PPS International (Holdings) Limited — Proxy Solicitation & Information Statement 2017

Jul 21, 2017

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 you should take, you should consult your licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in PPS International (Holdings) Limited, you should at once hand this circular to the purchaser or the transferee or to the bank manager, licensed securities dealer or registered institution in securities or other agent through whom the sale was effected for transmission to the purchaser or the transferee.

This circular appears for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for the shares or other securities of the Company.

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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PPS INTERNATIONAL (HOLDINGS) LIMITED 寶聯控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8201)

(1) CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE; AND

(2) NOTICE OF EXTRAORDINARY GENERAL MEETING

Financial adviser to the Company

Independent Financial Adviser to the Company

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Capitalized terms used in this cover page shall have the same meanings as those defined in this circular unless otherwise stated.

A letter from the Board is set out on pages 5 to 17 of this circular. A letter from the Independent Board Committee containing its recommendation to the Independent Shareholders is set out on pages 18 to 19 of this circular. A letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 20 to 43 of this circular.

A notice convening the EGM to be held at 6/F., Causeway Bay Function Room, L’hotel Causeway Bay Harbour View Hong Kong, 18 King’s Road, Causeway Bay, Hong Kong on 8 August 2017 at 11:00 a.m. or any adjournment thereof is set out on pages 48 to 49 of this circular. A proxy form for use at the EGM is enclosed with this circular. Whether or not you are able to attend the meeting in person, you are requested to complete the proxy form in accordance with the instructions printed thereon and return the same to the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish and in such event, the instrument appointing a proxy shall be deemed to be revoked.

21 July 2017

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate companies to which a high 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
Letter from the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
Appendix – General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	44
Notice of Extraordinary General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	48

– ii –

DEFINITIONS

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

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

• “Board” the board of Directors

• “Business Day(s)”

• a day (other than a Saturday, Sunday or public holiday in Hong Kong) on which licensed banks are generally open for business in Hong Kong

• “Company” PPS International (Holdings) Limited, a company incorporated in the Caymans Islands with limited liability, the issued Shares of which are listed on the GEM

• “Completion” Completion of the Subscription contemplated under the Subscription Agreement

• “Completion Date”

• the date on which Completion shall take place, being a date falling within 5 Business Days following the date on which the conditions precedent under the Subscription Agreement are fulfilled (or such other date as the Company and the Subscriber may agree in writing)

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

• “controlling shareholder(s)” has the meaning ascribed to it under the GEM Listing Rules

• “Conversion Price”

• the initial conversion price of the Convertible Bonds of HK$0.06 per Conversion Share, subject to adjustments

• “Conversion Share(s)”

• new Share(s) to be allotted and issued by the Company to the Subscriber upon the exercise of the conversion rights attaching to the Convertible Bonds at the Conversion Price

• “Convertible Bonds”

• convertible bonds in a principal amount of HK$50,000,000 to be issued by the Company pursuant to the Subscription Agreement

• “Director(s)”

• the director(s) of the Company

– 1 –

DEFINITIONS

• “EGM” the extraordinary general meeting of the Company to be convened and held to consider and, if thought fit, approve, among other matters, the Subscription Agreement and the transactions contemplated thereunder (including the grant of the Specific Mandate)

• “Executive” the Executive Director of the Corporate Finance Division of the SFC or any delegate of the Executive Director

• “FMA” Financial Markets Authority of New Zealand “GEM” the Growth Enterprise Market of the Stock Exchange “GEM Listing Rules” the Rules Governing the Listing of Securities on the GEM

• “Group” the Company and its subsidiaries “HK$” the lawful currency of Hong Kong dollars “Hong Kong” the Hong Kong Special Administrative Region of the PRC

• “Independent Board Committee” the independent board committee of the Company, comprising all the independent non-executive Directors, which has been established for the purpose of advising the Independent Shareholders in respect of the Subscription Agreement and the transactions contemplated thereunder

• “Independent Financial Advisor” Akron Corporate Finance Limited, a licensed corporation under the SFO, registered to conduct Type 6 (advising on corporate finance) regulated activity under the SFO, being the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Subscription Agreement and the transactions contemplated thereunder

• “Independent Shareholders” Shareholders other than (i) the Subscriber; (ii) Mr. Yu; and (iii) other Shareholders who have material interest in the Subscription

– 2 –

DEFINITIONS

• “Latest Practicable Date”

• 18 July 2017, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• “Listing Committee”

the listing committee of the Stock Exchange

• “Long Stop Date”

30 September 2017 (or such other date as the Company and the Subscriber may agree in writing)

• “Mr. Yu”

• Mr. Yu Weiye, a controlling shareholder of the Company as at the Latest Practicable Date

• “PRC”

• the People’s Republic of China, and for the purpose of this circular, excluding Hong Kong, Macau and Taiwan

• “SFC”

• the Securities and Futures Commission of Hong Kong

• “SFO”

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

• “Shareholders”

the holders of Shares

• “Specific Mandate”

• the specific mandate to allot and issue the Conversion Shares to be sought from the Independent Shareholders at the EGM

• “Stock Exchange”

The Stock Exchange of Hong Kong Limited

• “Subscriber”

• Wui Wo Enterprise Limited, a company incorporated in the British Virgin Islands with limited liability and is wholly-owned by Mr. Yu

• “Subscription”

• the proposed subscription of the Convertible Bonds by the Subscriber pursuant to the Subscription Agreement

• “Subscription Agreement” the conditional subscription agreement entered into between the Company and the Subscriber in relation to the Subscription

• “Subscription Amount”

• HK$50,000,000 payable by the Subscriber for the subscription of the Convertible Bonds under the Subscription Agreement

– 3 –

DEFINITIONS

“Takeovers Code” the Code on Takeovers and Mergers issued by the SFC “UCL” Union Capital Market Limited, a company incorporated in New Zealand with limited liabilities and a wholly-owned subsidiary of the Company “UIAML” Union International Asset Management Limited, a company incorporated in Hong Kong with limited liabilities and a wholly-owned subsidiary of the Company “UISL” Union International Securities Limited, a company incorporated in Hong Kong with limited liabilities and a wholly-owned subsidiary of the Company “Union Group” Union (BVI) Holdings Limited, a wholly-owned subsidiary of the Company, and its subsidiaries including UCL, UIAML and UISL “%” per cent.

* for identification purpose only

– 4 –

LETTER FROM THE BOARD

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PPS INTERNATIONAL (HOLDINGS) LIMITED 寶聯控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8201)

Executive Directors:

Mr. Ye Jingyuan Mr. Yu Shaoheng Ms. Mui Fong

Independent non-executive Directors:

Mr. Chui Chi Yun Robert Mr. Kwong Tsz Ching, Jack Mr. Yu Xiufeng

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:

24/F., SUP Tower 75-83 King’s Road, North Point Hong Kong

21 July 2017

To the Independent Shareholders

Dear Sir or Madam,

(1) CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE; AND

(2) NOTICE OF EXTRAORDINARY GENERAL MEETING

The purpose of this circular is to provide you with, among other things, the details of the Subscription, the notice of the EGM, and any other information as required by the GEM Listing Rules.

THE SUBSCRIPTION

On 15 June 2017 (after trading hours), the Company entered into the Subscription Agreement with the Subscriber, pursuant to which the Subscriber has conditionally agreed to subscribe for and the Company has conditionally agreed to issue the Convertible Bonds in the principal amount of HK$50,000,000, which entitle the holder(s) thereof to convert the Convertible Bonds into a maximum of 833,333,333 Conversion Shares at the Conversion

– 5 –

LETTER FROM THE BOARD

Price of HK$0.06 per Conversion Share (subject to adjustments) upon the full exercise of the conversion rights. The Subscription Amount of HK$50,000,000 payable by the Subscriber will be satisfied by cash at Completion.

Upon Completion and assuming that the Convertible Bonds are converted in full at the Conversion Price, the Conversion Shares to be issued represent (i) approximately 30.86% of the total issued share capital of the Company as at the Latest Practicable Date; and (ii) approximately 23.58% of the issued share capital of the Company as enlarged by the issuance of the Conversion Shares. Details of the Subscription Agreement and the terms of the Convertible Bonds are set out below.

THE SUBSCRIPTION AGREEMENT

Date

15 June 2017 (after trading hours)

Parties

• (i) the Company (as issuer); and

• (ii) Wui Wo Enterprise Limited (as subscriber).

As at the Latest Practicable Date, the Subscriber is wholly-owned by Mr. Yu, a controlling Shareholder beneficially interested in 972,211,500 Shares (representing approximately 36.01% of the total issued share capital of the Company) of which 427,897,500 Shares are owned by the Subscriber (representing approximately 15.85% of the total issued share capital of the Company). Accordingly, the Subscriber is an associate of Mr. Yu and a connected person of the Company under the GEM Listing Rules.

Conditions precedent

Completion is conditional upon satisfaction of the following conditions:

• (i) the approval(s) by the Independent Shareholders at the EGM for the Subscription Agreement and the transactions contemplated thereunder (including the grant of the Specific Mandate) having been obtained in accordance with the GEM Listing Rules; and

• (ii) the Listing Committee having granted the listing of, and permission to deal in, the Conversion Shares.

None of the above conditions can be waived. In the event that the above conditions are not fulfilled on or before the Long Stop Date (or such later date as may be agreed between the Company and the Subscriber in writing), the Subscription Agreement will cease and determine and all rights and obligations under the Subscription Agreement will be terminated save for any antecedent breach.

– 6 –

LETTER FROM THE BOARD

As at the Latest Practicable Date, none of the above conditions have been fulfilled.

Completion

Completion shall take place on the Completion Date, subject to the fulfillment of all the conditions precedent under the Subscription Agreement.

PRINCIPAL TERMS OF THE CONVERTIBLE BONDS

Principal amount : HK$50,000,000. Issue price : 100% of the principal amount. Maturity date : The date falling on the first anniversary of the date of issue of the Convertible Bonds (the “ Maturity Date ”). Interest rate : The Convertible Bonds shall not bear any interest. Conversion rights : Holder of the Convertible Bonds will have the right, during the period commencing on the date of issue of the Convertible Bonds and ending on the Maturity Date, to convert the Convertible Bonds in whole or in part of the outstanding principal amount of the Convertible Bonds into Conversion Shares, provided that (i) the exercise of the conversion rights will not result in the Company being in breach of any provision of the GEM Listing Rules, including the requirement to maintain any prescribed minimum percentage of the issued share capital of the Company held by the public; or (ii) upon exercise of the conversion rights, the Subscriber and its respective associates, together with any parties acting in concert (as defined in the Takeovers Code) with them, will not trigger a mandatory offer obligation under Rule 26 of the Takeovers Code, unless (a) such conversion is permissible under the Takeovers Code following the application by the holder of the Convertible Bonds and granting by the Executive of a whitewash waiver and the approval of the Shareholders in this regard; or (b) such holder of the Convertible Bonds has fulfilled sufficient financial resources to make a general offer pursuant to Rule 26 of the Takeovers Code.

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LETTER FROM THE BOARD

• Conversion Price : The Conversion Price of HK$0.06 per Conversion Share represents:

• (i) a premium of approximately 3.45% over the closing price of HK$0.058 per Share quoted on the Stock Exchange on the date of the Subscription Agreement;

• (ii) a discount of approximately 0.66% to the average closing price of HK$0.0604 per Share quoted on the Stock Exchange for the last five trading days for the Shares immediately prior to date of the Subscription Agreement;

• (iii) a discount of approximately 1.64% to the average closing price of HK$0.061 per Share quoted on the Stock Exchange for the last ten trading days for the Shares immediately prior to date of the Subscription Agreement;

• (iv) a premium of approximately 0.84% over the adjusted net asset value of approximately HK$0.0595 per Share, based on (i) the consolidated net asset value of the Company of approximately HK$113,713,000 as at 31 December 2016 as extracted from the interim report of the Company for the six months ended 31 December 2016; (ii) the net proceeds of approximately HK$47,000,000 arising from the Rights Issue (as defined below); and (iii) the number of issued Shares as at the Latest Practicable Date; and

• (v) a premium of approximately 93.55% over the closing price of HK$0.031 per Share quoted on the Stock Exchange on the Latest Practicable Date.

