KOALA Financial Group Limited — Proxy Solicitation & Information Statement 2014

Jan 29, 2014

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 your stockbroker, or other licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your Shares in Sunrise (China) Technology Group Limited , you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or the transfer was effected for onward transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited 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.

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 8226)

MAJOR TRANSACTION IN RELATION TO THE DISPOSAL OF A SUBSIDIARY

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

A letter from the Board is set out on pages 4 to 13 of this circular.

30 January 2014

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

i

CONTENTS

	Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Appendix I – Financial information of the Group. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Appendix II – General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

ii

DEFINITIONS

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

• “Announcement”

the announcement of the Company dated 23 December 2013 in relation to the Disposal

• “associate(s)” has the meaning ascribed thereto under the GEM Listing Rules

• “Beijing Xiangeqing” 北京湘鄂情集團股份有限公司 (Beijing Xiangeqing Group Co., Limited*), a company which is listed on the Shenzhen Stock Exchange in the PRC

• “Board” the board of Directors

• “Business Day(s)” a day (other than a Saturday, Sunday, public holiday and any weekday on which a tropical cyclone warning signal no. 8 or higher is hoisted or a black rain storm warning is given in Hong Kong at any time during 9:00 a.m. to 5:00 p.m.) on which licensed banks in Hong Kong are generally open for business throughout their normal business hours

• “BVI” British Virgin Islands

• “Company” Sunrise (China) Technology Group Limited, a company incorporated in the Cayman Islands whose shares are listed and traded on GEM

• “Completion” completion of the sale and purchase of the Sale Shares in accordance with the terms and conditions of the Sale and Purchase Agreement

• “Completion Date” the date of falling third Business Days after the fulfillment of the conditions set out in the Sale and Purchase Agreement (or such other date as may be agreed between the Company and the Purchaser)

• “connected person(s)” has the meaning ascribed thereto under the GEM Listing Rules

• “Consideration” the aggregate consideration of HK$50,980,962 for the Disposal

• “Controlling shareholder” has the meaning ascribed thereto under the GEM Listing Rules

• “Director(s)” the director(s) of the Company

“Disposal” the disposal of the Sale Shares pursuant to the Sale and Purchase Agreement

1

DEFINITIONS

“Disposal Group”	the Disposed Company and its subsidiaries
“Disposed Company”	Confident Echo Holdings Limited, a company incorporated in the
	BVI with limited liability
“GEM”	the Growth Enterprise Market of the Stock Exchange
“GEM Listing Rules”	the Rules Governing the Listing of Securities on GEM
“Group”	the Company and its subsidiaries
“Heilongjiang Shengyan”	黑龍江省盛焱新能源開發有限公司(Heilongjiang Province
	Shengyan New Energy Development Limited*), a company
	incorporated in the PRC with limited liability
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Independent Third Party(ies)”	third party(ies) who is/are independent from the Company and its
	connected person(s)
“Latest Practicable Date”	28 January 2014, being the latest practicable date before the
	printing of this circular for ascertaining certain information for
	inclusion in this circular
“Long Stop Date”	31 January 2014, or such later date as the Company and the
	Purchaser may agree
“Mr. Shan”	Mr. Shan Xiaochang, the chairman, the chief executive officer and
	an executive director of the Company
“PRC”	the People’s Republic of China, which for the purpose of this
	circular excludes Hong Kong, the Macau Special Administrative
	Region of the PRC and Taiwan
“Purchaser”	HongKong Xiangeqing Food Investments Co., Limited, a
	company incorporated in Hong Kong with limited liability
“Remaining Group”	the Group other than the Disposal Group
“Sale and Purchase Agreement”	the conditional sale and purchase agreement dated 23 December
	2013 entered into between the Company and the Purchaser for the
	sale and purchase of the Sale Shares
“Sale Shares”	510 shares of US$1.00 each in the issued share capital of the
	Disposed Company, representing 51% of the entire issued share
	capital of the Disposed Company

2

DEFINITIONS

“SFO”	Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
“Share(s)”	ordinary share(s) of HK$0.01 each in the share capital of the
	Company
“Shareholder(s)”	holder(s) of the Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“VSD”	very substantial disposal by the Company in relation to the
	disposal of the entire issued share capital of Taraki Inc. and all
	obligations, liabilities and debts owing or incurred by Taraki Inc.
	to the Company under the VSD Sale and Purchase Agreement, the
	completion of which took place on 18 July 2013
“VSD Sale and Purchase Agreement” the conditional sale and purchase agreement dated 2 May
	2013 entered into between the Company and Buena Holdings
	Limited in respect of the VSD at an aggregate consideration of
	HK$122,000,000
“Zhongyu Group ”	Zhongyu Group Holdings Limited, a company incorporated in the
	BVI with limited liability, which is wholly owned by Mr. Shan
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“RMB”	Renminbi, the lawful currency of the PRC
“THB”	Thai Bahts, the lawful currency of Thailand
“US$”	United Stated dollars, the lawful currency of USA
“%”	per cent.

