Speedy Global Holdings Limited — Proxy Solicitation & Information Statement 2015

Apr 30, 2015

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 Speedy Global Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or 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.

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(Incorporated in the Cayman Islands with limited liability) (Stock code: 540)

MAJOR TRANSACTION ACQUISITION OF LAND USE RIGHTS IN THE PRC

30 April 2015

CONTENTS

		Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		3
APPENDIX I	— FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . . . . . . .	7
APPENDIX II	— VALUATION REPORT OF THE PROPERTIES . . . . . . . . . . . . . . . .	10
APPENDIX III	— GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20

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DEFINITIONS

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

• ‘‘Acquisition’’ the acquisition of the land use rights of the Properties by the Purchaser through the Listing-For-Sale

• ‘‘Board’’ the board of Directors

• ‘‘close associates’’ has the meaning ascribed to it in the Listing Rules

• ‘‘Company’’ Speedy Global Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the Stock Exchange

• ‘‘connected persons’’ has the meaning ascribed to it in the Listing Rules

• ‘‘Consideration’’ the aggregate consideration of RMB75,682,350 for the Acquisition

• ‘‘Director(s)’’ the director(s) of the Company

• ‘‘Group’’ the Company and its subsidiaries

• ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong

• ‘‘Hong Kong’’

• the Hong Kong Special Administrative Region of the PRC

• ‘‘Land No.1’’ the state-owned land located at the east of Renhe Road, south of Laodong Street, west of Xingye Road and north of Fayuan Street, Xinmi City, Zhengzhou, Henan Province, PRC with a total site area of 106,024 sq.m. for industrial use

• ‘‘Land No.2’’ the state-owned land located at the east of Xingye Road, south of Laodong Street, west of Yangzhuan Road and north of Fayuan Street, Xinmi City, Zhengzhou, Henan Province, PRC with a total site area of 73,455.8 sq.m. for industrial use

• ‘‘Land No.3’’ the state-owned land located at the east of Renhe Road, south of Laodong Street, west of Xingye Road and north of Fayuan Street, Xinmi City, Zhengzhou, Henan Province, PRC with a total site area of 22,339.8 sq.m. for industrial use

• ‘‘Latest Practicable Date’’ 27 April 2015, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

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DEFINITIONS

• ‘‘Listing-For-Sale’’ the sale of the land use rights of the Properties by way of listing-for-sale and public bidding as announced by the Xinmi Land Bureau in accordance with the listing-for-sale document

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange

• ‘‘PRC’’ The People’s Republic of China

• ‘‘Properties’’ collectively Land No.1, Land No.2 and Land No.3

• ‘‘Purchaser’’ Speedy Global Development Limited, a company incorporated in the British Virgin Islands with limited liability and a wholly owned subsidiary of the Company

• ‘‘RMB’’ Renminbi, the lawful currency of the PRC

• ‘‘Share(s)’’ ordinary share(s) of HK$0.10 each in the capital of the Company

• ‘‘Shareholder(s)’’ the holder(s) of the Shares

• ‘‘Sky Halo’’ Sky Halo Holdings Limited, the controlling Shareholder of the Company

• ‘‘sq.m.’’ square meters

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

• ‘‘Transaction Confirmation’’ the confirmations of successful bidding at the Listing-ForSale dated 25 March 2015 made between Xinmi Real Estate Service Centre and the Purchaser

• ‘‘Xinmi Government’’ 新密市人民政府 (Xinmi City People’s Government), Zhengzhou, Henan Province, PRC

• ‘‘Xinmi Land Bureau’’ 新密市國土資源局 (Xinmi Bureau of Land and Resources)

• ‘‘Xinmi Real Estate 新密市地產服務中心 (Xinmi Real Estate Service Center) Service Center’’

• ‘‘%’’ per cent.

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LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability)

(Stock code: 540)

Executive Directors:

Mr. Huang Chih Shen (Chairman and chief executive officer) Mr. Chan Hung Kwong, Patrick Ms. Tang Wai Shan Mr. Au Wai Shing

Independent non-executive Directors:

Mr. Wong Ting Kon Ms. Pang Yuen Shan, Christina Mr. Chang Cheuk Cheung, Terence Dr. Chan Chung Bun, Bunny

Registered office: Scotia Centre, 4th Floor P.O. Box 2804, George Town Grand Cayman KY1-1112 Cayman Islands

Head office and principal place of business in the PRC: Nanmian Industrial District Xiagang Village, Changan Town Dongguan PRC

30 April 2015

To the Shareholders

Dear Sir/Madam,

MAJOR TRANSACTION ACQUISITION OF LAND USE RIGHTS IN THE PRC

INTRODUCTION

Reference is made to the Company’s announcements dated 26 November 2013, 21 January 2015, 18 March 2015 and 25 March 2015. The Purchaser succeeded in bidding the land use rights of the Properties at the Listing-For-Sale and the Transaction Confirmation was entered into on 25 March 2015.

The purpose of this circular is to provide you with further information on the Acquisition and other information as required under the Listing Rules.

INFORMATION ON THE LISTING-FOR-SALE

Date of the Transaction Confirmation

25 March 2015

Parties to the Transaction Confirmation

1. Purchaser

2. Xinmi Real Estate Service Center

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LETTER FROM THE BOARD

To the best knowledge, information and belief of the Directors after having made all reasonable enquiries, Xinmi Real Estate Service Center is a PRC government authority and is a third party independent of the Company and its connected persons (as defined in the Listing Rules).

