THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Sinopharm Tech Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

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

==> picture [77 x 77] intentionally omitted <==

Sinopharm Tech Holdings Limited 國藥科技股份有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8156)

CONNECTED TRANSACTION INVOLVING ALLOTMENT AND ISSUE OF NEW SHARES UNDER SPECIFIC MANDATE AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

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

A letter from the Board is set out on pages 4 to 14 of this circular. A letter from the Independent Board Committee is set out on pages 15 to 16 of this circular. A letter from Gram Capital, being the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, is set out on pages 17 to 26 of this circular.

A notice convening the EGM of the Company to be held at Units 307–313, 3/F, Wireless Centre, Phase One Hong Kong Science Park, Pak Shek Kok, New Territories, Hong Kong on Wednesday, 8 July 2020 at 11: 00 a.m. is set out on pages 32 to 33 of this circular. A form of proxy for use at the EGM is enclosed with this circular.

Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and deposit the same at the Hong Kong branch share registrar and transfer office of the Company, Tricor Standard Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish and in such event, the proxy shall be deemed to be revoked.

This circular will remain on the ‘‘Latest Listed Company Information’’ page of the GEM website at http://www.hkgem.com for a minimum period of 7 days from the date of its posting and on the website of the Company at http://www.sinopharmtech.com.hk.

19 June 2020

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration.

Given the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

– i –

		Page
Characteristics of GEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		i
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from	the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Letter from	Gram Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Appendix	— General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27
Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		32

– ii –

DEFINITIONS

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

‘‘associate(s)’’ has the meaning ascribed to it under the GEM Listing Rules ‘‘Best Frontier’’ Best Frontier Investments Limited, a limited liability company incorporated in the British Virgin Islands
‘‘Board’’ the board of Directors
‘‘Business Day’’ a day on which licensed banks are generally open for banking business in Hong Kong, other than Saturdays, Sundays, public holidays and any day on which a tropical cyclone warning No. 8 or above is hoisted or remains hoisted between 9: 00 a.m. and 12: 00 noon and is not lowered at or before 12: 00 noon or on which a black rainstorm warning signal is hoisted or remains in effect between 9: 00 a.m. and 12: 00 noon and is not discontinued at or before 12: 00 noon
‘‘Company’’ Sinopharm Tech Holdings Limited (Stock Code: 08156), a company incorporated in the Cayman Islands with limited liability and the issued Shares of which are listed on the GEM
‘‘Completion’’ Completion of the Subscription pursuant to the Subscription Agreement
‘‘Completion Date’’ the 10th Business Day following the day on which all the conditions precedent as set out in the Subscription Agreement have been satisfied or such other date as the Company and the Subscriber may agree in writing
‘‘connected person(s)’’ has the meaning ascribed to it under the GEM Listing Rules
‘‘Director(s)’’ the director(s) of the Company
‘‘EGM’’ the extraordinary general meeting of the Company to be convened and held for the Independent Shareholders to consider, and if thought fit, approving (among others) the Subscription Agreement and the transactions contemplated thereunder, including the granting of Specific Mandate to allot and issue the Subscription Shares to the Subscriber
‘‘GEM’’ GEM of the Stock Exchange
‘‘GEM Listing Rules’’ the Rules Governing the Listing of Securities on GEM
‘‘Group’’ the Company and its subsidiaries ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong

– 1 –

DEFINITIONS

‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC

‘‘Independent Board the independent board committee, comprising all the Committee’’ independent non-executive Directors, which has been formed in respect of the Subscription Agreement and the transactions contemplated thereunder
‘‘Independent Financial Gram Capital Limited, a licensed corporation to carry out Type Adviser’’ or ‘‘Gram 6 (advising on corporate finance) regulated activity under the Capital’’ SFO, being the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Subscription Agreement and the transactions contemplated thereunder
‘‘Independent Shareholder(s) other than those who are required under the Shareholder(s)’’ GEM Listing Rules to abstain from voting at the EGM for the resolution(s) approving the Subscription Agreement and the transactions contemplated thereunder, including the Specific Mandate for the allotment and issue of the Subscription Shares to the Subscriber
‘‘Last Trading Day’’ 2 April 2020, being the last trading day for the Shares before the entering into of the Subscription Agreement
‘‘Latest Practicable 16 June 2020, being the latest practicable date prior to the Date’’ printing of this circular for the purpose of ascertaining certain information contained in this circular
‘‘PRC’’ The People’s Republic of China excluding Hong Kong, Macau Special Administrative Region of the PRC and Taiwan for the purpose of this circular
‘‘SFO’’ Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong), as amended, supplemented and modified from time to time
‘‘Share(s)’’ ordinary share(s) of HK$0.0125 each in the share capital of the Company
‘‘Shareholder(s)’’ holder(s) of the Share(s)
‘‘Specific Mandate’’ the specific mandate to be obtained from the Independent Shareholders at the EGM to allot and issue the Subscription Shares to the Subscriber pursuant to the Subscription Agreement
‘‘Stock Exchange’’ the Stock Exchange of Hong Kong Limited

– 2 –

DEFINITIONS

‘‘Subscriber’’
Mr. CHAN Ting, an executive Director, the chief executive officer of the Company and a director of Best Frontier
‘‘Subscription’’
the subscription by the Subscriber for, and the allotment and issue by the Company of, the Subscription Shares under the terms and subject to the conditions of the Subscription Agreement
‘‘Subscription the subscription agreement entered into between the Company Agreement’’ and the Subscriber dated 2 April 2020 in relation to the Subscription (as supplemented by the supplemental agreement dated 16 June 2020)
‘‘Subscription Price’’ HK$0.20 per Subscription Share
‘‘Subscription Share(s)’’ 800,000,000 new Shares
‘‘substantial has the meaning ascribed thereto under the GEM Listing Rules Shareholder(s)’’
‘‘%’’ per cent.

If there is any inconsistency in this circular between the Chinese and English versions, the English version shall prevail.

– 3 –

LETTER FROM THE BOARD

==> picture [77 x 76] intentionally omitted <==

Sinopharm Tech Holdings Limited 國藥科技股份有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8156)

Executive Directors: Madam CHEUNG Kwai Lan (Chairperson) Mr. CHAN Ting (Deputy Chairperson and Chief Executive Officer)

Non-executive Directors: Mr. CHAN Tung Mei Dr. CHENG Yanjie

Independent Non-executive Directors: Mr. LAU Fai Lawrence Dr. LIU Ta-pei Mr. CHAU Wai Wah Fred

Registered office: Second Floor, Century Yard Cricket Square, P.O. Box 902 Grand Cayman, KY1-1103 Cayman Islands

Head office and principal place of business in Hong Kong: Units 307–313, 3/F Wireless Centre Phase One Hong Kong Science Park Pak Shek Kok, New Territories Hong Kong

19 June 2020

To the Shareholders

Dear Sir/Madam,

CONNECTED TRANSACTION INVOLVING ALLOTMENT AND ISSUE OF NEW SHARES UNDER SPECIFIC MANDATE AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

The Company announced on 2 April 2020 (after trading hours of the Stock Exchange) that the Company and the Subscriber entered into the Subscription Agreement, pursuant to which the Company has conditionally agreed to allot and issue, and the Subscriber has conditionally agreed to subscribe for, the Subscription Shares at the Subscription Price of HK$0.20 per Subscription Share.

– 4 –

LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among other things, (i) further information of the Subscription; (ii) the respective advice from the Independent Board Committee and the Independent Financial Adviser in respect of the Subscription Agreement and the transactions contemplated thereunder; and (iii) a notice of EGM at which resolution(s) will be proposed to consider and, if thought fit, to approve the Subscription Agreement and the transactions contemplated thereunder.

SUBSCRIPTION AGREEMENT

Set out below is a summary of the principal terms of the Subscription Agreement:

Date : 2 April 2020 (after trading hours) Parties Issuer : The Company Subscriber : Mr. CHAN Ting

As at the date of the Subscription Agreement and the Latest Practicable Date, Mr. CHAN Ting is an executive Director, the chief executive officer of the Company and a director of Best Frontier. Accordingly, Mr. CHAN Ting is a connected person of the Company under Chapter 20 of the GEM Listing Rules.

Subscription Shares

Pursuant to the Subscription Agreement, the Subscriber has conditionally agreed to subscribe for, and the Company has conditionally agreed to allot and issue, the Subscription Shares at the Subscription Price of HK$0.20 per Subscription Share.

