Sinohope Technology Holdings Limited - M&A Activity 2018

THIS COMPOSITE DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of the Offers, this Composite Document and/or the accompanying Forms of Acceptance or as to the action to be taken, you should consult a 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 PANTRONICS HOLDINGS LIMITED , you should at once hand this Composite Document and the accompanying Forms of Acceptance to the purchaser(s) or transferee(s) or the licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

This Composite Document should be read in conjunction with the accompanying Forms of Acceptance, the contents of which form part of the terms and conditions of the Offers contained herein.

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this Composite Document and the accompanying Forms of Acceptance, make no representation as to their 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 Composite Document and the Forms of Acceptance.

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HUOBI GLOBAL LIMITED

(Incorporated in the Cayman Islands with limited liability)

PANTRONICS HOLDINGS LIMITED

(Incorporated in the British Virgin Islands with limited liability) (Stock Code: 1611)

COMPOSITE OFFER AND RESPONSE DOCUMENT RELATING TO MANDATORY UNCONDITIONAL CASH OFFERS BY

FOR AND ON BEHALF OF HUOBI GLOBAL LIMITED TO ACQUIRE ALL THE ISSUED SHARES IN PANTRONICS HOLDINGS LIMITED (OTHER THAN THOSE ALREADY OWNED OR AGREED TO BE ACQUIRED BY HUOBI GLOBAL LIMITED AND PARTIES ACTING IN CONCERT WITH IT) AND FOR THE CANCELLATION OF ALL THE OUTSTANDING SHARE OPTIONS OF PANTRONICS HOLDINGS LIMITED

Financial adviser to the Offeror

Financial adviser to the Company

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Independent Financial Adviser to the Independent Board Committee

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Capitalised terms used in this cover page shall have the same meanings as those defined in the section headed “Definitions” in this Composite Document.

A letter from Kingston Securities containing, among other things, details of the terms of the Offers are set out on pages 7 to 19 of this Composite Document.

A letter from the Board is set out on pages 20 to 26 of this Composite Document. A letter from the Independent Board Committee is set out on pages 27 to 28 of this Composite Document. A letter from the Independent Financial Adviser, containing its advice to the Independent Board Committee, is set out on pages 29 to 49 of this Composite Document.

The procedures for acceptance and settlement of the Offers and other related information are set out in Appendix I to this Composite Document and in the accompanying Forms of Acceptance. Acceptance of the Offers should be received by the Registrar as soon as possible and in any event no later than 4:00 p.m. on Wednesday, 10 October 2018 (or such later time and/or date as the Offeror may decide and announce in accordance with the requirements under the Takeovers Code).

Any persons including, without limitation, custodians, nominees and trustees, who would, or otherwise intend to, forward this Composite Document and/or the accompanying Forms of Acceptance to any jurisdiction outside of Hong Kong should read the details in this regard which are contained in the section entitled “OVERSEAS SHAREHOLDERS AND OVERSEAS OPTIONHOLDERS” in Appendix I to this Composite Document before taking any action. It is the responsibility of each Overseas Shareholder and Overseas Optionholder wishing to accept the Offers to satisfy himself, herself or itself as to the full observance of the laws of the relevant jurisdiction in connection therewith, including the obtaining of any governmental, exchange control or other consents which may be required and the compliance with other necessary formalities or legal requirements. Overseas Shareholders and Overseas Optionholders are advised to seek professional advice on deciding whether to accept the Offers.

This Composite Document will remain on the websites of the Stock Exchange at http://www.hkexnews.hk and the Company at http://www.pantronicshk.com as long as the Offers remain open.

19 September 2018

	Page
EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
IMPORTANT NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
LETTER FROM KINGSTON SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
LETTER FROM THE INDEPENDENT BOARD COMMITTEE. . . . . . . . . . . . . . . . . . . .	27
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER . . . . . . . . . . . . . . . . . . .	29
APPENDIX I — FURTHER TERMS OF THE OFFERS AND PROCEDURES
FOR ACCEPTANCE AND SETTLEMENT . . . . . . . . . . . . . . . . .	I-1
APPENDIX II — FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . . . . . .	II-1
APPENDIX III — GENERAL INFORMATION OF THE OFFEROR . . . . . . . . . . . . .	III-1
APPENDIX IV — GENERAL INFORMATION OF THE GROUP . . . . . . . . . . . . . . .	IV-1
ACCOMPANYING DOCUMENT — FORM OF SHARE OFFER ACCEPTANCE	(FOR
INDEPENDENT SHAREHOLDERS)

ACCOMPANYING DOCUMENT — FORM OF OPTION OFFER ACCEPTANCE (FOR OPTIONHOLDERS)

— i —

EXPECTED TIMETABLE

The expected timetable set out below is indicative only and may be subject to change. Further announcement(s) will be made in the event of any changes to the timetable as and when appropriate.

All time and date references contained in this Composite Document refer to Hong Kong times and dates.

Events	Times & Dates
	2018
Despatch date of this Composite Document and the Forms
of Acceptance (Note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . Wednesday, 19 September
Offers open for acceptance (Note 1) . . . . . . . . . . . . . . . . . . . . . .	. . . . . Wednesday, 19 September
Latest time and date for acceptance of the Offers (Note 2) . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m.
	on Wednesday, 10 October
Closing Date (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . Wednesday, 10 October
Announcement of the results of the Offers (or its extension
or revision, if any) on the website of the Stock Exchange
(Note 2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . no later than 7:00 p.m.
	on Wednesday, 10 October
Latest date for posting of remittances in respect of valid
acceptances received at or before the latest time for
acceptance of the Offers (Note 3) . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . Monday, 22 October

Notes:

The Offers, which are unconditional in all respects, are made on the date of posting of this Composite Document, and are capable of acceptance on and from that date until 4:00 p.m. on the Closing Date, unless the Offeror revises the Offers in accordance with the Takeovers Code. Acceptances of the Offers shall be irrevocable and not capable of being withdrawn, except in the circumstances set out in the paragraph headed “7. RIGHT OF WITHDRAWAL” in Appendix I to this Composite Document.
In accordance with the Takeovers Code, the Offers must initially be open for acceptance for at least 21 days following the date on which this Composite Document is posted. The latest time and date for acceptance of the Offers is 4:00 p.m. on Wednesday, 10 October 2018 unless the Offeror revises or extends the Offers in accordance with the Takeovers Code. The Offeror has the right under the Takeovers Code to extend the Offers until such date as it may determine in accordance with the Takeovers Code (or as permitted by the Executive in accordance with the Takeovers Code). An announcement will be jointly issued by the Company and the Offeror on the website of the Stock Exchange by 7:00 p.m. on the Closing Date stating the results of the Offers and whether the Offers have been revised or extended or have expired. In the event that the Offeror decides to revise the Offers, all Independent Shareholders and Optionholders, whether or not they have already accepted the Offers, will be entitled to accept the revised Offers under the revised terms. The revised Offers must be kept open for at least 14 days following the date on which the revised offer document(s) are posted and shall not close earlier than the Closing Date.

— ii —

EXPECTED TIMETABLE

If there is a tropical cyclone warning signal number 8 or above or a “black” rainstorm warning signal in force on the Closing Date and (i) not cancelled in time for trading on the Stock Exchange to resume in the afternoon, the time and date of the close of the Offers will be postponed to 4:00 p.m. on the next Business Day which does not have either of those warnings in force in Hong Kong or such other day as the Executive may approve; or (ii) cancelled in time for trading on the Stock Exchange to resume in the afternoon, the time and date of the close of the Offers will remain on the same day, i.e. 4:00 p.m. on the Closing Date.

Remittances in respect of the cash consideration (after deducting the seller’s Hong Kong ad valorem stamp duty) payable for the Offer Shares tendered under the Share Offer and remittances in respect of the cash consideration payable for the Option Offer will be despatched to the Independent Shareholders and Optionholders respectively accepting the Offers by ordinary post at their own risk as soon as possible, but in any event within seven (7) Business Days following the date of receipt of all relevant documents required to render such acceptance complete and valid in accordance with the Takeovers Code.

Save as mentioned above, if the latest time for acceptance of the Offers and/or the posting of remittances do not take effect on the date and time as stated above, the other dates mentioned above may be affected. The Offeror and the Company will notify the Independent Shareholders and Optionholders any change to the expected timetable as soon as practicable by way of announcement(s).

— iii —

IMPORTANT NOTICE

NOTICE TO THE OVERSEAS SHAREHOLDERS AND OVERSEAS OPTIONHOLDERS

The making of the Offers to persons with a registered address in jurisdictions outside Hong Kong may be prohibited or affected by the laws of the relevant jurisdictions. Overseas Shareholders and Overseas Optionholders who are citizens or residents or nationals of jurisdictions outside Hong Kong should inform themselves about and observe any applicable legal requirements. It is the responsibility of any such person who wishes to accept the Offers to satisfy himself/herself/itself as to the full observance of the laws and regulations of the relevant jurisdictions in connection therewith, including the obtaining of any governmental, exchange control or other consents which may be required or compliance with other necessary formalities or legal requirements and the payment of any transfer or other taxes or other required payments due in respect of such jurisdictions. The Offeror and parties acting in concert with it (including Trinity Gate), the Company, Kingston Securities, Kingston Corporate Finance, Optima Capital Limited, Altus Capital, the Registrar, their respective ultimate beneficial owners, directors, officers, agents and associates and any other person involved in the Offers shall be entitled to be fully indemnified and held harmless by such person for any taxes as such person may be required to pay. Please refer to the paragraphs headed “Overseas Shareholders and Overseas Optionholders” in the “Letter from Kingston Securities” and Appendix I to this Composite Document for further information.

— 1 —

DEFINITIONS

In this Composite Document, the following expressions have the meanings set out below unless the context requires otherwise.

“acting in concert” has the meaning ascribed to it under the Takeovers Code “associate(s)” has the meaning ascribed to it under the Takeovers Code “Board” the board of Directors

“Business Day(s)” a day on which the Stock Exchange is open for the transaction of business

“BVI”

the British Virgin Islands

“CCASS” the Central Clearing and Settlement System established and operated by HKSCC

“Closing Date” Wednesday, 10 October 2018, being the closing date of the Offers or any subsequent closing date as may be announced by the Offeror and approved by the Executive
“Company” Pantronics Holdings Limited (stock code: 1611), a company incorporated in the BVI with limited liability and the Shares are listed on the Main Board of the Stock Exchange
“Completion” the completion of the sale and purchase of the Sale Shares in accordance with the terms and conditions of the Sale and Purchase Agreement, which took place on 21 August 2018
“Composite Document” this composite offer and response document jointly issued by the Offeror and the Company in accordance with the Takeovers Code in respect of the Offers
“connected person” has the meaning ascribed to it under the Listing Rules “controlling shareholder” has the meaning ascribed to it under the Listing Rules
“Director(s)” the director(s) of the Company from time to time
“Encumbrances” includes any option, right to acquire, right of pre-emption, mortgage, charge, pledge, lien, hypothecation, title retention, right of set off, claim, counterclaim, trust arrangement or other security, any equity or restriction (including any restriction imposed under the Companies Ordinance (Chapter 622 of the Laws of Hong Kong)) or other adverse rights and interests of all kinds and descriptions
“Executive” the Executive Director of the Corporate Finance Division of the SFC or any delegate of the Executive Director

— 2 —

DEFINITIONS

“Form(s) of Acceptance”

the Form of Share Offer Acceptance and the Form of Option Offer Acceptance, and “Form of Acceptance” means either of them

“Form of Option Offer the pink form of acceptance in respect of the Option Offer Acceptance” accompanying this Composite Document
“Form of Share Offer Acceptance”

the white form of acceptance in respect of the Share Offer accompanying this Composite Document

“Group” the Company and its subsidiaries
“Guarantor”
Mr. Simon Nai-cheng Hsu, being the ultimate beneficial owner of the Vendor
“HK$”

Hong Kong dollar, the lawful currency of Hong Kong

“HKSCC”

Hong Kong Securities Clearing Company Limited

“Hong Kong”

the Hong Kong Special Administrative Region of the People’s Republic of China

“Independent Board Committee”

an independent committee of the Board comprising all the non-executive Directors (but excluding Mr. Simon Nai-cheng Hsu) who have no direct or indirect interest in the Offers, established for the purpose of advising the Independent Shareholders and the Optionholders in respect of the Offers and in particular as to whether the terms of the Offers are fair and reasonable and as to the acceptance of the Offers

“Independent Financial Adviser” or “Altus Capital”

Altus Capital Limited, a corporation licensed by SFC to carry on Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO, being the independent financial adviser appointed for the purpose of advising the Independent Board Committee in respect of the terms of the Offers and as to their acceptance

“Independent Shareholders”

the Shareholders other than the Offeror and parties acting in concert with it (including Trinity Gate)

“Joint Announcement”

the announcement dated 29 August 2018 jointly issued by the Company and the Offeror in respect of, among other things, the Offers

“Kingston Corporate Finance”

Kingston Corporate Finance Limited, the financial adviser of the Offeror in respect of the Offers, and a licensed corporation under the SFO, licensed to carry on Type 6 (advising on corporate finance) regulated activity

— 3 —

DEFINITIONS

“Kingston Securities” Kingston Securities Limited, a licensed corporation under the SFO, licensed to carry on Type 1 (dealing in securities) regulated activity “Last Trading Day” 21 August 2018, the last trading day for the Shares prior to the halt of trading in the Shares prior to the release of the Joint Announcement “Latest Practicable Date” 14 September 2018, being the latest practicable date prior to the printing of this Composite Document for ascertaining certain information contained herein “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “Loan Facility” a loan facility granted by Kingston Securities as lender to the Offeror as borrower in accordance with the terms of the Loan Facility Agreement for financing the purchase of 199,295,269 Sale Shares and the Offers “Loan Facility Agreement” the loan facility agreement entered into between Kingston Securities as lender and the Offeror as borrower dated 21 August 2018 in relation to the Loan Facility “Main Board” the main board maintained and operated by the Stock Exchange “Mr. Li” Mr. Li Lin, who controls the Offeror through his wholly-owned company Huobi Capital Inc. and his non-wholly owned company Huobi Universal Inc. as at the Latest Practicable Date “Mr. Teng” Mr. Teng Rongsong, who wholly owns Trinity Gate “Offer Period” has the meaning ascribed to it under the Takeovers Code, being the period commencing on 29 August 2018, being the date of the Joint Announcement, and ending on the Closing Date “Offer Share(s)” Shares (other than those already owned or to be acquired by the Offeror or parties acting in concert with it (including Trinity Gate)) that are subject to the Share Offer “Offeror” Huobi Global Limited, a company incorporated in the Cayman Islands with limited liability “Offers” collectively, the Share Offer and the Option Offer “Option Offer” the mandatory unconditional cash offer made by Kingston Securities for and on behalf of the Offeror for the cancellation of all the outstanding Share Options in accordance with the Takeovers Code

— 4 —

DEFINITIONS

“Option Offer Price”

HK$1.22 per Share Option

“Option Share(s)”

a total of 4,166,668 Share(s) to be issued by the Company to the Option Shares Vendors upon exercise of the rights attached to their Share Options

“Option Shares Agreements”
six sale and purchase agreements all dated 21 August 2018 entered into between each of the Option Shares Vendors (as vendor) and Trinity Gate (as purchaser) in relation to the sale and purchase of the Option Shares
“Option Shares Vendors” collectively, Mr. Simon Nai-cheng Hsu, Mr. Henry Woon-hoe Lim, Mr. Ho Hon Ching, Mr. Fung Chow Man, Mr. Som Wai Tong Ivan and Ms. Alaina Shone, being the six Optionholders who will exercise their respective Share Options and sell the Option Shares to Trinity Gate in accordance with the terms of the Option Shares Agreements
“Optionholder(s)” holder(s) of the Share Options
“Overseas Optionholders”
Optionholders whose addresses are outside Hong Kong
“Overseas Shareholders”
Independent Shareholders whose addresses as shown on the register of members of the Company are outside Hong Kong
“Registrar”
Tricor Investor Services Limited, the Hong Kong branch share registrar and transfer office of the Company
“Relevant Period”
the period commencing on 28 February 2018, being the date falling six months preceding the date of commencement of the Offer Period, up to and including the Latest Practicable Date
“Pantene Industrial”
Pantene Industrial Co. Limited, a wholly-owned subsidiary of the Company as at the Latest Practicable Date
“Promissory Note”
the promissory note issued by Pantene Industrial in favour of the Vendor in the principal amount of HK$100 million

“Sale and Purchase Agreement”

“Sale Shares”
the sale and purchase agreement dated 21 August 2018 entered into amongst the Offeror and Trinity Gate (as purchasers), the Vendor and the Guarantor in relation to the sale and purchase of the Sale Shares an aggregate of 215,576,000 Shares, representing approximately 71.67% of the issued Shares, acquired by the Offeror and Trinity Gate from the Vendor pursuant to the terms of the Sale and Purchase Agreement
“SFC”
the Securities and Futures Commission of Hong Kong

— 5 —

DEFINITIONS

“SFO”	the Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong)
“Share(s)”	the ordinary share(s) of HK$0.001 each in the share capital of
	the Company
“Share Charge(s)”	collectively, (i) the share charge entered into between
	Kingston Securities as chargee and the Offeror as chargor
	dated 21 August 2018 whereby the Offeror has agreed to
	charge to Kingston Securities as security for the Loan Facility
	all of the Sale Shares owned by the Offeror upon Completion;
	and (ii) the share charge entered into between Kingston
	Securities as chargee and the Offeror as chargor dated 21
	August 2018 whereby the Offeror has agreed to charge to
	Kingston Securities as security for the Loan Facility the
	Shares to be acquired by the Offeror under the Share Offer
“Share Offer”	the mandatory unconditional cash offer made by Kingston
	Securities for and on behalf of the Offeror for all the Offer
	Shares in accordance with the Takeovers Code
“Share Offer Price”	HK$2.72 per Offer Share
“Share Option(s)”	the share option(s) granted by the Company pursuant to the
	Share Option Scheme, which entitle(s) holder(s) thereof to
	subscribe for the Shares in accordance with the terms and
	conditions thereof
“Share Option Scheme”	the share option scheme of the Company adopted on
	27 October 2016
“Shareholder(s)”	the holder(s) of the issued Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Takeovers Code”	The Hong Kong Code on Takeovers and Mergers
“Trinity Gate”	Trinity Gate Limited, a company incorporated in the BVI with
	limited liability, which is wholly owned by Timeness Vision
	Limited and in turn wholly and ultimately owned by Mr. Teng
“Vendor”	New Wave Capital Limited, a company incorporated in the
	BVI with limited liability which is indirect wholly owned by
	Mr. Simon Nai-cheng Hsu through SNH Global Holdings
	Limited, being the vendor of the Sale and Purchase
	Agreement, which held 215,576,000 Shares, representing
	approximately 71.67% of the issued Shares, immediately
	prior to Completion
“%”	per cent.

per cent.

— 6 —

LETTER FROM KINGSTON SECURITIES

Kingston Securities Limited Suite 2801 One International Finance Centre 1 Harbour View Street Central Hong Kong

19 September 2018

To the Independent Shareholders and Optionholders

Dear Sir/Madam,

MANDATORY UNCONDITIONAL CASH OFFERS BY

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FOR AND ON BEHALF OF THE OFFEROR TO ACQUIRE ALL THE ISSUED SHARES IN PANTRONICS HOLDINGS LIMITED

(OTHER THAN THOSE ALREADY OWNED OR AGREED TO BE ACQUIRED BY THE OFFEROR AND PARTIES ACTING IN CONCERT WITH IT) AND FOR THE CANCELLATION OF ALL THE OUTSTANDING SHARE OPTIONS OF PANTRONICS HOLDINGS LIMITED

INTRODUCTION

Reference is made to the Joint Announcement.

Immediately prior to Completion, none of the Offeror and parties acting in concert with it (including Trinity Gate) held, owned, controlled or had direction over any voting rights or rights over Shares, convertible securities, warrants, options or derivatives of the Company. Immediately following Completion and as at the Latest Practicable Date, the Offeror and parties acting in concert with it (including Trinity Gate) are interested in an aggregate of 215,576,000 Shares, representing approximately 71.67% of the issued Shares as at the Latest Practicable Date.

Accordingly, the Offeror is required to make the mandatory unconditional cash offers for all the issued Shares (other than those already owned or to be acquired by the Offeror and parties acting in concert with it (including Trinity Gate)) pursuant to Rule 26.1 of the Takeovers Code and to cancel all the outstanding Share Options pursuant to Rule 13.5 of the Takeovers Code.

— 7 —

LETTER FROM KINGSTON SECURITIES

This letter forms part of this Composite Document and sets out, among other things, the details of the Offers, certain information on the Offeror and the intention of the Offeror regarding the Group. The terms of the Offers and the procedures for acceptances are set out in this letter, Appendix I to this Composite Document and the Forms of Acceptance.

The Independent Shareholders and the Optionholders are strongly advised to carefully consider the information contained in the “Letter from the Board”, the “Letter from the Independent Board Committee” and the “Letter from the Independent Financial Adviser” as set out in this Composite Document before reaching a decision as to whether or not to accept the Offers.