• denotes English translation of the name of a Chinese company and is provided for identification purposes only

3

LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 8226)

Executive Directors:

Mr. Shan Xiaochang (Chairman) Ms. Shan Zhuojun Mr. Ma Arthur On-hing

Independent non-executive Directors:

Mr. Wang Jialian Mr. Wang Zhihua Ms. Chan Sze Man

Registered office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman, KY1-1111 Cayman Islands

Head office and principal place of business in Hong Kong: Units 01-03, 28th Floor Shui On Centre 6-8 Harbour Road Wan Chai, Hong Kong 30 January 2014

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION IN RELATION TO THE DISPOSAL OF A SUBSIDIARY

INTRODUCTION

Reference is made to the Announcement that on 23 December 2013 (after trading hours of the Stock Exchange), the Company and the Purchaser entered into the Sale and Purchase Agreement, pursuant to which the Purchaser has conditionally agreed to acquire, and the Company has conditionally agreed to sell, the Sale Shares at an aggregate consideration of HK$50,980,962.

As the relevant percentage ratio(s) under Chapter 19 of the GEM Listing Rules exceeds 25% but is less than 75%, the Disposal constitutes a major transaction for the Company and is subject to the reporting, announcement and shareholders’ approval requirements under the GEM Listing Rules.

4

LETTER FROM THE BOARD

The Company has obtained a written approval for the Disposal in accordance with Rule 19.44 of the GEM Listing Rules from Zhongyu Group which was beneficially interested in 239,556,536 Shares, representing approximately 55.5% of the issued share capital of the Company as at the Latest Practicable Date. On the basis that (i) no Shareholder is required to abstain from voting if the Company were to convene an extraordinary general meeting to approve the Disposal; and (ii) the Company has obtained a written approval for the Disposal from Zhongyu Group which holds approximately 55.5% in nominal value of the issued Shares giving the right to attend and vote at that general meeting to approval the Disposal, no extraordinary general meeting will be convened for the purpose of approving the Disposal as permitted under Rule 19.44 of the GEM Listing Rules.

This circular contains details of the Sale and Purchase Agreement and the Disposal and other information as required to be disclosed under the GEM Listing Rules.

THE SALE AND PURCHASE AGREEMENT

The principal terms of the Sale and Purchase Agreement are set out below:

Date: 23 December 2013

Parties: (1) the Company, as vendor; and (2) HongKong Xiangeqing Food Investment Co., Limited, as purchaser

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Purchaser and its beneficial owner(s) are Independent Third Parties.

Assets to be disposed of

Pursuant to the Sale and Purchase Agreement, the Purchaser has conditionally agreed to acquire, and the Company has conditionally agreed to sell, the Sale Shares. The Sale Shares represents 51% of the entire issued share capital of the Disposed Company. Upon Completion, the Company will not hold any interest in the Disposal Group and the Disposal Group will cease to be subsidiaries of the Company.

Consideration

The Consideration for the Sale Shares is HK$50,980,962 which is satisfied in cash and has been paid by the Purchaser to the Company in the following manner:

• (a) a sum of HK$22,000,000, being the deposit and part of the Consideration (the “ Deposit ”), has been paid by the Purchaser to the Company upon signing of the Sale and Purchase Agreement; and

• (b) the remaining balance of HK$28,980,962 has been paid by the Purchaser to the Company before Completion.

5

LETTER FROM THE BOARD

In the event that (i) the Company terminates the transactions contemplated under the Sale and Purchase Agreement as agreed by the Purchaser before the Completion Date, the Company will refund the Deposit (without interest) to the Purchaser upon or within seven Business Days after signing the deed of termination to terminate the Sale and Purchase Agreement; and (ii) the Purchaser terminates the transactions contemplated under the Sale and Purchase Agreement as agreed by the Company before the Completion Date, the Deposit (without interest) shall be refundable by the Company to the Purchaser upon or within seven Business Days after signing the deed of termination to terminate the Sale and Purchase Agreement. None of the parties shall take any action to claim for damages or to enforce specific performance or any other rights and remedies and the Sale and Purchase Agreement shall cease to have any effect (save as otherwise provided therein). No party shall have any obligations and liabilities towards the other party save for any antecedent breaches of the terms thereof.

The Consideration was determined after arm’s length negotiations between the Purchaser and the Company with reference to (i) the Group’s total investment in the Disposal Group since acquisition amounting to approximately HK$9.5 million; and (ii) the premium of approximately 436.6% to the total investment in the Disposal Group since acquisition.

Conditions precedent

Completion is conditional upon the satisfaction of the following conditions:

• (a) all requirement under the laws of (including approval from the Stock Exchange, if any) PRC, Hong Kong, BVI, Cayman Islands and other countries in respect of the Sale and Purchase Agreement and the transactions contemplated thereunder having been obtained;

• (b) the approval in the Board’s meeting and Shareholders’ general meeting of the Sale and Purchase Agreement and the transactions contemplated thereunder having been obtained (obtaining the written resolution(s) of the controlling shareholder of the Company shall be deemed to have obtained the approval of the Shareholders’ general meeting); and

• (c) the representations, warranties and undertakings given by the Purchaser under the Sale and Purchase Agreement remain true and accurate in all respects at any time from the date of the Sale and Purchase Agreement up to and including the Completion Date.

None of the above conditions can be waived. If the above conditions are not satisfied on or before 4:00 p.m. on the Long Stop Date (or such later date as the parties may agree), the Sale and Purchase Agreement shall terminate and no party shall have any obligations and liabilities under the Sale and Purchase Agreement save for any antecedent breaches of the terms thereof.

As at the Latest Practicable Date, condition (b) has been fulfilled.

Completion

Completion shall take place at 4:00 p.m. on the Completion Date. If Completion does not take place in accordance with the terms and conditions of the Sale and Purchase Agreement, the Sale and Purchase Agreement shall cease and determine (save as otherwise provided therein) and no party shall have any obligations and liabilities towards the other parties save for any antecedent breaches of the terms thereof.