As at the Latest Practicable Date, the Company has a total of 4,289,724,633 issued Shares. The Subscription Shares, being 800,000,000 new Shares, represent (i) approximately 18.65% of the issued share capital of the Company as at the Latest Practicable Date; and (ii) approximately 15.72% of the issued share capital of the Company immediately upon Completion (assuming there is no change to the issued share capital of the Company from the Latest Practicable Date and prior to the Completion) as enlarged by the Subscription Shares.

The aggregate nominal value of the Subscription Shares (with a par value of HK$0.0125 each) is HK$10,000,000.

Subscription Price

The Subscription Price of HK$0.20 per Subscription Share represents:

(i) a discount of approximately 12.28% to the closing price of HK$0.228 per Share as quoted on the Stock Exchange on the Last Trading Day; and

– 5 –

LETTER FROM THE BOARD

(ii) a discount of approximately 15.25% to the average closing price of approximately HK$0.236 per Share as quoted on the Stock Exchange for the five trading days immediately prior to the Last Trading Day.

The total Subscription Price for the Subscription shall be paid by the Subscriber to the Company in cash upon Completion.

The Subscription Price was arrived at after arm’s length negotiations between the Company and the Subscriber with reference to the prevailing market price of the Shares. The Directors (including the independent non-executive Directors who have given their opinion after considering the advice from the Independent Financial Adviser, and other than the Subscriber) consider that the Subscription Price is fair and reasonable and is in the interests of the Company and the Shareholders as a whole.

Conditions precedent of the Subscription Agreement

Completion of the Subscription Agreement is conditional upon the fulfilment of the following conditions:

(i) approval by the Stock Exchange of the listing of, and permission to deal in, the Subscription Shares;
(ii) the passing by the Shareholders who are entitled to vote and not required to abstain from voting under the GEM Listing Rules at the EGM;
(iii) all necessary corporate approvals and consents and third party consents, including the approval of the Cayman Islands Monetary Authority to the issue of the Subscription Shares (if necessary) for the transactions contemplated under the Subscription Agreement being obtained on or before Completion;
(iv) the Subscriber being satisfied that the warranties in the Subscription Agreement are true and accurate in all respects as at the date of the Subscription Agreement and at Completion;
(v) the allotment and issue of the Subscription Shares do not trigger the obligations to make a mandatory general offer under The Codes on Takeovers and Mergers and Share Buy-backs; and
(vi) there is no indication from the Stock Exchange that the listing status of the securities of the Company will be revoked by the Stock Exchange as a result of the implementation of the transactions contemplated under the Subscription Agreement.

– 6 –

LETTER FROM THE BOARD

The above conditions precedent cannot be waived by the Company and the Subscriber. In the event that any of the above conditions precedent of the Subscription is not fulfilled on or before 30 June 2020 (the ‘‘Long Stop Date’’) (or such later date as may be agreed by both parties in writing), the Subscription Agreement shall cease and determine and neither the Company nor the Subscriber shall have any obligations and liabilities under the Subscription Agreement, save for any antecedent breaches of the terms thereof. With reference to the announcement of the Company dated 16 June 2020, the above Long Stop Date was extended by the parties in writing on 16 June 2020 to 31 July 2020.

Completion

The Completion shall take place on the Completion Date in accordance with the terms of the Subscription Agreement.

Ranking

The Subscription Shares, when issued and fully paid up, shall rank pari passu in all respects among themselves and with all other Shares in issue on the date of allotment and issue of the Subscription Shares.

Specific Mandate

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

Application for Listing

Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Subscription Shares. No listing or permission to deal is or is proposed to be sought on any other stock exchange.

REASONS FOR THE SUBSCRIPTION AND USE OF PROCEEDS

The Group is principally engaged in (i) the provision of lottery-related services; (ii) the provision of Internet Plus services (solutions and supply chain); and (iii) other services.

The Directors are of the view that the Subscription represents an opportunity for the Company to raise capital for the development and expansion of the existing lottery-related, internet plus services and mask production business of the Group and to capture potential investment opportunities when such opportunities arise. The gross proceeds and the net proceeds (after deducting professional fees and other related expenses) from the Subscription will be HK$160.0 million and approximately HK$159.7 million respectively. On such basis, the net price of each Subscription Share is approximately HK$0.20. It is intended that the net proceeds from the Subscription will be utilised as follows: (i) 45% of the net proceeds, i.e. approximately HK$72.0 million for development and expansion of the existing lottery-related and internet plus services business; (ii) 30% of the net proceeds, i.e. approximately HK$48.0 million for development and expansion of the existing mask

– 7 –

LETTER FROM THE BOARD

production business of the Group; (iii) 15% of the net proceeds, i.e. approximately HK$24.0 million for repayment of debt; and (iv) 10% of the net proceeds, i.e. the remaining balance of approximately HK$15.7 million for general working capital of the Group.

Development of the lottery-related and ‘‘internet plus’’ service business

In order to effectively combat the circulation of counterfeited high value-added products (including tobacco, alcohol, medicines) on the market, and at the same time enhance the convenience for the public to identify the authenticity of goods, the Company entered into a strategic cooperation relationship with third party, joining hands to promote the extensive application of anti-counterfeit devices for product packaging and the online anti-counterfeit information verification platform in the market. The National Intellectual Property Administration is processing the application of patented technology applied in this anti-counterfeit comprehensive solution.

The anti-counterfeit comprehensive solution comprises of anti-counterfeit device for products and the anti-counterfeit information verification platform. The anti-counterfeit device for products includes physical anti-counterfeit packaging technology, product-specific unique code, the instant lottery ticket, RFID (smart electronic label) and other elements. The anti-counterfeit information verification platform will match the data entered by users with those saved in back-end data bank automatically, and the verification results will be delivered back to the end-user on the mobile phone. In actual application, for those enterprises who have demand for anti-counterfeit application for their products, the anti-counterfeit device for products will be integrated with their packages, and complemented by the anti-counterfeit information verification platform that based on blockchain technology, the anti-counterfeit comprehensive solution provides an efficient and easy-to-use anti-counterfeit identification method for products circulating in the market. The product-specific unique code appears in the form of QR Code, by scanning it, the consumer enters the anti-counterfeit information verification platform, and by matching the QR codes or participate in the Instant Lottery Game, consumers can verify the authenticity of the products and check if the products are fully sealed. The Group intends to carry out diversion from anti-counterfeit information verification platform, through the full utilization of B2B and B2C platforms as a means for sorting out the demand and supply between merchants and consumers, thus building a convenient and friendly trading environment. As the operation of this business model will produce a large amount of data, in order to secure and protect data privacy and personal information, the Group intends to establish an independent data centre for data collection and saving. In addition, the Group will promote the progress of ‘‘Internet Plus’’ business, we will cooperate with top and well-known enterprises in the industry of supply chain platform in the manner of mutual combination of capital and funding, for the development of the new supply chain financial services for e-commerce.

45% of the net proceeds from the Subscription (approximately HK$72.0 million) will be deployed for the development and expansion of the existing lottery-related and ‘‘Internet plus’’ services business. For the lottery business, the Group plans to procure the first batch of the instant lottery tickets with an aggregate amount of HK$20.0 million, and will invest approximately HK$8.0 million and HK$20.0 million on the establishment of

– 8 –

LETTER FROM THE BOARD

anti-counterfeit information verification platform and independent data centre respectively, while HK$8.0 million will be utilized for the establishment of B2B and B2C platforms. For the ‘‘Internet plus’’ business, the budget is approximately HK$16.0 million.

Development of the existing masks production business

The Group has established two joint ventures in Mainland China for the production and sales of medical and protective equipment, and the Group operates and manages three mask factories in Hong Kong that are already commenced mask production. As for three mask factories in Hong Kong, mask factory number 1 in Kwai Chung has achieved stable operation, in which equipments for mask production are operating smoothly and the production capacity has been increased stably. The mask factory number 3 is in stable operation, and similar to mask factory number 1, mask factory number 3 possesses a considerable production capacity, and there is still room for enhancing its production capacity. Mask factory number 2 locates in Shek Mun and comprises of two floors, which the construction works have been completed. It is planned to install ten mask production lines, and some of the equipments have been put into operation and is operating stably. The remaining production lines will be put into operation successively. A test lab is being set up in the plant, which is easy for the Group to test the raw material and the end product of mask and provide testing services for third parties. The Group also plans to set up Show Room and Display Room in the plant, which will be opened to the public, enhancing the transparency of production and public confidence.

