Leader Education Limited — Proxy Solicitation & Information Statement 2022

Feb 24, 2022

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 licensed securities dealer, bank manager, solicitor, professional accountant or other professional advisers.

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

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.

Leader Education Limited 立德教育股份有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1449)

MAJOR TRANSACTIONS FINANCE LEASE ARRANGEMENTS (HAIER)

A letter from the Board is set out on pages 6 to 16 of this circular.

The Finance Lease Arrangements (Haier) and the transactions contemplated thereunder have been approved by written shareholder’s approval obtained from Shuren Education and Junhua Education, being a closely allied group of Shareholders, which together hold 496,674,000 issued shares of the Company (representing approximately 74.50% of the total issued shares of the Company) pursuant to Rule 14.44 of the Listing Rules in lieu of holding a general meeting of the Company. This circular is being despatched to the Shareholders for information only.

25 February 2022

CONTENTS

	Pages
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
APPENDIX I — FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . . . . . .	17
APPENDIX II — GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22

– i –

DEFINITIONS

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

“Announcement” the announcement of the Company dated 30 December 2021 in relation to, among other things, Finance Lease Arrangements (Haier) “associate(s)” has the meaning ascribed thereto under the Listing Rules “Beijing Junhua” Beijing Junhua Business Information Consulting CO., Ltd.* (北京峻華商務信息諮詢有限公司), a limited liability company established under the laws of the PRC on 8 July 2020, an indirect wholly owned subsidiary of the Company

• “Board” the board of Directors

“Company” Leader Education Limited (立德教育股份有限公司) (stock code: 1449), an exempted company incorporated in the Cayman Islands with limited liability on 17 June 2019

• “connected person(s)” has the meaning ascribed to it in the Listing Rules

“Consultation Service Agreement the service agreement dated 31 August 2021 between Haier (Haier — August 2021)” and Heilongjiang College of Business and Technology as part of the Finance Lease Arrangement (Haier — August 2021) “Consultation Service Agreement the service agreement dated 24 November 2020 between (Haier — November 2020)” Haier and Heilongjiang College of Business and Technology as part of the Finance Lease Arrangement (Haier — November 2020) “controlling shareholders” has the meaning ascribed thereto in the Listing Rules “Daqing Xiangge” Daqing Xiangge Property Development Co, Ltd.* (大慶市 祥閣房地產開發有限公司), a limited liability company established under the laws of the PRC, and is indirectly owned as to 100% by Mr. Liu

– 1 –

DEFINITIONS

“Directors”

the director(s) of the Company

• “Finance Lease Arrangement —

• (Haier August 2021)”

• (i) the purchase of the Leased Assets (Haier — August 2021) by Haier and the lease back of the Leased Assets (Haier — August 2021) to Heilongjiang College of Business and Technology; and (ii) the provision of the finance lease consultation services by Haier to Heilongjiang College of Business and Technology, pursuant to the Sale and Leaseback Agreement (Haier — August 2021) and the Consultation Service Agreement (Haier — August 2021) respectively

• “Finance Lease Arrangement (Haier — November 2020)”

• (i) the purchase of the Leased Assets (Haier — November 2020) by Haier and the lease back of the Leased Assets (Haier — November 2020) to Heilongjiang College of Business and Technology; and (ii) the provision of the finance lease consultation services by Haier to Heilongjiang College of Business and Technology, pursuant to the Sale and Leaseback Agreement (Haier — November 2020) and the Consultation Service Agreement (Haier — November 2020) respectively

• “Finance Lease Arrangements the Finance Lease Arrangement (Haier — November 2020) (Haier)” and the Finance Lease Arrangement (Haier — August 2021)

• “Group”

• the Company, its subsidiaries and consolidated affiliated entities from time to time

“Haier”

Haier Financial Services China Co., Ltd.* (海爾融資租賃股 份有限公司), a limited liability company established under the laws of the PRC

• “Harbin Xiangge”

Harbin Xiangge Zhiye Co., Ltd. (哈爾濱祥閣置業有限公司), formerly known as Harbin Xiangge Enterprise Management Ltd. (哈爾濱祥閣企業管理有限公司), a limited liability company established under the laws of the PRC and a consolidated affiliated entity of the Company and is held as to 60% and 40% by Ms. Dong and Mr. Liu respectively

– 2 –

DEFINITIONS

• “Heilongjiang College of Heilongjiang College of Business and Technology (黑龍江工商 Business and Technology” 學院), a private regular undergraduate institution approved and established under the laws of PRC and a consolidated affiliated entity of the Company

• “Hong Kong”

the Hong Kong Special Administrative Region of the PRC

• “Independent Third Parties”

• person(s) or company(ies) which is/are independent of and not connected with the Company and its connected persons

• “Junhua Education”

  • Junhua Education Limited (竣華教育有限公司), a company incorporated under the laws of the BVI on 18 June 2019 and wholly-owned by Mr. Liu

• “Latest Practicable Date” 22 February 2022, being the latest practicable date for ascertaining certain information in this circular

• “Leased Assets

• (Haier — August 2021)”

certain equipment, books and furniture, the usage of which is for or in connection with teaching by Heilongjiang College of Business and Technology, which was sold by the Heilongjiang College of Business and Technology to Haier and leased back to Heilongjiang College of Business and Technology pursuant to the Finance Lease Arrangement (Haier — August 2021)

• “Leased Assets

• (Haier — November 2020)”

certain equipment and furniture, the usage of which is for or in connection with teaching by Heilongjiang College of Business and Technology, which was sold by the Heilongjiang College of Business and Technology to Haier and leased back to Heilongjiang College of Business and Technology pursuant to the Finance Lease Arrangement (Haier — November 2020)

