Kingwell Group Limited — Capital/Financing Update 2016

Jun 29, 2016

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.

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

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KINGWELL GROUP LIMITED 京維集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1195)

DISCLOSEABLE TRANSACTION IN RELATION TO THE ACQUISITION OF RENEWABLE ENERGY BUSINESS INVOLVING ISSUE OF CONSIDERATION SHARES

Financial Adviser

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THE ACQUISITION

On 29 June 2016 (after trading hours), the Company and the Vendor entered into the Sale and Purchase Agreement, pursuant to which the Vendor conditionally agreed to sell and the Purchaser conditionally agreed to purchase the entire issued share capital of Quick Nimble at the Consideration of RMB176,425,976 (equivalent to approximately HK$208,346,787) (subject to adjustments), which shall be fully satisfied by the allotment and issue of not more than 692,182,017 Consideration Shares at the initial issue price of HK$0.301 per Share under the Specific Mandate credited as fully paid.

Upon completion of Zhongke Reorganisation, Quick Nimble will hold 51% equity interest in Zhongke. Zhongke and its subsidiaries are principally engaged in investment, development, construction and operation of renewable energy power plant in the PRC, which includes solar thermal energy, solar photovoltaic energy and wind energy, and provision of consultancy services thereof.

As at the date of this announcement, major assets of Zhongke are the Damaoqi 10MW Solar Photovoltaic Energy Project and the Damaoqi 100MW Wind Energy Project. Zhongke is also planning to construct of a 200MW solar thermal energy plant in Baotou City, Inner Mongolia, PRC and has already conducted relevant feasibility study.

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THE SPECIFIC MANDATE

The Company will seek the Shareholders’ approval at the EGM for the Specific Mandate to allot and issue the Consideration Shares. Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Consideration Shares.

LISTING RULES IMPLICATION

As the relevant Percentage Ratios of the Acquisition are more than 5% but less than 25% and the Consideration will be fully satisfied by the allotment and issue of the Consideration Shares, the Acquisition constitutes a discloseable transaction for the Company under the Listing Rules and is therefore subject to reporting and announcement requirements but exempt from the Shareholders’ approval under Chapter 14 of the Listing Rules. However, as the Consideration Shares will be allotted and issued under the Specific Mandate, the Company will seek approval for, among other things, the Specific Mandate from the Shareholders at the EGM.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquires, no Shareholder has a material interest in the Acquisition and the transactions contemplated thereunder, therefore, no Shareholder is required to abstain from voting for the resolution(s) to be proposed at the EGM.

An EGM will be convened and held for the Shareholders to consider and, if thought fit, approve (i) the Sale and Purchase Agreement and the transactions contemplated thereunder, including the issue of the Consideration Shares; and (ii) the Specific Mandate. A circular containing, among other things, details of (i) the Acquisition and the transactions contemplated thereunder; (ii) the Specific Mandate; and (iii) the notice of the EGM will be despatched to the Shareholders as soon as practicable and in accordance with the Listing Rules.

As the Acquisition is subject to a number of Conditions Precedent, and may or may not complete, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

THE ACQUISITION

On 29 June 2016 (after trading hours), the Company and the Vendor entered into the Sale and Purchase Agreement, pursuant to which the Vendor conditionally agreed to sell, and the Company conditionally agreed to purchase, the entire issued share capital of Quick Nimble at the Consideration of RMB176,425,976 (equivalent to approximately HK$208,346,787) (subject to adjustments). Major terms of the Sale and Purchase Agreement are set out below.

The Sale and Purchase Agreement

Date: 29 June 2016 (after trading hours)

Parties: (i) The Company as the Purchaser; and (ii) Quick Nimble Group Limited as the Vendor

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As at the date of this announcement, the Vendor is interested in the entire issued share capital of Quick Nimble. The Vendor is incorporated in the BVI with limited liability and its principal activity is investment holdings.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Vendor and its ultimate beneficial owners are Independent Third Parties.