30% of the net proceeds of the Subscription (approximately HK$48.0 million) will be used for developing and expanding the existing mask production business of the Group in Mainland China and Hong Kong. The aggregate contribution of equipment for plants in Mainland China is approximately HK$9.0 million. The renovation cost of two mask factories in Hong Kong is approximately HK$12.0 million. Given that the price of machine, equipment and raw materials are fluctuant currently, we expect the aggregate expenses of 20 production equipment for factories in Hong Kong and the cost of procuring raw materials in the short term are approximately HK$12.0 million and HK$15.0 million respectively.

Repayment of debts

The Company intends to apply its proceeds of approximately HK$24.0 million to repay its existing debts of other loans which it is repayable within 1 year.

General working capital

The Company intends to apply its remaining proceeds of approximately HK$15.7 million to fulfill its general working capital for its operation in Hong Kong and the PRC (comprising salary, professional expenses, administrative expenses, etc.).

Before resorting to the Subscription, the Board had considered and compared the feasibilities of other fund raising alternatives for the Group, such as placement of new Shares to independent investors, rights issue, open offer, debt financing and bank borrowings. The Company applied for term loans from various banks that the Company has prior commercial relationship with and the applications were turned down subsequently

– 9 –

LETTER FROM THE BOARD

due to the lack of available assets collateral and loss making position of the Group for the year ended 30 June 2019. Taking into account the benefits and cost of each of the alternatives, the Board considers that the Subscription is in the interests of the Company and the Shareholders as a whole as it would not impose any interest burden or finance costs to the Group nor increase the gearing level of the Group.

Further, the Subscription also demonstrates the confidence of the Subscriber as an executive Director and the chief executive officer in the Company and the support to the development of the business of the Group, which is conducive to enhancing the market image of the Company. The Directors believe that the Subscription represents an opportunity for the Company to raise capital while strengthening the capital base of the Company. Having regard to the potential benefits brought by the funds raised by the Subscription for enhancing the Group’s position to achieve its business objectives, the Directors (including the independent non-executive Directors have formed form their view after considering the advice of the Independent Financial Adviser with regard to the Subscription, and excluding the Subscriber) believe that the Subscription is in the interests of the Company and the Shareholders as a whole.

FUND RAISING ACTIVITIES IN THE PAST TWELVE-MONTH PERIOD

Save for the fundraising activity mentioned below, the Board confirms that there has not been any fund raising exercise made by the Company in the twelve months immediately preceding the Latest Practicable Date.

				Actual use of
				proceeds as at
Date of			Intended use	the Latest
announcements	Event	Net proceeds	of proceeds	Practicable Date
03/01/2020	Issue of 200,000,000	Approximately	General working	Approximately
02/03/2020	units of unlisted	HK$8.0 million on	capital, repayment	HK$4.0 million and
	warrants under	completion of the	of debts and future	HK$3.9 million of
	specific mandate at	issue of warrants on	investment of the	the proceeds from
	the issue price of	2 March 2020, and	Group	issuance of the
	HK$0.04 per	approximately		warrants were used
	warrant and exercise	HK$70.0 million		for general working
	price of HK$0.35	upon exercise of the		capital and
	per warrant share	warrants. As at the		repayment of debts
		Latest Practicable		of the Group
		Date, the warrants		respectively.
		have not been
		exercised.

The Company issued convertible bonds in 2014 and has subsequently amended its terms on a few occasions. For details, please refer to the announcements of the Company dated 13, 17, 18 January 2014, 7 August 2017, 18 January 2018, 17 January 2019, 10 May 2019, 17 January 2020, 7 February 2020, the circulars of the Company dated 10 March 2017, 29 March 2018, 1 March 2019, 10 March 2020.

– 10 –

LETTER FROM THE BOARD

CHANGES IN SHAREHOLDING STRUCTURE

As at the Latest Practicable Date, the Company has 4,289,724,633 Shares in issue. Assuming there will be no further changes in the issued share capital of the Company between the Latest Practicable Date and immediately prior to the allotment and issue of the Subscription Shares, the shareholding structure of the Company (i) as at the Latest Practicable Date; and (ii) immediately after the allotment and issue of the 800,000,000 Subscription Shares in full, are set out as below for illustration purposes only:

Shareholders Directors Madam Cheung Kwai Lan Mr. Chan Tung Mei Dr. Cheng Yanji Mr. Chau Wai Wah Fred Sub-total Sinopharm Traditional Chinese Medicine Overseas Holdings Limited Best Frontier Investments Limited (Note 1) Integrated Asset Management (Asia) Limited (‘‘Integrated Asset Management’’) and its concert parties (Note 2) Sub-total The Subscriber Public Shareholders Total Notes:	As at the Latest Practicable Date Number of Shares Approximate % 4,656,000 0.11 3,020,000 0.07 1,965,000 0.05 3,800,000 0.09 13,441,000 0.32 650,000,000 15.15 632,920,856 14.75 461,733,000 10.76 1,744,653,856 40.66 — — 2,531,629,777 59.02 4,289,724,633 100.00	Immediately after the allotment and issue of the 800,000,000 Subscription Shares in full Number of Shares Approximate % 4,656,000 0.09 3,020,000 0.06 1,965,000 0.04 3,800,000 0.07 13,441,000 0.26 650,000,000 12.77 632,920,856 12.44 461,733,000 9.07 1,744,653,856 34.28 800,000,000 15.72 2,531,629,777 49.74 5,089,724,633 100.00	Immediately after the allotment and issue of the 800,000,000 Subscription Shares in full Number of Shares Approximate % 4,656,000 0.09 3,020,000 0.06 1,965,000 0.04 3,800,000 0.07 13,441,000 0.26 650,000,000 12.77 632,920,856 12.44 461,733,000 9.07 1,744,653,856 34.28 800,000,000 15.72 2,531,629,777 49.74 5,089,724,633 100.00
			0.26 12.77 12.44 9.07
			34.28 15.72 49.74
			100.00

632,920,856 Shares are owned by Best Frontier which is owned as to 99.89% and 0.11% by Madam CHEUNG Kwai Lan and Mr. CHAN Tung Mei who are spouses to each other and the parents of the Subscriber. In addition, Madam CHEUNG and Mr. CHAN directly beneficially holds 4,656,000 and 3,020,000 Shares respectively. Madam CHEUNG is the spouse of Mr. CHAN and so both of them are deemed to have interests in the Shares.
The 461,733,000 Shares are owned by Integrated Asset Management which is wholly-owned by Mr. YAM Tak Cheung. 8% coupon convertible bonds in aggregate amount of HK$89,625,000 (the ‘‘CBs’’) for a term of six months were issued to Integrated Asset Management pursuant to the first amendment agreement dated 18 January 2017 approved by the Shareholders at the extraordinary general meeting of the Company held on 29 March 2017. The Company received a written consent from Integrated Asset Management, on which the maturity date of the CBs would be extended for further six months to 17 January 2018. A maximum number of 249,651,810 Shares would be allotted and issued to Integrated Asset Management upon conversion of the CBs in full. The amended conversion price is HK$0.359 per conversion share subject to adjustment.

Pursuant to the second amendment agreement approved by the Shareholders at the extraordinary general meeting of the Company held on 18 April 2018, the amendments were that the maturity date of the CBs was extended for six months from 17 January 2018 to 17 July 2018, and further extended maturity date upon a prior written consent from Integrated Asset Management would be 17 January 2019. Such written consent from Integrated Asset Management has been received by the Company. A maximum number of 249,651,810 Shares would be allotted and issued to Integrated Asset Management upon conversion of the CBs in full.

– 11 –

LETTER FROM THE BOARD

Pursuant to the third amendment agreement approved by the Shareholders at the extraordinary general meeting of the Company held on 19 March 2019, the amendments were that the maturity date of the CBs was extended for six months from 17 January 2019 to 17 July 2019, and further extended maturity date upon a prior written consent from Integrated Asset Management would be 17 January 2020. Such written consent from Integrated Asset Management has been received by the Company. A maximum number of 249,651,810 Shares would be allotted and issued to Integrated Asset upon conversion of the CBs in full.

