Scholar Education Group — Capital/Financing Update 2019

Jun 12, 2019

Unless otherwise defined in this announcement, terms defined in the prospectus dated Wednesday, 12 June 2019 (the ‘‘Prospectus’’) issued by SCHOLAR EDUCATION GROUP (the ‘‘Company’’) have the same meanings when used in this announcement.

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

This announcement is for information purposes only and does not constitute an invitation or offer to sell, acquire, purchase or subscribe for securities or any Shares under the Global Offering.

This announcement is not, and is not intended to be, an offer of securities of the Company for sale in any jurisdiction, including, without limitation, the United Kingdom, Australia, Japan, Canada or the United States. The Shares have not been, and will not be, registered under the United States Securities Act 1933, as amended (the ‘‘U.S. Securities Act’’) and may not be offered or sold within the United States (as defined in Regulation S under the U.S. Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. This announcement and the information contained herein are not for release, publication or distribution, directly or indirectly, in or into the United States.

In connection with the Global Offering, CLSA Limited, as stabilising manager (the ‘‘Stabilising Manager’’), its affiliates or any person acting for it, on behalf of the Underwriters, may over- allocate or effect transactions with a view to stabilising or supporting the market price of the Shares at a level higher than that which might otherwise prevail for a limited period after the Listing Date. However, there is no obligation on the Stabilising Manager, its affiliates or any person acting for it, to conduct any such stabilising action, which, if commenced, will be done at the sole and absolute discretion of the Stabilising Manager, its affiliates or any person acting for it, and may be discontinued at any time. Any such stabilising activity is required to be brought to an end on the 30th day after the last date for lodging applications under the Hong Kong Public Offering, being 17 July 2019. Such stabilisation action, if commenced, may be effected in all jurisdictions where it is permissible to do so, in each case in compliance with all applicable laws, rules and regulatory requirements, including the Securities and Futures (Price Stabilizing) Rules, as amended, made under the Securities and Futures Ordinance (Cap.571 of the Laws of Hong Kong).

Potential investors should be aware that stabilising actions cannot be taken to support the price of the Shares for longer than the stabilisation period which will begin on the Listing Date and is expected to expire on the 30th day after the last day for lodging applications under the Hong Kong Public Offering, being 17 July 2019. After this day, no further stabilising action may be taken and demand for the Shares and the price of the Shares could fall.

Potential investors should read the Prospectus for detailed information about the Company and the Global Offering described below before deciding whether or not to invest in the Shares being offered. Any investment decision in relation to the Offer Shares should be taken solely in reliance on the information provided in the Prospectus.

The Hong Kong Offer Shares will be offered to the public in Hong Kong subject to the terms and conditions set out in the Prospectus and the related Application Forms. The Hong Kong Offer Shares will not be offered to any person who is outside Hong Kong and/or not resident in Hong Kong.

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Scholar Education Group 思 考 樂 教 育 集 團

(Incorporated in the Cayman Islands with limited liability)

GLOBAL OFFERING

Number of Offer Shares under the : 124,900,000 Shares (subject to Global Offering the Over-allotment Option) Number of Hong Kong Offer Shares : 12,490,000 Shares (including 1,249,000 Employee Reserved Shares) (subject to adjustment) Number of International Placing Shares : 112,410,000 Shares (subject to the Over-allotment Option and adjustment) Offer Price : HK$3.64 to HK$4.68 per Offer Share, plus brokerage (subject to a Downward Offer Price Adjustment) of 1.0%, SFC transaction levy of 0.0027%, and Stock Exchange trading fee of 0.005% (payable in full on application in Hong Kong dollars and subject to refund) (If the Offer Price is set at 10% below the bottom end of the indicative Offer Price range after making a Downward Offer Price Adjustment, the Offer Price will be HK$3.28 per Hong Kong Offer Share) Nominal value : US$0.001 per Share Stock code : 1769

Sole Sponsor, Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager

Joint Global Coordinator, Joint Bookrunner and Joint Lead Manager

Joint Bookrunners and Joint Lead Managers

Joint Lead Manager

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Application has been made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Shares in issue and to be issued pursuant to the Global Offering comprising (a) 124,900,000 Shares to be issued under the Global Offering; (b) 18,735,000 Shares which may be issued upon the exercise of the Over-allotment Option; and (c) 55,570,000 Shares which may be issued pursuant to the exercise of options to be granted under the Share Option Scheme.