THE OFFERS

Kingston Securities is making the Offers for and on behalf of the Offeror to all the Independent Shareholders for all issued Shares (other than those Shares already owned or agreed to be acquired by the Offeror and parties acting in concert with it (including Trinity Gate)) and to the Optionholders for the cancellation of all the outstanding Share Options on the terms set out in this Composite Document in accordance with Rules 26.1 and 13 of the Takeovers Code respectively, on the following basis:

Principal Terms of the Offers

Share Offer

For each Offer Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$2.72 in cash

The Share Offer Price of HK$2.72 per Offer Share was determined at a price of the same price per Sale Share paid by the Offeror and Trinity Gate under the Sale and Purchase Agreement.

Option Offer

For cancellation of each Share Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$1.22 in cash

The Offers are unconditional in all respects when they are made and are not conditional upon acceptances being received in respect of a minimum number of Shares or any other conditions.

As at the Latest Practicable Date, the Company had a total of (i) 300,794,332 Shares in issue and (ii) 6,205,668 Share Options entitling the grantees to subscribe for Shares at an exercise price of HK$1.50 per Share.

— 8 —

LETTER FROM KINGSTON SECURITIES

Assuming (i) there is no change in the total number of issued Shares except for (ii) hereinafter; and (ii) save for the Share Options held by the Option Shares Vendors, none of the other Share Options are exercised from the Latest Practicable Date up to the Closing Date, there will be 85,218,332 Shares subject to the Share Offer.

Save as aforesaid, the Company does not have any outstanding options, derivatives, warrants, relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) or securities which are convertible or exchangeable into Shares as at the Latest Practicable Date.

Exercise of the Share Options

Pursuant to the terms of the Option Shares Agreements, a total of 4,166,668 Share Options will be exercised by the Option Shares Vendors not later than fifteen (15) Business Days after the Share Offer becomes or is being declared unconditional (i.e. on the despatch date of this Composite Document) (the “ Unconditional Date ”). As at the Latest Practicable Date, none of such Share Options have been exercised by any of the Option Shares Vendors.

Pursuant to the Share Option Scheme, all Share Options (including vested and unvested Share Options and those not lapsed or exercised) will be exercisable at any time within one month after the Unconditional Date. Optionholders who do not accept the Option Offer may nonetheless exercise their Share Options within one month from the Unconditional Date.

Lapse of the Share Options

All Optionholders are reminded that pursuant to the Share Option Scheme, if any Share Option is not exercised within one month after the Unconditional Date, the Share Option will automatically lapse. Notwithstanding such lapse, the Optionholders may accept the Option Offer at any time from the commencement of the Option Offer up to 4:00 p.m. on the Closing Date.

Further terms of the Option Offer and the procedures for acceptance are set out in Appendix I to this Composite Document and the accompanying Form of Option Offer Acceptance.

Comparison of value

The Share Offer Price of HK$2.72 per Offer Share represents:

(i) a discount of 15.00% to the closing price of 3.20 per Share as quoted on the Stock Exchange on the Latest Practicable Date;
(ii) a discount of approximately 11.69% to the closing price of HK$3.08 per Share as quoted on the Stock Exchange on the Last Trading Day;

— 9 —

LETTER FROM KINGSTON SECURITIES

(iii) a discount of approximately 8.05% to the average of the closing prices of the Share as quoted on the Stock Exchange for the five consecutive trading days up to and including the Last Trading Day of HK$2.958 per Share; and
(iv) a premium of approximately 615.79% over the unaudited total equity attributable to the owners of the Company of approximately HK$0.38 per Share (based on a total of 300,794,332 Shares in issue as at the Latest Practicable Date and the unaudited total equity attributable to the owners of the Company of approximately HK$114 million) as at 31 March 2018, being the date to which the interim results of the Group were made up.

Highest and lowest Share prices

The highest and lowest closing prices of the Shares as quoted on the Stock Exchange during the Relevant Period were HK$5.24 per Share (on 30 August 2018) and HK$1.07 per Share (on 26 April 2018), respectively.

Total consideration of the Offers

Assuming (i) there is no change in the total number of issued Shares except for (ii) hereinafter; (ii) all the Share Options held by the Option Shares Vendors are exercised; and (iii) none of the other Share Options are exercised from the Latest Practicable Date up to the Closing Date, there would be 304,961,000 Shares in issue. On the basis of the Share Offer Price at HK$2.72 per Share, the entire issued ordinary share capital of the Company would be valued at approximately HK$829,493,920.00.

Excluding the 215,576,000 Shares already owned by the Offeror and parties acting in concert with it (including Trinity Gate) as at the Latest Practicable Date and the 4,166,668 Option Shares to be acquired by Trinity Gate upon completion of the Option Shares Agreements, 85,218,332 Shares will be subject to the Share Offer and the Share Offer is therefore valued at HK$231,793,863.04 based on the Share Offer Price.

Assuming (i) all the Share Options held by the Option Shares Vendors are exercised; and (ii) none of the other Share Options are exercised before the Closing Date and based on the Option Offer Price of HK$1.22 per Share Option, the total consideration required to satisfy the cancellation of all the remaining outstanding Share Options is HK$2,487,580.00. Accordingly, the Offers are valued at HK$234,281,443.04 in aggregate.

Assuming all the outstanding Share Options (including the outstanding Share Options held by the Option Shares Vendors) are exercised in full before the Closing Date, there would be 307,000,000 Shares in issue. Excluding the 215,576,000 Shares already owned by the Offeror and parties acting in concert with it (including Trinity Gate) as at the Latest Practicable Date and the 4,166,668 Option Shares to be acquired by Trinity Gate upon completion of the Option Shares Agreements, 87,257,332 Shares will be subject to the Share Offer and the Share Offer is therefore valued at HK$237,339,943.04 based on the Share Offer Price.

— 10 —

LETTER FROM KINGSTON SECURITIES

Confirmation of financial resources available for the Offers

The Offeror intends to finance the entire consideration payable under the Offers by the Loan Facility provided by Kingston Securities. Kingston Corporate Finance, being the financial adviser to the Offeror, is satisfied that sufficient financial resources are available to the Offeror to satisfy the total consideration payable by the Offeror under the Offers.

On the date of the Sale and Purchase Agreement, the Offeror entered into the Loan Facility Agreement in connection with the Loan Facility, and the Offeror entered into the Share Charges in favour of Kingston Securities.

The payment of interest on, repayment of or security for any existing liability (contingent or otherwise) in relation to the Loan Facility will not depend on the business of the Company to any significant extent. The voting rights of the Shares subject to the Share Charges would not be transferred to Kingston Securities unless and until the security under the Share Charges shall have become enforceable, and Kingston Securities has elected to enforce the security thereunder, pursuant to the terms and conditions thereof.

Effect of accepting the Offers

The acceptance of the Share Offer by any Independent Shareholders will be deemed to constitute a warranty by such Independent Shareholders that the Offer Shares sold under the Share Offer are free from all liens, claims, charges, options, equities, adverse interests, third party rights or Encumbrances whatsoever and together with all rights accruing or attaching thereto, including without limitation, the right to receive all dividends and distributions declared, paid or made, if any, on or after the date on which the Share Offer is made, being the date of this Composite Document.

The acceptance of the Option Offer by any Optionholders will be deemed to constitute a warranty by such Optionholders that the Share Options and all rights attached thereto are cancelled with effect from the date on which the Option Offer is made, being the date of this Composite Document.

Acceptance of the Offers will be irrevocable and not be capable of being withdrawn except as permitted under this Takeovers Code.

Independent Shareholders and Optionholders are reminded to read the recommendations of the Independent Board Committee and the advice of the Independent Financial Adviser in respect of the Offers which are included in this Composite Document.

Payment

Payment in cash in respect of acceptances of the Offers will be made as soon as possible but in any event within seven (7) Business Days of the date of receipt of a duly completed acceptance of the Offers. Relevant documents evidencing title must be received by or on behalf of the Offeror to render such acceptance of the Offer complete and valid.

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LETTER FROM KINGSTON SECURITIES

No fractions of a cent (HK$) will be payable and the amount of the consideration payable to an Independent Shareholder or an Optionholder who accepts the Offers will be rounded up to the nearest cent (HK$).

Stamp duty

The seller’s Hong Kong ad valorem stamp duty payable by the Independent Shareholders who accept the Share Offer and calculated at a rate of 0.1% of (i) the market value of the Offer Shares; or (ii) the consideration payable by the Offeror in respect of the relevant acceptances of the Share Offer, whichever is higher, will be deducted from the amount payable by the Offeror to such person on acceptance of the Share Offer.

The Offeror will arrange for payment of the seller’s Hong Kong ad valorem stamp duty on behalf of the relevant Independent Shareholders who accept the Share Offer and pay the buyer’s Hong Kong ad valorem stamp duty in connection with the acceptances of the Share Offer and the transfers of the Offer Shares in accordance with the Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong).

No stamp duty is payable in connection with the acceptance of the Option Offer.

Taxation advice

Independent Shareholders and Optionholders are recommended to consult their own professional advisers if they are in any doubt as to the taxation implications of accepting or rejecting the Offers. It is emphasised that none of the Offeror, parties acting in concert with the Offeror (including Trinity Gate), the Company, the Vendor, the Guarantor, Kingston Securities, Kingston Corporate Finance, Optima Capital Limited, Altus Capital, the Registrar or any of their respective ultimate beneficial owners, directors, officers, advisers, agents or associates or any other person involved in the Offers accept responsibility for any taxation effects on, or liabilities of, any persons as a result of their acceptance or rejection of the Offers.

Overseas Shareholders and Overseas Optionholders

The making of the Offers to a person with a registered address in a jurisdiction outside Hong Kong may be affected by the applicable laws and regulations of the relevant jurisdiction. Overseas Shareholders or Overseas Optionholders with registered addresses in jurisdictions outside Hong Kong should inform themselves about and observe any applicable legal or regulatory requirements or restrictions in their own jurisdictions in connection with the acceptance of the Offers (including the obtaining of any governmental or other consent which may be required or the compliance with other necessary formalities and the payment of any transfer or other taxes due by such Overseas Shareholders and Overseas Optionholders in respect of such jurisdictions).

Any acceptance of the Offers by any Overseas Shareholders or Overseas Optionholders will be deemed to constitute a representation and warranty from such Overseas Shareholder or Overseas Optionholders to the Offeror that the local laws and requirements have been complied with. The Overseas Shareholders or Overseas Optionholders should consult their professional advisers if in doubt.

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LETTER FROM KINGSTON SECURITIES

INFORMATION ON THE GROUP

Details of the information on the Group are set out in the paragraph headed “Information on the Group” in the “Letter from the Board” in this Composite Document.

INFORMATION ON THE OFFEROR

The Offeror is a company incorporated in the Cayman Islands with limited liability. The Offeror is owned as to 70% by Huobi Universal Inc. (“ Huobi Universal ”) and 30% by Huobi Capital Inc. (“ Huobi Capital ”).

Set out below is the simplified shareholding chart of the Offeror as at the Latest Practicable Date:

100% 100% 23.32% Sequoia Capital CV IV Senior Holdco, Ltd. Sequoia Capital China Venture FundIV,L.P. Sequoia Capital CV IV Holdco, Ltd.	Mr. Dai	Zhigang	Mr. D	Mr. Song Ying	Mr. Yuan Dawei	Mr. Yuan Dawei	Mr. Hu Donghai	Mr. Hu Donghai	Mr. Li Lin	Mr. Li Lin

						0.56%		4.55%		89.09%
Sequoia Capital China Venture FundIV,L.P.	Value Invest Lim	code ments ited		45.56% Morningside China TMT Fund III, L.P.					100%

Sequoia Capital CV IV Senior Holdco, Ltd.	Value Interna Lim	code tional ited	Morningside China TMT Fund III Co- investment,L.P.		Mr. Chen Weixing		Mr. Wong Anthony

						100%		100%
		7.46% artners I, L.P.
Sequoia Capital CV IV Holdco, Ltd.	Zhen P Fund	artners I, L.P.	Vision Leader II Investment Holdings Limited		Hong Jia Investment Management Co.,Ltd.		Sky Fort Investments Limited		Lightning Pay Technology Limited		Techwealth Limited
						4.70%		1.42%		1.22%

					Huobi Universal Inc.		Huobi Capital Inc.

						70%
					The Offeror

Note: Certain percentage figures included in this chart may be subject to rounding adjustments, if any.

Mr. Li controls the Offeror through his wholly owned company Huobi Capital and his non-wholly owned company Huobi Universal as at the Latest Practicable Date.

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LETTER FROM KINGSTON SECURITIES

Huobi Capital

Huobi Capital, a company incorporated in the Cayman Islands, is wholly owned by Mr. Li, who also controls Huobi Universal via Techwealth Limited. Mr. Li is therefore the ultimate controlling shareholder of the Offeror with an aggregate attributable interest of approximately 66% in the Offeror.

Mr. Li is an entrepreneur with over 10 years of experience in technology, corporate management and blockchain. Mr. Li is the founder and chairman of Huobi Group (which provides a digital asset trading platform) in the year 2013 and currently the chief executive officer of Huobi Group. Huobi Group comprises a number of companies among which are (i) Huobi Global Limited (Seychelles), which runs a leading global digital asset trading platform committed to exploring opportunities for digital asset investment and also provides trading and investment service for hundreds of digital asset pairs and (ii) Huobi Capital, which focuses on the blockchain industry venture capital. Prior to establishing Huobi Group, Mr. Li worked in Beijing Baide Yunbo Technology Co., Ltd. (北京百德雲博技術有限公司) from August 2007 to August 2011. Beijing Baide Yunbo Technology Co., Ltd. is a Beijing-based technology company focusing on SEO (Search Engine Optimization). Thereafter, Mr. Li joined and became the general manager in Beijing Zhongke Huishang Electronic Commerce Co., Ltd. (北京中科匯商電子商務有限公司) from September 2011 to April 2013. Beijing Zhongke Huishang Electronic Commerce Co., Ltd. is a Beijing-based e-commerce company targeting retail client.

In 2014, Mr. Li joined Sanya Forum which was an international forum regarding the internet and finance industry. He was a speaker at the forum speaking about the present development and the future expectation of the blockchain and crypto industry.

Mr. Li does not have direct experience in the business of the Company. However, his entrepreneurship of over 10 years and his experience in corporate management will have a positive impact and benefit to the business operation of the Group. The abovementioned role assumed by Mr. Li enhances his experience in blockchain industry.

Huobi Universal

Huobi Universal, a company incorporated in the Cayman Islands, was founded in 2014 as an investment holding company to invest or explore investment opportunities in various technology or innovation companies. A share sale agreement dated 31 July 2018 (the “ Vision Lightning Agreement ”) was entered into between Vision Leader II Investment Holdings Limited (“ Vision Leader ”) and Lightning Pay Technology Limited (“ Lightning Pay ”), a company incorporated in the Cayman Islands, which is wholly owned by Mr. Wong Anthony. Pursuant to the Vision Lightning Agreement, Vision Leader agreed to sell and Lightning Pay agreed to purchase from Vision Leader shares representing approximately 1.22% interest in Huobi Universal. The share sale under the Vision Lightning Agreement has been duly completed on 6 September 2018. As at the Latest Practicable Date, Huobi Universal is owned as to (i) approximately 58.44% by Techwealth Limited (“ Techwealth ”) which is in turn owned as to approximately 89.09% by Mr. Li; (ii) approximately 23.32% by Sequoia Capital CV IV Holdco, Ltd.; (iii) approximately 7.46% by Zhen Partners Fund I, L.P. (“ Zhen Partners ”); (iv) approximately 4.70% by Hong Jia Investment Management Co., Ltd., a company incorporated in the Cayman Islands, which is in turn wholly owned by Mr. Chen Weixing; (v)

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LETTER FROM KINGSTON SECURITIES

approximately 3.44% by Vision Leader; (vi) approximately 1.42% by Sky Fort Investments Limited, a company incorporated in the Republic of Seychelles, which is in turn wholly owned by Mr. Wong Anthony; and (vii) approximately 1.22% by Lightning Pay.

Techwealth

Techwealth, a company incorporated in the BVI, is an investment holding company owned as to approximately 89.09% by Mr. Li, approximately 5.07% by Mr. Du Jun, approximately 4.55% by Mr. Hu Donghai, approximately 0.73% by Mr. Song Ying and approximately 0.56% by Mr. Yuan Dawei.

Sequoia Capital CV IV Holdco, Ltd.

Sequoia Capital CV IV Holdco, Ltd. and its sole shareholder, Sequoia Capital CV IV Senior Holdco, Ltd. are exempted companies incorporated in the Cayman Islands with limited liability. The sole shareholder of Sequoia Capital CV IV Senior Holdco, Ltd. is Sequoia Capital China Venture Fund IV, L.P., an exempted limited partnership incorporated in the Cayman Islands, whose general partner is SC China Venture IV Management, L.P., another exempted limited partnership incorporated in the Cayman Islands, whose general partner is SC China Holding Limited. SC China Holding Limited is wholly owned by SNP China Enterprises Limited, a company wholly owned by Mr. Shen Nan Peng.

Zhen Partners

Zhen Partners, a limited liability partnership incorporated in the Cayman Islands, is a venture capital partnership principally engaged in the investment in companies in early stages of development, and managed by Zhen Advisors, Ltd.. Zhen Partners’ general partner is Zhen Partners Management (MTGP) I, L.P., whose general partner is Zhen Partners Management (TTGP) I, Ltd.. Zhen International Ltd., which is wholly owned by Rosy Glow Holdings Limited, owns 51% equity interest of Zhen Partners Management (TTGP) I, Ltd.. Best Belief PTC Limited, which is a trustee of The Best Belief Family Trust, owns 100% equity interest of Rosy Glow Holdings Limited.

Vision Leader

Vision Leader, a company incorporated in the BVI, is owned as to (i) approximately 50% in aggregate by Morningside China TMT Fund III Co-investment, L.P. and Morningside China TMT Fund III, L.P. (the “ Morningside Funds ”); and (ii) approximately 50% by Valuecode International Limited, of which its sole shareholder is Valuecode Investments Limited and is in turn wholly owned by Mr. Dai Zhigang.

The Morningside Funds are exempted limited partnerships incorporated in the Cayman Islands, whose general partner is Morningside China TMT GP III, L.P., another exempted limited partnership incorporated in the Cayman Islands, whose general partner is TMT General Partner Ltd..

Each of Mr. Qin Liu, Mr. Jianming Shi and Morningside Venture (VII) Investments Limited is entitled to exercise or control the exercise of one-third of the voting power at general meetings of

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LETTER FROM KINGSTON SECURITIES

TMT General Partner Ltd.. Morningside Venture (VII) Investments Limited is indirectly 100% held through a series of 100% owned holding companies by Landmark Trust Switzerland SA as trustee of a discretionary trust established by Mdm. Chan Tan Ching Fen for the benefit of certain members of her family and other charitable objects.

INFORMATION ON TRINITY GATE

Trinity Gate, a company incorporated in the BVI with limited liability, is wholly owned by Timeness Vision Limited and in turn wholly and ultimately owned by Mr. Teng.

Mr. Teng graduated from Peking University with a degree in science. Mr. Teng is the chairman of Fission Digital Asset Management Advisory Ltd. (“ Fission Digital ”) and the non-executive director of SHIS Limited (to be renamed as Grandshores Technology Group Limited (雄岸科技集團有限公司), a company that is listed on the Main Board of the Stock Exchange (stock code: 1647). Fission Digital is a Hong Kong based innovative service platform which focuses on contributing to and advising top blockchain projects globally.

During the period from March 2012 to December 2014, Mr. Teng had been the chairman, the chief executive officer and the executive director of China Development Bank International Investment Limited (“ China Development Bank ”) (stock code: 1062), a company that is listed on the Main Board of the Stock Exchange. Mr. Teng was responsible for the overseas investments and merger and acquisition business of China Development Bank.

INTENTION OF THE OFFEROR IN RELATION TO THE GROUP

The Group is principally engaged in the contract manufacturing, on electronic manufacturing services basis, of a wide range of power-related and electrical/electronic products.

The Offeror is of the view that the Group is an attractive investment whose current businesses have stable performance with growth potential. Upon completion of the Offers, the Offeror will assist the Group in reviewing its business and operations. As at the Latest Practicable Date, the Offeror had no plans for any disposal of the existing business of the Group other than those in the ordinary course of business of the Group. The Offeror and Mr. Li will utilise their knowledge and experience in the areas of blockchain and financial technology, to develop new businesses in such areas and also in areas that develop and provide technical infrastructure and solutions serving the cryptographic assets trading platform, building tools and marketplace for digital assets, and develop storage solutions for such assets. As at the Latest Practicable Date, detailed business plans for expansion initiatives has not yet been developed as it is dependent on the Offeror’s examination of the Group’s existing capabilities and resources.