As a result of the adjustments of the CBs on 10 May 2019 upon the allotment and issue of the consideration shares to Sinopharm Traditional Chinese Medicine Overseas Holdings Limited, a maximum number of 263,602,941 Shares shall be allotted and issued to Integrated Asset upon conversion of the CBs in full. The adjusted conversion price is HK$0.34 per conversion share subject to further adjustment.

An ordinary resolution was passed at the extraordinary general meeting of the Company held on 25 March 2020 in which pursuant to the fourth amendment agreement, the amendments are that the maturity date of the CBs shall be extended for six months from 17 January 2020 to 17 July 2020, and further extended to 17 January 2021 upon a prior written consent from Integrated Asset Management. A maximum number of 263,602,941 Shares shall be allotted and issued to Integrated Asset Management upon conversion of the CBs in full.

IMPLICATIONS UNDER THE GEM LISTING RULES

As the Subscriber is an executive Director and the chief executive officer of the Company and a director of Best Frontier, the Subscriber is a connected person of the Company under the GEM Listing Rules. Therefore, the entering into of the Subscription Agreement and the transactions contemplated thereunder constituted a connected transaction for the Company and is subject to the reporting, announcement, circular and Independent Shareholders’ approval requirements under Chapter 20 of the GEM Listing Rules.

As required under the GEM Listing Rules, any Shareholder with a material interest in a proposed transaction and such Shareholder’s associates will abstain from voting on resolution(s) approving the same.

The Subscriber, by virtue of his material interest in the Subscription Agreement and the transactions contemplated thereunder, and his associates, shall abstain from voting on all the resolution(s) to be proposed at the EGM. As at the Latest Practicable Date: (i) the Subscriber did not hold any Shares; (ii) Madam Cheung Kwai Lan, a substantial Shareholder, was interested in 640,596,856 Shares (which included the 632,920,856 Shares held by Best Frontier directly, the 4,656,000 Shares held by her directly as a beneficial owner and the 3,020,000 Shares held by her spouse Mr. Chan Tung Mei); (iii) Mr. Chan Tung Mei, a substantial Shareholder, was interested in 640,596,856 Shares (which included all the Shares held by Madam Cheung Kwai Lan and through Best Frontier, and the 3,020,000 Shares held by himself directly as a beneficial owner).

Best Frontier, a substantial Shareholder, by virtue of being a close associate of the Subscriber, and the associates of Best Frontier, shall also be required to abstain from voting on the resolution(s) regarding the Subscription Agreement and the transactions contemplated thereunder, including the granting of the Specific Mandate for the allotment and issue of the Subscription Shares.

– 12 –

LETTER FROM THE BOARD

Save as disclosed above, to the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, no other Shareholder is required to abstain from voting on the resolution(s) to be proposed at the EGM.

As at the Latest Practicable Date, the Subscriber, Madam Cheung Kwai Lan, Mr. Chan Tung Mei and Best Frontier together controlled or was entitled to exercise control over the voting right of an aggregate of 640,596,856 Shares, representing approximately 14.93% of the total issued Shares. Each of the Subscriber, Madam Cheung Kwai Lan, Mr. Chan Tung Mei and Best Frontier shall abstain from voting on all the resolution(s) at the EGM in compliance with the GEM Listing Rules.

GENERAL

The Subscription Agreement and the transactions contemplated thereunder, including the issue and allotment of the Subscription Shares, are subject to, inter alia, the approval of Independent Shareholders at the EGM. A Specific Mandate for the allotment and issue of 800,000,000 new Shares will be sought in the EGM to cater for the allotment and issue of these Subscription Shares.

An Independent Board Committee (comprising all Independent non-executive Directors) has been formed to advise the Independent Shareholders and the Company has also appointed Gram Capital to advise the Independent Board Committee and the Independent Shareholders regarding the Subscription.

The Subscriber, Madam Cheung Kwai Lan (an executive Director) and Mr. Chan Tung Mei (a non-executive Director) (the latter two being substantial Shareholders and the parents of the Subscriber) have abstained from voting on the board resolutions regarding the Subscription Agreement, the transactions contemplated thereunder and the allotment and issue of the Subscription Shares.

EXTRAORDINARY GENERAL MEETING

The resolutions to be proposed at the forthcoming EGM are set out in full in the notice of the EGM on pages 32 to 33 of this circular. A form of proxy for use at the EGM is enclosed with this circular.

If you intend to appoint a proxy to attend the EGM, you are requested to complete the form of proxy and return it to the Company’s Hong Kong branch share registrar and transfer office, Tricor Standard Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the EGM or adjourned meeting (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting at the EGM or any adjournments thereof if you so wish.

– 13 –

LETTER FROM THE BOARD

Pursuant to Rule 17.47(4) of the GEM Listing Rules, any vote of the Shareholders at a general meeting must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. Therefore, all resolutions set out in the notice of EGM will be voted by way of poll at the EGM. The Company will announce the results of poll in the manner prescribed under Rule 17.47(5) of the GEM Listing Rules.

RECOMMENDATIONS

The Independent Board Committee, having taken into account the advice of the Independent Financial Adviser, is of the opinion that the Subscription Agreement and transactions contemplated thereunder are fair and reasonable and on normal commercial terms so far as the Independent Shareholders are concerned. While the Subscription and the grant of Specific Mandate are not in the ordinary and usual course of business of the Group, they are in the interests of the Company and its Shareholders as a whole and accordingly recommends the Independent Shareholders to vote in favour of the resolution(s) relating to the Subscription Agreement and the transactions contemplated thereunder, including the grant of the Specific Mandate for the allotment and issue of the Subscription Shares to be proposed at the EGM.

Accordingly, the Directors (including the independent non-executive Directors, and excluding the Subscriber who have a material interest in the subject transaction and had abstained from voting on the Board resolution approving the same) consider that the Subscription are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. Therefore, the Directors (including the independent non-executive Directors, and excluding the Subscriber) recommend the Independent Shareholders to vote in favour of the relevant resolution(s) to be proposed at the EGM.

ADDITIONAL INFORMATION

Your attention is drawn to the (i) letter from the Independent Board Committee set out in this circular and (ii) letter from Gram Capital set out in this circular, which contains among other matters, its advice to the Independent Board Committee and the Independent Shareholders in connection with the Subscription Agreement and the transactions contemplated thereunder and the principal factors considered by it in arriving at its recommendation.

Your attention is also drawn to the additional information contained in the appendix to this circular.

Yours faithfully, By Order of the Board Sinopharm Tech Holdings Limited 國藥科技股份有限公司 CHAN Ting

Executive Director and Chief Executive Officer

– 14 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

==> picture [77 x 76] intentionally omitted <==

Sinopharm Tech Holdings Limited 國藥科技股份有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8156)

19 June 2020

To the Independent Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION INVOLVING ALLOTMENT AND ISSUE OF NEW SHARES UNDER SPECIFIC MANDATE

INTRODUCTION

We refer to the circular of the Company dated 19 June 2020 to (the ‘‘Circular’’), of which this letter forms part. Capitalized terms used herein shall have the same meaning as those defined in the Circular unless the context otherwise requires.

We have been appointed by the Board to advise you on whether the terms of the Subscription Agreement and the transaction contemplated thereunder, and the Specific Mandate are fair and reasonable so far as the Independent Shareholder are concerned.

Details of the advice of Gram Capital, together with the principal factors and reasons taken into consideration in arriving at such advice, are set out on pages 17 to 26 of the Circular. Your attention is also drawn to the letter from the Board set out on pages 4 to 14 of the Circular and the additional information set out in the appendix of the Circular.

– 15 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

RECOMMENDATION

Having considered the terms and conditions of the Subscription Agreement, the principal factors and reasons considered by, and the advice of Gram Capital, we are of the view that the Subscription Agreement and transactions contemplated thereunder are fair and reasonable and on normal commercial terms so far as the Independent Shareholders are concerned. While the Subscription and the grant of Specific Mandate are not in the ordinary and usual course of business of the Group, they are in the interests of the Company and its Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the resolution(s) to be proposed at the EGM to approve the Subscription Agreement and the transactions contemplated thereunder, and the Specific Mandate.

Mr. LAU Fai Lawrence

Yours faithfully, For and on behalf of Independent Board Committee Dr. LIU Ta-pei Mr. CHAU Wai Wah Fred

– 16 –

LETTER FROM GRAM CAPITAL

Set out below is the text of a letter received from Gram Capital, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Subscription for the purpose of inclusion in this circular.