– 3 –

DEFINITIONS

• “Liankang Consulting” Heilongjiang Liankang Business Information Consulting CO., Ltd.* (黑龍江聯康商務信息諮詢有限公司), a limited liability company established under the laws of the PRC on 8 August 2019, which is an indirect wholly owned subsidiary of the Company

• “Listing Rule” the Rules Governing the Listing of Securities on the Stock Exchange

• “Mr. Liu” Mr. Liu Laixiang (劉來祥), the Chairman, the Chief Executive Officer, an executive Director and the spouse of Ms. Dong

• “Ms. Dong” Ms. Dong Ling (董玲), an executive Director and the spouse of Mr. Liu

• “Nantong Junhua” Nantong Junhua Kechuangyuan Ltd* (南通峻華科創園有限公 司), a limited liability company established under the laws of the PRC, which is held as to 55.97% Heilongjiang College of Business and Technology and 44.03% by Leader Education (HK) Limited

“PRC”	the People’s Republic of China
“Prospectus”	the prospectus of the Company published on 27 July 2020
“RMB”	Renminbi, the lawful currency of the PRC
“Sale and Leaseback Agreement	the sale and leaseback agreement dated 31 August 2021
(Haier — August 2021)”	between Haier and Heilongjiang College of Business and
	Technology as part of the Finance Lease Arrangement (Haier —
	August 2021)
“Sale and Leaseback Agreement	the sale and leaseback agreement dated 24 November 2020
(Haier — November 2020)”	between Haier and Heilongjiang College of Business and
	Technology as part of the Finance Lease Arrangement (Haier —
	November 2020)

– 4 –

DEFINITIONS

“SFC” the Securities and Futures Commission “Share(s)” the ordinary share in the share capital of the Company “Shareholder(s)” holder(s) of share(s) “Shuren Education” Shuren Education Limited (樹人教育有限公司), a company incorporated under the laws of the BVI on 18 June 2019 and wholly-owned by Ms. Dong “Stock Exchange” The Stock Exchange of Hong Kong Limited “%” per cent.

• for identification purpose only

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LETTER FROM THE BOARD

Leader Education Limited 立德教育股份有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1449)

Executive Directors:

Mr. Liu Laixiang (Chairman and Chief Executive Officer) Ms. Dong Ling Mr. Wang Yunfu Mr. Che Wenge

Independent non-executive Directors:

Mr. Zhang Su Mr. Cao Shaoshan Mr. Chan Ngai Fan

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

Principal place of

business in Hong Kong: Unit 26, 14/F., Solo Building 41-43 Carnarvon Road Tsimshatsui, Kowloon Hong Kong

25 February 2022

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTIONS FINANCE LEASE ARRANGEMENTS (HAIER)

INTRODUCTION

Reference is made to the Announcement.

The purpose of this circular is to provide the Shareholders with, among other things, (i) details of the Finance Lease Arrangements (Haier) and the transactions contemplated thereunder; and (ii) other general information of the Company.

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LETTER FROM THE BOARD

BACKGROUND

On 31 August 2021, Heilongjiang College of Business and Technology entered into the Sale and Leaseback Agreement (Haier — August 2021) and the Consultation Service Agreement (Haier — August 2021) in respect of the Finance Lease Arrangement (Haier — August 2021), pursuant to which (i) Heilongjiang College of Business and Technology agreed to sell the Leased Assets (Haier — August 2021) to Haier at the sale price of RMB60,000,000 and lease back the Leased Assets (Haier — August 2021) from Haier with the total lease payment of RMB68,100,000; and (ii) Haier agreed to provide consultation services to Heilongjiang College of Business and Technology at the service fee of RMB1,800,000.

On 24 November 2020, Heilongjiang College of Business and Technology entered into the Sale and Leaseback Agreement (Haier — November 2020) and the Consultation Service Agreement (Haier — November 2020) in respect of the Finance Lease Arrangement (Haier — November 2020), pursuant to which (i) Heilongjiang College of Business and Technology agreed to sell the Leased Assets (Haier — November 2020) to Haier at the sale price of RMB15,000,000 and lease back the Leased Assets (Haier — November 2020) from Haier with the total lease payment of RMB17,000,000; and (ii) Haier agreed to provide consultation services to Heilongjiang College of Business and Technology at the service fee of RMB450,000.

FINANCE LEASE ARRANGEMENT (HAIER — AUGUST 2021)

The principal terms of the Finance Lease Arrangement (Haier — August 2021) are set out as follows:

Sale and Leaseback Agreement (Haier — August 2021)

Date : 31 August 2021 Parties : (i) Heilongjiang College of Business and Technology (as the lessee) (ii) Haier (as the lessor) Sale Price : RMB60,000,000 Lease Term : 36 months Total Lease Payment : RMB68,100,000

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LETTER FROM THE BOARD

Deposit : RMB600,000 Principal Terms : Sale of the Leased Assets (Haier — August 2021) to the Haier

Heilongjiang College of Business and Technology agreed to sell and Haier agreed to purchase the Leased Assets (Haier — August 2021) at a consideration of RMB60,000,000, which was determined after arm’s length negotiations between the parties. The deposit of RMB600,000 shall be deducted from the consideration of RMB60,000,000.

Delivery of the Leased Assets (Haier — August 2021)

The ownership of the Leased Assets (Haier — August 2021) shall be transferred to Haier upon signing of the receipt confirmation by Haier.

Lease of the Leased Assets (Haier)

The Leased Assets (Haier) shall be leased back to Heilongjiang College of Business and Technology for the lease term at the total lease payment of approximately RMB68,100,000, payable by Heilongjiang College of Business and Technology to Haier every three months in 12 installments during the lease term, the amount of which was determined after arm’s length negotiations between the parties.

