Persistence Gold Group Ltd — Major Shareholding Notification 2021

Sep 7, 2021

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

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APAC RESOURCES LIMITED 亞太資源有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock Code: 1104)

DISCLOSEABLE TRANSACTION

ACQUISITION OF SHARES IN CHINA HONGQIAO

The Board announces that on 7 September 2021, the Subsidiary acquired in aggregate 1,400,000 shares in China Hongqiao (representing approximately 0.015% of the total issued share capital of China Hongqiao as at the date of this announcement) through on-market transactions conducted on the Stock Exchange for an aggregate consideration of approximately HK$15,380,000 (exclusive of transaction costs), representing approximately HK$10.99 per share.

Prior to the Acquisition, the Subsidiary acquired an aggregate of 5,200,000 shares in China Hongqiao within a 12-month period prior to the date of the Acquisition (representing approximately 0.057% of the total issued share capital of China Hongqiao as at the date of this announcement) through on-market transactions conducted on the Stock Exchange for an aggregate consideration of approximately HK$56,349,000 (exclusive of transaction costs), representing approximately HK$10.84 per share.

LISTING RULES IMPLICATIONS

As the applicable percentage ratio(s) for the Acquisition does not exceed 5% on a stand-alone basis, the Acquisition is not subject to disclosure requirements under Chapter 14 of the Listing Rules.

As the applicable percentage ratio(s) for the Acquisition, when aggregated with the Previous Acquisitions which were conducted within 12 months of the Acquisition, is more than 5% but all are less than 25%, the Acquisition together with the Previous Acquisitions constitute a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

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ACQUISITION OF SHARES IN CHINA HONGQIAO

The Board announces that on 7 September 2021, the Subsidiary acquired in aggregate 1,400,000 shares in China Hongqiao (representing approximately 0.015% of the total issued share capital of China Hongqiao as at the date of this announcement) through on-market transactions conducted on the Stock Exchange for an aggregate consideration of approximately HK$15,380,000 (exclusive of transaction costs), representing approximately HK$10.99 per share.

Prior to the Acquisition, the Subsidiary acquired an aggregate of 5,200,000 shares in China Hongqiao within a 12-month period prior to the date of the Acquisition (representing approximately 0.057% of the total issued share capital of China Hongqiao as at the date of this announcement) through on-market transactions conducted on the Stock Exchange for an aggregate consideration of approximately HK$56,349,000 (exclusive of transaction costs), representing approximately HK$10.84 per share.

After the Acquisitions, the Group holds 6,600,000 shares in China Hongqiao, representing approximately 0.072% of the total issued share capital of China Hongqiao as at the date of this announcement.

As the Acquisitions were conducted through the open market, the identity(ies) of the counterparty(ies) of the Acquisitions cannot be ascertained by the Group. However, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Directors believe that the counterparty(ies) and its/their ultimate beneficial owner(s) in the Acquisitions is/are Independent Third Parties.

CONSIDERATION

The aggregate consideration for the Acquisitions is approximately HK$71,729,000 (exclusive of transaction costs) and shall be/have been (as the case may be) fully settled in cash from the Company’s internal resources.

The consideration of the Acquisitions were determined by reference to the prevailing trading prices of the shares of China Hongqiao on the Stock Exchange at the time of the relevant acquisitions.

INFORMATION ON THE COMPANY AND THE GROUP

The Company is a company incorporated in Bermuda with limited liability, the shares of which are listed on the main board of the Stock Exchange. The Group is an established investment fund and commodity trading house which owns strategic interests in natural resource companies with the main business lines comprising of primary strategic investment, resource investment, and commodity trading business, focused primarily on metals, mining and energy and investment in financial assets.

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INFORMATION ON CHINA HONGQIAO

China Hongqiao is a company incorporated under the laws of Cayman Islands with limited liability, the shares of which are listed on the main board of the Stock Exchange (Stock Code: 1378).

China Hongqiao is a multinational enterprise covering the entire aluminium industry chain. Developed into the world’s largest aluminium producer in 2015, China Hongqiao specialises in thermoelectric, mining, and producing aluminium products. Its diverse product portfolio includes alumina, liquid aluminium alloy, aluminium alloy ingots, rolled and cast aluminium alloy products, aluminium busbar, high precision aluminium plates with foil, and new materials.

Based on the audited consolidated financial statements of China Hongqiao, the consolidated net profit before and after taxation for the financial years ended 31 December 2019 and 2020 and the consolidated net assets of China Hongqiao as at 31 December 2019 and 2020 are as follows:

follows:
		For the year ended 31 December
	2020		2019
	RMB’000	HK$’000	RMB’000	HK$’000
Consolidated net profit before taxation	12,704,350	15,113,095	8,771,067	9,791,142
Consolidated net profit after taxation	10,444,751	12,425,076	6,455,143	7,205,876
		As at 31 December
	2020		2019
	RMB’000	HK$’000	RMB’000	HK$’000
Consolidated net assets	76,801,670	91,363,267	66,015,976	73,693,634

Note: The translation of RMB into HK$ is based on the exchange rate of HK$1.1163 to RMB1 and HK$1.1896 to RMB1 as at 31 December 2019 and 31 December 2020 respectively.

