Kingwell Group Limited — M&A Activity 2015

Apr 1, 2015

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 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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GUOCANG GROUP LIMITED 國 藏 集 團 有 限 公 司

(Incorporated in Bermuda with limited liability)

(Stock Code: 559)

(I) MAJOR TRANSACTION IN RESPECT OF THE ACQUISITION OF THE ENTIRE EQUITY INTEREST IN

SHENZHEN XINGMEI NEW ENERGY AUTOMOBILE LIMITED; (II) PROPOSED CHANGE OF COMPANY NAME; AND

(III) RESUMPTION OF TRADING

This announcement is made by the Company pursuant to Rule 13.09(2) and Chapter 14 of the Listing Rules and Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

THE ACQUISITION

The Board is pleased to announce that on 30 March 2015, the Purchaser, the Vendors and the Target Company entered into the Framework Agreement, pursuant to which the Purchaser has conditionally agreed to acquire and the Vendors have conditionally agreed to sell the entire equity interest of the Target Company for the Consideration of RMB200,000,000, which shall be satisfied by the Purchaser in cash.

LISTING RULES IMPLICATION ON THE ACQUISITION

Reference is made to the announcement of the Company dated 4 February 2015 in relation to a discloseable transaction in respect of the Green Flourish Acquisition. As Mr. He is one of the Vendors and the parties involved in the Green Flourish Acquisition, the Acquisition and the Green Flourish Acquisition shall be aggregated under Chapter 14 of the Listing Rules.

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As one or more of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the Acquisition when aggregated with the Green Flourish Acquisition exceed 25% but are all less than 100%, the Acquisition when aggregated with the Green Flourish Acquisition constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is subject to the announcement, circular and shareholders’ approval requirements under the Listing Rules.

A circular containing, among other things, (i) details of the Acquisition; (ii) the financial information of the Target Company; and (iii) other general information of the Company, together with a notice of the Acquisition SGM and the related proxy form, will be despatched to Shareholders on or before 24 April 2015.

As Completion is subject to the fulfilment (or if applicable, waiver) of the conditions precedent to the Framework Agreement, the Acquisition may or may not proceed. The issue of this announcement does not in any way imply that the Framework Agreement will be implemented or completed. Shareholders and potential investors should exercise caution when dealing in the Shares.

PROPOSED CHANGE OF COMPANY NAME

The Board proposes to change the English name of the Company from ‘‘Guocang Group Limited’’ to ‘‘Xingmei New Energy Group Limited’’ and to adopt and register ‘‘星美新能 源集團有限公司’’ as the secondary name of the Company to replace the current Chinese name ‘‘國藏集團有限公司’’.

A circular containing, among other matters, details of the proposed Change of Company Name, together with a notice of the Change of Company Name SGM and the related proxy form, will be despatched to the Shareholders as soon as practicable.

RESUMPTION OF TRADING

At the request of the Company, trading in the Shares has been halted from 9:00 a.m. on 30 March 2015 pending the release of this announcement. An application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares with effect from 9:00 a.m. on 1 April 2015.

This announcement is made by the Company pursuant to Rule 13.09(2) and Chapter 14 of the Listing Rules and Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

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THE ACQUISITION

The Board is pleased to announce that on 30 March 2015, the Purchaser, the Vendors and the Target Company entered into the Framework Agreement, pursuant to which the Purchaser has conditionally agreed to acquire and the Vendors have conditionally agreed to sell the entire equity interest of the Target Company for the Consideration of RMB200,000,000, which shall be satisfied by the Purchaser in cash.

THE FRAMEWORK AGREEMENT

Date: 30 March 2015

Parties: (i) the Purchaser, an indirect wholly-owned subsidiary of the Company;

• (ii) the Vendors; and

• (iii) the Target Company.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, each of the Vendors is an Independent Third Party.

Assets to be acquired

Pursuant to the Framework Agreement, the Purchaser has conditionally agreed to acquire and the Vendors have conditionally agreed to sell the entire equity interest of the Target Company.