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LETTER FROM THE BOARD

Transfer of Ownership of the Leased Assets (Haier — August 2021) Back to the Lessee

Upon the expiry of the lease term, provided that there is no continuing events of default, and subject to receipt of all lease payments and other receivables under the Sale and Leaseback Agreement (Haier — August 2021), Haier shall transfer the ownership of the Leased Assets (Haier — August 2021) to Heilongjiang College of Business and Technology in consideration of the payment of a retention money of RMB100 by Heilongjiang College of Business and Technology on an “as-is” basis.

Consultation Service Agreement (Haier — August 2021)

Date : 31 August 2021

• Parties : (i) Heilongjiang College of Business and Technology (as the recipient of service)

• (ii) Haier (as the service provider)

Service fee : RMB1,800,000

Principal Terms : Haier shall provide Heilongjiang College of Business and Technology with the service of consultation on finance lease.

Heilongjiang College of Business and Technology shall pay Haier the service fee within three days after signing the Consultation Service Agreement (Haier), the amount of which was determined after arm’s length negotiations between the parties.

Guarantee for Sale and Leaseback Agreement (Haier — August 2021)

Mr. Liu and Ms. Dong, Harbin Xiangge and Daqing Xiangge are the joint liability guarantors for Heilongjiang College of Business and Technology to perform its obligations under the Sale and Leaseback Agreement (Haier — August 2021). The guarantors provide joint liability guarantee to Haier for the liabilities of Heilongjiang College of Business and Technology under the Sale and Leaseback Agreement (Haier — August 2021).

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LETTER FROM THE BOARD

FINANCE LEASE ARRANGEMENT (HAIER — NOVEMBER 2020)

The principal terms of the Financial Lease Arrangement (Haier — November 2020) are set out as follows:

Sale and Leaseback Agreement (Haier — November 2020)

Date : 24 November 2020 Parties : (i) Heilongjiang College of Business and Technology (as the lessee) (ii) Haier (as the lessor) Sale Price : RMB15,000,000 Lease Term : 36 months Total Lease Payment : RMB17,000,000 Deposit : RMB300,000 Principal Terms : Sale of the Leased Assets (Haier — November 2020) to the Haier

Heilongjiang College of Business and Technology agreed to sell and Haier agreed to purchase the Leased Assets (Haier — November 2020) at a consideration of RMB15,000,000, which was determined after arm’s length negotiations between the parties. The deposit of RMB300,000 shall be deducted from the consideration of RMB15,000,000.

Delivery of the Leased Assets (Haier — November 2020)

The ownership of the Leased Assets (Haier — November 2020) shall be transferred to Haier upon signing of the receipt confirmation by Haier.

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LETTER FROM THE BOARD

Lease of the Leased Assets (Haier — November 2020)

The Leased Assets (Haier) shall be leased back to Heilongjiang College of Business and Technology for the lease term at the total lease payment of approximately RMB17,000,000, payable by Heilongjiang College of Business and Technology to Haier every three months in 12 installments during the lease term, the amount of which was determined after arm’s length negotiations between the parties.

Transfer of Ownership of the Leased Assets (Haier — November 2020) Back to the Lessee

Upon the expiry of the lease term, provided that there is no continuing events of default, and subject to receipt of all lease payments and other receivables under the Sale and Leaseback Agreement (Haier — November 2020), Haier shall transfer the ownership of the Leased Assets (Haier — November 2020) to Heilongjiang College of Business and Technology in consideration of the payment of a retention money of RMB100 by Heilongjiang College of Business and Technology on an “as-is” basis.

Consultation Service Agreement (Haier — November 2020)

Date : 24 November 2020

Parties : (i) Heilongjiang College of Business and Technology (as the recipient of service)

• (ii) Haier (as the service provider)

Service fee : RMB450,000

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LETTER FROM THE BOARD

Principal Terms : Haier shall provide Heilongjiang College of Business and Technology with the service of consultation on finance lease.

Heilongjiang College of Business and Technology shall pay Haier the service fee within three days after signing the Consultation Service Agreement (Haier), the amount of which was determined after arm’s length negotiations between the parties.

Guarantee for Sale and Leaseback Agreement (Haier — November 2020)

Mr. Liu and Ms. Dong, Harbin Xiangge and Daqing Xiangge are the joint liability guarantors for Heilongjiang College of Business and Technology to perform its obligations under the Sale and Leaseback Agreement (Haier — November 2020). The guarantors provide joint liability guarantee to Haier for the liabilities of Heilongjiang College of Business and Technology under the Sale and Leaseback Agreement (Haier — November 2020).

BOOK VALUE OF AND NET PROFITS ATTRIBUTABLE TO THE LEASED ASSETS (HAIER — AUGUST 2021) AND LEASED ASSETS (HAIER — NOVEMBER 2020)

The book value and the net profits attributable to the Leased Assets (Haier — August 2021) and Leased Assets (Haier — November 2020) for each of the financial years ended 31 August 2020 and 31 August 2021 are as follows:

				Leased Assets	**Leased **	Assets
				(Haier — August 2021)	(Haier — November 2020)
**Year **	**ended **	**31 **	August	Book Value Net Profits	Book Value	Net Profits
2020				RMB65,083,000 Nil*	RMB5,259,000	Nil*
2021				RMB56,777,000 Nil*	RMB4,263,000	Nil*

• There is no identifiable stream of income from the Leased Assets (Haier — August 2021) and Leased Assets (Haier — November 2020).