Assets to be acquired

Upon completion of Zhongke Reorganisation, Quick Nimble will hold 51% equity interest in Zhongke.

Zhongke and its subsidiaries are principally engaged in investment, development, construction and operation of renewable energy power plant in the PRC, which includes solar thermal energy, solar photovoltaic energy and wind energy, and provision of consultancy services thereof. As at the date of this announcement, major assets of Zhongke are the Damaoqi 10MW Solar Photovoltaic Energy Project and the Damaoqi 100MW Wind Energy Project. Zhongke is also planning to construct of a 200MW solar thermal energy plant in Baotou City, Inner Mongolia, PRC and has already conducted relevant feasibility study.

Upon Completion, Quick Nimble will become a wholly-owned subsidiary of the Company and the financial results of Quick Nimble and Zhongke will be consolidated into the financial statements of the Group.

Consideration

The Consideration of RMB176,425,976 (equivalent to approximately HK$208,346,787) (subject to adjustments) shall be fully satisfied by the allotment and issue of not more than 692,182,017 Consideration Shares at the initial issue price of HK$0.301 per Share under the Specific Mandate credited as fully paid.

The Consideration will be satisfied in the following manner:–

• (i) first payment representing HK$15,050,000, shall be satisfied by the allotment and issue of 50,000,000 Consideration Shares to the Vendor upon Completion;

• (ii) second payment representing HK$15,050,000 (subject to adjustment), shall be satisfied by the allotment and issue of 50,000,000 Consideration Shares to the Vendor once Zhongke has (a) completed the construction of Damaoqi 100MW Wind Energy Project within one year after the signing of the Sale and Purchase Agreement, where the Vendor has made 30% of equity investment of RMB225,417,000 (equivalent to approximately HK$266,195,000) by its own internal resources and 70% of equity investment by way of third party financing, and has completed power grid connection; and (b) achieved a positive Net Cash Flow of not less than HK$23,618,607 for the financial year ending 31 December 2017;

• (iii) third payment representing HK$42,140,000 (subject to adjustment), shall be satisfied by the allotment and issue of 140,000,000 Consideration Shares to the Vendor once Zhongke has achieved a positive Net Cash Flow of not less than HK$94,474,427 for the financial year ending 31 December 2018;

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• (iv) fourth payment representing HK$42,140,000 (subject to adjustment), shall be satisfied by the allotment and issue of 140,000,000 Consideration Shares to the Vendor once Zhongke has achieved a positive Net Cash Flow of not less than HK$94,474,427 for the financial year ending 31 December 2019;

• (v) fifth payment representing HK$42,140,000 (subject to adjustment), shall be satisfied by the allotment and issue of 140,000,000 Consideration Shares to the Vendor once Zhongke achieved a positive Net Cash Flow of not less than HK$94,474,427 for the financial year ending 31 December 2020; and

• (vi) final payment representing HK$51,826,787 (subject to adjustment), shall be satisfied by the allotment and issue of 172,182,017 Consideration Shares to the Vendor once Zhongke achieved a positive Net Cash Flow of not less than HK$118,093,034 for the financial year ending 31 December 2021.

The first payment shall be satisfied by the Company within 7 Business Days after Completion. Remaining stages of payment shall be satisfied by the Company within 7 Business Days after Zhongke has satisfied such specific conditions as set out above and the respective cash flow statement have been reviewed by the Company’s auditor.