Properties

Land No.1, Land No.2 and Land No.3.

Consideration

The aggregate consideration for the Acquisition is RMB75,682,350. The Consideration was arrived at after the bidding process at the Listing-For-Sale. Refundable security deposits of RMB37,840,000 have been paid by the Group on 18 March 2015 which will be applied to satisfy part of the Consideration. In addition, refundable advance payments of RMB5,000,000 and RMB30,000,000 have been paid by the Group on 6 January 2014 and 21 January 2015 respectively which will be also applied to satisfy part of the Consideration according to the Xinmi Government. The remaining balance of the Consideration in the sum of RMB2,842,350 has been paid on 9 April 2015.

Completion

The Purchaser has entered into the state construction land use rights grant contracts with Xinmi Land Bureau all dated 1 April 2015 in respect of the Properties, pursuant to which the Consideration shall be settled in full within 60 days from the date thereof.

Subject to full settlement of the Consideration, payment of relevant taxes and application for the Construction Land Use Planning Permit (建設用地規劃許可證) from the Urban and Rural Planning Authority (城鄉規劃管理局), application may be made to the Xinmi Land Bureau for land use approval and issue of land use certificates.

INFORMATION ON THE PROPERTIES

Land No.1 is located at the east of Renhe Road, south of Laodong Street, west of Xingye Road and north of Fayuan Street, Xinmi City, Zhengzhou, Henan Province, PRC with a total site area of 106,024 sq.m. It is designated for industrial use with a plot ratio of over 1.3. The land use right will be granted for a term of 50 years.

Land No.2 is located at the east of Xingye Road, south of Laodong Street, west of Yangzhuan Road and north of Fayuan Street, Xinmi City, Zhengzhou, Henan Province, PRC with a total site area of 73,455.8 sq.m. It is designated for industrial use with a plot ratio of over 1.3. The land use right will be granted for a term of 50 years.

Land No.3 is located at the east of Renhe Road, south of Laodong Street, west of Xingye Road and north of Fayuan Street, Xinmi City, Zhengzhou, Henan Province, PRC with a total site area of 22,339.8 sq.m. It is designated for industrial use with a plot ratio of over 1.3. The land use right will be granted for a term of 50 years.

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LETTER FROM THE BOARD

The Company intends to develop the Properties into a number of industrial premises for the Group’s own use and for investment and development purposes. The capital expenditure in respect of the Properties is currently estimated to be approximately RMB170 million, comprising approximately RMB75.7 million as the Consideration for the Acquisition and the remaining RMB94.3 million as the estimated first phase development costs. The aforesaid estimated capital expenditure will be funded by the Company’s internal resources and bank borrowings. The first phase development will involve the development of industrial premises with total gross area of approximately 65,000 sq.m., of which approximately 20% will be for the Group’s own use and the rest for investment and development purposes. The first phase development is expected to commence within the second quarter of 2015 and complete in around the end of 2015.

REASONS FOR AND BENEFIT OF THE ACQUISITION

The Group is principally engaged in (i) the apparel supply chain servicing business which offers a wide range of woven wear and knitwear products to a number of owners or agents of global reputable brands, and (ii) the apparel retail business operating under the brand name of Unisex and Promod in the PRC. Furthermore, because a strong market potential is foreseeable, the Group intends to diversify its business into the property investment and development aspects which comprises manufacturing plants and related commercial and residential developments for the garment industry, with a view to magnify the Company’s development potential and the Shareholders’ return.

In formulating its development plans into the property investment and development business in Xinmi City, Zhengzhou, the Board has considered the following major factors:

• . The proposed property investment and development plans in Xinmi City is in cooperation with and supported by the Xinmi Government. In Zhengzhou, the garment manufacturing industry is scattered and it is the government’s intention to centralize them into industrial parks. The Properties are located in one of the major industrial parks in Zhengzhou.

• . The garment industry is one of the principal industries for development in Zhengzhou and has enjoyed significant growth in recent years. The operating costs such as labour and utilities costs for manufacturing plants in Zhengzhou is relatively lower than other developed area in the PRC. Zhengzhou is also positioned to be a major national logistic hub. It is expected that there will be growing demand for industrial premises in Zhengzhou.

• . The first phase development costs of approximately RMB94.3 million will be funded from the Group’s internal resources and bank borrowings. With the existing unutilised banking facilities, such development costs will not have any material adverse effect on the Group’s working capital requirement for its apparel supply chain and retail businesses. The current low interest rates environment is expected to remain for a substantial period of time which will keep the Group’s borrowing costs at low level.

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LETTER FROM THE BOARD

Although the Company has no previous experience in the property investment and development business in the PRC, the Company is establishing a team of staff, based in Xinmi City, consisting of professional and experienced personnel to supervise and monitor the property projects.

The Directors consider that the Acquisition signifies the first industrial property project the Group invested in and the first step of the Group to diversify its business into the property investment and development business. The industrial premises will be held by the Group for its own use and for investment and development purposes which will generate a considerable income to the Group. The Directors also expect that there will be appreciation of real estate value in long term. Ultimately they will benefit the Company and its Shareholders as a whole.