Upon Completion, the Company will cease to hold any issued share capital in the Disposal Group and the Disposal Group will cease to be subsidiaries of the Group.

6

LETTER FROM THE BOARD

INFORMATION ON THE DISPOSAL GROUP

The Disposed Company, which was incorporated in BVI, is an investment holding company and is owned as to 51% by the Company. The Disposal Group is principally engaged in the provision of technological desulphurization service, which can effectively reduce sulfur dioxide and hydrogen sulfide emissions generated from burning of fossil fuels such as coal, natural gas and oil products.

To the best of the knowledge, information and belief of the Directors, the following diagram sets out the shareholding structure of the Group before and after Completion:

Before Completion

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----- Start of picture text -----

The Company
100% 100% 100% 51% 100%
Ever Wealth Confident
A-Plus Glory Modern World Rich Share
Capital Holdings Echo Holdings
Capital Limited Group Limited Global Limited
Limited Limited
(BVI) (BVI) (BVI)
(BVI) (BVI)
100% 100% 100% 100% 100%
Wealth Great Honest Smart Faith King Rise Joy
Era Smart
Corporation Investment Investment Investment
Trading Limited
Limited Limited Limited Limited
(Hong Kong)
(Hong Kong) (Hong Kong) (Hong Kong) (Hong Kong)
100% 100% 51%
宜興瑞添能源 黑龍江省盛焱
江蘇晟宜環保
技術諮詢 新能源開發有
科技有限公司
有限公司 限公司
(PRC)
(PRC) (PRC)
80%
陝西晟宜環保
科技有限公司
(PRC)
----- End of picture text -----

7

LETTER FROM THE BOARD

After Completion

The Remaining Group

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----- Start of picture text -----

The Company
100% 100% 100% 100%
Ever Wealth
A-Plus Glory Modern World Rich Share
Capital Holdings
Capital Limited Group Limited Global Limited
Limited
(BVI) (BVI) (BVI)
(BVI)
100% 100% 100% 100%
Wealth Great Honest Smart Rise Joy
Era Smart
Corporation Investment Investment
Trading Limited
Limited Limited Limited
(Hong Kong)
(Hong Kong) (Hong Kong) (Hong Kong)
100% 51%
宜興瑞添能源 黑龍江省盛焱
技術諮詢 新能源開發有
有限公司 限公司
(PRC) (PRC)
----- End of picture text -----

Set out below is a summary of the unaudited consolidated financial information of the Disposal Group prepared in accordance with Hong Kong Financial Reporting Standards (subject to audit) since completion of the Group’s acquisition of the Disposal Group in September 2011:

	For the year ended	For the year ended
	31 December 2011	31 December 2012
	(unaudited)	(unaudited)
	HK$’000	HK$’000
Turnover	–	20,417
Net loss before taxation	(2,517)	(13,310)
Net loss after taxation	(2,130)	(11,388)

The unaudited net asset value of the Disposal Group (subject to audit) was approximately HK$4,985,000 as at 31 December 2012. The excess of the Consideration over the unaudited net asset value of the Disposal Group amounted to approximately HK$45,995,962.

8

LETTER FROM THE BOARD

INFORMATION ON THE REMAINING GROUP

Upon Completion, the Remaining Group will be principally engaged in the production and sale of straw fuel briquettes, which is a type of biofuels and a substitute for coal, in the northeast region of the PRC through its subsidiary, Heilongjiang Shengyan. The Group completed the acquisition of its 51% interest in Heilongjiang Shengyan in December 2012, further details of which are disclosed in the announcement of the Company dated 30 October 2012.

Heilongjiang Shengyan was incorporated in the PRC in July 2010 with a registered capital of RMB30 million and is principally engaged in the production and sale of straw fuel briquettes, which is a type of biofuels and a substitute for coal, in the Northeast region of the PRC. The business model of Heilongjiang Shengyan is briefly summarised as follows:

• Straw collection – purchase, collect and strap raw straw from farmers and transport to the warehouses for storage;

• Straw chopping – the collected straw is then crushed into fine powder through crushing equipments;

• Straw briquetting – the powdered straw is then put into the briquetting press machines from where it is compressed and processed before straw fuel briquettes are made; and

• Sale of finished products – upon receiving sales orders, the straw fuel briquettes are then sold to customers.

The customers of Heilongjiang Shengyan mainly consist of companies, which are engaged in agricultural and manufacturing industries and use the straw fuel briquettes for different usage such as heat generation, located mostly at the Baiquan County of Heilongjiang Province. Revenue of Heilongjiang Shengyan is mainly derived from the sale of straw fuel briquettes by sales orders from customers and Heilongjiang Shengyan generates more revenue in winter seasons out of a year due to its usage mainly as heat generation by its customers. Heilongjian Shengyan purchases raw straw mainly from many different local farmers located at Heilongjian Province in the PRC. It entered into sales agreements with customers and purchase agreements with local farmers.