The Conversion Price was arrived at after arm’s length negotiation between the Company and the Subscriber with reference to, among others, the prevailing market price of the Shares. The Company had considered (i) the daily closing prices of the Shares as quoted on the Stock Exchange during this year, e.g. from 3 January 2017 to 15 June 2017 (being the approximate six-month period prior to the date of the Subscription Agreement)(the “ Reference Period ”) and noted that the Conversion Price is almost the same as the average closing prices of the Shares of approximately HK$0.0601 during the Reference Period; and (ii) the trading liquidity of the Shares is relatively thin during the Reference Period. The Directors consider that the Conversion Price is fair and reasonable and is in the interest of the Company and the Shareholders as a whole.

– 8 –

LETTER FROM THE BOARD

• Adjustment to : The Conversion Price shall from time to time be adjusted in Conversion Price accordance with the relevant provisions under the terms and conditions of the Convertible Bonds upon occurrence of the following events:

• (i) an alteration of the nominal amount of the Shares by reason of consolidation, subdivision, reclassification or otherwise;

• (ii) an issue of Shares credited as fully paid to Shareholders by way of capitalization of profits or reserves (including any share premium account or capital redemption reserve), other than Shares issued in lieu of a cash dividend;

• (iii) a capital distribution (as such term is defined in the conditions of the Convertible Bonds) to Shareholders being made by the Company;

• (iv) offer of new Shares for subscription by way of rights issue by the Company;

• (v) an issue wholly for cash by the Company of securities convertible into or exchangeable for or carrying rights of subscription for Shares, at a consideration per Share which is less than 80% of the market price of the Shares, or the conversion, exchange or subscription rights of any such securities (other than in accordance with the terms applicable thereto) are altered or modified so that the consideration per Share is less than 80% of the market price of the Shares;

• (vi) an issue of Shares being made wholly for cash at a price less than 80% of the market price of the Share; and

• (vii) an issue of Shares for the acquisition of asset at a total effective consideration per Share which is less than 80% of the market price of the Shares.

Conversion Shares

• : Based on the Conversion Price of HK$0.06 per Conversion Share, a maximum of 833,333,333 Conversion Shares will be allotted and issued upon exercise of the conversion rights attaching to the Convertible Bonds in full.

The aggregate nominal value of the Conversion Shares (with a par value of HK$0.001 each) will be approximately HK$833,333.33.

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LETTER FROM THE BOARD

• The Conversion Shares will be allotted and issued under the Specific Mandate to be sought from the Independent Shareholders at the EGM.

• Redemption : The Company may voluntarily redeem all or any part of the Convertible Bonds at any time following the issue of the Convertible Bonds and prior to the Maturity Date by repaying the holder(s) of the Convertible Bonds such amount of the outstanding principal amount (in HK$1,000,000 or multiples thereof) as may be determined by the Company.

• The Company shall redeem the Convertible Bonds by repaying the holder(s) of the Convertible Bonds all outstanding principal amount on the Maturity Date.

• Transferability : The Convertible Bonds are freely transferable by the holders in such principal amount in multiples of HK$1,000,000, provided that no Convertible Bonds may be transferred to any connected persons of the Company without the prior written consent of the Company.

• Voting rights : Holders of the Convertible Bonds shall not be entitled to attend or vote at any meetings of the Company by reason only of it being a holder of the Convertible Bonds.

• Listing : No application will be made for the listing of the Convertible Bonds on the Stock Exchange or any other stock exchange.

• The Company will apply to the Stock Exchange for the listing of and permission to deal in the Conversion Shares to be allotted and issued upon exercise of the conversion rights attached to the Convertible Bonds.

• Ranking : The Conversion Shares will, when allotted and issued, rank pari passu in all respects among themselves and with all other fully paid Shares in issue.

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LETTER FROM THE BOARD

• Events of default : Pursuant to the terms and conditions of the Convertible Bonds, a holder of the Convertible Bonds may give notice to the Company that the Convertible Bonds are immediately due and payable upon occurrence of any of the following events or circumstances:

• (a) the Company fails to pay the principal on the Convertible Bonds when due on the Maturity Date; or

• (b) the Company defaults in performance or observance or compliance with any of its other obligations set out in the Subscription Agreement which default is incapable of remedy or, if capable of remedy, is not in the reasonable opinion of the holder of the Convertible Bonds remedied within 14 days after notice of such default shall have been given to the Company by the holder of the Convertible Bonds; or

• (c) any present or future indebtedness of the Company for or in respect of any bonds, debentures, notes or similar instruments of indebtedness or any other monies borrowed or raised becomes due and payable prior to its stated maturity otherwise than at the option of the Company, or is not paid when due or as the case may be, within any applicable grace period and the amount of such indebtedness exceeds the equivalent of HK$10,000,000; or

• (d) an security holder takes possession or a receiver, manager or other similar officer is appointed of the whole or any material part of the undertaking, property, assets or revenues of the Company; or

• (e) the Company becomes insolvent or the Company shall initiate or consent to proceedings relating to itself under any applicable bankruptcy, composition or insolvency law or scheme of arrangement while insolvent and such proceedings shall not have been discharged or stayed within a period of 30 days (or such longer period as the holder of the Convertible Bonds may consider appropriate); or

• (f) an order of court is made or an effective resolution of shareholders is passed for the winding up of the Company or the Company ceases or threatens to cease carrying on all or substantially all or a material part of its business or operations; or

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LETTER FROM THE BOARD

• (g) a moratorium is agreed or declared in respect of any indebtedness of the Company or any governmental authority or agency seizes, compulsorily purchases, expropriates or nationalizes all or a substantial part of the assets of the Company; or

• (h) a distress, attachment, execution or other legal process is levied, enforced or sued out on or against all or any part of the property, assets or revenues of the Company and is not discharged or stayed within 45 days (or such longer period as the holder of the Convertible Bonds may consider appropriate in relation to the event concerned and confirm so in writing); or

• (i) proceedings shall have been initiated (that is, issued and served) against the Company under any applicable bankruptcy, composition or insolvency law or scheme of arrangement while insolvent and such proceedings shall not have been discharged or stayed within a period of 60 days (or such longer period as the holder of the Convertible Bonds may consider appropriate and confirm so in writing); or

• (j) any warranty is or proves to have been incorrect or misleading in any material respect when made or deemed to be made, or there is a material breach by the Company of any warranty or obligation under the Subscription Agreement;

• (k) any action, condition or thing (including the obtaining or effecting of any necessary consent, approval, authorisation, exemption, filing, licence, order, recording or registration) at any time required to be taken, fulfilled or done in order (i) to enable the Company lawfully to enter into, exercise its rights and perform and comply with its obligations under the Convertible Bonds, (ii) to ensure that those obligations are legally binding and enforceable and (iii) to make the Convertible Bonds admissible in evidence in the courts of Hong Kong is not taken, fulfilled or done by the requisite time or, if in the opinion of the holder of the Convertible Bonds such situation is capable of remedy, within 30 days of the time when the Company becomes (or ought reasonably to have become) aware of the same; or

• (l) it is or will become unlawful for the Company to perform or comply with any one or more of its obligations under the Convertible Bonds.

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LETTER FROM THE BOARD

INFORMATION OF THE SUBSCRIBER

The Subscriber is (i) a company incorporated in the British Virgin Islands with limited liability; (ii) principally engaged in investment holding; (iii) wholly-owned by Mr. Yu, who is a controlling Shareholder; and (iv) interested in 427,897,500 Shares, representing approximately 15.85% of the total issued share capital of the Company as at the Latest Practicable Date.

REASONS FOR THE SUBSCRIPTION AND USE OF PROCEEDS

The Group is principally engaged in the provision of (i) environmental services including cleaning services, pest management services, and waste management and recycling services; airline catering support services; and (ii) money lending services.

As announced by the Company on 5 June 2017, the Company had made applications to (i) the SFC for licenses to permit UISL to carry out Type 1 (dealing in securities) and Type 2 (dealing in futures contracts), and UIAML to carry out Type 4 (advising on securities) and Type 9 (asset management) regulated activities under the SFO; and (ii) the FMA to register UCL as financial services provider in New Zealand to carry out forex brokerage business in New Zealand. The Board considers the development of the aforementioned new businesses will enable the Company to diversify its businesses and broaden its revenue base and would be in the interests of the Company and the Shareholders as a whole. As at the Latest Practicable Date, none of the abovementioned licenses and registration has been granted by either SFC or FMA. It is expected the abovementioned licenses and registration will be granted and permitted by the end of August 2017.

Depending on the actual performance of the Union Group, including but not limited to the scale of operation, the number of customers and prime broker accounts, the margins to be provided to customers, the Company will review the funding needs of this new financial segment from time to time. If there is any further funding needs, the Company may raise capital by way of, including but not limited to, rights issue, open offer, placing of shares and issue of securities. However, as at the Latest Practicable Date, the Company has no such fund raising plan.

Upon Completion, the gross proceeds and net proceeds (after deducting relevant expenses) from the Subscription will be HK$50,000,000 and approximately HK$49,000,000 respectively. The Company intends to apply the net proceeds from the Subscription (i) as to approximately HK$5.0 million for the set up costs of the Union Group including UISL, UIAML and UCL; (ii) as to approximately HK$36.0 million for the deposits to be maintained in the prime broker accounts to carry out the margin securities and forex brokerage businesses; (iii) as to approximately HK$4.0 million for the development of the online trading platform for UISL, UIAML and UCL. The expected investment costs for the online trading platform will be approximately HK$7.0 million, while phase one of the online trading platform is expected to be launched in October 2017; and (iv) as to approximately HK$4.0 million for the general working capital of the Company, including but not limited to the remuneration of the management of the Union Group and the operating expenses of the Union Group.

– 13 –

LETTER FROM THE BOARD

In the event that the aforementioned license applications and/or registration by UISL, UIAML or UCL are not approved by the SFC or the FMA, the Company may utilise the proceeds from the Subscription to early redeem the Convertible Bonds and/or for the general working capital of the Group.

As at the Latest Practicable Date, approximately HK$38.6 million out of the net proceeds of HK$47.0 million from the Rights Issue (as defined below) had been utilized, resulting to a remaining proceed of approximately HK$8.4 million. Such remaining proceeds are expected to be utilized as intended to expand the operations of cleaning business in Shenzhen, the PRC and as pledged bank deposits as banks’ guarantees on the performance bonds. Please refer to the section headed “Equity fund raising activity during the past twelve months” of this circular for further information.

Having considered that (i) the reasons and benefits and the intended usage of the proceeds from the Subscription for the development of the new financial segment of the Group as discussed above; and (ii) the licenses applications and/or registration by UISL, UIAML or UCL are expected to be granted and permitted in a short period of time, e.g. by the end of August 2017, the Directors consider that (i) the Subscription will provide the Group additional and necessary financial resources in a timely manner to further expand and develop its businesses; and (ii) the terms of the Subscription Agreement are fair and reasonable and are in the best interests of the Company and the Shareholders as a whole.