==> picture [168 x 32] intentionally omitted <==

Room 1209, 12/F. Nan Fung Tower 88 Connaught Road Central/ 173 Des Voeux Road Central Hong Kong

19 June 2020

To: The independent board committee and the independent shareholders of Sinopharm Tech Holdings Limited

Dear Sir/Madam,

CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF NEW SHARES BY CONNECTED PERSON

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Subscription, details of which are set out in the letter from the Board (the ‘‘Board Letter’’) contained in the circular dated 19 June 2020 issued by the Company to the Shareholders (the ‘‘Circular’’), of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

On 2 April 2020, the Company and the Subscriber entered into the Subscription Agreement (as supplemented by a supplemental agreement dated 16 June 2020), pursuant to which the Company conditionally agreed to allot and issue, and the Subscriber conditionally agreed to subscribe for, 800,000,000 Subscription Shares at the Subscription Price of HK$0.20 per Subscription Share.

The 800,000,000 Subscription Shares, represent (i) approximately 18.65% of the existing issued share capital of the Company as at the Latest Practicable Date; and (ii) approximately 15.72% of the issued share capital of the Company immediately upon Completion (assuming there is no change to the issued share capital of the Company from the Latest Practicable Date and prior to Completion) as enlarged by the Subscription.

With reference to the Board Letter, the Subscription constitutes a connected transaction of the Company under the GEM Listing Rules, which is subject to the announcement, reporting and Independent Shareholders’ approval requirements under Chapter 20 of the GEM Listing Rules.

– 17 –

LETTER FROM GRAM CAPITAL

The Independent Board Committee comprising Mr. LAU Fai Lawrence, Dr. LIU Ta-pei and Mr. CHAU Wai Wah Fred (all being independent non-executive Directors) has been established to advise the Independent Shareholders on (i) whether the terms of the Subscription are on normal commercial terms and are fair and reasonable; (ii) whether the Subscription is conducted in the ordinary and usual course of the business of the Company and is in the interests of the Company and the Shareholders as a whole; and (iii) how the Independent Shareholders should vote in respect of the resolution(s) to approve the allotment and issue of the Subscription Shares pursuant to the Subscription Agreement at the EGM. We, Gram Capital Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

BASIS OF OUR OPINION

In formulating our opinion to the Independent Board Committee and the Independent Shareholders, we have relied on the statements, information, opinions and representations contained or referred to in the Circular and the information and representations as provided to us by the Directors. We have assumed that all information and representations that have been provided by the Directors, for which they are solely and wholly responsible, are true and accurate at the time when they were made and continue to be so as at the Latest Practicable Date. We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Circular were reasonably made after due enquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the opinions expressed by the Company, its advisers and/or the Directors, which have been provided to us. Our opinion is based on the Directors’ representation and confirmation that there is no undisclosed private agreement/arrangement or implied understanding with anyone concerning the Subscription. We consider that we have taken sufficient and necessary steps on which to form a reasonable basis and an informed view for our opinion in compliance with Rule 17.92 of the GEM Listing Rules.

The Circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in the Circular 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 the Circular misleading. We, as the Independent Financial Adviser, take no responsibility for the contents of any part of the Circular, save and except for this letter of advice.

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, conducted any independent in-depth investigation into the business and affairs of the Company, the Subscriber or their respective subsidiaries or associates, nor have we considered the taxation implication on the Group or the Shareholders as a result of the

– 18 –

LETTER FROM GRAM CAPITAL

Subscription. Our opinion is necessarily based on the financial, economic, market and other conditions in effect and the information made available to us as at the Latest Practicable Date. Shareholders should note that subsequent developments (including any material change in market and economic conditions) may affect and/or change our opinion and we have no obligation to update this opinion to take into account events occurring after the Latest Practicable Date or to update, revise or reaffirm our opinion. In addition, nothing contained in this letter should be construed as a recommendation to hold, sell or buy any Shares or any other securities of the Company.

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources, it is the responsibility of Gram Capital to ensure that such information has been correctly extracted from the relevant sources while we are not obligated to conduct any independent in-depth investigation into the accuracy and completeness of those information.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion in respect of the Subscription, we have taken into consideration the following principal factors and reasons:

Background of and reasons for the Subscription

Information on the Group

With reference to the Board Letter, the Group is principally engaged in (i) the provision of lottery-related services; (ii) the provision of internet plus services (solutions and supply chain); and (iii) other services.

Set out below are the consolidated financial information of the Group for the six months ended 31 December 2019 and the two years ended 30 June 2019 as extracted from the Company’s interim report for the six months ended 31 December 2019 (the ‘‘2019/20 Interim Report’’) and the Company’s annual report for the year ended 30 June 2019 (the ‘‘2018/19 Annual Report’’):

	For the six	For the	For the
	months ended	year ended	year ended
	31 December	30 June	30 June	Year-on-year
	2019	2019	2018	change
	HK$’000	HK$’000	HK$’000	%
	(unaudited)	(audited)	(audited)
Revenue	87,380	43,503	25,347	71.63
Loss for the period/
year	(18,270)	(45,626)	(71,585)	(36.26)

– 19 –

LETTER FROM GRAM CAPITAL

	As at	As at	As at
	31 December	30 June	30 June	Year-on-year
	2019	2019	2018	change
	HK$’000	HK$’000	HK$’000	%
	(unaudited)	(audited)	(audited)
Bank balances and
cash	6,709	6,646	4,719	40.83
Net assets/
(liabilities)	22,379	37,239	(59,999)	N/A

The Group recorded revenue of approximately HK$43.50 million for the year ended 30 June 2019 (‘‘FY2018/19’’), representing an increase of approximately 71.63% as compared to that for the year ended 30 June 2018 (‘‘FY2017/18’’). With reference to the 2018/19 Annual Report, the increase in revenue was attributable to the new business on internet plus services of supply chain and recognizing revenue from ‘‘internet plus lease’’ services contract. With reference to the 2019/20 Interim Report, the Group recorded revenue of approximately HK$87.38 million for the six months ended 31 December 2019 (‘‘HY2019/20’’), representing an increase of over 600% as compared to that for the corresponding period in 2018 and exceeding the Group’s revenue for FY2018/19. As advised by the Directors, such improvement in the Group’s revenue was mainly due to the aforesaid new business on internet plus services of supply chain.

The Group recorded loss of approximately HK$45.63 million for FY2018/19, representing a decrease of approximately 36.26% as compared to that for FY2017/18. With reference to the 2018/19 Annual Report and as advised by the Directors, the major reason for such decrease was the net effect of (i) new business segment contribution from internet plus supply chain services; (ii) the Group’s various measures to tighten cost controls; (iii) fair value gain on investment in associates; and (iv) written back of consideration payable for acquisition of subsidiaries and impairment losses on assets made for FY2018/19.

As at 31 December 2019, the Group had bank balances and cash of approximately HK$6.71 million.

Information on the Subscriber

With reference to the Board Letter, Mr. CHAN Ting (being the Subscriber) is an executive Director, the chief executive officer of the Company and a director of Best Frontier Investments Limited (being a substantial Shareholder). Accordingly, Mr. CHAN Ting is a connected person of the Company under Chapter 20 of the GEM Listing Rules.

– 20 –

LETTER FROM GRAM CAPITAL

Reasons for and benefits of the Subscription and use of proceeds

With reference to the Board Letter, the Directors are of the view that the Subscription represents an opportunity for the Company to raise capital for the development and expansion of the existing lottery-related, internet plus services and mask production business of the Group and to capture potential investment opportunities when such opportunities arise. The gross proceeds and the net proceeds (after deducting professional fees and other related expenses) from the Subscription will be HK$160.0 million and approximately HK$159.7 million respectively. It is intended that the net proceeds from the Subscription (the ‘‘Net Proceeds’’) will be utilised as follows (i) 45%, approximately HK$72.0 million for development and expansion of the existing lottery-related and internet plus services business; (ii) 30%, approximately HK$48.0 million for development and expansion of the existing mask production business of the Group; (iii) 15%, approximately HK$24.0 million for repayment of debt; and (iv) 10%, the remaining balance of approximately HK$15.7 million for general working capital of the Group.

Further details of each use of proceeds above are set out under the section headed ‘‘REASONS FOR THE SUBSCRIPTION AND USE OF PROCEEDS’’ of the Board Letter.