The Offeror had no intention to make material changes to the employment of the employees of the Group (other than the resignation of certain existing Directors of the Company as disclosed below), nor to cease any existing businesses of the Group or to dispose any material assets of the Group as at the Latest Practicable Date. However, in order to launch and execute the above and/or any other new business initiatives, the Group might (i) hire or contract personnel who have the appropriate execution and industry knowledge; and (ii) expand facilities such as office space and IT

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LETTER FROM KINGSTON SECURITIES

infrastructures and resources. Nevertheless, the Offeror intends to maintain continuity of normal business considerations but will retain the flexibility at any time to consider any options of opportunities which may present themselves and which it regards to be in the interests of the Company and its Shareholders.

PROPOSED CHANGE OF BOARD COMPOSITION

The existing Directors, namely Mr. Henry Woon-hoe Lim, Mr. Ho Hon Ching, Mr. Simon Nai-cheng Hsu, Mr. Pochin Christopher Lu, Mr. Danny J Lay and Ms. Hui Leung Ching Patricia, intend to resign from the Board with effect from (i) the date immediately after the Closing Date; or (ii) the earliest date as permitted for resignation of existing Directors under (or pursuant to any dispensation from) the Takeovers Code, the Listing Rules or other applicable laws or rules or regulations applicable to the Company or by the SFC, whichever is later.

The Offeror intends to nominate Mr. Lee Chris Curl and Mr. Huo Li as new executive Directors to the Board for appointment with effect from no earlier than the despatch date of this Composite Document and the Forms of Acceptance.

The personal biographical information of the new executive Directors is set out below:

Executive Directors

Mr. Lee Chris Curl (李書沸) (“ Mr. Lee ”) joined Huobi Group in May 2018 and is currently the group chief financial officer and board secretary of Huobi Universal. Prior to joining Huobi Group, Mr. Lee joined PAX Global Technology Limited (0327.HK) as the group financial controller from August 2011 to 2013 and became the chief financial officer from 2013 to August 2016. Mr. Lee was the group chief financial officer of OKC Holdings Corporation from October 2016 to May 2018, and the chief executive officer of OKEX Technology Company Limited from May 2017 to May 2018. Mr. Lee obtained a Bachelor’s Degree in Accountancy from University of Wollongong (臥龍崗大學) in Australia in 2001. Thereafter, Mr. Lee received a Master’s Degree in Commerce and Fund Management from University of New South Wales (新南威爾斯大學) in Australia. Mr. Lee is also a Chartered Accountant in Australia, Hong Kong Certified Public Accountant and Financial Risk Manager (FRM), who has over 15 years’ professional experience in corporate governance, strategic planning & execution, global business expansion and capital market in digital payment and fintech sectors.

Mr. Huo Li (霍力) (“ Mr. Huo ”) joined Huobi Group in 2017 and is currently the managing director of Huobi Capital. Prior to joining Huobi Capital, Mr. Huo joined the Bank of America Merrill Lynch in June 2011 and subsequently became the assistance vice president before he left the Bank of America Merrill Lynch in May 2015. From May 2015 to June 2016, Mr. Huo worked in the client service team in Ullink Limited, a company providing market leading multi-asset trading technology and infrastructure for buy-side and sell-side market participants. Mr. Huo obtained a Bachelor’s Degree in Engineering from The Hong Kong University of Science and Technology in 2011. Mr. Huo is experienced in financial services, technology and blockchain industries.

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LETTER FROM KINGSTON SECURITIES

COMPULSORY ACQUISITION

The Offeror does not intend to exercise any power of compulsory acquisition on any of the outstanding Offer Shares not acquired under the Share Offer after the close of the Offers.

MAINTAINING THE LISTING STATUS OF THE COMPANY

The Stock Exchange has stated that if, at the close of the Offers, less than the minimum prescribed percentage applicable to the Company, being 25% of the issued Shares are held by the public, or if the Stock Exchange believes that a false market exists or may exist in the trading of the Shares; or that there are insufficient Shares in public hands to maintain an orderly market, it will consider exercising its discretion to suspend trading in the Shares until a level of sufficient public float is attained.

The Offeror intends that the Company will remain listed on the Stock Exchange. The directors of the Offeror and the new directors to be appointed to the Board will jointly and severally undertake to the Stock Exchange to take appropriate steps to ensure that a sufficient public float exists in the Shares.

ACCEPTANCE AND SETTLEMENT

Your attention is drawn to the further details regarding the procedures for acceptance and settlement and acceptance period as set out in Appendix I to this Composite Document and the accompanying Form(s) of Acceptance.

GENERAL

To ensure equality of treatment of all Independent Shareholders, those registered Independent Shareholders who hold the Shares as nominee for more than one beneficial owner should, as far as practicable, treat the holding of each beneficial owner separately. It is essential for the beneficial owner of the Offer Shares whose investments are registered in the name of a nominee to provide instructions to their nominee of their intentions with regards to the Share Offer.

All documents and remittances will be sent to the Independent Shareholders and the Optionholders by ordinary post at their own risk. Such documents and remittances will be sent to the Independent Shareholders at their respective addresses as specified on the relevant Form of Share Offer Acceptance or if no name and address is specified, to the Independent Shareholder or the first named Independent Shareholder (in the case of joint registered holders) at their respective addresses as shown in the register of members of the Company, and in the case of the Optionholders, to the address specified on the relevant Form of Option Offer Acceptance. None of the Offeror, its beneficial owners and parties acting in concert with any of them, the Company, Kingston Securities, Kingston Corporate Finance, Optima Capital Limited, Altus Capital, the Registrar or any of their respective directors or professional advisers or the company secretary of the Company or any other parties involved in the Offers will be responsible for any loss or delay in transmission or any other liabilities that may arise as a result thereof or in connection therewith.

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LETTER FROM KINGSTON SECURITIES

ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendices to this Composite Document and the accompanying Form(s) of Acceptance, which form part of this Composite Document. You are reminded to carefully read the “Letter from the Board”, the recommendation of the “Letter from the Independent Board Committee”, the advice of the “Letter from the Independent Financial Adviser” and other information about the Group, which are set out in this Composite Document before deciding whether or not to accept the Offers.

Yours faithfully, For and on behalf of Kingston Securities Limited Chan Yin Tong, Cynthia Director

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LETTER FROM THE BOARD

==> picture [76 x 76] intentionally omitted <==

PANTRONICS HOLDINGS LIMITED 桐成控股有限公司

(Incorporated in the British Virgin Islands with limited liability)

(Stock Code: 1611)

Executive Directors:

Mr. Henry Woon-hoe Lim Mr. Ho Hon Ching

Non-executive Director: Mr. Simon Nai-Cheng Hsu (Chairman)

Principal place of business in Hong Kong: Suite 1603A, 16/F Tower 2, Nina Tower 8 Yeung UK Road Tsuen Wan, Hong Kong

Independent Non-executive Directors:

Mr. Pochin Christopher Lu Mr. Danny J Lay Ms. Hui Leung Ching Patricia

19 September 2018

To the Independent Shareholders and the Optionholders,

Dear Sir or Madam,

AND PARTIES ACTING IN CONCERT WITH IT) AND FOR THE CANCELLATION OF ALL THE OUTSTANDING SHARE OPTIONS OF PANTRONICS HOLDINGS LIMITED

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LETTER FROM THE BOARD

INTRODUCTION

Reference is made to the Joint Announcement in relation to, among other things, the mandatory unconditional cash offers being made by Kingston Securities for and on behalf of the Offeror to acquire all the issued Shares (other than those already owned or agreed to be acquired by the Offeror and parties acting in concert with it (including Trinity Gate)) and for the cancellation of all the outstanding Share Options.

As disclosed in the Joint Announcement, on 21 August 2018 (after trading hours of the Stock Exchange), the Offeror and Trinity Gate (as purchasers), the Vendor (as vendor) and the Guarantor entered into the Sale and Purchase Agreement in relation to the sale and purchase of an aggregate of 215,576,000 Sale Shares, representing approximately 71.67% of the entire issued share capital of the Company as at the date of the Joint Announcement, for the total consideration of HK$586,366,720.00 (equivalent to HK$2.72 per Sale Share).

On the same day, the six Option Shares Vendors entered into six Option Shares Agreements with Trinity Gate (as purchaser) in relation to the sale and purchase of a total of 4,166,668 Option Shares, for the total consideration of HK$11,333,336.96 (equivalent to HK$2.72 per Option Share). Pursuant to the Option Shares Agreements, unless it is restricted by the Share Option Scheme or the Takeovers Code, the Option Shares Vendors shall exercise their Share Options to subscribe for the Option Shares not later than fifteen (15) Business Days after the Share Offer becomes or is being declared unconditional (i.e. the date of this Composite Document) (the “ Unconditional Date ”). On the condition that the Company issues the Option Shares to the Option Shares Vendors, the Option Shares Vendors, as the legal and beneficial owners, shall sell, and Trinity Gate shall purchase, the Option Shares free from all Encumbrances and with all rights attached thereto, on the terms and subject to the conditions set out in the Option Shares Agreements and subject to the Takeovers Code.

Immediately following Completion, the Offeror and parties acting in concert with it (including Trinity Gate) are interested in an aggregate of 215,576,000 Shares, representing approximately 71.67% of the issued Shares as at the Latest Practicable Date.

Pursuant to the terms of the Sale and Purchase Agreement, upon Completion, the Vendor has provided an interest-free and collateral-free loan in the principal amount of HK$100 million to Pantene Industrial for a term of 3 years for the purpose of general working capital of the Group and to maintain sufficient cash flow when any of its indebtedness falls due and needs to be repaid. Against provision of the said loan, on 24 August 2018, Pantene Industrial has issued the Promissory Note to the Vendor. The Vendor shall not be entitled to demand early repayment of the loan but Pantene Industrial is entitled to early repayment in whole or in part (subject to an amount of HK$10 million or its integral multiples) of the loan without giving prior notice.

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LETTER FROM THE BOARD

Unless prior written consent is obtained from the Vendor, the whole of the principal amount of HK$100 million shall be immediately due and payable upon the written request of the Vendor if any of the following events occurs:

(a) change of controlling shareholder(s) of Pantene Industrial;
(b) breach of any provisions by Pantene Industrial under the Promissory Note; or
(c) any liquidation, reorganisation, schemes, dissolution, debt relief, bankruptcy or similar proceedings is commenced against Pantene Industrial.

The purpose of this Composite Document of which this letter forms part is to provide you with, among other things, information relating to the Group, the Offeror and the Offers as well as setting out the letter from the Independent Board Committee containing its recommendation to the Independent Shareholders and the Optionholders in respect of the terms of the Offers and as to the acceptance of the Offers, and the letter from the Independent Financial Adviser containing its advice to the Independent Board Committee in respect of the terms of the Offers and as to the acceptance of the Offers.

MANDATORY UNCONDITIONAL CASH OFFERS

Principal terms of the Offers

As mentioned in the “Letter from Kingston Securities” on pages 7 to 19 of this Composite Document, Kingston Securities is making the Offers for and on behalf of the Offeror in compliance with the Takeovers Code on the following terms:

Share Offer

For each Offer Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$2.72 in cash

The Share Offer Price of HK$2.72 per Offer Share was determined at a price of the same price per Sale Share paid by the Offeror and Trinity Gate under the Sale and Purchase Agreement.

Option Offer

For cancellation of each Share Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$1.22 in cash

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LETTER FROM THE BOARD

The Offers are unconditional in all respects when they are made and are not conditional upon acceptances being received in respect of a minimum number of Shares or any other conditions.

As at the Latest Practicable Date, the Company had a total of (i) 300,794,332 Shares in issue; and (ii) 6,205,668 Share Options entitling the grantees to subscribe for Shares at an exercise price of HK$1.50 per Share.

Save as aforesaid, the Company did not have any outstanding options, derivatives, warrants, relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) or securities which are convertible or exchangeable into Shares as at the Latest Practicable Date.

Exercise of the Share Options

Pursuant to the terms of the Option Shares Agreements, a total of 4,166,668 Share Options will be exercised by the Option Shares Vendors not later than fifteen (15) Business Days after the Unconditional Date. As at the Latest Practicable Date, none of such Share Options have been exercised by any of the Option Shares Vendors.

Lapse of the Share Options

Further Information of the Offer

Further details of the Offers, including, among other things, terms and procedures for acceptance and settlement of the Offers, are contained in the “Letter from Kingston Securities” as set out on pages 7 to 19 of, and Appendix I to, this Composite Document and the accompanying Forms of Acceptance.

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LETTER FROM THE BOARD

INFORMATION ON THE GROUP

The Company is incorporated in the BVI with limited liability, the Shares of which are currently listed on the Stock Exchange (stock code: 1611). The Company is an investment holding company and its subsidiaries are engaged in the contract manufacturing, on electronic manufacturing services basis, of a wide range of power-related and electrical/electronic products.

Further information of the Group has been set out in “Appendix II — Financial Information of the Group” and “Appendix IV — General Information of the Group” to this Composite Document.

Shareholding structure of the Company

Set out below is the shareholding structure of the Company (i) immediately before Completion; (ii) immediately after Completion and as at the Latest Practicable Date; and (iii) immediately after Completion and completion of the Option Shares Agreements:

The Offeror Trinity Gate *The Offeror and parties acting in* *concert with it (including* *Trinity Gate)* Mr. Simon Nai-cheng Hsu (“Mr. Hsu”) (Note 2) Mr. Henry Woon-hoe Lim (Note 3) Other Shareholders Total	(i) Immediately before Completion (ii) Immediately after Completion and as at the Latest Practicable Date (iii) Immediately after Completion and completion of the Option Shares Agreements Number of Shares Approximate % Number of Shares Approximate % Number of Shares Approximate % (Note 1) (Note 1) (Note 1) — — 199,295,269 66.26 199,295,269 65.35 — — 16,280,731 5.41 20,447,399 6.71 — — 215,576,000 71.67 219,742,668 72.06 215,942,000 71.79 366,000 0.12 366,000 0.12 250,000 0.08 250,000 0.08 250,000 0.08 84,602,332 28.13 84,602,332 28.13 84,602,332 27.74 300,794,332 100.00 300,794,332 100.00 304,961,000 100.00	(i) Immediately before Completion (ii) Immediately after Completion and as at the Latest Practicable Date (iii) Immediately after Completion and completion of the Option Shares Agreements Number of Shares Approximate % Number of Shares Approximate % Number of Shares Approximate % (Note 1) (Note 1) (Note 1) — — 199,295,269 66.26 199,295,269 65.35 — — 16,280,731 5.41 20,447,399 6.71 — — 215,576,000 71.67 219,742,668 72.06 215,942,000 71.79 366,000 0.12 366,000 0.12 250,000 0.08 250,000 0.08 250,000 0.08 84,602,332 28.13 84,602,332 28.13 84,602,332 27.74 300,794,332 100.00 300,794,332 100.00 304,961,000 100.00
		72.06 0.12 0.08 27.74
		100.00

Notes:

(1) Certain percentage figures included in this table may be subject to rounding adjustments, if any.
(2) Mr. Hsu is a non-executive Director. Mr. Hsu was interested in 215,576,000 Shares through the Vendor which is wholly owned by SNH Global Holdings Limited, a company wholly owned by Mr. Hsu. He is also interested in 366,000 Shares through personal interest.
(3) Mr. Henry Woon-hoe Lim is an executive Director and he is interested in 250,000 Shares through personal interest.

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LETTER FROM THE BOARD

INFORMATION ON THE OFFEROR

Your attention is drawn to the section headed “Information on the Offeror” in the “Letter from Kingston Securities” in, and Appendix III to, this Composite Document.

INTENTION OF THE OFFEROR IN RELATION TO THE GROUP AND THE PROPOSED CHANGE OF BOARD COMPOSITION

Your attention is drawn to the sections headed “Intention of the Offeror in relation to the Group” and “Proposed Change of Board Composition” in the “Letter from Kingston Securities” in this Composite Document for the Offeror’s intention with respect to the Group including the proposed change of Board composition. The Board is aware of the intention of the Offeror in respect of the Group and is willing to render reasonable co-operation with the Offeror which is in the interests of the Company and Shareholders as a whole.

MAINTAINING THE LISTING STATUS AND PUBLIC FLOAT OF THE COMPANY

It is stated in the “Letter from Kingston Securities” in this Composite Document that the Offeror intends to maintain the listing status of the Company on the Stock Exchange following the close of the Offers.

The Stock Exchange has stated that if, at the closing of the Offers, less than the minimum prescribed percentage applicable to the Company, being 25% of the issued Shares, are held by the public, or if the Stock Exchange believes that:

(a) a false market exists or may exist in the trading of the Shares; or
(b) there are insufficient Shares in public hands to maintain an orderly market,

it would consider exercising its discretion to suspend dealings in the Shares until a level of sufficient public float is attained.

The directors of the Offeror and the new Directors to be appointed to the Board will jointly and severally undertake to the Stock Exchange to take appropriate steps to ensure that a sufficient public float exists in the Shares.

RECOMMENDATION

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LETTER FROM THE BOARD

Optionholders as a whole and as to their acceptance. Mr. Simon Nai-cheng Hsu is not taking part in the Independent Board Committee in order to avoid any perceived conflict of interest due to him being the ultimate beneficial owner of the Vendor. The Board considers that members of the Independent Board Committee are therefore independent and able to consider the terms of the Offers and make recommendation to the Independent Shareholders and the Optionholders.

Altus Capital has been appointed by the Company with the approval of the Independent Board Committee as the Independent Financial Adviser to advise the Independent Board Committee in respect of the Offers and, in particular, as to whether the Offers are fair and reasonable and as to their acceptance.

Your attention is drawn to the “Letter from the Independent Board Committee” and the “Letter from the Independent Financial Adviser” as set out in this Composite Document containing their advice in respect of the Offers, and the principal factors and reasons they have considered before arriving at their advice.

ADDITIONAL INFORMATION

You are advised to read this Composite Document together with the accompanying Form(s) of Acceptance in respect of the acceptance and settlement procedures of the Offers. Your attention is also drawn to the additional information contained in the appendices to this Composite Document.

In considering what action to take in connection with the Offers, you should also consider your own tax positions, if any, and in case of any doubt, consult your professional advisers.

Yours faithfully, By order of the Board Pantronics Holdings Limited Simon Nai-cheng HSU Chairman

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Set out below is the text of the letter of recommendation from the Independent Board Committee in respect of the Offers.

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PANTRONICS HOLDINGS LIMITED 桐成控股有限公司

(Incorporated in the British Virgin Islands with limited liability)

(Stock Code: 1611)

19 September 2018

To the Independent Shareholders and the Optionholders,

Dear Sir or Madam,

MANDATORY UNCONDITIONAL CASH OFFERS BY KINGSTON SECURITIES LIMITED FOR AND ON BEHALF OF THE OFFEROR TO ACQUIRE ALL THE ISSUED SHARES IN PANTRONICS HOLDINGS LIMITED (OTHER THAN THOSE ALREADY OWNED OR AGREED TO BE ACQUIRED BY THE OFFEROR AND PARTIES ACTING IN CONCERT WITH IT) AND FOR THE CANCELLATION OF ALL THE OUTSTANDING SHARE OPTIONS OF PANTRONICS HOLDINGS LIMITED

INTRODUCTION

We refer to the composite offer and response document dated 19 September 2018 jointly issued by the Offeror and the Company (the “ Composite Document ”) of which this letter forms part. Capitalised terms used in this letter have the same meanings as those defined in the Composite Document, unless the context requires otherwise.

We have been appointed by the Board to form the Independent Board Committee to consider the terms of the Offers and to make a recommendation to you as to whether, in our opinion, the terms of the Offers are fair and reasonable so far as the Independent Shareholders and the Optionholders are concerned, and as to acceptance thereof.

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Altus Capital has been appointed as the Independent Financial Adviser to advise us in respect of the terms of the Offers and as to acceptance thereof. Details of its advice and the principal factors considered by it in arriving at its advice and recommendation are set out in the “Letter from the Independent Financial Adviser” in the Composite Document.

We also wish to draw your attention to the “Letter from the Board”, the “Letter from Kingston Securities” and the additional information set out in the appendices to the Composite Document.

RECOMMENDATION

Taking into account the terms of the Offers and the independent advice from Altus Capital, and the principal factors and reasons taken into account in arriving at its recommendation, we consider that the terms of the Offers are fair and reasonable so far as the Independent Shareholders and the Optionholders are concerned. Accordingly, we recommend the Independent Shareholders and the Optionholders to accept the Offers.

However, the Independent Shareholders and Optionholders who intend to accept the Offers are reminded to closely monitor the prices of the Shares and the liquidity of the Shares during the Offer Period for acceptance and shall, having regard to their own circumstances, consider selling the Shares or exercising the Options and selling these Shares in the open market where practicable, instead of accepting the Offers, if the net proceeds from the sale of such Shares or exercising the Options with a sale thereafter would be higher than the amount that can be received under the Offers.

Independent Shareholders and the Optionholders are recommended to read the full text of the “Letter from the Independent Financial Adviser” in the Composite Document. Notwithstanding our recommendation, the Independent Shareholders and the Optionholders should consider carefully the terms and conditions of the Offers.

Yours faithfully, Independent Board Committee of Pantronics Holdings Limited Mr. Pochin Christopher Lu Mr. Danny J Lay Ms. Hui Leung Ching Patricia Independent non-executive Directors

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the text of a letter of advice from Altus Capital Limited, the Independent Financial Adviser to the Independent Board Committee in respect of the Offers, which has been prepared for the purpose of incorporation in the Composite Document.

