her.

REASONS FOR THE SUBSCRIPTION AND USE OF PROCEEDS

The Group is principally engaged in the sales and distribution of household building materials and furnishings. The Directors consider that the raising of funds by the issuance of the Convertible Bonds is justifiable considering the recent market conditions which represent an opportunity for the Company to strengthen its capital base and financial position of the Group.

The Directors consider that the issue of the Convertible Bonds is an appropriate means of raising additional capital of the Company since it will not have an immediate dilution effect on the shareholding of the existing Shareholders.

Subject to the completion of the Subscription, the aggregate gross proceeds from the Subscription shall be HK$102,100,000 and the net proceeds from the Subscription (after deduction of all relevant costs and expenses) are estimated to be approximately HK$101.6 million.

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LETTER FROM THE BOARD

The Company intends to use the net proceeds as follows:-

• (i) Approximately HK$71.5 million (representing approximately 70% of the net proceeds) will be used for the development of the construction in process (including the beautiful countryside projects in Tangxi Town and Pantian Town of Fengshun County of Meizhou City, Tiehan Ecology city project, and Wei Long Ju project). The principal engagement of the Group in Tiehan Ecology city project is the construction of part of residential buildings, and the Group acts as the general contractor in Wei Long Ju project, mainly involves in construction of residential buildings, supermarkets, office buildings and landscape projects. The countryside project in Tangxi Town mainly includes remediation of villages, garbage disposal, construction of sewage treatment facilities, and renovation of dilapidated buildings, construction of power supply and distribution networks and improvement of public service facilities. The countryside project in Pantian Town mainly includes the remediation of villages, construction of sewage treatment facilities, construction of water supply facilities, road construction, the improvement and construction of public service facilities, and greening along the Pantian River. For further details of the beautiful countryside projects in Tangxi Town and Pantian Town, please refer to the announcement of the Company dated 28 October 2018;

• (ii) Approximately HK$20 million (representing approximately 20% of the net proceeds) will be used for tender or potential acquisition. The Company is currently exploring opportunities for tender or potential acquisitions and will be able to form a more concrete view on its use of proceeds in this respect when and if such tender or acquisition arises. Notwithstanding the above, no specific target has been identified as at the Latest Practicable Date; and

• (iii) Approximately HK$10 million (representing approximately 10% of the net proceeds) will be used for general working capital of the Group.

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LETTER FROM THE BOARD

CHANGES IN THE SHAREHOLDING STRUCTURE OF THE COMPANY

Set out below is the shareholding structure of the Company (i) as at the date of the Latest Practicable Date; and (ii) immediately after the allotment and issue of the Conversion Shares upon the exercise of the conversion rights under the Convertible Bonds in full (assuming that the Conversion Price is HK$1.0 per Conversion Share and there is no further issue or repurchase of Shares before the exercise of such conversion rights). For the Corporate Subscriber, it will not be regarded as a public shareholder upon fully conversion of its Convertible Bonds as it will become a substantial shareholder (as defined under Rule 1.01 of the Listing Rules) holding more than 10% share interests of the issued share capital of the Company. For the other Subscribers, each of them will be regarded as a public shareholder of the Company upon fully conversion of their respective Convertible Bonds. Based on the assumption above, immediately after such conversion, the Company will continue to be able to satisfy the public float requirement (i.e. which is 25% of the Company’s total number of issued Shares must be held by the public):

Hou Wei (Note 1) Brainy Economist Investment Limited (Note 2) (Liaw Lin Hsiang) Yiju Holdings Limited (Note 3) Mr. Lin Kuan Ming (Note 4) Corporate Subscriber Other Subscribers Other public Shareholders Total	As at the Latest Practicable Date Number of shares % 365,238,363 52.84 69,100,000 9.99 56,263,000 8.14 37,186,000 5.38 – – – – 163,412,637 23.65 691,200,000 100	Immediately after the allotment and issue of the Conversion Shares in full upon exercise of the conversion rights under the Convertible Bonds (for illustration purpose only) (Note 5) Number of shares % 365,238,363 46.04 69,100,000 8.71 56,263,000 7.09 37,186,000 4.69 93,500,000 11.79 8,600,000 1.08 163,412,637 20.60 793,300,000 100	Immediately after the allotment and issue of the Conversion Shares in full upon exercise of the conversion rights under the Convertible Bonds (for illustration purpose only) (Note 5) Number of shares % 365,238,363 46.04 69,100,000 8.71 56,263,000 7.09 37,186,000 4.69 93,500,000 11.79 8,600,000 1.08 163,412,637 20.60 793,300,000 100
			100

Notes:

1. Ms. Hou Wei (‘‘Ms. Hou’’), the Chairlady and an executive Director of the Company, is interested in 365,238,363 Shares through her controlled corporation Xin Ling Limited. In addition, Ms. Hou also owns 300,000 share options granted to her by the Company on 2 November 2018.