REASONS FOR AND BENEFITS OF THE ACQUISITIONS

China Hongqiao recently reported an excellent set of financial results for the six months ended 30 June 2021, including 2.801 million tonnes of aluminum alloy products and 0.369 million tonnes of aluminum fabrication products, a revenue of approximately RMB52.5 billion, a gross profit of approximately RMB15.7 billion and an attributable net profit after tax of approximately RMB8.1 billion. The valuation of China Hongqiao is considered compelling with reference to (i) a net cash build for the six months ended 30 June 2021 of approximately RMB12.7 billion and a net debt reduction by approximately RMB11.1 billion; and (ii) the current market capitalisation of China Hongqiao of approximately RMB84.9 billion. Looking forward, China Hongqiao is expected to benefit from strong LME aluminium prices, which averaged US$1.02 per pound in the first half of 2021 and have increased significantly to US$1.26 per pound at current spot, which has been driven by a strong rebound in demand growth, as well as supply issues in China, including hydro power instability in Yunnan and Guangxi, coal power shortages, flooding and logistics, and accordingly, bodes very well for future profitability, cash generation and shareholder returns of China Hongqiao, and therefore, the Directors believe the Acquisitions are attractive investments and can enhance the returns on investment of the Company.

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As the Acquisitions were traded at market price, the Directors (including the independent nonexecutive Directors) are of the view that the Acquisitions were fair and reasonable, on normal commercial terms and in the interests of the Company and the shareholders of the Company as a whole.

LISTING RULES IMPLICATIONS

As the applicable percentage ratio(s) for the Acquisition does not exceed 5% on a stand-alone basis, the Acquisition is not subject to disclosure requirements under Chapter 14 of the Listing Rules.

As the applicable percentage ratio(s) for the Acquisition, when aggregated with the Previous Acquisitions which were conducted within 12 months of the Acquisition, is more than 5% but all are less than 25%, the Acquisition together with the Previous Acquisitions constitute a discloseable transaction for the Company under Chapter 14 of the Listing Rules.

DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:

“Acquisition”	the acquisition of 1,400,000 shares in China Hongqiao in
	aggregate by the Subsidiary through on-market transactions
	conducted on the Stock Exchange on 7 September 2021 for
	an aggregate consideration of approximately HK$15,380,000
	(exclusive of transaction costs);
“Acquisitions”	the Acquisition and the Previous Acquisitions;
“Board”	the board of Directors;
“China Hongqiao”	China Hongqiao Group Limited, a company incorporated
	under the laws of Cayman Islands with limited liability, the
	shares of which are listed on the main board of the Stock
	Exchange (Stock Code: 1378);
“Company”	APAC Resources Limited, a company incorporated in
	Bermuda with limited liability, the shares of which are listed
	on the main board of the Stock Exchange (Stock Code:
	1104);
“Directors”	the directors of the Company;
“Group”	the Company and its subsidiaries;
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong;
“Hong Kong”	Hong Kong Special Administrative Region of the People’s
	Republic of China;

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“Independent Third third party(ies) independent of the Company and its Party(ies)” connected persons (as defined in the Listing Rules); “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange; “Previous Acquisitions” the acquisitions of 5,200,000 shares in China Hongqiao in aggregate, by the Subsidiary through on-market transactions conducted on the Stock Exchange within a 12-month period prior to the date of the Acquisition for an aggregate consideration of approximately HK$56,349,000 (exclusive of transaction costs); “RMB” Renminbi, the lawful currency of the People’s Republic of China; “Stock Exchange” The Stock Exchange of Hong Kong Limited; “Subsidiary” APAC Resources Asia Limited, a company incorporated in Hong Kong with limited liability, and a wholly-owned subsidiary of the Company; “US$” United States dollar(s), the lawful currency of the United States of America; and “%” per cent.

By Order of the Board APAC Resources Limited Andrew Ferguson Executive Director

Hong Kong, 7 September 2021

As at the date of this announcement, the directors of the Company are:

Executive Directors

Mr. Brett Robert Smith (Deputy Chairman) and Mr. Andrew Ferguson (Chief Executive Officer)

Non-Executive Directors

Mr. Arthur George Dew (Chairman) (Mr. Wong Tai Chun, Mark as his alternate), Mr. Lee Seng Hui and Ms. Lam Lin Chu

Independent Non-Executive Directors

Dr. Wong Wing Kuen, Albert, Mr. Chang Chu Fai, Johnson Francis and Mr. Wang Hongqian

• For identification purpose only

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