Mao Geping Cosmetics Co., Ltd. — M&A Activity 2018

May 11, 2018

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

==> picture [62 x 61] intentionally omitted <==

==> picture [308 x 45] intentionally omitted <==

(Incorporated in Bermuda with limited liability)

(Stock Code: 583)

MAJOR TRANSACTION IN RELATION TO ACQUISITION OF PATROL HALL 12 LIMITED INDIRECTLY OWNING KWAI FONG PLAZA

ACQUISITION OF PATROL HALL 12 INDIRECTLY OWNING KWAI FONG PLAZA

The Board is pleased to announce that on 11 May 2018 (after trading hours), GWPA Property (a wholly-owned subsidiary of the Company) exercised the Call Option for the purchase of the Sale Shares (representing the entire issued shares of Patrol Hall 12) and the Sale Loan (representing all of the shareholder’s loan owed by Patrol Hall 12). The Purchase Price of HK$725,051,488 will be paid at Completion by setting off against the outstanding amount of the Advance owed by the JVCo to GWPA Property. GWPA Property has designated GWPA PIL, a direct wholly-owned subsidiary of the Company, to take up the Sale Shares and the Sale Loan on Completion.

Patrol Hall 12 is the sole shareholder of Ray Glory, whose sole material assets are the property interests held in Kwai Fong Plaza. Through the acquisition of Patrol Hall 12 pursuant to the exercise of the Call Option, the Group will effectively acquire Kwai Fong Plaza indirectly. Completion is expected to take place by June 2018.

Kwai Fong Plaza is a completed property development comprising various commercial, car parking and associated areas within Kwai Fong Estate at Kwai Chung, Hong Kong.

LISTING RULES IMPLICATIONS

As the highest applicable percentage ratio calculated in respect of the Acquisition exceeds 25% but is less than 100%, the Acquisition constitutes a major transaction for the Company which is subject to notification, announcement and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

1

To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, and as far as the Company is aware, no Shareholders is materially interested in the Call Option, the Acquisition and the transactions contemplated thereunder. No Shareholder would be required to abstain from voting if the Company were to convene a general meeting for approving the Acquisition. GW Holding (BVI), holding approximately 74.89% of the entire issued share capital of the Company, has given its unconditional written approval to the Acquisition in lieu of holding a general meeting pursuant to Rule 14.44 of the Listing Rules.

The Company expects to despatch a circular containing, among other things, further details of the Acquisition and the other requisite information under the Listing Rules to the Shareholders on or before 25 May 2018.

1. BACKGROUND

The Board refers to the JV Investment Circular issued by the Company in relation to, among other things, the JV Investment (including provision of the Advance) under the Shareholders Agreement.

The Board is pleased to announce that on 11 May 2018 (after trading hours), GWPA Property (a wholly-owned subsidiary of the Company) exercised the Call Option for the purchase of the Sale Shares and the Sale Loan on the terms and conditions summarized below.

2. ACQUISITION

Date and parties:

On 22 February 2018, the JVCo and GWPA Property entered into the Call Option Deed, under which the Call Option was granted by the JVCo to GWPA Property in accordance with the Shareholders Agreement. As disclosed in the JV Investment Circular, the exercise of the Call Option will entitle GWPA Property to purchase Patrol Hall 12, the immediate holding company of Ray Glory which directly owns Kwai Fong Plaza.

On 11 May 2018 (after trading hours), GWPA Property exercised the Call Option by issuing the Call Option Notice to the JVCo. GWPA Property has designated GWPA PIL, a direct wholly-owned subsidiary of the Company, to take up the Sale Shares and the Sale Loan on Completion.

Except for the fact that GWPA Property has entered into the Shareholders Agreement with, among other persons, the JVCo as disclosed in the JV Investment Circular, to the best of the knowledge, information and belief of the Directors after having made all reasonable enquiries, the JVCo and its ultimate beneficial owners are third parties independent of the Company and its connected persons.

2

Assets:

The assets being the subject of the exercise of the Call Option comprise:

• the Sale Shares, representing the entire issued shares of Patrol Hall 12; and

• the Sale Loan, representing all of the shareholder’s loan owed by Patrol Hall 12 to its immediate holding company, Patrol Link 12, at Completion.

The Call Option Notice issued by GWPA Property shall constitute a binding agreement for the sale and purchase of the Sale Shares and the Sale Loan between the parties to the Call Option Deed.

Patrol Hall 12 is the sole shareholder of Ray Glory, whose sole material assets are the property interests held in Kwai Fong Plaza. Through the acquisition of Patrol Hall 12 pursuant to the exercise of the Call Option, the Group will effectively acquire Kwai Fong Plaza indirectly.