The production of Heilongjiang Shengyan is mainly conducted in one main plant and 30 sub-plants located at the Baiquan County of Heilongjiang Province with a production capacity of approximately 200,000 tonnes per year. The major assets of Heilongjiang Shengyan consist of land and buildings, 52 sets of straw briquette manufacturing devices and inventories. Heilongjiang Shengyan also owns technology patents in the production of straw fuel briquettes. Heilongjiang Shengyan is currently the largest company engaged in the manufacturing and sale of straw fuel briquettes in Heilongjiang Province. It has built 10 more sub-plants and increased its production capacity by 40,000 tonnes in the previous year. It is expected that Heilongjiang Shengyan will continue to increase its production capacity by building more sub-plants in Heilongjiang Province and neighbourhood provinces such as Jilin and Hebei Provinces as well as expand its product usage as fertilizers or animal feed though the Group has no exact future detailed plans of the scale of target production capacity or timing of the development plan. Due to its strong market position in Heilongjiang Province, Heilongjiang Shengyan has stable straw supplies and product demand and receives support from the local government.

9

LETTER FROM THE BOARD

In addition, the PRC government also promulgated several supporting policies and measures to support the straw industry. The State Council of the PRC has promulgated the 《「十二五」農作物秸稈 綜合利用實施方案》 (12th Five Year Plan – Implementation Plan for Straw Integrated Utilization) at the end of 2011 to determine the development directions and security measures for related industries regarding the straw integrated utilization. The Ministry of Finance of the PRC published in October 2008 《秸稈能源化利用補助資金管理暫行辦法》(Interim Measures for Straw Energy Utilization Subsidies) to support the development of the straw industry by providing subsidy from the government. Under the 《秸稈能源化利用補助資金管理暫行辦法》(Interim Measures for Straw Energy Utilization Subsidies*), the qualifications of companies entitling to receive subsidy include (i) the registered capital of the company should be at least RMB10 million; (ii) the straw utilization business of the company should be in accordance with the general plan made by local government; (iii) the total volume of raw material used for production by the company should be not less than 10,000 tonnes; and (iv) the company has stable customers and sales revenue. Since established in 2010, Heilongjiang Shengyan has been granted annual subsidy amounting to approximately RMB3.2 million and RMB18.8 million for the year ended 31 December 2010 and 2011 respectively based on its annual volume of sales in 2010 and 2011 respectively, offered by the Ministry of Finance of the State Council of the PRC. According to the website of the Ministry of Finance of the PRC publishing the list of companies who had been granted straw energy utilization subsidy, Heilongjiang Shengyan is the largest straw utilization manufacturer in Heilongjiang Province in terms of annual sales in 2011. Heilongjiang Shengyan only recorded the subsidy income as other revenue below gross profit item in its accounts when it received the subsidy income. The annual subsidy of RMB3.2 million was received during the year ended 31 December 2011. Heilongjian Shengyan recorded turnover, gross profit and net profits of approximately RMB46.5 million, RMB60,499 and RMB673,722 respectively for the year ended 31 December 2011. The annual subsidy of RMB18.8 million was received in March 2013 and therefore was not booked in the accounts of Heilongjiang Shengyan for the year ended 31 December 2012. Heilongjiang Shengyan recorded turnover, gross profit and net profits of approximately RMB77.4 million, RMB12.4 million and RMB9.0 million respectively for the year ended 31 December 2012. The subsidy granted is significant to the net profits of Heilongjiang Shengyan but has no effects on the turnover and gross profit of Heilongjiang Shengyan. Since the Group completed the acquisition of Heilongjiang Shengyan in December 2012 and Heilongjiang Shengyan had been able to generate net profits of RMB9.0 million for the year ended 31 December 2012 without recognising the subsidy income in its accounts, the Directors are of the view that the extent of the reliance on subsidy income by Heilongjiang Shengyan has weakened in 2012 as compared to 2011 and it is expected that the reliance on subsidy income by Heilongjiang Shengyan will continue to decrease as Heilongjiang Shengyan will expand its production capacity and gradually raise the product price year by year. Based on the historical average subsidy granted per tonne of products produced in 2011 and the annual volume of sales in 2012, it is expected that Heilongjiang Shengyan will be granted subsidy of approximately RMB25 million for the year ended 31 December 2012 and there will be no material adverse impact to the Group if the subsidy for the year ended 31 December 2012 is not granted.

10

LETTER FROM THE BOARD

Based on the unaudited consolidated accounts of the Remaining Group (subject to audit), the Remaining Group recorded turnover and net profits after taxation of approximately HK$30.1 million and HK$11.5 million for the year ended 31 December 2012 respectively (excluding the subsidy income). The total assets of the Remaining Group were approximately HK$284.1 million as at 31 December 2012 which comprises mainly of plant and equipment, inventories and prepayments, deposits and other receivables.

INFORMATION OF THE PURCHASER

The Purchaser is a company incorporated in Hong Kong and is a wholly-owned subsidiary of Beijing Xiangeqing, which is a company listed on the Shenzhen Stock Exchange and is principally engaged in the catering service business comprising group meals, fast food, restaurants and food processing in the PRC. As mentioned in its 2013 interim report, Beijing Xiangeqing is exploring investment opportunities in the environmental related businesses in the PRC in addition to its catering service business. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Purchaser and its beneficial owner(s) are Independent Third Parties.

REASONS FOR THE DISPOSAL AND USE OF PROCEEDS

The Company is an investment holding company. The Group is principally engaged in the environmental protection related businesses.