Consideration

The Consideration for the sale and purchase of the entire equity interest of the Target Company is RMB200,000,000, which will be satisfied by the Purchaser in cash in the following manners:

• (i) RMB160,000,000 will be paid upon the approval of the Equity Interest Transfer Agreement (which will be signed within ten (10) Business Days after the fulfillment of the conditions precedent to the Framework Agreement) by relevant government authorities and completion of the foreign exchange registration procedures; and

• (ii) RMB40,000,000 will be paid within ten (10) Business Days after the completion of the transfer of the equity interest of the Target Company and obtaining the new business license of the Target Company.

The Consideration was arrived at after arm’s length negotiations between the Vendors and the Purchaser after taking into account (i) the net asset value of the Target Company as at 31 December 2014 of RMB200,519,152; (ii) the Profit Guarantee provided by the Vendors; and (iii) the future prospects of the Target Company.

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Conditions precedent

Completion is subject to the following conditions having been fulfilled or waived (as the case may be):

• (i) the Vendors, the Purchaser and the Target Company having duly executed the Framework Agreement;

• (ii) as at the date of signing the Framework Agreement and the date of Completion, there being no circumstances which constitute or may constitute a breach of the statements, warranties and undertakings given by the Vendors and the Target Company or other provisions of the Framework Agreement and the statements, warranties and undertakings given by the Vendors and the Target Company under the Framework Agreement remaining true and accurate without material omission in all respects;

• (iii) the Target Company having amended the items which will affect the acquisition of the entire equity interest in the Target Company by the Purchaser as a foreign investor, from the business scope of the Target Company and completed the recordation procedures for its industry and commerce registration in respect of the amendment or modification to its business scope; the business scope and other matters of the Target Company being in compliance with the requirements of the relevant PRC laws and regulations to allow the Purchaser to complete the Acquisition without legal obstacles;

• (iv) the RMB200,000,000 registered capital of the Target Company being fully paid up; a capital contribution verification report (驗資報告) from a qualified accounting firm in the PRC confirming that the registered capital of the Target Company has been fully paid up having been obtained; and the industry and commerce registration of the actual payment of RMB200,000,000 as registered capital having been completed;

• (v) the transfer of the intellectual property as set out in the Intellectual Property Transfer Agreement and the Framework Agreement having been approved or registered and announced by the State Intellectual Property Office; the Target Company having become the applicant or the owner of such 20 items of intellectual property; and (a) the consideration for the transfer of the intellectual property having been fully settled by the Target Company; (b) the official transfer fees having been fully settled by Mr. Jiang and his technical teams and associate companies; and (c) the annuities of the intellectual property having been fully settled by the registered owners;

• (vi) Mr. He having become the chairman of the Target Company;

• (vii) Mr. He having signed the confidentiality and non-compete undertakings as provided in the Framework Agreement;

• (viii) the Purchaser being satisfied in its absolute discretion with the results of the due diligence review to be conducted on the assets, liabilities and operations of the Target Company; and

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• (ix) the Company having obtained the Shareholders’ approval in relation to the Framework Agreement and the transactions contemplated thereunder at the Acquisition SGM and having obtained and completed all other necessary consents and actions under the Listing Rules.

The Purchaser may waive conditions precedent under paragraphs (ii), (iv), (v), (vi), (vii) and (viii) above. All other conditions precedent are incapable of being waived. If the conditions precedent are not fulfilled or waived on or before 30 September 2015 (or such later date as agreed by the parties to the Framework Agreement), the Framework Agreement shall be terminated upon the unilateral notice from the Purchaser to the Vendors and the Target Company and all parties to the Framework Agreement shall have no obligations and liabilities under the Framework Agreement (save for antecedent breaches).