EFFECTS ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

For illustration purpose, assuming there will not be any change in the issued share capital of the Company from the Latest Practicable Date up to Completion, set out below is the shareholding structure of the Company (i) as at the Latest Practicable Date; (ii) following Completion and the maximum conversion of the Convertible Bonds without triggering a mandatory offer obligation under Rule 26 of the Takeovers Code; and (iii) upon Completion and assuming full conversion of the Convertible Bonds at the Conversion Price:

Mr. Yu (Notes 1 and 3) The Subscriber (Notes 1, 2 and 3) Sub-total Other public shareholders Total	As at the L Number of Shares 544,314,000 427,897,500 972,211,500 1,727,788,500 2,700,000,000	atest Practicable Number of consolidated Shares (Note 4) 54,431,400 42,789,750 97,221,150 172,778,850 270,000,000	Date % 20.16 15.85 36.01 63.99 100.00	following Completion and the maximum conversion of the Convertible Bonds without triggering a mandatory offer obligation under Rule 26 of the Takeovers Code Number of Shares Number of consolidated Shares (Note 4) % 544,314,000 54,431,400 19.53 514,653,145 51,465,314 18.47 1,058,967,145 105,896,714 38.00 1,727,788,500 172,778,850 62.00 2,786,755,645 278,675,564 100.00	Upon Completion and assuming full conversion of the Convertible Bonds at the initial Conversion Price Number of Shares Number of consolidated Shares (Note 4) % 544,314,000 54,431,400 15.41 1,261,230,833 126,123,083 35.69 1,805,544,833 180,554,483 51.10 1,727,788,500 172,778,850 48.90 3,533,333,333 353,333,333 100.00	Upon Completion and assuming full conversion of the Convertible Bonds at the initial Conversion Price Number of Shares Number of consolidated Shares (Note 4) % 544,314,000 54,431,400 15.41 1,261,230,833 126,123,083 35.69 1,805,544,833 180,554,483 51.10 1,727,788,500 172,778,850 48.90 3,533,333,333 353,333,333 100.00
						51.10 48.90
						100.00

Notes:

1. As at the Latest Practicable Date, Mr. Yu is beneficially interested in 972,211,500 Shares, of which 427,897,500 Shares are owned by the Subscriber, which is wholly owned by Mr. Yu.

– 14 –

LETTER FROM THE BOARD

1. The Convertible Bonds are subject to restrictions such that upon the conversion of which, the Subscriber and its respective associates, together with any parties acting in concert (as defined in the Takeovers Code) with them, will not trigger a mandatory offer obligation under Rule 26 of the Takeovers Code, unless (a) such conversion is permissible under the Takeovers Code following the application by the holder of the Convertible Bonds and granting by the Executive of a whitewash waiver and the approval of the Shareholders in this regard; or (b) such holder of the Convertible Bonds has fulfilled sufficient financial resources to make a general offer pursuant to Rule 26 of the Takeovers Code.

2. The Subscriber and Mr. Yu together are subject to the 2% creeper under Rule 26 of the Takeovers Code in relation to the acquisition or disposal of the Shares.

3. For illustration purpose, these figures represent the number of consolidated Shares assuming that the share consolidation of every ten (10) issued and unissued Shares of HK$0.001 each into one (1) consolidated share of HK$0.01 each as proposed by the Company on 20 June 2017 had taken effect at the relevant time. Please refer to the announcement dated 20 June 2017 and the circular dated 10 July 2017 of the Company for further details of the share consolidation.

EQUITY FUND RAISING ACTIVITY DURING THE PAST TWELVE MONTHS

Set out below is the equity fund raising activity of the Company during the past twelve months immediately preceding the Latest Practicable Date:

Date of			Intended use of	Actual use of net
announcement	Description	Net proceeds raised	proceeds	proceeds (approximate)
21 December 2016	The proposed offer by	Approximately HK$47	(i) approximately	(i) approximately
	the Company by way	million	HK$25.5 million	HK$2.1 million was
	of rights issue on the		will be utilized for	utilized for the set up
	basis of one (1) rights		the set up of the	of offices and
	Share for every two (2)		head office in	operations of
	Shares at the		Shenzhen (Note 1);	cleaning business in
	subscription price of			Shenzhen,
	HK$0.054 per rights		(ii) approximately	PRC (Note 2);
	share (the “Rights		HK$15 million will
	Issue”).		be utilized for the	(ii) HK$35 million was
			expansion of	granted as a loan
			money lending	under the money
			services; and	lending
				business (Note 1); and
			(iii)the remaining
			balance of	(iii)approximately
			approximately	HK$1.5 million was
			HK$6.5 million	utilized as the
			will be utilized as	pledged bank
			the pledged bank	deposits as banks’
			deposits and the	guarantees on the
			working capital of	performance bonds
			the Group.	issued for due
				performance of the
				environmental
				service contracts.

Note:

1. as disclosed in the announcement of the Company dated 28 June 2017, the Board has resolved to reallocate HK$20.0 million out of such intended usage to finance the loan in the principal amount of HK$20.0 million granted by Union Finance Limited, an indirect wholly-owned subsidiary of the Company, to an independent third party pursuant to the loan agreement dated 28 June 2017 entered into between the said parties.

– 15 –

LETTER FROM THE BOARD

1. The Company has rented an office premise as its head office for the operations of its cleaning business in Shenzhen, PRC. The renovation work is currently on-going and is expected to complete by end of July 2017. The rental and the renovation work is financed by the net proceeds allocated for such purpose from the Rights Issue.

Save as disclosed above, the Company has not conducted any equity fund raising activities in the past twelve months immediately preceding the Latest Practicable Date.

GEM LISTING RULES IMPLICATIONS

As at the Latest Practicable Date, the Subscriber is wholly-owned by Mr. Yu, a controlling shareholder who is beneficially interested in 972,211,500 Shares (representing approximately 36.01% of the total issued share capital of the Company) of which 427,897,500 Shares are owned by the Subscriber (representing approximately 15.85% of the total issued share capital of the Company).

Accordingly, the Subscriber is an associate of Mr. Yu and a connected person of the Company under the GEM Listing Rules. The Subscription constitutes a connected transaction of the Company under the GEM Listing Rules and is subject to the announcement, reporting and Independent Shareholders’ approval requirements pursuant to the GEM Listing Rules.

GENERAL

The Independent Board Committee comprising all the independent non-executive Directors has been established to advise the Independent Shareholders on the Subscription Agreement and the transactions contemplated thereunder. The Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

Completion is conditional upon satisfaction of certain conditions precedent under the Subscription Agreement and therefore may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Shares and if they are in any doubt about their position, they should consult their professional advisers.

EGM

A notice convening the EGM to be held at 6/F., Causeway Bay Function Room, L’hotel Causeway Bay Harbour View Hong Kong, 18 King’s Road, Causeway Bay, Hong Kong on 8 August 2017 at 11:00 a.m. or any adjournment thereof is set out on pages 48 to 49 of this circular. A proxy form for use at the EGM is enclosed with this circular. Whether or not you are able to attend the meeting in person, you are requested to complete the proxy form in accordance with the instructions printed thereon and return the same to the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish and in such event, the instrument appointing a proxy shall be deemed to be revoked.

– 16 –

LETTER FROM THE BOARD

Any Shareholder who is interested in the Subscription shall abstain from voting on the resolution(s) to approve the Subscription Agreement and the transactions contemplated thereunder at the EGM. To the best of the Director’s knowledge, information and belief after having made all reasonable enquiries, save for the Subscriber and Mr. Yu who in aggregate are interested in 972,211,500 Shares (representing approximately 36.01% of the total issued share capital of the Company), no Shareholder is interested in the Subscription and will be required to abstain from voting on the resolution(s) to approve the Subscription Agreement and the transactions contemplated thereunder at the EGM.

RECOMMENDATION

The Subscription is not in the ordinary and usual course of business of the Company. The Board considers that the terms of the Subscription Agreement are on normal commercial terms and fair and reasonable, and the entering into of the Subscription Agreement is in the interest of the Company and the Shareholders as a whole. Accordingly, the Directors would recommend the Independent Shareholders to vote in favour of the resolution(s) approving the Subscription Agreement and the transactions contemplated thereunder at the EGM.

ADDITIONAL INFORMATION

Your attention is drawn to the letter from the Independent Board Committee set out on pages 18 to 19 of this circular, the letter from the Independent Financial Adviser set out on pages 20 to 43 of the circular, which contain their advices in respect of the terms of the Subscription Agreement and the transactions contemplated thereunder and the information set out in the appendix of this circular.

By order of the Board PPS International (Holdings) Limited Ye Jingyuan Chief Executive Officer and Executive Director

– 17 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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PPS INTERNATIONAL (HOLDINGS) LIMITED 寶聯控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8201)

21 July 2017

To the Independent Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE

We refer to the circular of the Company to the Independent Shareholders dated 21 July 2017 (the “ Circular ”) of which this letter forms part. Capitalised terms defined in the Circular shall have the same meanings when used herein unless the context otherwise requires.

We have been appointed by the Board as members to constitute the Independent Board Committee and to advise the Independent Shareholders in respect of the terms of the Subscription Agreement and the transactions contemplated thereunder.

We wish to draw your attention to the letter from the Board on pages 5 to 17 of the Circular, which sets out details of the Subscription Agreement and the transactions contemplated thereunder. We also wish to draw your attention to the letter from the Independent Financial Adviser on pages 20 to 43 of the Circular, which contains their advice to the Independent Board Committee and the Independent Shareholders in respect of the terms of the Subscription Agreement and the transactions contemplated thereunder.

The Subscription is not in the ordinary and usual course of business of the Company. Having taken into account the terms of the Subscription Agreement and the advice and recommendation of the Independent Financial Adviser, we consider that the Subscription Agreement is on normal commercial terms and that such terms are fair and reasonable so far as the interests of the Independent Shareholders are concerned, and the Subscription Agreement and the transactions contemplated thereunder are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders

– 18 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

to vote in favour of the resolution(s) which will be proposed at the EGM to approve the Subscription Agreement and the transactions contemplated thereunder (including the grant of the Specific Mandate).

Yours faithfully,

For and on behalf of the Independent Board Committee

Mr. Chui Chi Yun Robert

Mr. Kwong Tsz Ching, Jack Mr. Yu Xiufeng

Independent non-executive Directors

– 19 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the text of a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Subscription Agreement and the transactions contemplated thereunder, and is prepared for inclusion in this circular.

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21 July 2017

The Independent Board Committee and the Independent Shareholders

Dear Sirs,

CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Subscription Agreement and the transactions contemplated thereunder, details of which are set out in the letter from the Board (the “ Letter from the Board ”) contained in the circular issued by the Company to its Shareholders dated 21 July 2017 (the “ Circular ”), of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as those defined in the Circular unless the context otherwise requires.

On 15 June 2017 (after trading hours), the Company entered into the Subscription Agreement with the Subscriber, pursuant to which the Subscriber has conditionally agreed to subscribe for and the Company has conditionally agreed to issue the Convertible Bonds in the principal amount of HK$50,000,000, which would entitle the holder(s) thereof to convert the Convertible Bonds into a maximum of 833,333,333 Conversion Shares at the Conversion Price of HK$0.06 per Conversion Share (subject to adjustments) upon the full exercise of the conversion rights. The Subscription Amount of HK$50,000,000 payable by the Subscriber will be satisfied by cash at Completion.

As at the Latest Practicable Date, (i) the Subscriber is a substantial Shareholder holding 427,897,500 Shares, representing approximately 15.85% of the total number of issued Shares; (ii) the Subscriber is wholly-owned by Mr. Yu who is a controlling Shareholder beneficially interested in 972,211,500 Shares representing approximately 36.01% of the total number of issued Shares, of which 427,897,500 Shares are owned by the Subscriber (representing approximately 15.85% of the total number of issued Shares).