Since the Group’s acquisition of the Disposal Group in September 2011, the Disposal Group recorded net loss after taxation of approximately HK$2.1 million and HK$11.4 million for the years ended 31 December 2011 and 2012 respectively. Having considered that (i) the Disposal Group has not generated profits to the Group since its acquisition by the Group; and (ii) the Consideration represents a premium of approximately 436.6% to the Group’s total investment in the Disposal Group of approximately HK$9.5 million since acquisition, the Directors are of the view that the Disposal provides an opportunity for the Group to generate gains from realizing its investment in the Disposal Group and to devote its resources to the operation of the business of the Remaining Group and to improve the working capital of the Group. Upon Completion, the Remaining Group will be principally engaged in the production and sale of straw fuel briquettes.

The Directors consider that the terms of the Sale and Purchase Agreement are fair and reasonable and the Disposal is in the interests of the Company and the Shareholders as a whole.

It is intended that the proceeds from the Disposal will be used for general working capital of the Remaining Group.

FINANCIAL EFFECT ON THE DISPOSAL

Upon Completion, the Company will cease to hold any equity interest in the Disposed Company. The Disposal Group will cease to be subsidiaries of the Company and the financial information of the Disposal Group will not be consolidated in the accounts of the Company upon Completion.

11

LETTER FROM THE BOARD

Earnings

Subject to the confirmation of the auditors of the Company, it is estimated that the Group will realize a gain of approximately HK$49.2 million from the Disposal, which is calculated based on the Consideration of approximately HK$51 million after deducting the equity interests attributable to the unaudited consolidated net asset value of the Disposal Group of approximately HK$1.8 million (which is calculated based on the unaudited net asset value of the Disposal Group of approximately HK$5.0 million less minority interests of approximately HK$3.2 million) as at 31 December 2012. Shareholders should note that the actual amount of the gain of the Disposal to be recognised in the consolidated financial statements of the Company depends on the net asset value of the Disposal Group as at the Completion Date and therefore may be different from the amount mentioned above.

Assets and liabilities

Based on the unaudited financial information of the Group and subject to confirmation of the auditors of the Company, the total assets and total liabilities of the Group are expected to decrease immediately upon completion of the Disposal (after taken into account the Consideration which was received by the Company before Completion). The expected decrease in total assets is mainly due to the deconsolidation of current assets of the Disposal Group and the expected decrease in total liabilities is mainly due to the deconsolidation of the accruals and other payables of the Disposal Group.

IMPLICATION UNDER THE GEM LISTING RULES

As the relevant percentage ratio(s) under Chapter 19 of the GEM Listing Rules exceeds 25% but is less than 75%, the Disposal constitutes a major transaction for the Company and is subject to the reporting, announcement and shareholders’ approval requirements under the GEM Listing Rules.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, no Shareholder has a material interest in the Disposal and no Shareholder is required to abstain from voting if an extraordinary general meeting is convened to approve the Disposal.

The Company has obtained a written approval for the Disposal in accordance with Rule 19.44 of the GEM Listing Rules from Zhongyu Group which is beneficially interested in 239,556,536 Shares, representing approximately 55.5% of the issued share capital of the Company as at the Latest Practicable Date. On the basis that (i) no Shareholder is required to abstain from voting if the Company were to convene an extraordinary general meeting to approve the Disposal; and (ii) the Company has obtained a written approval for the Disposal from Zhongyu Group which holds approximately 55.5% in nominal value of the issued Shares giving the right to attend and vote at that general meeting to approval the Disposal, no extraordinary general meeting will be convened for the purpose of approving the Disposal as permitted under Rule 19.44 of the GEM Listing Rules.

12

LETTER FROM THE BOARD

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendices to this circular.

Yours faithfully, By Order of the Board Sunrise (China) Technology Group Limited Shan Xiaochang Chairman

13

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL SUMMARY OF THE GROUP

The financial information of the Group for (i) the nine months ended 30 September 2013 is disclosed in the third quarterly report of the Company for the nine months ended 30 September 2013 from pages 1 to 7; (ii) the six months ended 30 June 2013 is disclosed in the interim report of the Company for the six months ended 30 June 2013 from pages 1 to 15; (iii) the three months ended 31 March 2013 is disclosed in the first quarterly report of the Company for the three months ended 31 March 2013 from pages 1 to 5; (iv) the year ended 31 December 2012 is disclosed in the annual report of the Company for the year ended 31 December 2012 from pages 26 to 90; (v) the year ended 31 December 2011 is disclosed in the annual report of the Company for the year ended 31 December 2011 from pages 27 to 92; (vi) the year ended 31 December 2010 is disclosed in the annual report of the Company for the year ended 31 December 2010 from pages 25 to 92, all of which have been published on the GEM website of the Stock Exchange (www.hkgem.com) and the website of the Company (www.sunrisechina-tech.com).

2. FINANCIAL AND TRADING PROSPECTS OF THE REMAINING GROUP

After completion of the Disposal, the Remaining Group will be principally engaged in the production and sale of straw fuel briquettes through its subsidiary, Heilongjiang Shengyan. Further details of Heilongjiang Shengyan are set out under the section headed “Information of the Remaining Group” in the letter from the Board of this circular.

As disclosed in the 2013 first quarterly report of the Company, Heilongjiang Shengyan recorded a sales income of approximately HK$19.3 million and a gross profit of approximately HK$6.8 million for the three months ended 31 March 2013. As disclosed in the 2013 interim report of the Company, Heilongjiang Shengyan recorded a sales income of approximately HK$5.1 million and a gross profit of approximately HK$1.6 million for the three months ended 30 June 2013, which decreased comparing with those of the first quarter. As disclosed in the 2013 third quarterly report of the Company, Heilongjiang Shengyan recorded a sales income of approximately HK$1.2 million and a gross profit of approximately HK$0.4 million, which decreased comparing with those of the first and second quarters. The reason for the decrease in sales in the second and third quarters as compared to the first quarter was that the products of Heilongjiang Shengyan are mainly used for heat generation by its customers and market demand is usually low in summer. It is expected that sales will recover in the coming winter.