The Directors consider that the terms of the Acquisition are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

FINANCIAL EFFECTS OF THE ACQUISITION ON THE GROUP

The Consideration has been fully paid and was funded by the Group’s internal resources and available bank borrowings. As at 31 March 2015, the Group has cash and cash equivalents of approximately HK$330 million. The Directors consider that the Acquisition will not have any immediate material effect on the total assets, earnings and liabilities of the Group.

LISTING RULES IMPLICATIONS

Based on the relevant percentage ratios calculations under the Listing Rules, the Acquisition constitutes a major transaction of the Company and is subject to the reporting, announcement and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

Since Sky Halo, being the controlling Shareholder of the Company, holds 327,242,688 Shares which representing approximately 54.54% of the total issued share capital of the Company and no Shareholder is required to abstain from voting if a general meeting was convened to approve the Acquisition, a written shareholders’ approval may be accepted in lieu of holding a general meeting pursuant to Chapter 14 of the Listing Rules. Sky Halo has already given a written approval to the Acquisition. Accordingly, no general meeting of the Company will be convened for the purpose of approving the Acquisition.

Yours faithfully By order of the Board Speedy Global Holdings Limited Huang Chih Shen

Chairman and chief executive officer

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

The financial information of the Group for the three years ended 31 December 2012, 31 December 2013 and 31 December 2014 are disclosed in the Company’s annual reports for the years ended 31 December 2012, 31 December 2013 and 31 December 2014 respectively, which are incorporated by reference into this circular. The said annual reports of the Company are available on the Company’s website at www.speedy-global.com and the website of the Stock Exchange at www.hkexnews.hk.

The following is a quick link to the 2012 annual report of the Company published on 24 April 2013 with its audited consolidated financial statements for the year ended 31 December 2012 on pages 55 to 140:

http://www.hkexnews.hk/listedco/listconews/SEHK/2013/0424/LTN20130424453.pdf

The following is a quick link to the 2013 annual report of the Company published on 11 April 2014 with its audited consolidated financial statements for the year ended 31 December 2013 on pages 54 to 132:

http://www.hkexnews.hk/listedco/listconews/SEHK/2014/0411/LTN201404111042.pdf

The following is a quick link to the 2014 annual report of the Company published on 15 April 2015 with its audited consolidated financial statements for the year ended 31 December 2014 on pages 55 to 128:

http://www.hkexnews.hk/listedco/listconews/SEHK/2015/0415/LTN20150415560.pdf

INDEBTEDNESS

As at the close of business on 28 February 2015, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group had the following bank borrowings and finance lease liabilities:

Bank borrowings Finance lease liabilities Total borrowings The amounts of bank borrowings are repayable as follows: Within one year Bank borrowings due for repayment after one year (*) More than 1 year but not exceeding 2 years	HK$’000 292,384 800
	293,184
	288,096 4,288
	292,384

• The amounts due are based on the scheduled repayment dates set out in the loan agreements without taking into account any repayment on demand clause.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

As at 28 February 2015, the total unutilised amount of facilities available to us amounted to approximately HK$643.3 million. On the same date, our total borrowings of approximately HK$292.4 million was guaranteed by companies within the Group.

As confirmed by the Directors, there are no material defaults in payment of bank borrowings up to the Latest Practicable Date.

Save as otherwise disclosed above, and apart from intra-group liabilities and normal trade payables and bills payable, the Group did not have, at the close of business on 28 February 2015, any other debt securities issued and outstanding, or authorised or otherwise created but unissued, any other term loans, any other borrowings or indebtedness in the nature of borrowings including bank overdrafts and liabilities under acceptance (other than normal trade bills) or acceptance credits or hire purchase commitments, any other mortgages and charges or any guarantees or any finance lease commitments or material contingent liabilities.

WORKING CAPITAL

The Directors, after due and careful enquiry, are of the opinion that taking into account the Acquisition and the present financial resources available to the Group including but not limited to its internally generated revenue and funds, cash and cash equivalents on hand, banking facilities available to the Group, and in the absence of unforeseen circumstances, the Group has sufficient working capital for its present requirements, that is for at least the next twelve months from the date of this circular.

MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2014, the date to which the latest published audited financial statements of the Group were made up.

FINANCIAL AND TRADING PROSPECT OF THE GROUP

As disclosed in the Company’s annual report for the year ended 31 December 2014, the Directors expect the business environment of the Group’s apparel supply chain servicing business in 2015 remains challenging due to the keen competition. In order to maintain the competitiveness, the Group will enhance product innovation and creativity to meet fashion trends and maintain premium quality. For production management, the Group will continue to enhance the operating efficiency by simplifying the production processes which results a shorter product delivery time. In addition, the Group will work closely with our customers to consolidate the fabrication in order to obtain better material prices with mass volume which will enhance our cost competitiveness. The Group is offering a competitive price with higher flexibility arrangements to our existing customers in order to secure more long term and committed orders and is also actively looking for new customers for further growth opportunities.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The Directors expect the retail sentiment in the PRC to be weak in the near future and accordingly, the Group will adopt a cautious approach in developing the retail business. Instead of adopting an aggressive approach to expand coverage of the retail network, the Group will retain capital and focus on restoring profitability in the foreseeable future.

The Group will seek any appropriate property investment and development projects to diversify our business in order to magnify the Company’s development potential and the Shareholder’s return.