– 20 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Accordingly, the Subscriber is a connected persons of the Company for the purpose of the GEM Listing Rules. The Subscription constitutes a connected transaction of the Company under the GEM Listing Rules and is subject to the announcement, reporting and Independent Shareholders’ approval requirements pursuant to the GEM Listing Rules.

To the best of the Director’s knowledge, information and belief after having made all reasonable enquiries, save for the Subscriber and Mr. Yu who in aggregate are interested in 972,211,500 Shares, representing approximately 36.01% of the total number of issued Shares, no Shareholder is interested in the Subscription and will be required to abstain from voting on the resolution(s) to approve the Subscription Agreement and the transactions contemplated thereunder at the EGM.

THE INDEPENDENT BOARD COMMITTEE

The Independent Board Committee comprising all the independent non-executive Directors, namely Mr. Chui Chi Yun, Robert, Mr. Kwong Tsz Ching, Jack and Mr. Yu Xiufeng, has been formed to advise the Independent Shareholders on the Subscription Agreement and the transactions contemplated thereunder. We, Akron Corporate Finance Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

OUR INDEPENDENCE

As at the Latest Practicable Date, we did not have any relationship with or interest in the Company or any other parties that could reasonably be regarded as relevant to our independence. Apart from normal professional fees paid or payable to us in connection with this appointment as the Independent Financial Adviser, no arrangements exist whereby we had received or will receive any fees or benefits from the Company or any other parties that could reasonably be regarded as relevant to our independence. Accordingly, we consider that we are independent pursuant to the GEM Listing Rules.

BASIS OF OUR ADVICE

In formulating our advice and recommendation to the Independent Board Committee and the Independent Shareholders, we have relied on the statements, information, opinion and representations contained or referred to in the Circular and the statements, information, opinion and representations provided to us by the management of the Company and the Directors. We have assumed that all information and representations contained or referred to in the Circular and all information and representations which have been provided by the management of the Company and the Directors, for which they are solely and wholly responsible, were true, accurate and complete at the time when they were made and continue to be so as at the Latest Practicable Date. We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors as set out in the Circular were reasonably made after due and careful inquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and representations contained in the Circular.

– 21 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, conducted any independent in-depth investigation into the business and affairs of the Company, or its subsidiaries or associates, nor have we considered the taxation implication on the Group or the Shareholders as a result of the Subscription Agreement and the transactions contemplated thereunder. Our opinion is necessarily based on the financial, economic, market and other conditions in effect and the information made available to us as at the Latest Practicable Date. Shareholders should note that subsequent developments (including any material change in market and economic conditions) may affect and/or change our opinion and we have no obligation to update this opinion taking into account the events occurring after the Latest Practicable Date or to update, revise or reaffirm our opinion. In addition, nothing contained in this letter should be construed as a recommendation to hold, sell or buy any Shares or any other securities of the Company.

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources, we are not obligated to conduct any independent in-depth investigation into the accuracy and completeness of those information.

PRINCIPAL FACTORS CONSIDERED

In giving our recommendation to the Independent Board Committee and the Independent Shareholders in respect of the Subscription Agreement and the transactions contemplated thereunder, we have taken into consideration the following factors and reasons:

1. Background and financial information of the Group

The Group is principally engaged in (i) the provision of environmental and cleaning services (the “ Cleaning Services ”); and (ii) money lending services (the “ Money Lending Services ”). Cleaning Services include provision of (i) public area and office cleaning services for commercial buildings, residential complexes, shopping arcades, hotels and their tenants and public transport facilities; (ii) overnight kitchen cleaning services mainly for private club and hotels; (iii) external wall and window cleaning services; (iv) stone floor maintenance and restoration services; (v) pest control and fumigation services; (vi) waste management and disposal services and sales of recyclable waste collected during the Group’s operations; (vii) professional daily housekeeping and cleaning services for local boutique hotels, hostels and serviced apartments; (viii) secure and confidential waste destruction for commercial clients; (ix) sanitation services for yacht; (x) cleaning and waste management services for renovated apartment; and (xi) airline catering support services. Cleaning Services are the major revenue contributor to the Group. Following the Group’s attempt in seeking for other investment opportunities for broadening its income source, in December 2016, the Group commenced the Money Lending Services.

– 22 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Set out below is the key financial results of the Group for the two years ended 30 June 2016 and for the six months ended 31 December 2016 as extracted from the annual report of the Company for the year ended 30 June 2016 (the “ 2016 Annual Report ”) and the interim report of the Company for the six months ended 31 December 2016 (the “ 2017 Interim Report ”) respectively:

	For the six
	months
	ended 31	For the year	For the year
	December	ended 30	ended 30
	2016	June 2016	June 2015
	(unaudited)	(audited)	(audited)
	HK$’000	HK$’000	HK$’000
Revenue	141,012	269,438	202,192
Gross profit	20,039	28,263	23,704
Gross profit margin (%)	14.2%	10.5%	11.7%
Loss for the year/period	(4,561)	(51,205)	(27,249)
Loss attributable to shareholders	(4,492)	(51,058)	(27,205)
Net current assets	71,683	68,889	69,469
Total equity	113,713	118,423	76,640
Total borrowings	13,242	14,449	10,338
Cash and cash equivalents	46,735	48,747	45,425
Gearing ratio (Note)	11.6%	12.2%	13.5%

Note: Gearing ratio is defined as total borrowings over total equity.

The Group recorded audited consolidated revenue of approximately HK$269.4 million for the year ended 30 June 2016, representing an increase of approximately 33.3% from 2015. According to the 2016 Annual Report, the increase in revenue of the Group was mainly attributable to (i) an increase in the revenue arising from the environmental and cleaning services business in Hong Kong by approximately HK$54.9 million to approximately HK$255.5 million as a result of regular price increment for own tenanted service contracts and successful bid and renewal of a number of significant service contracts for commercial complexes and transportation service providers in Hong Kong; (ii) an increase in revenue of approximately HK$6.7 million from the auto beauty services business acquired in April 2015; (iii) the contribution of the revenue of approximately HK$1.0 million from the newly acquired environmental and cleaning services business in Shanghai, the PRC in May 2016; and (iv) the contribution of the revenue of approximately HK$4.6 million from the newly acquired property and car park management services business in Shenzhen, the PRC in April 2016.

The gross profit margin of the Group slightly decreased to approximately 10.5% for the year ended 30 June 2016 as compared to approximately 11.7% in the corresponding period in 2015. Such decrease in the gross profit margin was a result of (i) the inflation in direct labour and manpower services costs; and (ii) lower profit margin of some newly secured service contracts with a view to gain additional market share in environmental and cleaning services business in Hong Kong.

– 23 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Group recorded a significant increase in net loss which amounted to approximately HK$51.2 million for year ended 30 June 2016 (as compared to approximately HK$27.2 million for year ended 30 June 2015). Such increase in net loss was mainly attributable to increase in the selling and marketing expenses, administrative expenses and other losses of the Group for the year ended 30 June 2016 which amounted to approximately HK$78.9 million (as compared to approximately HK$41.6 million for the year ended 30 June 2015). The aforesaid increase in expenses by approximately 89.7% was mainly due to: (i) the increase in legal and professional fees by approximately HK$12.7 million in 2016 incurred for the professional advisory services for the Group’s operations, business developments and the legal issues; (ii) the recognition of the share-based payment expenses of approximately HK$6.6 million in relation to the grant of share options to eligible employees of the Group on 11 December 2015 which is one-off and non-cash in nature; (iii) the increase in marketing and administrative expenses of approximately HK$9.5 million for further development of the existing businesses and the newly acquired businesses and future potential development of businesses in the PRC; and (iv) the additional selling marketing expenses and administrative expenses of approximately HK$8.1 million incurred by the auto beauty service business and approximately HK$2.1 million incurred by the newly acquired environmental and cleaning business in Shanghai, the PRC in May 2016 and the newly acquired property and car park management services business in Shenzhen, the PRC in April 2016.

As disclosed in the 2017 Interim Report, the Group recorded unaudited consolidated revenue of approximately HK$141.0 million for the six months ended 31 December 2016 (as compared to approximately HK$128.9 million for the six months ended 31 December 2015), representing an increase of approximately 9.4%. The increase in revenue was mainly due to (i) an increase in revenue from the environmental and cleaning services business in Hong Kong; (ii) the contribution of the revenue from the newly acquired environmental and cleaning services business in Shanghai, the PRC; and (iii) the contribution of the revenue from the newly acquired property and car park management services business in Shenzhen, the PRC.

The gross profit margin of the Group also surged to approximately 14.2% for the six months ended 31 December 2016 from approximately 10.0% for the six months ended 31 December 2015. The increase in gross profit margin of the Group was mainly due to the improvement in the gross profit margin from the environmental and cleaning services business in Hong Kong as a result of (i) the reduction in direct labour and manpower services costs; and (ii) early termination of some loss-making service contracts during the period.

The net loss of the Group narrowed to approximately HK$4.6 million for the six months ended 31 December 2016 (as compared to approximately HK$19.7 million for the six months ended 31 December 2015) following the reduction of the selling and marketing expenses, administrative expenses and other losses of the Group for the six months ended 31 December 2016 which amounted to approximately HK$20.5 million (as compared to approximately HK$33.3 million for the six months ended 31 December 2015). Such decrease was mainly a net effect of (i) reduction of various expenses, such as entertainment, advertising and promotion expenses, legal and professional fees and office expenses as a result of implementation of the tight costs control procedures by the Group; (ii) the

– 24 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

recognition of the share-based payment expenses of approximately HK$6.6 million in relation to the grant of share options to eligible employees of the Group on 11 December 2015 which was one-off and non-cash in nature; and (iii) the additional general selling marketing expenses and administrative expenses incurred by the newly acquired environmental and cleaning business in Shanghai, the PRC in May 2015 and the newly acquired property and car park management services business in Shenzhen, the PRC in April 2016.

As at 31 December 2016, the Group recorded net current assets of approximately HK$71.6 million (as compared to approximately HK$68.9 million as at 30 June 2016) and cash and cash equivalents of approximately HK$46.7 million (as compared to approximately HK$48.7 million as at 30 June 2016). The gearing ratio was approximately 11.6% as at 31 December 2016 (as compared to approximately 12.2% as at 30 June 2016). We are given to understand that as the Group had making loss for the last two financial years, it is unlikely for the Group to obtain any bank financing without the pledge of assets and/or cash. Given the asset base of the Group, except for pledge of cash for securing a bank financing, the Group does not have any other assets acceptable to banks to be pledged for securing bank loans.

2. Reasons for and benefits of the Subscription and use of net proceeds

As advised by the management of the Company (the “ Management ”), we understand that the Group has tried to seek for other investment opportunities in order to broaden the income source. In December 2016, the Group commenced its Money Lending Services upon obtaining the money lenders licence with loan portfolio amounted to HK$15 million as at 31 December 2016. Since the commencement of the Money Lending Services, it has been generating satisfactory revenue and returns for the Group with expanding loan portfolio. As at 30 June 2017, the loan portfolio of the Group was HK$75 million with interest rates ranging from 18% to 21.6% per annum which resulted in monthly interest income of approximately HK$1.2 million. The Group continues to look for potential investment opportunities and explore business opportunities in order to diversifying its business so as to minimize the business risks and to provide steady stream of income to the Group in the long run.