Adjustment to Consideration

The Consideration is subject to adjustment on the following basis:

For the financial year ending 31 December 2017:

• (i) In the event that the positive Net Cash Flow is less than HK$23,618,607 but more than HK$11,809,303, the Consideration Shares to be issued under the second payment shall be reduced by 2,116,975 Consideration Shares for every HK$1,000,000 shortfall of the positive Net Cash Flow below HK$23,618,607. In the event that the positive Net Cash Flow is below HK$11,809,303, or the construction of Damaoqi 100MW Wind Energy Project has not been completed or it has not completed the power grid connection, the Purchaser will not be obligated to satisfy any part of the second payment;

For each of the financial year ending 31 December 2018, 2019 and 2020:

• (i) In the event that the positive Net Cash Flow for respective financial year is less than HK$94,474,427 but more than HK$47,237,213, the Consideration Shares to be issued under such stage of payment shall be reduced by 1,481,882 Consideration Shares for every HK$1,000,000 shortfall of the positive Net Cash Flow below HK$94,474,427. In the event that the positive Net Cash Flow is below HK$47,237,213, the Purchaser will not be obligated to satisfy any part of such stage of payment. In the event that the positive Net Cash Flow is more than HK$94,474,427, the Consideration Shares to be issued under such stage of payment shall be increased by 1,481,882 Consideration Shares for every HK$1,000,000 surplus of the positive Net Cash Flow above HK$94,474,427;

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For the financial year ending 31 December 2021:

• (i) In the event that the positive Net Cash Flow is less than HK$118,093,034 but more than HK$59,046,517, the Consideration Shares to be issued under the final payment shall be reduced by 1,458,020 Consideration Shares for every HK$1,000,000 shortfall of the positive Net Cash Flow below HK$118,093,034. In the event that the positive Net Cash Flow is below HK$59,046,517, the Purchaser will not be obligated to satisfy any part of the final payment. In the event that the positive Net Cash Flow is more than HK$118,093,034, the Consideration Shares to be issued under the final payment shall be increased by 1,458,020 Consideration Shares for every HK$1,000,000 surplus of the positive Net Cash Flow above HK$118,093,034.

Principle terms of the Consideration Shares

The issue price of HK$0.301 per Consideration Share represents:–

• (i) a premium of approximately 0.3% to the closing price of HK0.3 per Share as quoted on the Stock Exchange on the Last Trading Day;

• (ii) equivalent to the average closing price of HK$0.301 per Share for the last five trading days immediately prior to and including the Last Trading Day; and

• (iii) equivalent to the average closing price of HK$0.301 per Share for the last ten trading days immediately prior to and including the Last Trading Day.

The Consideration was determined after arm’s length negotiation between the Company and the Vendor, with reference to (i) the net asset value and the growth prospects of Zhongke; (ii) initial equity investments to be made by Zhongke in the project companies for Damaoqi 10MW Solar Photovoltaic Energy Project and Damaoqi 100MW Wind Energy Project by its own internal resources of approximately RMB249,000,000 (equivalent to approximately HK$294,044,000), which will exceeds the total Consideration to be paid by the Company; and (iii) the prevailing market price of the Shares.

The Consideration Shares, if allotted and issued in full, represents approximately 24.0% of the issued share capital of Company as at the date of this announcement and approximately 19.4% of the enlarged issued share capital of the Company.

Conditions precedent

Completion is conditional upon the fulfillment of the following conditions:–

• (i) the Shareholders having approved the Sale and Purchase Agreement and the transactions contemplated thereunder;

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• (ii) the Purchaser having satisfied with the results of its due diligence review on Zhongke, Quick Nimble and its subsidiaries;

• (iii) Zhongke having completed the construction of Damaoqi 10MW Solar Photovoltaic Energy Project and has made 30% of equity investment by its own internal resources and 70% of equity investment by way of third party financing in accordance to the feasibility report, and it has completed power grid connection;

• (iv) the Vendor having obtained approval from the National Energy Administration of the PRC or other relevant governmental authorities for the transfer and registration of issued share capital of Quick Nimble;

• (v) completion of Zhongke Reorganisation, the Vendor having become the legal and beneficial owner of 51% equity interest in Zhongke;

• (vi) the Sale and Purchase Agreement and the transactions contemplated thereunder having been completed in accordance with the articles of associations of the Company, relevant laws, regulations and the Listing Rules;

• (vii) the Listing Committee of the Stock Exchange having approved the listing of and permission to deal in the Consideration Shares; and

• (viii) the warranties given by the Vendor remaining true, accurate and not misleading in all material respects upon repetition of the same immediately prior to the Completion.