The Net Proceeds can finance (i) the development of the Group’s principal business (i.e. lottery-related and internet plus service business), which may accelerate the improvement in the Group’s financial performance as mentioned under the section headed ‘‘Information on the Group above; and (ii) the development of the Group’s newly established masks production business, which may broaden the Group’s sources of revenue.

As aforementioned, the Group only had bank balances and cash of approximately HK$6.71 million as at 31 December 2019. It is reasonable for the Group to apply part of the Net Proceeds for repaying existing debts to reduce interest expense and for general working capital of the Group.

With reference to the Board Letter, before resorting to the Subscription, the Board considered and compared feasibilities of other fund raising alternatives for the Group, such as placement of new Shares to independent investors, rights issue, open offer, debt financing and bank borrowings. The Company applied for term loans from various banks that the Company has prior commercial relationship with and the application was turned down subsequently due to lack of available assets collateral and loss-making position of the Group for FY2018/19. Taking into account the benefits and cost of each of the alternatives, the Board considers that the Subscription is in the interests of the Company and the Shareholders as a whole as it would not impose any interest burden or finance costs to the Group and increase the gearing level of the Group. Furthermore, the Subscription also

– 21 –

LETTER FROM GRAM CAPITAL

demonstrates the confidence of the Subscriber as an executive Director and the chief executive officer of the Company and the support to the development of the Group’s business, which is conducive to enhancing the Company’s market image.

Upon our enquiry, the Directors advised us that given the recent market sentiment and loss-making position of the Group for FY2018/19, it would be difficult for the Company to seek for placing agent for share placement or underwriter for rights issue/open offer.

Accordingly, we concur with the Directors that the Subscription is an appropriate mean of fund raising.

Having considered that (i) the Net Proceeds can finance the Group’s business development, repayment of debts and working capital; and (ii) the Subscription is an appropriate mean of fund raising, we are of the view that, although the Subscription is not conducted in the ordinary and usual course of business of the Company, the Subscription is in the interest of the Company and the Shareholders as a whole.

2. Principal terms of the Subscription Agreement

Subscription Price

With reference to the Board Letter, the Subscription Price is HK$0.20 per Subscription Share, representing:

(i) a premium of approximately 0.50% over the closing price of HK$0.199 per Share as quoted on the Stock Exchange on the Latest Practicable Date;
(ii) a discount of approximately 12.28% to the closing price of HK$0.228 per Share as quoted on the Stock Exchange on the Last Trading Day (the ‘‘LTD Discount’’); and
(iii) a discount of approximately 15.25% to the average closing price of approximately HK$0.236 per Share as quoted on the Stock Exchange for the five trading days immediately prior to the Last Trading Day.

– 22 –

LETTER FROM GRAM CAPITAL

Analysis on the Subscription Price

In order to assess the fairness and reasonableness of the Subscription Price, we conducted the following analysis:

a) Share price performance

Set out below is a chart showing the movement of the closing prices of the Shares during the period from 1 April 2019 to 2 April 2020, being approximate one year up to and including the Last Trading Day (the ‘‘Review Period’’), to illustrate the general trend and level of movement of the closing prices of the Shares:

==> picture [345 x 202] intentionally omitted <==

Source: the Stock Exchange’s website

During the Review Period, the highest and lowest closing prices of the Shares as quoted on the Stock Exchange were HK$0.395 per Share recorded on 25 July 2019 and 26 July 2019 and HK$0.149 recorded on 16 May 2019 and 17 May 2019 respectively. The Subscription Price is within the closing price range of the Shares during the Review Period.

As depicted from the above chart, the closing prices of the Shares dropped from HK$0.184 on 1 April 2019 to HK$0.149 on 16 May 2019. Subsequently, the closing prices of the Shares increased to HK$0.395 on 25 July 2019. Thereafter, the closing prices of the Shares fluctuated and did not form any specific and continuous trend up to the Last Trading Day.

– 23 –

LETTER FROM GRAM CAPITAL

b) Liquidity

Set out below are (i) the number of trading days; (ii) the percentage of the Shares’ average daily trading volume (the ‘‘Average Volume’’) as compared to the total number of issued Shares held by the public as at the Last Trading Day; and (iii) the percentage of the Average Volume as compared to the total number of issued Shares as at the Last Trading Day, during the Review Period:

		% of the Average	% of the Average
		Volume to total		% of the Average
		number of issued		Volume to total
		Shares held by		number of issued
	No. of trading	the public as at		Shares as at the
	days in each	the Last Trading		Last Trading Day
Month	month	Day (Note 1)		(Note 2)
	%		%
2019
April	19		0.22	0.12
May	21		0.66	0.38
June	19		0.79	0.45
July	22		1.15	0.66
August	22		0.93	0.53
September	21		0.50	0.28
October	21		0.39	0.22
November	21		0.43	0.25
December	20		0.27	0.15
2020
January	20		0.40	0.23
February	20		0.78	0.45
March	22		0.31	0.18
April (up to and including
the Last Trading Day)	2		0.80	0.46

Source: the Stock Exchange’s website

Notes:

Based on 2,350,760,212 Shares held by the public as at the Last Trading Day.
Based on 4,108,855,068 Shares as at the Last Trading Day.

We noted from the above table that the average daily trading volume of the Shares was thin during the Review Period. During the Review Period, save for July 2019, the Average Volume was below 1% of the total number of issued Shares held in public hands and the total number of issued Shares as at the Last Trading Day.

Given the low liquidity of the Shares as illustrated above, it is reasonable to set the Subscription Price at discount to the closing price of the Share as at the Last Trading Day.

– 24 –

LETTER FROM GRAM CAPITAL

c) Comparables

As part of our analysis, we also identified placing/subscription of new shares under specific mandate for cash during the period from 1 September 2019 up to the Last Trading Day (being an approximate six-month period up to and including the Last Trading Day) as announced by companies listed on the Stock Exchange (the ‘‘Comparables’’). To the best of our knowledge and as far as we are aware of, we found 11 transactions which met the said criteria. Shareholders should note that the businesses, operations and prospects of the Company are not the same as the subject companies of the Comparables.

		Premium/(discount) of
		the subscription price
		to closing price per
		share on the date of
		agreement in relation
		to the respective
	Date of	subscription of new
Company name (stock code)	announcement	shares (%)
Evergreen Products Group Limited (1962)	20 September 2019	(14.36)
Global Bio-chem Technology Group	27 September 2019	(20.00)
Company Limited (809)
Hainan Meilan International Airport	30 September 2019	(8.40)
Company Limited (formerly known as
Regal International Airport Group
Company Limited) (357)
BeiGene, Ltd. (6160)	1 November 2019	25.47
		(Note)
Ozner Water International Holding Limited	1 November 2019	(30.41)
(2014)
Panda Green Energy Group Limited (686)	19 November 2019	7.76
JTF International Holdings Limited (8479)	26 November 2019	Nil
Shougang Concord International Enterprises	29 November 2019	(13.04)
Company Limited (697)
Sunway International Holdings Limited (58)	8 January 2020	25.00
CT Vision (International) Holdings Limited	22 January 2020	(21.57)
(994)
China Finance Investment Holdings Limited	6 February 2020	(31.58)
(875)
Maximum		25.47
Minimum		(31.58)
The Subscription		(12.28)

Note: Based on the US$/HK$ exchange rate of 1: 7.78.

We noted from the above table that the subscription prices of the Comparables ranged from a discount of approximately 31.58% to a premium of approximately 25.47% to/over the respective closing prices of their shares on the date of agreement in relation to the respective subscription of new

– 25 –

LETTER FROM GRAM CAPITAL

shares under specific mandate for cash (the ‘‘Discount/Premium Market Range’’). The LTD Discount of approximately 12.28% falls within the Discount/Premium Market Range.

Having considered that:

(i) the Subscription Price is within the closing price range of the Shares during the Review Period;
(ii) given the low liquidity of the Shares as illustrated above, it is reasonable to set the Subscription Price at discount over the closing price of the Share as at the Last Trading Day; and
(iii) the LTD Discount falls within the Discount/Premium Market Range,

we consider the Subscription Price to be fair and reasonable.

Detailed terms and conditions of the Subscription Agreement are set out under the section headed ‘‘SUBSCRIPTION AGREEMENT’’ of the Board Letter.

Taking into account the principal terms of the Subscription (including the Subscription Price) as highlighted above, we are of the view that the terms of the Subscription are on normal commercial terms and are fair and reasonable.