Subsequent to the commencement of the Money Lending Services, as disclosed in the announcement of the Company dated 5 June 2017, the Company had made applications to (i) the SFC for licenses to permit UISL to carry out Type 1 (dealings in securities) and Type 2 (dealings in futures contracts), and UIAML to carry out Type 4 (advising on securities) and Type 9 (asset management) regulated activities under the SFO; and (ii) the FMA for registration of UCL as financial service provider in New Zealand and perform forex brokerage services in New Zealand (collectively the “ New Businesses ”). As at the Latest Practicable Date, none of the abovementioned licenses and registration has been granted by either the SFC or the FMA. The Management expects the abovementioned licenses and registration will be granted and permitted by the end of August 2017.

– 25 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We have discussed the prospect and development of the New Business with the Management and we are given to understand that:

• (i) according to the “HKEX Fact Book 2016” (the “ 2016 Fact Book ”) published by the Stock Exchange:–

• (a) the total trading turnover value has increased from approximately HK$17,155.73 billion in 2014 to approximately HK$26,090.62 billion in 2015 (representing a growth of approximately 52.1%) and has reduced to approximately HK$16,396.42 billion in 2016 and such reduction representing a decrease of approximately 4.4% and approximately 37.2% as compared to 2014 and 2015 respectively. Despite the reduction in trading turnover value in 2016, the total trading turnover was gradually increasing which demonstrated growth of approximately 14.8% from 2012 to 2013, approximately 12.4% from 2013 to 2014 and approximately 52.1% from 2014 to 2015. The reduction in trading turnover value in 2016 was mainly due to the factors such as concerns over subdued global growth and uncertainties associated with the timing of US interest rate hikes, the heightened RMB depreciation risks, the decision to exit the European Union by the United Kingdom;

• (b) the contract volume for all futures and options products (excluding stock options) for 2014 to 2016 was 67,895,178, 97,360,884 and 114,568,558 respectively, representing a growth of approximately 43.4% from 2014 to 2015 and approximately 17.7% from 2015 to 2016;

• (ii) according to the information published by the Census and Statistics Department of the HKSAR, the business receipts indices for the asset management industry (the “ Index ”) in the first quarter of 2012 was approximately 120 and reached approximately 180 in the fourth quarter of 2016, representing a growth of approximately 50%. The Index is in an upward trend since 2012 in general. It indicated the stable demand for asset management services; and

• (iii) according to the Triennial Central Bank Survey 2016 conducted by Bank for International Settlements, turnover in global forex market amounted to approximately US$5.1 trillion per day in April 2016 as compared with approximately US$3.3 trillion per day in April 2007, demonstrating a growth of approximately 54.5%.

Based on the foregoing, there is a growing demand in the financial services aspects and the Directors are optimistic towards the development of the New Businesses and consider it is an opportunity for the Group to tap into the financial services industry and will be beneficial to the Company and the Shareholders as a whole.

– 26 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Following our discussion with the Management regarding the New Businesses, we were made aware that the Union Group will provide brokerage services and margin financing in respect of its securities and futures trading and forex brokerage businesses. As such, it will generate brokerage income and interest from margin financing to the Group and will provide a new income stream to the Group. Therefore, the Board considers that upon development and full operation of the New Businesses, it will enable the Group to diversify its businesses and broaden its revenue base and would be in the interests of the Company and the Shareholders as a whole.

We are also given to understand that two existing senior management of the Group, namely (i) Mr. Ye Jingyuan, the chief executive officer of the Company and an executive Director; and (ii) Mr. Benjamin Yeung, the chief financial officer of the Company, possess experience and expertise in the New Businesses and they will be overseeing the New Businesses.

Mr. Ye Jingyuan, (“ Mr. Ye ”) is (i) chief executive officer and an executive Director; and (ii) founder and chief executive officer of the Union Group. Mr. Ye is familiar with the securities and global futures markets. Mr. Ye has previously worked with Bank of America Merrill Lynch from 2007, of which he has 9 years of working experience in global markets. He also has extensive experience in private and public equity transactions, risk and portfolio management. Mr. Ye holds a Master degree of Applied Statistics from the University of Oxford, and a Bachelor degree in Mathematics, Operational Research, Statistics and Economics from the University of Warwick. In respect of the New Businesses, Mr. Ye is responsible for (i) devising the business strategy and priorities for the Union Group’s products and services; (ii) overseeing business development of the Union Group; and (iii) managing the Union Group’s business partner relationships. Mr. Ye will also serve as the responsible officer (the “ RO ”) of Type 1 (dealings in securities) and Type 2 (dealings in futures contract) regulated activities in UISL.

Mr. Benjamin Yeung (“ Mr. Yeung ”) is the chief financial officer of the Company. Mr. Yeung has over 10 years of experiences in corporate finance industry, including but not limited to, initial public offering, merger and acquisition, funds raising exercise, rights issue and open offer. Mr. Yeung graduated from the Hong Kong University of Science and Technology in 2004 with a Bachelor Degree in Mathematics majoring in statistics. In respect of the New Businesses, Mr. Yeung is responsible for (i) directing the organisation budget to meet financial requirement of the Union Group; (ii) managing the financial risk of the Union Group; (iii) developing economic strategy and financial forecast to satisfy the future growth of the Union Group; and (iv) overseeing the Union Group’s operation in order to ensure its compliance with the GEM Listing Rules and the Takeovers Code.

Alongside with the experience and involvement of Mr. Ye and Mr. Yeung in supervising and overseeing the New Businesses as discussed above, the New Businesses will also be managed, supervised and monitored by senior management of the Union Group who possess profound experience and expertise.

– 27 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The proposed managing director of UISL (the “ MD A ”) will be responsible for overseeing and developing the overall business activities of UISL. MD A possesses over 15 years of financial services experiences with leading financial institutions and is familiar with business operation of a securities firm. MD A has been a RO for Type 1 (dealings in securities) and Type 2 (dealings in futures contract) regulated activities since 2015.

The proposed managing director of UIAML (the “ MD B ”) will be responsible for supervising the overall business activities of the UIAML. MD B has over 10 years of solid working experience in financial and asset management in Hong Kong and Taiwan. MD B has been a RO for Type 4 (advising on securities) and Type 9 (asset management) regulated activities since 2012.

In view of the foregoing, taking into account that (i) the New Businesses will be managed and developed by the existing management of the Group coupling with the senior management of the Union Group who possess related experiences and expertise for the New Businesses; and (ii) the New Businesses will provide an additional source of income to the Group, we concur with the view of the Management that the Subscription which serves to finance the development of the New Businesses for broadening the revenue base of the Group is in the interests of the Company and the Shareholders as a whole.

As stated in the Letter from the Board, the gross proceeds and the net proceeds from the Subscription are estimated to be approximately HK$50,000,000 and HK$49,000,000 respectively. The Company intends to apply the net proceeds as follows:

• (i) approximately HK$5 million as set up costs of the Union Group including UISL, UIAML and UCL;

• (ii) approximately HK$36 million as deposits to be maintained in the prime broker accounts to carry out the margin securities and forex brokerage businesses;

• (iii) approximately HK$4 million for the development of the online trading platform for UISL, UIAML and UCL. The expected investment costs for the online trading platform will be approximately HK$7 million, while phase one of the online trading platform is expected to be launched in October 2017; and

• (iv) approximately HK$4 million for the general working capital of the Company, including but not limited to the remuneration of the management of the Union Group and the operating expenses of the Union Group.

The Management considers that it is essential for the Union Group to obtain services from prime broker for the New Businesses not only for its operations but also to enable the Union Group to operate the New Businesses on an enhanced scale given the leverage and liquidity offered by the prime broker. In order to receive services and enjoy leverage from prime broker, the Union Group has to place deposit to prime broker. At the same time, the Union Group has to maintain sufficient level of liquidity of not less than the specified amounts according to the financial resources rules as stipulated under the SFO (the “ Liquidity Requirement ”). As such, considering the difficulty in obtaining bank financing,

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

the necessity for the Group to place deposits in order to open prime brokerage accounts and the Liquidity Requirement, the Management intends to apply majority of fund from the Subscription for the deposits to be placed to prime broker for securing their services.

As stated in the Letter from the Board, save for the Rights Issue which was completed on 13 February 2017, the Company has not conducted any equity fund raising activity in the 12 months immediately preceding the Latest Practicable Date.

As at 30 June 2017, cash and bank balances of the Group (excluding pledged deposits) was approximately HK$47.8 million, of which (i) approximately HK$20.0 million is earmarked for funding requirement for setting up and operation of the New Businesses, such as paid-up capital requirement, the Liquidity Requirement and operating needs of the Union Group; and (ii) approximately HK$27.8 million will be available for the development of the Cleaning Services (the “ Available Cash ”), of which approximately HK$8.4 million, being the unutilized proceeds from the Rights Issue are expected to be utilized as intended to expand the operations of cleaning business in Shenzhen, the PRC and as pledged bank deposits as banks’ guarantees on the performance bonds. According to the 2017 Interim Report, net cash used in operating activities was approximately HK$17.0 million for the six months ended 31 December 2016. Furthermore, as disclosed in the announcement of the Company dated 20 June 2017, based on the management accounts of the Group for the ten months ended 30 April 2017, the Group recorded (i) a monthly average administrative expenses of approximately HK$1.7 million; and (ii) a monthly average costs of services of approximately HK$19.8 million, which aggregated to monthly expenses of approximately HK$21.5 million (the “ Monthly Expenses ”) in relation to the operation of the Cleaning Services in both Hong Kong and the PRC. The Available Cash will provide buffer to cover the Monthly Expenses for slightly over one month. In addition, given the nature of the Money Lending Services which requires readily available fund for its operation and the expanding loan portfolio of the Money Lending Services, it will be beneficial for the Group to reserve additional financial resources for development of its existing businesses.

Although the licenses and registration for the New Businesses have not yet been obtained, we are advised by the Management that it is essential to perform certain preparation work, being prerequisite for obtaining relevant licenses, such as lease of new office and employment of ROs, compliance officer and settlement personnel etc. Furthermore, it will be crucial for the Group to maintain certain bank balances to initiate discussion with potential prime brokers.

Based on the foregoing, after taking into account (i) the reasons and benefits and the intended usage of the proceeds the Subscription for the development of the New Businesses as discussed above; (ii) the Group is in the course of making application for licenses and/or registration from relevant regulatory authorities for the New Businesses and such approval is anticipated to be granted in a short period of time, expectantly by August 2017; (iii) the Group will require readily available fund for conducting preparation work before relevant approval is granted and upon commencement of the New Businesses for capturing potential opportunities in a timely manner; (iv) current cash and bank balance of the Group will only provide slight buffer for the Group’s existing businesses; and (v) given the Group’s proposal for the New Businesses, it will be beneficial for the Group to obtain additional funding for facilitating development of the New Businesses and to provide extra buffer for development

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

of the Group’s existing businesses, we concur with the view of the Management that the Subscription will provide the Group additional and necessary financial resources in a timely manner to further expand and develop its businesses.

The Management has considered other fund raising alternatives before resolving to the Subscription, such as debt financing and equity financing. In respect of debt financing, it will inevitably incur a higher interest rate as compared to the zero coupon rate of the Convertible Bonds. In respect of equity financing such as placing and subscription of new shares, rights issue and open offer, given the loss-making position of the Group for the last two financial years, the Management considers that a substantial discount of the subscription price to the current market price of the Shares might be required in order to attract the Shareholders to participate in the equity financing. As such, the Management considers that funds raising through the issue of the Convertible Bonds are a better way at this stage.