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Altus Capital Limited 21 Wing Wo Street Central, Hong Kong

19 September 2018

To the Independent Board Committee Pantronics Holdings Limited Room 1603A, 16/F Tower 2, Nina Tower 8 Yeung Uk Road Tsuen Wan Hong Kong

Dear Sir or Madam,

MANDATORY UNCONDITIONAL CASH OFFERS BY KINGSTON SECURITIES LIMITED FOR AND ON BEHALF OF THE OFFEROR TO ACQUIRE ALL THE ISSUED SHARES IN PANTRONICS HOLDINGS LIMITED (OTHER THAN THOSE ALREADY OWNED OR AGREED TO BE ACQUIRED BY THE OFFEROR AND PARTIES ACTING IN CONCERT WITH IT) AND FOR THE CANCELLATION OF ALL THE OUTSTANDING SHARE OPTIONS OF PANTRONICS HOLDINGS LIMITED

INTRODUCTION

We refer to our appointment as the independent financial adviser to advise the Independent Board Committee in respect of the Offers. Details of the Offers are set out in the “Letter from Kingston Securities” contained in the Composite Document dated 19 September 2018, of which this letter forms part. Terms used in this letter shall have the same meanings as those defined in the Composite Document unless the context requires otherwise.

On 21 August 2018 (after trading hours of the Stock Exchange), the Offeror and Trinity Gate (as purchasers), the Vendor (as vendor) and the Guarantor entered into the Sale and Purchase Agreement in relation to the sale and purchase of an aggregate of 215,576,000 Sale Shares, representing approximately 71.67% of the entire issued share capital of the Company. Completion took place on the date of the Sale and Purchase Agreement on 21 August 2018.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Immediately following Completion and as at the Latest Practicable Date, the Offeror and parties acting in concert with it (including Trinity Gate) are interested in an aggregate of 215,576,000 Shares, representing approximately 71.67% of the issued Shares.

Accordingly, the Offeror is required to make the Offers for all the issued Shares (other than those already owned or to be acquired by the Offeror and parties acting in concert with it (including Trinity Gate)) pursuant to Rule 26.1 of the Takeovers Code and to cancel all the outstanding Share Options pursuant to Rule 13.5 of the Takeovers Code.

It is noted that six sale and purchase agreements all dated 21 August 2018 had been entered into between each of the Option Shares Vendors (as vendors) and Trinity Gate (as purchaser) in relation to the sale and purchase of the Option Shares, details of which are set out in the “Letter from the Board” of the Composite Document.

Also described in the Joint Announcement, on 24 August 2018, the Vendor provided an interest-free and collateral-free loan in the principal amount of HK$100 million to Pantene Industrial for a term of 3 years for the purpose of the general working capital of the Group and to maintain sufficient cash flow when any of its indebtedness falls due and needs to be repaid. Against provision of the said loan, Pantene Industrial has issued the Promissory Note to the Vendor. The Vendor shall not be entitled to demand early repayment of the loan but Pantene Industrial is entitled to early repayment in whole or in part (subject to an amount of HK$10 million or its integral multiples) of the loan without giving prior notice.

(a) change of controlling shareholder(s) of Pantene Industrial;
(b) breach of any provisions by Pantene Industrial under the Promissory Note; or
(c) any liquidation, reorganisation, schemes, dissolution, debt relief, bankruptcy or similar proceedings is commenced against Pantene Industrial.

INDEPENDENT BOARD COMMITTEE

Pursuant to Rule 2.1 of the Takeovers Code, the Independent Board Committee comprising the non-executive Directors who have no direct or indirect interest in the Offers, namely Mr. Pochin Christopher Lu, Mr. Danny J Lay and Ms. Hui Leung Ching Patricia, has been established to advise the Independent Shareholders and the Optionholders as to whether the terms of the Offers are fair and reasonable and as to their acceptance. Mr. Simon Nai-cheng Hsu is not taking part in the Independent Board Committee in order to avoid any perceived conflict of interest due to him being the ultimate beneficial owner of the Vendor. The Board considers that members of the Independent Board Committee are therefore independent and able to consider the terms of the Offers and make recommendation to the Independent Shareholders and the Optionholders.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

INDEPENDENT FINANCIAL ADVISER

We have been appointed by the Company with the approval of the Independent Board Committee as the independent financial adviser to advise the Independent Board Committee in respect of the Offers and, in particular, as to whether the Offers are fair and reasonable and as to their acceptance.

We have not acted as independent financial adviser or financial adviser in relation to any transactions of the Company, the Offeror, or any of the Offeror’s concert parties in the last two years prior to the date of the Composite Document. Pursuant to Rule 13.84 of the Listing Rules, and given that remuneration for our engagement to opine on the Offers is at market level and not conditional upon the outcome of the Offers, and that our engagement is on normal commercial terms, we are independent of the Company, the Offeror, and any of the Offeror’s concert parties.

BASIS OF OUR ADVICE

In formulating our advice, we have reviewed, amongst others, (i) the Composite Document; and (ii) the interim report of the Company for the six months ended 31 March 2018 (“ 2018 Interim Report ”) and the annual report of the Company for the year ended 30 September 2017 (“ 2017 Annual Report ”). We have also relied on the statements, information, opinions and representations contained or referred to in the Composite Document and/or provided to us by the Company, the Directors and the management of the Company (the “ Management ”).

We have assumed that all statements, information, opinions and representations contained or referred to in the Composite Document and/or provided to us were true, accurate and complete at the time they were made and continued to be so as at the date of the Composite Document. The Company will notify the Independent Shareholders and Optionholders of any material changes to information contained or referred to in the Composite Document as soon as practicable in accordance with Rule 9.1 of the Takeovers Code. Independent Shareholders and Optionholders will also be informed as soon as practicable when there are any material changes to the information contained or referred to herein as well as changes to our opinion after the Latest Practicable Date and throughout the Offer Period.

We have no reason to believe that any statements, information, opinions or representations relied on by us in forming our opinion is untrue, inaccurate or misleading, nor are we aware of any material facts the omission of which would render the statements, information, opinions or representations provided to us untrue, inaccurate or misleading. We have assumed that all the statements, information, opinions and representations for matters relating to the Group contained or referred to in the Composite Document and/or provided to us by the Company and the Management have been reasonably made after due and careful enquiry. We have relied on such statements, information, opinions and representations and have not conducted any independent investigation into the business, financial conditions and affairs or the future prospects of the Group.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We have not considered the taxation implications on the Independent Shareholders nor the Optionholders arising from acceptance or non-acceptance of the Offers, if any, and therefore we will not accept responsibility for any tax effect or liability that may potentially be incurred to the Independent Shareholders and the Optionholders as a result of the Offers. In particular, the Independent Shareholders and Optionholders who are subject to Hong Kong or overseas taxation on dealings in securities are urged to seek their own professional advisers on tax matters.

PRINCIPAL TERMS OF THE OFFERS

Kingston Securities is making the Offers for and on behalf of the Offeror in compliance with the Takeovers Code on the following terms:

Share Offer

For each Offer Share ..............................................................................

HK$2.72 in cash

The Share Offer Price of HK$2.72 per Offer Share was determined at a price of the same price per Sale Share paid by the Offeror under the Sale and Purchase Agreement.

The acceptance of the Share Offer by any Shareholders will be deemed to constitute a warranty by such Shareholders that the Offer Shares sold under the Share Offer are free from all liens, claims, charges, options, equities, adverse interests, third party rights or encumbrances whatsoever and together with all rights accruing or attaching thereto, including without limitation, the right to receive all dividends and distributions declared, paid or made, if any, on or after the date on which the Share Offer is made, being the date of the Composite Document.

Acceptance of the Share Offer will be irrevocable and not be capable of being withdrawn except as permitted under the Takeovers Code.

Option Offer

For cancellation of each Share Option .....................................................

HK$1.22 in cash

Acceptance of the Option Offer will be irrevocable and not be capable of being withdrawn except as permitted under the Takeovers Code.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion and recommendation on whether the terms of the Offers are fair and reasonable, we have taken into consideration the following principal factors and reasons:

1. Information and prospects of the Group

1.1. Background and financial information of the Group

The Company is incorporated in the BVI as a limited liability company on 27 December 1990 and the Shares were listed on the Main Board of the Stock Exchange since 21 November 2016 (the “ Listing ”).

The Group is principally engaged in the contract manufacturing, on electronic manufacturing services basis, of a wide range of power-related and electrical/electronic products. Such products include solenoid coils, battery charger solution and power supply, light-emitting diode ( LED ) lighting and others such as printed circuit board assembly ( PCBA ) and inserted molding parts.

The Company has raised a sum of HK$62.5 million (net of expenses) through the initial public offering at an offer price of HK$1.50 per Share in November 2016. As described in the 2018 Interim Report, the Company had substantially completed the relocation of its manufacturing premises from the facility in Songgang to a manufacturing facility in Guangming (the “ Relocation ”) in January 2018. Given that the Relocation took longer than originally anticipated and certain estimated allocation of the use of proceeds stated in the prospectus of the Company dated 9 November 2016 (the “ Prospectus ”) had been superseded by actual costs, the original plan on the use of proceeds had changed though not significantly different from the original allocation. Although the physical Relocation has completed in January 2018 and the new facility is fully operational, plans to purchase the remaining items of plant and equipment have been deferred until further feasibility on their effectiveness is carried out, in line with the Group’s objective to streamline and utilise its manufacturing processes. Hence, as at 31 March 2018 (which is according to the 2018 Interim Report), the Group had a sum of approximately HK$5.8 million net proceeds, representing approximately 9.3% of the total net proceeds as mentioned above, which remained unutilised and was deposited with banks in Hong Kong.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

1.2. Historical financial information of the Group

The following is an extract of the financial results of the Group for the two years ended 30 September 2017 and the six months ended 31 March 2017 and 2018.

	For the	year ended	For the	six months
	30 September		ended	31 March
	2016	2017	2017	2018
	HK$’000	HK$’000	HK$’000	HK$’000
	(audited)	(audited)	(unaudited)	(unaudited)
Revenue	289,002	306,422	137,672	161,032
Gross profit	69,149	67,633	30,218	22,419
Administrative expenses	(22,312)	(43,356)	(16,333)	(20,358)
Listing expenses	(17,227)	(5,873)	(5,873)	—
Profit for the year/period	14,664	5,194	2,163	986
				As at
		As at 30 September		31 March
		2016	2017	2018
	HK$’000		HK$’000	HK$’000
	(audited)		(audited)	(unaudited)
Total assets	175,917		240,689	229,042
Total liabilities	144,944		132,093	114,646
Net assets		30,973	108,596	114,396

Source: 2017 Annual Report and 2018 Interim Report

Six months ended 31 March 2018 compared to the six months ended 31 March 2017

Revenue for the six months ended 31 March 2018 amounted to approximately HK$161.0 million, representing an increase of approximately 17.0% as compared to the amount of approximately HK$137.7 million recorded for the corresponding period of the previous year. Such increase was mainly attributable to the growth in the Group’s customer base and geographical coverage.

Gross profit was approximately HK$30.2 million and HK$22.4 million, representing a gross profit margin of 21.9% and 13.9% for the six months ended 31 March 2017 and 31 March 2018, respectively. The lower gross profit margin recorded for the six months ended 31 March 2018 as compared to the corresponding period of the previous year was attributable to a combination of higher raw material costs, predominantly copper costs, coupled with increased labour costs and additional manpower resources required to prepare for and complete the Relocation.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Administrative expenses for the six months ended 31 March 2018 was approximately HK$20.4 million, representing an increase of approximately 24.6% from approximately HK$16.3 million for the corresponding period in 2017. Such increase was primarily due to increased legal fees, adverse exchange differences resulting from the strengthening of the Renminbi against the US Dollar, and the inclusion of HK$3.5 million relocation-related costs.

Profit for the six months ended 31 March 2018 was approximately HK$1.0 million, representing a decrease of approximately 54.4% as compared to approximately HK$2.2 million for the corresponding period in 2017. Despite the higher revenue and the absence of any listing expenses during the six months ended 31 March 2018, the lower profit for the period was principally attributable to the costs associated with the Relocation and the impact of the increased raw material costs and higher labour costs. Net assets of approximately HK$108.6 million and HK$114.4 million were recorded as at 30 September 2017 and 31 March 2018. The difference was arisen as a result of share-based compensation expenses principally relating to the Directors and employees of the Group, and currency exchange differences mainly between Renminbi and Hong Kong dollars arising on the translation of financial statements of foreign operations.

Year ended 30 September 2017 compared to the year ended 30 September 2016

Revenue for the year ended 30 September 2017 amounted to approximately HK$306.4 million, representing an increase of approximately 6.0% as compared to the amount of approximately HK$289.0 million recorded for the previous year. Such increase was mainly attributable to the improvement in trading conditions of the Group’s customers and the countries which they were located.

Gross profit was approximately HK$69.1 million and HK$67.6 million, representing a gross profit margin of 23.9% and 22.1% for the year ended 30 September 2016 and 2017, respectively. The lower gross profit margin recorded for the year ended 30 September 2017 as compared to the previous year was attributable to a combination of higher raw material costs, predominantly copper costs, coupled with higher minimum labour rates.

Administrative expenses for the year ended 30 September 2017 was approximately HK$43.4 million, representing an increase of approximately 94.3% from approximately HK$22.3 million for the corresponding period in 2017. The increase of approximately HK$21.1 million for the year ended 30 September 2017 was mainly arisen from (i) approximately HK$12.0 million of additional head office costs associated with the listed status of the Group, including but not limited to, Directors’ remuneration, salary and legal and professional costs in addition to increased head office rentals; (ii) approximately HK$6.8 million of duplicated rental costs and relocation costs associated with the Relocation; (iii) approximately HK$1.0 million of share-based compensation expense; and (iv) approximately HK$2.7 million of impairment loss on trade receivables.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Profit for the year ended 30 September 2017 was approximately HK$5.2 million, representing a decrease of approximately 64.6% as compared to approximately HK$14.7 million for the year ended 30 September 2016. Despite the higher revenue, the decrease in profit for the year ended 30 September 2017 was principally attributable to (i) the impact of the increased raw material costs and higher labour costs; (ii) the increased administrative expenses as described above; (iii) restructuring costs of HK$1.2 million and other costs associated with the Relocation of HK$6.8 million; and (iv) the one-off listing expenses of approximately HK$5.9 million. For illustration purpose, after adjusting the aforesaid non-recurring restructuring costs, other costs associated with the Relocation, the listing expenses as well as the related tax effect, the adjusted profit after tax for the year ended 30 September 2017 would have been approximately HK$17.4 million (the “ 2017 Adjusted Profit ”).

Net assets of approximately HK$31.0 million and HK$108.6 million were recorded as at 30 September 2016 and 2017. The difference was primarily arisen as a result of the new Shares issued in relation to the Listing.

1.3. Prospects of the Group

According to the 2018 Interim Report, the Management was of the view that the Group was in the transformational period following the Relocation, the completion of which would significantly improve its production and development capabilities. This put the Group in good stead to expand and grow its market share and to take advantage of opportunities offered by the “Made in China 2025” and the “Belt and Road” initiatives as well as the prospective growth in the solenoid coil market.

The “Made in China 2025” strategy was issued by the China’s State Council in 2015 to enhance the quality of made-in-China products and promote such products to the global market. Chinese manufacturers in certain priority development industries can make use of the related policies initiated under such strategy to upgrade their manufacturing technology and quality of products and increase their sales. Since our Group’s main products, including solenoid coils, industrial grade chargers and LED lighting for commercial use can be applied in the equipment/machines in almost all of the priority development industries, the demand for our Group’s products may increase due to the issuance of this “Made in China 2015” strategy. The “Belt and Road” policy aims to boost connectivity and commerce between the People’s Republic of China (the “ PRC ”) and other countries in Europe and Asia, some of which are new export destinations of products such as solenoid coil, industrial grade chargers and LED lighting for commercial use. Such policy offers opportunities for the Group to expand its export business in its existing markets as well as new markets.

In this regard, the Management was of the view that the Group’s business operation has promising prospects in the future due to (i) improved production and equipment capabilities following the completion of the Relocation; and (ii) the opportunities offered by the aforementioned PRC government strategy and policy.

In the past one to two years, however, the Group’s business operations had faced challenges arising from higher material costs, predominantly copper costs, and increasing labour costs. The price of copper rose from US$5,177 per tonne as quoted on the London Metal Exchange as at 1 October 2015 to US$5,939 per tonne as at the Latest Practicable Date, representing an increase of approximately 14.7%. While we also noted that the copper price fluctuated significantly during this

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

period, with the highest price of US$7,261 per tonne recorded on 8 June 2018 and the lowest price of US$4,310 per tonne recorded on 15 January 2016. Such rising trend and fluctuation may have an adverse impact on the Group’s business performance in the future. We also noted that there has been a trade war between the United States of America (the “ U.S. ”) and the PRC since early 2018 where higher tariffs on goods traded were being imposed. If that is the case, certain products manufactured by the Group to be exported to the U.S. may be adversely affected in the future, which in turn may have material and adverse effects on the Group’s business performance given that approximately 49.8% of the Group’s revenue for the year ended 30 September 2017 was generated from sales to the U.S. market. According to the Management, there has been no notable impact on the Group’s orders from the U.S. market so far. Nevertheless, given the continuous development of the trade war, the long-term effect of the trade war, if any, on the Group’s business performance cannot be ascertained at this juncture.

1.4. Section summary

In summary, we concur with the Management’s view that the Group’s overall business operation may have promising prospects in the future over the longer term. However, we noted that the Group’s business performance has faced uncertainties due to increasing and volatile material costs and labour costs recently as well as the potential effects arising from the trade war. This may continue to impact the Group’s business performance over the short to medium term.

2. Background information of the Offeror and Trinity Gate

2.1 The Offeror

The Offeror is a company incorporated in the Cayman Islands with limited liability. The Offeror is owned as to 70% by Huobi Universal and 30% by Huobi Capital. Mr. Li controls the Offeror through his wholly-owned company Huobi Capital and his non-wholly owned company Huobi Universal. A simplified shareholding chart and full description of the background of the Offeror and its shareholders are set out in the “Letter from Kingston Securities” of the Composite Document.

Based on background information as set out in the “Letter from Kingston Securities” of the Composite Document, notwithstanding that the Offeror, Mr. Li, Mr. Lee Chris Curl and Mr. Huo Li appear not to have prior experience in the electronic manufacturing industry, however, according to their biographical information set out in the “Letter from Kingston Securities” of the Composite Document, have knowledge and experience in a broad range of areas including blockchain and financial technology, as well as general management experience.

2.2 Trinity Gate

Trinity Gate, a company incorporated in the BVI with limited liability, is wholly-owned by Timeness Vision Limited and in turn wholly and ultimately owned by Mr. Teng.

Mr. Teng graduated from Peking University with a degree in science. Mr. Teng is the chairman of Fission Digital and the non-executive director of SHIS Limited (to be renamed as Grandshores Technology Group Limited (雄岸科技集團有限公司)), a company listed on the Main Board of the Stock Exchange (stock code: 1647). Fission Digital is a Hong Kong-based innovative service platform which focuses on contributing to and advising top blockchain projects globally.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

3. Intention of the Offeror in relation to the Group

As described in the “Letter from Kingston Securities” of the Composite Document, the Offeror is of the view that the Group is an attractive investment whose current businesses have stable performance with growth potential. Upon completion of the Offers, the Offeror will assist the Group in reviewing its business and operations. As at the Latest Practicable Date, the Offeror has no plans for any disposal of the existing business of the Group other than those in the ordinary course of business of the Group. The Offeror and Mr. Li will utilise their knowledge and experience in the areas of blockchain and financial technology, to develop new businesses in such areas and also in areas that develop and provide technical infrastructure and solutions serving the cryptographic assets trading platform, building tools and marketplace for digital assets, and develop storage solutions for such assets. According to the Offeror, detailed business plans for expansion initiatives has not yet been developed as it is dependent on the Offeror’s examination of the Group’s existing capabilities and resources.

The Offeror has no intention to make material changes to the employment of the employees of the Group (other than the appointment of new executive Directors and resignation of all existing Directors as disclosed below), nor to cease any existing businesses of the Group or to dispose any material assets of the Group.

However, in order to launch and execute the above and/or any other new business initiatives, the Group might (i) hire or contract personnel who have the appropriate execution and industry knowledge; and (ii) expand facilities such as office space and IT infrastructures and resources. Nevertheless, the Offeror intends to maintain continuity of normal business considerations but will retain the flexibility at any time to consider any options of opportunities which may present themselves and which it regards to be in the interests of the Company and its Shareholders.

Based on the above, it appears that there will not be material changes to the Group after the close of the Offers. Its business scope may expand after the Offerors’ review but there is no concrete plan at this moment.

4. Proposed change of board composition

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Offeror intends to nominate Mr. Lee Chris Curl and Mr. Huo Li as new executive Directors to the Board for appointment with effect from no earlier than the despatch date of the Composite Document and the Forms of Acceptance. The personal biographical information of the new executive Directors is set out in the “Letter from Kingston Securities” of the Composite Document.