Possible dilution effect on the shareholding interests of the public Shareholders

With reference to the shareholding table in the section headed ‘‘CHANGES IN SHAREHOLDING STRUCTURE’’ of the Board Letter, the shareholding interests held by the public would be diluted by approximately 9.28 percentage points as a result of the Subscription. In this regard, taking into account (i) the reasons for and benefits of the Subscription; and (ii) the terms of the Subscription being fair and reasonable, we are of the view that the said level of dilution to the shareholding interests of the public Shareholders as a result of the Subscription is justifiable.

RECOMMENDATION

Having taken into consideration the factors and reasons as stated above, we are of the opinion that (i) the terms of the Subscription are on normal commercial terms and are fair and reasonable; and (ii) although the Subscription is not conducted in the ordinary and usual course of business of the Company, it is in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the resolution to be proposed at the EGM to approve the Subscription and we recommend the Independent Shareholders to vote in favour of the resolution in this regard.

Yours faithfully, For and on behalf of Gram Capital Limited Graham Lam Managing Director

– 26 –

APPENDIX

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Directors’ and chief executive’s interests and short positions in the Shares, underlying Shares and debentures of the Company and its associated corporations

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which were notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO), or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules to be notified to the Company and the Stock Exchange, were as follows:

Long position in the Shares and underlying Shares of the Company or any of its associates corporation

Name of Directors The Company/ Name of Associated Corporation Madam CHEUNG Kwai Lan (‘‘Madam CHEUNG’’) (Note 1) The Company Mr. CHAN Tung Mei (‘‘Mr. CHAN’’) (Note 1) The Company Madam CHEUNG Best Frontier (Note 1) Mr. CHAN Best Frontier (Note 1) Mr. CHAU Wai Wah Fred The Company Dr. CHENG Yanji The Company	Number of Shares Held Interest in Controlled Corporation Personal Interest Family Interest Total Interest Approximate Percentage of Shareholding 632,920,856 4,656,000 3,020,000 640,596,856 14.93% — 3,020,000 637,576,856 640,596,856 14.93% — 909 1 910 — — 1 909 910 — — 3,800,000 — 3,800,000 0.09% — 1,965,000 — 1,965,000 0.05%

– 27 –

APPENDIX

GENERAL INFORMATION

Notes:

The 632,920,856 Shares were owned by Best Frontier which was owned as to 99.89% and 0.11% by Madam CHEUNG and Mr. CHAN who are spouses to each other. In addition, Madam CHEUNG and Mr. CHAN directly held 4,656,000 Shares and 3,020,000 Shares respectively. Accordingly, Madam CHEUNG is the spouse of Mr. CHAN and so both of them were deemed to be interested in the Shares.
As disclosed in the announcement of the Company dated 7 January 2020, on 7 January 2020 the Company granted share options (the ‘‘Option(s)’’) to certain eligible persons, including the Directors, pursuant to the share option scheme of the Company adopted on 31 January 2013 to subscribe for an aggregate of 92,800,000 ordinary shares of HK$0.0125 each in the share capital of the Company. The following Options were granted to the following Directors:

Madam CHEUNG 4,000,000 Options Mr. CHAN Ting 4,000,000 Options Mr. CHAN 3,600,000 Options Dr. CHENG Yanjie 3,600,000 Options Dr. LIU Ta-pei 3,600,000 Options Mr. CHAU Wai Wah Fred 3,600,000 Options

None of the Directors has exercised his or her Options as at the Latest Practicable Date. The Directors are deemed to be interested in the Options granted to him or her for the purpose of Part XV of the SFO.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and chief executive of the Company had or was deemed to have any interests or short positions in any Shares, debentures or underlying Shares of the Company and its associated corporations (within the meaning of Part XV of the SFO) that are required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO) or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein or which were required, pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules relating to securities transactions by the Directors, to be notified to the Company and the Stock Exchange.

(b) Substantial Shareholders’ Interests and Short Positions in the Shares and Underlying Shares of the Company

As at the Latest Practicable Date, according to the register kept by the Company pursuant to section 336 of SFO, and so far as is known to any Directors or chief executive of the Company, the following persons (other than the Directors or chief

– 28 –

GENERAL INFORMATION

APPENDIX

executive of the Company) had, or was deemed or taken to have, an interest or short position in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, were as follow:

Long Positions in the Shares

			Approximate
		Number of issued	Percentage
Name of Shareholders	Capacity	Shares Held	of the Shareholding
Sinopharm Traditional	Beneficial Owner	650,000,000	15.15%
Chinese Medicine Overseas
Holdings Limited
Best Frontier & its concert	Beneficial Owner	640,596,856	14.93%
parties (Note)
Integrated Asset Management	Beneficial Owner	461,733,000	10.76%
& its concert parties
Mr. TSE Siu Hoi	Beneficial Owner	310,650,000	7.56%

Note:

The Subscriber, Madam Cheung Kwai Lan and Mr. Chan Tung Mei, being the directors of Best Frontier, are also the Directors.

Save as disclosed above, as at the Latest Practicable Date, the Directors or chief executive of the Company were not aware of any person (other than a Director or chief executive of the Company) who had an interest or short position in the Shares or underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Division 2 an 3 of Part XV of the SFO, or which recorded in the register required to be kept by the Company under section 336 of the SFO.

3. COMPETING INTERESTS

As at the Latest Practicable Date, none of Directors, the substantial shareholders nor the controlling shareholders of the Company or any of their respective close associates (as defined under the GEM Listing Rules) have any interest in any business which competes or is likely to compete, directly or indirectly, with the business of the Group.

4. DIRECTORS’ SERVICE CONTRACTS

All the executive Directors and the non-executive Director have entered into a service contract with the Company with effect from the date of appointment and will continue thereafter unless and until terminated by either party by giving not less than six months’ notice in writing served by either party on the other. All the independent non-executive Directors have not entered into any service contracts with the Company but are subject to retirement by rotation and re-election in accordance with the articles of association of the Company.

– 29 –

GENERAL INFORMATION

APPENDIX

As at the Latest Practicable Date, none of the Directors had entered into or proposed to enter into, a service contract with any member of the Group excluding contracts expiring or determinable by such member of the Group within one year without payment of compensation, other than statutory compensation.

5. DIRECTORS’ INTERESTS IN CONTRACT OR ARRANGEMENT

As at the Latest Practicable Date, save as the Subscription Agreement, none of the Directors was materially interested in any contract or arrangement subsisting which was significant in relation to the business of the Group, nor has any Director had any direct or indirect interest in any assets which have been acquired or disposed of by or leased to or were proposed to be acquired or disposed of by or leased to any member of the Group since 30 June 2019, being the date to which the latest published audited financial statements of the Group were made up.

6. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position or prospects of the Group since 30 June 2019, being the date to which the latest published audited financial statements of the Group were made up.

7. WORKING CAPITAL

As at the Latest Practicable Date, having made appropriate inquiries and taking into account of the cash flows generated from the operating activities and the internal resources of the Group, the Directors are of the opinion that the Group will have sufficient working capital for its requirements for at least the next 12 months from the date of this circular.

8. LITIGATION

So far as the Directors are aware, as at the Latest Practicable Date, no member of the Group was involved in any litigation or claim of material importance and there was no litigation or claim of material importance known to the Directors to be pending or threatened by or against any member of the Group.

9. QUALIFICATION AND CONSENT OF EXPERT

The following is the qualification of the expert who has given opinions or advice which are contained in this circular:

Name Qualifications Gram Capital Limited A licensed corporation to carry out Type 6 (advising on corporate finance) regulated activity under the SFO

– 30 –

GENERAL INFORMATION

APPENDIX

Gram Capital has given and has not withdrawn its written consent to the issue of this circular with the inclusion therein of its letter and/or reference to its name, in the form and context in which they appear.