Having considered the above, we are of the view and concur with the Directors that the issue of the Convertible Bonds is an appropriate means of raising additional capital for the Company since (i) the issue of the Convertible Bonds incurs no interest burden and finance costs of the Group; (ii) there would not be an immediate dilution effect on the shareholding of the existing Shareholders; (iii) the Company has the right to early redeem the Convertible Bonds (in whole or in part); and (iv) it may enlarge the capital base of the Company should the Convertible Bonds be converted into Conversion Shares.

After taking into account of the aforesaid, we are of the view that the Subscription is in the interest of the Company and the Shareholders as a whole.

3. The Subscription Agreement

On 15 June 2017 (after trading hours), the Company entered into the Subscription Agreement with the Subscriber in relation to the Subscription. The Subscription Amount of HK$50,000,000 payable by the Subscriber for the Subscription will be satisfied by cash at Completion.

Details of the Subscription Agreement are set out under the section headed “The Subscription Agreement” in the Letter from the Board.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

4. Principle terms of the Convertible Bonds

The principal terms of the Convertible Bonds to be subscribed by the Subscriber pursuant to the Subscription Agreement are summarized below. Further details of the terms of the Convertible Bonds are set out under the section headed “Principal Terms of the Convertible Bonds” in the Letter from the Board.

Principal amount: HK$50,000,000

Issue price: 100% of the principal amount Maturity date: The date falling on the first

The date falling on the first anniversary of the date of issue of the Convertible Bonds (the “ Maturity Date ”)

Interest rate: Conversion rights:

The Convertible Bonds shall not bear any interest

Holder of the Convertible Bonds will have the right, during the period commencing on the date of issue of the Convertible Bonds and ending on the Maturity Date, to convert the Convertible Bonds in whole or in part of the outstanding principal amount of the Convertible Bonds into Conversion Shares, provided that (i) the exercise of the conversion rights will not result in the Company being in breach of any provision of the GEM Listing Rules, including the requirement to maintain any prescribed minimum percentage of the issued share capital of the Company held by the public; or (ii) upon exercise of the conversion rights, the Subscriber and its respective associates, together with any parties acting in concert (as defined in the Takeovers Code) with them, will not trigger a mandatory offer obligation under Rule 26 of the Takeovers Code, unless (a) such conversion is permissible under the Takeovers Code following the application by the holder of the Convertible Bonds and granting by the Executive of a whitewash waiver and the approval of the Shareholders in this regard; or (b) such holder of the Convertible Bonds has fulfilled sufficient financial resources to make a general offer pursuant to Rule 26 of the Takeovers Code

Conversion Price:

The initial Conversion Price of HK$0.06 per Conversion Share

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Conversion Shares:

Based on the initial Conversion Price of HK$0.06 per Conversion Share, a maximum of 833,333,333 Conversion Shares will be allotted and issued upon exercise of the conversion rights attaching to the Convertible Bonds in full

Redemption:

The Company may voluntarily redeem all or any part of the Convertible Bonds at any time following the issue of the Convertible Bonds and prior to the Maturity Date by repaying the holder(s) of the Convertible Bonds such amount of the outstanding principal amount (in HK$1,000,000 or multiples thereof) as may be determined by the Company

The Company shall redeem the Convertible Bonds by repaying the holder(s) of the Convertible Bonds all outstanding principal amount on the Maturity Date

5. Analysis on the terms of the Convertible Bonds

The initial Conversion Price of HK$0.06 per Conversion Share represents:

• (i) a premium of approximately 3.45% over the closing price of HK$0.058 per Share quoted on the Stock Exchange on the date of the Subscription Agreement;

• (ii) a discount of approximately 0.66% to the average closing price of HK$0.0604 per Share quoted on the Stock Exchange for the last five trading days for the Shares immediately prior to date of the Subscription Agreement;

• (iii) a discount of approximately 1.64% to the average closing price of HK$0.061 per Share quoted on the Stock Exchange for the last ten trading days for the Shares immediately prior to date of the Subscription Agreement;

• (iv) a premium of approximately 0.84% over the adjusted net asset value of approximately HK$0.0595 per Share, based on (i) the consolidated net asset value of the Company of approximately HK$113,713,000 as at 31 December 2016 as extracted from the 2017 Interim Report; (ii) the net proceeds of approximately HK$47,000,000 arising from the Rights Issue (as defined in the Circular); and (iii) the total number of issued Shares as at the Latest Practicable Date; and

• (v) a premium of approximately 93.55% over the closing price of HK$0.031 per Share quoted on the Stock Exchange on the Latest Practicable Date.

As set out in the Letter from the Board, the Conversion Price was arrived at after arm’s length negotiation between the Company and the Subscriber with reference to, among others, the prevailing market price of the Shares. The Company had considered (i) the daily

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

closing prices of the Shares as quoted on the Stock Exchange during this year, e.g. from 3 January 2017 to 15 June 2017 (being the approximate six-month period prior to the date of the Subscription Agreement) (the “ Reference Period ”) and noted that the Conversion Price and the average closing prices of the Shares of approximately HK$0.0601 during the Reference Period are at par; and (ii) the trading liquidity of the Shares is relatively thin during the Reference Period.

In order to further assess the fairness and reasonableness of the Conversion Price, we have reviewed (i) the daily closing price of the Shares as quoted on the Stock Exchange from 16 June 2016 up to and including the date of the Subscription Agreement (the “ Review Period ”), being a period of one year prior to the date of the Subscription Agreement; (ii) the average daily trading volume of the Shares during the Review Period; and (iii) the comparison on the recent issuance of convertible bonds/notes by companies listed on the Stock Exchange.

(a) Historical Share price performance

Historical daily closing price per Share

==> picture [351 x 160] intentionally omitted <==

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

0.14
0.12
0.10
0.08
0.06
0.04
0.02
0
Daily closing price Initial Conversion Price
(HK$)
Share price
16/6/2016 15/7/2016 15/8/2016 12/9/2016 12/10/2016 10/11/2016 8/12/2016 10/1/2017 9/2/2017 9/3/2017 7/4/2017 11/5/2017 9/6/2017
----- End of picture text -----

Source: The website of the Stock Exchange (www.hkex.com.hk)

Notes:

1. The closing price of the Shares from 16 June 2016 to 10 January 2017 (both days inclusive) were adjusted for the effect of the Rights Issue, details of which were set out in the announcement of the Company dated 21 December 2016 and prospectus of the Company dated 20 January 2017.

2. Trading of Shares was suspended from 27 September 2016 to 3 October 2016 (both days inclusive).

– 33 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As shown in the chart above, the closing price of the Shares during the Review Period ranged from the lowest closing price of HK$0.051 per Share recorded on 28 April 2017 to the highest closing price of HK$0.119 per Share recorded on 22 June 2016 with an average closing price per Share of approximately HK$0.083. The Conversion Price of HK$0.06 represents a premium of approximately 17.6% over the lowest closing price per Share, a discount of approximately 49.6% to the highest closing price per Share and a discount of approximately 27.7% to the average closing price per Share during the Review Period.

We note that the Conversion Price is below the daily closing prices for most of the Review Period. The closing prices of the Shares has maintained at a level above HK$0.1 for approximately 84.1% of the time for the period from 16 June 2016 to 18 November 2016 (i.e. 90 trading days out of a total of 107 trading days) and showed a downward trend after reaching its peak on 22 June 2016. On 18 November 2016, the Company published an announcement regarding the lapse of a mandatory conditional cash offer made by the offeror to the Company where offer price for each Share was HK$0.13 (the “ November Announcement ”). Following publication of the November Announcement, closing price of Shares dropped from HK$0.115 on 18 November 2016 to HK$0.100 on 21 November 2016 and continued to decline significantly in November 2016 and December 2016 where the Rights Issue was announced by the Company on 21 December 2016. Closing price of the Shares decreased from HK$0.100 on 21 November 2016 to HK$0.071 on 30 December 2016, representing a decline of 29%.

Since 3 January 2017 until the date of the Subscription Agreement (the “ 2017 Period ”), price of the Shares are generally in a downward trend with monthly average closing price decreased from approximately HK$0.071 in January 2017 to approximately HK$0.053 in May 2017, representing a decrease of approximately 25.4%. During the 2017 Period, closing price of the Shares ranged from the lowest closing price of HK$0.051 per Share to the highest closing price of HK$0.079 per Share with an average closing price per Share of approximately HK$0.0601. The Conversion Price of HK$0.06 represents a premium of approximately 17.6% over the lowest closing price per Share, a discount of approximately 24.1% to the highest closing price per Share and equivalent to the average closing price per Share during the 2017 Period.

– 34 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(b) Historical trading liquidity of the Shares

We have further reviewed the trading liquidity of the Shares. The table below sets out the number of trading days, the average daily trading volume of the Shares traded in each month, and the respective percentages of the Shares’ monthly average daily trading volume as compared to (i) the total number of issued Shares held by the public Shareholders as at the Latest Practicable Date; and (ii) the total number of issued Shares as at the Latest Practicable Date during the Review Period:

				Percentage of
				average daily
			Percentage of	trading volume
			average daily	for the month to
		Average daily	trading volume	total number of
	Number of	trading volume	for the month to	issued Shares
	trading	of the Shares for	total number of	held by public
Month	days	the month	issued Shares	Shareholders
		(Note 1)	(Note 2)	(Note 3)
			(Approximately)	(Approximately)
2016
June	11	4,297,363	0.24%	0.57%
July	20	6,275,850	0.35%	0.83%
August	22	4,757,500	0.26%	0.33%
September	21	2,420,857	0.13%	0.21%
October	19	4,643,189	0.26%	0.40%
November	22	2,705,810	0.15%	0.23%
December	20	2,067,704	0.11%	0.18%
2017
January	19	2,583,476	0.14%	0.22%
February	20	3,171,657	0.12%	0.18%
March	23	916,217	0.03%	0.05%
April	17	747,176	0.03%	0.04%
May	20	412,300	0.02%	0.02%
June (Up to and
include the
date of the
Subscription
Agreement)	11	3,677,590	0.14%	0.21%
		Maximum	0.35%	0.83%
		Minimum	0.02%	0.02%
		Average	0.15%	0.27%

Source: The website of the Stock Exchange (http://www.hkex.com.hk)

– 35 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Notes:

1. Average daily trading volume of the Shares for the month equals to monthly total trading volume of the Shares divided by number of trading days in the respective month.

2. Based on 2,700,000,000 Shares in issue as at the Latest Practicable Date.

3. Based on 1,727,788,500 Shares held by the public Shareholders as at the Latest Practicable Date.

As illustrated from the table above, the average daily trading volume of the Shares during the Review Period was low. The lowest of the Group’s average daily trading volume was approximately 412,300 Shares in May 2017 and the highest was approximately 6,275,850 Shares in July 2016. The average daily trading volume of the Shares falls in the range of (i) approximately 0.02% to approximately 0.35% of the total number of issued Shares as at the Latest Practicable Date with an average of approximately 0.15%; and (ii) approximately 0.02% to approximately 0.83% of the total number of issued Shares held by the public Shareholders as at the Latest Practicable Date with an average of approximately 0.27%. As such, the trading of the Shares did not appear to be active during the Review Period.

(c) Comparison with other convertible bonds/notes

In order to assess the fairness and reasonableness of the major principal terms of the Convertible Bonds, we have reviewed the transactions announced by companies listed on the Stock Exchange, in which the transactions involved issue of convertible bonds/notes under the specific mandate (excluding the issuance for consideration/ acquisition) during the period from 16 June 2016 to the date of the Subscription Agreement (the “ CB Comparables ”), being 12-month period prior to the date of the Subscription Agreement and has not been terminated as at the date of the Subscription Agreement. Based on the aforesaid criteria and to the best of our knowledge, we have identified thirty-five (35) CB Comparables. Shareholders should note that the businesses, operations and prospects of the Company may not be the same as, or even substantially vary from, that of the CB Comparables; and we have not conducted any detailed investigation into the respective businesses and operations of the CB Comparables.