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VALUATION REPORT OF THE PROPERTIES

APPENDIX II

The following is the text of a letter and the valuation certificate prepared for the purpose of incorporation in this circular received from LCH (Asia-Pacific) Surveyors Limited, an independent professional surveyor, in connection with its valuation as at 25 March 2015 of the property interests to be acquired by the Group.

利駿行測量師有限公司

The readers are reminded that the report which follows has been prepared in accordance with the reporting guidelines set by the International Valuation Standard 2013 (the ‘‘IVS’’) published by the International Valuation Standards Council as well as the HKIS Valuation Standards 2012 Edition (the ‘‘HKIS Standards’’) published by the Hong Kong Institute of Surveyors (the ‘‘HKIS’’). Both standards entitle the valuer to make assumptions which may on further investigation, for instance by the readers’ legal representative, prove to be inaccurate. Any exception is clearly stated below. Headings are inserted for convenient reference only and have no effect in limiting or extending the language of the paragraphs to which they refer. Translations of terms in English or in Chinese are for reader’s identification purpose only and have no legal status or implication in this report. This report was prepared and signed off in English format, translation of this report in language other than English shall only be used as a reference and should not be regarded as a substitute for this report. Piecemeal reference to this report is considered to be inappropriate and no responsibility is assumed from our part for such piecemeal reference. It is emphasised that the findings and conclusion presented below are based on the documents and facts known to the valuer at the Latest Practicable Date of this circular. If additional documents and facts are made available, the valuer reserves the right to amend this report and its conclusion.

17th Floor Champion Building Nos. 287–291 Des Voeux Road Central Hong Kong

30 April 2015

The Board of Directors Speedy Global Holdings Limited Flat B, 13th Floor Wing Chai Industrial Building Nos. 27–29 Ng Fong Street San Po Kong Kowloon Hong Kong Dear Sirs,

In accordance with the instructions given by the present management of Speedy Global Holdings Limited (hereinafter referred to as the ‘‘Instructing Party’’) to us to conduct valuation of a real property (same as the word ‘‘property’’ in this report) proposed to be acquired by Speedy Global Holdings Limited (hereinafter referred to as the ‘‘Company’’) and its

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VALUATION REPORT OF THE PROPERTIES

APPENDIX II

subsidiaries (collectively, together with the Company hereinafter referred to as the ‘‘Group’’) in the People’s Republic of China (hereinafter referred to as the ‘‘PRC’’ or ‘‘China’’), we confirm that we have conducted inspections, made relevant enquiries and obtained such further information as we consider necessary to support our findings and our value of the property interest as at 25 March 2015 (hereinafter referred to as the ‘‘Valuation Date’’) for the Instructing Party’s internal management reference purpose.

We understand that the use of our work product (regardless of form of presentation) will form part of the Instructing Party’s due diligence but we have not been engaged to make specific sales or purchase recommendations, or give opinion for any financing arrangement. We further understand that the use of our work product will not supplant other due diligence which the Instructing Party should conduct in reaching its business decision regarding the property valued. Our work is designed solely to provide information that will give the Instructing Party a reference in its due diligence process, and our work should not be the only factor to be referenced by the Instructing Party. Our findings and value of the property interest are documented in a narrative valuation report and submitted to the Instructing Party at today’s date (hereinafter referred to as the ‘‘Report Date’’).

At the request of the Instructing Party, we prepared this summary report (including this letter and the valuation certificate) to summarise our findings and opinion of value as documented in the valuation report for the purpose of inclusion in this circular at the Report Date for the Company’s shareholders’ reference. Terms herein used without definition shall have the same meanings as in the valuation report, and the assumptions and caveats adopted in the valuation report also applied to this summary report.

BASIS OF VALUATION AND ASSUMPTIONS

According to the IVS which the HKIS Standards also follows, there are two valuation bases, namely market value basis and valuation bases other than market value. In this engagement, we have provided our opinion of value of the property on the market value basis.

The term ‘‘Market Value’’ is defined by the IVS and the HKIS Standards as ‘‘the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion’’.

Our valuation of the real property has been made on the assumptions that, as at the Valuation Date,

1. the legally interested party in the property has free and uninterrupted rights to assign its relevant property interest for the whole of the unexpired terms as granted, and any premium payable have already been fully paid;

2. the legally interested party in the property sells its relevant property interest in the market in its existing state without the benefit of a deferred terms contract, leaseback, joint venture, management agreement or any other similar arrangement which could serve to increase the value of the property interest;

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VALUATION REPORT OF THE PROPERTIES

APPENDIX II

1. the legally interested party in the property has absolute title to its relevant property interest;

2. the property has obtained relevant government’s approvals for the sale of the property and is able to dispose of and transfer free of all encumbrances (including but not limited to the cost of transaction) in the market; and

3. the property can be freely disposed of and transferred free of all encumbrances as at the Valuation Date for its existing use in the market to both local and overseas purchasers without payment of any premium to the government.

Should any of the above not be the case, it will have adverse impact to the value as reported.

APPROACH TO VALUE

There are three generally accepted approaches in arriving at the market value of a property on an absolute title basis, namely the Sales Comparison Approach (or known as the Market Approach), the Cost Approach and the Income Approach.