Notwithstanding that the existing Directors will resign from the Board, it is noted that Mr. Henry Woon-hoe Lim and Mr. Ho Hon Ching will remain as the senior Management to continue to manage and operate the Group’s contract manufacturing business.

5. Maintaining the listing status of the Company

6. Analysis of the Share Offer

6.1. Share Offer Price analysis

6.1.1. Share Offer Price comparisons

The Share Offer Price of HK$2.72 per Offer Share represents:

(a) a discount of approximately 11.69% to the closing price of HK$3.08 per Share as quoted on the Stock Exchange on the Last Trading Day;
(b) a discount of approximately 8.05% to the average of the closing prices of the Share as quoted on the Stock Exchange for the five consecutive trading days up to and including the Last Trading Day of HK$2.958 per Share;
(c) a discount of approximately 11.40% to the average of the closing prices of the Share as quoted on the Stock Exchange for the ten consecutive trading days up to and including the Last Trading Day of HK$3.07 per Share;
(d) a discount of approximately 3.20% to the average of the closing prices of the Share as quoted on the Stock Exchange for the 30 consecutive trading days up to and including the Last Trading Day of HK$2.81 per Share;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(e) a premium of approximately 615.79% over the unaudited total equity attributable to the owners of the Company of approximately HK$0.38 per Share (based on a total of 300,794,332 Shares in issue as at the Latest Practicable Date and the unaudited total equity attributable to the owners of the Company of approximately HK$114.4 million as at 31 March 2018), being the date to which the interim results of the Group were made up; and
(f) a discount of approximately 15.00% to the closing price of HK$3.20 per Share as quoted on the Stock Exchange on the Latest Practicable Date.

6.1.2. Share Offer Price comparable analysis

In order to assess the fairness and reasonableness of the Share Offer Price, we have conducted a comparable analysis through identifying listed companies in Hong Kong engaging in similar businesses of the Group. Having considered that (i) the Company is listed on the Main Board of the Stock Exchange; (ii) the market capitalisation of the Company was approximately HK$900 million as at the Last Trading Day; and (iii) the Group is principally engaged in the contract manufacturing, on electronic manufacturing services basis, of a wide range of power-related and electrical/electronic products, we believe it is reasonable to conduct the comparable analysis by comparing the Group with other companies engaging in electronic manufacturing services basis of a similar scale (the “ Comparable Companies ”).

In the selection of the Comparable Companies, our selection criteria targets at companies that (i) are listed on the Main Board of the Stock Exchange; (ii) have a market capitalisation range between HK$300 million and HK$1,000 million; and (iii) have over 50.0% of the revenue derived from electronic manufacturing business.

Independent Shareholders and Optionholders should note that the business, scale of operation, trading prospect, target market, product mix and capital structure of the Company are not exactly the same as those of the Comparable Companies and we have not conducted any in-depth investigation into the businesses and operations of the Comparable Companies save for the aforesaid selection criteria.

The Comparable Companies below have been selected based on the above criteria, and have been identified through our research using public information. We believe it is an exhaustive list based on these criteria.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

			Market		Net asset
			capitalisation		value per	Price to	Price to
		Description of	as at the		the latest	earnings	book ratio
Name of the	Stock	principal	Last	Profit for	published	ratio (“P/E	(“P/B
company	code	businesses	Trading Day	the year	accounts	Ratio(s)”)	Ratio(s)”)
			(HK$’000)	(HK$’000)	(HK$’000)
			(Note 1)	(Note 2)	(Note 3)	(Note 6)	(Note 7)
Yorkey Optical	2788	Engaged in the	960,687	45,084	792,472	21.3	1.2
International		manufacturing and sales
(Cayman) Ltd.		of plastic and metallic
(Note 4)		parts and components
		of optical and
		opto-electronic products
		and manufacturing and
		sales of molds and
		cases, including plastic
		and metallic parts and
		components of digital
		still cameras, action
		cameras, etc.
Yusei Holdings	96	Engaged in the design,	850,080	100,194	611,978	8.5	1.4
Limited		development and
(Note 5)		fabrication of precision
		plastic injection
		moulds, and the
		manufacture of plastic
		components. The group
		also provides services
		for certain assembling
		and further processing
		of plastic components
		for its customers.
Wong’s Kong	532	Engaged in the	824,279	113,848	1,679,394	7.2	0.5
King		manufacture of
International		electrical and electronic
(Holdings)		products for OEM
Limited		customers and the
		trading and distribution
		of chemicals, materials
		and equipment used in
		the manufacture of
		printed circuit boards
		and electronic products.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

			Market		Net asset
			capitalisation		value per	Price to	Price to
		Description of	as at the		the latest	earnings	book ratio
Name of the	Stock	principal	Last	Profit for	published	ratio (“P/E	(“P/B
company	code	businesses	Trading Day	the year	accounts	Ratio(s)”)	Ratio(s)”)
			(HK$’000)	(HK$’000)	(HK$’000)
			(Note 1)	(Note 2)	(Note 3)	(Note 6)	(Note 7)
Trio Industrial	1710	Engaged in the	390,000	70,008	332,564	5.6	1.2
Electronics		manufacturing and sales
Group		of customised industrial
Limited		electronic components
		and products, including
		electro-mechanical
		products, switch-mode
		power supplies, and
		smart chargers. The
		group is an original
		equipment
		manufacturer.
					Maximum	21.3	1.4
					Mean	10.7	1.1
					Median	7.9	1.2
					Minimum	5.6	0.5
The Company	1611	Engaged in the contract	818,149	5,194	114,396	157.5	7.2
		manufacturing, on	(Note 8)				(Note 11)
		electronic		17,389		47.1
		manufacturing services		(Note 9)		(Note 10)
		basis, of a wide range
		of power-related and
		electrical/electronic
		products.

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

Notes:

Calculated based on the closing share price and number of shares in issue as at the Last Trading Day.
Profit for the year refers to the profit for the year as per the respective companies’ latest published audited financial report.
Net asset value refers to net assets as per the respective companies’ latest published annual or interim report as the case may be.
As the financial results of the company was presented in US dollars, for illustration, the exchange rates of US$1.00 to HK$7.80 is adopted.
As the financial results of the company was presented in RMB, for illustration, the exchange rates of RMB1.00 to HK$1.20 is adopted.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

P/E Ratio is calculated based on the respective market capitalisation at the Last Trading Day divided by their respective latest published profit for the financial year.
P/B Ratio is calculated based on the respective market capitalisation at the Last Trading Day divided by their respective latest published net asset value.
The market capitalisation of the Company is implied by the Share Offer Price, which is the Share Offer Price times the number of issued Shares as at the Last Trading Day.
Profit of the Company for the year ended 30 September 2017 was approximately HK$5.2 million. For illustration purpose, the 2017 Adjusted Profit was approximately HK$17.4 million.
The implied P/E Ratio and the implied adjusted P/E Ratio of the Company are calculated based on the market capitalisation of the Company implied by the Share Offer Price divided by the profit for the year ended 30 September 2017 (which is the latest available published profit for the year of the Company prior to the Last Trading Day) and the 2017 Adjusted Profit, respectively.
The implied P/B Ratio of the Company is calculated based on the market capitalisation of the Company implied by the Share Offer Price divided by the net asset value of the Company as at 31 March 2018 (which is the latest available published net asset value of the Company prior to the Last Trading Day).

As shown in the table above, the P/E Ratios of the Comparable Companies range from approximately 5.6 times to 21.3 times, with mean and median of approximately 10.7 times and 7.9 times respectively. The implied P/E Ratio of the Company based on the Share Offer Price and the profit for the year ended 30 September 2017 is approximately 157.5 times and the implied P/E Ratio of the Company based on the Share Offer Price and the 2017 Adjusted Profit is approximately 47.1 times respectively, both of which are substantially higher than the maximum of the P/E Ratios of the Comparable Companies. Based on this, we are of the view that the Share Offer Price, from a P/E Ratio analysis standpoint, is fair and reasonable.

We have also performed the P/B Ratio analysis for reference. As shown in the table above, the P/B Ratios of the Comparable Companies range from approximately 0.5 times to 1.4 times, with mean and median of approximately 1.1 times and 1.2 times respectively. The implied P/B Ratio of the Company based on the Share Offer Price is approximately 7.2 times, which is also substantially higher than the maximum of the P/B Ratios of the Comparable Companies. Based on this, we are of the view that the Share Offer Price, from a P/B Ratio analysis standpoint, is fair and reasonable.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

6.1.3 Historical share price performance of the Company

The chart below illustrates the movement of closing prices of the Shares from the date that dealings in the Shares commenced following the Listing, up to and including the Last Trading Day (the “ Review Period ”) as well as the period after the Date of the Joint Announcement until and including the Latest Practicable Date (the “ Post Joint Announcement Period ”).

==> picture [366 x 247] intentionally omitted <==

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

The highest and lowest closing prices of the Shares as quoted on the Stock Exchange during the period commencing six months preceding the commencement of the Offer Period (as defined under the Takeovers Code, i.e. the date of the Joint Announcement) and up to the date of the Joint Announcement (i.e. from 28 February 2018 to 29 August 2018), were HK$3.26 per Share (the closing price recorded on 10 August 2018) and HK$1.07 per Share (the closing price recorded on 26 April 2018), respectively.

During the Review Period, the Shares have been traded between HK$1.07 (the lowest closing price per Share recorded on 26 April 2018) and HK$3.26 (the highest closing price per Share recorded on 10 August 2018) with the average closing price per Share during the Review Period of HK$1.44, which is lower than the Share Offer Price. The Share prices were relatively stable during the period between the date that dealings in the Shares commenced following the Listing and the date the Company announced its results for the six months ended 31 March 2018 as well as continuing connected transaction in relation to the transactions with an indirectly wholly-owned company of Mr. Simon Nai-cheng Hsu on 17 May 2018. Meanwhile, we noted an increasing trend of Share prices subsequent to the aforesaid announcements. However, we are not aware of any specific reason for such increase. Such trend continued to the Last Trading Day when trading of the Shares were temporarily halted pending the release of an announcement relating to the Offers.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

For the Post Joint Announcement Period, trading of the Shares resumed on 30 August 2018 following the issue of the Joint Announcement, and the Share price closed at HK$5.24 on 30 August 2018 and thereafter gradually fell and traded between HK$3.18 to HK$4.30 up to the Latest Practicable Date.

Shareholders should note that the information set out above is not an indication of the future performance of the Shares and that the prices of the Shares may increase or decrease from its closing price recorded on the Latest Practicable Date.

6.1.4 Historical liquidity of the Shares

Set out in the table below are the number of trading days, total monthly/period trading volume, average daily trading volume of the Shares and the percentages of such average daily trading volume to the total issued Shares and the public float of the Company during the Review Period and the Post Joint Announcement Period:

				Average daily	Average daily
		Total		trading volume	trading volume
	Number of	monthly/period	Average daily	of the Shares to	of the Shares to
	trading	trading volume	trading volume	the total issued	the public float
	days	of the Shares	of the Shares	Shares	of the Company
		(number of	(Note 1) (number	(Note 2)	(Note 3)
		Shares)	of Shares)
Review Period
2016
November	8	74,666,000	9,333,250	3.11%	11.03%
December	20	262,420,000	13,121,000	4.37%	15.51%
2017
January	19	11,804,000	621,263	0.21%	0.73%
February	20	54,594,000	2,729,700	0.91%	3.23%
March	23	36,370,000	1,581,304	0.53%	1.87%
April	17	9,672,000	568,941	0.19%	0.67%
May	20	5,322,000	266,100	0.09%	0.31%
June	22	4,790,000	217,727	0.07%	0.26%
July	21	4,242,000	202,000	0.07%	0.24%
August	22	27,210,000	1,236,818	0.41%	1.46%
September	21	31,260,000	1,488,571	0.50%	1.76%
October	20	11,056,000	552,800	0.18%	0.65%
November	22	5,472,000	248,727	0.08%	0.29%
December	19	1,846,000	97,158	0.03%	0.11%

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

				Average daily	Average daily
		Total		trading volume	trading volume
	Number of	monthly/period	Average daily	of the Shares to	of the Shares to
	trading	trading volume	trading volume	the total issued	the public float
	days	of the Shares	of the Shares	Shares	of the Company
		(number of	(Note 1) (number	(Note 2)	(Note 3)
		Shares)	of Shares)
2018
January	22	3,512,000	159,636	0.05%	0.19%
February	18	51,882,000	2,882,333	0.96%	3.41%
March	21	12,146,000	578,381	0.19%	0.68%
April	19	3,410,000	179,474	0.06%	0.21%
May	21	73,540,000	3,501,905	1.17%	4.14%
June	20	19,615,332	980,767	0.33%	1.16%
July	21	8,773,000	417,762	0.14%	0.49%
1 August up to 21
August 2018 (i.e.
the Last Trading
Day)	15	4,089,700	272,647	0.09%	0.32%
Post Joint Announcement Period
30 August 2018 up to
the Latest
Practicable Date	12	48,094,500	4,007,875	1.33%	4.74%

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

Notes:

Based on the monthly/period trading volume of the Shares divided by the total trading days of that month/period.
Based on the average daily trading volume of the Shares divided by the total number of issued Shares at the respective months.
We note that the public float of the Company at the time of initial public offering was 30.00%, which was slightly different from that of 28.13% as at the date of the Joint Announcement. Such difference was a result of the net increase in the aggregate shareholding of Mr. Simon Nai-Cheng Hsu, Mr. Henry Woon-hoe Lim and Mr. Ho Hon Ching, who are Directors, during the Review Period. For the purpose of this analysis, given that the change in public float is not material, the public float of the Company was based on the total number of issued Shares held by the public shareholders as at the date of the Joint Announcement.

Based on the above table, the average daily trading volume of the Shares in the Review Period ranged from (i) approximately 0.03% to approximately 4.37% of the total issued Shares; and (ii) from approximately 0.11% to approximately 15.51% of the public float of the Company. The average daily trading volume of the Shares during the Review Period was approximately 1,665,179 Shares, representing approximately 0.55% of the total issued Shares and approximately 1.97% of the public float of the Company. We note that the average daily trading volume of the Company was relatively higher during the initial months after the Listing in November and December 2016.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Following the publication of the Joint Announcement, the average daily trading volume of the Shares was significantly higher than that during the Review Period. We are of the view that this could be attributable to the announcement of the Offers.

6.2 Section summary

While liquidity has increased during the Post Joint Announcement Period which is likely due to the reaction towards the Offers, it is uncertain whether going forward trading in the Shares would remain active in the future to ensure sufficient liquidity in the market for Independent Shareholders who are contemplating selling their Shares or to dispose of a significant number of Shares in the open market without exerting downward pressure on the prices of the Shares. The Share Offer therefore presents an opportunity to exit at a fixed price for Independent Shareholders who may be considering realising their shareholding in the Company.

Given that (i) the Share Offer Price of HK$2.72 represents a premium of approximately 88.89% over the average of the closing prices of the Share as quoted on the Stock Exchange for all the trading days during the Review Period of HK$1.44 per Share; (ii) the implied P/E Ratio of the Company based on the Share Offer Price and the profit for the year ended 30 September 2017 is approximately 157.5 times and the implied P/E Ratio of the Company based on the Share Offer Price and the 2017 Adjusted Profit is approximately 47.1 times respectively, both of which are substantially higher than the maximum of the P/E Ratios of Comparable Companies; (iii) the Share Offer Price represents a premium of approximately 615.79% over the unaudited total equity attributable to the owners of the Company per Share; (iv) the implied P/B Ratio of the Company is substantially higher than the maximum of the P/B Ratios of Comparable Companies; and (v) it is uncertain whether trading in the Shares would remain active going forward and there may be pressure on the prices of the Shares if there is large scale disposal, we are of the view that the Share Offer at the Share Offer Price is fair and reasonable.

7. Analysis of the Option Offer

In order to assess the fairness and reasonableness of the Option Offer Price, the market normally employ “see-through” principle which is a normal practice in Hong Kong in evaluating the value of share option.

Pursuant to Rule 13.5 of the Takeovers Code and Practice Note 6 of the Takeovers Code, the Option Offer to cancel each Share Option is calculated on a see-through basis, so that the Option Offer Price would represent the difference between the exercise price of the Share Options and the Share Offer Price, which is in line with the normal practice. We note that the current Option Offer Price is derived based on the “see-through” principle, which is in accordance with the general practice. On this basis, we are of the view that the Option Offer at the Option Offer Price is fair and reasonable.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

RECOMMENDATIONS

Having considered the principal factors and reasons for the Offers above, in particular,

(i) uncertainties in the Group’s business performance in the short run due to the increasing and volatile material costs and labour costs, which in turn has adversely affected the Group’s business performance recently and perhaps in the short to medium term, as well as the potential effects arising from the trade war as detailed in the section headed “1.3 Prospects of the Group” of this letter;
(ii) no material changes to the Group’s business are expected after the close of the Offers and there is no concrete plan in respect of the Offeror’s intention to expand the Group’s business;
(iii) the Share Offer Price of HK$2.72 represents a premium of approximately 88.89% over the average of the closing prices of the Share as quoted on the Stock Exchange for all the trading days during the Review Period of HK$1.44 per Share;
(iv) the Share Offer Price of HK$2.72 represents a premium of approximately 615.79% over the unaudited total equity attributable to the owners of the Company of approximately HK$0.38 per Share;
(v) the Share Offer Price and the profit for the year ended 30 September 2017 derives an implied P/E Ratio of approximately 157.5 times; and the Share Offer Price and the 2017 Adjusted Profit derives an implied adjusted P/E Ratio of approximately 47.1 times respectively; both of which are substantially higher than the maximum of the P/E Ratios of the Comparable Companies;
(vi) the Share Offer Price represents an implied P/B Ratio of the Company of approximately 7.2 times, which is higher than the maximum of the P/B Ratios of the Comparable Companies;
(vii) it is uncertain whether trading in the Shares would remain active in the future to ensure sufficient liquidity in the market, and there may be pressure on the prices of the Shares if there is large scale disposal and thus adversely affecting the prices of the Shares; and
(viii) the Option Offer Price is derived based on the “see-through” principle, which is in accordance with the general practice,

we consider the terms of the Offers are fair and reasonable so far as the Independent Shareholders and Optionholders are concerned. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders and Optionholders to accept the Offers.

We noted that the Share Offer Price represents a discount of approximately 15.00% to the closing price of the Shares as at the Latest Practicable Date. The Independent Shareholders and Optionholders, in particular those who intend to accept the Offers, are however reminded to note the fluctuations in the price of the Shares. There is no guarantee that the current price of the Shares will

— 48 —

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

or will not sustain, and will or will not be higher than the Share Offer Price, during and after the close of the Offer Period. The Independent Shareholders and Optionholders who intend to accept the Offers are reminded to closely monitor the prices of the Shares and the liquidity of the Shares during the Offer Period for acceptance and shall, having regard to their own circumstances, consider selling the Shares or exercising the Options and selling these Shares in the open market where practicable, instead of accepting the Offers, if the net proceeds from the sale of such Shares or exercising the Options with a sale thereafter would be higher than the amount that can be received under the Offers.

The Independent Shareholders and Optionholders should carefully read the procedures for accepting the Offers as detailed in the Composite Document, the appendices and the Forms of Acceptance, if they wish to accept the Offers.

Yours faithfully, For and on behalf of Altus Capital Limited Jeanny Leung Executive Director

Ms. Jeanny Leung (“ Ms. Leung ”) is a Responsible Officer of Altus Capital Limited licensed to carry on Type 6 (advising on corporate finance) regulated activity under the SFO and permitted to undertake work as a sponsor. She is also a Responsible Officer of Altus Investments Limited licensed to carry on Type 1 (dealing in securities) regulated activity under the SFO. Ms. Leung has about 30 years of experience in corporate finance advisory and commercial field in Greater China, in particular, she has participated in sponsorship work for initial public offerings and acted as financial adviser or independent financial adviser in various corporate finance transactions.

— 49 —

APPENDIX I

FURTHER TERMS OF THE OFFERS AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

To accept the Offers, you should complete and sign the accompanying Form(s) of Acceptance in accordance with the instructions printed thereon. The instructions set out in this Composite Document should be read together with the instructions printed on the Form(s) of Acceptance which form part of the terms of the Offers.