REASONS FOR AND BENEFITS OF ENTERING INTO THE FINANCE LEASE ARRANGEMENTS (HAIER)

The terms of each of the Finance Lease Arrangements (Haier) and the transactions contemplated thereunder are determined after arm’s length negotiations with reference to the average fair market price of the similar assets and the prevailing market interest rates and trading terms of the similar Finance Lease Arrangements (Haier). The Directors are of the opinion that the

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LETTER FROM THE BOARD

Group will be able to supplement its working capital through the Finance Lease Arrangements (Haier), the terms and conditions of which are on normal commercial terms, fair and reasonable and in the interests of the Company and its shareholders as a whole.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, there is, and in the past twelve months, there has been, no material loan arrangement between (i) Haier, its directors and legal representatives and any ultimate beneficial owner(s) of Haier who can exert influence on the transaction; and (ii) the Company, any connected person at the Company’s level, and/or any connected person at Heilongjiang College of Business and Technology’s level.

FINANCIAL EFFECTS OF ENTERING INTO THE FINANCE LEASE ARRANGEMENTS (HAIER)

According to the International Financial Reporting Standards, the transactions contemplated under the Finance Lease Arrangement (Haier — August 2021) and Finance Lease Arrangement (Haier — November 2020) do not constitute a disposal of assets and will not give rise to any gain or loss to be recorded in the Group’s income statement.

Under the Finance Lease Arrangements (Haier), it is expected that (i) the total assets of the Group will increase to reflect the cash to be received from the sale proceeds of the Leased Asset (Haier — August 2021) and Leased Asset (Haier — November 2020) (the “ Proceeds ”) and (ii) the total liabilities of the Group will increase by the amount of the Proceeds to reflect the liability of the Group.

LISTING RULES IMPLICATIONS

As the applicable percentage ratios (as defined in the Listing Rules) of the transactions under the Finance Lease Arrangement (Haier — November 2020), on a standalone basis, are all less than 5%, the transactions under the Finance Lease Arrangement (Haier — November 2020) did not constitute discloseable transactions of the Company under Chapter 14 of the Listing Rules when it was entered into. Since the Finance Lease Arrangement (Haier — November 2020) and the Finance Lease Arrangement (Haier — August 2021) were entered into with the same finance lease company and were of similar nature and within a 12-month period, the Finance Lease Arrangement (Haier — August 2021) shall be aggregated with the Finance Lease Arrangement (Haier — November 2020) for the purpose of calculating the relevant percentage ratios pursuant to Rule 14.22 of the Listing Rules. As the highest applicable percentage ratio of the Finance Lease Arrangement (Haier — November 2020) and the Finance Lease Arrangement (Haier — August 2021) (as aggregated) exceeds 25% but is less than 100%, the Finance Lease Arrangement (Haier

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LETTER FROM THE BOARD

— November 2020) and the Finance Lease Arrangement (Haier — August 2021) (as aggregated) constitute major transactions for the Company and therefore shall be subject to the reporting, announcement and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, no Shareholder has a material interest in, and would be required to abstain from voting on, any resolution to approve, confirm and/or ratify the Finance Lease Arrangements (Haier) if the Company were to convene a general meeting to approve, confirm and/or ratify the same. The Company has received written certificate to approve, confirm and ratify the Finance Lease Arrangements (Haier) from Shuren Education and Junhua Education, being a closely allied group of Shareholders, which together hold 496,674,000 issued shares of the Company (representing approximately 74.50% of the total issued shares of the Company) as at the Latest Practicable Date, in accordance with Rule 14.44 of the Listing Rules. Accordingly no Shareholders’ meeting will be convened by the Company to approve, confirm and/or ratify the Finance Lease Arrangements (Haier).

REMEDIAL ACTION

As disclosed in the announcement of the Company dated 30 November 2021, at the time of entering into the finance lease arrangements prior to November 2021, the Directors of the Company were not aware that finance lease arrangements constituted notifiable transactions under the Listing Rules due to misunderstanding of the application of the Listing Rules. After the publication of the announcement dated 30 November 2021, the Directors directed the management to conduct a thorough internal check to ascertain whether there are other finance lease arrangements and it was found that the Finance Lease Arrangement (Haier — August 2021) was entered into on 31 August 2021. The Directors, on behalf of the Company, hereby apologize for the delay in making the Announcement.

In order to avoid recurrence of the incident and to ensure proper compliance with the Listing Rules in the future, certain remedial measures have been adopted by the Group as follows:

• (1) the Company will consult its legal advisors on any transaction that might constitute a notifiable transaction on a timely manner and seek their advice to ensure compliance with the relevant requirements under the Listing Rules;

• (2) regular training will be provided to the Directors, senior management and the relevant employees in relation to the requirements under the Listing Rules, particularly those concerning notifiable transactions, to reinforce their understanding of and importance of compliance with the Listing Rules; and

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LETTER FROM THE BOARD

• (3) the Company will continue to review its internal control procedures and will make such disclosure in a timely manner to ensure compliance with the relevant requirements under the Listing Rules.

The Directors believe that the implementation of the remedial measures as disclosed above will strengthen and reinforce the knowledge of the responsible staff, management and Directors relating to notifiable transactions under the Listing Rules, and improve the regulatory compliance abilities of the Company in the identification and reporting of related issues with assistance from appropriate external advisers.

INFORMATION ON THE PARTIES

Heilongjiang College of Business and Technology

Heilongjiang College of Business and Technology is a consolidated affiliated entity of the Company, and is a private regular undergraduate institution approved and established under the laws of PRC.

Haier

Haier is a limited liability company established under the laws of the PRC and is principally engaged in financial leasing business and financial services in the PRC. Haier is owned as to 37.65%, 33% and 29.35% by Haier Group (Qingdao) Finance Holding Co., Ltd. (海爾集團(青 島)金融控股有限公司), Shanghai Haizhu Yunju Enterprise Management Consulting Partnership (Limited Partnership) (上海海鑄雲聚企業管理諮詢合夥企業(有限合夥)) and Haier International Co., Limited respectively.