Assuming the Hong Kong Public Offering becomes unconditional at or before 8:00 a.m. on Friday, 21 June 2019, dealings in the Shares on the Main Board of the Stock Exchange are expected to commence at 9:00 a.m. on Friday, 21 June 2019. In the event the Over-allotment Option is exercised, an announcement will be made by the Company on the Company’s website at www.skledu.com and the website of the Stock Exchange at www.hkexnews.hk.

The Global Offering comprises the Hong Kong Public Offering of 12,490,000 Shares (including 1,249,000 Employee Reserved Shares) (subject to adjustment), representing 10% of the total number of Offer Shares under the Global Offering, and the International Placing of 112,410,000 Shares (subject to adjustment and the Over-allotment Option), representing 90% of the total number of Offer Shares under the Global Offering. The allocation of the Offer Shares between the Hong Kong Public Offering and the International Placing will be subject to adjustment as described in the section headed ‘‘Structure of the Global Offering’’ in the Prospectus. In particular, the Offer Shares to be offered in the Hong Kong Public Offering and the International Placing may, in certain circumstances, be reallocated as between these offerings at the discretion of the Joint Global Coordinators. If such reallocation is done other than pursuant to Practice Note 18 of the Listing Rules, in accordance with Guidance Letter HKEX-GL91-18, the maximum total number of Offer Shares that may be reallocated to the Hong Kong Public Offering will be 24,980,000 Shares, representing 20% of the number of the Offer Shares initially available under the Global Offering, and the final Offer Price shall be fixed at the bottom end of the indicative Offer Price range (i.e. HK$3.64 per Offer Share) stated in the Prospectus.

Subject to the granting of the approval for the listing of, and permission to deal in, the Shares on the Stock Exchange and compliance with the stock admission requirements of HKSCC, the Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the date of commencement of dealings in the Shares on the Stock Exchange or on any other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange is required to take place in CCASS on the second Business Day after any trading day. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. All necessary arrangements have been made to enable the Shares to be admitted into CCASS.

Pursuant to the Over-allotment Option, the International Underwriters have the right, exercisable by the Joint Global Coordinators (for themselves and on behalf of the International Underwriters) within 30 days from the last day for lodging applications under the Hong Kong Public Offering (the last day for the exercise of the Over-allotment Option being Wednesday, 17 July 2019), to require the Company to allot and issue up to 18,735,000 additional Shares, representing 15% of the initial Offer Shares, at the Offer Price, to cover over-allocations in the International Placing (if any).

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The Offer Price will not be more than HK$4.68 per Offer Share and is currently expected to be not less than HK$3.64 per Offer Share (subject to a reduction of up to 10% below the bottom end of the indicative Offer Price range through making a Downward Offer Price Adjustment as set out in the Prospectus). If the Offer Price is set after making an approximately 10% Downward Offer Price Adjustment, the Offer Price will be HK$3.28 per Offer Share. Applicants for the Hong Kong Offer Shares are required to pay, on application, the maximum Offer Price of HK$4.68 per Offer Share together with brokerage of 1%, SFC transaction levy of 0.0027% and Stock Exchange trading fee of 0.005%, subject to refund if the Offer Price as finally determined is less than HK$4.68 per Offer Share.

If the Company decides to set the Offer Price after making a Downward Offer Price Adjustment (a reduction of up to 10% below the bottom end of the indicative Offer Price range), the Company will separately announce the final Offer Price no later than June 20, 2019 on the website of the Stock Exchange at www.hkexnews.hk and the Company’s website at www.skledu.com.

If an application is rejected, not accepted or accepted in part only, or if the Offer Price as finally determined is less than the maximum Offer Price of HK$4.68 per Offer Share (excluding brokerage, SFC transaction levy and the Stock Exchange trading fee thereon), or if the conditions of the Hong Kong Public Offering are not fulfilled in accordance with the ‘‘Structure of the Global Offering — Conditions of the Global Offering’’ in the Prospectus or if any application is revoked, the application monies, or the appropriate portion thereof, together with the related brokerage, SFC transaction levy and the Stock Exchange trading fee, will be refunded, without interest or the cheque or banker’s cashier order will not be cleared.