Completion

The parties to the Framework Agreement shall submit all the application documents including the Equity Interest Transfer Agreement to the relevant government authorities for approval within ten (10) Business Days after the date of fulfillment of the conditions precedent to the Framework Agreement and complete the change in the industry and commerce registration in respect of the transfer of the equity interest in the Target Company at the Administration for Industry and Commerce within ten (10) Business Days after the obtaining of the approval from the relevant government authorities.

Upon Completion, the Target Company will become an indirect wholly-owned subsidiary of the Company and its results will be consolidated with the financial results of the Group in accordance with the relevant accounting standards.

Upon Completion, Mr. He shall become the chairman of the Target Company to assist in the business management and operation of the Target Company for a term of three years. Mr. He, aged 43, holds a doctorate degree from the Chinese Academy of Social Sciences since 2001. He held directorship in various companies with a focus in producing automotive parts and investing in new energy business development projects.

Profit Guarantee

Pursuant to the terms and conditions contained in the Framework Agreement, the Vendors have irrevocably warranted and guaranteed to the Purchaser (the ‘‘Profit Guarantee’’) that the after-tax audited consolidated net profit (the ‘‘Audited Net Profit’’) of the Target Company in accordance with the Hong Kong generally accepted accounting principles for the eighteen-month period from 1 July 2015 to 31 December 2016 shall not be less than RMB400,000,000 (the ‘‘Guaranteed Net Profit’’).

In the event that the Target Company cannot achieve the Guaranteed Net Profit, the Vendors have irrevocably, jointly and severally undertaken to the Purchaser to pay to the Purchaser in cash an amount equivalent to the difference between the Audited Net Profit and the Guaranteed Net Profit on a dollar-for-dollar basis up to a maximum amount of RMB200,000,000 within 30 days after the release of the audited consolidated financial report of the Target Company.

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INFORMATION ON THE VENDORS AND THE TARGET COMPANY

Mr. He is a merchant and Ms. Zhao is the spouse of Mr. He. Save for Mr. He being one of the parties involved in the Green Flourish Acquisition which has not been completed as at the date of this announcement, to the best of the Director’s knowledge, information and belief having made all reasonable enquiries, each of the Vendors is an Independent Third Party.

The Target Company is a limited liability company incorporated in the PRC on 18 November 2014 with registered capital of RMB200,000,000 and is owned as to 60% by Ms. Zhao and as to 40% by Mr. He respectively. The Target Company’s business scope includes the development and sales of new energy automobiles, batteries and battery charging equipment; corporate management and advisory; and permitted operations of manufacture of new energy automobiles and batteries.

On 22 January 2015, the Target Company and the People’s Government of Zhangjiakou, Hebei, the PRC (河北省張家口市人民政府) entered into a cooperation agreement (the ‘‘Cooperation Agreement’’), of which the parties to the Cooperation Agreement will jointly promote the use of pure electric automobiles and to develop and operate battery recharging stations and other related supporting facilities in Zhangjiakou region. It is expected that a total of 1,500 lithium-ion batteries electric automobiles, battery recharging stations and other related supporting facilities will be in operation in Zhangjiakou region during 2015–2016. This development plan is expected to replace the existing fuel public vehicles and targeted to full coverage of electric automobiles in rural and urban traffic and intended to lead Zhangjiakou region as a model city in developing new energy automobiles before 2030. Pursuant to the Cooperation Agreement, the Target Company has agreed to (i) sell and distribute 1,500 lithium-ion batteries electric automobiles to the People’s Government of Zhangjiakou at a favorable price which shall not be higher than the market price; (ii) develop and operate battery recharging infrastructure and provide its related technical supports; and (iii) provide technical supports and after-sale services on the development of pure electric automobiles, whereas the People’s Government of Zhangjiakou has agreed to (i) provide strategic supports and implement related policies on the development and operation in new energy automobiles; (ii) provide subsidies with reference to the difference in the fuel price and electricity price to the Target Company; (iii) provide supports in the development of battery recharging stations and other related supporting facilities; (iv) provide policy supports and technical services such as provision of land and electricity for the construction of the fundamental facilities; and (v) give consideration when implementing policies in relation to the operational electricity fee consumed by the battery recharging stations.