1. PROCEDURES FOR ACCEPTANCE OF THE OFFERS

1.1 The Share Offer
(a) To accept the Share Offer, you should complete and sign the accompanying Form of Share Offer Acceptance in accordance with the instructions printed thereon, which form part of the terms of the Share Offer.
(b) If the Share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Shares is/are in your name, and you wish to accept the Share Offer, you must send the duly completed and signed Form of Share Offer Acceptance together with the relevant Share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) to the Registrar, being Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, by post or by hand, marked “ Pantronics Holdings Limited — Share Offer ” on the envelope, as soon as possible and in any event not later than 4:00 p.m. on the Closing Date or such later time and/or date as the Offeror may determine and announce in accordance with the Takeovers Code.
(c) If the Share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Shares is/are in the name of a nominee company or a name other than your own, and you wish to accept the Share Offer whether in full or in part of your Shares, you must either:
- (i) lodge your Share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) with the nominee company, or other nominee, with instructions authorising it to accept the Share Offer on your behalf and requesting it to deliver in an envelope marked “ Pantronics Holdings Limited — Share Offer ” with the duly completed and signed Form of Share Offer Acceptance together with the relevant Share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) to the Registrar; or
- (ii) arrange for the Shares to be registered in your name by the Company through the Registrar, and deliver in an envelope marked “ Pantronics Holdings Limited — Share Offer ” with the duly completed and signed Form of Share Offer Acceptance together

— I-1 —

APPENDIX I FURTHER TERMS OF THE OFFERS AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

with the relevant Share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) to the Registrar; or

(iii) if your Shares have been lodged with your licensed securities dealer/registered institution in securities/custodian bank through CCASS, instruct your licensed securities dealer/registered institution in securities/custodian bank to authorise HKSCC Nominees Limited to accept the Share Offer on your behalf on or before the deadline set by HKSCC Nominees Limited. In order to meet the deadline set by HKSCC Nominees Limited, you should check with your licensed securities dealer/registered institution in securities/custodian bank for the timing on the processing of your instruction, and submit your instruction to your licensed securities dealer/registered institution in securities/custodian bank as required by them; or
(iv) if your Shares have been lodged with your investor participant’s account maintained with CCASS, authorise your instruction via the CCASS Phone System or CCASS Internet System on or before the deadline set out by HKSCC Nominees Limited.
(d) If the Share certificate(s) and/or transfer receipts and/or other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Shares is/are not readily available and/or is/are lost, as the case may be, and you wish to accept the Share Offer in respect of your Shares, the Form of Share Offer Acceptance should nevertheless be completed, signed and delivered in an envelope marked “ Pantronics Holdings Limited — Share Offer ” to the Registrar together with a letter stating that you have lost one or more of your Share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) or that it/they is/are not readily available. If you find such document(s) or if it/they become(s) available, it/they should be forwarded to the Registrar as soon as possible thereafter. If you have lost your Share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title, you should also write to the Registrar a letter of indemnity which, when completed in accordance with the instructions given, should be returned to the Registrar.
(e) If you have lodged transfer(s) of any of your Shares for registration in your name and have not yet received your Share certificate(s), and you wish to accept the Share Offer in respect of your Shares, you should nevertheless complete and sign the Form of Share Offer Acceptance and deliver it in an envelope marked “ Pantronics Holdings Limited — Share Offer ” to the Registrar together with the transfer receipt(s) duly signed by yourself. Such action will be deemed to be an irrevocable authority to the Offeror and/or Kingston Securities and/or their respective agent(s) to collect from the Company or the Registrar on your behalf the relevant Share certificate(s) when issued and to deliver such Share certificate(s) to the Registrar on your behalf and to authorise and instruct the Registrar to hold such Share certificate(s), subject to the terms and conditions of the Share Offer, as if it was/they were delivered to the Registrar with the Form of Share Offer Acceptance.

— I-2 —

APPENDIX I

FURTHER TERMS OF THE OFFERS AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

(f) Acceptance of the Share Offer will be treated as valid only if the completed and signed Form of Share Offer Acceptance is received by the Registrar by no later than 4:00 p.m. on the Closing Date (or such later time and/or date as the Offeror may determine and announce in accordance with the Takeovers Code) and the Registrar has recorded the Form of Share Offer Acceptance and any relevant documents required by the Takeovers Code have been so received, and is:
(i) accompanied by the relevant Share certificate(s) and/or transfer receipt(s) and/ or other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) and, if that/those Share certificate(s) and/or transfer receipt(s) and/or other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) is/are not in your name, such other documents (e.g. a duly stamped transfer of the relevant Share(s) in blank or in your favour executed by the registered holder) in order to establish your right to become the registered holder of the relevant Shares; or
(ii) from a registered Shareholder or his/her/its personal representative (but only up to the amount of the registered holding and only to the extent that the acceptance relates to the Shares which are not taken into account under another subparagraph of this paragraph (f)); or
(iii) certified by the Registrar or the Stock Exchange.

If the Form of Share Offer Acceptance is executed by a person other than the registered Shareholder, appropriate documentary evidence of authority (e.g. grant of probate or certified copy of a power of attorney) to the satisfaction of the Registrar must be produced.

(g) No acknowledgement of receipt of any Form of Share Offer Acceptance, Share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) will be given.
1.2 The Option Offer
(a) To accept the Option Offer, you should complete and sign the Form of Option Offer Acceptance in accordance with the instructions printed thereon, which form part of the terms of the Option Offer.
(b) If you are an Optionholder and you wish to accept the Option Offer in respect of your Share Options (whether in full or in part), you must send duly completed and signed Form of Option Offer Acceptance, together with the relevant certificate(s) of the Share Options (if applicable) and/or other document(s) of title or entitlement (and/or satisfactory indemnity or indemnities required in respect thereof) for the aggregate principal amount of Share Options which you hold that you wish to tender to the Option Offer, by post or by hand, in an envelope marked “ Pantronics Holdings Limited — Option Offer ”, to the company

— I-3 —

APPENDIX I FURTHER TERMS OF THE OFFERS AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

secretary of the Company, at Suite 1603A, 16/F, Tower 2, Nina Tower, 8 Yeung Uk Road, Tsuen Wan, Hong Kong as soon as possible and in any event no later than 4:00 p.m. on the Closing Date or such later time(s) and/or date(s) as the Offeror may determine and announce in compliance with the requirements of the Takeovers Code.

(c) No stamp duty is payable in connection with the acceptances of the Option Offer.
(d) No acknowledgement of receipt of any Form of Option Offer Acceptance, certificate(s) of the Share Options (if applicable) and/or any other documents of title (and/or any satisfactory indemnity/indemnities required in respect thereof) will be given.

2. SETTLEMENT OF THE OFFERS

2.1 The Share Offer

Provided that a valid Form of Share Offer Acceptance and the relevant certificate(s) and/or transfer receipt(s) and/or other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) are complete and in good order in all respects in accordance with the Takeovers Code and have been received by the Registrar no later than 4:00 p.m. on the Closing Date or such later time and/or date as the Offeror may determine and announce in accordance with the Takeovers Code, a cheque for the amount representing the cash consideration due to each of the Independent Shareholders who accepts the Share Offer less seller’s Hong Kong ad valorem stamp duty in respect of the Shares tendered by it/him/her under the Share Offer will be despatched to such Independent Shareholder by ordinary post at its/his/her own risk as soon as possible but in any event within seven (7) Business Days after the date on which all the relevant documents which render such acceptance complete and valid are received by the Registrar in accordance with the Takeovers Code.

2.2 The Option Offer

Provided that a valid Form of Option Offer Acceptance and the relevant certificate(s) of Share Option or other documents (if any) evidencing the grant of the Share Options and any documents of title or entitlement (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of the relevant Share Options are complete and in good order and in all respects and have been received by the company secretary of the Company by 4:00 p.m. on the Closing Date, a cheque or a banker’s cashier order for the amount due to each of the Optionholders who accept the Option Offer in respect of the Share Options tendered by him/her under the Option Offer will be despatched to such Optionholder by ordinary post at his/her own risk as soon as possible but in any event within seven (7) Business Days following the later of the date on which the duly completed acceptances of the Option Offer and the relevant documents of title in respect of such acceptances are received by the company secretary of the Company to render such acceptance complete and valid.

Settlement of the consideration to which any accepting Independent Shareholder or Optionholder is entitled under the Share Offer or the Option Offer will be implemented in full in accordance

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APPENDIX I

FURTHER TERMS OF THE OFFERS AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

with the terms of the Offers (save with respect to the payment of seller’s Hong Kong ad valorem stamp duty of the Share Offer), without regard to any lien, right of set-off, counterclaim or other analogous right to which the Offeror may otherwise be, or claim to be, entitled against such accepting Independent Shareholder or Optionholder.

No fractions of a cent (HK$) will be payable and the amount of cash consideration payable to an Independent Shareholder or Optionholder who accepts the Share Offer or the Option Offer will be rounded up to the nearest cent (HK$).

3. ACCEPTANCE PERIOD AND REVISIONS

(a) In order to be valid for the Offers, the Form of Share Offer Acceptance and Form of Option Offer Acceptance must be received by the Registrar and the company secretary of the Company respectively in accordance with the instructions printed thereon by 4:00 p.m. on the Closing Date, unless the Offers are extended or revised in accordance with the Takeovers Code. The Offers are unconditional.
(b) The Offeror reserves the right to revise the terms of the Offers in accordance with the Takeovers Code. If the Offeror revises the terms of the Offers, all the Independent Shareholders and the Optionholders, whether or not they have already accepted the Offers, will be entitled to accept the revised Offers under the revised terms.
(c) If the Offers are extended or revised, the announcement of such extension or revision will state the next closing date or the Offers will remain open until further notice. In the latter case, at least 14 days’ notice in writing will be given before the Offers are closed to the Independent Shareholders and the Optionholders who have not accepted the Offers, and an announcement will be released. The revised Offers will be kept open for at least 14 days thereafter.
(d) If the Closing Date of the Offers are extended, any reference in this Composite Document and in the Forms of Acceptance to the Closing Date shall, except where the context otherwise requires, be deemed to refer to the closing date of the Offers as so extended.
(e) Any acceptance of the relevant revised Offers shall be irrevocable unless and until the Independent Shareholders and the Optionholders who accept the Offers become entitled to withdraw their acceptance under the paragraphs headed “7. RIGHT OF WITHDRAWAL” below and duly do so.

4. EXERCISE OF OPTIONS

Optionholders who wish to accept the Share Offer may (i) exercise his/her/its Share Options (to the extent exercisable) by completing, signing and delivering a notice for exercising the Share Options together with a cheque for payment of the subscription monies and the related certificates (if applicable) for the Share Options to the company secretary of the Company before the Offers close; and (ii) at the same time, or in any event no later than 4:00 p.m. on the Closing Date, complete and

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APPENDIX I

FURTHER TERMS OF THE OFFERS AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

sign the Form of Share Offer Acceptance and deliver it to the Registrar together with a copy of the set of documents delivered to the Company for exercising the Share Options. Exercise of the Share Options is subject to the respective terms and conditions of the Share Option Scheme and the terms attaching to the grant of the relevant Share Options. Delivery of the completed and signed Form of Share Offer Acceptance to the Registrar will not serve to complete the exercise of the Share Options but will only be deemed to be an irrevocable authority to the Offeror and/or Kingston Securities and/or any of their respective agent(s) or such other person(s) as they may direct to collect from the Company or the Registrar on his/her/its behalf the relevant share certificate(s) when issued on exercise of the Share Options as if it/they were delivered to the Registrar with the Form of Share Offer Acceptance. If the Optionholder fails to exercise his/her/ its Share Options as aforesaid and in accordance with the respective terms and conditions of the Share Option Scheme, there is no guarantee that the Company may issue the relevant share certificate in respect of the Shares allotted pursuant to his/her/its exercise of the Share Option(s) to such Optionholder in time for it to accept the Share Offer as an Independent Shareholder of such Shares under the terms of the Share Offer.

Lapse of the Share Options

5. NOMINEE REGISTRATION

To ensure equality of treatment of all Independent Shareholders, those registered Independent Shareholders who hold the Shares as nominees for more than one beneficial owner should, as far as practicable, treat the holding of each beneficial owner separately. It is essential for the beneficial owners of the Shares whose investments are registered in the names of nominees to provide instructions to their nominees of their intentions with regard to the Share Offer.

6. ANNOUNCEMENTS

(a) By 6:00 p.m. on the Closing Date (or such later time and/or date as the Executive may in exceptional circumstances permit), the Offeror must inform the Executive and the Stock Exchange of its decision in relation to the revision, extension or expiry of the Offers. The Offeror must post an announcement on the Stock Exchange’s website by 7:00 p.m. on the Closing Date stating the results of the Offers and whether the Offers have been revised, extended, or have expired.

— I-6 —

APPENDIX I

FURTHER TERMS OF THE OFFERS AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

The announcement must state the following:

(i) the total number of Offer Shares for which acceptances for the Share Offer have been received;
(ii) the total number of Share Options for which acceptances of the Option Offer have been received;
(iii) the total number of Shares and Share Options held, controlled or directed by the Offeror and parties acting in concert with it (including Trinity Gate) before the Offer Period; and
(iv) the total number of Shares acquired or to be acquired, or the number of Share Options cancelled as the case may be in connection during the Offer Period by the Offeror and persons acting in concert with it (including Trinity Gate).

The announcement must include details of any relevant securities (as defined in the Takeovers Code) in the Company which the Offeror and parties acting in concert with it (including Trinity Gate) have borrowed or lent, save for any borrowed shares which have been either on-lent or sold.

The announcement must also specify the percentages of the issued share capital of the Company and the percentages of voting rights of the Company represented by these numbers.

(b) In computing the total number or principal amount of Shares and Share Options represented by acceptances, only valid acceptances that are complete, in good order and fulfill the acceptance conditions set out in this appendix, and which have been received by the Registrar (in respect of the Share Offer) or the company secretary of the Company (in respect of the Option Offer) respectively no later than 4:00 p.m. on the Closing Date, unless the Offers are extended or revised in accordance with the Takeovers Code, shall be included.
(c) As required under the Takeovers Code, all announcements in relation to the Offers which the Executive and the Stock Exchange have confirmed that they have no further comments thereon must be made in accordance with the requirements of the Takeovers Code and the Listing Rules.

7. RIGHT OF WITHDRAWAL

(a) Acceptance of the Offers tendered by the Independent Shareholders and the Optionholders shall be irrevocable and cannot be withdrawn, except in the circumstances set out in subparagraph (b) below.

— I-7 —

APPENDIX I FURTHER TERMS OF THE OFFERS AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

(b) If the Offeror is unable to comply with the requirements set out in the paragraphs headed “6. ANNOUNCEMENTS” above, the Executive may require that the Independent Shareholders and Optionholders who have tendered acceptances to the Offers be granted a right of withdrawal on terms that are acceptable to the Executive until the requirements set out in those paragraphs are met.

In such case, when any Independent Shareholder(s) and Optionholders withdraw their acceptance(s), the Offeror shall, as soon as possible but in any event within 10 days thereof, return by ordinary post the Share certificate(s) and/or transfer receipt(s) and/or other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of the Shares lodged with the Form(s) of Acceptance to the relevant Independent Shareholder(s) and to the company secretary of the Company for collection of such Optionholder(s).

8. OVERSEAS SHAREHOLDERS AND OVERSEAS OPTIONHOLDERS

The availability of the Offers to persons who are not Hong Kong residents or who have registered addresses outside Hong Kong may be affected by the applicable laws and regulations of the relevant jurisdictions. Overseas Shareholders and Overseas Optionholders who are citizens, residents or nationals of a jurisdiction outside Hong Kong should fully observe all applicable legal or regulatory requirements and, where necessary, seek their own legal advice. It is the responsibility of the Overseas Shareholders and Overseas Optionholders who wish to accept the Offers to satisfy themselves as to the full observance of the laws and regulations of the relevant jurisdictions in connection with the Offers (including the obtaining of any governmental, exchange control or other consents which may be required or compliance with other necessary formalities and the payment of any transfer or other taxes due by such accepting Overseas Shareholders and Overseas Optionholders in respect of such jurisdictions).

Acceptance of the Offers by any Overseas Shareholders and Overseas Optionholders will be deemed to constitute a representation and warranty from such Overseas Shareholders and Overseas Optionholders to the Offeror that all the laws and requirements of the relevant jurisdictions have been complied with. The Offeror and parties acting in concert with it (including Trinity Gate), the Company, Kingston Securities, Kingston Corporate Finance, Optima Capital Limited, Altus Capital, the Registrar, their respective ultimate beneficial owners, directors, officers, agents and associates and any other person involved in the Offers shall be entitled to be fully indemnified and held harmless by such person for any taxes as such person may be required to pay. The Overseas Shareholders and Overseas Optionholders should consult their professional advisers if in any doubt. The Overseas Shareholders and Overseas Optionholders who are in doubt as to the action they should take should consult a licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional advisers.

9. HONG KONG STAMP DUTY

The seller’s Hong Kong ad valorem stamp duty payable by the Independent Shareholders who accept the Share Offer and calculated at a rate of 0.1% of (i) the market value of the Offer Shares; or (ii) the consideration payable by the Offeror in respect of the relevant acceptances of the Share Offer, whichever is higher, will be deducted from the cash amount payable by the Offeror to the relevant Independent Shareholders who accept the Share Offer.

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APPENDIX I

FURTHER TERMS OF THE OFFERS AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

No Stamp duty is payable in connection with the acceptance of the Option Offer.

10. TAXATION ADVICE

None of the Offeror, parties acting in concert with the Offeror (including Trinity Gate), the Company, the Vendor, the Guarantor, Kingston Securities, Kingston Corporate Finance, Optima Capital Limited, Altus Capital, the Registrar or any of their respective ultimate beneficial owners, directors, officers, advisers, agents or associates or any other person involved in the Offers is in a position to advise the Independent Shareholders and the Optionholders on their individual tax implications. Independent Shareholders and Optionholders are recommended to consult their own professional advisers if they are in any doubt as to the taxation implications of accepting or rejecting the Offers. None of the Offeror, parties acting in concert with the Offeror (including Trinity Gate), the Company, the Vendor, the Guarantor, Kingston Securities, Kingston Corporate Finance, Optima Capital Limited, Altus Capital, the Registrar or any of their respective ultimate beneficial owners, directors, officers, advisers, agents or associates or any other person involved in the Offers accepts any responsibility for any taxation effects on, or liabilities of, any persons as a result of their acceptance or rejection of the Offers.

11. GENERAL

(a) All communications, notices, Form(s) of Acceptance, Share certificate(s), transfer receipt(s), other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) and remittances to settle the consideration payable under the Offers to be delivered by or sent to or from the Independent Shareholders and/or the Optionholders will be delivered by or sent to or from them, or their designated agents, by ordinary post at their own risk. None of the Offeror, its beneficial owners, the Company, Kingston Securities, Kingston Corporate Finance, Optima Capital Limited, Altus Capital, the Registrar, and any of their respective directors and professional advisers and any other parties involved in the Offers and any of their respective agents accepts any liability for any loss or delay in postage or any other liabilities that may arise as a result thereof.
(b) The provisions set out in the Form of Share Offer Acceptance and Form of Option Offer Acceptance form part of the terms and conditions of the Share Offer and Option Offer, respectively.

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APPENDIX I FURTHER TERMS OF THE OFFERS AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

(c) The accidental omission to despatch this Composite Document and/or Form(s) of Acceptance or any of them to any person to whom the Offers are made will not invalidate either the Share Offer or the Option Offer in any way.
(d) The Offers are, and all acceptances will be, governed by and construed in accordance with the laws of Hong Kong.
(e) Due execution of the Form(s) of Acceptance will constitute an irrevocable authority to the Offeror, Kingston Securities, Kingston Corporate Finance, or such person or persons as the Offeror may direct to complete, amend and execute any document on behalf of the person or persons accepting the Offers and to do any other act that may be necessary or expedient for the purposes of vesting in the Offeror, or such person or persons as they may direct, the Shares or the Share Options in respect of which such person or persons has/have accepted the Offers.
(f) Acceptance of the Share Offer by any Independent Shareholders will be deemed to constitute a warranty by such person or persons to the Offeror and the Company that the Shares acquired under the Share Offer are sold by such person or persons free from all Encumbrances and together with all rights accruing or attaching thereto including (without limitation) the rights to receive in full any and all dividends and distributions declared, made or paid on or after the date on which the Share Offer is made.
(g) Acceptance of the Option Offer by any Optionholders will be deemed to constitute a warranty by such person that the Share Options and all rights attached thereto are cancelled with effect from the date on which the Option Offer is made, being the date of this Composite Document.
(h) References to the Offers in this Composite Document and the Form(s) of Acceptance shall include any revision and/or extension thereof.
(i) The making of the Offers to the Overseas Shareholders and Overseas Optionholders may be prohibited or affected by the laws of the relevant jurisdictions. The Overseas Shareholders and Overseas Optionholders should inform themselves about and observe any applicable legal or regulatory requirements. It is the responsibility of each Overseas Shareholder and Overseas Optionholder who wishes to accept the Offers to satisfy himself/herself/itself as to the full observance of the laws and regulations of all relevant jurisdictions in connection therewith, including, but not limited to the obtaining of any governmental, exchange control or other consents and any registration or filing which may be required and the compliance with all necessary formalities, regulatory and/or legal requirements. Such Overseas Shareholders and Overseas Optionholders shall be fully responsible for the payment of any transfer or cancellation or other taxes and duties due by such Overseas Shareholders and Overseas Optionholders in respect of the relevant jurisdictions. The Overseas Shareholders and Overseas Optionholders are recommended to seek professional advice on deciding whether or not to accept the Offers.