Purchase Price:

The Purchase Price payable for the Sale Shares and the Sale Loan is HK$725,051,488. At Completion, GWPA Property shall set off the Purchase Price against the Advance in the equivalent amount pursuant to the Call Option Deed, upon which the Advance shall be deemed satisfied and repaid in full.

As disclosed in the JV Investment Circular, the amount of the Advance committed by GWPA Property would not exceed HK$743,000,000. The actual amount of the Advance provided to the JVCo by GWPA Property is HK$725,051,488.

The amount of the Purchase Price is agreed at arm’s length after commercial negotiations between the JVCo and GWPA Property. The Purchase Price is determined primarily based on the costs of acquisition of Kwai Fong Plaza by the JV Group (including the related costs and expenses such as stamp duties incurred for its acquisition and the exercise of the Call Option) minus the outstanding amount of the Bank Borrowings of approximately HK$901,657,000, which will remain after Completion. In agreeing to the Purchase Price, the Directors have also taken into account other factors including the reasons for and benefits of the Acquisition set out below and the market value of Kwai Fong Plaza valued by an independent property valuer engaged by the Group as disclosed in the JV Investment Circular.

Completion:

Completion has been made conditional upon approval by the Shareholders under Chapter 14 of the Listing Rules.

Completion will take place on the business day immediately after expiry of 14 days from the date of the notice issued by GWPA Property for such purposes or such other date as the parties to the Call Option Deed may agree but in any event, Completion shall take place not later than six (6) months from the date of such notice or such longer period as the parties may agree. Completion is expected to take place by June 2018.

3

GWPA Property has designated GWPA PIL, a direct wholly-owned subsidiary of the Company, to take up the Sale Shares and the Sale Loan on Completion.

Upon Completion, both Patrol Hall 12 and Ray Glory will become wholly-owned subsidiaries of the Company and their financial results will be fully consolidated into the financial statements of the Group.

3. INFORMATION ON PATROL HALL 12, RAY GLORY AND KWAI FONG PLAZA

Patrol Hall 12 is an indirect wholly-owned subsidiary of the JVCo. Patrol Hall 12 and its sole wholly-owned subsidiary, Ray Glory, are investment holding companies. The material asset of Patrol Hall 12 is Ray Glory. Other than the acquisition and holding of interests in Kwai Fong Plaza, Ray Glory had no other material business operations since its incorporation.

Financial Information of Patrol Hall 12 Group

Set out below are certain unaudited consolidated financial information of Patrol Hall 12 Group for the period from 7 November 2017 (date of incorporation of Patrol Hall 12) to 31 December 2017 and for the period from 1 January 2018 to 28 February 2018:

	For the period
	from 7 November
	2017 (date of	For the period
	incorporation of	from 1 January
	Patrol Hall 12)	2018 to
	to 31 December	28 February
	2017	2018
	(HK$)	(HK$)
Item	(Unaudited)	(Unaudited)
Consolidated net loss before and after taxation	44,175	35,108

The unaudited consolidated net liabilities of Patrol Hall 12 Group as at 31 December 2017 and as at 28 February 2018 amounted to approximately HK$44,167 and HK$79,275, respectively. The shareholder’s loan outstanding from Patrol Hall 12 to Patrol Link 12 as at 28 February 2018 stood at approximately HK$725,051,480.

Kwai Fong Plaza is one of the Portfolio Assets acquired by the relevant subsidiaries of the JVCo from the Seller on 28 February 2018. Kwai Fong Plaza is located in a mixed residential and industrial area, comprising private and public residential developments and a cluster of industrial buildings. The total internal floor area of Kwai Fong Plaza is approximately 5,323.67 sq m (retail portion: 4,641.95 sq m; fresh market: 677.91 sq m; ancillary: 3.81 sq m). The development comprises:

• a 2-storey commercial and car park complex consisting of various shop units, a car park and a fresh market;

• various shop units on the ground floor of Kwai Kin House and an enclosed area on the first floor of Kwai Oi House;

• a stand-alone 6-storey car parking building;

4

• a stand-alone 8-storey car parking building with a management office on portion of the ground floor and recreational area on the roof; and

• various open car parks, loading/unloading spaces and associated areas scattered over Kwai Fong Estate.

The market value of Kwai Fong Plaza as at 26 February 2018 was valued at approximately HK$1,602,000,000 by an independent property valuer engaged by the Group.

4. REASONS FOR, AND BENEFITS OF, THE ACQUISITION

The Group is principally engaged in (i) property investment business and (ii) provision of financial services.