2. As at the date of the Latest Practicable Date, Brainy Economist Investment Limited was the registered holder of 69,100,000 Shares and Liaw Lin Hsiang is the sole shareholder of Brainy Economist Investment Ltd. Under Part XV of the SFO, Liaw Lin Hsiang was therefore deemed to have interests in 69,100,000 Shares in which Brainy Economist Investment Ltd. was interested.

3. As at the Latest Practicable Date, Yiju Holdings Limited was the registered holder of 56,263,000 Shares and Mr. Liu Shui is the sole shareholder of Yiju Holdings Limited. Under Part XV of the SFO, Mr. Liu Shui was therefore deemed to have interests in 56,263,000 Shares in which Yiju Holdings Limited was interested.

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LETTER FROM THE BOARD

1. Mr. Lin Kuan Ming (‘‘Mr. Lin’’) is deemed to be interested in a total of 37,186,000 Shares, which were held as to 9,261,000 Shares by Corporate Image Limited and 27,925,000 Shares by Lucky Union Int’l Co., Ltd.. On the other hand, Ms. Lin Ling Yu (spouse of Mr. Lin, ‘‘Ms. Lin’’) is deemed to be interested in a total of 37,186,000 Shares, which were held as to 9,261,000 Shares by Corporate Image Limited and 27,925,000 Shares by Lucky Union Int’l Co., Ltd. in which Mr. Lin is interested in. By virtue of the SFO, as Mr. Lin beneficially owns the entire issued share capital of Corporate Image Limited, he is deemed to be interested in 9,261,000 Shares held by Corporate Image Limited and Ms. Lin, as his spouse, is also deemed to be interested in these 9,261,000 Shares. Further, Mr. Lin, Ms. Lin, Ms. Lin Hsin Hui and Ms. Lin Chia Hui, the daughters of Mr. Lin and Ms. Lin, own 30%, 50%, 10% and 10% of the issued share capital of Lucky Union Int’l Co., Ltd., respectively. By virtue of the SFO, both Mr. Lin and Ms. Lin are deemed to be interested in 27,925,000 Shares held by Lucky Union Int’l Co., Ltd..

2. This is for illustrative purpose only as there are restrictions under the terms of the Convertible Bonds that prohibit any conversion which will trigger a mandatory offer obligation under Rule 26 of the Takeovers Code.

FUND RAISING EXERCISE OF THE COMPANY IN THE PAST TWELVE MONTHS

Save as disclosed below, the Company has not conducted any other equity fund raising activities in the past twelve (12) months immediately preceding the date of this circular:

Date of	Fund raising		Intended use of
announcement	activity	Net proceeds	proceeds as announced	Actual use of proceeds
10 December	Placing of	Approximately	Approximately HK$53.7	Approximately HK$39.8
2018 and 27	86,400,000 new	HK$59.7 million	million for funding a	million was utilised.
December 2018	Shares at		proposed acquisition; and	Among which,
	HK$0.70 per		the remaining portion of	approximately HK$21.3
	Share		approximately HK$6.0	million and HK$18.4
			million for the general	million were respectively
			working capital of the	used for paying the sale
			Group	price and expenses in
				relation to a share
				acquisition.
23 July 2018	The allotment and	Approximately	(i) 90% (approximately	used as intended
	issuance of	HK$101.8	HK$91.62 million) would
	172,800,000 new	million	be used for financing the
	Shares at the		capital input for several
	subscription		interior design and
	price of		engineering projects under
	HK$0.60 per		construction in PRC, and
	one new Share		(ii) 10% (approximately
	on the basis of		HK$10.18 million) would
	two new Shares		be used for general
	for every five		working capital for the
	existing Shares		payment of operational
	at the time being		expenses for the Company’s
	as at the close		Hong Kong principal
	of business on		office, such as payment of
	24 July 2018		salaries and rents and
	payable in full		general operational
	on acceptance		expenses etc.

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LETTER FROM THE BOARD

EGM

A notice convening the EGM at Conference Room, 6/F, Overseas Trust Bank Building, 160 Gloucester Road, Wanchai, Hong Kong, on Thursday, 30 May 2019 at 10:00 a.m. is set out on pages EGM-1 to EGM-3 of this circular. Whether or not you are able to attend the EGM in person, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the Company’s share registrar, Computershare Hong Kong Investor Services Limited of 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, as soon as practicable but in any event not later than 48 hours before the time appointed for holding the EGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting at the EGM or any adjournment thereof (as the case may be) should you so wish.

To the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiries, no Shareholder has an interest in the Subscription which is materially different from the other Shareholders. Therefore no Shareholder is required to abstain from voting on the resolution to be proposed at the EGM.

RECOMMENDATIONS

The Directors are of the opinion that the proposed Subscriptions and issue of Convertible Bonds are in the interest of the Company and the Shareholders as a whole and so recommend you to vote in favour of the resolution to be proposed at the EGM.