— I-10 —

APPENDIX I

FURTHER TERMS OF THE OFFERS AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

(j) Acceptance of the Offers by any nominee will be deemed to constitute a warranty by such nominee to the Offeror that the number of Shares or Share Options, in respect of which it is indicated in the Form(s) of Acceptance, is the aggregate number of Shares or Share Options held by such nominee for such beneficial owners who accept the Offers.
(k) Acceptance of the Offers by any Independent Shareholders or Optionholders will be deemed to constitute a warranty by such persons that such persons are permitted under all applicable laws and regulations to receive and accept the Offers, and any revision thereof, and such acceptances shall be valid and binding in accordance with all applicable laws and regulations. Any such persons will be responsible for any such issue, transfer and other applicable taxes or other governmental payments payable by such persons.
(l) Subject to the Takeovers Code, the Offeror reserves the right to notify any matter (including the making of the Offers) to all or any Independent Shareholders and the Optionholders with registered address(es) outside Hong Kong or whom the Offeror, Kingston Securities or Kingston Corporate Finance, knows to be nominees, trustees or custodians for such persons by announcement in which case such notice shall be deemed to have been sufficiently given notwithstanding any failure by any such Independent Shareholders and the Optionholders to receive or see such notice, and all references in this Composite Document to notice in writing shall be construed accordingly.
(m) In making their decision, the Independent Shareholders and Optionholders must rely on their own examination of the Offeror, the Group and the terms of the Share Offer and the Option Offer, including the merits and risks involved. The contents of this Composite Document, including any general advice or recommendation contained herein, together with the Form(s) of Acceptance, shall not be construed as any legal or business advice on the part of the Company, the Offeror and parties acting in concert with it (including Trinity Gate), Kingston Securities, Kingston Corporate Finance, Optima Capital Limited, Altus Capital, the Registrar or any of their respective ultimate beneficial owners, directors, officers, agents, professional advisers or associates or any other persons involved in the Offers. The Independent Shareholders and Optionholders should consult their own professional advisers for professional advice.

— I-11 —

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

1. SUMMARY OF FINANCIAL INFORMATION OF THE GROUP

Set out below is a summary of (i) the audited consolidated financial results of the Group for each of the three years ended 30 September 2015, 2016 and 2017 as extracted from the annual reports of the Company for the years ended 30 September 2016 and 2017; and (ii) the unaudited consolidated financial results of the Group for the six months ended 31 March 2018 as extracted from the interim report of the Company for the six months ended 31 March 2018.

For the six months ended 31 March 2018 HK$’000 (unaudited) Revenue 161,032 Profit before income tax 1,250 Income tax expense (264) Profit for the period/year 986 Profit for the period/year attributable to owners of the Company 986 Other comprehensive income Item that may be reclassified subsequently to profit or loss: Exchange differences arising on the translation of financial statements of foreign operations 3,852	For the year ended 30 2017 2016 HK$’000 HK$’000 (audited) (audited) 306,422 289,002 10,034 23,423 (4,840) (8,759) 5,194 14,664 5,194 14,664 671 (2,865)	September 2015 HK$’000 (audited) 327,634 43,187 (9,979) 33,208 33,208 (2,459)

— II-1 —

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

For the six months ended 31 March 2018 HK$’000 (unaudited) Other comprehensive income for the period/year, net of tax 3,852 Total comprehensive income for the period/year attributable to owners of the Company 4,838 Earnings per Share Basic and diluted (HK cents per Share) 0.33 Dividends per Share (HK cents per Share) Nil	For the year ended 30 2017 2016 HK$’000 HK$’000 (audited) (audited) 671 (2,865) 5,865 11,799 1.78 6.19 5.00 N/A_(Note)_	September 2015 HK$’000 (audited) (2,459) 30,749 14.01 N/A_(Note)_

Note: Prior to the listing of the Shares on the Main Board of the Stock Exchange, the Company declared a total dividend of HK$67,094,000 and HK$50,000,000 for the years ended 30 September 2015 and 30 September 2016 respectively.

Save for (i) the listing expenses in relation to the Group’s listing on the Stock Exchange in November 2016 amounted to approximately HK$17,227,000 and HK$5,873,000 for the years ended 30 September 2016 and 2017, respectively; and (ii) the relocation costs of the Group’s manufacturing base amounted to approximately HK$8,026,000 for the year ended 30 September 2017, the Group had no item of any income or expense which was material for the years ended 30 September 2015, 2016 and 2017.

The auditor of the Company, BDO Limited, has not issued any qualified opinion or modified opinion (including emphasis of matter, adverse opinion and disclaimer of opinion) on the respective financial statements of the Group for the three years ended 30 September 2015, 2016 and 2017, and nothing has come to their attention that causes them to believe that the interim financial report for the six months ended 31 March 2018 is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34, Interim financial reporting .

2. AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP FOR THE YEAR ENDED 30 SEPTEMBER 2017

Set out below are the audited consolidated financial statements of the Group for the year ended 30 September 2017 contained in the annual report of the Company for the year ended 30 September 2017 (the “ 2017 Annual Report ”), which has been published on the websites of the Company (http://www.pantronicshk.com) and the Stock Exchange (http://www.hkexnews.hk/listedco/listconews/SEHK/2018/0123/LTN20180123706.pdf).

— II-2 —

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

(i) Consolidated Statement of Financial Position as at 30 September 2017

Please refer to page 45 of the 2017 Annual Report.

(ii) Consolidated Statement of Cash Flows for the year ended 30 September 2017

Please refer to pages 47 to 48 of the 2017 Annual Report.

(iii) Other Consolidated Financial Statements for the year ended 30 September 2017
(a) Consolidated Statement of Profit or Loss for the year ended 30 September 2017

Please refer to page 43 of the 2017 Annual Report.

(b) Consolidated Statement of Other Comprehensive Income for the year ended 30 September 2017

Please refer to page 44 of the 2017 Annual Report.

Please refer to page 46 of the 2017 Annual Report.

(iv) Significant Accounting Policies and Notes to the Audited Consolidated Financial Statements for the year ended 30 September 2017

Please refer to pages 49 to 99 of the 2017 Annual Report.

3. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP FOR THE SIX MONTHS ENDED 31 MARCH 2018

The unaudited consolidated financial statements of the Group for the six months ended 31 March 2018 and notes thereto are set out on pages 12 to 43 of the interim report of the Company for the six months ended 31 March 2018, which has been published on the websites of the Company (http://www.pantronicshk.com) and the Stock Exchange (http://www.hkexnews.hk/listedco/listconews/SEHK/2018/0530/LTN20180530449.pdf).

4. MATERIAL CHANGE

Save as disclosed below, the Directors confirm that there were no material change in the financial and trading position or outlook of the Group since 30 September 2017, being the date to which the latest published audited consolidated financial statements of the Group were made up, and up to and including the Latest Practicable Date:

(i) As disclosed in the interim report for the six months ended 31 March 2018, the Group recorded a net profit of approximately HK$1.0 million for the six months ended

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APPENDIX II

FINANCIAL INFORMATION OF THE GROUP

31 March 2018 as compared to a net profit of approximately HK$2.2 million for the same period of last year. The drop in the financial results of the Group for the six months ended 31 March 2018 was mainly due to the increase in costs associated with the sales, including the impact of higher raw material prices, predominantly copper, and higher labour costs;

(ii) as disclosed in the Joint Announcement, Pantene Industrial issued the Promissory Note to the Vendor in the principal amount of HK$100,000,000 which was completed on 24 August 2018; and
(iii) there has been a trade war between the United States of America (the “ U.S. ”) and China since early 2018 where higher tariffs on certain goods traded were being imposed. If that is the case, certain products manufactured by the Group to be exported to the U.S. may be adversely affected in the future.

5. INDEBTEDNESS

As at the close of business on 31 July 2018, being the latest practicable date for the purpose of this statement of indebtedness prior to the printing of this Composite Document, the details of the Group’s indebtedness are as follows:

Bank borrowings

The following table sets out the Group’s borrowings as at the close of business on 31 July 2018:

	As at 31 July
	2018
	HK$’000
Bank borrowings (all secured) comprise:
Asset-backed lending	27,471
Export invoices/loan financing	12,863
Term loan subject to repayment on demand clause	13,348
	53,682

As at the close of business on 31 July 2018, the Group had bank borrowings of approximately HK$53,682,000 comprising (i) a borrowing of HK$27,471,000 which carried interest rate of 2% per annum over 4 months London Interbank Offered Rate and is repayable within 60 days; (ii) a borrowing of HK$12,863,000 which carried variable interest rates linked to the relevant prime rates applicable to the country in which the facility has been taken out and is repayable within 60 to 90 days; and (iii) loans totalling HK$13,348,000 which carried interest rate of 110% of the applicable People’s Bank of China benchmark lending rate and are scheduled for repayment in five equal six-monthly instalments commencing 12 months from the first drawdown date of each loan.

— II-4 —

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

Pledge of assets

The Group’s banking facilities amounted to approximately HK$129,286,000, comprising overdraft, confidential invoicing, import loans and a term loan. The facilities were secured against certain keyman insurance and debentures over all of the assets of a wholly-owned subsidiary of the Company, certain corporate guarantees from the Company and, in the case of the confidential invoice facility, an assignment over specific trade receivables. As at the close of business on 31 July 2018, the amount drawn down under the confidential invoice facility was approximately HK$27,471,000, the import loan facility was approximately HK$12,863,000 and the term loan was approximately HK$13,348,000.

As at the close of business on 31 July 2018, the Group had unutilised banking facilities amounted to approximately HK$75,604,000.

Contingent liabilities

As at the close of business on 31 July 2018, the Group had no material contingent liabilities.

Save as aforesaid or as otherwise disclosed herein, and apart from intra-group liabilities and normal trade and other payables in the ordinary course of business, the Group did not have any loan capital issued or agreed to be issued but unissued, bank overdrafts or loans, or other similar indebtedness, liabilities under acceptances (other than normal trade bills), acceptance credits, debentures, mortgages, charges, finance lease or hire purchase commitments, guarantees or other material contingent liabilities outstanding as at the close of business on 31 July 2018.

The Directors have confirmed that there had not been any material change in the indebtedness or contingent liabilities of the Group since 31 July 2018 and up to the Latest Practicable Date.

— II-5 —

GENERAL INFORMATION OF THE OFFEROR

APPENDIX III

RESPONSIBILITY STATEMENT

The directors of the Offeror and Mr. Li jointly and severally accept full responsibility for the accuracy of the information contained in this Composite Document (other than that relating to the Group, the Vendor and parties acting in concert with any of them), and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this Composite Document (other than those expressed by the Directors) have been arrived at after due and careful consideration and there are no other facts not contained in this Composite Document, the omission of which would make any statement contained in this Composite Document misleading.

DISCLOSURE OF INTERESTS

Save as disclosed below, as at the Latest Practicable Date, none of the Offeror, the directors of the Offeror nor any party acting in concert with the Offeror (including Trinity Gate) owned or controlled any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company.

			Approximate
			percentage of the
			total number of
		Number of Shares	issued Shares
Name of Shareholders	Capacity	held/interested	(Note 3)
			(%)
The Offeror (Note 1)	Beneficial owner	199,295,269	66.26
Huobi Universal Inc. (Note 1)	Interest of controlled	199,295,269	66.26
	corporation
Techwealth Limited (Note 1)	Interest of controlled	199,295,269	66.26
	corporation
Huobi Capital Inc. (Note 1)	Interest of controlled	199,295,269	66.26
	corporation
Mr. Li (Note 1)	Interest of controlled	199,295,269	66.26
	corporation
Trinity Gate (Note 2)	Beneficial owner	16,280,731	5.41
Timeness Vision (Note 2)	Interest of controlled	16,280,731	5.41
	corporation
Mr. Teng (Note 2)	Interest of controlled	16,280,731	5.41
	corporation

Notes:

The Offeror is a company incorporated in the Cayman Islands with limited liability which is owned as to 30% by Huobi Capital Inc. and as to 70% by Huobi Universal Inc.. Mr. Li holds the entire share capital of Huobi Capital Inc. and controls Huobi Universal Inc. via Techwealth Limited as at the Latest Practicable Date. Accordingly, Mr. Li is deemed to be interested in the Shares held by the Offeror under the SFO.

Trinity Gate is a company incorporated in the BVI with limited liability, which is wholly-owned by Timeness Vision which in turn is wholly and ultimately owned by Mr. Teng as at the Latest Practicable Date. Accordingly, Mr. Teng is deemed to be interested in the Shares held by Trinity Gate under the SFO. The 16,280,731 Shares held by Trinity Gate as at the Latest Practicable Date do not include the 4,166,668 Option Shares to be owned by it upon the completion of the Option Shares Agreements.
Based on 300,794,332 Shares in issue as at the Latest Practicable Date.

— III-1 —

GENERAL INFORMATION OF THE OFFEROR

APPENDIX III

DEALING AND INTERESTS IN THE COMPANY’S SECURITIES

As at the Latest Practicable Date:

(i) save for the Sale Shares, none of the Offeror and parties acting in concert with it (including Trinity Gate) held, owned or had control or direction over any voting rights or rights over Shares or convertible securities, warrants, options or derivatives of the Company;
(ii) save for the Option Shares under the Option Shares Agreements, there was no outstanding derivative in respect of the securities of the Company which has been entered into by the Offeror, and/or any parties acting in concert with it (including Trinity Gate);
(iii) none of the Offeror and parties acting in concert with it (including Trinity Gate) has borrowed or lent any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company;
(iv) save for the Sale and Purchase Agreement, the Option Shares Agreements, the Loan Facility Agreement and the Share Charges, there was no arrangement (whether by way of option, indemnity or otherwise) of any kind referred to in Note 8 to Rule 22 of the Takeovers Code in relation to the shares of the Offeror or the Shares;
(v) there was no agreement or arrangement to which the Offeror or parties acting in concert with it (including Trinity Gate) is a party which relates to circumstances in which it may or may not invoke or seek to invoke a pre-condition or condition to the Offers;
(vi) none of the Offeror and parties acting in concert with it (including Trinity Gate) has received any irrevocable commitment(s) to accept or reject the Offers;
(vii) save for the Loan Facility Agreement and the Share Charges, there was no agreement, arrangement or understanding that any securities of the Company acquired in pursuance of the Offers would be transferred, charged or pledged to any other persons;
(viii) no benefit (other than statutory compensation) was or will be given to any Directors as compensation for loss of office or otherwise in connection with the Offers;
(ix) other than the consideration paid by each of the Offeror and Trinity Gate to the Vendor under the Sale and Purchase Agreement and the consideration paid by Trinity Gate to Mr. Simon Nai-cheng Hsu, being one of the Option Shares Vendors, under the Option Shares Agreement, there was no other consideration, compensation or benefits paid by the Offeror and parties acting in concert with it (including Trinity Gate) to the Vendor and parties acting in concert with it; and
(x) there was no special deal (as defined under Rule 25 of the Takeovers Code) between the Offeror and parties acting in concert with it (including Trinity Gate) and the Vendor and parties acting in concert with it.

— III-2 —

GENERAL INFORMATION OF THE OFFEROR

APPENDIX III

During the Relevant Period,

(i) save for the Sale and Purchase Agreement and the Option Shares Agreements, none of the Offeror and parties acting in concert with it (including Trinity Gate) has dealt in or owned any Shares, warrants, options, derivatives or other securities convertible into Shares;
(ii) save for the entering into of the Sale and Purchase Agreement and the transactions contemplated thereunder, none of the directors of the Offeror had dealt for value in any Shares or any convertible securities, warrants, options or derivatives in respect of any Shares; and
(iii) save for the entering into of the Option Shares Agreements and the transactions contemplated thereunder, no person who had any arrangement of the kind referred to in Note 8 to Rule 22 of the Takeovers Code with the Offeror or any person acting in concert with it (including Trinity Gate) had dealt for value in any Shares or any convertible securities, warrants, options or derivatives in respect of any Shares.

MARKET PRICES

The table below shows the closing price of the Shares quoted on the Stock Exchange on (i) the last day on which trading took place in each of the calendar months during the Relevant Period; (ii) the Last Trading Day; and (iii) the Latest Practicable Date.

Date	Closing price per Share
	HK$
2018
28 February	1.36
29 March	1.15
30 April	1.12
31 May	2.53
29 June	2.52
31 July	2.91
21 August (Last Trading Day)	3.08
31 August	4.30
14 September (Latest Practicable Date)	3.20

— III-3 —

GENERAL INFORMATION OF THE OFFEROR

APPENDIX III

EXPERTS AND CONSENTS

The followings are the qualification of the experts whose letter or opinion is contained in this Composite Document:

Name Qualification Kingston Corporate Finance Kingston Corporate Finance Limited, a corporation licensed to carry on Type 6 (advising on corporate finance) regulated activity under the SFO Kingston Securities Kingston Securities Limited, a corporation licensed to carry on Type 1 (dealing in securities) regulated activity under the SFO

Each of Kingston Securities and Kingston Corporate Finance has given and has not withdrawn its written consents to the issue of this Composite Document with the inclusion of the text of its letter or report and/or references to its name in the form and context in which they are respectively included.

MISCELLANEOUS

As at the Latest Practicable Date:

(a) The principal members of the Offeror’s concert group are the Offeror, Huobi Universal Inc., Huobi Capital Inc. and Mr. Li;
(b) the registered office address of the Offeror is Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KYl-1002, Cayman Islands;
(c) the correspondence address of each of the Offeror, Huobi Universal Inc., Huobi Capital Inc. and Mr. Li is Room 1701-2, QRC 100, 100 Queen’s Road Central, Central, Hong Kong; and
(d) the registered address of each of Kingston Securities and Kingston Corporate Finance is Suite 2801, 28/F., One International Finance Centre, 1 Harbour View Street, Central, Hong Kong.

— III-4 —

APPENDIX III GENERAL INFORMATION OF THE OFFEROR

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection (i) at the principal office of the Company at Suite 1603A, 16/F, Tower 2, Nina Tower, 8 Yeung Uk Road, Tsuen Wan, Hong Kong during normal business hours from 9:30 a.m. to 5:30 p.m. (on any weekdays, except public holidays); (ii) on the website of the Company (http://www.pantronicshk.com); and (iii) on the website of the SFC (http://www.sfc.hk), from the date of this Composite Document up to and including the Closing Date:

(a) the memorandum and articles of association of the Offeror;
(b) the letter from Kingston Securities, the text of which is set out on pages 7 to 19 of this Composite Document; and
(c) the written consents referred to under the paragraph headed “EXPERTS AND CONSENTS” in this appendix.

— III-5 —

GENERAL INFORMATION OF THE GROUP

APPENDIX IV

1. RESPONSIBILITY STATEMENT

The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this Composite Document (other than that relating to the Offeror and parties acting in concert with it (including Trinity Gate)) and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in this Composite Document (other than those expressed by the directors of the Offeror and Mr. Li) have been arrived at after due and careful consideration and there are no other facts not contained in this Composite Document, the omission of which would make any statement in this Composite Document misleading.

2. SHARE CAPITAL OF THE COMPANY

As at the Latest Practicable Date, the authorised and issued share capital of the Company were as follows:

*Authorised:* 500,000,000 Shares of HK$0.001 each *Issued and fully paid up:* 300,794,332 Shares of HK$0.001 each	HK$ 500,000
	300,794.332

As at the Latest Practicable Date, save for the 6,205,668 Share Options entitling the grantees to subscribe for Shares at an exercise price of HK$1.50 per Share, there were no other outstanding options, warrants or securities carrying rights of conversion into or exchange or subscription for Shares.

All of the Shares currently in issue are fully paid up and rank pari passu in all respects with each other, including all rights in respect of capital, dividends and voting.

The number of Shares in issue as at 30 September 2017, being the date to which the latest audited consolidated financial statements of the Company were made up, was 300,000,000. Since 30 September 2017 and up to the Latest Practicable Date, 794,332 Shares were issued through the exercise of 794,332 Share Options under the Share Option Scheme.

— IV-1 —

GENERAL INFORMATION OF THE GROUP

APPENDIX IV

3. DISCLOSURE OF INTERESTS

Director’s interests and short positions in Shares, underlying Shares and debentures of the Company and its associated corporations

As at the Latest Practicable Date, the Directors’ interest and short position in the Shares and underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept under Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to Division 7 and 8 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provisions of the SFO) and/or the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Listing Rules (the “ Model Code ”) or as required to be disclosed under the Takeovers Code are set out below:

(i) Interests of the Directors in the Shares or securities of the Company

				Approximate
				percentage of
				the existing
			Total number	issued share
			of Shares	capital of the
Name of Director	Capacity	Nature of interest	interested	Company
				(Note 1)
Mr. Simon Nai-cheng Hsu	Beneficial	Personal interest	366,000	0.12%
(“Mr. Hsu”) (Note 2)	owner
Mr. Henry Woon-hoe Lim	Beneficial	Personal interest	250,000	0.08%
(“Mr. Lim”) (Note 2)	owner

Notes:

Certain percentage figures included in this table may be subject to rounding adjustments, if any.
Mr. Hsu is a non-executive Director while Mr. Lim is an executive Director.