– 36 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We consider that the CB Comparables (i) adequately covered the prevailing market conditions and sentiments of the capital market in Hong Kong; (ii) such period represented recent structure of the convertible bonds/notes issues in Hong Kong; and (iii) the number of the CB Comparables identified demonstrate the market practice during the period and allow the Independent Shareholders to have a general understanding of recent issues of convertible bonds/notes being conducted in the capital market of Hong Kong. Our analysis on the CB Comparables is set out below.

						Premium/
					Premium/	(Discount) of
					(Discount) of	the
					the	conversion
					conversion	price
					price	over/(to)
					over/(to)	average
					closing price	closing price
					per share on	per share for
					the last	the last five
					trading day	trading days
					prior to/on	prior to/on
				Annual	the date of	the date of
	Stock	Date of		interest	the	the
Company	code	announcement	Maturity	rate	announcement	announcement
			year	%	%	%
Sino Golf Holdings	361	13 July 2016	5	Nil	(63.23)	(59.86)
Limited
Value Convergence	821	21 July 2016	2	2	(49.61)	(49.77)
Holdings Limited
Ground Properties	989	5 August 2016	2	8	(18.03)	(17.08)
Company Limited
SMI Culture	2366	8 August 2016	1	5	8.87	24.08
Sino Energy	1096	31 August 2016	2	7.5	11.44	12.78
International
Holdings Group
Limited
Lee & Man	1488	18 September	5	3	(5.60)	(6.80)
International		2016
Holdings Group
Limited
Sun Century Group	1383	20 September	2	Nil	4.00	3.20
Limited		2016
TC Orient Lighting	515	26 September	3	7	(67.21)	(60.82)
Holdings Limited		2016
Kiu Hung	381	28 October 2016	2	8	(13.39)	(18.52)
International
Holdings Limited
Lamtex Holdings	1041	21 November	2	2	–	(0.35)
Limited		2016

– 37 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

						Premium/
					Premium/	(Discount) of
					(Discount) of	the
					the	conversion
					conversion	price
					price	over/(to)
					over/(to)	average
					closing price	closing price
					per share on	per share for
					the last	the last five
					trading day	trading days
					prior to/on	prior to/on
				Annual	the date of	the date of
	Stock	Date of		interest	the	the
Company	code	announcement	Maturity	rate	announcement	announcement
			year	%	%	%
China Fortune	290	21 November	3	2	(82.90)	(81.40)
Financial Group		2016
Limited
Beijing Capital Juda	1329	25 November	N/A	0.01	(23.91)	(23.91)
Limited		2016	(Note 1)
C&D International	1908	4 December	N/A	4	(7.07)	(0.86)
Investment Group		2016	(Note 1)
Limited
Silverman Holdings	1616	22 December	2	5	4.31	11.21
Limited		2016
China Trends	8171	30 December	3	1	117.65	128.40
Holdings Limited		2016
Automated Systems	771	12 January 2017	3	Nil	(32.7)	(21.05)
Holdings Limited
China Huarong	1101	16 January 2017	2	7	16.28	13.90
Energy Company
Limited
Tesson Holdings	1201	17 January 2017	3	3	45.45	41.59
Limited			(Note 2)
National Investments	1227	9 February 2017	2	Nil	(64.29)	(60.82)
Fund Limited
China Digital Culture	8175	9 February 2017	5	5.5	34.15	29.41
(Group) Limited
Shanghai Zendai	755	24 February	3	4	69.23	69.23
Property Limited		2017
TUS International	872	1 March 2017	2	6	23.01	27.49
Limited
Eminence Enterprise	616	1 March 2017	5	3	1.91	(1.84)
Limited
New Concepts	2221	31 March 2017	5	6.5	1.45	(5.15)
Holdings Limited

– 38 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

						Premium/
					Premium/	(Discount) of
					(Discount) of	the
					the	conversion
					conversion	price
					price	over/(to)
					over/(to)	average
					closing price	closing price
					per share on	per share for
					the last	the last five
					trading day	trading days
					prior to/on	prior to/on
				Annual	the date of	the date of
	Stock	Date of		interest	the	the
Company	code	announcement	Maturity	rate	announcement	announcement
			year	%	%	%
China Soft Power	139	7 April 2017	2	Nil	–	17.18
Technology
Holdings Limited
REXLot Holdings	555	7 April 2017	5	3	25.00	24.14
Limited
Grand T G Gold	8299	11 April 2017	5	4	(72.22)	(73.83)
Holdings Limited
Victory City	539	25 April 2017	2	5	11.11	12.78
International
Holdings Limited
Larry Jewelry	8351	16 May 2017	2	7.5	106.90	118.02
International
Company Limited
Larry Jewelry	8351	16 May 2017	2	6.5	72.41	81.69
International
Company Limited
Code Agriculture	8153	25 May 2017	3	6	(40.20)	(25.25)
(Holdings) Limited
CASH Financial	510	26 May 2017	3	4	(3.13)	(2.82)
Services Group
Limited
China Ocean Fishing	8047	29 May 2017	2	13	(38.50)	(44.30)
Holdings Limited
E-Commodities	1733	2 June 2017	5	5	–	1.35
Holdings Limited
Kiu Hung	381	14 June 2017	2	9	14.29	17.19
International
Holdings Limited
		Maximum	5	13	117.65	128.40
		Minimum	1	Nil	(82.90)	(81.40)
		Average	2.94	4.36	(0.42)	2.26
The Company	8201	15 June 2017	1	Nil	3.45	(0.66)

– 39 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Notes:

1. The convertible bonds do not specific any fixed redemption date or maturity date.

2. The convertible bonds will mature in June 2036 and the conversion rights will be lapsed on the third anniversary to the date of issue of the convertible bonds.

Conversion Price

As illustrated in the table above, the conversion prices of the CB Comparables ranged from (i) a discount of approximately 82.90% to a premium of approximately 117.65% to the respective closing prices of the shares on the last trading day prior to/ on the date of the relevant announcements (the “ LTD Range ”), with an average discount of approximately 0.42% (the “ LTD Average ”); and (ii) a discount of approximately 81.40% to a premium of approximately 128.40% to the respective average closing prices of the shares on the last five consecutive trading days immediately prior to/on the date of the relevant announcements (the “ 5-Days Range ”), with an average premium of approximately 2.26% (the “ 5-Days Average ”). We note that (i) the premium of the Conversion Price of approximately 3.45% over the closing price per Share on the date of the Subscription Agreement falls within the LTD Range and is above the LTD Average; and (ii) the discount of the Conversion Price of approximately 0.66% to the average closing price for last five trading days immediately prior to date of the Subscription Agreement falls within 5-Days Range and is slightly below the 5-Days Average.

Taking into account (i) the Conversion Price is at premium over the closing price of the Shares on the date of the Subscription Agreement; (ii) the Subscription provides interest-free financing for the development of the New Business; and (iii) the offer of discount to the closing prices is a common market practice for accommodating the uncertainty that might emerge during the validity period of the convertible bonds, we consider that the Conversion Price is fair and reasonable.

Interest rate

As illustrated in the table above, the CB Comparables bear interest rates from nil to 13% per annum, with an average interest rate of approximately 4.36% per annum. The Convertible Bonds which bear no interest falls within the market range and is below the average interest charged by the CB Comparables. The interest-free Convertible Bonds will save the Group interest expenses. We therefore consider that the zero interest rate of the Convertible Bonds is fair and reasonable.

Maturity

As illustrated in the table above, the CB Comparables have the maturity ranged from one year to five years, with an average maturity of around three years. The Convertible Bonds with a maturity of one year falls within such market range. We therefore consider that the maturity of the Convertible Bonds is fair and reasonable.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Conclusion

In view of all the foregoing, we consider that the principal terms of the Convertible Bonds are fair and reasonable so far as the Independent Shareholders are concerned.

6. Financial effect of the Subscription

(a) Effects on earnings

We were advised by the Management that the liability portion of the Convertible Bonds will be carried at amortised cost using the effective interest method and the effective interest expenses (non-cash) of the Convertible Bonds will be charged to the consolidated statement of profit or loss subsequent to the Completion until the conversion and/or redemption of the Convertible Bonds in full.

(b) Effects on net assets

With the net asset value of the Group of approximately HK$113.7 million as at 31 December 2016 as set out in the 2017 Interim Report and the net proceeds of approximately HK$47 million arising from the Rights Issue, the adjusted consolidated net asset value of the Group was approximately HK$160.7 million.

Based on the total number of issued share capital of the Company of 2,700,000,000 Shares as at the Latest Practicable Date, the net asset value per Share is approximately HK$0.0595. In light of the aforesaid, the initial Conversion Price of the Convertible Bonds of HK$0.06 per Conversion Share represents a premium of approximately 0.84% over the consolidated net asset value per Share attributable to the Shareholders as at the Latest Practicable Date.

In the event of conversion of Convertible Bonds into Conversion Shares at the Conversion Price of HK$0.06 per Conversion Shares, assuming that all other things remain the same, it is estimated to result in an increase of the equity of the Group by the value of the Conversion Shares being converted at the Conversion Price and simultaneously as decrease in the Group’s liability. Therefore, the net asset value of the Group will be increased under the conversion.

(c) Effects on liquidity and working capital

It is noted that the Convertible Bonds carry no interest payment, therefore it will involve no cash outflow until redemption/repayment of the Convertible Bonds by the Group. As part of the net proceeds from the Subscription will be used for general working capital of the Group, accordingly, the liquidity and working capital position of the Group will be improved upon completion of the issue of the Convertible Bonds.

It should be noted that the aforementioned analyses are for illustrative purpose only and do not purport to represent how the financial position of the Group will be upon Completion.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

7. Possible dilution effect on the shareholding interests of the public Shareholders

The table below sets out the shareholding structure of the Company (i) as at the Latest Practicable Date; (ii) following the Completion and the maximum conversion of the Convertible Bonds without triggering a mandatory offer obligation under Rule 26 of the Takeovers Code; and (iii) upon Completion and assuming full conversion of the Convertible Bonds at the initial Conversion Price (assuming no other Shares are issued and/or repurchased by the Company from the Latest Practicable Date up to the Completion), for illustrative and reference purpose:

Mr. Yu (Note 1 and 3) The Subscriber (Notes 1, 2 and 3) Sub-total Other public shareholders Total	As at the Number of Shares 544,314,000 427,897,500 972,211,500 1,727,788,500 2,700,000,000	Latest Practicabl Number of consolidated Shares (Note 4) 54,431,400 42,789,750 97,221,150 172,778,850 270,000,000	e Date Approximate % 20.16 15.85 36.01 63.99 100.00	Following Completion and the maximum conversion of the Convertible Bonds without triggering a mandatory offer obligation under Rule 26 of the Takeovers Code (Note 3) Number of Shares Number of consolidated Shares (Note 4) Approximate % 544,314,000 54,431,400 19.53 514,653,145 51,465,314 18.47 1,058,967,145 105,896,714 38.00 1,727,788,500 172,778,850 62.00 2,786,755,645 278,675,564 100.00	Upon Completion and assuming full conversion of the Convertible Bonds at the initial Conversion Price Number of Shares Number of consolidated Shares (Note 4) Approximate % 544,314,000 54,431,400 15.41 1,261,230,833 126,123,083 35.69 1,805,544,833 180,554,483 51.10 1,727,788,500 172,778,850 48.90 3,533,333,333 353,333,333 100.00	Upon Completion and assuming full conversion of the Convertible Bonds at the initial Conversion Price Number of Shares Number of consolidated Shares (Note 4) Approximate % 544,314,000 54,431,400 15.41 1,261,230,833 126,123,083 35.69 1,805,544,833 180,554,483 51.10 1,727,788,500 172,778,850 48.90 3,533,333,333 353,333,333 100.00
						100.00

Notes:

1. As at the Latest Practicable Date, Mr. Yu is beneficially interested in 972,211,500 Shares, of which 427,897,500 Shares are owned by the Subscriber, which is wholly owned by Mr. Yu.