Haier Group (Qingdao) Finance Holding Co., Ltd. (海爾集團(青島)金融控股有限公司) is a wholly-owned subsidiary of Haier Electric Appliances Internation Co., Ltd. (海爾卡奧斯股份有限 公司). Haier Electric Appliances Internation Co., Ltd. (海爾卡奧斯股份有限公司) is a wholly owned subsidiary of Haier Group Corporation (海爾集團公司) (“ Haier Group ”).

Shanghai Haizhu Yunju Enterprise Management Consulting Partnership (Limited Partnership) (上海海鑄雲聚企業管理諮詢合夥企業(有限合夥)) is owned as to 99% by Qingdao Haier Venture Capital Investment Co., Ltd. (青島海爾創業投資有限責任公司), which is a wholly-owned subsidiary of Haier Group (Qingdao) Finance Holding Co., Ltd.* (海爾集團(青 島)金融控股有限公司).

– 15 –

LETTER FROM THE BOARD

Haier International Co., Limited is a wholly-owned subsidiary of Haier (HK) Investment Co., Limited. Haier (HK) Investment Co., Limited, which in turn is a wholly-owned subsidiary of Haier Group.

According to publicly available information, the nature of Haier Group is a collectively-owned enterprise. Pursuant to the Regulation of the People’s Republic of China on Urban Collectively-Owned Enterprises (2016 Revision), the property of Haier Group, being a socialist economic organisation, is collectively owned by the working masses, subject to joint work, with distribution according to work as the principal distribution method. In light of its enterprise nature, Haier Group has no shareholders.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, Haier and its ultimate beneficial owner are third parties independent from the Company and its connected persons (as defined in the Listing Rules).

FURTHER INFORMATION

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

Yours faithfully, By order of the Board Leader Education Limited LIU Laixiang Chairman

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. CONSOLIDATED FINANCIAL STATEMENTS

Details of the financial information of the Group for each of the financial years ended 31 August 2019, 31 August 2020 and 31 August 2021 are disclosed in the following documents which have been published on both the website of the Stock Exchange and the website of the Company ( http://www.leader-education.cn ).

• Annual report of the Company for the year ended 31 August 2021 published on 30 December 2021 (pages 66 to 145) (available on: https://www1.hkexnews.hk/listedco/listconews/sehk/2021/1230/2021123000354.pdf );

• Annual report of the Company for the year ended 31 August 2020 published on 31 December 2020 (pages 71 to 153) (available on: https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1231/2020123100127.pdf ); and

• Prospectus of the Group published on 27 July 2020 (pages I-1 to I-71) (available on: https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0727/2020072700005.pdf ).

2. INDEBTEDNESS STATEMENT

As at the close of business on 31 December 2021, being the latest practicable date for the purpose of ascertaining the indebtedness of the Group prior to the printing of this circular, the Group had the following indebtedness:

Security and guarantees

As at the close of business of 31 December 2021, the Group’s sale and leaseback borrowings were guaranteed by the Group’s assets of approximately RMB189.4 million.

Bank and other borrowings and interest accruals

As at the close of business of 31 December 2021, the Group had bank and other outstanding borrowings and interest accruals of approximately RMB857.4 million.

Commitments

As at the close of business of 31 December 2021, the Group’s capital commitments to make contracted payment amounted to RMB50.3 million.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Contingent liabilities

As at 31 December 2021, the Group did not incur any material contingent liabilities.

Save as aforesaid or as otherwise disclosed above, and apart from intra-group liabilities and normal trade payables, the Group did not have at the close of business on 31 December 2021 any other debt securities issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptable credits, debentures, mortgages, charges, hire purchase commitments, guarantees or other material contingent liabilities.

3. WORKING CAPITAL

The Directors are satisfied after due and careful consideration and taking into account the present internal financial resources available to the Group, the banking facilities presently available, the effect of the transactions contemplated under the Finance Lease Arrangements (Haier) and in the absence of unforeseen circumstances, the Group will have sufficient working capital for its present requirements for at least the next twelve months from the date of this circular. The Company has obtained the relevant confirmation as required under Rule 14.66(12) of the Listing Rules.

4. MATERIAL ADVERSE CHANGE

The Directors confirm that, as at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 August 2021, being the date to which the latest published audited consolidated accounts of the Group were made up.

5. FINANCIAL AND TRADING PROSPECTS

Market overview

The Company is a large private formal higher education service provider in Heilongjiang Province, the PRC.

During the year ended 31 August 2021, the government issued a number of policies to support and encourage the development of vocational education.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

In June 2021, the “Vocational Education Law of the People’s Republic of China (Revised Draft)” was submitted to the National People’s Congress for deliberation. The draft stated that “vocational education and general education have the same important status” and supported social forces to run schools.

Decree No. 741 of the “Implementing Regulations of the Law of the People’s Republic of China on the Promotion of Private Education (the “ Implementation Regulations ”), which came into effect on 1 September 2021, expressly encourages enterprises to organize or participate in the implementation of vocational education in the forms such as sole proprietorship, joint venture and cooperation. It also grants all private schools the right to change their sponsors regardless of their attributes, which is a positive signal for vocational education.

In October 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council issued the “Opinions on Promoting the High-Quality Development of Modern Vocational Education”, clearly supporting and encouraging listed companies and industry leaders to develop vocational education, and encouraging applied undergraduate schools to carry out vocational undergraduate education, quantifying the scale of undergraduate enrolment in vocational education and achieving the long-term goal of basically building a skilled society by 2035.