Accordingly to chapter 24 of the 12th Five-Year Plan, the PRC government plans to enhance environmental protection intensity by, among others, prioritizing solutions to air and land contamination which adversely affect people’s health, assigning target responsibilities for emissions reduction and strictly controlling the discharge of pollutants as well as strengthening the regulation of heavy metals, hazardous waste, and soil pollution. In addition, according to the 《「十二五」農作物秸稈綜合利用 實施方案》 (12th Five Year Plan – Implementation Plan for Straw Integrated Utilization*), the straw integrated utilization rate was 70.6% in 2010 and the PRC government aims to improve the straw integrated utilization rate to above 80% by 2015. Using straw as an energy resource can improve the straw integrated utilization rate. Benefited from the enormous support given by the PRC government towards straw integrated utilization and being the largest company engaging in the manufacturing and sale of straw fuel briquettes in Heilongjiang Province, it is expected that the future prospect of the Remaining Group is positive.

14

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

3. STATEMENT OF INDEBTEDNESS

As at the close of business on 31 December 2013, being the latest practicable date for the purpose of this indebtedness statement prior to the publication of this circular, the Group had outstanding unsecured convertible loan notes with an aggregate outstanding principal amounts of RMB33 million due on 8 August 2016, bearing interest at 12% per annum and convertible into Shares at the price of HK$0.6 per Share. On 9 October 2013, the holder of the convertible loan notes demanded the Company for redemption of the outstanding loan note at the principal amount of the notes and, in this respect, the loan notes with the principal amount of RMB21.6 million were redeemed on 10 January 2014.

Save as disclosed above and apart from intra-group liabilities, the Group did not have any loan capital issued and outstanding or agreed to be issued, bank overdrafts or other similar indebtedness, liabilities under acceptances (other than normal trade bills), acceptance credits, debentures, mortgages, charges, finance lease or hire purchase commitments, guarantee or other material contingent liabilities at the close of business on 31 December 2013.

4. WORKING CAPITAL STATEMENT

The Directors are of the opinion that, after taking into account the banking facilities and financial resources available to the Remaining Group, its internally generated funds and the estimated cash proceeds from the Disposal, the Remaining Group has sufficient working capital to satisfy its requirements for at least the next 12 months from the date of publication of this circular in the absence of unforeseen circumstances.

5. MATERIAL ADVERSE CHANGES

Save as the VSD, the Directors are not aware, as at the Latest Practicable Date, of any material adverse change in the financial or trading position of the Group since 31 December 2012, the date to which the latest published audited financial statements of the Company were made up.

15

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Group. The Directors, having made all reasonable inquiries, 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.

2. DISCLOSURE OF INTERESTS

• (a) Directors’ and chief executives’ interests and short positions in shares, underlying shares and debentures of the Company

As at the Latest Practicable Date, the interests of the Directors and chief executives of the Company in the Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO), or which were required to be entered in the register maintained by the Company pursuant to Section 352 of the SFO, or which were required to be notified to the Company and the Stock Exchange pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules were as follows:

Long positions

			Approximate
			percentage of
		Number of Shares or	issued share capital
Name	Capacity	underlying Shares held	of the Company
Mr. Shan	Interest of a controlled	239,556,536_(Note 1)_	55.48%
	corporation
	Beneficial owner	35,000,000_(Note 2)_	8.11%

Notes:

1. These shares are held by Zhongyu Group. The entire issued share capital of Zhongyu Group is beneficially owned by Mr. Shan, the Chairman, the Chief Executive Officer and the executive Director, who is therefore deemed to be interested in the shares held by Zhongyu Group.

2. Total number of shares to be alloted and issued upon exercise in full of options under share option scheme adopted by the Company on 8 July 2002. These share options were conditionally granted to Mr. Shan, the Chairman, the Chief Executive Officer and the executive Director on 2 September 2011. Such grants were approved by independent shareholders of the Company at the extraordinary general meeting of the Company on 20 October 2011.

16

GENERAL INFORMATION

APPENDIX II

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executives of the Company had any interests and short positions in the Shares, underlying Shares and debentures of the Company or any associated corporation (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO), or which were required to be entered in the register maintained by the Company pursuant to Section 352 of the SFO, or which were required to be notified to the Company and the Stock Exchange pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules.

(b) Substantial shareholders’ and other person’s interests and short positions in shares, underlying shares and debentures of the Company

As at the Latest Practicable Date, save as disclosed below, so far as is known to the Directors and the chief executives of the Company, no person (other than a Director or a chief executive of the Company) has an interest or short position in the Shares or underlying Shares of the Company which will fall to be disclosed to the Company under the provisions of Part XV of the SFO and no person (other than the Directors or chief executives of the Company), has an interest or short position in the Shares or underlying Shares, who is expected, directly or indirectly, to be interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group or has any options in respect of such capital.