As at the Latest Practicable Date, Gram Capital was not beneficially interested in the share capital of any member of the Group nor had any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities in any member of the Group, nor did it have any interest, directly or indirectly, in any asset which had been, since 30 June 2019, being the date to which the latest published audited financial statements of the Group were made up, acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

10. MISCELLANEOUS

(i) The registered office of the Company is situated at Second Floor, Century Yard, Cricket Square, P.O. Box 902, Grand Cayman, KY1-1103, Cayman Islands.
(ii) The principal place of business of the Company in Hong Kong is at Units 307–313, 3/F., Wireless Centre, Phase One Hong Kong Science Park, Pak Shek Kok, New Territories, Hong Kong.
(iii) The company secretary of the Company is Mr. Ho Kam Kin (CPA), who was appointed on 1 September 2016.
(iv) The Company’s branch share registrar and transfer office in Hong Kong is Tricor Standard Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be made available for inspection at the office of the Company at Units 307–313, 3/F, Phase One Hong Kong Science Park, Wireless Centre, Pak Shek Kok, New Territories, Hong Kong, during 10: 00 a.m. to 4: 00 p.m. on any Business Day from the date of this circular up to and including the date of the EGM:

(a) the Subscription Agreement;
(b) the written consent of the expert referred to in the paragraph headed ‘‘Qualification and Consent of Expert’’ in this Appendix;
(c) the letter from the Independent Board Committee, the text of which is set out on pages 15 to 16 in this circular;
(d) the letter of advice from Gram Capital to the Independent Board Committee and the Independent Shareholders, the text of which is set out on pages 17 to 26 in this circular; and
(e) this circular.

– 31 –

NOTICE OF EGM

==> picture [77 x 76] intentionally omitted <==

Sinopharm Tech Holdings Limited 國藥科技股份有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8156)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the ‘‘EGM’’) of Sinopharm Tech Holdings Limited (the ‘‘Company’’) will be held at Units 307–313, 3/F, Wireless Centre, Phase One Hong Kong Science Park, Pak Shek Kok, New Territories, Hong Kong on Wednesday, 8 July 2020 at 11: 00 a.m., for the purpose of considering and, if thought fit, passing the following resolution:

ORDINARY RESOLUTION

‘‘THAT:

(a) the conditional subscription agreement dated 2 April 2020 (the ‘‘Subscription Agreement’’), a copy of which has been produced to the meeting and marked ‘‘A’’ and initialed by the chairman of the EGM for the purpose of identification, and entered into between the Company as issuer and Mr. CHAN Ting (the ‘‘Subscriber’’) as subscriber in relation to the subscription of 800,000,000 new ordinary shares (each a ‘‘Subscription Share’’) of HK$0.0125 each in the share capital of the Company at the subscription price of HK$0.20 per Subscription Share and the transactions contemplated thereunder, be and are hereby confirmed, approved and ratified;
(b) subject to the fulfilment of the conditions precedent of the Subscription Agreement, any one director (each a ‘‘Director’’) of the Company be and is hereby authorized to exercise all the powers of the Company and to take all steps as might in his/her opinion be desirable or necessary in connection with the Subscription Agreement to, including and without limitation, execute, deliver and perform the Subscription Agreement and the transactions contemplated thereunder and allot and issue the Subscription Shares to the Subscriber in accordance with the terms and conditions of the Subscription Agreement;
(c) the board (the ‘‘Board’’) of Directors be and is hereby granted with a specific mandate to allot and issue the Subscription Shares in accordance with the terms and conditions of the Subscription Agreement; and

– 32 –

NOTICE OF EGM

(d) any Director be and is hereby authorised to do such acts and things, to sign and execute all such further documents and to take such steps as he/she may consider necessary, appropriate, desirable or expedient to give effect to or in connection with the Subscription Agreement or any transactions contemplated thereunder and all other matters incidental thereto or in connection therewith, and to agree to and make such variations, amendments or waivers of any of the matters relating thereto or in connection therewith.’’

By order of the Board Sinopharm Tech Holdings Limited 國藥科技股份有限公司 CHAN Ting

Executive Director and Chief Executive Officer

Hong Kong, 19 June 2020

Registered Office: Second Floor, Century Yard Cricket Square, P.O. Box 902 Grand Cayman, KY1-1103 Cayman Islands

Head office and principal place of business in Hong Kong: Units 307–313, 3/F, Wireless Centre Phase One Hong Kong Science Park Pak Shek Kok, New Territories Hong Kong

Notes:

A shareholder of the Company entitled to attend and vote at the EGM (or at any adjournment thereof) is entitled to appoint another person as his/her/its proxy to attend and vote in his/her/its stead in accordance with the articles of association of the Company. A proxy need not be a shareholder of the Company. A form of proxy for use at the EGM is enclosed.
In order to be valid, this form of proxy together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of that power or authority, must be deposited with the Hong Kong branch share registrar and transfer office of the Company, Tricor Standard Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude a shareholder of the Company from attending in person and voting at the EGM or any adjournment thereof, should he/she/it so wish and in such event, the proxy shall be deemed to be revoked.
In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the vote(s) of other joint holder(s), and for this purpose, seniority will be determined by the order in which the names stand in the register of members of the Company in respect of such jointly-held shares.

– 33 –

AI assistant

Sinopharm Tech Holdings Limited — Proxy Solicitation & Information Statement 2020

51300_rns_2020-06-18_17c6b8d9-99e5-48de-8e21-103b76b821e1.pdf

Sinopharm Tech Holdings Limited 國藥科技股份有限公司

CONNECTED TRANSACTION INVOLVING ALLOTMENT AND ISSUE OF NEW SHARES UNDER SPECIFIC MANDATE AND NOTICE OF EXTRAORDINARY GENERAL MEETING

CONTENTS

DEFINITIONS

DEFINITIONS

Sinopharm Tech Holdings Limited 國藥科技股份有限公司

CONNECTED TRANSACTION INVOLVING ALLOTMENT AND ISSUE OF NEW SHARES UNDER SPECIFIC MANDATE AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

LETTER FROM THE BOARD

SUBSCRIPTION AGREEMENT

Subscription Shares

Subscription Price

Conditions precedent of the Subscription Agreement

LETTER FROM THE BOARD

Completion

Ranking

Specific Mandate

Application for Listing

REASONS FOR THE SUBSCRIPTION AND USE OF PROCEEDS

LETTER FROM THE BOARD

Development of the lottery-related and ‘‘internet plus’’ service business

LETTER FROM THE BOARD

Development of the existing masks production business

Repayment of debts

General working capital

LETTER FROM THE BOARD

FUND RAISING ACTIVITIES IN THE PAST TWELVE-MONTH PERIOD

CHANGES IN SHAREHOLDING STRUCTURE

IMPLICATIONS UNDER THE GEM LISTING RULES

LETTER FROM THE BOARD

GENERAL

EXTRAORDINARY GENERAL MEETING

RECOMMENDATIONS

ADDITIONAL INFORMATION

Sinopharm Tech Holdings Limited 國藥科技股份有限公司

CONNECTED TRANSACTION INVOLVING ALLOTMENT AND ISSUE OF NEW SHARES UNDER SPECIFIC MANDATE

INTRODUCTION

RECOMMENDATION

CONNECTED TRANSACTION IN RELATION TO SUBSCRIPTION OF NEW SHARES BY CONNECTED PERSON

INTRODUCTION

LETTER FROM GRAM CAPITAL

BASIS OF OUR OPINION

LETTER FROM GRAM CAPITAL

PRINCIPAL FACTORS AND REASONS CONSIDERED

Information on the Group

LETTER FROM GRAM CAPITAL

Information on the Subscriber

Reasons for and benefits of the Subscription and use of proceeds

2. Principal terms of the Subscription Agreement

Subscription Price

b) Liquidity

c) Comparables

RECOMMENDATION

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

(a) Directors’ and chief executive’s interests and short positions in the Shares, underlying Shares and debentures of the Company and its associated corporations

(b) Substantial Shareholders’ Interests and Short Positions in the Shares and Underlying Shares of the Company

APPENDIX

3. COMPETING INTERESTS

4. DIRECTORS’ SERVICE CONTRACTS

APPENDIX

5. DIRECTORS’ INTERESTS IN CONTRACT OR ARRANGEMENT

6. MATERIAL ADVERSE CHANGE

7. WORKING CAPITAL

8. LITIGATION

9. QUALIFICATION AND CONSENT OF EXPERT

APPENDIX

10. MISCELLANEOUS

11. DOCUMENTS AVAILABLE FOR INSPECTION

Sinopharm Tech Holdings Limited 國藥科技股份有限公司

NOTICE OF EXTRAORDINARY GENERAL MEETING

ORDINARY RESOLUTION

‘‘THAT:

Notes:

More from Sinopharm Tech Holdings Limited

Sinopharm Tech Holdings Limited Proxy Solicitation & Information Statement 2020