Having considered the inherent characteristics of the property, in valuing the property on ‘‘as-is’’ basis at the Valuation Date, we have adopted the Sales Comparison Approach by making reference to the sales evidences as made available to us in the relevant market, and to consider the cost incurred as at the Valuation Date.

Unless otherwise stated, we have not carried out any valuation on alternative development basis to the property, and the study of possible alternative development options and the related economics do not come within the scope of our work.

MATTERS THAT MIGHT AFFECT THE VALUE REPORTED

For the sake of valuation, we have adopted the areas as appeared in the copies of the documents as provided, and no further verification work has been conducted. Should it be established subsequently that the adopted areas were not the latest approved, we reserve the right to revise our report and the valuation accordingly.

No allowance has been made in our valuation for any charges, mortgages, outstanding premium or amounts owing on the property valued nor any expenses or taxation which may be incurred in affecting a sale of the property. Unless otherwise stated, it is assumed that the property is free from all encumbrances, restrictions, and outgoings of an onerous nature which could affect its value.

In our valuation, we have assumed that the property is able to be sold and purchased in the market without any legal impediment (especially from the regulators). Should this not be the case, it will affect the reported value significantly. The readers are reminded to have their own legal due diligence work on such issue. No responsibility or liability is assumed.

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VALUATION REPORT OF THE PROPERTIES

APPENDIX II

As at the Latest Practicable Date of this circular, we were unable to identify any adverse news against the property which may affect the reported value in our work product. Thus, we are not in the position to report and comment on its impact (if any) to the property. However, should it be established subsequently that such news did exist at the Valuation Date, we reserve the right to adjust the value reported herein.

ESTABLISHMENT OF TITLES

Due to the purpose of this engagement and the market value basis of valuation, the Instructing Party or the designated personnel of the Company provided us the necessary copies of documents to support that the legally interested party in the property has free and uninterrupted rights to transfer, to mortgage or to let its relevant property interests (in this instance, an absolute title) for the whole of the unexpired terms as granted, free of all encumbrances and any premiums payable have already been paid in full or outstanding procedures have been completed, and the Group has the right to occupy and to use the property. However, our procedures to value, as agreed with the Instructing Party, did not require us to conduct legal due diligence on the legality and formality on the way that the legally interested party obtained the property from the relevant authorities. We agreed with the Instructing Party that this should be the responsibility of the legal advisor to the Instructing Party. Thus, no responsibility or liability is assumed from our part to the origin and continuity of the titles to the property.

The land registration system of China forbids us to search the original documents of the property that are filed in the relevant authorities, and to verify legal titles or to verify any material encumbrances or amendment which may not appear on the copies handed to us. For the purpose of valuation, we have relied solely on a copy of the PRC legal opinions provided by the Instructing Party or the appointed personnel of the Company with regard to the legal titles of the property. We are given to understand that the PRC legal opinion was prepared by a qualified PRC legal advisor Guangdong Everwin Law Office dated 7 April 2015.

We need to state that we are not legal professionals and are not qualified to ascertain the titles and to report any encumbrances that may be registered against the property. However, we have complied with the requirements as stated in Chapter 5 and Practice Note No. 12 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and relied solely on the copies of documents and the various copies of legal opinions provided by the Instructing Party or the designated personnel of the Company in our valuation. No responsibility or liability from our part is assumed in relation to those legal opinions.

In our valuation, we have assumed that the existing legally interested party in the property has obtained all the approval and/or endorsement from the relevant authorities to own or to use the property, and that there would be no legal impediment (especially from the regulators) for the existing legally interested party to continue the legal titles to the property. Should this not be the case, it will affect our findings or opinion of value in this report significantly. The readers are reminded to have their own legal due diligence work on such issues. No responsibility or liability is assumed.

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VALUATION REPORT OF THE PROPERTIES

APPENDIX II

INSPECTIONS AND INVESTIGATIONS OF THE PROPERTY

We have conducted inspections to the exterior, and where possible, the interior of the property in respect of which we have been provided with such information as we have requested for the purpose of valuation. The property was inspected by our graduate surveyor Mr. Sam Ngai in November 2014. We have not inspected those parts of the property which were covered, unexposed or inaccessible and such parts have been assumed to be in a reasonable condition. We cannot express an opinion about or advice upon the condition of the property and our work product should not be taken as making any implied representation or statement about the condition of the property. No structural survey, investigation or examination has been made, but in the course of our inspections, we did not note any serious defects in the property inspected. We are not, however, able to report that the property is free from rot, infestation or any other structural defects. No tests were carried out to the utilities (if any) and we are unable to identify those utilities covered, unexposed or inaccessible.

We have not carried out on-site measurements to verify the correctness of the areas of the property, but have assumed that the areas shown on the documents and official layout plans handed to us are correct. All dimensions, measurements and areas are approximations.

Our engagement and the agreed procedures to value the property did not include an independent land survey to verify the legal boundaries of the property. We need to state that we are not in the land survey profession, therefore, we are not in the position to verify or ascertain the correctness of the legal boundaries of such property that appeared on the documents handed to us. No responsibility from our part is assumed. The Instructing Party or interested party in the property should conduct their own legal boundaries due diligence work.

We have not arranged for any investigation to be carried out to determine whether or not any deleterious or hazardous material has been used in the construction of the property, or has since been incorporated, and we are therefore unable to report that the property is free from risk in this respect, and therefore we have not considered such factors in our valuation.