In accordance with the national development policy on vocational education, the Company established a new integrated campus in Hai’an of Nantong City after listing. A school-running pattern of “one school, two places, and three campuses” has been formed. The Yangtze River Delta is one of the regions with the highest population growth and economic vitality in China, and its economic development momentum is strong, which is favourable to the development of vocational education. Nantong is also a major city in the Yangtze River Delta, the development of the new integrated campus is being aided by the favourable timing, geographical and human conditions.

Business progress

China’s private higher education market offers many market opportunities, and the Group has strong potential for further business development.

During the year ended 31 August 2021, although COVID-19 occurred sporadically in China from time to time, the Group still managed to provide students with online teaching at any time according to the needs of pandemic prevention and control. Thus, the pandemic does not have a major impact on the business.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The Company closely follows the national policies, adheres to high-quality, high-compliant education, and continues to develop in-depth in teaching quality, teaching facilities, integration of industry and education, and speciality construction.

In terms of the integration of industry and education, the Group’s career guidance courses focus on cultivating students’ practical skills that meet the needs of China’s economic development, and the average employment rate of graduates of the Group’s higher education courses has reached 88.68%.

The Company actively implements and advances the policy of “school-enterprise cooperation, collaborative education”, and has successively established long-term and stable cooperative relations with 110 well-known leading companies to build a whole system covering talent training, scientific research innovation, experimental bases, internship employment, social services, market branding, etc., so as to achieve a sustainable professional skill-based talent training route for students, schools, enterprises, and the market.

In terms of speciality construction, the Company closely follows the needs of society and the market, continuously enriches its speciality settings, and gradually forms a superior professional group focusing on new business disciplines, new engineering, artificial intelligence, big data, digital creativity and other disciplines. Among them, the establishment of the Railway College and the establishment of railway engineering, vehicle engineering and other majors filled the gaps in the undergraduate railway majors of private universities in the three northeast provinces. The Group has become a council member of China Association of Metros. The Group will further develop and refine the speciality construction and development of railways, high-speed railways, light rails, urban rails, civil aviation services, etc., and provide excellent undergraduate professionals for improving the concentration of advantageous industries in the province and the transportation industry across China.

Development strategy

During the 14th Five-Year Plan period, China’s education has entered a new stage of high-quality development, and building a high-quality education system is the main goal of the new stage. The Company will, as always, actively promote academic education and vocational education through internal and external extension, adhere to the orientation of application-oriented universities, and continue to create value for shareholders.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Adhere to the strategy of combining organic growth and mergers and acquisitions

In view of the Group’s excellent record in providing high-quality private higher education and industry reputation, China’s education department will accept the Group’s application to increase the number of admissions under the premise that the Group can prove that the Group has sufficient school capacity, appropriate facilities and high-quality educational programs. These are the Group’s main goals for self-construction and expansion by mergers and acquisitions.

To this end, after listing, the Group built a new Nantong-Hai’an-Lifa Industry-Education Integration Campus, which was the first in the industry to allow college students to complete university studies, life and internships on different campuses, and enrich their life experience. In the first stage, senior students are gradually arranged to the Nantong Lifa campus to develop a mode of combining learning, internship and practical training. This innovative new model of industry-education integration has been recognized by the Heilongjiang Provincial Department of Education and will be promoted as a demonstration in major colleges and universities in the province.

In terms of mergers and acquisitions, the Group will give priority to high-quality secondary schools, colleges, and higher vocational education licenses and schools in the three northeast provinces that are within the Group’s manageable distance. At the same time, the Group will develop business in the Yangtze River Delta with the Nantong campus as the basis, and comprehensively promote the acquisition in a solid manner with the judgement of the combined factors of regional advantages, school running level, profitability, synergy, consideration level and school-running concept, etc.

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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 Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTEREST BY DIRECTORS

As at the Latest Practicable Date, the interests and short positions of Directors and the chief executive of the Company in the Shares, underlying Shares and debentures of the Company or any of its associated corporation (within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong) (the “ SFO ”)) as recorded in the register required to be kept under section 352 of the SFO, or as notified the Company and the Stock Exchange pursuant to the Model Code, are as follows:

Directors’ interests in the Company:

			Approximate
			percentage of
		Number of	issued share
		Shares	capital of the
Name	Capacity	interested(1)	Company(1)
Mr. Liu(2)(3)	Interest in a controlled	496,674,000 (L)	74.5% (L)
	corporation
Ms. Dong(4)(5)	Interest in a controlled	496,674,000 (L)	74.5% (L)
	corporation

Notes:

• (1) The letter “L” denotes the person’s long position in the Shares.

• (2) Junhua Education is 100% owned by Mr. Liu and he is therefore deemed to be interested in all the Shares held by Junhua Education.

• (3) Mr. Liu is the spouse of Ms. Dong and he is therefore deemed to be interested in the Shares held by Ms. Dong.

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GENERAL INFORMATION

APPENDIX II

• (4) Shuren Education is 100% owned by Ms. Dong and she is therefore deemed to be interested in all the Shares held by Shuren Education.

• (5) Ms. Dong is the spouse of Mr. Liu and she is therefore deemed to be interested in the Shares held by Mr. Liu.