Long positions

			Approximate
		Number of	percentage of
		Shares or	issued share
		underlying	capital of the
Name	Capacity	Shares held	Company
Zhongyu Group	Beneficial owner	239,556,536	55.48%
(Note 1)
Mr. Shan_(Note 1)_	Interest of a controlled	239,556,536	55.48%
	corporation
	Beneficial owner	35,000,000	8.11%
		(Note 2)
Ms. Wu Shuhua	Interest of spouse	274,556,536	63.59%
(Note 3)
Concept Capital	Beneficial owner	146,163,814	33.85%
Management
Limited_(Note 4)_
Tong Heng	Beneficial owner	230,000,000	53.27%
Company
Limited
Mr.Yan Qiyu	Interest of a controlled	230,000,000	53.27%
(Note 5)	corporation

17

GENERAL INFORMATION

APPENDIX II

Notes:

1. The entire issued share capital of Zhongyu Group was solely and beneficially owned by Mr. Shan, the Chairman and the Chief Executive Officer and the executive Director, who is therefore deemed to be interested in the shares held by Zhongyu Group.

2. Total number of shares to be alloted and issued upon exercise in full of options under share option scheme adopted by the Company on 8 July 2002. These share options were conditionally granted for Mr. Shan, the Chairman, the Chief Executive Officer and the executive Director on 2 September 2011. Such grants were approved by independent shareholders of the Company at the extraordinary general meeting of the Company on 20 October 2011.

3. Ms. Wu Shuhua is the spouse of Mr. Shan and, under section 316 of the SFO, is therefore deemed to be interested in all 274,556,536 shares in which Mr. Shan is interested.

4. The latest disclosure of interest notice filed by Concept Capital Management Limited has not taken into account the reset adjustment to the conversion and exercise prices on 9 May 2012.

5. Mr. Yan Qiyu holds approximately 69.69% interest in Tong Heng Company Limited and therefore is deemed to be interested in the 230,000,000 shares in which Tong Heng Company Limited is interested.

3. DIRECTORS’ SERVICE CONTRACTS

Each of Mr. Shan, Ms. Shan Zhuojun and Mr. Ma Arthur On-hing entered into an appointment letter with the Company on 10 September 2010. They have no fixed term of service with the Company save that they are subject to retirement by rotation in accordance with the articles of association of the Company.

Each of Mr. Wang Jialian, Mr. Wang Zhihua and Ms. Chan Sze Man entered into a 2-year service contract with the Company and they are subject to retirement by rotation in accordance with the articles of association of the Company.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group which does not expire or is not terminable by such member of the Company within one year without payment of any compensation (other than statutory compensation).

4. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

As at the Latest Practicable Date, so far as the Directors were aware, none of the Directors or their respective associates were considered to have interest in any business which competes or may compete, either directly or indirectly, with the business of the Group or have or may have any other conflicts of interest with the Group pursuant to the GEM Listing Rules.

5. INTEREST OF DIRECTORS IN ASSETS OR CONTRACT ON ARRANGEMENT

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had been acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2012, the date to which the latest published audited consolidated financial statements of the Company were made up.

As at the Latest Practicable Date, there was no contract or arrangement subsisting in which any Director was materially interested and which was significant in relation to the business of the Group.

18

GENERAL INFORMATION

APPENDIX II

6. LITIGATION

As at the Latest Practicable Date, so far as the Directors are aware, no member of the Group was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance pending or threatened by or against any member of the Group.

7. MATERIAL CONTRACTS

Within the two years immediately preceding the date of this circular, the following agreements, being contracts not entered into in the ordinary course of business, have been entered into by members of the Company and are or may be material:

• (a) the loan agreement dated 18 January 2012 (the “ Loan Agreement ”) entered into between Tong Heng Company Limited, the Company and Mr. Shan in respect of an unsecured and interest bearing loan of HK$30,000,000 granted by Tong Heng Company Limited to the Company;

• (b) a supplemental agreement dated 1 March 2012 entered into between Time Pro International Company Limited (a then indirect wholly-owned subsidiary of the Company at that time) and 宜興市興遠物貿有限公司 (Yixing Xingyuan Materials Trade Co., Ltd.) to extend the expected delivery date of the 2 sets of gasifier machines under the the contract dated 1 September 2011 (the “Machines Contract”) entered into between Time Pro International Company Limited (a then indirect wholly-owned subsidiary of the Company at that time) and 宜興市興遠物貿有限公司 (Yixing Xingyuan Materials Trade Co., Ltd.);

• (c) the termination agreement dated 31 August 2012 entered into between Time Pro International Company Limited (a then indirect wholly-owned subsidiary of the Company at that time) and 宜興市興遠物貿有限公司 (Yixing Xingyuan Materials Trade Co., Ltd.*) to terminate the Machines Contract;

• (d) the supplemental agreement dated 31 August 2012 entered into between Time Pro International Company Limited (a then indirect wholly-owned subsidiary of the Company at that time) and 宜興市興遠物貿有限公司 (Yixing Xingyuan Materials Trade Co., Ltd.*) to extend the repayment date of the part payment in the amount of US$2,000,000;

• (e) the sale and purchase agreement dated 30 October 2012 (the “ SP Agreement ”) entered into between the Company, Risen Talent Limited and Ms. Wong Yan Lan in respect of the acquisition of 51% interests in Pro-Worth Limited at a consideration of RMB21,840,000 (subject to adjustment) and a loan in the amount of RMB8,160,000 at a consideration equal to the principal amount;

• (f) the sale and purchase agreement dated 29 November 2012 entered into between the Company and Mr. Pan Jun in respect of the disposal of the entire issued share capital of Time Pro International Company Limited (a then indirect wholly-owned subsidiary of the Company at that time) at a consideration of HK$2,000,000;