We are not aware of the content of any environmental audit or other environmental investigation or soil survey which may have been carried out in the property and which may draw attention to any contamination or the possibility of any such contamination. In undertaking our work, we have been instructed to assume that no contaminative or potentially contaminative uses have ever been carried out in the property. We have not carried out any investigation into past or present uses, either of the property or of any neighbouring land, to establish whether there is any contamination or potential for contamination to the property from these uses or sites, and have therefore assumed that none exists. However, should it be established subsequently that contamination, seepage or pollution exists at the property or on any neighbouring land, or that the premises have been or are being put to a contaminative use, this might reduce the value now reported or affect our findings.

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VALUATION REPORT OF THE PROPERTIES

APPENDIX II

SOURCES OF INFORMATION AND ITS VERIFICATION

In the course of our work, we have been provided with copies of the documents regarding the property, and these copies have been referenced without further verifying with the relevant bodies and/or authorities. Our procedures did not require us to conduct any searches or to inspect the original documents to verify ownership or to verify any amendment which may not appear on the copies handed to us. We need to state that we are not legal professionals, therefore, we are not in the position to advise and comment on the legality and effectiveness of the documents provided by the Instructing Party or the designated personnel of the Company.

We have relied solely on the information provided by the Instructing Party or the designated personnel of the Company without further verification, and have fully accepted advice given to us on such matters as planning approvals or statutory notices, locations, titles, easements, tenure, occupation, site and floor areas and all other relevant matters.

Our valuation has been made only based on the advice and information made available to us. While a limited scope of general inquiries had been made to the local real property market practitioners, we are not in a position to verify and ascertain the correctness of the advice given by the relevant personnel. No responsibility or liability is assumed.

Information furnished by others, upon which all or portions of our report are based, is believed to be reliable but has not been verified in all cases. Our procedures to work do not constitute an audit, review, or compilation of the information provided. Thus, no warranty is made nor liability assumed for the accuracy of any data, advice, opinions, or estimates identified as being furnished by others which have been used in formulating our work product.

When we adopted the work products from other professions, external data providers and the Instructing Party or the designated personnel of the Company in our works, the assumptions and caveats that adopted by them in arriving at their figures also applied to this report. The procedures we have taken do not provide all the evidence that would be required in an audit and, as we have not performed an audit, accordingly, we do not express an audit opinion. The procedures we have taken do not provide all the evidence that would be required in an audit and, as we have not performed an audit, accordingly, we do not express an audit opinion.

We are unable to accept any responsibility for the information that has not been supplied to us by the Instructing Party or the designated personnel of the Company. Also, we have sought and received confirmation from the management of the Company or its designated personnel that no material factors have been omitted from the information supplied. Our analysis and valuation are based upon full disclosure between us and the Instructing Party of material and latent facts that may affect our works.

We have had no reason to doubt the truth and accuracy of the information provided to us by the Instructing Party or the designated personnel of the Company. We consider that we have been provided with sufficient information to reach an informed view, and have had no reasons to suspect that any material information has been withheld.

Unless otherwise stated, all monetary amounts are in Renminbi Yuan (‘‘RMB’’).

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VALUATION REPORT OF THE PROPERTIES

APPENDIX II

LIMITING CONDITIONS IN THIS SUMMARY REPORT

Our findings and opinion of value of the property in this summary report are valid only for the stated purpose and only for the Valuation Date, and for the sole use of the Instructing Party. We or our personnel shall not be required to give testimony or attendance in court or to any government agency by reason of this summary report, and the valuer accepts no responsibility whatsoever to any other person.

Our valuation has been made on the assumption that no unauthorised alteration, extension or addition has been made in the property, and that the inspections and the use of this report do not purport to be a building survey of the property. We have assumed that the property is free of rot and inherent danger or unsuitable materials and techniques.

No responsibility is taken for changes in market conditions and local government policy, and no obligation is assumed to revise this summary report to reflect events or conditions, which occur or make known to us subsequent to the date hereof.

Neither the whole nor any part of this summary report or any reference made hereto may be included in any published documents, prospectus or statement, or published in any way, without our written approval of the form and context in which it may appear. Nonetheless, we consent to the publication of this summary report in this circular for the Company’s shareholders’ reference.

Our maximum liability relating to services rendered under this engagement (regardless of form of action, whether in contract, negligence or otherwise) shall be limited to the charges paid to us for the portion of its services or work products giving rise to liability. In no event shall we be liable for consequential, special, incidental or punitive loss, damage or expense (including without limitation, lost profits, opportunity costs, etc.), even if it has been advised of their possible existence.

The Company and the Instructing Party are required to indemnify and hold us and our personnel harmless from any claims, liabilities, costs and expenses (including, without limitation, attorney’s fees and the time of our personnel involved) brought against, paid or incurred by us at a time and in any way based on the information made available in connection with our work product except to the extent that any such loses, expenses, damages or liabilities are ultimately determined to be the result of gross negligence of our engagement team in conducting its work. This provision shall survive even after the termination of this engagement for any reason.

STATEMENTS

The attached valuation certificate is prepared in line with the requirements contained in Chapter 5 and Practice Note No. 12 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited as well as the reporting guidelines contained in the IVS and the HKIS Standards. The valuation has been undertaken by valuer, acting as external valuer, qualified for the purpose of this valuation.