Long positions in the Shares and/or underlying Shares of the associated corporations

			Amount of	Percentage of
Name	Capacity	Associated corporation	registered capital	shareholding(1)
Mr. Liu(2)(4)	Beneficial owner/interest	Harbin Xiangge Zhiye	RMB40,000,000	100% (L)
	of spouse	Co., Ltd.* (哈爾濱祥閣
		置業有限公司)
	Interest in a	Heilongjiang College of	RMB183,000,000	100% (L)
	controlled	Business and
	corporation/interest of	Technology
	spouse
Ms. Dong(3)(5)	Beneficial owner/interest	Harbin Xiangge Zhiye	RMB40,000,000	100% (L)
	of spouse	Co., Ltd.* (哈爾濱祥閣
		置業有限公司)
	Interest in a	Heilongjiang College of	RMB183,000,000	100% (L)
	controlled	Business and
	corporation/interest of	Technology
	spouse

Notes:

• (1) The letter “L” denotes the person’s long position in the relevant shares/securities.

• (2) Mr. Liu is the beneficial owner of 40% of equity interest in Harbin Xiangge; his spouse, Ms. Dong is the beneficial owner of the remaining 60% of equity interest. Mr. Liu is deemed to be interest in all the equity interest held by Ms. Dong in Harbin Xiangge.

• (3) Ms. Dong is the beneficial owner of 60% of equity interest in Harbin Xiangge; her spouse, Mr. Liu is the beneficial owner of the remaining 40% of equity interest. Ms. Dong is deemed to be interest in all the equity interest held by Mr. Liu in Harbin Xiangge.

• (4) Harbin Xiangge is the sole school sponsor and holding all equity interest of Heilongjiang College of Business and Technology. Harbin Xiangge is 40% owned by Mr. Liu and thus he is deemed to be interested in all the shares held by Harbin Xiangge in Heilongjiang College of Business and Technology; at the same time, he is the spouse of Ms. Dong and he is therefore deemed to be interested in the shares held by Ms. Dong through Harbin Xiangge under the SFO.

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GENERAL INFORMATION

APPENDIX II

• (5) Harbin Xiangge is the sole school sponsor and holding all equity interest of Heilongjiang College of Business and Technology. Harbin Xiangge is 60% owned by Ms. Dong and thus she is deemed to be interested in all the shares held by Harbin Xiangge in Heilongjiang College of Business and Technology; at the same time, she is the spouse of Mr. Liu and she is therefore deemed to be interested in the shares held by Mr. Liu through Harbin Xiangge under the SFO.

Save as disclosed above and to the best knowledge of the Directors, as at the Latest Practicable Date, none of the Directors or the chief executive of the Company has any interests and/or short positions in the Shares, underlying shares or debentures of the Company or 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 are taken or deemed to have under such provisions of the SFO) or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein or which were required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange.

Save as disclosed above, no Director was a director or employee of a company which has an interest or short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

As at the Latest Practicable Date, no Directors had any existing or proposed service contracts with the Company or any of its subsidiaries which is not determinable within one year without payment of compensation other than statutory compensation.

As at the Latest Practicable Date, none of the Directors had direct or indirect material interest in any assets which have been, since 31 August 2021 (being the date to which the latest published audited financial statements of the Company were made up), acquired or disposed of by or leased to or by or proposed to be acquired or disposed of by or leased to or by any member of the Group.

There is no contract or arrangement subsisting at the date of this circular in which any of the Directors is materially interested and which is significant in relation to the business of the Group.

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GENERAL INFORMATION

APPENDIX II

3. SUBSTANTIAL SHAREHOLDERS

So far as is known to any Director or chief executive of the Company, as at the Latest Practicable Date, the following corporations/persons (other than Directors or the chief executive of the Company) had interests of 5% or more in the issued shares of the Company according to the register of interests required to be kept by the Company under section 336 of the SFO:

		Number of	Approximate
		Shares	percentage of
Name	Capacity	interested(1)	shareholding(1)
Junhua Education	Beneficial owner	196,674,000	29.5%
Limited(2)(3)
Shuren Education	Beneficial owner	300,000,000	45.0%
Limited(4)(5)
Huatai Securities	Interest in a controlled	498,853,000	74.82%
Co., Ltd.(6)	corporation

Notes:

• (1) The letter “L” denotes the person’s long position in the Shares.

• (2) Junhua Education is 100% owned by Mr. Liu and he is therefore deemed to be interested in all the shares of the Company held by Junhua Education under the SFO.

• (3) Mr. Liu is the spouse of Ms. Dong. Mr. Liu is deemed to be interested in all the shares of the Company in which Ms. Dong is interested under the SFO.

• (4) Shuren Education is 100% owned by Ms. Dong and she is therefore deemed to be interested in all the shares of held by Shuren Education under the SFO.

• (5) Ms. Dong is the spouse of Mr. Liu. Ms. Dong is deemed to be interested in all the shares of the Company in which Mr. Liu is interested under the SFO.

• (6) Among the 498,853,000 shares, 2,179,000 shares were held by Huatai Financial Holdings (Hong Kong) Limited, which is 100% owned by Huatai Securities Co., Ltd. through Huatai International Financial Holdings Company Limited. Shuren Education has charged 300,000,000 shares of Leader Education and Junhua Education has charged 196,674,000 shares of Leader Education in favour of Huatai International Greater Bay Area Investment Fund II, L.P. as security for a loan to Shuren Education and Junhua Education. Huatai International Greater Bay Area Investment Fund II, L.P. is 100% owned by Huatai Capital Investment Partners Limited, while Huatai Capital Investment Partners Limited is 100% owned by Huatai Financial Holdings (Hong Kong) Limited. Huatai Securities Co., Ltd. is therefore deemed under the SFO to be interested in all the shares of the Company held or was interested in which Huatai Financial Holdings (Hong Kong) Limited and Huatai International Greater Bay Area Investment Fund II, L.P.

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GENERAL INFORMATION

APPENDIX II

Save as disclosed above and to the best knowledge of the Directors, as at the Latest Practicable Date, no person (other than the Directors or chief executives of the Company) had registered an interest or a short position in the Shares or underlying shares of the Company as recorded in the register required to be kept by the Company under section 336 of the SFO.