RESPONSIBILITY STATEMENT

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

By Order of the Board of

JIYI HOUSEHOLD INTERNATIONAL HOLDINGS LIMITED

Hou Wei

Chairlady

• For identification purpose only

The English text of this circular shall prevail over the Chinese text for the purpose of interpretation.

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NOTICE OF EGM

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Jiyi Household International Holdings Limited 集一家居國際控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1495)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (‘‘EGM’’) of Jiyi Household International Holdings Limited (the ‘‘Company’’) will be held at Conference Room, 6/F, Overseas Trust Bank Building, 160 Gloucester Road, Wanchai, Hong Kong on Thursday, 30 May 2019 at 10:00 a.m., for the purposes of considering and, if thought fit, passing with or without modifications, the following resolution which will be proposed as ordinary resolution of the Company:

ORDINARY RESOLUTION

‘‘THAT

• (a) the Subscription Agreements as defined in the circular dated 14 May 2019 despatched to the shareholders of the Company (the ‘‘Circular’’), a copy of the said Subscription Agreements has been produced to this meeting marked ‘‘A’’ and signed by the chairlady hereof for the purpose of identification, and all the transactions contemplated thereby be and are hereby approved, confirmed and ratified;

• (b) the issue of the Convertible Bonds (as defined in the Circular) by the Company in accordance with the terms and conditions of the Subscription Agreements and the transactions contemplated thereunder be and are hereby approved, ratified and confirmed;

• (c) the issue and allotment of ordinary shares of the Company which may fall to be issued upon the exercise of the conversion rights attached to the Convertible Bonds be and are hereby approved; and

EGM – 1

NOTICE OF EGM

• (d) any one director of the Company be and is hereby authorised to do all such acts and things as he/she in his/her sole and absolute discretion deems necessary, desirable or expedient to implement, give effect to and/or complete the Subscription Agreements and the transactions contemplated thereunder and, where required, any amendment of the terms of the Subscription Agreements as required by, or for the purposes of obtaining the approval of, relevant authorities or to comply with all applicable laws, rules and regulations.’’

By Order of the Board of JIYI HOUSEHOLD INTERNATIONAL HOLDINGS LIMITED Hou Wei

Chairlady

Hong Kong, 14 May 2019

Registered Office: Head office and principal place of Clifton House business in Hong Kong: 75 Fort Street Room 1405, 14/F. P.O. Box 1350 Jubilee Centre Grand Cayman 18 Fenwick Street KY1-1108 Wanchai, Cayman Islands Hong Kong

Notes:

1. A member of the Company entitled to attend and vote at the EGM convened by the above notice is entitled to appoint one or more proxy to attend and, subject to the provisions of the memorandum and articles of association of the Company, to vote on his/her/its behalf. A proxy need not be a member of the Company but must be present in person at the EGM to represent the member. If more than one proxy is so appointed, the appointment shall specify the number and class of Shares in respect of which each such proxy is so appointed.

2. Where there are joint registered holders of any Share, any one of such persons may vote at the EGM, either personally or by proxy, in respect of such Share as if he/she/it were solely entitled thereto; but if more than one of such joint holders be present at the EGM personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such Shares shall alone be entitled to vote in respect thereof.

3. The transfer books and register of members of the Company will be closed from Friday, 24 May 2019 to Thursday, 30 May 2019, both days inclusive, to determine the entitlement of shareholders to attend and vote at the EGM, during which period no share transfers can be registered. All transfers accompanied by the relevant share certificates must be lodged with the Hong Kong branch share registrar and transfer office of the Company, Computershare Hong Kong Investor Services Limited on 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, for registration not later than 4:30 p.m. on Thursday, 23 May 2019.

EGM – 2

NOTICE OF EGM

1. In order to be valid, the form of proxy must be deposited together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority, at the Hong Kong branch share registrar and transfer office of the Company, Computershare Hong Kong Investor Services Limited on 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time for holding the EGM or any adjournment thereof.

2. Completion and return of a form of proxy will not preclude a shareholder of the Company from attending in person and voting at the EGM or any adjournment thereof, should he/she/it so wish.

3. If Typhoon Signal no. 8 or above, or a ‘‘black’’ rainstorm warning is in effect any time after 7:00 a.m. on the date of the EGM, the meeting will be postponed. The Company will post an announcement on the website of Company at http://www.jiyihousehold.com and on the HKExnews website of the Stock Exchange at www.hkexnews.hk to notify Shareholders of the date, time and place of the rescheduled meeting.

As at the date of this notice, Ms. Hou Wei, Mr. Liu Xianxiu and Mr. Yang Baikang are the executive directors of the Company, Mr. Hou Bo is the non-executive director of the Company, and Mr. Ye Yihui, Mr. Ho Hin Yip and Mr. Hou Lianchang are the independent non-executive directors of the Company.

EGM – 3