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VALUATION REPORT OF THE PROPERTIES

APPENDIX II

We retain a copy of this summary report and the detailed valuation report together with the data that provided for the purpose of this engagement, and these data and documents will, according to the Laws of Hong Kong, keep for a period of 6 years from the date of this report and to be destroyed thereafter. We considered these records confidential, and we do not permit access to them by anyone, with the exception for law enforcement authorities or court order, without the Instructing Party’s authorisation and prior arrangement made with us. Moreover, we will add the Company’s information into our client list for our future reference.

The analysis or valuation of the property depends solely on the assumptions made in this report and not all of which can be easily quantified or ascertained exactly. Should some or all of the assumptions prove to be inaccurate at a later date, it will affect the reported findings or opinion of value significantly.

We hereby certify that the fee for this service is not contingent upon our conclusion and we have no significant interest in the property, the Group or the value reported.

The valuation certificate is attached.

Yours faithfully, For and on behalf of

LCH (Asia-Pacific) Surveyors Limited

Elsa Ng Hung Mui B.Sc. M.Sc. RPS(GP)

Director

Contributing valuer:

Sam Ngai Yat Lun B.Sc.

Sr Elsa Ng Hung Mui has been conducting valuation of real properties in Hong Kong, Macau and mainland China since 1994. She is a Member of The HKIS and a valuer on the List of Property Valuers for Undertaking Valuation for Incorporation or Reference in Listing Particulars and Circulars and Valuation in Connection with Takeovers and Mergers published by The HKIS. She is also a Registered Real Estate Appraiser in China.

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VALUATION REPORT OF THE PROPERTIES

APPENDIX II

VALUATION CERTIFICATE

Property to be acquired by the Group in the PRC and valued on market value basis

Amount of valuation in its Particulars of existing state as at Property Description and tenure occupancy 25 March 2015 RMB 3 parcels of land known as The property comprises 3 parcels of As inspected and 75,700,000 Lot Nos. 2015–1, 2015–2 and adjoining land having a total site advised by the (100% interest) 2015–3 and located at the area of approximately 201,819.60 appointed personnel East of Renhe Road, the sq. m. (See Note 1 below) of the Company, the (RENMINBI South of Laodong Street, the property was vacant SEVENTY FIVE West of Yangzhuan Road and The property is located at a with various MILLION AND the North of Fayuan Street, developing area of Xinmi City with temporary structures SEVEN HUNDRED Xinmi City various kinds of industrial erected thereon as at THOUSAND Zhengzhou developments. There are ancillary the Valuation Date. YUAN ONLY) Henan Province facilities and developed The PRC transportation network in the area. 425370 As at the date of our inspection, there were few construction in progress items on the property.

The property is subject to a right to use the land for a term of 50 years for industrial usage.

Notes:

1. The right to possess the land is held by the State and the right to use the land has been granted by the State to the Group via the following ways:

2. (i) 3 various 成交確認書 (translated as ‘‘Confirmation of Transaction of State-owned Land Use Rights’’) all dated 25 March 2015, the land use rights of Lot Nos. 2015–1, 2015–2 and 2015–3 having a total site area of approximately 201,819.60 sq.m. are granted to Speedy Global Development Limited, a whollyowned subsidiary of the Company, at a consideration of RMB75,682,350 by the Xinmi Real Estate Service Center.

3. (ii) Lot No. 2015–1

Pursuant to a Contract for the Grant of State-owned Land Use Rights No. 410183–CR–2015–0200– 13199 dated 1 April 2015 and made between 新密市國土資源局 (translated as Ximin Bureau of Land and Resources and hereinafter referred to as Xinmi Land Bureau) and Speedy Global Development Limited, the land use right of a parcel of land having a site area of 106,024.00 sq.m. was granted to Speedy Global Development Limited at a consideration of RMB39,759,000.

• (iii) Lot No. 2015–2

Pursuant to a Contract for the Grant of State-owned Land Use Rights No. 410183–CR–2015–0201– 13200 dated 1 April 2015 and made between Xinmi Land Bureau and Speedy Global Development Limited, the land use right of a parcel of land having a site area of 73,455.80 sq.m. was granted to Speedy Global Development Limited at a consideration of RMB27,545,925.

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VALUATION REPORT OF THE PROPERTIES

APPENDIX II

• (iv) Lot No. 2015–3

Pursuant to a Contract for the Grant of State-owned Land Use Rights No. 410183–CR–2015–0199– 13197 dated 1 April 2015 and made between Xinmi Land Bureau and Speedy Global Development Limited, the land use right of a parcel of land having a site area of 22,339.80 sq.m. was granted to Speedy Global Development Limited at a consideration of RMB8,377,425.

We are advised that the Group is in the process to complete the transaction and registration of its titles to the property, and the date to complete the process is unknown at present moment.

1. According to the legal opinion prepared by the Company’s PRC legal adviser, Guangdong Everwin Law Office dated 7 April 2015, the following opinions are noted:

2. (i) As at 7 April 2015, the Group has paid the security deposit and part of the consideration, there should not be a risk in terminating the contract by Xinmi Land Bureau due to breaching the contract; and

3. (ii) after signing the various Contracts for the Grant of State-owned Land Use Rights and prior to the issuance of various State-owned Land Use Rights Certificates, the land use right user’s (i.e. the Group) rights to occupy and to use the land are protected by the relevant PRC laws. Upon issuance of the various State-owned Land Use Rights Certificates, the Group would obtain the land use rights of the land, and has the legal rights to occupy, assign, lease or mortgage the property.

