Kingwell Group Limited — M&A Activity 2016

Jul 5, 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.

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(Incorporated in Bermuda with limited liability) (Stock Code: 559)

STRATEGIC COOPERATION MEMORANDUM IN RELATION TO THE POSSIBLE ACQUISITION OF INTERNET EDUCATION BUSINESS IN THE PRC

This announcement is made by the Company pursuant to Rule 13.09 of the Listing Rules and the inside information provisions under Part XIVA of the SFO.

The Board announces that on 5 July 2016 (after trading hours), the Company and the Vendors entered into a non-legally binding Memorandum in relation to the Possible Acquisition.

Pursuant to the Memorandum, the Company (or its nominee) intends to acquire not less than 90% of the issued share capital of the Target Company such that the Company will indirectly hold not less than 51% equity interest in Zhongshan Bei Dou. The consideration for the Possible Acquisition will be subject to further negotiations and will be determined upon signing of the Formal Agreement.

The Target Group is principally engaged in operating a system platform for the development of ‘‘Bei Dou + Internet + Education’’ business model in the PRC.

The Board wishes to emphasise that no binding agreement in relation to the Possible Acquisition has been entered into by the Vendors and the Company as at the date of this announcement. As such, the Possible Acquisition may or may not proceed. Shareholders and investors are urged to exercise caution when dealing in the securities of the Company.

Further announcement in respect of the Possible Acquisition will be made by the Company in compliance with the Listing Rules as and when appropriate.

This announcement is made by the Company pursuant to Rule 13.09 of the Listing Rules and the inside information provisions under Part XIVA of the SFO.

The Board announces that on 5 July 2016 (after trading hours), the Company and the Vendors entered into a non-legally binding Memorandum in relation to the Possible Acquisition.

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THE MEMORANDUM

Date: 5 July 2016 (after trading hours)

Parties: (1) Mr. Ng Victor; (2) Mr. Zheng Gang; and

• (3) the Company.

Subject matter

Pursuant to the Memorandum, the Company (or its nominee) intends to acquire not less than 90% of the issued share capital of the Target Company such that the Company will indirectly hold not less than 51% equity interest in Zhongshan Bei Dou. The consideration for the Possible Acquisition will be subject to further negotiations and will be determined upon signing of the Formal Agreement.

Formal Agreement

Pursuant to the Memorandum, the Vendors and the Company shall negotiate in good faith towards one another in ensuring that the Formal Agreement be entered into as soon as possible and in any event no later than 30 September 2016 or such later date as the Company and the Vendors may agree.

The Formal Agreement shall contain, including but not limited to representations, warranties, undertaking and indemnifications which are generally given by vendor(s) under the transactions similar to the Possible Acquisition.

If no Formal Agreement is entered into on or before 30 September 2016 (or such later date as the Company and the Vendors may agree), the Memorandum shall lapse.

Due diligence

The Company shall and shall procure that its advisers and agents shall, forthwith upon the signing of the Memorandum, conduct such review of the assets, liabilities, operations and affairs of the Target Group as it may consider appropriate and the Vendors shall provide and procure the Target Group and their agents to provide such assistance as the Company and its advisers and agents may require in connection with such review and shall procure that such due diligence review shall be completed on or before 30 September 2016 (or such later date as the Vendors and the Company may agree).

Exclusivity

Pursuant to the Memorandum, on or before 30 September 2016, the Vendors will not, and will procure that the Target Company and their respective directors, officers, employees, representatives and agents will not, directly or indirectly, (i) solicit, initiate or encourage inquiries or offers from, or (ii) initiate the provision of or furnish any information to, or (iii) enter into any agreement or letter of intent or memorandum of understanding with, any person or entity other than the Company with respect to the Possible Acquisition.

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INFORMATION OF THE TARGET GROUP

The Target Company was incorporated in Hong Kong with limited liability and is beneficially owned as to 50% by Mr. Ng Victor and 50% by Mr. Zheng Gang. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, each of the Vendors is an Independent Third Party. The Target Company is the beneficial owner of 70% equity interest of Bei Dou Shenzhen, which in turn owns 85% equity interest of Zhongshan Bei Dou. The Target Group is principally engaged in operating a system platform for the development of ‘‘Bei Dou + Internet + Education’’ in the PRC.