Applications for the Hong Kong Offer Shares will only be considered on the basis of the terms and conditions of the Prospectus, the relevant Application Forms and the designated website (www.eipo.com.hk) for White Form eIPO.

Applicants who would like to have the Hong Kong Offer Shares allotted and issued in their own names should (i) complete and sign the WHITE Application Forms; or (ii) submit applications online through the designated website of the White Form eIPO Service Provider at www.eipo.com.hk under the White Form eIPO service.

Applicants who would like to have the Hong Kong Offer Shares allotted and issued in the name of HKSCC Nominees and deposited directly into CCASS for credit to their CCASS Investor Participants’ stock accounts or their designated CCASS Participants’ stock accounts should either (i) complete and sign the YELLOW Application Forms; or (ii) give electronic application instructions to HKSCC via CCASS. Eligible Employees who would like to have the Employee Reserved Shares allotted and issued in their own names should complete and sign the PINK Application Forms.

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Copies of the Prospectus, together with the WHITE Application Forms, may be obtained during normal business hours from 9:00 a.m. on Wednesday, 12 June 2019, until 12:00 noon on Monday, 17 June 2019 at:

1. any of the following offices of the Hong Kong Underwriters:

CLSA Limited

18/F, One Pacific Place 88 Queensway Hong Kong

China Industrial Securities International Capital Limited

7/F, Three Exchange Square 8 Connaught Place Central Hong Kong

Haitong International Securities Company Limited

22/F, Li Po Chun Chambers 189 Des Voeux Road Central Hong Kong

China Everbright Securities (HK) Limited

24/F, Lee Garden One 33 Hysan Avenue, Causeway Bay Hong Kong

First Capital Securities Limited

Unit 4512, 45/F, The Center 99 Queen’s Road Central Central Hong Kong

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1. any of the following designated branches of Bank of China (Hong Kong) Limited:

	Branch Name	Address
Hong Kong Island	Connaught Road	13–14 Connaught Road Central, Hong Kong
	Central Branch
	Wan Chai	213 Queen’s Road East, Wan Chai,
	(Wu Chung House)	Hong Kong
	Branch
Kowloon	Telford Plaza Branch	Shop Unit P2–P7, Telford Plaza,
		No.33 Wai Yip Street, Kowloon Bay,
		Kowloon
	Mong Kok Branch	589 Nathan Road, Mong Kok, Kowloon
New Territories	Shatin Branch	Shop 20, Level 1, Lucky Plaza,
		1–15 Wang Pok Street, Sha Tin,
		New Territories

Copies of the Prospectus, together with the YELLOW Application Forms, may be obtained during normal business hours from 9:00 a.m. on Wednesday, 12 June 2019, until 12:00 noon on Monday, 17 June 2019 at

• . the Depository Counter of HKSCC at 1/F, One & Two Exchange Square, 8 Connaught Place, Central, Hong Kong; or

• . your stockbroker, who may have such Application Forms and the Prospectus available.

The WHITE or YELLOW Application Form completed in accordance with the instructions printed thereon, together with a cheque or banker’s cashier order payable to ‘‘BANK OF CHINA (HONG ’’ KONG) NOMINEES LIMITED — SCHOLAR EDUCATION PUBLIC OFFER attached should be deposited in the special collection boxes provided at any of the designated branches listed above, at the following times:

• . Wednesday, 12 June 2019 — 9:00 a.m. to 5:00 p.m.

• . Thursday, 13 June 2019 — 9:00 a.m. to 5:00 p.m.

• . Friday, 14 June 2019 — 9:00 a.m. to 5:00 p.m.

• . Saturday, 15 June 2019 — 9:00 a.m. to 1:00 p.m.

• . Monday, 17 June 2019 — 9:00 a.m. to 12:00 noon

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Applicants applying by White Form eIPO may submit their applications to the White Form eIPO Service Provider, Computershare Hong Kong Investor Services Limited, through the designated website at www.eipo.com.hk from 9:00 a.m. on Wednesday, 12 June 2019, until 11:30 a.m. on Monday, 17 June 2019 (24 hours daily, except on the last application day) and the latest time for completing full payment of application monies in respect of such applications will be 12:00 noon on Monday, 17 June 2019 (or such later time as may apply as described in the section headed ‘‘How to Apply for Hong Kong Offer Shares and Employee Reserved Shares — 10. Effect of Bad Weather on the Opening of the Application Lists’’ in the Prospectus).

