Sinopharm Tech Holdings Limited — M&A Activity 2015

May 22, 2015

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

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COMPLETION OF THE ACQUISITION

Reference is made to the Company’s Announcements dated 5 August 2014 and subsequently 7 August 2014 in relation to the Acquisition. The Board is pleased to announce that all the Conditions Precedent to the Completion have been fulfilled and the Acquisition contemplated under the Share Transfer Agreement has been completed on 22 May 2015. Pursuant to the terms and conditions as set out in the Share Transfer Agreement, a Cash Consideration consisting of RMB3,000,000 (approximately HK$3,804,885 at the Exchange Rate) and the Consideration Shares of 4,000,000 shares* at the Issue Price of HK$1.30 per Share*, as first part of the Consideration for the Target Sales Shares, will be issued to the Vendor on or before 10 July 2015. Immediately following the Completion, the Company will indirectly through the Company’s whollyowned subsidiary own 100% of Target Group.

REASONS FOR AND BENEFITS OF THE ACQUISITION

The Group’s principle business activities include the provision of authorized lottery solutions and related services for both Sports and Welfare Lottery Centres in the PRC. The Group is a leading purveyor with a proven trackrecord in providing comprehensive, end-to-end solutions in hardware and software solutions, marketing promotion and distribution services, as well as downstream channel management services to Sports Lottery and Welfare Lottery Centres located across 21 provinces and regions in the PRC, focusing on interactive self-service lottery; whereas the Target Group is principally engaged in the provision of an interactive electronic marketing and administrative platform to Lottery Centres.

The digitalization and mobilization of modern lottery operations has created the need for a more efficient and measurable interactive electronic information system to facilitate data and information flow between Lottery Centres and various distribution channels. The Board is of the view that the Acquisition will enable the potential rollout of the Target Group’s information service solutions, which includes installing interactive LCD display panels throughout the Group’s existing distribution network and stores located over 21 provinces and regions in the PRC, to enable more effective information management and enhance end-user experience.

The Share Transfer Agreement was entered into by the Company in the ordinary and usual course of business. The Board of the Company considers that the terms of the Share Purchase Agreement are of normal commercial terms, fair and reasonable and is in favor and in the interests of the Company and its shareholders as a whole.

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ONGOING CONSIDERATION

Subsequent to the above, the Share Transfer Agreement also entails that, whereas after the Vendor has fulfilled the requirements for Vendor’s Performance Guarantee for specific operational milestones, a total of 16,000,000 Shares* will be issued to the Vendor or such nominee(s) in five stages each within fourteen business days or such date as agreed by both parties at the Issue Price at the Exchange Rate.

The Consideration Shares are subject to the lock up period that the Vendor agrees not to sell or transfer of (i) 50% of the Consideration Shares over a lock up period of three months from the date of allotment; and (ii) 50% of the Consideration Shares over a lock up period of six months from the date of allotment.

IMPLICATIONS UNDER THE LISTING RULES

At the highest applicable percentage ratio for the Acquisition is less than 5% under Chapter 19 of GEM Listing Rules. The Acquisition, therefore, constitutes a share transaction subject to reporting and announcement as required under Chapter 19 of GEM listing Rules.

• Adjusted to reflect the Company’s share subdivision whereas 1 share of HK$0.050 each in the Company’s Share is divided into 4 subdivided shares of HK$0.0125 each effective as of 17 December 2014.

DEFINITIONS

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

“Acquisition”	the sale and purchase of Target Sale Shares;
“Board”	the board of Directors;
“Cash Consideration”	RMB3,000,000 (approximately HK$3,804,885 at the Exchange
	Rate);
“China”	the People’s Republic of China (excluding, for the purpose of this
	announcement, Hong Kong, the Macao Special Administrative
	Region of the PRC and Taiwan);
“Company”	China Vanguard Group Limited, a company incorporated in Cayman
	Islands; the shares of which are listed on the GEM of the Stock
	Exchange (stock code: 08156);
“Completion”	the completion of the sale and purchase of the Target Sale Shares and
	the issue of the Consideration Shares in accordance with the terms of
	the Share Transfer Agreement;
“Conditions Precedent”	the conditions precedent to the Share Transfer Agreement;
“Consideration”	the consideration for the Target Sale Shares comprising the Cash
	Consideration and the Consideration Shares;

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“Consideration Shares”	4,000,000 Shares to be issued at the issue price of HK$1.30 per Share
	to the Vendor or such person as they may direct after Completion and
	16,000,000 Shares to be issued to the Vendor when the Vendor has
	fulflled the Vendor’s Performance Guarantee;
“Directors”	the directors of the Company from time to time;
“Exchange Rate”	the middle exchange rate of RMB to HK$ as announced by the China
	Foreign Exchange Trade System which is authorized by the People’s
	Bank of China on the date of the Share Transfer Agreement;
“GEM”	the Growth Enterprise Market of the Stock Exchange;
“GEM Listing Rules”	the Rules Governing the Listing of Securities on the GEM;
“Group”	the Company and its subsidiaries from time to time;
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong;
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC;
“Issue Price”	closing price per Share, quoted on the Stock Exchange on the date of
	completion;
“Lottery Centre”	including the provincial China Welfare Lottery Centre and the
	provincial China Sports Lottery Administration Centre;
“PRC”	People’s Republic of China;
“RMB”	Renminbi, the lawful currency of China;
“SFO”	Securities and Futures Ordinance (Cap. 571 of the Laws of Hong
	Kong) as amended from time to time;
“Share(s)”	ordinary share(s) of HK$0.0125 each in the issued share capital of the
	Company;
“Share Transfer Agreement”	the sale and purchase agreement entered into between the Purchaser
	and the Vendor relating to the Acquisition;
“Shareholders”	holders of issued Shares;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“Target Group”	including the Target Company, the company in Hong Kong and the
	company in China;
“Target Sale Shares”	being all the issued share capital of the Target Group;

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“Vendor”

Regal Century Development Limited, a company incorporated in British Virgin Islands;

“Vendor’s Performance Guarantee”

the Vendor undertakes and guarantees to the Purchaser under the Share Transfer Agreement in relation to the Conditions Precedent;

“%”

Percentage.

By Order of the Board China Vanguard Group Limited 眾彩科技股份有限公司 * Chan Ting Executive Director and Chief Executive Officer

Hong Kong, 22 May 2015

As at the date of this announcement, the board of directors of the Company comprises Madam Cheung Kwai Lan, Mr. Chan Ting as Executive Directors, Mr. Chan Tung Mei as Non-executive Director and Mr. Zhang Xiu Fu, Mr. Yang Qing Cai and Mr. To Yan Ming Edmond as Independent Non-executive Directors.

This announcement, for which the directors of the Company collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited for the purpose of giving information with regard to the Company. The directors of the Company, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive and there are no other matters the omission of which would make any statement herein or this announcement misleading.

This announcement will remain on the “Latest Company Announcements” page of the GEM website at www.hkgem.com for a minimum period of 7 days from the date of its posting and on the website of the Company at www.cvg.com.hk.

• For identification purposes only

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