In event that any of the conditions above has not been fulfilled on or before 31 October 2016, the Purchaser will not be obligated to complete the Acquisition and the Sale and Purchase Agreement shall lapse.

Undertaking, Warranties and Indemnity

Each of the Vendor and the Purchaser has given customary warranties to each other.

The Vendor undertakes that each of Zhongke and Quick Nimble and their respective subsidiaries shall not increase its registered capital and shall not enter into any mortgage, charge, pledge and lien in any of their assets or enter into other agreement in relation to their respective shareholdings.

Specific Mandate

The Consideration Shares will be allotted and issued under the Specific Mandate to be approved by the Shareholders at the EGM.

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The Consideration Shares, when allotted and issued upon, shall rank pari passu in all respects with the Shares in issue at the date of allotment, and in particular, shall rank in full for all dividends and other distributions declared made or paid hereafter.

Application will be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Consideration Shares.

Completion

Completion shall take place on a date to be agreed by the Purchaser and the Vendor after all the Conditions Precedent have been satisfied or waived (as the case may be).

Upon Completion, the Vendor shall procure the resignation of existing directors of Zhongke. The Company will be entitled to appoint three new directors and the Vendor will be entitled to appoint two new directors to Zhongke.

EFFECT OF THE SHAREHOLDING STRUCTURE OF THE COMPANY

Details of the shareholding structure of the Company (assuming no adjustment to the Consideration has been made) (i) as at the date of this announcement; (ii) upon satisfaction of the first payment; (iii) upon satisfaction of the second payment; (iv) upon satisfaction of the third payment; (v) upon satisfaction of the fourth payment; (vi) upon satisfaction of the fifth payment; and (vii) upon satisfaction of the final payment, are set out below:

Shareholders Vendor Sze Ming Yee (Note) Hui Lung Hing Yin Jia Tang Public Shareholders Total	As at the this anno Number of Shares – 384,198,376 277,777,777 160,962,963 2,061,152,621 2,884,091,737	dated of uncement % – 13.32% 9.63% 5.58% 71.47% 100.00%	Upon satisfaction of first payment Number of Shares % 50,000,000 1.70% 384,198,376 13.09% 277,777,777 9.47% 160,962,963 5.49% 2,061,152,621 70.25% 2,934,091,737 100.00%	Upon satisfaction of first payment Number of Shares % 50,000,000 1.70% 384,198,376 13.09% 277,777,777 9.47% 160,962,963 5.49% 2,061,152,621 70.25% 2,934,091,737 100.00%	Upon satisfaction of second payment Number of Shares % 100,000,000 3.35% 384,198,376 12.88% 277,777,777 9.31% 160,962,963 5.39% 2,061,152,621 69.07% 2,984,091,737 100.00%	Upon satisfaction of third payment Number of Shares % 240,000,000 7.68% 384,198,376 12.30% 277,777,777 8.89% 160,962,963 5.15% 2,061,152,621 65.98% 3,124,091,737 100.00%	Upon satisfaction of fourth payment Number of Shares % 380,000,000 11.64% 384,198,376 11.77% 277,777,777 8.51% 160,962,963 4.93% 2,061,152,621 63.15% 3,264,091,737 100.00%	Upon satisfaction of fifth payment Number of Shares % 520,000,000 15.27% 384,198,376 11.29% 277,777,777 8.16% 160,962,963 4.73% 2,061,152,621 60.55% 3,404,091,737 100.00%	Upon satisfaction of final payment Number of Shares % 692,182,017 19.36% 384,198,376 10.74% 277,777,777 7.77% 160,962,963 4.50% 2,061,152,621 57.63% 3,576,273,754 100.00%	Upon satisfaction of final payment Number of Shares % 692,182,017 19.36% 384,198,376 10.74% 277,777,777 7.77% 160,962,963 4.50% 2,061,152,621 57.63% 3,576,273,754 100.00%
				100.00%						100.00%

Note:

As at the date of this announcement, 384,198,376 Shares were held by Union Day Group Limited, a company incorporated in the BVI with limited liability, which is beneficially owned as to 72% by Mr. Sze Ming Yee, a Director.