On 5 February 2015, the Target Company has entered into the Intellectual Property Transfer Agreement with Mr. Jiang, whereby Mr. Jiang has agreed to transfer and procure his technical teams and associated companies to transfer the intellectual property including but not limited to 20 patents and patent applications to the Target Company for a consideration of RMB200,000,000 in cash. The 20 patents and patent applications relating to, among others, the design and application of air-conditioning, motor system, power and control system of electric automobiles, battery recharging equipment and station, are currently under the name of Mr. Jiang, his technical teams and associate companies. As at the date of this announcement, the consideration of RMB200,000,000 has been paid by the Target Company

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to Mr. Jiang. Upon completion of the relevant registration procedural matter on the transfer, Mr. Jiang and his technical teams and associate companies shall not own or have the right to use these 20 items of intellectual property.

On 6 February 2015, the Target Company and Mr. Jiang have entered into a non-legally binding memorandum of understanding of which both parties agreed to establish a company (the ‘‘New PRC Company’’) in Shenzhen, the PRC, with a registered capital of RMB50,000,000. The New PRC Company will be owned as to 90% by the Target Company and as to 10% by Mr. Jiang respectively and its business scope will include but not limited to, sale and distribution and research and development of new energy automobile power system, electric and control system and battery recharging equipment and other related products. The profit of the New PRC Company will be shared by the Target Company and Mr. Jiang according to their respective equity interest in the New PRC Company.

Mr. Jiang will be the technical director of the New PRC Company with a monthly salary of RMB100,000 and be responsible for the research and development of the driving systems for electric automobiles from small to large size according to the national standards and requirements of the PRC, America and European Union. During the term of his employment, Mr. Jiang shall not engage in any job which competes to the business of the New PRC Company. Pursuant to the memorandum of understanding, Mr. Jiang’s technical teams shall be employed by the New PRC Company. The Target Company shall compensate the loss on housing deposit and relocation expense of Mr. Jiang’s technical teams, which shall not exceed RMB50,000 in aggregate.

Mr. Jiang and his technical teams have researched and developed the first hybrid bus in 1991 and having continued to research and develop the pure electric automobiles in the PRC. Currently, they possess the technologies of batteries, power and control system and the load weight reduction for electric automobiles and those technologies have been affirmed by the PRC, America and European Union.

Financial information of the Target Company

The Target Company was incorporated on 18 November 2014. Based on the unaudited financial information of the Target Company for the period ended 31 December 2014, the profit before and after taxation and extraordinary items was RMB519,152.

The net asset value of the Target Company as at 31 December 2014 was RMB200,519,152.

REASONS FOR AND BENEFITS OF THE ACQUISITION

The Group is principally engaged in the businesses of trading and distribution of liquor and wine, investments in listed securities and provision of money lending services.

The Board continuously explores different investment opportunities and is of the view that the Acquisition presents an excellent opportunity for the Group to further expand its business portfolio into the new energy sector subsequent to the Green Flourish Acquisition.

According to the ‘‘Notice of the State Council on Issuing the Planning for the Development of the Energy-Saving and new Energy Automobile Industry (2012–2020)’’ (國務院關於印發 節能與新能源汽車產業發展規劃(2012–2020年)的通知), the automobile industry is a major

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pillar industry for the national economy and plays an important role in the national economy and social development. Along with the sustained and rapid growth of the Chinese economy and accelerated promotion of urbanization in China, the growth in demand for automobiles is sustainable, however, the resulting energy shortage and environmental pollution issues will become more conspicuous. The development of new energy automobiles is not only an imperative task for effectively easing pressure on both energy and environment issues as well as promoting sustainable development of the automobile industry, but is also a strategic approach for accelerating they systemic transformation and upgrading of the automobile industry.