4. MATERIAL CONTRACTS

The Group has entered into the following contracts (not being contracts entered into in the ordinary course of business) within the two years preceding the date of this circular which are or may be material:

• (1) an equity pledge agreement dated 25 March 2020 and entered into by and among Mr. Liu, Ms. Dong, Harbin Xiangge and Liankang Consulting, pursuant to which each of Mr. Liu and Ms. Dong unconditionally and irrevocably agreed to pledge and grant first priority security interest over all of their respective equity interest in Harbin Xiangge together with all related rights thereto to Liankang Consulting for the purpose of securing the performance of certain contractual obligations of Harbin Xiangge, Heilongjiang College of Business and Technology, Mr. Liu and Ms. Dong;

• (2) a supplemental equity pledge agreement dated 5 April 2020 and entered into by and among Mr. Liu, Ms. Dong, Harbin Xiangge and Liankang Consulting, pursuant to which the parties agreed that, among others, the equity pledge agreement dated 6 February 2020 had been terminated upon the date of execution of the equity pledge agreement dated 25 March 2020;

• (3) a deed of indemnity dated 22 July 2020 entered into by Ms. Dong, Mr. Liu, Junhua Education and Shuren Education in favor of the Company (for the Company and as trustee for its subsidiaries) in respect of, among other things, certain indemnities;

• (4) a cornerstone investment agreement dated 23 July 2020 entered into by and among the Company, Sino Edu Capital Fund I LP and Huatai Financial Holdings (Hong Kong) Limited, pursuant to which Sino Edu Capital Fund I LP agreed to subscribe for the Shares in an aggregate amount of US$3,840,000 at the offer price;

• (5) a cornerstone investment agreement dated 23 July 2020 entered into by and among the Company, Huang Zhanxiong and Huatai Financial Holdings (Hong Kong) Limited, pursuant to which Huang Zhanxiong agreed to subscribe for the Shares in an aggregate amount of US$5,000,000 at the offer price;

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GENERAL INFORMATION

APPENDIX II

• (6) a cornerstone investment agreement dated 23 July 2020 entered into by and among the Company, New China Asset Management (Hong Kong) Limited and Huatai Financial Holdings (Hong Kong) Limited, pursuant to which New China Asset Management (Hong Kong) Limited agreed to subscribe for the Shares in an aggregate amount of US$2,500,000 at the offer price;

• (7) a cornerstone investment agreement dated 23 July 2020 entered into by and among the Company, Wu Shang Tun Mason and Huatai Financial Holdings (Hong Kong) Limited, pursuant to which Wu Shang Tun Mason agreed to subscribe for the Shares in an aggregate amount of US$1,000,000 at the offer price; and

• (8) the underwriting agreement dated 24 July 2020 relating to the Hong Kong Public Offering and entered into by, among others, the Company, Ms. Dong, Mr. Liu, Junhua Education and Shuren Education, the Huatai Financial Holdings (Hong Kong) Limited and CMB International Capital Limited, Victory Securities Company Limited, CASH Financial Services Group Limited and Goldbridge Securities Limited.

5. LITIGATION AND CLAIMS

At as the Latest Practicable Date, the Group was not engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened by or against the Group.

6. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

As at the Latest Practicable Date, none of the Directors or their respective associates had any personal interests in companies engaged in businesses, which compete or may compete with the Group.

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GENERAL INFORMATION

APPENDIX II

7. GENERAL

The English text of this circular shall prevail over the Chinese text in case of inconsistency.

The company secretary of the Company is Mr. Chang Eric Jackson, who is a member of Hong Kong Institute of Certified Public Accountants.

The registered office of the Company is at Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands, Hutchins Drive. The Headquarters and principal place of business in PRC is at Qunying Jie No. 33, Xueyuan Road, Limin Development Zone, Harbin City, Heilongjiang Province, the PRC. The principal place of business in Hong Kong is at Unit 26, 14/F., Solo Building, 41-43 Carnarvon Road, Tsimshatsui, Kowloon, Hong Kong. The Hong Kong Share Registrar of the Company is Tricor Investor Services Limited, Level 54, Hopewell Centre 183 Queen’s Road East, Hong Kong.

8. DOCUMENTS AVAILABLE ON DISPLAY

Copies of the following documents will be published on the websites of the Stock Exchange ( http://www.hkexnews.hk ) and the Company ( http://www.leader-education.cn ) for a period of 14 days from the date of this circular:

1. Sale and Leaseback Agreement (Haier — August 2021)

2. Consultation Service Agreement (Haier — August 2021)

3. Personal guarantee of Mr. Liu in respect of Finance Lease Arrangement (Haier — August 2021)

4. Personal guarantee of Ms. Dong in respect of Finance Lease Arrangement (Haier — August 2021)

5. Corporate guarantee of Harbin Xiangge in respect of Finance Lease Arrangement (Haier — August 2021)

6. Corporate guarantee of Daqing Xiangge in respect of Finance Lease Arrangement (Haier — August 2021)

7. Sale and Leaseback Agreement (Haier — November 2020)

8. Consultation Service Agreement (Haier — November 2020)

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GENERAL INFORMATION

APPENDIX II

1. Personal guarantee of Mr. Liu in respect of Finance Lease Arrangement (Haier — November 2020)

2. Personal guarantee of Ms. Dong in respect of Finance Lease Arrangement (Haier — November 2020)

3. Corporate guarantee of Harbin Xiangge in respect of Finance Lease Arrangement (Haier — November 2020)

4. Corporate guarantee of Daqing Xiangge in respect of Finance Lease Arrangement (Haier — November 2020)

– 29 –