19

GENERAL INFORMATION

APPENDIX II

• (g) the sale and purchase agreement dated 10 December 2012 entered into between Rise Joy Investment Limited (an indirect wholly-owned subsidiary of the Company) and Mr. Wu Qin Min in respect of the acquisition of 51% interest in Heilongjiang Shengyan at a consideration of RMB15,500,000;

• (h) a trust agreement dated 10 December 2012 entered into between Rise Joy Investment Limited (an indirect wholly-owned subsidiary of the Company) and Mr. Wu Qin Min pursuant to which Mr. Wu shall hold the Sale Interest upon trust for Rise Joy Investment Limited pending completion of all necessary procedures for completion of the transfer of the Sale Interest;

• (i) the cancellation agreement dated 10 December 2012 entered into between the Company, Risen Talent Limited and Ms. Wong Yan Lan to rescind and terminate the SP Agreement;

• (j) the supplemental agreement dated 22 January 2013 entered into between Tong Heng Company Limited, the Company and Mr. Shan to extend the repayment date of the loan in the amount of HK$30,000,000 under the Loan Agreement;

• (k) the supplemental agreement dated 11 March 2013 entered into between Tong Heng Company Limited, the Company and Mr. Shan to extend the repayment date of the loan in the amount of HK$30,000,000 under the Loan Agreement;

• (l) the supplemental agreement dated 3 April 2013 entered into between Tong Heng Company Limited, the Company and Mr. Shan to extend the repayment date of the remaining loan in the amount of HK$20,000,000 under the Loan Agreement;

• (m) the VSD Sale and Purchase Agreement;

• (n) the supplemental agreement dated 16 May 2013 entered into between Tong Heng Company Limited, the Company and Mr. Shan Xiaochang (an executive Director) to extend the repayment date of the remaining loan in the amount of HK$20,000,000 under the Loan Agreement;

• (o) the conditional sale and purchase agreement dated 20 August 2013 (the “ Previous Sale and Purchase Agreement 1 ”) entered into between the Company and Mr. Pan Xiaoping for the sale and purchase of the Sale Shares and the shareholder’s loan amounting to HK$19,038 owed by the Disposed Company to the Company as at the date of the Previous Sale and Purchase Agreement 1 at an aggregate consideration of HK$20,000,000;

• (p) the deed of termination dated 25 October 2013 entered into between the Company and Mr. Pan Xiaoping to terminate the Previous Sale and Purchase Agreement 1;

20

APPENDIX II

GENERAL INFORMATION

• (q) the conditional sale and purchase agreement dated 31 October 2013 (the “ Previous Sale and Purchase Agreement 2 ”) entered into between the Company and Great View Global Limited for the sale and purchase of the Sale Shares and the shareholder’s loan amounting to HK$19,038 owed by the Disposed Company to the Company as at the date of the Previous Sale and Purchase Agreement 2 at an aggregate consideration of HK$21,000,000;

• (r) the deed of termination dated 3 December 2013 entered into between the Company and Great View Global Limited to terminate the Previous Sale and Purchase Agreement 2; and

• (s) the Sale and Purchase Agreement.

8. MISCELLANEOUS

• (a) The principal share registrar and transfer office of the Company is Royal Bank of Canada Trust Company (Cayman) Limited, the address of which is 4th Floor, Royal Bank House, 24 Shedden Road, George Town, Grand Cayman KY1-1110, Cayman Islands. The branch share registrar and transfer office of the Company in Hong Kong is Union Registrars Limited, the address of which is 18th Floor, Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong.

• (b) The company secretary of the Company is Mr. Tam Chak Chi, who is a fellow member of the Hong Kong Institute of Certified Public Accountants and a member of the American Institute of Certified Public Accountants.

• (c) The compliance officer of the Company is Mr. Shan, an executive Director and one of the authorised representatives of the Company.

• (d) The Company has established an audit committee, comprising of three independent nonexecutive Directors, namely Ms. Chan Sze Man (Chairman of the audit committee), Mr. Wang Jialian and Mr. Wang Zhihua, in compliance with the GEM Listing Rules. The primary role and function of the audit committee of the Company are to oversee the relationship with the external auditors, to review the Group’s preliminary quarterly results, interim results and annual financial statements and to monitor compliance with statutory and listing requirements, to engage independent legal or other advisers as it determines is necessary and to perform any investigations. Please refer to the annual report of the Company for the year ended 31 December 2012 for the background and directorships of the audit committee members.

• (e) This circular is prepared in both English and Chinese. In the event of inconsistency, the English text shall prevail

21

GENERAL INFORMATION

APPENDIX II

9. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours from 9:30 a.m. to 5:30 p.m. (except Saturdays and public holidays) at the head office and principal place of business of the Company in Hong Kong at Units 01-03, 28th Floor, Shui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong, from the date of this circular up to and including 14 February 2014:

• (a) the memorandum and articles of association of the Company;

• (b) the annual reports of the Company for each of the financial years ended 31 December 2011 and 2012;

• (c) the material contracts referred to under the paragraph headed “Material contracts” in this appendix;

• (d) the Directors’ service contracts referred to in the section headed “Directors’ service contracts in this appendix;

• (e) the Sale and Purchase Agreement;

• (f) the circular of the Company dated 28 June 2013; and

• (g) this circular.

22