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GENERAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm to the best of their knowledge and belief that 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’ interests in the Company

At the Latest Practicable Date, the interests and short positions of the Directors or the chief executives of the Company in the Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Division 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO) or were required, pursuant to Section 352 of the SFO, to be entered on the register maintained by the Company referred to therein, or which were required, pursuant to Part XV of the SFO or the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange, were as follows:

			Approximate
			percentage of
			the issued share
			capital of the
			Company as at
			the Latest
		Number of	Practicable
Name	Capacity	shares held	Date
Mr. Huang Chih Shen	Interest of a controlled	327,242,688	54.54%
	corporation (Note)
Mr. Chan Hung Kwong,	Beneficial owner	33,031,758	5.51%
Patrick
Mr. Au Wai Shing	Beneficial owner	26,847,366	4.47%
Ms. Tang Wai Shan	Beneficial owner	15,428,853	2.57%

Note: Mr. Huang Chih Shen’s interest in 327,242,688 Shares is held through Sky Halo which is wholly-owned by Mr. Huang Chih Shen.

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GENERAL INFORMATION

APPENDIX III

The following is a list of the Directors who, as at the Latest Practicable Date, were also directors or employees of a company which has an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Division 2 and 3 of Part XV of the SFO:

				Approximate
				percentage of
				the issued share
				capital of the
		Capacity of	Number of	Company as at
	Name of	Director in	shares held by	the Latest
Name of Director	Shareholder	Shareholder	the Shareholder	Practicable Date
Mr. Huang Chih Shen	Sky Halo	Director	327,242,688	54.54%

3. SERVICE CONTRACTS

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

4. COMPETING INTERESTS

As at the Latest Practicable Date, so far as the Directors are aware of, none of the Directors nor their respective close associates had any interest in any business which competes or is likely to compete, or is in conflict or is likely to be in conflict, either directly or indirectly, with the business of Group.

5. OTHER INTERESTS OF THE DIRECTORS

As at the Latest Practicable Date:

• (a) none of the Directors had any interest, either direct or indirect, in any assets which have, since 31 December 2014 (being the date to which the latest published audited accounts of the Group were made up), been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group; and

• (b) none of the Directors was materially interested in any contract or arrangement entered into by any member of the Group which is subsisting as at the date of this circular and is significant in relation to the business of the Group.

6. LITIGATION

As at the Latest Practicable Date, there was no litigation or claim of material importance known to the Directors to be pending or threatened against any member of the Group.

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GENERAL INFORMATION

APPENDIX III

7. EXPERT AND CONSENT

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

Name	Qualification
LCH (Asia-Pacific) Surveyors Limited	Independent professional valuer
Guangdong Everwin Law Office	PRC lawyer

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

As of the Latest Practicable Date, the above expert did not have any shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group, or any interests, directly or indirectly, in any assets which had been, since 31 December 2014, being the date to which the latest published audited accounts of the Company were made up, acquired, disposed of or leased to any member of the Group, or were proposed to be acquired, disposed of or leased to any member of the Group.

8. MATERIAL CONTRACTS

As at the Latest Practicable Date, the following material contracts (not being contracts entered into in the ordinary course of business) have been entered into by the members of the Group within the two years immediately preceding the issue of this circular:

• (a) the sale and purchase agreement dated 28 October 2013 between Ma Hung Yeh and Speedy Global Commercial Limited relating to the acquisition of 100% equity interest in Bright Master International Holdings Co., Limited at the consideration of HK$1,286,000;

• (b) the Transaction Confirmation; and

• (c) the state construction land use rights grant contracts dated 1 April 2015 in respect of the Properties

9. GENERAL

• (a) The company secretary of the Company is Mr. Cheung Kai Yiu. He is a member of the Hong Kong Institute of Certified Public Accountants.

• (b) The registered office of the Company is located at Scotia Centre, 4th Floor, P.O. Box 2804, George Town, Grand Cayman KY1-1112, Cayman Islands.

• (c) The principal place of business of the Company is Nanmian Industrial District, Xiagang Village, Changan Town, Dongguan, PRC.

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GENERAL INFORMATION

APPENDIX III

• (d) The Hong Kong branch share registrar and transfer office of the Company is Tricor Investor Services Limited of Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

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

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours (i.e. from 9:30 a.m. to 5:00 p.m. on Monday to Friday except public holidays) on any Business Day at the place of business in Hong Kong of the Company at Flat B, 13/F, Wing Chai Industrial Building, 27-29 Ng Fong Street, San Po Kong, Kowloon, Hong Kong for 14 days from the date of this circular:

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

• (b) the material contracts referred to in the paragraph headed ‘‘Material Contracts’’ in this Appendix;

• (c) the annual reports of the Company for the year ended 31 December 2012, 31 December 2013 and 31 December 2014 respectively;

• (d) the valuation report of the Properties prepared by LCH (Asia-Pacific) Surveyors Limited dated 30 April 2015 set out in Appendix II to this circular; and

• (e) the letter of consent referred to under the paragraph headed ‘‘Expert and Consent’’ in this Appendix.

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