Zhongshan Bei Dou was appointed as the sole operator of a personal safety system (人身安 全保障系統) under the demonstration construction project namely ‘‘Zhongshan Bei Dou City’’ (‘‘中山北斗城市’’建設示範項目) by the General Armament Department of Central Military Commission (中央軍委總裝備部) and the Guangdong Provincial Government (廣東 省政府) and obtained the franchise of ‘‘Bei Dou Civil Operation Services Branch Qualification’’ (‘‘北斗民用分理運營服務資質’’) in Guangdong, Guangxi, Hunan, Fujian and Hainan from 北斗九億信息科技產業(北京)有限公司 (Bei Dou Jiuyi Information Technology Industry (Beijing) Limited*). The self-developed educational information exchange platform (學互通) has been approved by Zhongshan Municipal Bureau of Education (中山市政府教育局) for promotion to primary school students in Zhongshan City. Currently, Zhongshan Bei Dou has signed cooperation agreements with three educational institutions to provide free home-school platform and signed strategic cooperation agreements with Beijing Normal University, Zhuhai (北京師範大學珠海分校) and Aerospace Feeling Measuring & Control Technology Co., Ltd. (航天飛鄰測控技術公司) to further develop its e-education business.

REASONS FOR THE POSSIBLE ACQUISITION

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

Following the abolishment of the ‘‘One-child policy’’ in the PRC in early 2016, the birth rate is expected to increase in the coming years. Due to higher education level and improved living standard, Chinese parents have become more willing to spend money on their children, especially on education and safety wise, which brings about investment opportunities in the development of education e-platforms. The Board foresees a good prospect with high and sustainable growth in the internet education sector.

In consideration of the above, the Directors are of the view that the terms of the Memorandum are fair and reasonable and the Possible Acquisition is in the interests of the Company and Shareholders as a whole.

GENERAL

The Memorandum does not constitute legally-binding commitment in respect of the Possible Acquisition. The Possible Acquisition is subject to, among others, the execution and completion of the Formal Agreement.

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The Board wishes to emphasise that no binding agreement in relation to the Possible Acquisition has been entered into by the Vendors and the Company as at the date of this announcement. As such, the Possible Acquisition may or may not proceed. Shareholders and investors are urged to exercise caution when dealing in the securities of the Company.

Further announcement in respect of the Possible Acquisition will be made by the Company in compliance with the Listing Rules as and when appropriate.

DEFINITIONS

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

‘‘Bei Dou Shenzhen’’ 北斗互聯網教育科技 (深圳) 有限公司 (Bei Dou Internet Education Technology (Shenzhen) Limited), a company established in the PRC with limited liability, and is owned as to 70% and 30% by the Target Company and 中山北斗資 產管理有限公司 (Zhongshan Bei Dou Asset Management Limited) respectively as at the date of this announcement ‘‘Board’’ the board of Directors ‘‘Company’’ DeTai New Energy Group Limited, a company incorporated in Bermuda with limited liability whose issued Shares are listed on the main board of the Stock Exchange ‘‘connected person’’ has the meaning ascribed to it under the Listing Rules ‘‘Director(s)’’ the director(s) of the Company ‘‘Formal Agreement’’ the formal sale and purchase agreement to be entered into between the Vendors and the Company in relation to the Possible Acquisition ‘‘Group’’ the Company and its subsidiaries ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC ‘‘Independent Third Party’’ third party independent of and not connected with the Company and its connected persons ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange ‘‘Memorandum’’ the non-legally binding strategic cooperation memorandum of understanding dated 5 July 2016 and entered into between the Vendors and the Company setting out the preliminary understanding in relation to the Possible Acquisition

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• ‘‘Possible Acquisition’’ the possible acquisition by the Company of not less than 90% equity interest of the Target Company as contemplated under the Memorandum

• ‘‘PRC’’ the People’s Republic of China, which for the purposes of this announcement excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

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

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

• ‘‘Shareholder(s)’’ the holder(s) of issued Share(s) ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘Target Company’’ China Bei Dou Communications Technology Group Limited (中國北斗通信科技集團有限公司), a company incorporated in Hong Kong with limited liability, which is owned as to 50% by each of the Vendors as at the date of this announcement

• ‘‘Target Group’’ the Target Company, Bei Dou Shenzhen and Zhongshan Bei Dou

• ‘‘Vendor(s)’’ Mr. Ng Victor and Mr. Zheng Gang, as at the date of this announcement, each of them directly holds 50% of the issued share capital of the Target Company

• ‘‘Zhongshan Bei Dou’’ 中山北斗教育科技有限公司 (Zhongshan Bei Dou Education Technology Limited*), a company established in the PRC with limited liability, and is owned as to 85% and 15% by Bei Dou Shenzhen and Mr. Lin Keliang respectively as at the date of this announcement

• ‘‘HK$’’ Hong Kong dollars, the lawful currency for the time being of Hong Kong

• ‘‘%’’ per cent.

• for identification purposes only

By order of the Board

DeTai New Energy Group Limited Wong Hin Shek Chairman and Executive Director

Hong Kong, 5 July 2016

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

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