The year 2014 marks an important year for the development of new energy automobiles. In order to expedite the promotion and application of new energy automobiles, alleviate energy and environmental pressures and accelerate the structuring and upgrade of the automobile industry, the central government successively promulgated a series of favorable policies. As a result, the country sold a total of approximately 74,800 new energy automobiles in 2014, representing a triple increase year on year according to the data from China Association Automobile Manufactures The exponential growth in sales of new energy automobiles in 2014 has marked the beginning of an era for commercializing new energy automobiles in China.

The industrialization of new energy vehicles market benefited not only from technical enhancement and the accelerated collaboration in the industry but also the full support from the enactment of the comprehensive and favourable policies by the central and provincial governments. In July 2014, the General Office of the State Council issued the ‘‘Guiding Opinions on Accelerating the Promotion and Application of New Energy Vehicles’’ (關於加 快新能源汽車推廣應用的指導意見) in which the development of new energy vehicle was raised to the national strategy level. The Guiding Opinions called for cancellation of regional protectionism and acceleration of the construction of vehicle charging facilities, and that the public services sector shall actively promote the use of new energy vehicles. Moreover, it is stipulated that buyers of new energy vehicles shall be exempted from paying the purchase tax in order to promote healthy and rapid development of the new energy vehicle industry. In December 2014, the ‘‘Notice on the Promotion and Application of Financial Supporting Policy on New Energy Vehicles 2016–2020 (Consultation Draft)’’ (關 於2016–2020年新能源汽車推廣應用財政支持政策的通知(徵求意見稿)), was jointly issued by the country’s four ministries and it was agreed that the subsidy for new energy vehicles will be extended to 2020. Local governments nationwide (including Beijing, Shanghai and Wuhan) also introduced a series of supporting policies for new energy vehicles facilities, encouraging the promotion and application of new energy vehicles in regions various. All these have demonstrated the government’s efforts and determination to facilitate the rapid development of new energy vehicles and have helped to make the operating environment favourable for the new energy vehicle industry.

By acquiring the Target Company, the Group will lapse into this fast growing industry at it’s beginning stage, with benefits of strong supportive government policies, associating with the interests of energy conservation and emission reduction.

With the new research and development team’s extensive experience and knowledge in the electric automobile industry, the Group is confident that it will continue to actively enhance and research and develop technologies for new energy automobiles and develop outstanding

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performance and high energy efficiency innovative technologies allowing the Group to be the leading business player in the new energy automobile industry. In addition, the new team can bring value added opportunity to the Group which allows the Group to expand its sources of revenue in benefiting shareholder.

Furthermore, Beijing is joint bidding with Zhangjaikou and the Chinese Olympic Committee for 2022 Winter Olympics where the bidding and hosting of the Winter Olympics require good air quality and environment. As such, it motivates the PRC government and creates an urgency need to take stringent measure to upgrade the economic structure, thus cutting the emission of air pollutants. Hence, Beijing, Zhangjaikou and its neighboring cities are making efforts to improve air quality. The Group believes this is a great opportunity in creating substantial local demand and at the same time promoting the Group’s new energy automobile globally.

In consideration of the net asset value of the Target Company, the future prospects of the Target Company and the Profit Guarantee as mentioned above, the Board considers that the terms of the Framework Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS ON THE ACQUISITION

As Mr. He is one of the Vendors and the parties involved in the Green Flourish Acquisition, the Acquisition and the Green Flourish Acquisition shall be aggregated under Chapter 14 of the Listing Rules.

As one or more of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the Acquisition when aggregated with the Green Flourish Acquisition exceed 25% but are all less than 100%, the Acquisition when aggregated with the Green Flourish Acquisition constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is subject to the announcement, circular and shareholders’ approval requirements under the Listing Rules.

A circular containing, among other things, (i) details of the Acquisition; (ii) the financial information of the Target Company; and (iii) other general information of the Company, together with a notice of the Acquisition SGM and the related proxy form will be despatched to Shareholders on or before 24 April 2015.