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INFORMATION OF QUICK NIMBLE AND ZHONGKE

Set out below are the shareholding structure of Quick Nimble and Zhongke (i) as at the date of the Sale and Purchase Agreement; (ii) upon completion of Zhongke Reorganisation; and (iii) after Completion.

(i) As at the date of the Sale and Purchase Agreement

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Shenzhen Quantum Shenzhen Zhongke Shenzhen Zhongke
Fuxing Investment Lizhong Investment Zhiyuan Investment
Limited Limited Limited
8.67% 7.85% 0.63%
Shenzhen Morgan Shenzhen Zhongke
Yuantong Investment Mr. Tang Chang Rong Jiutai Investment
Limited Limited
78.00% 1.10% 3.75%
Zhongke
Zhongke Subsidiaries
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• (ii) Immediately upon completion of Zhongke Reorganisation

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Vendor
100.00%
Shenzhen Quantum Shenzhen Zhongke
Fuxing Investment Quick Nimble Jiutai Investment
Limited Limited
4.25% 51.00% 1.84%
Shenzhen Morgan Shenzhen Zhongke Shenzhen Zhongke
Yuantong Investment Mr. Tang Chang Rong Lizhong Investment Zhiyuan Investment
Limited Limited Limited
38.22% 0.54% 3.84% 0.31%
Zhongke
Zhongke Subsidiaries
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(iii) Immediately after Completion

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Company
100.00%
Shenzhen Quantum Shenzhen Zhongke
Fuxing Investment Quick Nimble Jiutai Investment
Limited Limited
4.25% 51.00% 1.84%
Shenzhen Morgan Shenzhen Zhongke Shenzhen Zhongke
Yuantong Investment Mr. Tang Chang Rong Lizhong Investment Zhiyuan Investment
Limited Limited Limited
38.22% 0.54% 3.84% 0.31%
Zhongke
Zhongke Subsidiaries
----- End of picture text -----*

Information on Quick Nimble

Quick Nimble is incorporated in the BVI with limited liability on 23 November 2015 and is whollyowned by the Vendor. Upon completion of the Zhongke Reorganisation, Quick Nimble will hold 51% equity interest in Zhongke.

Information on Zhongke

Zhongke is incorporated in the PRC with limited liability on 5 November 2014. Zhongke and its subsidiaries are principally engaged in investment, development, construction and operation of renewable energy power plant in the PRC, which includes solar thermal energy, solar photovoltaic energy and wind energy, and provision of consultancy services thereof.

Set out below is the unaudited financial information of Zhongke for the year ended 31 December 2015:

	For the year
	ended
	31 December
	2015
	RMB
Revenue	–
Net loss before taxation	21,666,738
Net loss after taxation	21,666,738
Net asset value	27,213,262

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As at the date of this announcement, Zhongke owns (i) Damaoqi 10MW Solar Photovoltaic Energy Project, which construction has been completed and expects to generate income from 2016 onwards; and (ii) Damaoqi 100MW Wind Energy Project, which is under construction and expects to be completed before the end of 2016 and generate income from 2017 onwards.

Damaoqi 10MW Solar Photovoltaic Energy Project

Damaoqi 10MW Solar Photovoltaic Energy Project is wholly-owned by Zhongke Blue Sky (Baotou) Solar Photovoltaic Investment Company Limited*（中科藍天（包頭）光伏投資有限公司）, which in turn is wholly-owned by Zhongke. It is located at Damaoqi, Baotou City, Inner Mongolia, PRC.