CCASS Clearing/Custodian Participants can input electronic application instructions at the following times on the following dates:

• . Wednesday, 12 June 2019 — 9:00 a.m. to 8:30 p.m.

• . Thursday, 13 June 2019 — 8:00 a.m. to 8:30 p.m.

• . Friday, 14 June 2019 — 8:00 a.m. to 8:30 p.m.

• . Saturday, 15 June 2019 — 8:00 a.m. to 1:00 p.m.

• . Monday, 17 June 2019 — 8:00 a.m. to 12:00 noon

CCASS Investor Participants can input electronic application instructions from 9:00 a.m. on Wednesday, 12 June 2019, until 12:00 noon on Monday, 17 June 2019. Please refer to the sections headed ‘‘Structure of the Global Offering’’ and ‘‘How to Apply for Hong Kong Offer Shares and Employee Reserved Shares’’ in the Prospectus for details of the conditions and procedures of the Hong Kong Public Offering.

The PINK Application Form together with the Prospectus can be collected by Eligible Employees during normal business hours from 9:00 a.m. on Wednesday, 12 June 2019 until 12:00 noon on Saturday, 15 June 2019 at the Company’s principal place of business in Hong Kong at Unit 02, 3/F, Austin Plaza No. 83 Austin Road, Kowloon, Hong Kong. Electronic copies of the PINK Application Form and the Prospectus can be viewed from the website of the Company at www.skledu.com and the Stock Exchange’s website at www.hkexnews.hk.

Your completed PINK Application Form, together with a cheque or a banker’s cashier order attached and marked payable to ‘‘BANK OF CHINA (HONG KONG) NOMINEES LIMITED — SCHOLAR EDUCATION PUBLIC OFFER’’ for the payment, must be deposited in the collection point located at the principal place of business of the Company at Unit 02, 3/F, Austin Plaza, No. 83 Austin Road, Kowloon, Hong Kong by 12:00 noon on Saturday, 15 June 2019. Please refer to the sections headed ‘‘Structure of the Global Offering’’ and ‘‘How to apply for Hong Kong Offer Shares and Employee Reserved Shares’’ in the Prospectus for details of the conditions and procedures of the Hong Kong Public Offering.

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Irrespective of whether a Downward Offer Price Adjustment is made, the Company expects to announce the final Offer Price together with the level of indication of interest in the International Placing and the level of applications and the basis of allocations of the Hong Kong Public Offering (including the Employee Preferential Offering) on Thursday, 20 June 2019 in South China Morning Post (in English) and Hong Kong Economic Times (in Chinese), and on the Company’s website at www.skledu.com and the website of the Stock Exchange at www.hkexnews.hk.

Results of allocations (with successful applicants’ identification document numbers, where applicable) will be made available through a variety of channels as described in the section headed ‘‘How to Apply for Hong Kong Offer Shares and Employee Reserved Shares — 11. Publication of Results’’ in the Prospectus from Thursday, 20 June 2019.

Share certificates will only become valid at 8:00 a.m. on Friday, 21 June 2019 provided that the Global Offering has become unconditional and the right of termination described in the section headed ‘‘Underwriting’’ in the Prospectus has not been exercised. Dealings in the Shares on the Stock Exchange are expected to commence at 9:00 a.m. on Friday, 21 June 2019. The Shares will be traded in board lots of 1,000 Shares. The Company will not issue temporary documents of title. No receipt will be issued for application monies paid. The stock code for the Shares is 1769.

By Order of the Board of Directors SCHOLAR EDUCATION GROUP CHEN QIYUAN Chairman

Hong Kong, 12 June 2019

As at the date of this announcement, our executive Directors are Mr. Chen Qiyuan, Mr. Chen Hongyu, Mr. Qi Mingzhi and Mr. Xu Chaoqiang, our non-executive Director is Mr. Shen Jing Wu and our independent non-executive Directors are Mr. Huang Victor, Dr. Liu Jianhua and Mr. Yang Xuezhi.

Please also refer to the published version of this announcement in South China Morning Post (in English) and Hong Kong Economic Times (in Chinese).

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