As Completion is subject to the fulfilment (or if applicable, waiver) of the conditions precedent to the Framework Agreement, the Acquisition may or may not proceed. The issue of this announcement does not in any way imply that the Framework Agreement will be implemented or completed. Shareholders and potential investors should exercise caution when dealing in the Shares.

PROPOSED CHANGE OF COMPANY NAME

The Board proposes to change the English name of the Company from ‘‘Guocang Group Limited’’ to ‘‘Xingmei New Energy Group Limited’’ and to adopt and register ‘‘星美新能源 集團有限公司’’ as the secondary name of the Company to replace the current Chinese name ‘‘ ’’ 國藏集團有限公司 .

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Conditions for the Change of Company Name

The Change of Company Name is conditional upon the following conditions having been satisfied:

1. the passing of a special resolution by the Shareholders at the Change of Company Name SGM approving the Change of Company Name; and

2. the Registrar of Companies in Bermuda granting approval for the Change of Company Name.

Reasons for the Change of Company Name

The Change of Company Name is to reflect the Company’s plan to focus on its new businesses in clean energy sector, apart from its existing businesses of trading and distribution of liquor and wine, investment in securities and provision of money lending services. The Board is of the view that the new energy sector is with good prospect and with high and sustainable growth. The Board believes that the new name of the Company can demonstrate the Group’s commitment towards clean energy sector and improve the Company’s corporate image and identity, which the Board considers to be in the interests of the Company and the Shareholders as a whole.

Effects of the Change of Company Name

Assuming all the conditions set out in the paragraph headed ‘‘Conditions for the Change of Company Name’’ having been fulfilled, the Change of Company Name will take effect from the date of entry of the new name of the Company on the register maintained by the Registrar of Companies in Bermuda. The Company will then carry out all necessary filing procedures with the Companies Registry in Hong Kong.

The Change of Company Name will not affect any rights of the Shareholders or the Company’s daily business operation or its financial position. All existing share certificates of the Company in issue bearing the current name of the Company will, upon the Change of Company Name becoming effective, continue to be good evidence of legal title to such Shares and will remain valid for trading, settlement, registration and delivery purposes. There will not be any arrangement for the exchange of the existing share certificates for new share certificates bearing the new name of the Company. Upon the Change of Company Name becoming effective, all new share certificates will be issued only in the new name of the Company.

In addition, subject to confirmation by the Stock Exchange, the English and Chinese stock short names of the Company for trading in the securities on the Stock Exchange will also be changed after the Change of Company Name becoming effective. Further announcement(s) will be made by the Company in relation to the effective dates of the Change of Company Name and the change of the English and Chinese stock short names.

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LISTING RULES IMPLICATIONS ON THE CHANGE OF COMPANY NAME

A Change of Company Name SGM will be convened and held for the Shareholders to consider and, if thought fit, approve, among other matters, the Change of Company Name. A circular containing, among other matters, details of the proposed Change of Company Name, together with a notice of the Change of Company Name SGM and the related proxy form, will be despatched to the Shareholders as soon as practicable.

RESUMPTION OF TRADING

At the request of the Company, trading in the Shares has been halted from 9:00 a.m. on 30 March 2015 pending the release of this announcement. An application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares with effect from 9:00 a.m. on 1 April 2015.