The solar photovoltaic energy generation system has installed capacity of approximately 10MW solar photovoltaic energy in aggregate, which can generate maximum electricity output of 16,697,000kwh per annum.

Damaoqi 100MW Wind Energy Project

Damaoqi 100MW Wind Energy Project is wholly-owned by Zhongke Blue Sky (Baotou) Wind Energy Investment Company Limited（中科藍天（包頭）風電投資有限公司）, which in turn is wholly-owned by Zhongke. It is located at Damaoqi, Baotou City, Inner Mongolia, PRC.

The wind energy generation system has installed capacity of approximately 100MW wind energy in aggregate, which can generate maximum electricity output of 281,118,000kwh per annum.

Solar Thermal Energy Project

Zhongke is also planning to construct of a 200MW solar thermal energy plant in Baotou City, Inner Mongolia, PRC and has already conducted relevant feasibility study.

After completion of the solar thermal energy project, it will form an intelligent energy generation system with Damaoqi 10MW Solar Photovoltaic Energy Project and Damaoqi 100MW Wind Energy Project, which integrates solar thermal energy, solar photovoltaic energy and wind energy, and provide preserved energy from shortfall of each others. This intelligent integrated energy system will be the first of its kind in the PRC.

Other Business

Zhongke also provides consultancy services to development, construction and operation of renewable energy power plant to other operators in the PRC.

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REASONS FOR THE ACQUISITION

Since the disposal of the electronic manufacturing services business in October 2014, the Group is principally engaged in property development and gold mining business. The Group has been proactively searching for potential investment opportunities and implementing its diversified development strategy.

Renewable energy has been an actively growing industry in the PRC. Recently the PRC Government has released policies aimed at boosting distributed solar energy generation which include strengthening, improving the development of renewable energy and providing better financial support.

Given the continuous growth of the renewable energy industry in the PRC, the Directors are optimistic about the long-term development and prospects of the renewable energy business in the PRC. The Board expects the Acquisition to provide a long term stable income to the Group and to enables the Group to participate in the renewable energy sector.

Having considered the abovementioned factors, the Directors are of the view that the terms and conditions of the Sale and Purchase Agreement are fair and reasonable and is in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

As the relevant Percentage Ratios of the Acquisition are more than 5% but less than 25% and the Consideration will be fully satisfied by the allotment and issue of the Consideration Shares, the Acquisition constitutes a discloseable transaction for the Company under the Listing Rules and is therefore subject to reporting and announcement requirements but exempt from the Shareholders’ approval under Chapter 14 of the Listing Rules. However, as the Consideration Shares will be allotted and issued under the Specific Mandate, the Company will seek approval for, among other things, the Specific Mandate from the Shareholders at the EGM.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquires, no Shareholder has a material interest in the Acquisition and the transactions contemplated thereunder, therefore, no Shareholder is required to abstain from voting for the resolution(s) to be proposed at the EGM.

An EGM will be convened and held for the Shareholders to consider and, if thought fit, approve (i) the Sale and Purchase Agreement and the transactions contemplated thereunder, including the issue of the Consideration Shares; and (ii) the Specific Mandate. A circular containing, among other things, details of (i) the Acquisition and the transactions contemplated thereunder; (ii) the Specific Mandate; and (iii) the notice of the EGM will be despatched to the Shareholders as soon as practicable and in accordance with the Listing Rules.

GENERAL

As the Acquisition is subject to a number of Conditions Precedent, and may or may not complete, Shareholders and potential investors are reminded to exercise caution when dealing in the Shares.