— IV-2 —

APPENDIX IV

GENERAL INFORMATION OF THE GROUP

(ii) Interests of the Directors in the Share Options of the Company

				Approximate
			Total number	percentage of
			of underlying	the existing
			Shares of	issued share
			Share Options	capital of the
Name of Director	Capacity	Nature of interest	held	Company
				(Note 1)
Mr. Hsu	Beneficial	Personal interest	500,000	0.17%
	owner
Mr. Lim	Beneficial	Personal interest	1,500,000	0.50%
	owner
Mr. Ho Hon Ching (Note 2)	Beneficial	Personal interest	1,000,000	0.33%
	owner
Mr. Christopher Pochin Lu	Beneficial	Personal interest	300,000	0.10%
(Note 2)	owner
Mr. Danny J Lay (Note 2)	Beneficial	Personal interest	300,000	0.10%
	owner
Ms. Hui Leung Ching Patricia	Beneficial	Personal interest	300,000	0.10%
(Note 2)	owner

Notes:

Certain percentage figures included in this table may be subject to rounding adjustments, if any.
Mr. Ho Hon Ching is an executive Director while Mr. Christopher Pochin Lu, Mr. Danny J Lay and Ms. Hui Leung Ching Patricia are independent non-executive Directors.

Save for those disclosed above, as at the Latest Practicable Date, none of the Directors had any interests or short positions in the Shares, underlying Shares or debentures of the Company or any of its associated corporation (within the meaning of Part XV of the SFO) as recorded in the register required to be kept under Section 352 of the SFO or otherwise notified to the Company and the Stock Exchange pursuant to the Model Code or as required to be disclosed under the Takeovers Code.

— IV-3 —

GENERAL INFORMATION OF THE GROUP

APPENDIX IV

4. DEALINGS IN SECURITIES OF THE COMPANY AND THE OFFEROR

(i) During the Relevant Period,
(a) none of the Company, any member of the Group and any of the Directors was interested in or owned or controlled or dealt with for value in any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of Offeror; and
(b) save as disclosed in the section headed “3. Disclosure of Interests” above and the Sale Shares previously held by Mr. Hsu, none of the Directors had any interests in any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company, and save for the Sale Shares sold by Mr. Hsu under the Sale and Purchase Agreement and the total of 3,000,000 Option Shares to be sold by Mr. Hsu, Mr. Lim and Mr. Ho Hon Ching to Trinity Gate under the Option Shares Agreements, none of the Directors had dealt for value in any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company;
(ii) No relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company was owned or controlled or dealt with by a subsidiary of the Company or by a pension fund of members of the Group or by a person who is presumed to be acting in concert with the Company by virtue of class (5) of the definition of acting in concert or who is an associate of the Company by virtue of class (2) of the definition of associate under the Takeovers Code (but excluding exempt principal traders and exempt fund managers) during the Offer Period and up to the Latest Practicable Date;
(iii) No person who had any arrangement of the kind referred to in Note 8 to Rule 22 of the Takeovers Code with the Company or with any person who is presumed to be acting in concert with the Company by virtue of classes (1), (2), (3) and (5) of the definition of acting in concert or who is an associate of the Company by virtue of classes (2), (3) and (4) of the definition of associate under the Takeovers Code had any dealings in any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company during the Offer Period and up to the Latest Practicable Date;
(iv) No relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company was managed on a discretionary basis or dealt with by any fund managers (other than exempt fund managers) connected with the Company during the Offer Period and up to the Latest Practicable Date;
(v) In respect of the intention of the Directors to accept or reject the Offers:
(a) 3,000,000 Option Shares held by Mr. Hsu, Mr. Lim and Mr. Ho Hon Ching would be sold to Trinity Gate pursuant to the terms under the Option Shares Agreement;
(b) Mr. Pochin Christopher Lu, an independent non-executive Director, has expressed his intention that he will accept the Option Offer in respect of the 300,000 Share Options owned by him;

— IV-4 —

GENERAL INFORMATION OF THE GROUP

APPENDIX IV

(c) Mr. Danny J Lay, an independent non-executive Director, has expressed his intention that he will accept the Option Offer in respect of the 300,000 Share Options owned by him;
(d) Ms. Hui Leung Ching Patricia, an independent non-executive Director, has expressed her intention that she will accept the Option Offer in respect of the 300,000 Share Options owned by her;
(e) Mr. Hsu and Mr. Lim, who hold 366,000 Shares and 250,000 Shares respectively as at the Latest Practicable Date, have expressed their intention that they will not accept the Share Offer in respect of the Shares owned by them; and
(vi) Neither the Company nor the Directors had borrowed or lent any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company.

5. ARRANGEMENTS AFFECTING AND RELATING TO DIRECTORS

As at Latest Practicable Date, no benefit (other than statutory compensation) had been or would be given to any Director as compensation for loss of office or otherwise in connection with the Offers.

As at the Latest Practicable Date, save for the Sale and Purchase Agreement and the Option Shares Agreements, there was no agreement or arrangement between any Director and any other person which is conditional on or dependent upon the outcome of the Offers or otherwise connected with the Offers.

As at the Latest Practicable Date, save for (i) the Sale and Purchase Agreement entered into amongst the Offeror, Trinity Gate, the Vendor (which is indirectly wholly owned by Mr. Hsu, a non-executive Director) and the Guarantor; and (ii) the Option Shares Agreements entered into between Trinity Gate and the Option Shares Vendors, three of which namely, Mr. Hsu, Mr. Lim and Mr. Ho Hon Ching are Directors, the Offeror (or parties acting in concert with it (including Trinity Gate)) had not entered into any material contract in which any Director has a material personal interest.

— IV-5 —

GENERAL INFORMATION OF THE GROUP

APPENDIX IV

6. SERVICE CONTRACTS OF DIRECTORS

The following six Directors entered into fixed term service contracts and/or letters of appointment with the Company on 27 October 2016, all of which still have more than 12 months to run irrespective of the notice period. Details of the said fixed term service contracts and/or letters of appointment are set out below:

	Period of appointment and	Amount of fixed	Amount of variable	Amount of variable
Name of Director	expiry date	remuneration	remuneration
Mr. Hsu	For an initial period of three	Annual remuneration	Nil
	years commencing from	of HK$300,000
	21 November 2016 to
	20 November 2019, and
	subject to termination by either
	party giving to the other not
	less than three months’ notice
	in writing
Mr. Lim	For an initial period of three	Total remuneration of	(i)	A performance
	years commencing from	HK$3,075,600 per		incentive bonus
	21 November 2016 to	annum (composing of		based on targets,
	20 November 2019, and the	a base salary of		objectives and
	appointment may be terminable	HK$2,415,600,		formula as
	by either party giving to the	together with housing		determined by
	other not less than three	benefits at cost at		the Board;
	months’ notice in writing	approximately
		HK$660,000 per	(ii)	one round-trip
		annum), which was		home leave
		increased to		ticket each in
		HK$3,160,800 per		business and
		annum (composing of		premium
		a base salary of		economy class
		HK$2,512,800,		respectively each
		together with housing		year for him and
		benefits at cost at		his spouse; and
		approximately
		HK$648,000 per	(iii)	be eligible to
		annum) effective from		participate in the
		1 October 2017		Share Option
				Scheme.

— IV-6 —

APPENDIX IV

GENERAL INFORMATION OF THE GROUP

	Period of appointment and	Amount of fixed	Amount of variable	Amount of variable
Name of Director	expiry date	remuneration	remuneration
Mr. Ho Hon	For an initial period of three	Remuneration of	(i)	A performance
Ching	years commencing from	HK$1,339,596 per		incentive bonus
	21 November 2016 to	annum, which was		based on targets,
	20 November 2019, and the	increased to		objectives and
	appointment may be terminable	HK$1,393,200 per		formula as
	by either party giving to the	annum effective from		determined by
	other not less than three	1 October 2017		the Board; and
	months’ notice in writing
			(ii)	be eligible to
				participate in the
				Share Option
				Scheme.
Mr. Pochin	For a period of three years	An annual	Be	eligible to
Christopher Lu	from 21 November 2016 to	remuneration of	participate in the
	20 November 2019, and the	HK$200,000	Share Option Scheme.
	appointment shall be
	terminable by either party
	giving notice to the other party
	not less than three months’
	prior notice in writing
Mr. Danny J Lay	For a period of three years	An annual	Be	eligible to
	from 21 November 2016 to	remuneration of	participate in the
	20 November 2019, and the	HK$200,000	Share Option Scheme.
	appointment shall be
	terminable by either party
	giving notice to the other party
	not less than three months’
	prior notice in writing
Ms. Hui Leung	For a period of three years	An annual	Be	eligible to
Ching Patricia	from 21 November 2016 to	remuneration of	participate in the
	20 November 2019, and the	HK$200,000	Share Option Scheme.
	appointment shall be
	terminable by either party
	giving notice to the other party
	not less than three months’
	prior notice in writing

— IV-7 —

APPENDIX IV

GENERAL INFORMATION OF THE GROUP

Save as disclosed above, as at the Latest Practicable Date, none of the Directors had entered into any service contract with the Company or any of its subsidiaries or any associated companies of the Company which (i) (including both continuous and fixed term contracts) has been entered into or amended within the 6 months before the commencement of the Offer Period; (ii) is continuous contract with a notice period of 12 months or more; or (iii) is fixed term contract with more than 12 months to run irrespective of the notice period.

7. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business carried on or intended to be carried on by the Group) have been entered into after the date 2 years before the commencement of the Offer Period up to and including the Latest Practicable Date, and which are or may be material:

(i) the deed of non-competition (the “ Deed of Non-Competition ”) dated 27 October 2016 and entered into by Mr. Hsu, SNH Global Holdings Limited and the Vendor in favour of the Company (for itself and as trustee for its subsidiaries), pursuant to which each of Mr. Hsu, SNH Global Holdings Limited and the Vendor irrevocably and unconditionally undertook to the Company (for itself and as trustee for its subsidiaries) that, during the period that the Deed of Non-Competition remains effective, he/ it should not, and should procure his/ its associates (other than any member of the Group) not to, directly or indirectly, develop, acquire, participate in, hold any right or interest or invest in or engage in, render any services for or otherwise be involved in any business in competition with or likely to be in competition with the existing business activity of any member of the Group.

Each of Mr. Hsu, SNH Global Holdings Limited and the Vendor further undertakes that he/it or his/its associates other than any member of the Group is offered or becomes aware of any business opportunity which may compete with the business of the Group, he/ it shall (and he/ it shall procure his/its close associates to) notify the Company in writing and the Company shall have a right of refusal to take up such business opportunity. The Company shall, within 6 months after receipt of the written notice (or such longer period if the Company is required to complete any approval procedures as set out under the Listing Rules from time to time), notify each of Mr. Hsu, SNH Global Holdings Limited and the Vendor whether the Company will exercise the right of refusal or not.

The Deed of Non-Competition was terminated in accordance with its terms upon Completion on 21 August 2018 when Mr. Hsu, SNH Global Holdings Limited and the Vendor ceased to be interested in 30% or more of the issued Shares;

(ii) the deed of indemnity (the “ Deed of Indemnity ”) dated 27 October 2016 and entered into by each of Mr. Hsu, SNH Global Holdings Limited and the Vendor in favour of the Company (for itself and as trustee for its subsidiaries) pursuant to which Mr. Hsu, SNH Global Holdings Limited and the Vendor have given indemnities in favour of the Group from and against, among other things (a) any tax liability which might be payable by any member of the Group (i) in respect of any income, profits or gains earned, accrued or received up to 21 November 2016 (the “ Listing Date ”); or (ii) in respect of or resulting

— IV-8 —

APPENDIX IV

GENERAL INFORMATION OF THE GROUP

from any act, omission or event occurring up to the Listing Date; and (b) any action, claims, losses, charges, penalties which any member of the Group may incur or suffer as a result of or in connection with any failure to comply with relevant laws and regulations up to the Listing Date, and the reasonable costs and expenses incurred in connection with the actions, claims, legal or arbitration proceedings related thereto;

(iii) the conditional public offer underwriting agreement (the “ Public Offer Underwriting Agreement ”) dated 8 November 2016 and entered into between, among others, the Company and the Public Offer Underwriters (as defined in the prospectus of the Company dated 9 November 2016 (the “ Prospectus ”)) pursuant to which the Public Offer Underwriters (as defined in the Prospectus) have agreed severally to subscribe or procure subscribers for 9,000,000 new Shares initially offered by the Company for subscription pursuant to the public offer (the “ Public Offer ”) made on 9 November 2016 but are not taken up under the Public Offer on the terms and conditions of the Prospectus, the pink, white and yellow application forms and the Public Offer Underwriting Agreement.

Failing the procurement of subscribers for the 9,000,000 new Shares, such Shares would be subscribed by the Public Offer Underwriters (as defined in the Prospectus) respectively at the offer price of HK$1.50 per Share, together with the brokerage of 1%, the 0.0027% transaction levy of the SFC and 0.005% trading fee of the Stock Exchange;

(iv) the conditional placing underwriting agreement (the “ Placing Underwriting Agreement ”) dated 15 November 2016 and entered into between, among others, the Company and Quam Securities Company Limited (for itself and on behalf of the Placing Underwriters (as defined in the Prospectus) relating to the placing of 81,000,000 Shares to selected professional, institutional and other investors as set out in the Prospectus.

The 81,000,000 Shares would be subscribed and/or purchased by the relevant placees at the offer price of HK$1.50 per Share, together with the brokerage of 1%, the SFC transaction levy of 0.0027% and the Stock Exchange trading fee of 0.005%;

(v) the lease agreement dated 11 October 2016 and entered into between an independent third party (as landlord) and Shenzhen Pantai Electronic Co., Ltd, an indirectly wholly-owned subsidiary of the Company (as lessee) regarding the lease of an industrial complex located in No. 36, Hengzhao Industrial District, Yangchong River Section, Songgang Street, Bao’an District, Shenzhen City, China for a lease period from 1 November 2016 to 31 December 2019 with a monthly rent of RMB215,851 and deposit of RMB500,000.

The abovementioned lease agreement was terminated by the Company by giving a written notice to terminate to the relevant landlord on 30 December 2016;

(vi) the supplemental agreement to the pre-lease agreement dated 14 October 2016 and entered into between the parties to the Formal Lease Agreement (as defined below) and regarding the entrance into of the Formal Lease Agreement (as defined below);

— IV-9 —

GENERAL INFORMATION OF THE GROUP

APPENDIX IV

(vii) the formal lease agreement (the “ Formal Lease Agreement ”) dated 30 December 2016 and entered into between Shenzhen Senfeng Vacuum Coating Co., Ltd. (as landlord) and Shenzhen Pantai Electronic Co., Ltd, an indirectly wholly-owned subsidiary of the Company (as lessee) in relation to the lease of the 1st to 3rd floor of Senfeng Building located in Time Valley, Fangyuan Road, Gongming Street, Guangming New District, Shenzhen City, China for a lease period from 1 January 2017 to 31 December 2025 with the following monthly rent:
From 1 April 2017 to RMB436,645.00 (including management fees but 31 December 2019: excluding value-added tax) From 1 January 2020 to RMB534,890.00 (including management fees but 31 December 2022: excluding value-added tax)
From 1 January 2023 to US$5.638 per sq.m. (excluding value-added tax), plus 31 December 2025: additional 10% of the monthly rent as management fees.
- The monthly rental payment shall be calculated based on the exchange rate at the time of payment; and
(viii) the Promissory Note issued by Pantene Industrial on 24 August 2018 in favour of the Vendor in the principal amount of HK$100 million, pursuant to which Pantene Industrial shall repay the principal amount of HK$100 million (with no interest) on the third anniversary date of the said Promissory Note.

8. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries was engaged in any litigation or arbitration of material importance and, so far as the Directors were aware, no litigation or claims of material importance is pending or threatened by or against the Company and any of its subsidiaries.

9. QUALIFICATION AND CONSENT OF EXPERT

The following is the qualification of the expert who has given its letter and advice which is contained in this Composite Document:

Name Qualifications Altus Capital a corporation licensed by SFC to carry out Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO, and has been appointed as the independent financial adviser to advise the Independent Board Committee in respect of the Offers

— IV-10 —

GENERAL INFORMATION OF THE GROUP

APPENDIX IV

Altus Capital has given and has not withdrawn its written consent to the issue of this Composite Document with the inclusion herein of its letter and references to its name, in the form and context in which they are included.

10. MISCELLANEOUS

(i) The company secretary of the Company is Mr. Som Wai Tong Ivan.
(ii) The registered office of the Company is situated at 3rd Floor, J&C Building, PO Box 362, Road Town, Tortola, BVI VG 1110. The principal place of business of the Company in Hong Kong is situated at Suite 1603A, 16/F, Tower 2, Nina Tower, 8 Yeung UK Road, Tsuen Wan, Hong Kong.
(iii) The branch share registrar and transfer office of the Company in Hong Kong is Tricor Investor Services Limited situated at Level 22 Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(iv) The registered office of Altus Capital is situated at 21 Wing Wo Street, Central, Hong Kong.
(v) The English text of this Composite Document and the Form(s) of Acceptance shall prevail over the Chinese text in case of inconsistency.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection (i) during normal business hours from 9:30 a.m. to 5:30 p.m. (other than Saturdays, Sundays and public holidays) at the principal place of business of the Company in Hong Kong at Suite 1603A, 16/F, Tower 2, Nina Tower, 8 Yeung UK Road, Tsuen Wan, Hong Kong; (ii) on the website of the SFC (http://www.sfc.hk); and (iii) on the website of the Company (http://www.pantronicshk.com) from the date of this Composite Document up to and including the Closing Date:

(i) the memorandum and articles of association of the Company;
(ii) the annual reports of the Company for the years ended 30 September 2016 and 30 September 2017 respectively;
(iii) the material contracts referred to under the paragraph headed “7. Material Contracts” in this appendix;
(iv) the service contracts and letters of appointment of the Directors referred to under the paragraph headed “6. Service Contracts of Directors” in this appendix;
(v) the letter from the Board as set out on pages 20 to 26 of this Composite Document;

— IV-11 —

GENERAL INFORMATION OF THE GROUP

APPENDIX IV

(vi) the letter from the Independent Board Committee to the Independent Shareholders and the Optionholders as set out on pages 27 to 28 of this Composite Document;
(vii) the letter from Altus Capital to the Independent Board Committee as set out on pages 29 to 49 of this Composite Document; and
(viii) the written consent from Altus Capital referred to under the paragraph headed “9. Qualification and Consent of Expert” in this appendix.

— IV-12 —

AI assistant

Sinohope Technology Holdings Limited — M&A Activity 2018

50036_rns_2018-09-18_e50f913b-030d-45ca-a296-2b5fdb98705a.pdf

THIS COMPOSITE DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

COMPOSITE OFFER AND RESPONSE DOCUMENT RELATING TO MANDATORY UNCONDITIONAL CASH OFFERS BY

Independent Financial Adviser to the Independent Board Committee

CONTENTS

EXPECTED TIMETABLE

EXPECTED TIMETABLE

IMPORTANT NOTICE

NOTICE TO THE OVERSEAS SHAREHOLDERS AND OVERSEAS OPTIONHOLDERS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

LETTER FROM KINGSTON SECURITIES

MANDATORY UNCONDITIONAL CASH OFFERS BY

FOR AND ON BEHALF OF THE OFFEROR TO ACQUIRE ALL THE ISSUED SHARES IN PANTRONICS HOLDINGS LIMITED

INTRODUCTION

LETTER FROM KINGSTON SECURITIES

THE OFFERS

Principal Terms of the Offers

Share Offer

Option Offer

LETTER FROM KINGSTON SECURITIES

Exercise of the Share Options

Lapse of the Share Options

Comparison of value

LETTER FROM KINGSTON SECURITIES

Highest and lowest Share prices

Total consideration of the Offers

Confirmation of financial resources available for the Offers

Effect of accepting the Offers

Payment

LETTER FROM KINGSTON SECURITIES

Stamp duty

Taxation advice

Overseas Shareholders and Overseas Optionholders

INFORMATION ON THE GROUP

INFORMATION ON THE OFFEROR

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Huobi Capital

Huobi Universal

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Techwealth

Sequoia Capital CV IV Holdco, Ltd.

Zhen Partners

Vision Leader

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INFORMATION ON TRINITY GATE

INTENTION OF THE OFFEROR IN RELATION TO THE GROUP

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PROPOSED CHANGE OF BOARD COMPOSITION

Executive Directors

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COMPULSORY ACQUISITION

MAINTAINING THE LISTING STATUS OF THE COMPANY

ACCEPTANCE AND SETTLEMENT

GENERAL

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ADDITIONAL INFORMATION

PANTRONICS HOLDINGS LIMITED 桐成控股有限公司

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INTRODUCTION

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MANDATORY UNCONDITIONAL CASH OFFERS

Principal terms of the Offers

Share Offer

Option Offer

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Exercise of the Share Options

Lapse of the Share Options

Further Information of the Offer

INFORMATION ON THE GROUP

Shareholding structure of the Company

LETTER FROM THE BOARD

INFORMATION ON THE OFFEROR

INTENTION OF THE OFFEROR IN RELATION TO THE GROUP AND THE PROPOSED CHANGE OF BOARD COMPOSITION

MAINTAINING THE LISTING STATUS AND PUBLIC FLOAT OF THE COMPANY

Sinohope Technology Holdings Limited M&A Activity 2018