The Board is of the view that the Acquisition will bring the following key benefits to the Group:

(1) Well-established property with promising outlook

Built in 2000, Kwai Fong Plaza is a relatively new property among the Portfolio Assets, of which the decorations and facilities have been enhanced after the renovation in 2009. At present, Kwai Fong Plaza is overall in a good condition and enjoys excellent accessibility, being within five minutes, walking distance to Kwai Fong Station of the Mass Transit Railway, with entrance drawing passengers to and from the station; another Mass Transit Railway station, Kwai Hing Station, is also situated at about five minutes’ walking distance from Kwai Fong Plaza. Developments in the vicinity comprise public rental housing blocks within Kwai Fong Plaza, private residential developments such as Kwai Chung Plaza and New Kwai Fong Gardens etc. and some medium/high rise residential/commercial composite buildings. There is also a cluster of industrial buildings located on the southeastern side of Kwai Fong Plaza. These provide Kwai Fong Plaza with a more steady and positive prospect in the years to come.

(2) Diversify investment property portfolio with a steady income stream

The Board believes that the Acquisition would constitute an important step of the Group towards diversification of its investment property portfolio. Kwai Fong Plaza has strong occupancy rate and a diversified tenant portfolio, of which the occupancy rate at 30 September 2017 and 31 March 2017 was 94.1% and 95.5%, respectively. This offers a stable and attractive rental income stream for the Company after Completion. Kwai Fong Plaza has a high quality tenant mix that features both local and multinational tenants, which will further enhance the overall quality of the tenants of the investment property portfolio of the Group.

5

(3) The Acquisition is consistent with the Company’s development plans and growth strategy

As stated in the JV Investment Circular, in order to generate favourable investment returns to the Shareholders, the Group continues to enhance its potential long-term growth by, among others, proactively seeking different investment opportunities in the property segment. The Acquisition is a significant opportunity for the Group to expand its own property portfolio, and to consolidate the continuing development of its principal business activities in property sector. The addition of Kwai Fong Plaza to the Group’s property portfolio through the Acquisition will enable the Group to gain an immediate retail presence, thus improving its existing position and potential for further development within the property industry in Hong Kong in the long term. The Acquisition is consistent with the Company’s development plans and growth strategy.

(4) Full consolidation of financial results of Patrol Hall 12 and Ray Glory

Upon Completion, both Patrol Hall 12 and Ray Glory will become wholly-owned subsidiaries of the Company. Their financial results will be fully consolidated into that of the Group, which would create additional source of revenue and bring direct contributions to the profits of the Group as a whole.

The Directors believe that the terms of the Acquisition are fair and reasonable and in the interests of the Company and the Shareholders as a whole. The Acquisition is carried out as one of the Group’s principal activities in property investment business.

5. LISTING RULES IMPLICATIONS

As the highest applicable percentage ratio calculated in respect of the Acquisition exceeds 25% but is less than 100%, the Acquisition constitutes a major transaction for the Company which is subject to notification, announcement and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, and as far as the Company is aware, no Shareholder is materially interested in the Call Option, the Acquisition and the transactions contemplated thereunder. No Shareholder would be required to abstain from voting if the Company were to convene a general meeting for approving the Acquisition. GW Holding (BVI), holding approximately 74.89% of the total issued share capital of the Company, has given its unconditional written approval to the Acquisition in lieu of holding a general meeting pursuant to Rule 14.44 of the Listing Rules.

The Company expects to despatch a circular containing, among other things, further details of the Acquisition and the other requisite information under the Listing Rules to the Shareholders on or before 25 May 2018.

6

6. DEFINITIONS

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

• “Acquisition”

• the acquisition of the Sale Shares and the Sale Loan in accordance with the terms of the Call Option Deed;

• “Advance” the sum (not exceeding HK$743,000,000) advanced by GWPA Property to the JVCo, as disclosed in the JV Investment Circular, and the actual amount of which is HK$725,051,488;

• “Bank Borrowings” the outstanding bank borrowings (including outstanding principal and interests accrued) owed by Ray Glory under a term loan facility in an aggregate amount equal to HK$901,657,000 granted by a licensed bank in Hong Kong for financing in part the costs of Ray Glory’s acquisition of Kwai Fong Plaza from the Seller and the related costs and expenses;

• “Board” the board of Directors;

• “BVI” the British Virgin Islands;

• “Call Option” the option granted to GWPA Property to purchase the Sale Shares and the Sale Loan;

• “Call Option Deed” the deed dated 22 February 2018 entered into between the JVCo and GWPA Property under which the JVCo granted the Call Option in favour of GWPA Property in accordance with the Shareholders Agreement;

• “Call Option Notice” the notice dated 11 May 2018 issued by GWPA Property to the JVCo for the exercise of the Call Option;

• “Company”

• Great Wall Pan Asia Holdings Limited (長城環亞控股有限 公司)*, an exempted company incorporated in Bermuda with limited liability, the issued Shares of which are listed on the Main Board (Stock Code: 583);

• “Completion” the completion of the sale and purchase of the Sale Shares and the assignment of the Sale Loan pursuant to the exercise of the Call Option;