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DEFINITIONS

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

“Acquisition”	Acquisition of the entire issued share capital of Quick Nimble pursuant
	to the terms and conditions of the Sale and Purchase Agreement
“Board”	the board of directors of the Company
“Business Days”	a day (other than a Saturday, a Sunday, a public holiday and a day on
	which a tropical cyclone warning signal no. 8 or above or a “black
	rainstorm warning signal” is hoisted in Hong Kong at any time between
	9:00 a.m. and 5:00 p.m.) on which banks are open for banking business
	in Hong Kong
“BVI”	the British Virgin Islands
“Company”	Kingwell Group Limited, a company incorporated in Cayman Islands
	with limited liability whose issued Shares are listed on the Main Board
	of the Stock Exchange (stock code: 1195)
“Completion”	completion of the Sale and Purchase Agreement
“Completion Date”	the date of Completion
“Conditions Precedent”	the conditions precedent set out in the Sale and Purchase Agreement,
	details of which are set out in the subsection headed “Conditions
	Precedent” in this announcement
“Consideration”	the consideration for the Acquisition of RMB176,425,976 (equivalent
	to approximately HK$208,346,787)
“Consideration Shares”	a total of not more than 692,182,017 Consideration Shares at the initial
	issue price of HK$0.301 per Share to be issued by the Company as
	Consideration
“Damaoqi 10MW	a solar photovoltaic energy plant with an aggregate installed capacity
Solar Photovoltaic	of approximately 10MW located in Damaoqi, Baotou City, Inner
Energy Project”	Mongolia, PRC
“Damaoqi 100MW	a wind energy project with an aggregate installed capacity of
Wind Energy Project”	approximately 100MW located in Damaoqi, Baotou City, Inner
	Mongolia, PRC

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“Directors” the directors of the Company “EGM” Extraordinary general meeting of the Company to be convened for the purpose of considering, and if thought fit, approving, among other things, the granting of the Specific Mandate “Group” the Company and its subsidiaries “HK$” Hong Kong dollars, the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the PRC “Independent third party(ies) independent of the Company and are not connected Third Party(ies)” persons (as defined under the Listing Rules) of the Company “Last Trading Day” 28 June 2016, being the last trading day for the Shares prior to the entering into of the Sales and Purchase Agreement “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “Net Cash Flow” the consolidated net cash flow of Zhongke as referred to in the Sale and Purchase Agreement, representing the cash and cash equivalent inflow minus the cash outflow in a specific period of time. The cash inflow shall exclude any capital investment from shareholders of Zhongke or any borrowings, and the cash outflow shall include all the expenses, repayment of loan and relevant interest

• “PRC” the People’s Republic of China but excluding, for the purposes of this announcement, Hong Kong, Macau Special Administrative Region and Taiwan

• “Purchaser” the Company “Quick Nimble” Quick Nimble International Limited, a company established in the BVI with limited liability and wholly-owned by the Vendor

• “RMB” Renminbi, the lawful currency of the PRC “Sale and the agreement dated 29 June 2016 (after trading hours) entered into Purchase Agreement” among the Company and the Vendor in relation to the Acquisition

• “Shareholder(s)” holder(s) of Share(s)

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“Specific Mandate” the specific mandate to be sought at the EGM to allot and issue of the Consideration Shares “Shares” ordinary shares of par value of HK$0.10 each in the capital of the Company “Stock Exchange” The Stock Exchange of Hong Kong Limited “Vendor” Quick Nimble Group Limited, a company incorporated in the BVI with limited liability “Zhongke” Shenzhen Zhongke Blue Sky Investment Limited*（深圳中科藍天投資 有限公司）, a company established in the PRC with limited liability “Zhongke the reorganisation of Zhongke, which involves an acquisition of 51% Reorganisation” equity interests in Zhongke by Quick Nimble “%” per cent.

• For illustration purpose only

(The exchange rate used for the purpose of this announcement is at RMB1 = HK$1.809)

By Order of the Board KINGWELL GROUP LIMITED Mu Dongsheng Chairman

Hong Kong, 29 June 2016

As at the date of this announcement, the Board comprises Mr. Mu Dongsheng, Mr. Yang Xue Jun and Mr. Sze Ming Yee as executive Directors, and Mr. Ling Aiwen, Mr. Han Hongwei and Mr. Cheung Chuen as independent non-executive Directors.

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