2. The Convertible Bonds are subject to restrictions such that upon the conversion of which, the Subscriber and its respective associates, together with any parties acting in concert (as defined in the Takeovers Code) with them, will not trigger a mandatory offer obligation under Rule 26 of the Takeovers Code, unless (a) such conversion is permissible under the Takeovers Code following the application by the holder of the Convertible Bonds and granting by the Executive of a whitewash waiver and the approval of the Shareholders in this regard; or (b) such holder of the Convertible Bonds has fulfilled sufficient financial resources to make a general offer pursuant to Rule 26 of the Takeovers Code.

3. The Subscriber and Mr. Yu together are subject to 2% creeper under Rule 26 of the Takeovers Code in relation to the acquisition or disposal of the Shares.

4. For illustration purpose, these figures represent the number of consolidated Shares assuming that the share consolidation of every ten (10) issued and unissued Shares of HK$0.001 each into one (1) consolidated share of HK$0.01 each as proposed by the Company on 20 June 2017 had taken effect at the relevant time. Please refer to the announcement dated 20 June 2017 and the circular dated 10 July 2017 of the Company for further details of the share consolidation.

Upon Completion and full conversion of the Convertible Bonds at the initial Conversion Price, 833,333,333 Conversion Shares will be allotted and issued, representing approximately 30.86% of the total number of issued Shares as at the Latest Practicable Date and approximately 23.58% of the total number of issued Shares as enlarged by the issuance of the Conversion Shares. Assuming that the Company does not issue and/or repurchase any

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Shares from the Latest Practicable Date up to Completion, the aggregate shareholding of the public Shareholders will decrease from approximately 63.99% as at the Latest Practicable Date to approximately 48.90% upon full conversion of the Convertible Bonds at the initial Conversion Price, representing a potential maximum dilution in public shareholding of approximately 15.09% in absolute terms and a potential dilution by approximately 23.58%.

Taking into account (a) the reasons for entering into the Subscription Agreement as set out under the section headed “Reasons for and benefits of the Subscription and use of net proceeds” in this letter; and (b) our conclusion on the terms of the Convertible Bonds as set out under the section headed “Analysis on the terms of the Convertible Bonds” in this letter, we consider that the above-mentioned potential dilution attributable to the conversion of the Convertible Bonds (assuming that there is no other change in the issued share capital of the Company) is acceptable.

RECOMMENDATION

Having considered the factors and reasons as stated above, we are of the opinion that (i) the nature of the Subscription is not in the ordinary and usual course of business of the Company but is in the interest of the Company and the Shareholders as a whole; and (ii) the Subscription Agreement and the transactions contemplated thereunder are on normal commercial terms, fair and reasonable so far as the Company and the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the EGM to approve the Subscription Agreement and the transactions contemplated thereunder.

Yours faithfully, For and on behalf of

Akron Corporate Finance Limited Ross Cheung Managing Director

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GENERAL INFORMATION

APPENDIX

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 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, 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 Executive

As at the Latest Practicable Date, save as disclosed below, none of the Directors and chief executives of the Company had any interests or short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO, Chapter 571 under the Laws of Hong Kong), which were notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including any interests and short positions which they have taken or deemed to have taken 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 Rules 5.46 to 5.67 of the GEM Listing Rules relating to securities transactions by Directors to be notified to the Company and the Stock Exchange.

					Percentage of
					total issued
					share capital
	Name of the				in the
	company in				company as
	which		Total number		at the Latest
	interest is	Capacity in which	of ordinary	Long/short	Practicable
Name of Director	held	interests are held	shares	position	Date
Ms. Mui Fong (Note)	The Company	Interests of spouse	972,211,500	Long	36.01%

Note: Mr. Yu is beneficially interested in 972,211,500 Shares, of which 427,897,500 Shares are owned by the Subscriber, which is in turn wholly owned by Mr. Yu. Ms. Mui Fong is the spouse of Mr. Yu and deemed to be interested in 972,211,500 Shares held by Mr. Yu in accordance with the SFO.

(b) Substantial Shareholders

So far as is known to the Directors or chief executive of the Company, save as disclosed below, there is no person (other than a Director or chief executive of the Company) who, as at the Latest Practicable Date, had an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO,

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GENERAL INFORMATION

APPENDIX

or, was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital, including options in respect of such capital, carrying rights to vote in all circumstances at general meeting of any other member of the Group.

					Percentage
					of total
					issued share
					capital in
					the
	Name of the				company as
	company in		Total		at the
	which	Capacity in	number of		Latest
Name of	interest is	which interests	ordinary	Long/short	Practicable
Shareholder	held	are held	shares	position	Date
Mr. Yu	The	Beneficial owner	544,314,000	Long	20.16%
	Company
Mr. Yu	The	Interested in	427,897,500	Long	15.85%
	Company	controlled
		corporation

3. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with any member of the Group or any associated company of the Company (excluding contracts expiring or determinable within one year without payment of compensation, other than statutory compensation).

4. INTERESTS IN CONTRACT OR ARRANGEMENT

Save for the Subscription Agreement, as at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement entered into by any member of the Group, which was subsisting and was significant in relation to the business of the Group.

5. INTERESTS IN ASSETS

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 proposed to be so acquired, disposed of by or leased to any member of the Group since 30 June 2016, being the date to which the latest published audited accounts of the Company were made up, and up to the Latest Practicable Date.

6. COMPETING BUSINESS INTEREST OF DIRECTORS

As at the Latest Practicable Date, none of the Directors or their respective associates was interested in any business which competes or is likely to compete, either directly or indirectly, with the business of the Group as required to be disclosed pursuant to the GEM Listing Rules.

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GENERAL INFORMATION

APPENDIX

7. MATERIAL ADVERSE CHANGE

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 30 June 2016 (being the date to which the latest published audited consolidated financial statements of the Group were made up).

8. EXPERT AND CONSENT

The following is the qualification of the expert who has been named in this circular and has given opinion and advice which are contained in this circular:

Name Qualification

Akron Corporate Finance Limited a licenced corporation to carry on Type 6 (advising on corporate finance) regulated activity as defined under the SFO

As at the Latest Practicable Date, the above party had no shareholding, directly or indirectly, in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group; (ii) had no 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 30 June 2016, the date to which the latest published audited financial statements of the Group were made up.

The above party has given and has not withdrawn its written consent to the issue of this circular, with the inclusion of its letter and the reference to its name in the form and context in which it appears.

9. GENERAL

• (a) The registered office of the Company is Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands.

• (b) The head office and principal place of business of the Company in Hong Kong is at 24/F., SUP Tower, 75-83 King’s Road, North Point, Hong Kong.

• (c) The branch share registrar of the Company in Hong Kong is Tricor Investor Services Limited.

• (d) The principal share registrar of the Company is Codan Trust Company (Cayman) Limited.

• (e) The English text of this circular shall prevail over their respective Chinese text for the purpose of interpretation.

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GENERAL INFORMATION

APPENDIX

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the Company’s head office and principal place of business in Hong Kong at 24/F., SUP Tower, 75-83 King’s Road, North Point, Hong Kong during normal business hours on any weekdays, except public holidays, from the date of this circular up to and including the date of the EGM:

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

• (b) the annual reports of the Company for each of the three years ended 30 June 2016;

• (c) the letter from the Independent Board Committee, the text of which is set out on pages 18 to 19 of this circular;

• (d) the letter from the Independent Financial Adviser, the text of which is set out on pages 20 to 43 of this circular;

• (e) the written consent from the expert as referred to in the paragraph headed “Expert and Consent” in this appendix;

• (f) a copy of each circular issued pursuant to the requirements set out in Chapter 19 and/or 20 of the GEM Listing Rules which has been issued since 30 June 2016, being the date of the latest published audited accounts, including this circular; and

• (g) the Subscription Agreement.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [62 x 52] intentionally omitted <==

PPS INTERNATIONAL (HOLDINGS) LIMITED 寶聯控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8201)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “ Meeting ”) of PPS International (Holdings) Limited (the “ Company ”) will be held at 11:00 a.m on Tuesday, 8 August 2017 at 6/F., Causeway Bay Function Room, L’hotel Causeway Bay Harbour View Hong Kong, 18 King’s Road, Causeway Bay, Hong Kong to consider and, if thought fit, approve, with or without modifications, the following resolution as an ordinary resolution:

ORDINARY RESOLUTIONS

“ THAT:

1. the conditional subscription agreement (the “ Subscription Agreement ”) dated 15 June 2017 entered into by the Company (as issuer) and Wui Wo Enterprise Limited (as subscriber) (the “ Subscriber ”) in relation to the subscription of convertible bonds (the “ Convertible Bonds ”) in a principal amount of HK$50,000,000 to be issued by the Company and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified;

2. (a) subject to the fulfillment or waiver of the conditions as set out on the Subscription Agreement, the issue of the Convertible Bonds to the Subscriber, which may be converted into a maximum of 833,333,333 ordinary shares of HK$0.001 each in the share capital of the Company (the “ Conversion Share(s) ”) at the initial conversion price of HK$0.06 per Conversion Share (subject to adjustments) subject to and in accordance with the terms and conditions of the Subscription Agreement is hereby approved, confirmed and ratified;

3. (b) the allotment and issue of such number of Conversion Shares upon exercise of the conversion rights attaching to the Convertible Bonds, credited as fully paid to the Subscriber, subject to and in accordance with the terms and conditions of the Subscription Agreement and the Articles of Association of the Company (the “ Conversion Shares Specific Mandate ”) be and is hereby approved and the Conversion Shares Specific Mandate shall be in addition to and without prejudice to or revocation of any existing general mandate granted to the Directors of the Company; and

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (c) any one or more of the directors of the Company (the “ Directors ”) be and is/are hereby authorised to do all such acts and things and execute all such documents which he/they consider necessary, desirable or expedient for the purpose of, or in connection with, the implementation of and giving effect to the terms of, or the transactions contemplated by, the Convertible Bonds and all documents and deeds in connection therewith and to agree to such variation, amendments or waiver or matters relating thereto as are, in the opinion of the Directors, in the interest of the Company and its shareholders as a whole.”

By order of the Board PPS International (Holdings) Limited Ye Jingyuan Chief Executive Officer and Executive Director

Hong Kong, 21 July 2017

Notes:

• (1) A member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or more proxy to attend and, subject to the provisions of the articles of association of the Company, to vote on his behalf. A proxy need not be a member of the Company but must be present in person at the meeting to represent the member. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed.

• (2) In order to be valid, the proxy form must be deposited together with a power of attorney or other authority, if any, under which it is signed or certified copy of that power or authority, at the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time for holding the meeting or any adjournment thereof. Completion and return of a proxy form will not preclude a shareholder of the Company from attending in person and voting at the meeting or any adjournment thereof, should he/she/it so wish.

As at the date hereof, the board of directors of the Company comprises three executive Directors, Mr. Ye Jingyuan, Mr. Yu Shaoheng and Ms. Mui Fong, and three independent non-executive Directors, Mr. Chui Chi Yun Robert, Mr. Kwong Tsz Ching, Jack and Mr. Yu Xiufeng.

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