• “Completion Date” the date of the Completion as shall be designated by GWPA Property by notice to the JVCo in accordance with the Call Option Deed;

• “connected person” has the meaning ascribed to it under the Listing Rules;

• “controlling shareholder”

has the meaning ascribed to it under the Listing Rules;

7

“Director(s)”

• (a) director(s) of the Company;

“Group”

• the Company and its subsidiaries from time to time;

• “GW Holding (BVI)” Great Wall Pan Asia (BVI) Holding Limited, a limited liability company incorporated in the BVI and a direct wholly-owned subsidiary of Great Wall International;

• “Great Wall International” China Great Wall AMC (International) Holdings Company Limited (中國長城資產（國際）控股有限公司), a company incorporated under the laws of Hong Kong with limited liability and a controlling shareholder of the Company;

• “GWPA PIL” Great Wall Pan Asia Property Investment Limited (長城環亞置業投資有限公司), a limited liability company incorporated in the BVI and a direct wholly-owned subsidiary of the Company;

• “GWPA Property” GWPA Property I Holding Limited, a limited liability company incorporated in the BVI and a wholly-owned subsidiary of the Company;

• “HK$” Hong Kong dollar, the lawful currency of Hong Kong;

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

• “JVCo” Everwell City Limited, a limited liability company incorporated in the BVI which carries on the business of acquiring, holding, managing, developing or disposing of the Portfolio Assets in accordance with the Shareholders Agreement, an associated company of the Company;

• “JV Group” the JVCo and its subsidiaries from time to time;

• “JV Investment” the acquisition of investment interests in the JVCo by GWPA Property, including subscription of equity capital of the JVCo, the provision of the Contribution (as defined in the JV Investment Circular) and the provision of the Advance in accordance with the Shareholders Agreement, as disclosed in the JV Investment Circular;

• “JV Investment Circular” the Company’s circular dated 30 December 2017 in respect of the JV Investment;

8

• “Kwai Fong Plaza” the various commercial, car parking and associated areas (known as Kwai Fong Plaza) within Kwai Fong Estate at 177 Hing Fong Road, Kwai Chung, New Territories, Hong Kong, further details of which are set out in the JV Investment Circular;

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

• “Main Board” the Main Board of the Stock Exchange;

• “Patrol Hall 12” Patrol Hall 12 Limited, a limited liability company incorporated in the BVI on 7 November 2017 and a direct wholly-owned subsidiary of Patrol Link 12;

• “Patrol Hall 12 Group” Collectively, Patrol Hall 12 and its sole wholly-owned subsidiary, Ray Glory;

• “Patrol Link 12” Patrol Link 12 Limited, a limited liability company incorporated in the BVI on 7 November 2017 and an indirect wholly-owned subsidiary of the JVCo;

• “percentage ratios” has the meaning ascribed to it in Rule 14.07 of the Listing Rules;

• “Portfolio Assets” the assets in the portfolio of 17 Hong Kong commercial properties and shopping centres, plazas and carparks purchased by the JV Group from the Seller, further particulars of which are contained in the JV Investment Circular;

• “Purchase Price” the sum of HK$725,051,488, being the consideration for the Sale Shares and the Sale Loan;

• “Ray Glory” Ray Glory Limited (頂煌有限公司), a limited liability company incorporated in Hong Kong on 26 October 2017 and a direct wholly-owned subsidiary of Patrol Hall 12;

• “Sale Loan” all of the shareholder’s loan/indebtedness owed by Patrol Hall 12 to Patrol Link 12 at Completion;

9

“Sale Shares” the entire issued shares in the share capital of Patrol Hall 12, currently owned by Patrol Link 12;

“Seller” the seller (a real estate investment trust listed on the Main Board) of the Portfolio Assets to the JVCo;

• “Share(s)” ordinary share(s) of HK$0.10 each in the capital of the Company;

• “Shareholder(s)” holder(s) of Share(s) from time to time;

“Shareholders Agreement” the Shareholders Agreement dated 28 November 2017 entered into between, among other persons, GWPA Property and the JVCo in connection with the JVCo, as amended and supplemented from time to time;

• “sq m” square metres;

• “Stock Exchange” The Stock Exchange of Hong Kong Limited; and

• “%” per cent.

By Order of the Board Great Wall Pan Asia Holdings Limited OU Peng Chairman

Hong Kong, 11 May 2018

As at the date of this announcement, the Board consists of Mr. Ou Peng and Mr. Meng Xuefeng as executive Directors of the Company, Mr. Huang Hu and Ms. Lv Jia as non-executive Directors of the Company, and Dr. Song Ming, Dr. Sun Mingchun and Mr. Woo Chin Wan as independent non-executive Directors of the Company.

• For identification purpose only

10