DEFINITIONS

Unless the context otherwise require, the following expressions have the following meaning in this announcement:

• ‘‘Acquisition’’ the acquisition of the entire equity interest of the Target Company pursuant to the Framework Agreement

• ‘‘Acquisition SGM’’ a special general meeting of the Company to be convened and held to consider and, if thought fit, to approve, among other things, the Framework Agreement and the transactions contemplated thereunder

• ‘‘Board’’ the board of Directors

• ‘‘Business Day(s)’’ a day (excluding Saturday, Sunday and public holiday) on which licensed banks in the PRC are generally open for business

• ‘‘Change of Company a proposal for the Company to change its English name Name’’ from ‘‘Guocang Group Limited’’ to ‘‘Xingmei New Energy Group Limited’’ and adopt and register ‘‘星美新能源集團有 限公司’’ as the secondary name of the Company to replace the current Chinese name ‘‘國藏集團有限公司’’

• ‘‘Change of Company a special general meeting of the Company to be convened to Name SGM’’ approve, among other matters, the Change of Company Name

• ‘‘Company’’ Guocang Group Limited (國藏集團有限公司), a company incorporated in Bermuda with limited liability, the Shares of which are listed on the Stock Exchange

‘‘Completion’’ completion of the Acquisition in accordance with the terms and conditions of the Framework Agreement

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• ‘‘connected person(s)’’

has the meaning ascribed to it under the Listing Rules

• ‘‘Consideration’’

• the consideration of RMB200,000,000 for the entire equity interest of the Target Company

• ‘‘Directors’’

the director(s) of the Company

• ‘‘Equity Interest Transfer Agreement’’

• the agreement for the transfer of the entire equity interest of the Target Company from the Vendors to the Purchaser pursuant to the terms of the Framework Agreement for the purposes of the registration of the transfer

• ‘‘Framework Agreement’’

• the agreement dated 30 March 2015 entered into among the Purchaser, the Vendors and the Target Company in relation to the sale and purchase of the entire equity interest of the Target Company

• ‘‘Green Flourish Acquisition’’

• the acquisition of the entire issued share capital of Green Flourish Enterprises Limited and all the liabilities, loans and obligations owing by Green Flourish Enterprises Limited and its subsidiaries at completion by the Company pursuant to the sale and purchase agreement dated 4 February 2015 entered into among the Company as purchaser, Mr. Yam Tak Cheung as vendor and Mr. He as executive

• ‘‘Group’’ the Company and its subsidiaries

• ‘‘Hong Kong’’

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

• ‘‘Independent Third Party’’

• third party independent of and not connected with the Company and its connected persons

• ‘‘Intellectual Property the sale and purchase agreement dated 5 February 2015 Transfer Agreement’’ entered into between the Target Company and Mr. Jiang in relation to the transfer of the intellectual property related to the new energy automobile possessed by Mr. Jiang and his technical teams and associate companies to the Target Company

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

• ‘‘Mr. He’’ Mr. He Yumin (賀玉民)

• ‘‘Mr. Jiang’’ Mr. Jiang Ruihua (江瑞華)

• ‘‘Ms. Zhao’’ Ms. Zhao Yanjun (趙燕君)

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• ‘‘PRC’’ the People’s Republic of China, and for the purpose of this announcement, excluding Hong Kong, the Macao Special Administrative Region of the PRC and Taiwan

• ‘‘Purchaser’’ Tech Bloom Limited (德世有限公司), a company incorporated in Hong Kong with limited liability and an indirect wholly-owned subsidiary of the Company

• ‘‘Share(s)’’ the ordinary share(s) of HK$0.05 each in the share capital of the Company

• ‘‘Shareholder(s)’’ the holder(s) of the issued Shares ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘Target Company’’ 深圳市星美新能源汽車有限公司 (in English, for identification purpose only, Shenzhen Xingmei New Energy Automobile Limited), a company incorporated in the PRC with limited liability

• ‘‘Vendors’’ Mr. He and Ms. Zhao ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong ‘‘RMB’’ the lawful currency of the PRC ‘‘%’’ per cent.

By order of the Board

Guocang Group Limited Wong Hin Shek Chairman and Executive Director

Hong Kong, 31 March 2015

As at the date of this announcement, the executive directors of the Company are Mr. Wong Hin Shek and Mr. Chi Chi Hung Kenneth; and the independent non-executive directors are Mr. Chiu Wai On, Mr. Man Kwok Leung and Dr. Wong Yun Kuen.

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